Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 05, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | JOINT Corp | |
Entity Central Index Key | 1,612,630 | |
Trading Symbol | jynt | |
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) | 12,731,995 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 6,118,763 | $ 16,792,850 |
Restricted cash | 565,175 | 385,282 |
Accounts receivable, net | 1,807,783 | 743,239 |
Income taxes receivable | 38,814 | 70,981 |
Notes receivable - current portion | 46,500 | 60,908 |
Deferred franchise costs - current portion | 578,800 | 605,850 |
Prepaid expenses and other current assets | 359,695 | 366,033 |
Total current assets | 9,515,530 | 19,025,143 |
Property and equipment, net | 8,171,315 | 7,138,746 |
Notes receivable, net of current portion and reserve | 18,327 | 15,823 |
Deferred franchise costs, net of current portion | 1,252,950 | 1,534,700 |
Deferred tax asset | ||
Intangible assets, net | 2,727,232 | 2,542,269 |
Goodwill | 2,945,263 | 2,466,937 |
Deposits and other assets | 626,073 | 638,710 |
Total assets | 25,256,690 | 33,362,328 |
Current liabilities: | ||
Accounts payable | 1,135,052 | 1,996,971 |
Accrued expenses | 107,093 | 375,529 |
Co-op funds liability | 104,363 | 201,078 |
Payroll liabilities | 538,688 | 1,493,375 |
Notes payable - current portion | 550,400 | 451,850 |
Deferred rent - current portion | 277,041 | 334,560 |
Deferred revenue - current portion | 2,599,896 | 2,579,423 |
Other current liabilities | 68,614 | 54,596 |
Total current liabilities | 5,381,147 | 7,487,382 |
Notes payable, net of current portion | 130,000 | |
Deferred rent, net of current portion | 1,391,965 | 457,290 |
Deferred revenue, net of current portion | 3,499,387 | 4,369,702 |
Other liabilities | 269,456 | 238,648 |
Total liabilities | 10,541,955 | 12,683,022 |
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, 2016, and December 31, 2015 | ||
Common stock, $0.001 par value; 20,000,000 shares authorized, 13,262,016 shares issued and 12,728,016 shares outstanding as of June 30, 2016 and 13,070,180 shares issued and 12,536,180 outstanding as of December 31, 2015 | 13,262 | 13,070 |
Additional paid-in capital | 36,089,128 | 35,267,376 |
Treasury stock (534,000 shares as of June 30, 2016 and December 31, 2015, at cost) | (791,638) | (791,638) |
Accumulated deficit | (20,596,017) | (13,809,502) |
Total stockholders' equity | 14,714,735 | 20,679,306 |
Total liabilties and stockholders' equity | $ 25,256,690 | $ 33,362,328 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
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, shares issued (in shares) | 0 | 0 |
Series A Preferred Stock, shares 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) | 13,262,016 | 13,070,180 |
Common Stock, shares outstanding (in shares) | 12,728,016 | 12,536,180 |
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Revenues and management fees from company clinics | $ 2,137,252 | $ 783,016 | $ 3,795,805 | $ 1,170,469 |
Royalty fees | 1,428,548 | 1,098,190 | 2,797,379 | 2,113,704 |
Franchise fees | 524,209 | 876,259 | 1,039,009 | 1,224,259 |
Advertising fund revenue | 356,580 | 339,462 | 622,301 | 624,978 |
IT related income and software fees | 229,400 | 197,214 | 450,534 | 401,189 |
Regional developer fees | 225,080 | 50,750 | 372,617 | 268,250 |
Other revenues | 72,972 | 81,855 | 161,432 | 131,796 |
Total revenues | 4,974,041 | 3,426,746 | 9,239,077 | 5,934,645 |
Cost of revenues: | ||||
Franchise cost of revenues | 668,851 | 743,592 | 1,363,586 | 1,251,158 |
IT cost of revenues | 58,888 | 48,226 | 104,116 | 85,921 |
Total cost of revenues | 727,739 | 791,818 | 1,467,702 | 1,337,079 |
Selling and marketing expenses | 1,174,178 | 534,298 | 1,912,861 | 1,380,924 |
Depreciation and amortization | 637,115 | 278,502 | 1,212,659 | 401,098 |
General and administrative expenses | 5,625,996 | 3,668,187 | 11,322,502 | 6,576,826 |
Total selling, general and administrative expenses | 7,437,289 | 4,480,987 | 14,448,022 | 8,358,848 |
Loss from operations | (3,190,987) | (1,846,059) | (6,676,647) | (3,761,282) |
Other income (expense), net | 3,075 | (9,811) | 7,999 | 1,689 |
Loss before income tax expense | (3,187,912) | (1,855,870) | (6,668,648) | (3,759,593) |
Income tax expense | (73,470) | (117,867) | ||
Net loss and comprehensive loss | $ (3,261,382) | $ (1,855,870) | $ (6,786,515) | $ (3,759,593) |
Loss per share: | ||||
Basic and diluted loss per share (in dollars per share) | $ (0.26) | $ (0.19) | $ (0.54) | $ (0.39) |
Basic and diluted weighted average shares (in shares) | 12,672,974 | 9,768,230 | 12,620,438 | 9,734,115 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (6,786,515) | $ (3,759,593) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
(Recovery) Provision for bad debts | (10,830) | 4,345 |
Regional developer fees recognized upon acquisition of development rights | (138,500) | (159,500) |
Net franchise fees recognized upon termination of franchise agreements | (184,159) | (343,250) |
Depreciation and amortization | 1,212,659 | 401,098 |
Gain on sale of property and equipment | (11,500) | |
Deferred income taxes | ||
