Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 07, 2015 | |
Entity Registrant Name | JOINT Corp | |
Entity Central Index Key | 1,612,630 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 9,825,153 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - Scenario, Unspecified [Domain] - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 12,579,991 | $ 20,796,783 |
Restricted cash | 281,968 | 224,576 |
Accounts receivable, net | 458,914 | 704,905 |
Income taxes receivable | 292,730 | 395,814 |
Note receivable - current portion | 17,768 | 27,528 |
Deferred franchise costs - current portion | 597,970 | 622,800 |
Deferred tax asset - current portion | 208,800 | 208,800 |
Prepaid expenses and other current assets | 97,195 | 375,925 |
Total current assets | 14,535,336 | 23,357,131 |
Property and equipment, net | 2,691,042 | 1,134,452 |
Note receivable, net of current portion and reserve | 27,942 | 31,741 |
Deferred franchise costs, net of current portion | 1,894,930 | 2,574,450 |
Intangible assets, net | 2,021,136 | 153,000 |
Goodwill | 2,747,668 | 636,104 |
Deposits and other assets | 118,073 | 585,150 |
Total assets | 24,036,127 | 28,472,028 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,452,076 | 1,271,405 |
Co-op funds liability | 281,857 | 186,604 |
Payroll liabilities | 874,825 | $ 617,944 |
Notes payable - current portion | 479,400 | |
Deferred rent - current portion | 98,053 | $ 93,398 |
Deferred revenue - current portion | 2,080,787 | 1,957,500 |
Other current liabilities | 48,691 | 50,735 |
Total current liabilities | 5,315,689 | $ 4,177,586 |
Notes payable, net of current portion | 140,000 | |
Deferred rent, net of current portion | 410,755 | $ 451,766 |
Deferred revenue, net of current portion | 5,734,709 | 7,915,918 |
Other liabilities | 277,715 | 299,405 |
Total liabilities | $ 11,878,868 | $ 12,844,675 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of June 30, 2015, and December 31, 2014 | ||
Common stock, $0.001 par value; 20,000,000 shares authorized, 10,333,534 shares issued and 9,799,534 shares outstanding as of June 30, 2015 and 10,196,502 shares issued and 9,662,502 outstanding as of December 31, 2014 | $ 10,333 | $ 10,197 |
Additional paid-in capital | 21,710,338 | 21,420,975 |
Treasury stock (534,000 shares as of June 30, 2015 and December 31, 2014, at cost) | (791,638) | (791,638) |
Accumulated deficit | (8,771,774) | (5,012,181) |
Total stockholders' equity | 12,157,259 | 15,627,353 |
Total liabilities and stockholders' equity | $ 24,036,127 | $ 28,472,028 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Series A preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Series A preferred stock, shares authorized (in shares) | 50,000 | 50,000 |
Series A preferred stock, issued (in shares) | 0 | 0 |
Series A preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 10,333,534 | 10,196,502 |
Common stock, shares outstanding (in shares) | 9,799,534 | 9,662,502 |
Treasury stock, shares (in shares) | 534,000 | 534,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Royalty fees | $ 1,098,190 | $ 753,265 | $ 2,113,704 | $ 1,361,591 |
Franchise fees | 876,259 | $ 570,500 | 1,224,259 | $ 1,034,500 |
Revenues and management fees from company clinics | 783,016 | 1,170,469 | ||
Advertising fund revenue | 339,462 | $ 29,376 | 624,978 | $ 116,110 |
IT related income and software fees | 197,214 | 211,200 | 401,189 | 410,825 |
Regional developer fees | 50,750 | 116,000 | 268,250 | 224,750 |
Other revenues | 81,855 | 51,494 | 131,796 | 96,895 |
Total revenues | 3,426,746 | 1,731,835 | 5,934,645 | 3,244,671 |
Cost of revenues: | ||||
Franchise cost of revenues | 743,592 | 490,298 | 1,251,158 | 949,074 |
IT cost of revenues | 48,226 | 63,915 | 85,921 | 135,663 |
Total cost of revenues | 791,818 | 554,213 | 1,337,079 | 1,084,737 |
Selling and marketing expenses | 790,001 | 253,612 | 1,757,024 | 399,778 |
Depreciation and amortization | 278,502 | 48,819 | 401,098 | 88,885 |
General and administrative expenses | 3,412,484 | 1,084,346 | 6,200,726 | 2,050,640 |
Total selling, general and administrative expenses | 4,480,987 | 1,386,777 | 8,358,848 | 2,539,303 |
Loss from operations | (1,846,059) | (209,155) | (3,761,282) | (379,369) |
Other income (expense), net | (9,811) | (3,800) | 1,689 | (3,800) |
Loss before income tax benefit | (1,855,870) | (212,955) | (3,759,593) | (383,169) |
Income tax benefit | 0 | 79,206 | 0 | 121,523 |
Net loss and comprehensive loss | $ (1,855,870) | $ (133,749) | $ (3,759,593) | $ (261,646) |
Loss per share: | ||||
Basic and diluted loss per share (in dollars per share) | $ (0.19) | $ (0.03) | $ (0.39) | $ (0.05) |
Weighted average shares (in shares) | 9,768,230 | 4,819,902 | 9,734,115 | 4,815,754 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (3,759,593) | $ (261,646) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Provision for bad debts | 4,345 | |
Regional developer fees recognized upon acquisition of development rights | (159,500) | |
Net franchise fees recognized upon termination of franchise agreements | (343,250) | |
Depreciation and amortization | 401,098 | $ 88,885 |
Gain on sale of property and equipment | $ (11,500) | |
Deferred income taxes | $ (96,588) | |
Stock based compensation expense | $ 289,499 | 27,922 |
Changes in operating assets and liabilties, net of effects from acquisitions: | ||
Restricted cash | (57,392) | (57,547) |
Accounts receivable | 241,646 | $ 133,543 |
Income taxes receivable | 103,084 | |
Prepaid expenses and other current assets | 278,730 | $ 16,025 |
Deferred franchise costs | 5,700 | 28,700 |
Deposits and other assets | (40,423) | (133,274) |
Accounts payable and accrued expenses | 180,671 | 491,099 |
Co-op funds liability | 95,253 | (20,508) |
Payroll liabilities | 256,881 | 49,689 |
Other liabilities | (23,734) | 56,547 |
Deferred rent | $ (36,356) | 541,962 |
Income taxes payable | (419,297) | |
Deferred revenue | $ 31,273 | (186,250) |
Other, net | 14,556 | |
Net cash (used in) provided by operating activities | $ (2,543,568) | $ 273,818 |
Cash flows from investing activities: | ||
Cash paid for acquisitions | (4,242,975) | |
Reacquisition and termination of regional developer rights | (945,000) | |
Purchase of property and equipment | (485,308) | $ (542,673) |
Proceeds received on sale of property and equipment | 11,500 | |
Payments received on notes receivable | 13,559 | $ 12,771 |
Net cash used in investing activities | (5,648,224) | $ (529,902) |
Cash flows from financing activities: | ||
Repayments on note payable | (25,000) | |
Net cash used in financing activities | (25,000) | |
Net decrease in cash | (8,216,792) | $ (256,084) |
Cash at beginning of period | 20,796,783 | 3,516,750 |
Cash at end of period | $ 12,579,991 | 3,260,666 |
Supplemental cash flow disclosures: | ||
Cash paid for income taxes | $ 420,250 | |
Cash paid for interest | $ 135 |
Supplemental Disclosure of Non-
Supplemental Disclosure of Non-cash Activity | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | Supplemental disclosure of non-cash activity: In connection with the Company’s acquisitions of franchises during the six months ended June 30, 2015, the Company acquired $1,346,766 of property and equipment, and intangible assets of $1,070,500, goodwill of $2,111,564 and assumed deferred revenue associated with membership packages paid in advance of $107,555 in exchange for $4,242,975 in cash and an aggregate amount of $644,400 in notes payable to the sellers. Additionally, at the time of these transactions, the Company carried deferred revenue of $928,000, representing franchise fees collected upon the execution of franchise agreements, and deferred costs of $461,900, related to Company’s acquisition of undeveloped franchises. In accordance with ASC-952-605, the Company netted these amounts against the aggregate purchase price of the acquisitions (Note 2). In connection with Company’s reacquisition and termination of regional developer rights during the six months ended June 30, 2015, the Company had deferred revenue of $688,750, representing license fees collected upon the execution of the regional developer agreements. In accordance with ASC-952-605, the Company netted these amounts against the aggregate purchase price of the acquisitions (Note 5). As of December 31, 2014, the Company recorded a deposit of $507,500 for the reacquisition and termination of regional developer rights, which were paid in advance. During the six months ended June 30, 2015, upon the effective date of the agreement, the Company reclassified $507,500 from deposits to intangible assets. |
Note 1 - Nature of Operations a
Note 1 - Nature of Operations and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
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 Basis of Presentation These unaudited financial statements represent the condensed consolidated financial statements of The Joint Corp. (“The Joint”) and its wholly owned subsidiary The Joint Corporate Unit No. 1, LLC (collectively, the “Company”). These unaudited condensed consolidated financial statements should be read in conjunction with The Joint Corp. and Subsidiary consolidated financial statements and the notes thereto as set forth in The Joint Corp.’s Form 10-K, which included all disclosures required by generally accepted accounting principles. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the Company’s financial position on a consolidated basis and the consolidated results of operations and cash flows for the interim periods presented. The results of operations for the periods ended June 30, 2015 and 2014 are not necessarily indicative of expected operating results for the full year. The information presented throughout the document as of and for the periods ended June 30, 2015 and 2014 is unaudited. 