Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 11, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | JOINT Corp | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 9,621,581 | ||
Entity Public Float | $0 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1612630 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||
Cash and cash equivalents | $20,796,783 | $3,516,750 |
Restricted cash | 224,576 | 58,786 |
Accounts receivable, net | 704,905 | 394,655 |
Income taxes receivable | 395,814 | |
Note receivable - current portion | 27,528 | 25,929 |
Deferred franchise costs - current portion | 668,700 | 939,750 |
Deferred tax asset - current portion | 208,800 | 701,200 |
Prepaid expenses and other current assets | 375,925 | 23,729 |
Total current assets | 23,403,031 | 5,660,799 |
Property and equipment, net | 1,134,452 | 400,267 |
Note receivable | 31,741 | 59,269 |
Note receivable - related party, net of allowance | 21,750 | |
Deferred franchise costs, net of current portion | 2,574,450 | 2,283,000 |
Deferred tax asset - noncurrent | 1,265,700 | |
Intangible assets | 153,000 | |
Goodwill | 677,204 | |
Deposits and other assets | 585,150 | 77,650 |
Total assets | 28,559,028 | 9,768,435 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
Accounts payable and accrued expenses | 1,271,405 | 226,757 |
Co-op funds liability | 186,604 | 54,133 |
Payroll liabilities | 617,944 | 128,370 |
Advertising fund deferred revenue | 4,652 | |
Income taxes payable | 419,297 | |
Deferred rent - current portion | 93,398 | |
Deferred revenue - current portion | 2,044,500 | 2,756,250 |
Other current liabilities | 50,735 | |
Total current liabilities | 4,264,586 | 3,589,459 |
Deferred rent, net of current portion | 451,766 | |
Deferred revenue, net of current portion | 7,915,918 | 7,252,084 |
Other liabilities | 299,405 | 147,753 |
Total liabilities | 12,931,675 | 10,989,296 |
Commitment and contingencies | ||
Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of December 31, 2014, and 25,000 issued and outstanding as of December 31, 2013 | 25 | |
Common stock, $0.001 par value; 20,000,000 shares authorized, 10,196,502 shares issued and 9,662,502 shares outstanding as of December 31, 2014 and 5,340,000 shares issued and 4,806,000 outstanding as of December 31, 2013 | 10,197 | 5,340 |
Additional paid-in capital | 21,420,975 | 1,546,373 |
Treasury stock (534,000 shares, at cost) | -791,638 | -791,638 |
Accumulated deficit | -5,012,181 | -1,980,961 |
Total stockholders' equity (deficit) | 15,627,353 | -1,220,861 |
Total liabilties and stockholders' equity (deficit) | $28,559,028 | $9,768,435 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Series A preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Series A preferred stock, shares authorized | 50,000 | 50,000 |
Series A preferred stock, shares issued | 0 | 25,000 |
Series A Preferred stock, shares outstanding | 0 | 25,000 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 10,196,502 | 5,340,000 |
Common stock, shares outstanding | 9,662,502 | 4,806,000 |
Treasury stock, shares | 534,000 | 534,000 |
Consolidated_Statement_of_Oper
Consolidated Statement of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Royalty fees | $3,194,286 | $1,531,201 |
Franchise fees | 1,933,500 | 2,536,333 |
Regional developer fees | 478,500 | 742,875 |
IT related income and software fees | 840,825 | 762,867 |
Advertising fund revenue | 459,493 | 216,784 |
Other income | 210,058 | 168,007 |
Total revenues | 7,116,662 | 5,958,067 |
Cost of revenues: | ||
Franchise cost of revenues | 2,081,382 | 1,781,477 |
IT cost of revenues | 165,057 | 224,719 |
Total cost of revenues | 2,246,439 | 2,006,196 |
Selling and marketing expenses | 1,188,016 | 781,256 |
Depreciation and amortization | 210,123 | 70,725 |
General and administrative expenses | 5,098,793 | 2,660,101 |
Total selling, general and administrative expenses | 6,496,932 | 3,512,082 |
Income (loss) from operations | -1,626,709 | 439,789 |
Other expense | -64,075 | -32,000 |
Income (loss) before income tax provision | -1,690,784 | 407,789 |
Income tax provision | -1,340,436 | -252,154 |
Net income (loss) | ($3,031,220) | $155,635 |
Earnings per share: | ||
Basic earnings (loss) per share (in Dollars per share) | ($0.56) | $0.03 |
Diluted earnings (loss) per share (in Dollars per share) | ($0.56) | $0.02 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (USD $) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Balances, December 31, 2012 at Dec. 31, 2012 | $25 | $5,340 | $994,735 | ($2,136,596) | ($1,136,496) | |
Balances, December 31, 2012 (in Shares) at Dec. 31, 2012 | 25,000 | 5,340,000 | ||||
Purchase of treasury stock | 551,638 | -791,638 | -240,000 | |||
Net income (loss) | 155,635 | 155,635 | ||||
Balance at Dec. 31, 2013 | 25 | 5,340 | 1,546,373 | -791,638 | -1,980,961 | -1,220,861 |
Balances, December 31, 2012 (in Shares) at Dec. 31, 2013 | 25,000 | 5,340,000 | ||||
Net income (loss) | -3,031,220 | -3,031,220 | ||||
Stock-based compensation expense | 101,830 | 101,830 | ||||
Issuance of common stock - IPO, net of offering costs of $2,761,325 | 3,450 | 19,774,154 | 19,777,604 | |||
Issuance of common stock - IPO, net of offering costs of $2,761,325 (in Shares) | 3,450,000 | |||||
Issuance of vested restricted stock | 72 | -72 | ||||
Issuance of vested restricted stock (in Shares) | 71,502 | |||||
Conversion of preferred stock to common stock | -25 | 1,335 | -1,310 | |||
Conversion of preferred stock to common stock (in Shares) | -25,000 | 1,335,000 | ||||
Balance at Dec. 31, 2014 | $10,197 | $21,420,975 | ($791,638) | ($5,012,181) | $15,627,353 | |
Balance (in Shares) at Dec. 31, 2014 | 10,196,502 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net (loss) income | ($3,031,220) | $155,635 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Provision for bad debts | 102,782 | |
Depreciation and amortization | 210,123 | 70,725 |
Loss on disposal of property and equipment | 10,127 | |
Deferred income taxes | 1,758,100 | -552,300 |
Accrued interest on notes receivable | -5,551 | |
Stock based compensation expense | 101,830 | |
Changes in operating assets and liabilties: | ||
Restricted cash | -165,790 | 17,290 |
Accounts receivable | -369,532 | -287,757 |
Income taxes receivable | -395,814 | |
Prepaid income taxes | 300,000 | |
Prepaid expenses and other current assets | -352,196 | 47,069 |
Deferred franchise costs | -20,400 | -14,850 |
Deposits and other assets | -60,686 | |
Accounts payable and accrued expenses | 1,044,648 | 125,394 |
Co-op funds liability | 132,471 | 9,359 |
Payroll liabilities | 489,574 | 58,046 |
Advertising fund deferred revenue | -4,652 | -26,650 |
Other liabilities | -25,447 | 108,029 |
Deferred rent | 545,164 | |
Income taxes payable | -419,297 | 419,297 |
Deferred revenue | -47,916 | 59,167 |
Net cash (used in) provided by operating activities | -437,445 | 422,217 |
Cash flows from investing activities: | ||
Acquisition of business, net of cash acquired | -900,000 | |
Advances for reacquisition and termination of regional developer rights | -507,500 | |
Purchase of property and equipment | -659,305 | -241,412 |
Proceeds from sale of equipment | 2,500 | |
Payments received on notes receivable | 4,179 | 10,353 |
Net cash used in investing activities | -2,060,126 | -231,059 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock - initial public offering | 22,425,000 | |
Offering costs paid | -2,647,396 | |
Purchase of treasury stock | -240,000 | |
Net cash provided by (used in) financing activities | 19,777,604 | -240,000 |
Net increase (decrease) in cash | 17,280,033 | -48,842 |
Cash at beginning of year | 3,516,750 | 3,565,592 |
Cash at end of year | 20,796,783 | 3,516,750 |
Supplemental cash flow disclosures: | ||
Cash paid for income taxes | 420,250 | |
Non-cash financing and investing activities: | ||
Warrants issued for services in connection with initial public offering | 113,929 | |
Conversion of preferred stock to common stock | $25 |
Note_1_Nature_of_Operations_an
Note 1 - Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Note 1: Nature of Operations and Summary of Significant Accounting Policies | ||||||||
Nature of Operations | |||||||||
The Joint Corp. (“The Joint”), a Delaware corporation, was formed on March 10, 2010, for the purpose of franchising chiropractic clinics, selling regional developer rights and supporting the operations of franchised chiropractic clinics at locations throughout the United States of America. The franchising of chiropractic clinics is regulated by the Federal Trade Commission and various state authorities. | |||||||||
The Joint Corporate Unit No. 1, LLC (“Clinic”), an Arizona limited liability company, was formed on July 14, 2010, for the purpose of operating chiropractic clinics in the state of Arizona. It operated one company-owned clinic the assets of which were sold on July 1, 2012. All remaining account balances were consolidated with The Joint as of December 31, 2012. | |||||||||
We completed our initial public offering of 3,000,000 shares of common stock at a price to the public of $6.50 per share on November 14, 2014, whereupon we received aggregate net proceeds of approximately $17,065,000 after deducting underwriting discounts, commissions and other offering expenses. Our underwriters exercised their option to purchase 450,000 additional shares of common stock to cover over-allotments on November 18, 2014, pursuant to which we received aggregate net proceeds of approximately $2,710,000, after deducting underwriting discounts, commissions and expenses. Also, in conjunction with the IPO, we issued warrants to the underwriters for the purchase of 90,000 shares of common stock, which can be exercised between November 10, 2015 and November 10, 2018 at an exercise price of $8.125 per share. | |||||||||
The following table summarizes the number of clinics in operation for years ended December 31, 2014 and 2013. | |||||||||
Year Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Clinics open at beginning of period | 175 | 82 | |||||||
Clinics opened during the period | 73 | 93 | |||||||
Clinics closed during the period | (2 | ) | - | ||||||
Clinics in operation at the end of the period | 246 | 175 | |||||||
Clinics sold but not yet operational | 268 | 223 | |||||||
Principles of Consolidation | |||||||||
The accompanying consolidated financial statements include the accounts of The Joint Corp. and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC (collectively, the “Company”). | |||||||||
All significant intercompany accounts and transactions between The Joint Corp. and its subsidiary have been eliminated in consolidation. | |||||||||
Cash and Cash Equivalents | |||||||||
We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash. We continually monitor our positions with, and credit quality of, the financial institutions with which we invest. As of the balance sheet date and periodically throughout the year, we have maintained balances in various operating accounts in excess of federally insured limits. We have invested substantially all of the proceeds of our IPO in short-term bank deposits. We had no cash equivalents as of December 31, 2014 and 2013. | |||||||||
Restricted Cash | |||||||||
Restricted cash held by the Company relates to cash franchisees are required to contribute to our National Marketing Fund and cash franchisees provide to various voluntary regional Co-Op Marketing Funds. Cash contributed to the National Marketing Fund is to be used in accordance with the Franchise Disclosure Document with a focus on regional and national marketing and advertising. | |||||||||
Concentrations of Credit Risk | |||||||||
In certain circumstances, we grant credit to franchisees related to the collection of initial franchise fees, royalties, and other operating revenues. We periodically perform credit analysis and monitor the financial condition of the franchisees to reduce credit risk. As of December 31, 2014 and 2013, six and two franchisees, respectfully, represented 56% and 54% of outstanding accounts receivable. We did not have any franchisees that represented greater than 10% of our revenues during the years ended December 31, 2014 and 2013. | |||||||||
Accounts Receivable | |||||||||
Accounts receivable represent amounts due from franchisees for initial franchise fees, royalty fees and marketing and advertising expenses. We consider a reserve for doubtful accounts based on the creditworthiness of the franchisee. The provision for uncollectible amounts is continually reviewed and adjusted to maintain the allowance at a level considered adequate to cover future losses. The allowance is management’s best estimate of uncollectible amounts and is determined based on specific identification and historical performance we track on an ongoing basis. The losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. We determined that an allowance for doubtful accounts was not necessary at December 31, 2013. As of December 31, 2014, we had an allowance for doubtful accounts of $81,032. | |||||||||
Deferred Franchise Costs | |||||||||