Stock based compensation expense | 757,394 | 289,499 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Restricted cash | (179,893) | (57,392) |
Accounts receivable | (1,053,714) | 241,646 |
Income taxes receivable | 32,167 | 103,084 |
Prepaid expenses and other current assets | 6,338 | 278,730 |
Deferred franchise costs | 211,650 | 5,700 |
Deposits and other assets | 12,637 | (40,423) |
Accounts payable | (1,120,615) | (65,521) |
Accrued expenses | (268,436) | 246,192 |
Co-op funds liability | (96,715) | 95,253 |
Payroll liabilities | (954,687) | 256,881 |
Other liabilities | 44,826 | (23,734) |
Deferred rent | 877,156 | (36,356) |
Deferred revenue | (416,001) | 31,273 |
Net cash used in operating activities | (8,055,238) | (2,543,568) |
Cash flows from investing activities: | ||
Cash paid for acquisitions | (811,451) | (4,242,975) |
Reacquisition and termination of regional developer rights | (325,000) | (945,000) |
Purchase of property and equipment | (1,341,402) | (485,308) |
Proceeds received on sale of property and equipment | 11,500 | |
Payments received on notes receivable | 11,904 | 13,559 |
Net cash used in investing activities | (2,465,949) | (5,648,224) |
Cash flows from financing activities: | ||
Issuance of common stock, offering costs adjustment | (1,042) | |
Proceeds from exercise of stock options | 65,592 | |
Repayments on notes payable | (217,450) | (25,000) |
Net cash used in financing activities | (152,900) | (25,000) |
Net decrease in cash | (10,674,087) | (8,216,792) |
Cash at beginning of period | 16,792,850 | 20,796,783 |
Cash at end of period | $ 6,118,763 | $ 12,579,991 |
Supplemental Disclosure of Non-
Supplemental Disclosure of Non-cash Information | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | Supplemental disclosure of cash flow information: During the six months ended June 30, 2016 and 2015, cash paid for income taxes was $0 and $0, respectively. During the six months ended June 30, 2016 and 2015, cash paid for interest was $3,550 and $135, respectively. Supplemental disclosure of non-cash activity: As of June 30, 2016 we had property and equipment purchases of $258,696 which were included in accounts payable. In connection with our reacquisition and termination of regional developer rights during the six months ended June 30, 2016 and 2015, we had deferred revenue of $224,750 and $688,750, respectively, representing license fees collected upon the execution of the regional developer agreements. In accordance with ASC-952-605, we netted these amounts against the aggregate purchase price of the acquisitions (Note 5). In connection with our acquisitions of franchises during the six months ended June 30, 2016, we acquired $296,571 of property and equipment, intangible assets of $294,772, goodwill of $478,326 and assumed deferred revenue associated with membership packages paid in advance of $72,218 in exchange for $839,000 in cash and notes payable issued to the sellers for an aggregate amount of $186,000. Additionally, at the time of these transactions, we carried deferred revenue of $29,000, representing franchise fees collected upon the execution of franchise agreements, and deferred costs of $1,450, related to our acquisition of undeveloped franchises. We netted these amounts against the aggregate purchase price of the acquisitions (Note 2). In connection with our acquisitions of franchises during the six months ended June 30, 2015, we acquired $1,346,766 of property and equipment, 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 notes payable issued to the sellers for an aggregate amount of $644,000. Additionally, at the time of these transactions, we carried deferred revenue of $928,000, representing franchise fees collected upon the execution of franchise agreements, and deferred costs of $461,900, related to our acquisition of undeveloped franchises. We netted these amounts against the aggregate purchase price of the acquisitions (Note 2). As of December 31, 2014, we 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 reacquisition and termination agreement, we 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, 2016 | |
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. 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 our 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, 2016 and 2015 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, 2016 and 2015 is unaudited. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of The Joint Corp. and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC, 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, 2016 and 2015. Nature of Operations The Joint Corp. (“The Joint”), a Delaware corporation, was formed on March 10, 2010 for the principal purpose of franchising and developing chiropractic clinics, selling regional developer rights and supporting the operations of franchised chiropractic clinics at locations throughout the United States of America. The franchising of chiropractic clinics is regulated by the Federal Trade Commission and various state authorities. The following table summarizes the number of clinics in operation under franchise agreements and as company-owned or managed clinics for the three and six months ended June 30, 2016 and 2015: Three Months Ended Six Months Ended Franchised clinics: 2016 2015 2016 2015 Clinics open at beginning of period 277 241 265 242 Opened during the period 11 10 25 23 Acquired during the period (6 ) (11 ) (6 ) (21 ) Closed during the period (2 ) (1 ) (4 ) (5 ) Clinics in operation at the end of the period 280 239 280 239 Three Months Ended Six Months Ended Company-owned or managed clinics: 2016 2015 2016 2015 Clinics open at beginning of period 54 12 47 4 Opened during the period 1 - 8 - Acquired during the period 6 11 6 21 Closed during the period - - - (2 ) Clinics in operation at the end of the period 61 23 61 23 Total clinics in operation at the end of the period 341 262 341 262 Clinics licenses sold but not yet developed 134 230 134 230 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. Such PCs are VIEs. 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 PCs. As such, the activity of the PCs is not included in the Company’s condensed 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 its cash in short-term bank deposits. The Company had no cash equivalents as of June 30, 2016 and December 31, 2015. Restricted Cash Restricted cash relates to cash franchisees and company-owned or managed 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 Company’s 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 monitors the financial condition of the franchisees to reduce credit risk. As of June 30, 2016 and December 31, 2015, three PC entities and six franchisees represented 40% and 31%, respectively, of outstanding accounts receivable. The Company did not have any customers that represented greater than 10% of its revenues during the three and six months ended June 30, 2016 and 2015. Accounts Receivable Accounts receivable represent amounts due from franchisees for initial franchise fees, royalty fees, marketing and advertising expenses, working capital advances due from PCs, and tenant improvement allowances due from landlords. The Company considers a reserve for doubtful accounts based on the creditworthiness of the entity. 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 that the Company tracks on an ongoing basis. Actual losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. As of June 30, 2016 and December 31, 2015, the Company had an allowance for doubtful accounts of $131,830. 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 or for property acquired as part of franchise acquisitions at fair value at the date of closing. Depreciation is computed using the straight-line method over 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 certain 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, 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 five years. Intangible Assets Intangible assets consist primarily of re-acquired franchise and regional developer 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 range from six to eight years. In the case of regional developer rights the Company amortizes the acquired regional developer rights over seven years. The fair value of customer relationships is amortized over their estimated useful life of two 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. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. As required, the Company performs an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. No impairments of goodwill were recorded for the three and six months ended June 30, 2016 and 2015. Long-Lived Assets The Company reviews its 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 three and six months ended June 30, 2016 and 2015. 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 is 2% of clinic sales. 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. Amounts collected in excess of marketing expenditures are included in restricted cash on the Company’s condensed 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 condensed consolidated balance sheets. Deferred Rent The Company leases office space for its corporate offices and company-owned or 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 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. Regional Developer Fees Revenues and Management Fees from Company Clinics. Royalties. IT Related Income and Software Fees. Advertising Costs Advertising costs are expensed as incurred. Advertising expenses were $747,797 and $1,169,895 for the three and six months ended June 30, 2016, respectively. Advertising expenses were $207,483 and $475,988 for the three and six months ended June 30, 2015, respectively. Income Taxes The Company uses an estimated annual effective tax rate method in computing its interim tax provision. This effective tax rate is based on forecasted annual pre-tax income, permanent tax differences and statutory tax rates. Deferred income taxes are recognized 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, 2016 and December 31, 2015, the Company maintained a liability for income taxes for uncertain tax positions of approximately $49,300 and $66,000, respectively, of which $32,000 and $33,000, 