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”), which was dormant for all periods presented. All significant intercompany accounts and transactions between The Joint Corp. and its subsidiary have been eliminated in consolidation. Comprehensive Loss Net loss and comprehensive loss are the same for the three and six months ended June 30, 2015 and 2014. Nature of Operations The Joint Corp., a Delaware corporation, was formed on March 10, 2010. Its principal business purposes are owning, operating, managing and franchising chiropractic clinics, selling regional developer rights and supporting the operations of owned, managed and 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 following table summarizes the number of clinics in operation under franchise agreements or that are company-owned or managed for the three and six months ended June 30, 2015 and 2014: Three Months Ended Six Months Ended Franchised clinics: 2015 2014 2015 2014 Clinics open at beginning of period 241 192 242 175 Opened during the period 10 23 23 41 Acquired during the period (11 ) - (21 ) - Closed during the period (1 ) - (5 ) (1 ) Clinics in operation at the end of the period 239 215 239 215 Franchises sold but not yet operational 230 250 230 250 Three Months Ended Six Months Ended Corporate owned or managed clinics: 2015 2014 2015 2014 Clinics open at beginning of period 12 - 4 - Acquired during the period 11 - 21 - Closed during the period - - (2 ) - Clinics in operation at the end of the period 23 - 23 - Total clinics in operation at the end of the period 262 215 262 215 Variable Interest Entities An entity deemed to hold the controlling interest in a voting interest entity or deemed to be the primary beneficiary of a variable interest entity (“VIE”) is required to consolidate the VIE in its financial statements. An entity is deemed to be the primary beneficiary of a VIE if it has both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb the majority of losses of the VIE or the right to receive the majority of benefits from the VIE. Investments where the Company does not hold the controlling interest and are not the primary beneficiary are accounted for under the equity method. Certain states in which the Company manages clinics, regulate the practice of chiropractic care and require that chiropractic services be provided by legal entities organized under state laws as professional corporations or PCs. In these states, the Company has entered into management services agreements with PCs under which the Company provides on an exclusive basis, all non-clinical services of the chiropractic practice. The Company has analyzed its relationship with the PCs and has determined that the Company does not have the power to direct the activities of the VIE. As such, the activity of the PCs is not included in the Company’s consolidated financial statements. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company continually monitors its positions with, and credit quality of, the financial institutions with which it invests. As of the balance sheet date and periodically throughout the period, the Company has maintained balances in various operating accounts in excess of federally insured limits. The Company has invested substantially all of the proceeds of its IPO in short-term bank deposits. The Company had no cash equivalents as of June 30, 2015 and December 31, 2014. Restricted Cash Restricted cash relates to cash franchisees and corporate clinics contribute to the Company’s National Marketing Fund and cash franchisees provide to various voluntary regional Co-Op Marketing Funds. Cash contributed by franchisees 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 From time to time the Company grants credit in the normal course of business to franchisees related to the collection of royalties and other operating revenues. The Company periodically performs credit analysis and monitor the financial condition of the franchisees to reduce credit risk. As of December 31, 2014, six franchisees represented 56% of outstanding accounts receivable. The Company did not have any customers that represented greater than 10% of its accounts receivable or revenues during the three and six months ended June 30, 2015 and 2014. Accounts Receivable Accounts receivable represent amounts due from franchisees for initial franchise fees, royalty fees and marketing and advertising expenses. The Company considers 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 the Company tracks on an ongoing basis. The losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. As of June 30, 2015 and December 31, 2014, the Company had an allowance for doubtful accounts of $85,377 and $81,032, respectively. 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 income. Software Developed The Company capitalizes most software development costs. These capitalized costs are primarily related to proprietary software used by clinics for operations and by the Company for the 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. The Company also capitalizes 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. The Company amortizes 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 approximately 7 years. The fair value of customer relationships is amortized over their estimated useful life of 2 years. Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the acquisitions discussed in Note 2. Under 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 ASC 350-10, and are written down when impaired. Long-Lived Assets The Company reviews our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to estimated undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. No impairments of long-lived assets were recorded for the periods ended June 30, 2015 and 2014. Advertising Fund The Company has established an advertising fund for national/regional marketing and advertising of services offered by its clinics. The monthly marketing fee was increased to 2% in January 2015. The Company segregates the marketing funds collected which are included in restricted cash on its consolidated balance sheets. As amounts are expended from the fund, the Company recognizes advertising fund revenue and a related expense properly eliminating intercompany transactions. Amounts collected in excess of marketing expenditures are included in restricted cash on the Company’s consolidated balance sheets. Co-Op Marketing Funds Some franchises have established regional Co-Ops for advertising within their local and regional markets. The Company maintains a custodial 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 the Company’s consolidated balance sheets. Deferred Rent The Company leases office space for its corporate offices and company-owned and managed clinics under operating leases, which may include rent holidays and rent escalation clauses. It 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 The Company generates revenue through initial franchise fees, regional developer fees, royalties, advertising fund revenue, IT related income, and computer software fees, and from its company-owned and managed clinics. Franchise Fees. During the three months ended June 30, 2015, the Company terminated 20 franchise licenses that were in default of various obligations under their respective franchise agreements. In conjunction with these terminations, the Company recognized $580,000 of revenue in the quarter, and $236,750 of costs which were previously deferred. Regional Developer Fees Revenues and Management Fees from Company Clinics. Royalties. IT Related Income and Software Fees. Advertising Costs The Company incurs advertising costs in addition to those included in the advertising fund. The Company’s policy is to expense all operating advertising costs as incurred. Advertising expenses were $207,483 and $475,988 for the three and six months ended June 30, 2015, respectively. Advertising expenses were $4,042 and $40,039 for the three and six months ended June 30, 2014, respectively. Income Taxes The Company accounts for income taxes in accordance with the ASC 740 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. The Company accounts 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. The Company measures the tax benefits and expenses recognized in the condensed 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. At June 30, 2015 and December 31, 2014, the Company maintained a liability for income taxes for uncertain tax positions of approximately $125,000 and $122,000, respectively, of which $33,000 and $30,000, respectively, represent penalties and interest and are recorded in the “other liabilities” section of the accompanying condensed consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. The Company’s tax returns for tax years subject to examination by tax authorities include 2011 through the current period for state and federal reporting purposes. Loss per Common Share Basic loss per common share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is computed by giving effect to all potentially dilutive common shares including preferred stock, restricted stock, and stock options. Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss $ (1,855,870 ) $ (133,749 ) $ (3,759,593 ) $ (261,646 ) Weighted average common shares outstanding - basic 9,768,230 4,819,902 9,734,115 4,815,754 Effect of dilutive securities: Stock options - - - - Weighted average common shares outstanding - diluted 9,768,230 4,819,902 9,734,115 4,815,754 Basic and diluted loss per share $ (0.19 ) $ (0.03 ) $ (0.39 ) $ (0.05 ) 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: Three Months Ended Six Months Ended 2015 2014 2015 2014 Unvested restricted stock 453,846 116,818 453,846 116,818 Stock options 376,275 271,895 376,275 271,895 Warrants 90,000 - 90,000 - Stock-Based Compensation The Company accounts for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. The Company determines 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. 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. Prior to the IPO the grant date fair value was determined by the Board of Directors. Changes to the assumptions could cause significant adjustments to the valuation. The Company recognizes compensation costs ratably over the period of service using the straight-line method. Use of Estimates The preparation of the condensed 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 condensed 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, realizability of deferred tax assets, impairment of goodwill and intangible assets and purchase price allocations. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard becomes effective for us on January 1, 2018. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. 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. The Company is currently evaluating the impact of the adoption of ASU No. 2014-15 on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.” The guidance provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. The update is effective for reporting periods beginning after December 15, 2015. The Company is currently evaluating the impact of the adoption of ASU No. 2015-05 on its consolidated financial statements. |
Note 2 - Acquisitions