Deferred franchise costs represent commissions that are paid in conjunction with the sale of a franchise and are expensed when the respective revenue is recognized, which is generally upon the opening of a clinic. | |||||||||
Property and Equipment | |||||||||
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the assets. | |||||||||
Maintenance and repairs are charged to expense as incurred; major renewals and improvements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in other income. | |||||||||
Software Developed | |||||||||
We capitalize most software development costs. These capitalized costs are primarily related to proprietary software used by clinics for operations and the Company for management of operations. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized as assets in progress until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Software developed is recorded as part of property and equipment. Maintenance and training costs are expensed as incurred. Internal use software is amortized on a straight line basis over its estimated useful life, generally 5 years. | |||||||||
Intangible Assets | |||||||||
Intangible assets consist primarily of re-acquired franchise rights, and customer relationships. We amortize the fair value of re-acquired franchise rights over the remaining contractual terms of the re-acquired franchise rights at the time of the acquisition, which was 7 years. The fair value of customer relationships is amortized over their estimated useful life of 2 years. | |||||||||
Goodwill | |||||||||
As of December 31, 2014, we had recorded goodwill of $677,204. Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in the acquisition of six franchises on December 31, 2014 (See Note 2). Under FASB ASC 350-10, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests, and tests between annual tests in certain circumstances, based on estimated fair value in accordance with FASB ASC 350-10, and written down when impaired. | |||||||||
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 undiscounted future cash flows in our assessment of whether or not long-lived assets have been impaired. No impairments of long-lived assets were recorded for the years ended December 31, 2014 and 2013. | |||||||||
Advertising Fund | |||||||||
We have established an advertising fund for national/regional marketing and advertising of services offered by the clinics owned by the franchisees. As stipulated in the typical franchise agreement, a franchisee, in addition to the monthly royalty fee, pays a monthly marketing fee of 1% of gross sales, which increased at our discretion to 2% in January 2015. We segregate the marketing funds collected and use the funds for specific purposes as outlined in the Franchise Disclosure Document. These funds are included in restricted cash on our consolidated balance sheet. As amounts are expended from the fund, we recognize advertising fund revenue and a related expense. Amounts collected in excess of marketing expenditures are included in restricted cash on our consolidated balance sheets. | |||||||||
Co-Op Marketing Funds | |||||||||
Some franchises have established regional Co-Ops for advertising within their local and regional markets. We maintain an agency relationship under which the marketing funds collected are segregated and used for the purposes specified by the Co-Ops officers. The marketing funds are included in restricted cash on our consolidated balance sheets. | |||||||||
Deferred Rent | |||||||||
The Company leases its office space and company-owned clinics under operating leases, which may include rent holidays and rent escalation clauses. The Company recognizes rent holiday periods and scheduled rent increases on a straight-line basis over the term of the lease. The Company records tenant improvement allowances as deferred rent liabilities and amortizes the allowance over the term of the lease, as a reduction to rent expense. | |||||||||
Revenue Recognition | |||||||||
We generate revenue through initial franchise fees, regional developer fees, transfer fees, royalties, IT related income, and computer software fees. | |||||||||
Initial Franchise Fees. We require the entire non-refundable initial franchise fee to be paid upon execution of a franchise agreement, which has an initial term of ten years. Initial franchise fees are recognized as revenue when we have substantially completed our initial services under the franchise agreement, which typically occurs upon opening of the clinic. Our services under the franchise agreement include: training of franchisee and staff, site selection, construction/vendor management and ongoing operations support. We provide no financing to franchisees or offer guarantees on their behalf. | |||||||||
Regional Developer Fees. During 2011, we established a regional developer program to engage independent contractors to assist in developing specified geographical regions. Under this program, regional developers pay a license fee of 25% of the then current franchise fee for each franchise they receive the right to develop within a specified geographical region. Each regional developer agreement establishes a minimum number of franchises that the regional developer must develop. Regional developers receive 50% of franchise fees collected upon the sale of franchises within their region and a royalty of 3% of sales generated by franchised clinics in their region. Regional developer fees are non-refundable and are recognized as revenue when we have performed substantially all initial services required by the regional developer agreement, which generally is considered to be upon the opening of each franchised clinic. Upon the execution of a regional developer agreement, we estimate the number of franchised clinics to be opened, which is typically consistent with the contracted minimum. When we anticipate that the number of franchised clinics to be opened will exceed the contracted minimum, the license fee on a per-clinic basis is determined by dividing the total fee collected from the regional developer by the number of clinics expected to be opened within the region. Certain regional developer agreements provide that no additional fee is required for franchises developed by the regional developer above the contracted minimum, while other regional developer agreements require a supplemental payment. We reassess the number of clinics expected to be opened as the regional developer performs under its regional developer agreement. When a material change to the original estimate becomes apparent, the fee per clinic is revised on a prospective basis, and the unrecognized fees are allocated among, and recognized as revenue upon the opening of, the remaining unopened franchised clinics within the region. The franchisor’s services under regional developer agreements include site selection, grand opening support for two clinics, sales support for identification of qualified franchisees, general operational support and marketing support to advertise for ownership opportunities. Several of our regional developer agreements grant us the option to repurchase the regional developer’s license. | |||||||||
Royalties. We collect royalties, as stipulated in the franchise agreement, equal to 7% of gross sales, and a marketing and advertising fee currently of 1% of gross sales. Certain franchisees with franchise agreements acquired during the formation of the Company pay a monthly flat fee. Royalties are recognized as revenue when earned. Royalties are collected bi-monthly two working days after each sales period has ended. | |||||||||
IT Related Income and Software Fees. We collect a monthly computer software fee for use of our proprietary chiropractic software, computer support, and internet services support, which was made available to all clinics in April 2012. These fees are recognized on a monthly basis as services are provided. IT related revenue represents a flat fee to purchase a clinic’s computer equipment, operating software, preinstalled chiropractic system software, key card scanner (patient identification card), credit card scanner and credit card receipt printer. These fees are recognized as revenue upon receipt of equipment by the franchisee. | |||||||||
Advertising Costs | |||||||||
We incur advertising costs in addition to those included in the advertising fund. Our policy is to expense all operating advertising costs as incurred. Advertising expenses for years ended December 31, 2014 and 2013 were $145,492 and $323,219, respectively. | |||||||||
Income Taxes | |||||||||
We account for income taxes in accordance with the Accounting Standards Codification that requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate principally to depreciation of property and equipment and treatment of revenue for franchise fees and regional developer fees collected. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||
We account for uncertainty in income taxes by recognizing the tax benefit or expense from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits and expenses recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. | |||||||||
For the year ended December 31, 2014 and, 2013, we recorded a liability for income taxes for operations and uncertain tax positions of approximately $122,000 and $148,000, respectively, of which $30,000 and $33,000 respectively, represent penalties and interest and recorded in the “other liabilities” section of the accompanying consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. Our tax returns for tax years subject to examination by tax authorities include 2010 and 2011 through the current period for state and federal reporting purposes, respectively. | |||||||||
Earnings (Loss) per Common Share | |||||||||
Basic earnings (loss) per common share is computed by dividing the net earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed by giving effect to all potentially dilutive common shares including preferred stock, restricted stock, and stock options. | |||||||||
Year Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net income (loss) | $ | (3,031,220 | ) | $ | 155,635 | ||||
Weighted average common shares outstanding - basic | 5,451,851 | 5,313,665 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | - | 21,732 | |||||||
Shares issuable on conversion of preferred stock | - | 1,335,000 | |||||||
Weighted average common shares outstanding - diluted | 5,451,851 | 6,670,397 | |||||||
Basic earnings per share | $ | (0.56 | ) | $ | 0.03 | ||||
Diluted earnings per share | $ | (0.56 | ) | $ | 0.02 | ||||
The following table summarizes the potential shares of common stock that were excluded from diluted net loss per share, because the effect of including these potential shares was anti-dilutive: | |||||||||
Year Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Unvested restricted stock | 590,873 | - | |||||||
Stock options | 312,995 | - | |||||||
Warrants | 90,000 | - | |||||||
Stock-Based Compensation | |||||||||
We account for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. We determined the estimated grant-date fair value of restricted shares using quoted market prices and the grant-date fair value of stock options using the Black-Scholes option pricing model and recognize compensation costs ratably over the period of service using the straight-line method. | |||||||||
Use of Estimates | |||||||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Items subject to significant estimates and assumptions include the allowance for doubtful accounts, share-based compensation arrangements, fair value of stock options, useful lives and realizability of long-lived assets, classification of deferred revenue and deferred franchise costs and the related deferred tax assets and liabilities as long-term or current, uncertain tax positions and realizability of deferred tax assets. | |||||||||
Recent Accounting Pronouncements | |||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle, and in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. | |||||||||
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern." The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter. We are currently evaluating the impact of the adoption of ASU No. 2014-15 on our consolidated financial statements. | |||||||||
Note_2_Acquistions
Note 2 - Acquistions | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Business Combination Disclosure [Text Block] | Note 2: Acquisitions | ||||||||
Los Angeles County Acquisition of Franchise Units | |||||||||
On December 31, 2014, we acquired substantially all the assets and certain liabilities of six franchises held by The Joint RRC Corp. including four operating clinics in Los Angeles County for a purchase price of $900,000 which was paid in cash on December 31, 2014. We intend to operate four of the acquired franchises as company-owned clinics and to relocate two remaining franchises. As we acquired the clinics effective December 31, 2014, the Consolidated Statements of Comprehensive Operations do not include any post-acquisition results of operations. | |||||||||