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 2012 through the current period for 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 2016 2015 2016 2015 Net loss $ (3,261,382 ) $ (1,855,870 ) $ (6,786,515 ) $ (3,759,593 ) Weighted average common shares outstanding - basic 12,672,974 9,768,230 12,620,438 9,734,115 Effect of dilutive securities: Stock options - - - - Weighted average common shares outstanding - diluted 12,672,974 9,768,230 12,620,438 9,734,115 Basic and diluted loss per share $ (0.26 ) $ (0.19 ) $ (0.54 ) $ (0.39 ) 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 2016 2015 2016 2015 Unvested restricted stock 151,806 116,818 151,806 453,846 Stock options 787,955 271,895 787,955 376,275 Warrants 90,000 90,000 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 Company’s initial public offering (“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 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, 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 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. In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments - Overall (Subtopic 825-10) In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842). In March 2016, the FASB issued ASU 2016-09, “ Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients |
Note 2 - Acquisitions
Note 2 - Acquisitions | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | Note 2: Acquisitions Franchises acquired during 2016 During the six months ended June 30, 2016, 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 six developed franchises and one undeveloped franchise throughout California and New Mexico for an aggregate purchase price of $1,025,000, subject to certain adjustments, consisting of cash of $839,000 and notes payable of $186,000. The Company is operating the six developed franchises as company-owned or managed clinics and has terminated the undeveloped clinic license. At the time these transactions were consummated, the Company carried a deferred revenue balance of $29,000, representing franchise fees collected upon the execution of the franchise agreements, and deferred franchise costs of $1,450, related to an undeveloped franchise. 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 $997,451 was accounted for as consideration paid for the acquired franchises. The Company incurred approximately $49,000 of transaction costs related to these acquisitions for the six months ended June 30, 2016 which are included in general and administrative expenses in the accompanying statements of operations. 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 estimated fair values of the assets acquired and liabilities assumed during 2016 as of the acquisition date: Property and equipment $ 296,571 Intangible assets 294,772 Goodwill 478,326 Total assets acquired 1,069,669 Deferred membership revenue (72,218 ) Net assets acquired 997,451 Deferred tax liability - Net purchase price $ 997,451 Intangible assets in the table above consist of reacquired franchise rights of $201,409 and customer relationships of $93,363, and will be amortized over their estimated useful lives ranging from six to eight years and two years, respectively. 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. Franchises acquired during 2015 During the year ended December 31, 2015, the Company entered into a series of unrelated transactions with existing franchisees to re-acquire an aggregate of 24 developed and 35 undeveloped franchises throughout Arizona, California, and New York for an aggregate purchase price of $5,725,875, subject to certain adjustments, consisting of cash of $4,925,525 and notes payable of $800,350. Of the 24 developed franchises, the Company is operating 22 as company-owned or managed clinics and has closed the remaining two clinics. The 35 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 $1,005,500, representing franchise fees collected upon the execution of the franchise agreements, and deferred franchise costs of $493,500, related to undeveloped franchises. The Company accounted for the franchise rights associated with the undeveloped franchises as a cancellation, and the respective deferred revenue and deferred franchise costs were netted against the aggregate purchase price. The remaining $5,213,875 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 in exchange for $25,000. The Company has accounted for this as a business combination. The Company completed its valuation of the fair value of the assets acquired, including intangible assets, in September 2015. Because the net assets acquired exceeded the consideration paid, the Company recognized a bargain purchase gain of $233,804 during the year ended December 31, 2015. The Company also recognized a bargain purchase gain of $27,343 related to the acquisition of two developed franchises and seven undeveloped franchises in San Diego, California. Total bargain purchase gain for the year ended December 31, 2015 was $261,147. The Company incurred $393,069 of transaction costs related to these acquisitions for the year ended December 31, 2015 which are included in general and administrative