Note 2 - Acquisitions | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | Note 2: Acquisitions Franchises acquired during 2014 During 2014, the Company acquired substantially all the assets and certain liabilities of six franchises including franchises that manage four clinics operating in Los Angeles County, for a purchase price of $900,000 which was paid in cash. The Company is operating four of the acquired franchises as managed company clinics and has terminated the two remaining franchises. On January 1, 2015, the Company acquired an additional three undeveloped franchises. This resulted in a net deferred revenue adjustment of $41,100 to the net purchase price. No additional consideration was paid on January 1, 2015. The remaining $858,900 was accounted for as the total consideration paid for the acquired franchises. The purchase price allocation for these acquisitions is subject to further adjustment upon completion of the valuation report. 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 636,104 Total assets acquired 1,086,734 Unfavorable leases (227,834 ) Net assets acquired $ 858,900 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 Company has retrospectively adjusted the condensed consolidated balance sheet as of December 31, 2014 related to adjustments to the purchase price allocation of the above acquisition. The impacts are adjustments to deferred franchise costs, goodwill and deferred revenue, with no changes to total net assets. There were no impacts on the consolidated statements of operations or cash flows for any prior periods as a result of these adjustments. The balance sheet impacts are as follows: December 31, 2014 As reported As revised Deferred franchise costs - current portion $ 668,700 $ 622,800 Goodwill $ 677,204 $ 636,104 Deferred revenue - current portion $ 2,044,500 $ 1,957,500 Franchises acquired during 2015 During the six months ended June 30, 2015, the Company continued to execute its growth strategy and entered into a series of unrelated transactions with existing franchisees to re-acquire an aggregate of 21 developed and 31 undeveloped franchises throughout Arizona and California for an aggregate purchase price of $4,887,375, subject to certain adjustments, consisting of cash of $4,242,975 and notes payable of $644,400. Of the 21 developed franchises, the Company is operating 19 as company-owned or managed clinics and has closed the remaining 2 clinics. The 31 undeveloped franchises have been terminated and the Company may relocate them. At the time these transactions were consummated, the Company carried a deferred revenue balance of $928,000, representing franchise fees collected upon the execution of the franchise agreements, and deferred franchise costs of $461,900, related to undeveloped franchises. In accordance with ASC 952-605, the Company accounted for the franchise rights associated with the undeveloped franchise as a cancellation, and the respective deferred revenue and deferred franchise costs were netted against the aggregate purchase price. The remaining $4,421,275 was accounted for as consideration paid for the acquired franchises. Additionally, in January 2015, in connection with the default by a franchisee under its franchise agreement, the Company assumed substantially all of the assets of a clinic in Tempe, Arizona. The Company is accounting for this as a business combination. As no consideration was transferred to the franchisee, the Company expects to recognize a bargain purchase gain equal to the fair value of the net assets acquired; however, no valuation amounts have been recorded in the consolidated financial statements for the three and six months ended June 30, 2015 as the valuation for these assets has not yet been completed. The Company incurred $279,253 of transaction costs related to these acquisitions for the six months ended June 30, 2015. Purchase Price Allocation The purchase price allocations for these acquisitions are preliminary and subject to further adjustment upon finalization of the opening balance sheet. The following summarizes the aggregate fair values of the assets acquired and liabilities assumed during 2015 as of the acquisition date: Property and equipment $ 1,346,766 Intangible assets 1,070,500 Goodwill 2,111,564 Total assets acquired 4,528,830 Deferred membership revenue (107,555 ) Net assets acquired $ 4,421,275 Intangible assets in the table above consist of reacquired franchise rights of $809,900 and customer relationships of $260,600, and will be amortized over their estimated useful lives of approximately seven years and two years, respectively. The estimates of the fair value of the assets or rights acquired and liabilities assumed at the date of the applicable acquisition are subject to adjustment during the measurement period (up to one year from the particular acquisition date). The primary areas of the accounting for the acquisitions that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired, residual goodwill and any related tax impact. The fair value of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While the Company believes that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired and liabilities assumed, it evaluates any necessary information prior to finalization of the fair value. During the measurement period, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the revised estimated values of those assets or liabilities as of that date. The effect of measurement period adjustments to the estimated fair value is reflected as if the adjustments had been completed on the acquisition date. The impact of all changes that do not qualify as measurement period adjustments are included in current period earnings. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the condensed consolidated financial statements could be subject to a possible impairment of the intangible assets or goodwill, or require acceleration of the amortization expense of intangible assets in subsequent periods. During the six months ended June 30, 2015, the Company made certain measurement period adjustments related to several acquisitions consummated in the quarter ended March 31, 2015. Property and equipment was increased by $13,866, intangible assets increased by $186,000, and deferred membership revenue decreased by $19,990 with the resulting offset to goodwill of $179,876. Goodwill recorded in connection with these acquisitions 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. Pro Forma Results of Operations (Unaudited) The following table summarizes selected unaudited pro forma condensed consolidated statements of operations data for the three and six months ended June 30, 2015 and 2014 as if the acquisitions had been completed on January 1, 2014. Pro Forma for the Three Months Ended Pro Forma for the Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Revenues, net $ 3,595,084 $ 2,393,624 $ 6,650,946 $ 4,568,248 Net loss $ (1,992,385 ) $ (783,166 ) $ (4,155,929 ) $ (1,508,163 ) This selected unaudited pro forma consolidated financial data is included only for the purpose of illustration and does not necessarily indicate what the operating results would have been if the acquisitions had been completed on that date. Moreover, this information does not indicate what our future operating results will be. The information for 2014 and 2015 prior to the acquisitions is included based on prior accounting records maintained by the acquired companies. In some cases, accounting policies differed materially from accounting policies adopted by the Company following the acquisitions. For 2015, this information includes actual data recorded in its financial statements for the period subsequent to the date of the acquisition. The Company’s consolidated statement of operations for the three months ended June 30, 2015 includes net revenue and net loss of $783,016 and $(346,295), respectively, attributable to the 2015 acquisitions. The Company’s consolidated statement of operations for the six months ended June 30, 2015 includes net revenue and net loss of $1,170,319 and $(354,734), respectively, attributable to the acquisitions. As the 2014 acquisition occurred on the last day of the period, there were no net revenues or income attributable to the acquisitions. The pro forma amounts included in the table above reflect the application of 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, 2014, together with the consequential tax impacts. |
Note 3 - Notes Receivable
Note 3 - Notes Receivable | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 3: Notes Receivable Effective July 2012, the Company sold a company-owned clinic, including the license agreement, equipment, and customer base, in exchange for a $90,000 unsecured 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 of the note as of June 30, 2015 and December 31, 2014 was $45,711 and $59,269, respectively. |
Note 4 - Property and Equipment
Note 4 - Property and Equipment | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | Note 4: Property and Equipment Property and equipment consists of the following: June 30, December 31, 2015 2014 Office and computer equipment $ 406,272 $ 209,575 Leasehold improvements 1,998,814 665,961 Software developed 648,871 564,560 3,053,957 1,440,096 Accumulated depreciation (581,128 ) (305,644 ) 2,472,829 1,134,452 Assets in progress 218,213 - $ 2,691,042 $ 1,134,452 Depreciation expense was $189,555 and $275,484 for the three and six months ended June 30, 2015, respectively. Depreciation expense was $48,819 and $88,885 for the three and six months ended June 30, 2014, respectively. Assets in progress relate to the ongoing development of company-owned or managed clinics, which are not yet placed in service. |
Note 5 - Intangible Assets
Note 5 - Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | Note 5: Intangible Assets During the six months ended June 30, 2015, in a series of unrelated transactions, the Company completed its reacquisition and termination of regional developer rights in Los Angeles County, California, San Diego, California, New Jersey, and Orange County, California in exchange for cash consideration of $1,452,500, of which $507,500 was recorded as a cash advance at December 31, 2014. At the time of the transaction, the Company carried a deferred revenue balance of $688,750, representing license fees collected upon the execution of the regional developer agreements. In accordance with ASC 952-605, the Company accounted for the development rights associated with the unsold or undeveloped franchises as a cancellation, and the respective deferred revenue was netted against the aggregate purchase price or recognized as revenue to the extent deferred revenue was in excess of the cash consideration paid. During the six months ended June 30, 2015, the revenue recognized as excess deferred regional developer fees totaled $159,500. The remaining $923,250 was accounted for as consideration paid for the reacquired development rights. As the deferred revenue with respect to these regional developer rights had previously been taken into account for income tax purposes, the tax basis in the reacquired development rights is equal to the cash consideration paid. Intangible assets which remain subject to adjustment upon receipt of final valuation information, consisted of the following: As of June 30, 2015 Gross Carrying Accumulated Net Carrying Amortized intangible assets: Reacquired franchise rights $ 890,900 $ 33,383 $ 857,517 Customer relationships 332,600 46,829 285,771 Reacquired development rights 923,250 45,402 877,848 Unamortized intangible assets: $ 2,146,750 $ 125,614 $ 2,021,136 Goodwill 2,747,668 Total intangible assets $ 4,768,804 Amortization expense was $88,947 and $125,614 for the three and six months ended June 30, 2015, respectively. There was no amortization expense for the three and six months ended June 30, 2014. Estimated amortization expense for 2015 and subsequent years is as follows: 2015 $ 212,733 2016 425,464 2017 295,485 2018 259,164 2019 259,164 Thereafter 569,126 Total $ 2,021,136 |