The purchase price allocation for these acquisitions is preliminary and subject to further adjustment upon finalization of the opening balance sheet. The following summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: | |||||||||
Property and equipment | $ | 297,630 | |||||||
Intangible assets | 153,000 | ||||||||
Goodwill | 677,204 | ||||||||
Total assets acquired | 1,127,834 | ||||||||
Unfavorable leases | (227,834 | ) | |||||||
Net assets acquired | $ | 900,000 | |||||||
Intangible assets consist of reacquired franchise rights of $81,000 and customer relationships of $72,000 and will be amortized over their estimated useful lives of seven years and two years, respectively. | |||||||||
Unfavorable leases consist of leases with rents that are in excess of market value. This liability will be amortized over the lives of the associated leases. | |||||||||
Goodwill recorded in connection with this acquisition was attributable to the workforce of the clinics and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is tax-deductible. | |||||||||
The supplemental pro forma information set forth in the following table has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made on January 1, 2013, nor is it indicative of any future results. The pro forma information does not give effect to any potential revenue enhancements or operating efficiencies that could result from the acquisition. | |||||||||
Pro Forma for the Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Revenues, net | $ | 7,306,565 | $ | 5,879,654 | |||||
Net loss | $ | (3,927,259 | ) | $ | (374,932 | ) | |||
The pro forma amounts included in the table above reflect the application of our accounting policies and adjustment of the results of the clinics to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from January 1, 2013, together with the consequential tax impacts. | |||||||||
Note_3_Notes_Receivable
Note 3 - Notes Receivable | 12 Months Ended |
Dec. 31, 2014 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 3: Notes Receivable |
Effective July 2012, we sold the assets of our company-owned clinic, including the equipment and customer base, in exchange for a $90,000 promissory note. The note bears interest at 6% per annum for fifty-four months and requires monthly principal and interest payments over forty-two months, beginning August 2013 and maturing January 2017. The outstanding balance on the note as of December 31, 2014 and 2013 was $59,269 and $85,198, respectively and is uncollateralized. | |
Note Receivable — Related Party | |
Effective October 2012, a stockholder and former director of the Company transferred ownership in his clinic to a third party. In connection with this transaction we assessed a contractual transfer fee of $21,750 and accepted the promissory note as payment. The note has not been formalized with terms, including interest rate or payment schedules and, accordingly, is presented as a long-term note receivable in the accompanying consolidated balance sheets. Due to the uncertainty surrounding the collectability of the note, we reserved the note in full as of December 31, 2014. | |
Note_4_Property_and_Equipment
Note 4 - Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment Disclosure [Text Block] | Note 4: Property and Equipment | ||||||||
Property and equipment consist of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Office and computer equipment | $ | 209,575 | $ | 28,817 | |||||
Leasehold improvements | 665,961 | - | |||||||
Software developed | 564,560 | 379,415 | |||||||
1,440,096 | 408,232 | ||||||||
Accumulated depreciation and amortization | (305,644 | ) | (117,047 | ) | |||||
1,134,452 | 291,185 | ||||||||
Assets in progress | - | 109,082 | |||||||
$ | 1,134,452 | $ | 400,267 | ||||||
Depreciation and amortization expense was $210,123 and $70,725 for the years ended December 31, 2014 and 2013, respectively. | |||||||||
As of December 31, 2013, assets in progress include costs for signage, furniture and equipment related to our office relocation as well as software under development. These costs were transferred to the appropriate property and equipment category and commenced depreciation when the assets became ready for their intended use. | |||||||||
Note_5_Fair_Value_Consideratio
Note 5 - Fair Value Consideration | 12 Months Ended | ||
Dec. 31, 2014 | |||
Fair Value Disclosures [Abstract] | |||
Fair Value Disclosures [Text Block] | Note 5: Fair Value Consideration | ||
Our financial instruments include cash, restricted cash, accounts receivable, notes receivable, accounts payable and accrued expenses. The carrying amounts of our financial instruments approximate their fair value due to their short maturities. | |||
We do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. | |||
Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect our assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on reliability of the inputs as follows: | |||
Level 1: | Observable inputs such as quoted prices in active markets; | ||
Level 2: | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | ||
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||
As of December 31, 2014 and 2013, we do not have any financial instruments that are measured on a recurring basis as Level 1, 2 or 3. | |||
Note_6_Intangibles
Note 6 - Intangibles | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Disclosure Text Block [Abstract] | |||||
Intangible Assets Disclosure [Text Block] | Note 6: Intangibles | ||||
Intangible assets consisted of the following: | |||||
31-Dec-14 | |||||
Reacquired franchise rights | $ | 81,000 | |||
Customer relationships | 72,000 | ||||
Total intangible assets | $ | 153,000 | |||
All intangible assets relate to the acquisition that occurred on December 31, 2014 and, accordingly, there is no amortization expense for the year ended December 31, 2014. | |||||
Estimated amortization expense for 2015 and subsequent years is as follows: | |||||
2015 | $ | 47,571 | |||
2016 | 47,571 | ||||
2017 | 11,571 | ||||
2018 | 11,571 | ||||
2019 | 11,571 | ||||
Thereafter | 23,143 | ||||
Total | $ | 153,000 | |||
Note_7_Income_Taxes
Note 7 - Income Taxes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||
Income Tax Disclosure [Text Block] | Note 7: Income Taxes | ||||||||||||||||
Income tax provision reported in the consolidated statements of operations is comprised of the following: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Current provision: | |||||||||||||||||
Federal | $ | (388,864 | ) | $ | 583,558 | ||||||||||||
State, net of state tax credits | (28,800 | ) | 220,896 | ||||||||||||||
(417,664 | ) | 804,454 | |||||||||||||||
Deferred provision: | |||||||||||||||||
Federal | 1,403,100 | (482,350 | ) | ||||||||||||||
State | 355,000 | (69,950 | ) | ||||||||||||||
1,758,100 | (552,300 | ) | |||||||||||||||
Total income tax provision | $ | 1,340,436 | $ | 252,154 | |||||||||||||
The following are the components of our net deferred taxes for federal and state income taxes: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Current deferred tax asset: | |||||||||||||||||
Deferred revenue | $ | 776,100 | $ | 1,064,000 | |||||||||||||
Deferred franchise costs | (253,900 | ) | (362,800 | ) | |||||||||||||
Allowance for doubtful accounts | 30,800 | - | |||||||||||||||
Accrued expenses | 197,300 | - | |||||||||||||||
Restricted stock compensation | (60,700 | ) | - | ||||||||||||||
Deferred rent | 35,500 | - | |||||||||||||||
Charitable contribution carryover | 400 | - | |||||||||||||||
725,500 | 701,200 | ||||||||||||||||
Less valuation allowance | (516,700 | ) | - | ||||||||||||||
Net current deferred tax asset | $ | 208,800 | $ | 701,200 | |||||||||||||
Non-current deferred tax asset: | |||||||||||||||||
Deferred revenue | $ | 2,223,200 | $ | 1,825,700 | |||||||||||||
Deferred franchise costs | (679,000 | ) | (469,100 | ) | |||||||||||||
Restricted stock compensation | (170,600 | ) | - | ||||||||||||||
Deferred rent | 171,500 | - | |||||||||||||||
Net operating loss carryforwards | 38,200 | - | |||||||||||||||
Asset basis difference related to property and equipment | (45,400 | ) | (90,900 | ) | |||||||||||||
1,537,900 | 1,265,700 | ||||||||||||||||
Less valuation allowance | (1,537,900 | ) | - | ||||||||||||||
Net non-current deferred tax asset | $ | - | $ | 1,265,700 | |||||||||||||
At December 31, 2014, we had state net operating losses of approximately $965,000. These net operating losses are available to offset future taxable income and will begin to expire in 2019. | |||||||||||||||||
The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net income (loss), compared to the income tax provision in the consolidated statement of operations: | |||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||
Expected federal tax expense | $ | (574,900 | ) | (34.0 | )% | $ | 138,633 | 34 | % | ||||||||
State tax provision, net of federal benefit | (72,500 | ) | (4.3 | ) | 18,774 | 4.6 | |||||||||||
Effect of increase in valuation allowance | 2,054,600 | 121.5 | - | - | |||||||||||||
Non-deductible expenses | 23,900 | 1.4 | 19,831 | 4.9 | |||||||||||||
Uncertain tax positions | (20,900 | ) | (1.2 | ) | 85,157 | 20.9 | |||||||||||
Effect of reduced state rates for deferred | 33,000 | 2 | - | - | |||||||||||||
Other, net | (102,764 | ) | (6.0 | ) | (10,241 | ) | (2.5 | ) | |||||||||
$ | 1,340,436 | 79.3 | % | $ | 252,154 | 61.8 | % | ||||||||||
Our state tax expense, penalties and interest stem from uncertain tax positions related to unresolved state apportionment of taxable income. | |||||||||||||||||
Changes in our income tax expense related primarily to changes in pretax income during the year ended December 31, 2014, as compared to year ended December 31, 2013, and changes in the effective rate from 79.3% to 61.8%, respectively. The difference is due to a valuation allowance on our deferred tax assets, uncertain tax positions that were recorded during the prior period, the reduction in the state income tax rate, and the impact of certain permanent differences on taxable income. | |||||||||||||||||
For the year ended December 31, 2014 and, 2013, we recorded a liability for income taxes for operations and uncertain tax positions of approximately $122,000 and $148,000, respectively, of which $30,000 and $33,000 respectively, represent penalties and interest and recorded in the “other liabilities” section of the accompanying consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. Our tax returns for tax years subject to examination by tax authorities include 2010 and 2011 through the current period for state and federal reporting purposes, respectively. | |||||||||||||||||
The following table sets forth a reconciliation of the beginning and ending amount of uncertain tax benefits during the tax years ended December 31, 2014 and 2013: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Uncertain tax benefit - January 1 | $ | 114,500 | $ | 29,500 | |||||||||||||
Gross decreases - tax positions in prior period | (22,800 | ) | - | ||||||||||||||
Gross increases - tax positions in current period | - | 85,000 | |||||||||||||||
Uncertain tax benefit - December 31 | $ | 91,700 | $ | 114,500 | |||||||||||||
Note_8_Commitments_and_Conting
Note 8 - Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies Disclosure [Text Block] | Note 8: Commitments and Contingencies | ||||
Operating Leases | |||||
We lease our corporate office space. Monthly payments under the lease were approximately $10,500 through June 2012 and approximately $6,700 through December 2013. The lease expired on December 31, 2013. On September 17, 2013, we entered into a new lease for corporate office space, with 66 monthly payments increasing from $10,500 to $22,000, beginning February 3, 2014, the date we took occupancy of the new office space. On December 31, 2014 we acquired four additional leases for clinic locations. These leases vary in length from 30 to 40 months and have monthly payments ranging from $2,609 to $5,909. | |||||
Total rent expense for the year ended December 31, 2014 and 2013 was $135,000 and $124,000, respectively. | |||||
Future minimum annual lease payments are approximately as follows: | |||||
2015 | $ | 444,746 | |||
2016 | 465,404 | ||||
2017 | 440,212 | ||||
2018 | 293,812 | ||||
2019 | 154,055 | ||||
Thereafter | - | ||||
$ | 1,798,229 | ||||
Litigation | |||||
In the normal course of business, we are party to litigation from time to time. We maintain insurance to cover certain actions and believe that resolution of such litigation will not have a material adverse effect on the Company. | |||||
Note_9_Related_Party_Transacti
Note 9 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 9: Related Party Transactions |
We entered into consulting and legal agreements with certain common stockholders related to services performed for the development and ongoing support of the Company. Amounts incurred under these agreements were approximately $923,000 and $700,000 for the years ended December 31, 2014 and 2013, respectively. As of December 31, 2014 approximately $282,000 was recorded in accounts payable. | |
Note_10_Equity
Note 10 - Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | Note 10: Equity | ||||||||||||||||
Initial Public Offering | |||||||||||||||||