Note 6 - Notes Payable
Note 6 - Notes Payable | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 6: Notes Payable On February 17, 2015, the Company delivered a $155,000 note payable as a portion of the consideration paid in connection with the acquisition of two existing franchises and a license to develop one additional franchise from Roth & Pelan Enterprises, LLC. This note bears interest at 1.5% per annum with a principal payment of $25,000 plus interest due on June 17, 2015, and the remaining principal and interest due February 17, 2017. While this is a below market interest rate loan, the Company did not impute interest as the effects are immaterial. On March 3, 2015, the Company delivered a $60,000 note payable as a portion of the consideration paid in connection with the acquisition of four existing franchises and a license to develop one additional franchise from TJSC, LLC. This note bears interest at 4.5% per annum with a principal payment of $30,000 plus interest due on July 30, 2015, and the remaining principal plus interest due on January 30, 2016. On March 6, 2015, the Company delivered a $30,000 note payable as a portion of the consideration paid in connection with the acquisition of two existing franchises and licenses to develop seven additional franchises from The Joint San Gabriel Valley Inc. This note bears interest at 1.5% per annum with principal and interest due on November 19, 2015. While this is a below market interest rate loan, the Company did not impute interest as the effects are immaterial. On March 23, 2015, the Company delivered a $10,000 note payable as a portion of the consideration paid in connection with the acquisition of an existing franchise from The Joint Arrowhead Ranch LLC. This note bears interest at 1.5% per annum with principal and interest due September 20, 2016. If the seller has fully performed its duties under the agreement, one half of the principal plus interest will be paid on July 20, 2015. While this is a below market interest rate loan, the Company did not impute interest as the effects are immaterial. On April 1, 2015, the Company delivered a $58,500 note payable as a portion of the consideration paid in connection with the acquisition of an existing franchise from The Joint Chiropractic Bell Towne LLC. This note bears interest at 1.50% per annum with the principal and interest due September 30, 2015. If the seller has fully performed its duties under the agreement, $25,000 plus interest will be paid on July 30, 2015. While this is a below market interest rate loan, the Company did not impute interest as the effects are immaterial. On May 1, 2015, the Company delivered a $80,900 note payable as a portion of the consideration paid in connection with the acquisition of two existing franchises and licenses to develop six additional franchises from San Diego Joint Development Inc. This note bears interest at 4.25% per annum with the principal and interest due April 30, 2016. If the seller has fully performed its duties under the agreement, $40,450 plus interest will be paid on November 1, 2015 and $40,450 plus interest will be paid on April 30, 2016. On May 18, 2015, the Company delivered a $75,000 note payable as a portion of the consideration paid in connection with the acquisition of three existing franchises and licenses to develop two additional franchises from First Light Junction. This note bears interest at 4.0% per annum with the principal and interest due November 18, 2016. If the seller has fully performed its duties under the agreement, $25,000 plus interest will be paid on September 18, 2015, $25,000 plus interest will be paid on February 18, 2016 and $25,000 plus interest will be paid on November 18, 2016. On June 3, 2015, the Company delivered a $100,000 note payable as a portion of the consideration paid in connection with the acquisition of two existing franchises and licenses to develop four additional franchises from WHB Franchise, Inc. This note bears interest at 5.25% per annum with the principal and interest due April 3, 2016. If the seller has fully performed its duties under the agreement, $25,000 plus interest will be paid on October 3, 2015, $25,000 plus interest will be paid on December 3, 2015 and $50,000 plus interest will be paid on April 3, 2016. On June 5, 2015, the Company delivered a $75,000 note payable as a portion of the consideration paid in connection with the acquisition of three existing franchises and licenses to develop three additional franchises from Clear Path Ventures, Inc. This note bears interest at 4.25% per annum with the principal and interest due June 4, 2016. If the seller has fully performed its duties under the agreement, $25,000 plus interest will be paid on October 5, 2015, $12,500 plus interest will be paid on December 5, 2015 and $37,500 plus interest will be paid on June 4, 2016. Maturities of the Company’s notes payable are as follows as of June 30, 2015: 2015 $ 276,450 2016 212,950 2017 130,000 Total $ 619,400 |
Note 7 - Equity
Note 7 - Equity | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 7: Equity Initial Public Offering The Company completed its 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 it received aggregate net proceeds of approximately $17,065,000 after deducting underwriting discounts, commissions and other offering expenses. The Company’s underwriters exercised their option to purchase 450,000 additional shares of common stock to cover over-allotments on November 18, 2014, pursuant to which it received aggregate net proceeds of approximately $2,710,000, after deducting underwriting discounts, commissions and expenses. Also, in conjunction with the IPO, the Company 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 the six months ended June 30, 2015, the Company granted 61,500 stock options to employees and certain non-employee members of its board of directors with exercise prices ranging from $6.75 - $8.32. The fair value of the Company’s common stock prior to its 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 the Company’s common stock including its EBITDA, assessments of an amount its shareholders would accept in the private sale of the company, discussions with its 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 the Company’s common stock are not complex, the board’s estimate of the fair value of the common stock did involve subjectivity, especially assessments of value in a private sale and estimates of value in the public stock market. Upon the completion of the Company’s IPO, its stock trading price became the basis of fair value of its common stock used in determining the value of share based awards. To the extent the value of the Company’s share based awards involves a measure of volatility, it will rely upon the volatilities from publicly traded companies with similar business models until its common stock has accumulated enough trading history for it to utilize its 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. The Company has computed the fair value of all options granted during the six months ended June 30, 2015 and 2014, using the following assumptions: Six Months Ended June 30, 2015 2014 Expected volatility 46% - 47% 43% - 46% Expected dividends None None Expected term (years) 5 - 6.25 5.5 - 7.5 Risk-free rate 1.32% to 1.74% 0.07% - 2.05% Forfeiture rate 20% None The information below summarizes the stock options: Number of Weighted Weighted Weighted Outstanding at December 31, 2014 314,775 $ 2.04 $ 0.92 9.2 Granted at market price 61,500 8.16 Exercised - - Cancelled - - Outstanding at June 30, 2015 376,275 $ 3.20 $ 1.46 8.9 Exercisable at June 30, 2015 90,377 $ 1.91 $ 0.86 8.7 The intrinsic value of the Company’s stock options outstanding was $2,686,126 at June 30, 2015. For the three and six months ended June 30, 2015, stock based compensation expense for stock options was $67,468, and $110,996, respectively. For the three and six months ended June 30, 2014, stock based compensation expense for stock options was $4,395, and $7,157, respectively. Unrecognized stock-based compensation expense for stock options as of June 30, 2015 was $300,716, which is expected to be recognized ratably over the next 2.9 years. Restricted Stock The information below summaries the restricted stock activity: Restricted Stock Awards Shares Outstanding at December 31, 2014 662,375 Restricted stock awards granted - Awards forfeited or exercised - Outstanding at June 30, 2015 662,375 For the three and six months ended June 30, 2015, stock based compensation expense for restricted stock was $89,744, and $178,503, respectively. For the three and six months ended June 30, 2014, stock based compensation expense for restricted stock was $9,950, and $19,682, respectively. Unrecognized stock based compensation expense for restricted stock awards as of June 30, 2015 was $1,019,710 to be recognized ratably over the next 2.9 years. |
Note 8 - Income Taxes
Note 8 - Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 8: Income Taxes During the three and six months ended June 30, 2015, the Company recorded no income tax provision due to a net operating loss and a valuation allowance against deferred tax assets. |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | Note 9: Related Party Transactions The Company entered into consulting and legal agreements with certain common stockholders related to services performed for the operations of the Company. Amounts paid to or for the benefit of these stockholders was approximately $349,000 and $558,000 for the three and six months ended June 30, 2015, respectively. Amounts paid to or for the benefit of these stockholders was approximately $238,000 and $447,000 for the three and six months ended June 30, 2014, respectively. |
Note 10 - Commitments and Conti