We completed our initial public offering of 3,000,000 shares of common stock at a price to the public of $6.50 per share on November 14, 2014, whereupon we received aggregate net proceeds of approximately $17,065,000 after deducting underwriting discounts, commissions and other offering expenses. Our underwriters exercised their option to purchase 450,000 additional shares of common stock to cover over-allotments on November 18, 2014, pursuant to which we received aggregate net proceeds of approximately $2,710,000, after deducting underwriting discounts, commissions and expenses. Also, in conjunction with the IPO, we issued warrants to the underwriters for the purchase of 90,000 shares of common stock, which can be exercised between November 10, 2015 and November 10, 2018 at an exercise price of $8.125 per share. | |||||||||||||||||
Stock Options | |||||||||||||||||
In November 2012, we adopted the 2012 Stock Plan (“2012 Plan”). The Plan’s purpose is to attract and retain the best available personnel for positions of substantial responsibility, provide incentives and additional ownership opportunities for employees, directors, and consultants, and generally promote the success of our business. The Plan permits us to grant incentive stock options, non-statutory stock options, restricted stock, stock appreciation rights, performance units and performance shares to employees, directors, and consultants for a period of ten years. | |||||||||||||||||
On May 15, 2014, we adopted the 2014 Stock Plan (“2014 Plan”). The 2014 Plan is designed to supersede and replace the 2012 Plan, effective as of the adoption date and set aside 1,513,000 shares of our common stock that may be granted under the 2014 Plan. | |||||||||||||||||
On January 1, 2014, we granted stock options to employees to purchase 198,915 shares of the Company. These options vest over a period of four years from grant date with the exception of 100,125 options that were contingent on the initial public offering that took place on November 14, 2014. These options vest in 12 monthly installments of 4,171 shares the first year, 12 monthly installments of 2,503 shares the second year, and 12 monthly installments of 1,670 shares the third year. | |||||||||||||||||
On May 15, 2014, we granted stock options to an employee to purchase 72,100 shares of the Company. These options vest over 16 quarterly installments of 4,450 shares, beginning September 30, 2014. | |||||||||||||||||
On November 10, 2014, in conjunction with the initial public offering, 50,000 additional stock options were granted that vest one year after the grant date. | |||||||||||||||||
The estimated fair value of each option granted is calculated using the Black-Scholes option-pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding the components of the model, including the estimated fair value of underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. | |||||||||||||||||
The fair value of our common stock prior to our IPO was estimated by the Board of Directors at or about the time of grant for each share-based award. At each grant, the board considered a number of factors in establishing a value for our common stock including our EBITDA, assessments of an amount our shareholders would accept in the private sale of the company, discussions with our investment bankers regarding pricing of the company’s common stock in an initial public offering and the probability of successfully completing an IPO. Although the methods for determining the fair value of our common stock are not complex, the board’s estimate of the fair value of our common stock did involve subjectivity, especially assessments of value in a private sale and estimates of value in the public stock market. | |||||||||||||||||
Since our stock was not publicly traded, expected volatilities were based on volatilities from publicly traded companies with business models similar to ours. Upon the completion of our IPO, our stock trading price became the basis of fair value of our common stock used in determining the value of share based awards. We will rely upon the volatilities from publicly traded companies with similar business models until our common stock has accumulated enough trading history for us to utilize our own historical volatility. The expected life of the options granted is based on the average of the vesting term and the contractual term of the option. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury 10-year yield curve in effect at the date of the grant. | |||||||||||||||||
We have computed the fair value of all options granted during the year ended December 31, 2014, using the following assumptions: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 43% | - | 46% | - | |||||||||||||
Expected dividends | None | - | |||||||||||||||
Expected term (years) | 5.5 | - | 7.5 | - | |||||||||||||
Risk-free rate | 0.07% | - | 2.05% | - | |||||||||||||
Forfeiture rate | 20% | - | |||||||||||||||
The information below summarizes the stock options: | |||||||||||||||||
Number of | Weighted | Weighted | Weighted | ||||||||||||||
Shares | Average | Average | Average | ||||||||||||||
Exercise | Fair | Remaining | |||||||||||||||
Price | Value | Contractual Life | |||||||||||||||
Outstanding at December 31, 2013 | - | $ | - | $ | - | ||||||||||||
Granted at market price | 320,115 | 2.04 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Cancelled | (7,120 | ) | 1.2 | ||||||||||||||
Outstanding at December 31, 2014 | 312,995 | 2.04 | 0.92 | 9.2 | |||||||||||||
Exercisable at December 31, 2014 | 13,072 | $ | 1.2 | $ | 0.57 | 9.3 | |||||||||||
The intrinsic value of our stock options outstanding was $1,357,201 at December 31, 2014. | |||||||||||||||||
For the years ended December 31, 2014 and 2013, stock based compensation expense for stock options was $32,105, and $0, respectively. Unrecognized stock-based compensation expense for stock options for the year ended December 31, 2014 was $201,909, which is expected to be recognized ratably over the next 2.0 years. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
On January 1, 2014, we granted restricted stock awards to an executive and a consultant to earn an aggregate of 567,375 shares of our stock. The restricted stock was granted in two tranches. The first tranche vests over a period of four years from the grant date. The second tranche began vesting upon completion of our initial public offering on November 14, 2014 over a three year period. The fair market value of the 567,375 shares of restricted stock was valued at $1.20 per share, determined by our Board of Directors, totaling approximately $679,000 to be recognized ratably as the stock is vested. | |||||||||||||||||
On December 16, 2014, we granted restricted stock to an executive to earn 95,000 shares of our common stock. These shares vest over a four year period from the grant date. The estimated fair market value of these shares was valued at $6.20 per share, based on our stock trading price, totaling approximately $589,000 to be recognized ratably as the stock is vested. | |||||||||||||||||
The information below summaries the restricted stock activity: | |||||||||||||||||
Restricted Share Awards | Shares | ||||||||||||||||
Outstanding at December 31, 2013 | - | ||||||||||||||||
Restricted stock awards granted | 662,375 | ||||||||||||||||
Awards forfeited or exercised | - | ||||||||||||||||
Outstanding at December 31, 2014 | 662,375 | ||||||||||||||||
Remaining available to be issued | 42,950 | ||||||||||||||||
For the years ended December 31, 2014 and 2013, stock based compensation expense for restricted stock awards was $69,725, and $0, respectively. Unrecognized stock based compensation expense for restricted stock awards as of December 31, 2014 was $1,198,212 to be recognized ratably over 3.4 years. | |||||||||||||||||
Warrants | |||||||||||||||||
In conjunction with the IPO, we issued warrants to the underwriters for the purchase of 90,000 shares of common stock, which can be exercised between November 10, 2015 and November 10, 2018 at an exercise price of $8.125 per share. For the year ended December 31, 2014, a net expense of $113,929 was recorded against proceeds under additional paid in capital, associated with these awards. The fair value of the warrants was determined using the Black-Scholes option valuation model. The warrants expire on November 10, 2018 and have a remaining contractual life of 3.9 years as of December 31, 2014. | |||||||||||||||||
We have computed the fair value of all warrants granted during the year ended December 31, 2014, using the following assumptions: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Volatility | 33% | - | |||||||||||||||
Risk-free interest rate | 0.78% | - | |||||||||||||||
Expected term (years) | 4 | - | |||||||||||||||
The information below summarizes the warrants: | |||||||||||||||||
Number of Units | Weighted | Weighted Average Remaining Contractual Term | Intrinsic Value | ||||||||||||||
Average | (in years) | ||||||||||||||||
Exercise Price | |||||||||||||||||
Outstanding at December 31, 2013 | - | $ | - | ||||||||||||||
Granted | 90,000 | 8.13 | |||||||||||||||
Outstanding at December 31, 2014 | 90,000 | $ | 8.13 | 3.9 | $ | - | |||||||||||
Exercisable at December 31, 2014 | - | $ | - | - | $ | - | |||||||||||
Preferred Stock | |||||||||||||||||
We have 50,000 shares authorized as preferred stock. The preferred stock is senior to common stock and each share has the same voting rights as the common stockholders. The liquidation preference is equal to the stated value of the stock plus any dividends declared but unpaid at the time of a liquidation event. The preferred shares are convertible to common stock at the option of the holder at a rate of one share of preferred stock for 53.4 shares of common stock. On November 14, 2014, the holders of our preferred stock converted all 25,000 outstanding shares of preferred stock to 1,335,000 shares of common stock. | |||||||||||||||||
Common Stock | |||||||||||||||||
On November 26, 2012, the Board declared a dividend of 29 shares of our common stock on each share of common stock outstanding as of December 1, 2012. The stock dividend was effective and payable automatically as of the effective date of the Certificate of Amendment to our Certificate of Incorporation which was January 9, 2013. The stock dividend has been accounted for as a stock split and retroactively reflected in these consolidated financial statements. On September 16, 2014, the Board declared a second stock dividend of .78 shares of common stock for each share of common stock outstanding as of September 15, 2014. The second stock dividend was effective and payable automatically as of the effective date of the Company’s Amended and Restated Certificate of Incorporation, which was September 17, 2014. This stock dividend has been accounted for as a stock split and retroactively reflected in these consolidated financial statements. | |||||||||||||||||
On January 9, 2013, a Certificate of Amendment of Certificate of Incorporation was filed with the Delaware Secretary of State. This amendment authorized us to increase the number of common stock shares from 150,000 to 4,000,000. A subsequent Certificate of Amendment of Certificate of Incorporation was filed on December 24, 2013, authorizing us to increase the number of common stock shares to 4,250,000. An Amended and Restated Certificate of Incorporation was filed on September 17, 2014, authorizing us to increase the number of common stock shares to 20,000,000. | |||||||||||||||||
Treasury Stock | |||||||||||||||||
In December 2013, we exercised our right of first refusal under the terms of a Stockholders Agreement dated March 10, 2010 to repurchase 534,000 shares of our common stock. The shares were purchased for $0.45 per share or $240,000 in cash along with the issuance of an option to repurchase the 534,000 shares. We had the right to call the option upon a 15% change in ownership. The repurchased shares were recorded as treasury stock, at cost in the amount of $791,638, and are available for general corporate purposes. The option is classified in equity as it is considered indexed to our stock and meets the criteria for classification in equity. The option was granted to the seller for a term of 8 years. The option contained the following exercise prices: | |||||||||||||||||
Year 1 | $ | 0.56 | |||||||||||||||
Year 2 | $ | 0.68 | |||||||||||||||
Year 3 | $ | 0.84 | |||||||||||||||
Year 4 | $ | 1.03 | |||||||||||||||
Year 5 | $ | 1.28 | |||||||||||||||
Year 6 | $ | 1.59 | |||||||||||||||
Year 7 | $ | 1.97 | |||||||||||||||
Year 8 | $ | 2.45 | |||||||||||||||
Consideration given in the form of the option was valued using a Binomial Lattice-Based model resulting in a fair value of $1.03 per share option for a total fair value of $551,638. The option was valued using the Binomial Lattice-Based valuation methodology because that model embodies all of the relevant assumptions that address the features underlying the instrument. Significant assumptions were as follows: | |||||||||||||||||
Market value of underlying common stock | $1.20 | ||||||||||||||||
Term (years) | 1 | – | 8 | ||||||||||||||
Strike price | $0.56 | – | $2.45 | ||||||||||||||
Volatility | 27.03% | – | 45.64% | ||||||||||||||
Risk-free interest | 0.13% | – | 2.45% | ||||||||||||||
Note_11_Subsequent_Events
Note 11 - Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 11: Subsequent Events |
On January 1, 2015, we completed our reacquisition and termination of our regional developer rights for the Los Angeles County, California region in exchange for cash consideration of $507,500. This payment was made in advance and is reflected as part of other assets in our accompanying consolidated balance sheet at December 31, 2014. | |
On January 30, 2015, we entered into an agreement to repurchase four developed franchises and one undeveloped franchise from a franchisee. The total consideration for this transaction was approximately $750,000, subject to certain adjustments, which was funded from the proceeds of our recent initial public offering and was completed on March 3, 2015. We intend to continue to operate two of the clinics opened under the developed franchises as company-owned clinics. The franchisee closed the two clinics operated under the remaining developed franchises. We have terminated the undeveloped franchise and may relocate it. | |
On February 17, 2015, we entered into an agreement to repurchase two operating franchises from a franchisee and the equipment, leasehold improvements, inventory, supplies and other assets used in the operation of the repurchased franchises. The total consideration for this transaction was $935,000, subject to certain adjustments, which was funded from the proceeds of our recent initial public offering. We intend to operate the two franchises as company-owned clinics. | |
On March 6, 2015, we entered into an agreement for and completed its repurchase of nine franchises from a franchisee. The transaction involved the repurchase of two developed franchises and seven undeveloped franchises. We intend to operate the clinics opened under the two developed franchises as company-owned clinics and to terminate, re-locate or re-sell the seven undeveloped franchises. The total consideration for this transaction was approximately $300,000, subject to adjustment for certain adjustments and was funded from the proceeds of our recent initial public offering. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Consolidation, Policy [Policy Text Block] | Principles of Consolidation | ||||||||
The accompanying consolidated financial statements include the accounts of The Joint Corp. and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC (collectively, the “Company”). | |||||||||
All significant intercompany accounts and transactions between The Joint Corp. and its subsidiary have been eliminated in consolidation. | |||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents | ||||||||
We consider all highly liquid instruments purchased with an original maturity of three months or less to be cash. We continually monitor our positions with, and credit quality of, the financial institutions with which we invest. As of the balance sheet date and periodically throughout the year, we have maintained balances in various operating accounts in excess of federally insured limits. We have invested substantially all of the proceeds of our IPO in short-term bank deposits. We had no cash equivalents as of December 31, 2014 and 2013. | |||||||||
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash | ||||||||
Restricted cash held by the Company relates to cash franchisees are required to contribute to our National Marketing Fund and cash franchisees provide to various voluntary regional Co-Op Marketing Funds. Cash contributed to the National Marketing Fund is to be used in accordance with the Franchise Disclosure Document with a focus on regional and national marketing and advertising. | |||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk | ||||||||
In certain circumstances, we grant credit to franchisees related to the collection of initial franchise fees, royalties, and other operating revenues. We periodically perform credit analysis and monitor the financial condition of the franchisees to reduce credit risk. As of December 31, 2014 and 2013, six and two franchisees, respectfully, represented 56% and 54% of outstanding accounts receivable. We did not have any franchisees that represented greater than 10% of our revenues during the years ended December 31, 2014 and 2013. | |||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable | ||||||||
Accounts receivable represent amounts due from franchisees for initial franchise fees, royalty fees and marketing and advertising expenses. We consider a reserve for doubtful accounts based on the creditworthiness of the franchisee. The provision for uncollectible amounts is continually reviewed and adjusted to maintain the allowance at a level considered adequate to cover future losses. The allowance is management’s best estimate of uncollectible amounts and is determined based on specific identification and historical performance we track on an ongoing basis. The losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. We determined that an allowance for doubtful accounts was not necessary at December 31, 2013. As of December 31, 2014, we had an allowance for doubtful accounts of $81,032. | |||||||||
Revenue Recognition, Services, Commissions [Policy Text Block] | Deferred Franchise Costs | ||||||||
Deferred franchise costs represent commissions that are paid in conjunction with the sale of a franchise and are expensed when the respective revenue is recognized, which is generally upon the opening of a clinic. | |||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment | ||||||||
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the assets. | |||||||||
Maintenance and repairs are charged to expense as incurred; major renewals and improvements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in other income. | |||||||||
Internal Use Software, Policy [Policy Text Block] | Software Developed | ||||||||
We capitalize most software development costs. These capitalized costs are primarily related to proprietary software used by clinics for operations and the Company for management of operations. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized as assets in progress until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Software developed is recorded as part of property and equipment. Maintenance and training costs are expensed as incurred. Internal use software is amortized on a straight line basis over its estimated useful life, generally 5 years. | |||||||||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets | ||||||||
Intangible assets consist primarily of re-acquired franchise rights, and customer relationships. We amortize the fair value of re-acquired franchise rights over the remaining contractual terms of the re-acquired franchise rights at the time of the acquisition, which was 7 years. The fair value of customer relationships is amortized over their estimated useful life of 2 years. | |||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill | ||||||||
As of December 31, 2014, we had recorded goodwill of $677,204. Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in the acquisition of six franchises on December 31, 2014 (See Note 2). Under FASB ASC 350-10, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests, and tests between annual tests in certain circumstances, based on estimated fair value in accordance with FASB ASC 350-10, and written down when impaired. | |||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | 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 undiscounted future cash flows in our assessment of whether or not long-lived assets have been impaired. No impairments of long-lived assets were recorded for the years ended December 31, 2014 and 2013. | |||||||||
Advertising Fund [Policy] | Advertising Fund | ||||||||
We have established an advertising fund for national/regional marketing and advertising of services offered by the clinics owned by the franchisees. As stipulated in the typical franchise agreement, a franchisee, in addition to the monthly royalty fee, pays a monthly marketing fee of 1% of gross sales, which increased at our discretion to 2% in January 2015. We segregate the marketing funds collected and use the funds for specific purposes as outlined in the Franchise Disclosure Document. These funds are included in restricted cash on our consolidated balance sheet. As amounts are expended from the fund, we recognize advertising fund revenue and a related expense. Amounts collected in excess of marketing expenditures are included in restricted cash on our consolidated balance sheets. | |||||||||
Cooperative Advertising Policy [Policy Text Block] | Co-Op Marketing Funds | ||||||||
Some franchises have established regional Co-Ops for advertising within their local and regional markets. We maintain an agency relationship under which the marketing funds collected are segregated and used for the purposes specified by the Co-Ops officers. The marketing funds are included in restricted cash on our consolidated balance sheets. | |||||||||
Lease, Policy [Policy Text Block] | Deferred Rent | ||||||||
The Company leases its office space and company-owned clinics under operating leases, which may include rent holidays and rent escalation clauses. The Company recognizes rent holiday periods and scheduled rent increases on a straight-line basis over the term of the lease. The Company records tenant improvement allowances as deferred rent liabilities and amortizes the allowance over the term of the lease, as a reduction to rent expense. | |||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition | ||||||||
We generate revenue through initial franchise fees, regional developer fees, transfer fees, royalties, IT related income, and computer software fees. | |||||||||
Revenue Recognition, Services, Franchise Fees [Policy Text Block] | Initial Franchise Fees. We require the entire non-refundable initial franchise fee to be paid upon execution of a franchise agreement, which has an initial term of ten years. Initial franchise fees are recognized as revenue when we have substantially completed our initial services under the franchise agreement, which typically occurs upon opening of the clinic. Our services under the franchise agreement include: training of franchisee and staff, site selection, construction/vendor management and ongoing operations support. We provide no financing to franchisees or offer guarantees on their behalf. | ||||||||
Regional Developer Fees Policy [Policy Text Block] | Regional Developer Fees. During 2011, we established a regional developer program to engage independent contractors to assist in developing specified geographical regions. Under this program, regional developers pay a license fee of 25% of the then current franchise fee for each franchise they receive the right to develop within a specified geographical region. Each regional developer agreement establishes a minimum number of franchises that the regional developer must develop. Regional developers receive 50% of franchise fees collected upon the sale of franchises within their region and a royalty of 3% of sales generated by franchised clinics in their region. Regional developer fees are non-refundable and are recognized as revenue when we have performed substantially all initial services required by the regional developer agreement, which generally is considered to be upon the opening of each franchised clinic. Upon the execution of a regional developer agreement, we estimate the number of franchised clinics to be opened, which is typically consistent with the contracted minimum. When we anticipate that the number of franchised clinics to be opened will exceed the contracted minimum, the license fee on a per-clinic basis is determined by dividing the total fee collected from the regional developer by the number of clinics expected to be opened within the region. Certain regional developer agreements provide that no additional fee is required for franchises developed by the regional developer above the contracted minimum, while other regional developer agreements require a supplemental payment. We reassess the number of clinics expected to be opened as the regional developer performs under its regional developer agreement. When a material change to the original estimate becomes apparent, the fee per clinic is revised on a prospective basis, and the unrecognized fees are allocated among, and recognized as revenue upon the opening of, the remaining unopened franchised clinics within the region. The franchisor’s services under regional developer agreements include site selection, grand opening support for two clinics, sales support for identification of qualified franchisees, general operational support and marketing support to advertise for ownership opportunities. Several of our regional developer agreements grant us the option to repurchase the regional developer’s license. | ||||||||