Note 10 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | Note 10: Commitments and Contingencies Operating Leases The Company leases its corporate office space with 66 monthly payments increasing from $10,500 to $22,000, beginning February 3, 2014, the date it took occupancy of the new office space. Between December 31, 2014 and June 30, 2015, the Company assumed 19 additional leases for clinic locations. These leases vary in length from 18 to 88 months and have monthly payments ranging from $2,015 to $6,073. Total rent expense for the three and six months ended June 30, 2015 was $236,137 and $354,617, respectively. Total rent expense for the three and six months ended June 30, 2014 was $33,860 and $67,081, respectively. Future minimum annual lease payments are as follows: 2015 $ 629,310 2016 1,242,706 2017 1,101,769 2018 580,604 2019 247,301 Thereafter 104,961 Total $ 3,906,651 Litigation In the normal course of business, the Company is party to litigation from time to time. The Company maintains insurance to cover certain actions and believe that resolution of such litigation will not have a material adverse effect on the Company. On July 7, 2015, a group of 13 franchisees, whose licenses had been terminated by the Company due to defaults in performance, commenced a collective arbitration proceeding in San Diego, California. The claimants’ demand for arbitration asserts claims for breach of contract, promissory fraud, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, wrongful termination of franchise agreements and “wrongful competition” pursuant to unspecified state business practices, unfair competition and franchise statutes. The claimants also seek “a preliminary and permanent injunction prohibiting the Company from seeking to operate corporate clinics within 25 miles of any franchise clinic.” Although commenced in California, all of the franchise agreements in dispute include clauses that make it mandatory for any arbitration proceeding to be conducted in Phoenix, Arizona. Each agreement also requires claims to be arbitrated on an individual, not class-wide basis. Additionally, some of the claimants may be unauthorized assignees of franchisees and, therefore, may not have standing to assert certain claims. The Company does not believe any of the claims, either collectively or individually, have any legal merit and intends to vigorously defend the arbitration proceeding. |
Note 11 - Subsequent Event
Note 11 - Subsequent Event | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | Note 11: Subsequent Events On July 1, 2015, the Company completed the repurchase of two franchises in Maricopa County, Arizona. The transaction involved the repurchase of one operating franchise and one undeveloped franchise. The Company intends to operate the operating franchise as a company-owned clinic. The total consideration this transaction was $265,000, $212,000 of which was funded from the proceeds of the Company’s recent initial public offering, and $53,000 of which was funded with a promissory note. On August 10, 2015, the Company repurchased three franchises in Erie County, New York (the “Repurchase Transaction”). In a related transaction, the Company terminated a regional developer agreement (the “Termination Transaction”). The Repurchase Transaction involved the repurchase of one operating franchise and two undeveloped franchises. The Company intends to manage the operating franchise. The Termination Transaction involved the repurchase of development rights in Erie County, Monroe County, Nassau County, Suffolk County, and Albany County, all located in the state of New York. The Company does not intend to resell these rights, but rather to terminate this regional developer license as a prelude to developing Company-managed clinics in this region. The total consideration for the Repurchase Transaction and the Termination Transaction was $350,000, $303,050 of which was funded from the proceeds of the Company’s recent IPO, and $46,950 of which was funded with a promissory note. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation These unaudited financial statements represent the condensed consolidated financial statements of The Joint Corp. (“The Joint”) and its wholly owned subsidiary The Joint Corporate Unit No. 1, LLC (collectively, the “Company”). These unaudited condensed consolidated financial statements should be read in conjunction with The Joint Corp. and Subsidiary consolidated financial statements and the notes thereto as set forth in The Joint Corp.’s Form 10-K, which included all disclosures required by generally accepted accounting principles. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the Company’s financial position on a consolidated basis and the consolidated results of operations and cash flows for the interim periods presented. The results of operations for the periods ended June 30, 2015 and 2014 are not necessarily indicative of expected operating results for the full year. The information presented throughout the document as of and for the periods ended June 30, 2015 and 2014 is unaudited. |
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”), which was dormant for all periods presented. All significant intercompany accounts and transactions between The Joint Corp. and its subsidiary have been eliminated in consolidation. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Loss Net loss and comprehensive loss are the same for the three and six months ended June 30, 2015 and 2014. |
Nature of Operations Policy [Policy Text Block] | Nature of Operations The Joint Corp., a Delaware corporation, was formed on March 10, 2010. Its principal business purposes are owning, operating, managing and franchising chiropractic clinics, selling regional developer rights and supporting the operations of owned, managed and 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 following table summarizes the number of clinics in operation under franchise agreements or that are company-owned or managed for the three and six months ended June 30, 2015 and 2014: Three Months Ended Six Months Ended Franchised clinics: 2015 2014 2015 2014 Clinics open at beginning of period 241 192 242 175 Opened during the period 10 23 23 41 Acquired during the period (11 ) - (21 ) - Closed during the period (1 ) - (5 ) (1 ) Clinics in operation at the end of the period 239 215 239 215 Franchises sold but not yet operational 230 250 230 250 Three Months Ended Six Months Ended Corporate owned or managed clinics: 2015 2014 2015 2014 Clinics open at beginning of period 12 - 4 - Acquired during the period 11 - 21 - Closed during the period - - (2 ) - Clinics in operation at the end of the period 23 - 23 - Total clinics in operation at the end of the period 262 215 262 215 |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Variable Interest Entities An entity deemed to hold the controlling interest in a voting interest entity or deemed to be the primary beneficiary of a variable interest entity (“VIE”) is required to consolidate the VIE in its financial statements. An entity is deemed to be the primary beneficiary of a VIE if it has both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb the majority of losses of the VIE or the right to receive the majority of benefits from the VIE. Investments where the Company does not hold the controlling interest and are not the primary beneficiary are accounted for under the equity method. Certain states in which the Company manages clinics, regulate the practice of chiropractic care and require that chiropractic services be provided by legal entities organized under state laws as professional corporations or PCs. In these states, the Company has entered into management services agreements with PCs under which the Company provides on an exclusive basis, all non-clinical services of the chiropractic practice. The Company has analyzed its relationship with the PCs and has determined that the Company does not have the power to direct the activities of the VIE. As such, the activity of the PCs is not included in the Company’s consolidated financial statements. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company continually monitors its positions with, and credit quality of, the financial institutions with which it invests. As of the balance sheet date and periodically throughout the period, the Company has maintained balances in various operating accounts in excess of federally insured limits. The Company has invested substantially all of the proceeds of its IPO in short-term bank deposits. The Company had no cash equivalents as of June 30, 2015 and December 31, 2014. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash relates to cash franchisees and corporate clinics contribute to the Company’s National Marketing Fund and cash franchisees provide to various voluntary regional Co-Op Marketing Funds. Cash contributed by franchisees 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 From time to time the Company grants credit in the normal course of business to franchisees related to the collection of royalties and other operating revenues. The Company periodically performs credit analysis and monitor the financial condition of the franchisees to reduce credit risk. As of December 31, 2014, six franchisees represented 56% of outstanding accounts receivable. The Company did not have any customers that represented greater than 10% of its accounts receivable or revenues during the three and six months ended June 30, 2015 and 2014. |
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. The Company considers 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 the Company tracks on an ongoing basis. The losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. As of June 30, 2015 and December 31, 2014, the Company had an allowance for doubtful accounts of $85,377 and $81,032, respectively. |
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 income. |
Internal Use Software, Policy [Policy Text Block] | Software Developed The Company capitalizes most software development costs. These capitalized costs are primarily related to proprietary software used by clinics for operations and by the Company for the 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. The Company also capitalizes 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. The Company amortizes 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 approximately 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 Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the acquisitions discussed in Note 2. Under 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 ASC 350-10, and are written down when impaired. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company reviews our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to estimated undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. No impairments of long-lived assets were recorded for the periods ended June 30, 2015 and 2014. |
Advertising Fund, Policy [Policy Text Block] | Advertising Fund The Company has established an advertising fund for national/regional marketing and advertising of services offered by its clinics. The monthly marketing fee was increased to 2% in January 2015. The Company segregates the marketing funds collected which are included in restricted cash on its consolidated balance sheets. As amounts are expended from the fund, the Company recognizes advertising fund revenue and a related expense properly eliminating intercompany transactions. Amounts collected in excess of marketing expenditures are included in restricted cash on the Company’s 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. The Company maintains a custodial 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 the Company’s consolidated balance sheets. |