Royalties Policy [Policy Text Block] | Royalties. We collect royalties, as stipulated in the franchise agreement, equal to 7% of gross sales, and a marketing and advertising fee currently of 1% of gross sales. Certain franchisees with franchise agreements acquired during the formation of the Company pay a monthly flat fee. Royalties are recognized as revenue when earned. Royalties are collected bi-monthly two working days after each sales period has ended. | ||||||||
IT Related Income and Software Fees Policy [Policy Text Block] | IT Related Income and Software Fees. We collect a monthly computer software fee for use of our proprietary chiropractic software, computer support, and internet services support, which was made available to all clinics in April 2012. These fees are recognized on a monthly basis as services are provided. IT related revenue represents a flat fee to purchase a clinic’s computer equipment, operating software, preinstalled chiropractic system software, key card scanner (patient identification card), credit card scanner and credit card receipt printer. These fees are recognized as revenue upon receipt of equipment by the franchisee. | ||||||||
Advertising Costs, Policy [Policy Text Block] | Advertising Costs | ||||||||
We incur advertising costs in addition to those included in the advertising fund. Our policy is to expense all operating advertising costs as incurred. Advertising expenses for years ended December 31, 2014 and 2013 were $145,492 and $323,219, respectively. | |||||||||
Income Tax, Policy [Policy Text Block] | Income Taxes | ||||||||
We account for income taxes in accordance with the Accounting Standards Codification that requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate principally to depreciation of property and equipment and treatment of revenue for franchise fees and regional developer fees collected. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||
We account for uncertainty in income taxes by recognizing the tax benefit or expense from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits and expenses recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. | |||||||||
For the year ended December 31, 2014 and, 2013, we recorded a liability for income taxes for operations and uncertain tax positions of approximately $122,000 and $148,000, respectively, of which $30,000 and $33,000 respectively, represent penalties and interest and recorded in the “other liabilities” section of the accompanying consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. Our tax returns for tax years subject to examination by tax authorities include 2010 and 2011 through the current period for state and federal reporting purposes, respectively. | |||||||||
Earnings Per Share, Policy [Policy Text Block] | Earnings (Loss) per Common Share | ||||||||
Basic earnings (loss) per common share is computed by dividing the net earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed by giving effect to all potentially dilutive common shares including preferred stock, restricted stock, and stock options. | |||||||||
Year Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net income (loss) | $ | (3,031,220 | ) | $ | 155,635 | ||||
Weighted average common shares outstanding - basic | 5,451,851 | 5,313,665 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | - | 21,732 | |||||||
Shares issuable on conversion of preferred stock | - | 1,335,000 | |||||||
Weighted average common shares outstanding - diluted | 5,451,851 | 6,670,397 | |||||||
Basic earnings per share | $ | (0.56 | ) | $ | 0.03 | ||||
Diluted earnings per share | $ | (0.56 | ) | $ | 0.02 | ||||
The following table summarizes the potential shares of common stock that were excluded from diluted net loss per share, because the effect of including these potential shares was anti-dilutive: | |||||||||
Year Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Unvested restricted stock | 590,873 | - | |||||||
Stock options | 312,995 | - | |||||||
Warrants | 90,000 | - | |||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation | ||||||||
We account for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. We determined the estimated grant-date fair value of restricted shares using quoted market prices and the grant-date fair value of stock options using the Black-Scholes option pricing model and recognize compensation costs ratably over the period of service using the straight-line method. | |||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates | ||||||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Items subject to significant estimates and assumptions include the allowance for doubtful accounts, share-based compensation arrangements, fair value of stock options, useful lives and realizability of long-lived assets, classification of deferred revenue and deferred franchise costs and the related deferred tax assets and liabilities as long-term or current, uncertain tax positions and realizability of deferred tax assets. | |||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements | ||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle, and in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. | |||||||||
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern." The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter. We are currently evaluating the impact of the adoption of ASU No. 2014-15 on our consolidated financial statements. |
Note_1_Nature_of_Operations_an1
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Franchisor Disclosure [Table Text Block] | Year Ended | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Clinics open at beginning of period | 175 | 82 | |||||||
Clinics opened during the period | 73 | 93 | |||||||
Clinics closed during the period | (2 | ) | - | ||||||
Clinics in operation at the end of the period | 246 | 175 | |||||||
Clinics sold but not yet operational | 268 | 223 | |||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Year Ended | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net income (loss) | $ | (3,031,220 | ) | $ | 155,635 | ||||
Weighted average common shares outstanding - basic | 5,451,851 | 5,313,665 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | - | 21,732 | |||||||
Shares issuable on conversion of preferred stock | - | 1,335,000 | |||||||
Weighted average common shares outstanding - diluted | 5,451,851 | 6,670,397 | |||||||
Basic earnings per share | $ | (0.56 | ) | $ | 0.03 | ||||
Diluted earnings per share | $ | (0.56 | ) | $ | 0.02 | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Year Ended | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Unvested restricted stock | 590,873 | - | |||||||
Stock options | 312,995 | - | |||||||
Warrants | 90,000 | - |
Note_2_Acquistions_Tables
Note 2 - Acquistions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Property and equipment | $ | 297,630 | ||||||
Intangible assets | 153,000 | ||||||||
Goodwill | 677,204 | ||||||||
Total assets acquired | 1,127,834 | ||||||||
Unfavorable leases | (227,834 | ) | |||||||
Net assets acquired | $ | 900,000 | |||||||
Business Acquisition, Pro Forma Information [Table Text Block] | Pro Forma for the Year Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Revenues, net | $ | 7,306,565 | $ | 5,879,654 | |||||
Net loss | $ | (3,927,259 | ) | $ | (374,932 | ) |
Note_4_Property_and_Equipment_
Note 4 - Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Office and computer equipment | $ | 209,575 | $ | 28,817 | |||||
Leasehold improvements | 665,961 | - | |||||||
Software developed | 564,560 | 379,415 | |||||||
1,440,096 | 408,232 | ||||||||
Accumulated depreciation and amortization | (305,644 | ) | (117,047 | ) | |||||
1,134,452 | 291,185 | ||||||||
Assets in progress | - | 109,082 | |||||||
$ | 1,134,452 | $ | 400,267 |
Note_6_Intangibles_Tables
Note 6 - Intangibles (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Disclosure Text Block [Abstract] | |||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | 31-Dec-14 | ||||
Reacquired franchise rights | $ | 81,000 | |||
Customer relationships | 72,000 | ||||
Total intangible assets | $ | 153,000 | |||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2015 | $ | 47,571 | ||
2016 | 47,571 | ||||
2017 | 11,571 | ||||
2018 | 11,571 | ||||
2019 | 11,571 | ||||
Thereafter | 23,143 | ||||
Total | $ | 153,000 |
Note_7_Income_Taxes_Tables
Note 7 - Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Current provision: | |||||||||||||||||
Federal | $ | (388,864 | ) | $ | 583,558 | ||||||||||||
State, net of state tax credits | (28,800 | ) | 220,896 | ||||||||||||||
(417,664 | ) | 804,454 | |||||||||||||||
Deferred provision: | |||||||||||||||||
Federal | 1,403,100 | (482,350 | ) | ||||||||||||||
State | 355,000 | (69,950 | ) | ||||||||||||||
1,758,100 | (552,300 | ) | |||||||||||||||
Total income tax provision | $ | 1,340,436 | $ | 252,154 | |||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Current deferred tax asset: | |||||||||||||||||
Deferred revenue | $ | 776,100 | $ | 1,064,000 | |||||||||||||
Deferred franchise costs | (253,900 | ) | (362,800 | ) | |||||||||||||
Allowance for doubtful accounts | 30,800 | - | |||||||||||||||
Accrued expenses | 197,300 | - | |||||||||||||||
Restricted stock compensation | (60,700 | ) | - | ||||||||||||||
Deferred rent | 35,500 | - | |||||||||||||||
Charitable contribution carryover | 400 | - | |||||||||||||||
725,500 | 701,200 | ||||||||||||||||
Less valuation allowance | (516,700 | ) | - | ||||||||||||||
Net current deferred tax asset | $ | 208,800 | $ | 701,200 | |||||||||||||
Non-current deferred tax asset: | |||||||||||||||||
Deferred revenue | $ | 2,223,200 | $ | 1,825,700 | |||||||||||||
Deferred franchise costs | (679,000 | ) | (469,100 | ) | |||||||||||||
Restricted stock compensation | (170,600 | ) | - | ||||||||||||||
Deferred rent | 171,500 | - | |||||||||||||||
Net operating loss carryforwards | 38,200 | - | |||||||||||||||
Asset basis difference related to property and equipment | (45,400 | ) | (90,900 | ) | |||||||||||||
1,537,900 | 1,265,700 | ||||||||||||||||
Less valuation allowance | (1,537,900 | ) | - | ||||||||||||||
Net non-current deferred tax asset | $ | - | $ | 1,265,700 | |||||||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | For the Years Ended December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||
Expected federal tax expense | $ | (574,900 | ) | (34.0 | )% | $ | 138,633 | 34 | % | ||||||||
State tax provision, net of federal benefit | (72,500 | ) | (4.3 | ) | 18,774 | 4.6 | |||||||||||
Effect of increase in valuation allowance | 2,054,600 | 121.5 | - | - | |||||||||||||
Non-deductible expenses | 23,900 | 1.4 | 19,831 | 4.9 | |||||||||||||
Uncertain tax positions | (20,900 | ) | (1.2 | ) | 85,157 | 20.9 | |||||||||||
Effect of reduced state rates for deferred | 33,000 | 2 | - | - | |||||||||||||
Other, net | (102,764 | ) | (6.0 | ) | (10,241 | ) | (2.5 | ) | |||||||||
$ | 1,340,436 | 79.3 | % | $ | 252,154 | 61.8 | % | ||||||||||
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | 2014 | 2013 | |||||||||||||||
Uncertain tax benefit - January 1 | $ | 114,500 | $ | 29,500 | |||||||||||||
Gross decreases - tax positions in prior period | (22,800 | ) | - | ||||||||||||||
Gross increases - tax positions in current period | - | 85,000 | |||||||||||||||
Uncertain tax benefit - December 31 | $ | 91,700 | $ | 114,500 |
Note_8_Commitments_and_Conting1
Note 8 - Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 2015 | $ | 444,746 | ||
2016 | 465,404 | ||||
2017 | 440,212 | ||||
2018 | 293,812 | ||||
2019 | 154,055 | ||||
Thereafter | - | ||||
$ | 1,798,229 |
Note_10_Equity_Tables
Note 10 - Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Note 10 - Equity (Tables) [Line Items] | |||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 43% | - | 46% | - | |||||||||||||
Expected dividends | None | - | |||||||||||||||
Expected term (years) | 5.5 | - | 7.5 | - | |||||||||||||
Risk-free rate | 0.07% | - | 2.05% | - | |||||||||||||
Forfeiture rate | 20% | - | |||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of | Weighted | Weighted | Weighted | |||||||||||||
Shares | Average | Average | Average | ||||||||||||||
Exercise | Fair | Remaining | |||||||||||||||
Price | Value | Contractual Life | |||||||||||||||
Outstanding at December 31, 2013 | - | $ | - | $ | - | ||||||||||||
Granted at market price | 320,115 | 2.04 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Cancelled | (7,120 | ) | 1.2 | ||||||||||||||
Outstanding at December 31, 2014 | 312,995 | 2.04 | 0.92 | 9.2 | |||||||||||||
Exercisable at December 31, 2014 | 13,072 | $ | 1.2 | $ | 0.57 | 9.3 | |||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Restricted Share Awards | Shares | |||||||||||||||
Outstanding at December 31, 2013 | - | ||||||||||||||||
Restricted stock awards granted | 662,375 | ||||||||||||||||
Awards forfeited or exercised | - | ||||||||||||||||
Outstanding at December 31, 2014 | 662,375 | ||||||||||||||||
Remaining available to be issued | 42,950 | ||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Number of Units | Weighted | Weighted Average Remaining Contractual Term | Intrinsic Value | |||||||||||||