Lease, Policy [Policy Text Block] | Deferred Rent The Company leases office space for its corporate offices and company-owned and managed clinics under operating leases, which may include rent holidays and rent escalation clauses. It 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 The Company generates revenue through initial franchise fees, regional developer fees, royalties, advertising fund revenue, IT related income, and computer software fees, and from its company-owned and managed clinics. |
Revenue Recognition, Services, Franchise Fees [Policy Text Block] | Franchise Fees. During the three months ended June 30, 2015, the Company terminated 20 franchise licenses that were in default of various obligations under their respective franchise agreements. In conjunction with these terminations, the Company recognized $580,000 of revenue in the quarter, and $236,750 of costs which were previously deferred. |
Regional Developer Fees, Policy [Policy Text Block] | Regional Developer Fees |
Revenues and Management Fees, Policy [Policy Text Block] | Revenues and Management Fees from Company Clinics. |
Royalties, Policy [Policy Text Block] | Royalties. |
IT Related Income And Software Fees, Policy [Policy Text Block] | IT Related Income and Software Fees. |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs The Company incurs advertising costs in addition to those included in the advertising fund. The Company’s policy is to expense all operating advertising costs as incurred. Advertising expenses were $207,483 and $475,988 for the three and six months ended June 30, 2015, respectively. Advertising expenses were $4,042 and $40,039 for the three and six months ended June 30, 2014, respectively. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes in accordance with the ASC 740 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. The Company accounts 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. The Company measures the tax benefits and expenses recognized in the condensed 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. At June 30, 2015 and December 31, 2014, the Company maintained a liability for income taxes for uncertain tax positions of approximately $125,000 and $122,000, respectively, of which $33,000 and $30,000, respectively, represent penalties and interest and are recorded in the “other liabilities” section of the accompanying condensed consolidated balance sheets. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. The Company’s tax returns for tax years subject to examination by tax authorities include 2011 through the current period for state and federal reporting purposes. |
Earnings Per Share, Policy [Policy Text Block] | Loss per Common Share Basic loss per common share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is computed by giving effect to all potentially dilutive common shares including preferred stock, restricted stock, and stock options. Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss $ (1,855,870 ) $ (133,749 ) $ (3,759,593 ) $ (261,646 ) Weighted average common shares outstanding - basic 9,768,230 4,819,902 9,734,115 4,815,754 Effect of dilutive securities: Stock options - - - - Weighted average common shares outstanding - diluted 9,768,230 4,819,902 9,734,115 4,815,754 Basic and diluted loss per share $ (0.19 ) $ (0.03 ) $ (0.39 ) $ (0.05 ) 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: Three Months Ended Six Months Ended 2015 2014 2015 2014 Unvested restricted stock 453,846 116,818 453,846 116,818 Stock options 376,275 271,895 376,275 271,895 Warrants 90,000 - 90,000 - |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The Company accounts for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. The Company determines 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. 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. Prior to the IPO the grant date fair value was determined by the Board of Directors. Changes to the assumptions could cause significant adjustments to the valuation. The Company recognizes 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 condensed 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 condensed 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, realizability of deferred tax assets, impairment of goodwill and intangible assets and purchase price allocations. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard becomes effective for us on January 1, 2018. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. 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. The Company is currently evaluating the impact of the adoption of ASU No. 2014-15 on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.” The guidance provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. The update is effective for reporting periods beginning after December 15, 2015. The Company is currently evaluating the impact of the adoption of ASU No. 2015-05 on its consolidated financial statements. |
Note 1 - Nature of Operations19
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Franchisor Disclosure [Table Text Block] | Three Months Ended Six Months Ended Franchised clinics: 2015 2014 2015 2014 Clinics open at beginning of period 241 192 242 175 Opened during the period 10 23 23 41 Acquired during the period (11 ) - (21 ) - Closed during the period (1 ) - (5 ) (1 ) Clinics in operation at the end of the period 239 215 239 215 Franchises sold but not yet operational 230 250 230 250 Three Months Ended Six Months Ended Corporate owned or managed clinics: 2015 2014 2015 2014 Clinics open at beginning of period 12 - 4 - Acquired during the period 11 - 21 - Closed during the period - - (2 ) - Clinics in operation at the end of the period 23 - 23 - Total clinics in operation at the end of the period 262 215 262 215 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss $ (1,855,870 ) $ (133,749 ) $ (3,759,593 ) $ (261,646 ) Weighted average common shares outstanding - basic 9,768,230 4,819,902 9,734,115 4,815,754 Effect of dilutive securities: Stock options - - - - Weighted average common shares outstanding - diluted 9,768,230 4,819,902 9,734,115 4,815,754 Basic and diluted loss per share $ (0.19 ) $ (0.03 ) $ (0.39 ) $ (0.05 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Three Months Ended Six Months Ended 2015 2014 2015 2014 Unvested restricted stock 453,846 116,818 453,846 116,818 Stock options 376,275 271,895 376,275 271,895 Warrants 90,000 - 90,000 - |
Note 2 - Acquisitions (Tables)
Note 2 - Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Franchises in Phoenix and Tucson, Arizona [Member] | |
Notes Tables | |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | December 31, 2014 As reported As revised Deferred franchise costs - current portion $ 668,700 $ 622,800 Goodwill $ 677,204 $ 636,104 Deferred revenue - current portion $ 2,044,500 $ 1,957,500 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Property and equipment $ 297,630 Intangible assets 153,000 Goodwill 636,104 Total assets acquired 1,086,734 Unfavorable leases (227,834 ) Net assets acquired $ 858,900 Property and equipment $ 1,346,766 Intangible assets 1,070,500 Goodwill 2,111,564 Total assets acquired 4,528,830 Deferred membership revenue (107,555 ) Net assets acquired $ 4,421,275 |
Business Acquisition, Pro Forma Information [Table Text Block] | Pro Forma for the Three Months Ended Pro Forma for the Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Revenues, net $ 3,595,084 $ 2,393,624 $ 6,650,946 $ 4,568,248 Net loss $ (1,992,385 ) $ (783,166 ) $ (4,155,929 ) $ (1,508,163 ) |
Note 4 - Property and Equipme21
Note 4 - Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | June 30, December 31, 2015 2014 Office and computer equipment $ 406,272 $ 209,575 Leasehold improvements 1,998,814 665,961 Software developed 648,871 564,560 3,053,957 1,440,096 Accumulated depreciation (581,128 ) (305,644 ) 2,472,829 1,134,452 Assets in progress 218,213 - $ 2,691,042 $ 1,134,452 |
Note 5 - Intangible Assets (Tab
Note 5 - Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | As of June 30, 2015 Gross Carrying Accumulated Net Carrying Amortized intangible assets: Reacquired franchise rights $ 890,900 $ 33,383 $ 857,517 Customer relationships 332,600 46,829 285,771 Reacquired development rights 923,250 45,402 877,848 Unamortized intangible assets: $ 2,146,750 $ 125,614 $ 2,021,136 Goodwill 2,747,668 Total intangible assets $ 4,768,804 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2015 $ 212,733 2016 425,464 2017 295,485 2018 259,164 2019 259,164 Thereafter 569,126 Total $ 2,021,136 |
Note 6 - Notes Payable (Tables)
Note 6 - Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Maturities of Long-term Debt [Table Text Block] | 2015 $ 276,450 2016 212,950 2017 130,000 Total $ 619,400 |
Note 7 - Equity (Tables)
Note 7 - Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Six Months Ended June 30, 2015 2014 Expected volatility 46% - 47% 43% - 46% Expected dividends None None Expected term (years) 5 - 6.25 5.5 - 7.5 Risk-free rate 1.32% to 1.74% 0.07% - 2.05% Forfeiture rate 20% None |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Weighted Weighted Weighted Outstanding at December 31, 2014 314,775 $ 2.04 $ 0.92 9.2 Granted at market price 61,500 8.16 Exercised - - Cancelled - - Outstanding at June 30, 2015 376,275 $ 3.20 $ 1.46 8.9 Exercisable at June 30, 2015 90,377 $ 1.91 $ 0.86 8.7 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Restricted Stock Awards Shares Outstanding at December 31, 2014 662,375 Restricted stock awards granted - Awards forfeited or exercised - Outstanding at June 30, 2015 662,375 |
Note 10 - Commitments and Con25
Note 10 - Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 2015 $ 629,310 2016 1,242,706 2017 1,101,769 2018 580,604 2019 247,301 Thereafter 104,961 Total $ 3,906,651 |
Supplemental Disclosure of No26
Supplemental Disclosure of Non-cash Activity (Details Textual) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Franchise Fees [Member] | |||
Deferred Revenue | $ 928,000 | ||
License Fees [Member] | |||
Deferred Revenue | 688,750 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 1,346,766 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 1,070,500 | ||
Goodwill, Acquired During Period | 2,111,564 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | 107,555 | ||
Payments to Acquire Businesses, Net of Cash Acquired | 4,242,975 | ||
Business Combination, Consideration Transferred, Liabilities Incurred | 644,400 | ||
Deferred Franchise Costs Netted Against Aggregate Purchase Price | 461,900 | ||
Deposit Assets | $ 507,500 | ||
Intangible Assets Reclassified from Deposits | $ 507,500 |
Note 1 - Nature of Operations27
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk, Number of Major Customers | 0 | 0 | 0 | 0 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Franchisees [Member] | |||||
Number of Franchises | 3 | 3 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Six Franchisees [Member] | |||||
Number of Franchises | 6 | ||||
Concentration Risk, Percentage | 56.00% | ||||
Minimum [Member] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Maximum [Member] | |||||
Property, Plant and Equipment, Useful Life | 7 years | ||||
Computer Software, Intangible Asset [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||
Franchise Rights [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
Scenario at the Companys Discretion [Member] | |||||
Franchise Monthly Marketing Fee Gross Sales Percentage | 2.00% | ||||
Other Noncurrent Liabilities [Member] | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 30,000 | ||||
Cash Equivalents, at Carrying Value | $ 0 | $ 0 | 0 | ||
Impairment of Long-Lived Assets Held-for-use | 0 | $ 0 | |||
Allowance for Doubtful Accounts Receivable | $ 85,377 | $ 85,377 | 81,032 | ||
Initial Franchise Agreement Term | 10 years | ||||
Number of Franchise Licenses Terminated | 20 | ||||
Revenue Recognized in Conjunction with Franchise License Terminations | $ 580,000 | ||||
Recognition of Previously Deferred Costs in Conjunction with Franchise License Terminations | 236,750 | ||||
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% | ||||
Franchise Royalty Gross Sales Percentage | 7.00% | ||||
Marketing and Advertising Fee Gross Sales Percentage | 2.00% | ||||
Advertising Expense | 207,483 | $ 4,042 | $ 475,988 | $ 40,039 | |
Liability for Uncertain Tax Positions, Current | 125,000 | 125,000 | $ 122,000 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 33,000 | $ 33,000 |
Note 1 - Franchise Agreements (
Note 1 - Franchise Agreements (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Franchised Units [Member] | ||||
Clinics open at beginning of period | 241 | 192 | 242 | 175 |
Opened during the period | 10 | 23 | 23 | 41 |
Acquired during the period | (11) | (21) | ||
Closed during the period | (1) | (5) | (1) | |
Clinics in operation at the end of the period | 239 | 215 | 239 | 215 |
Franchises sold but not yet operational | 230 | 250 | 230 | 250 |
Entity Operated Units [Member] | ||||
Clinics open at beginning of period | 12 | 4 | ||
Acquired during the period | 11 | 21 | ||
Closed during the period | (2) | |||
Clinics in operation at the end of the period | 23 | 23 | ||
Clinics in operation at the end of the period | 262 | 215 | 262 | 215 |
Note 1 - Earnings (Loss) Per Co
Note 1 - Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net loss | $ (1,855,870) | $ (133,749) | $ (3,759,593) | $ (261,646) |
Weighted average common shares outstanding - basic (in shares) | 9,768,230 | 4,819,902 | 9,734,115 | 4,815,754 |
Weighted average common shares outstanding - diluted (in shares) | 9,768,230 | 4,819,902 | 9,734,115 | 4,815,754 |
Basic and diluted loss per share (in dollars per share) | $ (0.19) | $ (0.03) | $ (0.39) | $ (0.05) |
Note 1 - Potential Shares of Co
Note 1 - Potential Shares of Common Stock Excluded from Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Restricted Stock [Member] | ||||
Unvested restricted stock (in shares) | 453,846 | 116,818 | 453,846 | 116,818 |
Employee Stock Option [Member] | ||||
Unvested restricted stock (in shares) | 376,275 | 271,895 | 376,275 | 271,895 |
Warrant [Member] | ||||
Unvested restricted stock (in shares) | 90,000 | 90,000 |
Note 2 - Acquisitions (Details
Note 2 - Acquisitions (Details Textual) - Scenario, Unspecified [Domain] | Jan. 02, 2015USD ($) | Dec. 31, 2014USD ($) | Jan. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Clinic in Tempe, Arizona [Member] | ||||||
Business Combination, Consideration Transferred | $ 0 | |||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 0 | $ 0 | ||||
Reacquisitions of Franchises Throughout Arizona and California and Acquisition of Clinic in Tempe, Arizona [Member] | Franchise Rights [Member] | ||||||
Finite-lived Intangible Assets Acquired | $ 809,900 | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||||
Reacquisitions of Franchises Throughout Arizona and California and Acquisition of Clinic in Tempe, Arizona [Member] | Customer Relationships [Member] | ||||||
Finite-lived Intangible Assets Acquired | $ 260,600 | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | |||||
Reacquisitions of Franchises Throughout Arizona and California and Acquisition of Clinic in Tempe, Arizona [Member] | ||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | 783,016 | $ 1,170,319 | ||||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | 346,295 | 354,734 | ||||
Business Combination, Acquisition Related Costs | 279,253 | |||||
Business Combination, Measurement Period Adjustments, Property and Equipment, Increase (Decrease) | 13,866 | |||||
Business Combination, Measurement Period Adjustments, Intangible Assets, Increase (Decrease) | 186,000 | |||||
Business Combination, Measurement Period Adjustments, Deferred Revenue, Increase (Decrease) | 19,990 | |||||
Business Combination, Measurement Period Ajustment, Goodwill, Increase (Decrease) | 179,876 | |||||
The Joint RRC Corp [Member] | Los Angeles County [Member] | ||||||
Number of Franchises Acquired from Franchisee | 4 | 4 | ||||
The Joint RRC Corp [Member] | Franchise Rights [Member] | ||||||
Finite-lived Intangible Assets Acquired | $ 81,000 | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||||
The Joint RRC Corp [Member] | Customer Relationships [Member] | ||||||
Finite-lived Intangible Assets Acquired | $ 72,000 | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | |||||
The Joint RRC Corp [Member] | ||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 0 | |||||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 0 | |||||
Number of Franchises Acquired from Franchisee | 6 | 6 | ||||
Payments to Acquire Businesses, Gross | $ 900,000 | |||||
Number of Franchises to Be Operated as Company-owned from Franchisee Acquistion | 4 | 4 | ||||
Number Of Franchises To Be Closed | 2 | 2 | ||||
Number of Additional Undeveloped Franchises Acquired | 3 | |||||
Net Purchase Price, Net Deferred Revenue Adjustment | $ 41,100 | |||||
Developed and Undeveloped Franchises Reacquired [Member] | ||||||
Business Combination, Consideration Transferred | 4,887,375 | |||||
Payments to Acquire Businesses, Gross | 4,242,975 | |||||
Business Combination, Consideration Transferred, Net of Deferred Revenue and Deferred Franchise Costs | 4,421,275 | |||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 644,400 | |||||
Franchise Rights [Member] | ||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||||
Customer Relationships [Member] | ||||||
Finite-Lived Intangible Asset, Useful Life | 2 years | |||||
Franchise Fees [Member] | ||||||
Deferred Revenue | $ 928,000 | $ 928,000 | ||||
Business Combination, Consideration Transferred, Net of Deferred Revenue and Deferred Franchise Costs | $ 858,900 | |||||
Number of Developed Franchises Reacquired During Period | 21 | |||||
Number of Undeveloped Franchises Reacquired During the Period | 31 | |||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 644,400 | |||||
Number of Reacquired Developed Franchises Operated as Company-owned or Managed Clinics | 19 | 19 | ||||
Number of Reacquired Undeveloped Franchises that Have Been Terminated and May Be Relocated | 31 | 31 | ||||
Deferred Franchise Costs | $ 461,900 | $ 461,900 |
Note 2 - Assets Acquired and Li
Note 2 - Assets Acquired and Liabilities Assumed (Details) - Scenario, Unspecified [Domain] - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
The Joint RRC Corp [Member] | ||
Property and equipment | $ 297,630 | |
Intangible assets | 153,000 | |
Goodwill | 636,104 | |
Total assets acquired | 1,086,734 | |
Unfavorable leases | (227,834) | |
Net assets acquired | 858,900 | |
Reacquisitions of Franchises Throughout Arizona and California and Acquisition of Clinic in Tempe, Arizona [Member] | ||
Property and equipment | $ 1,346,766 | |
Intangible assets | 1,070,500 | |
Goodwill | 2,111,564 | |
Total assets acquired | 4,528,830 | |
Net assets acquired | 4,421,275 | |
Deferred membership revenue | (107,555) | |
Property and equipment | 1,346,766 | |
Intangible assets | 1,070,500 | |
Goodwill | 2,747,668 | $ 636,104 |
Deferred membership revenue | $ (107,555) |
Note 2 - Balance Sheet Adjustme
Note 2 - Balance Sheet Adjustments Related to the Purchase Price Allocation (Details) - USD ($) | Dec. 31, 2014 |
Scenario, Previously Reported [Member] | |
Deferred franchise costs - current portion | $ 668,700 |
Goodwill | 677,204 |
Deferred revenue - current portion | 2,044,500 |
Deferred franchise costs - current portion | 622,800 |
Goodwill | 636,104 |
Deferred revenue - current portion | $ 1,957,500 |
Note 2 - Supplemental Pro Forma
Note 2 - Supplemental Pro Forma Information (Details) - The Joint RRC Corp [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues, net | $ 3,595,084 | $ 2,393,624 | $ 6,650,946 | $ 4,568,248 |
Net loss | $ (1,992,385) | $ (783,166) | $ (4,155,929) | $ (1,508,163) |
Note 3 - Notes Receivable (Deta
Note 3 - Notes Receivable (Details Textual) - Company-owned Clinic [Member] - USD ($) | 1 Months Ended | ||
Jul. 31, 2012 | Jun. 30, 2015 | Dec. 31, 2014 | |
Financing Receivable, Net | $ 90,000 | $ 45,711 | $ 59,269 |
Notes Receivable, Interest Rate | 6.00% | ||
Notes Receivable, Contractual Term | 4 years 180 days | ||
Notes Receivable, Principal and Interest, Term | 3 years 180 days |
Note 4 - Property and Equipme36
Note 4 - Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Depreciation | $ 189,555 | $ 48,819 | $ 275,484 | $ 88,885 |
Note 4 - Property and Equipme37
Note 4 - Property and Equipment (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Office Equipment [Member] | ||
Office and computer equipment | $ 406,272 | $ 209,575 |
Leasehold Improvements [Member] | ||
Office and computer equipment | 1,998,814 | 665,961 |
Software Development [Member] | ||
Office and computer equipment | 648,871 | 564,560 |
Property, Plant and Equipment Excluding Assets in Progress [Member] | ||
Office and computer equipment | 3,053,957 | 1,440,096 |
Accumulated depreciation | (581,128) | (305,644) |
2,472,829 | $ 1,134,452 | |
Assets in Progress [Member] | ||
218,213 | ||
$ 2,691,042 | $ 1,134,452 |
Note 5 - Intangible Assets (Det
Note 5 - Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Regional Developer Rights in Los Angeles County, San Diego, and New Jersey [Member] | Franchises [Member] | ||||
Deferred Revenue | $ 688,750 | $ 688,750 | ||
Excess Deferred Regional Fees Revenue Recognized | 159,500 | |||
Regional Developer Rights in Los Angeles County, San Diego, and New Jersey [Member] | ||||
Finite-lived Intangible Assets Acquired | 1,452,500 | |||
Cash Advance to Acquire Intangible Assets | 507,500 | 507,500 | ||
Payments to Acquire Intangible Assets | 923,250 | |||
Amortization of Intangible Assets | $ 88,947 | $ 0 | $ 125,614 | $ 0 |
Note 5 - Intangible Assets Acqu
Note 5 - Intangible Assets Acquired (Details) - Scenario, Unspecified [Domain] - USD ($) | Jun. 30, 2015 |
Franchise Rights [Member] | |
Amortized intangible assets: | |
Gross Carrying Amount | $ 890,900 |
Accumulated Amortization | 33,383 |
Net Carrying Value | 857,517 |
Customer Relationships [Member] | |
Amortized intangible assets: | |