Average | (in years) | ||||||||||||||||
Exercise Price | |||||||||||||||||
Outstanding at December 31, 2013 | - | $ | - | ||||||||||||||
Granted | 90,000 | 8.13 | |||||||||||||||
Outstanding at December 31, 2014 | 90,000 | $ | 8.13 | 3.9 | $ | - | |||||||||||
Exercisable at December 31, 2014 | - | $ | - | - | $ | - | |||||||||||
Class of Treasury Stock [Table Text Block] | Year 1 | $ | 0.56 | ||||||||||||||
Year 2 | $ | 0.68 | |||||||||||||||
Year 3 | $ | 0.84 | |||||||||||||||
Year 4 | $ | 1.03 | |||||||||||||||
Year 5 | $ | 1.28 | |||||||||||||||
Year 6 | $ | 1.59 | |||||||||||||||
Year 7 | $ | 1.97 | |||||||||||||||
Year 8 | $ | 2.45 | |||||||||||||||
Fair Value Inputs, Instruments Classified in Shareholders' Equity, Quantitative Information [Table Text Block] | Market value of underlying common stock | $1.20 | |||||||||||||||
Term (years) | 1 | – | 8 | ||||||||||||||
Strike price | $0.56 | – | $2.45 | ||||||||||||||
Volatility | 27.03% | – | 45.64% | ||||||||||||||
Risk-free interest | 0.13% | – | 2.45% | ||||||||||||||
Warrant [Member] | |||||||||||||||||
Note 10 - Equity (Tables) [Line Items] | |||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Volatility | 33% | - | |||||||||||||||
Risk-free interest rate | 0.78% | - | |||||||||||||||
Expected term (years) | 4 | - |
Note_1_Nature_of_Operations_an2
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||
Nov. 18, 2014 | Nov. 14, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Stock Issued During Period, Shares, New Issues (in Shares) | 3,000,000 | ||||
Share Price (in Dollars per share) | $6.50 | $0.45 | |||
Proceeds from Issuance Initial Public Offering (in Dollars) | $17,065,000 | $22,425,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares) | 450,000 | ||||
Proceeds from Stock Options Exercised (in Dollars) | 2,710,000 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 90,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $8.13 | $8.13 | |||
Concentration Risk, Percentage | 1.00% | ||||
Allowance for Doubtful Accounts Receivable (in Dollars) | 81,032 | 81,032 | |||
Goodwill (in Dollars) | 677,204 | 677,204 | |||
Franchise Monthly Marketing Fee, Gross Sales, Percentage | 1.00% | ||||
Initial Franchise Agreement Term | 10 years | ||||
Regional Developers License Fee, Current Franchise Fee, Percentage | 25.00% | ||||
Regional Developers Receive, Franchise Fees Collected Upon Sale of Franchise, Percentage | 50.00% | ||||
Regional Developers Royalty, Sales Generated by Franchises, Percentage | 3.00% | ||||
Regional Developers, Grand Opening Support, Number of Clinics | 2 | ||||
Franchise Royalty, Gross Sales, Percentage | 7.00% | ||||
Advertising Expense (in Dollars) | 145,492 | 323,219 | |||
Liability for Uncertain Tax Positions, Current (in Dollars) | 122,000 | 148,000 | 122,000 | ||
Two Franchisees [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Number of Franchises | 6 | 2 | |||
Concentration Risk, Percentage | 56.00% | 54.00% | |||
Scenario, At the Company's Discretion [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Franchise Monthly Marketing Fee, Gross Sales, Percentage | 2.00% | ||||
Computer Software, Intangible Asset [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||
Franchise Rights [Member] | The Joint RRC Corp [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||
Franchise Rights [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||
Customer Relationships [Member] | The Joint RRC Corp [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
Customer Relationships [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
The Joint RRC Corp [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Goodwill (in Dollars) | 677,204 | 677,204 | |||
Number of Franchises Acquired from Franchisee | 6 | 6 | |||
Minimum [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Impairment of Long-Lived Assets Held-for-use (in Dollars) | 3 | ||||
Maximum [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Impairment of Long-Lived Assets Held-for-use (in Dollars) | 7 | ||||
Other Noncurrent Liabilities [Member] | |||||
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued (in Dollars) | $30,000 | $33,000 | 30,000 |
Note_1_Nature_of_Operations_an3
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Franchise Agreements (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Franchise Agreements [Abstract] | ||
Clinics open at beginning of period | 175 | 82 |
Clinics opened during the period | 73 | 93 |
Clinics closed during the period (in Dollars) | ($2) | |
Clinics in operation at the end of the period | 246 | 175 |
Clinics sold but not yet operational | 268 | 223 |
Note_1_Nature_of_Operations_an4
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Earnings (Loss) Per Common Share (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings (Loss) Per Common Share [Abstract] | ||
Net income (loss) (in Dollars) | ($3,031,220) | $155,635 |
Weighted average common shares outstanding - basic | 5,451,851 | 5,313,665 |
Effect of dilutive securities: | ||
Stock options | 21,732 | |
Shares issuable on conversion of preferred stock | 1,335,000 | |
Weighted average common shares outstanding - diluted | 5,451,851 | 6,670,397 |
Basic earnings per share (in Dollars per share) | ($0.56) | $0.03 |
Diluted earnings per share (in Dollars per share) | ($0.56) | $0.02 |
Note_1_Nature_of_Operations_an5
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Potential Shares of Common Stock Excluded from Diluted Net Loss Per Share | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive Securities | 590,873 |
Equity Option [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive Securities | 312,995 |
Warrant [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive Securities | 90,000 |
Note_2_Acquistions_Details
Note 2 - Acquistions (Details) (USD $) | 0 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | |
Franchise Rights [Member] | The Joint RRC Corp [Member] | ||
Note 2 - Acquistions (Details) [Line Items] | ||
Finite-lived Intangible Assets Acquired (in Dollars) | $81,000 | |
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Franchise Rights [Member] | ||
Note 2 - Acquistions (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Customer Relationships [Member] | The Joint RRC Corp [Member] | ||
Note 2 - Acquistions (Details) [Line Items] | ||
Finite-lived Intangible Assets Acquired (in Dollars) | 72,000 | |
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Customer Relationships [Member] | ||
Note 2 - Acquistions (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | |
The Joint RRC Corp [Member] | Los Angeles County [Member] | ||
Note 2 - Acquistions (Details) [Line Items] | ||
Number of Franchises Acquired from Franchisee | 4 | 4 |
The Joint RRC Corp [Member] | ||
Note 2 - Acquistions (Details) [Line Items] | ||
Number of Franchises Acquired from Franchisee | 6 | 6 |
Payments to Acquire Businesses, Gross (in Dollars) | $900,000 | |
Number of Franchises to be Operated as Company-Owned from Franchisee Acquistion | 4 | 4 |
Number of Franchises Re-located of Franchises Acquired from Franchisee | 2 |
Note_2_Acquistions_Details_Ass
Note 2 - Acquistions (Details) - Assets Acquired and Liabilities Assumed (USD $) | Dec. 31, 2014 |
Note 2 - Acquistions (Details) - Assets Acquired and Liabilities Assumed [Line Items] | |
Goodwill | $677,204 |
The Joint RRC Corp [Member] | |
Note 2 - Acquistions (Details) - Assets Acquired and Liabilities Assumed [Line Items] | |
Property and equipment | 297,630 |
Intangible assets | 153,000 |
Goodwill | 677,204 |
Total assets acquired | 1,127,834 |
Unfavorable leases | -227,834 |
Net assets acquired | $900,000 |
Note_2_Acquistions_Details_Sup
Note 2 - Acquistions (Details) - Supplemental Pro Forma Information (The Joint RRC Corp [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
The Joint RRC Corp [Member] | ||
Note 2 - Acquistions (Details) - Supplemental Pro Forma Information [Line Items] | ||
Revenues, net | $7,306,565 | $5,879,654 |
Net loss | ($3,927,259) | ($374,932) |
Note_3_Notes_Receivable_Detail
Note 3 - Notes Receivable (Details) (USD $) | 1 Months Ended | |||
Jul. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Former Director of the Company [Member] | ||||
Note 3 - Notes Receivable (Details) [Line Items] | ||||
Due from Related Parties | $21,750 | |||
Company-Owned Clinic [Member] | ||||
Note 3 - Notes Receivable (Details) [Line Items] | ||||
Financing Receivable, Net | $90,000 | $59,269 | $85,198 | |
Notes Receivable, Interest Rate | 6.00% | |||
Notes Receivable Contractual Term | 54 months | |||
Notes Receivable Principal and Interest Term | 42 months |
Note_4_Property_and_Equipment_1
Note 4 - Property and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation, Depletion and Amortization | $210,123 | $70,725 |
Note_4_Property_and_Equipment_2
Note 4 - Property and Equipment (Details) - Property and Equipment (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Net | $1,134,452 | $400,267 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 209,575 | 28,817 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 665,961 | |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 564,560 | 379,415 |
Property, Plant and Equipment Excluding Assets in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 1,440,096 | 408,232 |
Accumulated depreciation and amortization | -305,644 | -117,047 |
Property and Equipment, Net | 1,134,452 | 291,185 |
Assets in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Net | $109,082 |
Note_5_Fair_Value_Consideratio1
Note 5 - Fair Value Consideration (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Disclosures [Abstract] | ||
Financial Instruments, Owned, at Fair Value | $0 | $0 |
Note_6_Intangibles_Details
Note 6 - Intangibles (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block [Abstract] | |
Amortization | $0 |
Note_6_Intangibles_Details_Int
Note 6 - Intangibles (Details) - Intangible Assets Acquired (USD $) | Dec. 31, 2015 | Dec. 31, 2014 |
Note 6 - Intangibles (Details) - Intangible Assets Acquired [Line Items] | ||
Intangible assets | $153,000 | $153,000 |
Franchise Rights [Member] | ||
Note 6 - Intangibles (Details) - Intangible Assets Acquired [Line Items] | ||
Intangible assets | 81,000 | |
Customer Relationships [Member] | ||
Note 6 - Intangibles (Details) - Intangible Assets Acquired [Line Items] | ||
Intangible assets | $72,000 |
Note_6_Intangibles_Details_Est
Note 6 - Intangibles (Details) - Estimated Amortization Expense (USD $) | Dec. 31, 2015 | Dec. 31, 2014 |
Estimated Amortization Expense [Abstract] | ||
2015 | $47,571 | |
2016 | 47,571 | |
2017 | 11,571 | |
2018 | 11,571 | |
2019 | 11,571 | |
Thereafter | 23,143 | |
Total | $153,000 | $153,000 |
Note_7_Income_Taxes_Details
Note 7 - Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Note 7 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, Percent | 79.30% | 61.80% |
Liability for Uncertain Tax Positions, Current | $122,000 | $148,000 |
Earliest Tax Year [Member] | State and Local Jurisdiction [Member] | ||
Note 7 - Income Taxes (Details) [Line Items] | ||
Open Tax Year | 2010 | |
Earliest Tax Year [Member] | Domestic Tax Authority [Member] | ||
Note 7 - Income Taxes (Details) [Line Items] | ||
Open Tax Year | 2010 | |
Latest Tax Year [Member] | State and Local Jurisdiction [Member] | ||
Note 7 - Income Taxes (Details) [Line Items] | ||
Open Tax Year | 2011 | |
Latest Tax Year [Member] | Domestic Tax Authority [Member] | ||
Note 7 - Income Taxes (Details) [Line Items] | ||
Open Tax Year | 2011 | |
State and Local Jurisdiction [Member] | ||
Note 7 - Income Taxes (Details) [Line Items] | ||
Operating Loss Carryforwards | 965,000 | |
Other Liabilities [Member] | ||
Note 7 - Income Taxes (Details) [Line Items] | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $30,000 | $33,000 |
Note_7_Income_Taxes_Details_In
Note 7 - Income Taxes (Details) - Income Tax Provision (Benefit) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Provision (Benefit) [Abstract] | ||
Federal | ($388,864) | $583,558 |
State, net of state tax credits | -28,800 | 220,896 |
-417,664 | 804,454 | |
Federal | 1,403,100 | -482,350 |
State | 355,000 | -69,950 |
1,758,100 | -552,300 | |
Total income tax provision | $1,340,436 | $252,154 |
Note_7_Income_Taxes_Details_Ne
Note 7 - Income Taxes (Details) - Net Deferred Taxes (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Net Deferred Taxes [Abstract] | ||
Deferred revenue | $776,100 | $1,064,000 |
Deferred franchise costs | -253,900 | -362,800 |
Allowance for doubtful accounts | 30,800 | |
Accrued expenses | 197,300 | |
Restricted stock compensation | -60,700 | |
Deferred rent | 35,500 | |
Charitable contribution carryover | 400 | |
725,500 | 701,200 | |
Less valuation allowance | -516,700 | |
Net current deferred tax asset | 208,800 | 701,200 |
Deferred revenue | 2,223,200 | 1,825,700 |
Deferred franchise costs | -679,000 | -469,100 |
Restricted stock compensation | -170,600 | |
Deferred rent | 171,500 | |
Net operating loss carryforwards | 38,200 | |
Asset basis difference related to property and equipment | -45,400 | -90,900 |
1,537,900 | 1,265,700 | |
Less valuation allowance | -1,537,900 | |
Net non-current deferred tax asset | $1,265,700 |
Note_7_Income_Taxes_Details_Re
Note 7 - Income Taxes (Details) - Reconciliation of the Statutory Federal Income Tax Rate (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the Statutory Federal Income Tax Rate [Abstract] | ||
Expected federal tax expense | ($574,900) | $138,633 |
Expected federal tax expense | -34.00% | 34.00% |
State tax provision, net of federal benefit | -72,500 | 18,774 |
State tax provision, net of federal benefit | -4.30% | 4.60% |
Effect of increase in valuation allowance | 2,054,600 | |
Effect of increase in valuation allowance | 121.50% | |
Non-deductible expenses | 23,900 | 19,831 |
Non-deductible expenses | 1.40% | 4.90% |
Uncertain tax positions | -20,900 | 85,157 |
Uncertain tax positions | -1.20% | 20.90% |
Effect of reduced state rates for deferred | 33,000 | |
Effect of reduced state rates for deferred | 2.00% | |
Other, net | -102,764 | -10,241 |
Other, net | -6.00% | -2.50% |
$1,340,436 | $252,154 | |
79.30% | 61.80% |
Note_7_Income_Taxes_Details_Un
Note 7 - Income Taxes (Details) - Uncertain Tax Benefits (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Uncertain Tax Benefits [Abstract] | ||
Uncertain tax benefit - January 1 | $114,500 | $29,500 |
Gross decreases - tax positions in prior period | -22,800 | |
Gross increases - tax positions in current period | 85,000 | |
Uncertain tax benefit - December 31 | $91,700 | $114,500 |
Note_8_Commitments_and_Conting2
Note 8 - Commitments and Contingencies (Details) (USD $) | 6 Months Ended | 11 Months Ended | 12 Months Ended | 18 Months Ended | |
Jun. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |
Note 8 - Commitments and Contingencies (Details) [Line Items] | |||||
Operating Leases, Rent Expense | $10,500 | $135,000 | $124,000 | $6,700 | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 66 months | ||||
Minimum [Member] | |||||
Note 8 - Commitments and Contingencies (Details) [Line Items] | |||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 30 months | ||||
Operating Lease, Monthly Rent Expense | 10,500 | 2,609 | |||
Maximum [Member] | |||||
Note 8 - Commitments and Contingencies (Details) [Line Items] | |||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 40 months | ||||
Operating Lease, Monthly Rent Expense | 22,000 | $5,909 |
Note_8_Commitments_and_Conting3
Note 8 - Commitments and Contingencies (Details) - Future Minimum Annual Lease Payments (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Future Minimum Annual Lease Payments [Abstract] | |
2015 | $444,746 |
2016 | 465,404 |
2017 | 440,212 |
2018 | 293,812 |
2019 | 154,055 |
$1,798,229 |
Note_9_Related_Party_Transacti1
Note 9 - Related Party Transactions (Details) (Shareholder [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Shareholder [Member] | ||
Note 9 - Related Party Transactions (Details) [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $923,000 | $700,000 |
Accounts Payable, Related Parties | $282,000 |
Note_10_Equity_Details
Note 10 - Equity (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||||
Nov. 18, 2014 | Nov. 14, 2014 | Nov. 26, 2012 | Dec. 31, 2013 | Dec. 31, 2014 | 15-May-14 | Nov. 10, 2014 | Dec. 31, 2013 | Jan. 01, 2014 | Dec. 12, 2014 | Nov. 30, 2012 | Sep. 17, 2014 | Dec. 24, 2013 | Jan. 09, 2013 | |
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,000,000 | |||||||||||||
Share Price (in Dollars per share) | $6.50 | $0.45 | $0.45 | |||||||||||
Proceeds from Issuance Initial Public Offering (in Dollars) | $17,065,000 | $22,425,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 450,000 | |||||||||||||
Proceeds from Stock Options Exercised (in Dollars) | 2,710,000 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 90,000 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $8.13 | $8.13 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 320,115 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value (in Dollars) | 1,357,201 | |||||||||||||
Share-based Compensation (in Dollars) | 101,830 | |||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | 201,909 | |||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||||||||||||
Allocated Share-based Compensation Expense (in Dollars) | 113,929 | |||||||||||||
Class of Warrant or Right Issued During Period | 90,000 | |||||||||||||
Class of Warrants or Rights Outstanding Remaining Contractual Life | 3 years 328 days | |||||||||||||
Preferred Stock, Shares Authorized | 50,000 | 50,000 | 50,000 | |||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 53.4 | |||||||||||||
Convertible Preferred Stock Converted to Other Securities (in Dollars) | 25,000 | |||||||||||||
Conversion of Stock, Shares Issued | 1,335,000 | |||||||||||||
Common Stock Dividends, Shares | 29 | |||||||||||||
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 4,250,000 | |||||||||
Stock Repurchased During Period, Value (in Dollars) | 240,000 | |||||||||||||
Authorization to Purchase Option, Shares | 534,000 | |||||||||||||
Treasury Stock, Retired, Cost Method, Amount (in Dollars) | 791,638 | |||||||||||||
Authorization to Purchase Option, Term | 8 years | |||||||||||||
Binomial Lattice-based Model Fair Value Share Price (in Dollars per share) | $1.03 | $1.03 | ||||||||||||
Binomial Lattice-based Model Fair Value Total (in Dollars) | 551,638 | 551,638 | ||||||||||||
Employee [Member] | The 2014 Plan [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 72,100 | |||||||||||||
Share-based Compensation Arrangement Number of Share Vesting Each Vesting Period | 4,450 | |||||||||||||
Share-based Compensation Arrangement Number of Quarterly Installements | 16 | |||||||||||||
IPO [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,000,000 | |||||||||||||
Share Price (in Dollars per share) | $6.50 | |||||||||||||
Proceeds from Issuance Initial Public Offering (in Dollars) | 17,065,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 450,000 | |||||||||||||
Proceeds from Stock Options Exercised (in Dollars) | 2,710,000 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 90,000 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $8.13 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 50,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||||||||
Employee Stock Option [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation (in Dollars) | 32,105 | 0 | ||||||||||||
Restricted Stock [Member] | Tranche 1 [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||||||
Restricted Stock [Member] | Tranche 2 [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||||||||||
Restricted Stock [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share Price (in Dollars per share) | 1.2 | $6.20 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 42,950 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | 1,198,212 | |||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 146 days | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 567,375 | 95,000 | ||||||||||||
Number of Tranches of Restricted Stock | 2 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost (in Dollars) | 679,000 | 589,000 | ||||||||||||
Allocated Share-based Compensation Expense (in Dollars) | $69,725 | $0 | ||||||||||||
First Year [Member] | The 2014 Plan [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement Number of Share Vesting Each Vesting Period | 4,171 | |||||||||||||
Second Year [Member] | The 2014 Plan [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement Number of Share Vesting Each Vesting Period | 2,503 | |||||||||||||
Third Year [Member] | The 2014 Plan [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement Number of Share Vesting Each Vesting Period | 1,670 | |||||||||||||
Prior to Increase [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Common Stock, Shares Authorized | 150,000 | |||||||||||||
Posterior to Increase [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Common Stock, Shares Authorized | 4,000,000 | |||||||||||||
The 2012 Plan [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement, Award Plan Term | 10 years | |||||||||||||
The 2014 Plan [Member] | ||||||||||||||
Note 10 - Equity (Details) [Line Items] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,513,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 198,915 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||||||
Options that Vest Dependent upon Initial Public Offering | 100,125 | |||||||||||||
Share-based Compensation Arrangement Shares Vesting Period of Installments | 12 years |
Note_10_Equity_Details_Fair_Va
Note 10 - Equity (Details) - Fair Value Assumptions of Options Granted | 12 Months Ended |
Dec. 31, 2014 | |
Note 10 - Equity (Details) - Fair Value Assumptions of Options Granted [Line Items] | |
Expected volatility | 33.00% |
Expected dividends | 0.00% |
Expected term (years) | 4 years |
Risk-free rate | 0.78% |
Forfeiture rate | 20.00% |
Minimum [Member] | |
Note 10 - Equity (Details) - Fair Value Assumptions of Options Granted [Line Items] | |
Expected volatility | 43.00% |
Expected term (years) | 5 years 6 months |
Risk-free rate | 0.07% |
Maximum [Member] | |
Note 10 - Equity (Details) - Fair Value Assumptions of Options Granted [Line Items] | |
Expected volatility | 46.00% |
Expected term (years) | 7 years 6 months |
Risk-free rate | 2.05% |
Note_10_Equity_Details_Stock_O
Note 10 - Equity (Details) - Stock Options Activity (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Stock Options Activity [Abstract] | |
Outstanding at December 31, 2013 (in Shares) | 0 |
Outstanding at December 31, 2013 | $0 |
Granted at market price (in Shares) | 320,115 |
Granted at market price | $2.04 |
Cancelled (in Shares) | -7,120 |
Cancelled | $1.20 |
Outstanding at December 31, 2014 (in Shares) | 312,995 |
Outstanding at December 31, 2014 | $2.04 |
Outstanding at December 31, 2014 | $0.92 |
Outstanding at December 31, 2014 | 9 years 73 days |
Exercisable at December 31, 2014 (in Shares) | 13,072 |
Exercisable at December 31, 2014 | $1.20 |
Exercisable at December 31, 2014 (in Dollars) | $0.57 |
Exercisable at December 31, 2014 | 9 years 109 days |
Note_10_Equity_Details_Restric
Note 10 - Equity (Details) - Restricted Stock Activity | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | |
Note 10 - Equity (Details) - Restricted Stock Activity [Line Items] | ||
Restricted stock awards granted | 90,000 | |
Restricted Stock [Member] | ||
Note 10 - Equity (Details) - Restricted Stock Activity [Line Items] | ||
Outstanding at December 31, 2013 | 0 | |
Restricted stock awards granted | 662,375 | |
Outstanding at December 31, 2014 | 662,375 | |
Remaining available to be issued | 42,950 |
Note_10_Equity_Details_Fair_Va1
Note 10 - Equity (Details) - Fair Value of Warrants Granted | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value of Warrants Granted [Abstract] | |
Volatility | 33.00% |
Risk-free interest rate | 0.78% |
Expected term (years) | 4 years |
Note_10_Equity_Details_Warrant
Note 10 - Equity (Details) - Warrants (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Warrants [Abstract] | ||
Number of Units | 90,000 | |
Weighted Average Remaining Contractual Term (in years) | 3 years 328 days | |
Granted | 90,000 | |
Granted | $8.13 | |
Number of Units | 90,000 | |
Weighted Average Exercise Price | $8.13 |
Note_10_Equity_Details_Stock_R
Note 10 - Equity (Details) - Stock Repurchase Option (USD $) | Dec. 31, 2013 |
Stock Repurchase Option [Abstract] | |
Year 1 | $0.56 |
Year 2 | $0.68 |
Year 3 | $0.84 |
Year 4 | $1.03 |
Year 5 | $1.28 |
Year 6 | $1.59 |
Year 7 | $1.97 |
Year 8 | $2.45 |
Note_10_Equity_Details_Binomia
Note 10 - Equity (Details) - Binomial Lattice-based Model Option Valuation Assumptions (Binomial-lattice Fair Value Method [Member], USD $) | 1 Months Ended |
Dec. 31, 2013 | |
Fair Value Inputs, Equity, Quantitative Information [Line Items] | |
Market value of underlying common stock (in Dollars per share) | $1.20 |
Minimum [Member] | |
Fair Value Inputs, Equity, Quantitative Information [Line Items] | |
Term (years) | 1 year |
Strike price (in Dollars per share) | $0.56 |
Volatility | 27.03% |
Risk-free interest | 0.13% |
Maximum [Member] | |
Fair Value Inputs, Equity, Quantitative Information [Line Items] | |
Term (years) | 8 years |
Strike price (in Dollars per share) | $2.45 |
Volatility | 45.64% |
Risk-free interest | 2.45% |
Note_11_Subsequent_Events_Deta
Note 11 - Subsequent Events (Details) (Subsequent Event [Member], USD $) | 0 Months Ended | ||||||
Mar. 06, 2015 | Feb. 17, 2015 | Jan. 30, 2015 | Jan. 01, 2015 | Mar. 06, 2015 | Feb. 17, 2015 | Jan. 30, 2015 | |
Subsequent Event [Member] | |||||||
Note 11 - Subsequent Events (Details) [Line Items] | |||||||
Payments to Acquire Businesses, Gross (in Dollars) | $507,500 | ||||||
Number of Developed Franchises Acquired | 2 | 4 | 2 | 4 | |||
Number of Undeveloped Franchises Acquired | 7 | 1 | 7 | 1 | |||
Business Combination, Consideration Transferred (in Dollars) | $300,000 | $935,000 | $750,000 | ||||
Number of Franchises to be Operated as Company-Owned from Franchisee Acquistion | 2 | 2 | 2 | 2 | 2 | 2 | |
Number of Franchises to be Closed | 7 | 2 | 7 | 2 | |||
Number of Franchises Acquired from Franchisee | 9 | 2 | 9 | 2 |