Gross Carrying Amount | 332,600 |
Accumulated Amortization | 46,829 |
Net Carrying Value | 285,771 |
Development Rights [Member] | |
Amortized intangible assets: | |
Gross Carrying Amount | 923,250 |
Accumulated Amortization | 45,402 |
Net Carrying Value | 877,848 |
Gross Carrying Amount | 2,146,750 |
Accumulated Amortization | 125,614 |
Net Carrying Value | 2,021,136 |
Goodwill | 2,747,668 |
Total Intangible Assets | $ 4,768,804 |
Note 5 - Estimated Amortization
Note 5 - Estimated Amortization Expense (Details) | Jun. 30, 2015USD ($) |
2,015 | $ 212,733 |
2,016 | 425,464 |
2,017 | 295,485 |
2,018 | 259,164 |
2,019 | 259,164 |
Thereafter | 569,126 |
Total | $ 2,021,136 |
Note 6 - Notes Payable (Details
Note 6 - Notes Payable (Details Textual) | Jun. 30, 2015USD ($) | Jun. 05, 2015USD ($) | Jun. 03, 2015USD ($) | May. 18, 2015USD ($) | May. 01, 2015USD ($) | Apr. 02, 2015USD ($) | Mar. 23, 2015USD ($) | Mar. 06, 2015USD ($) | Mar. 03, 2015USD ($) | Feb. 17, 2015USD ($) |
Franchise from Roth Pelan Enterprises LLC [Member] | ||||||||||
Debt Instrument, Face Amount | $ 155,000 | |||||||||
Number of Franchises | 2 | |||||||||
Number of Acquired Franchises to Develop | 1 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | |||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 25,000 | |||||||||
Franchise from TJSC LLC [Member] | ||||||||||
Debt Instrument, Face Amount | $ 60,000 | |||||||||
Number of Franchises | 4 | |||||||||
Number of Acquired Franchises to Develop | 1 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 30,000 | |||||||||
Franchises from The Joint San Gabriel Valley Inc [Member] | ||||||||||
Debt Instrument, Face Amount | $ 30,000 | |||||||||
Number of Franchises | 2 | |||||||||
Number of Acquired Franchises to Develop | 7 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | |||||||||
Franchise from The Joint Arrowhead Ranch LLC [Member] | ||||||||||
Debt Instrument, Face Amount | $ 10,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | |||||||||
Franchise from The Joint Chiropractic Bell Towne LLC [Member] | ||||||||||
Debt Instrument, Face Amount | $ 58,500 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | |||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 25,000 | |||||||||
Franchise from San Diego Joint Development Inc. [Member] | ||||||||||
Debt Instrument, Face Amount | $ 80,900 | |||||||||
Number of Franchises | 2 | |||||||||
Number of Acquired Franchises to Develop | 6 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | |||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 40,450 | |||||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | $ 40,450 | |||||||||
Franchise from First Light Junction [Member] | Payable February 18, 2016 [Member] | ||||||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | $ 25,000 | |||||||||
Franchise from First Light Junction [Member] | Payable on November 18, 2016 [Member] | ||||||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 25,000 | |||||||||
Franchise from First Light Junction [Member] | ||||||||||
Debt Instrument, Face Amount | $ 75,000 | |||||||||
Number of Franchises | 3 | |||||||||
Number of Acquired Franchises to Develop | 2 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 25,000 | |||||||||
Franchise from WHB Franchise Inc. [Member] | Payable on October 3, 2015 [Member] | ||||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 25,000 | |||||||||
Franchise from WHB Franchise Inc. [Member] | Payable on December 3, 2015 [Member] | ||||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 25,000 | |||||||||
Franchise from WHB Franchise Inc. [Member] | ||||||||||
Debt Instrument, Face Amount | $ 100,000 | |||||||||
Number of Franchises | 2 | |||||||||
Number of Acquired Franchises to Develop | 4 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | |||||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | $ 50,000 | |||||||||
Franchise from Clear Path Ventures Inc. [Member] | Payable on October 5, 2015 [Member] | ||||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 25,000 | |||||||||
Franchise from Clear Path Ventures Inc. [Member] | Payable on December 5, 2015 [Member] | ||||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 12,500 | |||||||||
Franchise from Clear Path Ventures Inc. [Member] | ||||||||||
Debt Instrument, Face Amount | $ 75,000 | |||||||||
Number of Franchises | 3 | |||||||||
Number of Acquired Franchises to Develop | 3 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | |||||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | $ 37,500 | |||||||||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 276,450 | |||||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | $ 212,950 |
Note 6 - Maturities of Notes Pa
Note 6 - Maturities of Notes Payable (Details) - Scenario, Unspecified [Domain] | Jun. 30, 2015USD ($) |
2,015 | $ 276,450 |
2,016 | 212,950 |
2,017 | 130,000 |
Total | $ 619,400 |
Note 7 - Equity (Details Textua
Note 7 - Equity (Details Textual) - USD ($) | Nov. 14, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
IPO [Member] | |||||
Stock Issued During Period, Shares, New Issues | 3,000,000 | ||||
Share Price | $ 6.50 | ||||
Proceeds from Issuance Initial Public Offering | $ 17,065,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 450,000 | ||||
Proceeds from Stock Options Exercised | $ 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 | $ 8.125 | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Exercise Price | $ 6.75 | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Exercise Price | $ 8.32 | ||||
Employee Stock Option [Member] | |||||
Allocated Share-based Compensation Expense | $ 67,468 | $ 4,395 | $ 110,996 | $ 7,157 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 328 days | ||||
Restricted Stock [Member] | |||||
Allocated Share-based Compensation Expense | 89,744 | $ 9,950 | $ 178,503 | $ 19,682 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 328 days | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | 1,019,710 | $ 1,019,710 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 61,500 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 2,686,126 | $ 2,686,126 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 300,716 | $ 300,716 |
Note 7 - Fair Value Assumptions
Note 7 - Fair Value Assumptions of Options Granted (Details) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Minimum [Member] | ||
Expected volatility | 46.00% | 43.00% |
Expected dividends | ||
Expected term (years) | 5 years | 5 years 182 days |
Risk-free rate | 1.32% | 0.07% |
Forfeiture rate | ||
Maximum [Member] | ||
Expected volatility | 47.00% | 46.00% |
Expected dividends | ||
Expected term (years) | 6 years 91 days | 7 years 182 days |
Risk-free rate | 1.74% | 2.05% |
Forfeiture rate | ||
Expected volatility | ||
Expected dividends | 0.00% | 0.00% |
Expected term (years) | ||
Risk-free rate | ||
Forfeiture rate | 20.00% | 0.00% |
Note 7 - Stock Options Activity
Note 7 - Stock Options Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue | $ 1.46 | $ 0.92 |
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 8 years 328 days | 9 years 73 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 61,500 | |
Granted at market price (in dollars per share) | $ 8.16 | |
Outstanding at June 30, 2015 (in shares) | 376,275 | |
Outstanding at June 30, 2015 (in dollars per share) | $ 3.20 | |
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue | $ 1.46 | $ 0.92 |
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2 | 8 years 328 days | 9 years 73 days |
Exercisable at June 30, 2015 (in shares) | 90,377 | |
Exercisable at June 30, 2015 (in dollars per share) | $ 1.91 | |
Exercisable at June 30, 2015 (in dollars per share) | $ 0.86 | |
Exercisable at June 30, 2015 | 8 years 255 days |
Note 7 - Restricted Stock Activ
Note 7 - Restricted Stock Activity (Details) - Restricted Stock [Member] | Jun. 30, 2015shares |
Outstanding at December 31, 2014 (in shares) | 662,375 |
Outstanding at June 30, 2015 (in shares) | 662,375 |
Note 8 - Income Taxes (Details
Note 8 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Expense (Benefit) | $ 0 | $ (79,206) | $ 0 | $ (121,523) |
Note 9 - Related Party Transa48
Note 9 - Related Party Transactions (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Shareholder [Member] | ||||
Related Party Transaction, Amounts of Transaction | $ 349,000 | $ 238,000 | $ 558,000 | $ 447,000 |
Note 10 - Commitments and Con49
Note 10 - Commitments and Contingencies (Details Textual) | 3 Months Ended | 6 Months Ended | 11 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Jul. 07, 2015 | |
Minimum [Member] | ||||||
Operating Lease, Monthly Rent Expense | $ 2,015 | $ 10,500 | ||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 1 year 180 days | |||||
Maximum [Member] | ||||||
Operating Lease, Monthly Rent Expense | $ 6,073 | $ 22,000 | ||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 7 years 120 days | |||||
Subsequent Event [Member] | ||||||
Number of Franchisees, in Litigation | 13 | |||||
Number of Monthly Payments | 66 | |||||
Additional Leases Assumed | 19 | |||||
Operating Leases, Rent Expense | $ 236,137 | $ 33,860 | $ 354,617 | $ 67,081 |
Note 10 - Summary of Future Min
Note 10 - Summary of Future Minimum Rental Payments for Operating Leases (Details) | Jun. 30, 2015USD ($) |
2,015 | $ 629,310 |
2,016 | 1,242,706 |
2,017 | 1,101,769 |
2,018 | 580,604 |
2,019 | 247,301 |
Thereafter | 104,961 |
Total | $ 3,906,651 |
Note 11 - Subsequent Event (Det
Note 11 - Subsequent Event (Details Textual) | Aug. 10, 2015USD ($) | Jul. 01, 2015USD ($) | Jun. 30, 2015 |
Franchises in Maricopa County, Arizona [Member] | Subsequent Event [Member] | Portion Funded from IPO [Member] | |||
Business Combination, Consideration Transferred | $ 212,000 | ||
Franchises in Maricopa County, Arizona [Member] | Subsequent Event [Member] | Portion Funded with Promissory Note [Member] | |||
Business Combination, Consideration Transferred | $ 53,000 | ||
Franchises in Maricopa County, Arizona [Member] | Subsequent Event [Member] | |||
Number of Franchises Acquired from Franchisee | 2 | ||
Number of Developed Franchises Reacquired During Period | 1 | ||
Number of Undeveloped Franchises Reacquired During the Period | 1 | ||
Business Combination, Consideration Transferred | $ 265,000 | ||
Franchisee in Erie, Ney York [Member] | Subsequent Event [Member] | |||
Number of Franchises Acquired from Franchisee | 3 | ||
Number of Undeveloped Franchises Reacquired During the Period | 1 | ||
Payments to Acquire Businesses, Gross | $ 350,000 | ||
Franchise Agreement Termination, Payments | 303,050 | ||
Franchise Agreement Termination, Notes Payable | $ 46,950 | ||
Number of Developed Franchises Reacquired During Period | 21 | ||
Number of Undeveloped Franchises Reacquired During the Period | 31 |
Uncategorized Items - jynt-2015
Label | Element | Value |
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice | $ 2.04 |
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber | 314,775 |