expenses in the accompanying statements of operations. Purchase Price Allocation The purchase price allocations for these acquisitions are complete with the exception of the acquisition completed on December 29, 2015. For that transaction the balances 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 $ 1,504,169 Intangible assets 1,942,180 Favorable leases 521,825 Goodwill 1,830,833 Total assets acquired 5,799,007 Unfavorable leases (49,077 ) Deferred membership revenue (106,908 ) Net assets acquired 5,643,022 Deferred tax liability (168,000 ) Bargain purchase gain (261,147 ) Net purchase price $ 5,213,875 Intangible assets in the table above consist of reacquired franchise rights of $1,458,667 and customer relationships of $483,513, and will be amortized over their estimated useful lives ranging from six to eight years and two years, respectively. 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, 2016 and 2015 as if the acquisitions in 2016 had been completed on January 1, 2015. Pro Forma for the Three Months Ended Pro Forma for the Six Months Ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Revenues, net $ 4,954,003 $ 4,099,994 $ 9,219,436 $ 7,695,781 Net loss $ (3,224,469 ) $ (2,052,405 ) $ (6,728,596 ) $ (4,293,283 ) 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 is not indicative of what the Company’s future operating results will be. The information for 2015 and 2016 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 2016, this information includes actual data recorded in the Company’s financial statements for the period subsequent to the date of the acquisitions. The Company’s consolidated statement of operations for the three months ended June 30, 2016 includes net revenue and net income of approximately $1.9 million and $0.3 million, respectively, attributable to the acquisitions. The Company’s consolidated statement of operations for the six months ended June 30, 2016 includes net revenue and net income of approximately $3.5 million and $0.4 million, respectively, 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, 2015, together with the consequential tax impacts. |
Note 3 - Notes Receivable
Note 3 - Notes Receivable | 6 Months Ended |
Jun. 30, 2016 | |
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. Effective July 2015, the Company entered into two license transfer agreements, in exchange for $10,000 and $29,925 in separate unsecured promissory notes. The non-interest bearing notes require monthly principal payments over 24 months, beginning on September 1, 2015 and maturing on August 1, 2017. Effective July 2015, the Company entered into a license transfer agreement, in exchange for $29,925 in an unsecured promissory note. The note bears interest at 4.0% per annum, and requires monthly principal payments over 12 months, beginning on August 1, 2015 and matured on July 1, 2016. Effective May 2016, the Company entered into three license transfer agreements, in exchange for three separate $7,500 unsecured promissory notes. The non-interest bearing notes require monthly principal payments over six months, beginning on May 1, 2017 and maturing on October 1, 2017. The outstanding balance of the notes as of June 30, 2016 and December 31, 2015 were $64,827 and $76,731, respectively. |
Note 4 - Property and Equipment
Note 4 - Property and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
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, Office and computer equipment $ 1,198,214 $ 963,299 Leasehold improvements 7,846,212 4,672,582 Software developed 830,646 691,827 9,875,072 6,327,708 Accumulated depreciation and amortization (1,962,538 ) (1,098,438 ) 7,912,534 5,229,270 Construction in progress 258,781 1,909,476 $ 8,171,315 $ 7,138,746 Depreciation expense was $462,233 and $864,100 for the three and six months ended June 30, 2016, respectively. Depreciation expense was $189,555 and $275,484 for the three and six months ended June 30, 2015, respectively. |
Note 5 - Intangible Assets
Note 5 - Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | Note 5: Intangible Assets On January 1, 2016, the Company entered into an agreement under which it repurchased the regional development rights to develop franchises in San Bernardino and Riverside Counties in California. The total consideration for the transaction was $275,000, paid in cash. The Company carried a deferred revenue balance associated with these transactions of $36,250, representing license fees collected upon the execution of the regional developer agreements. 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. On June 1, 2016, the Company entered into an agreement under which it repurchased the regional development rights to develop franchises in Virginia. The total consideration for the transaction was $50,000, paid in cash. The Company carried a deferred revenue balance associated with these transactions of $188,500, representing license fees collected upon the execution of the regional developer agreements. 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. Intangible assets consist of the following: As of June 30, 2016 Gross Carrying Accumulated Net Carrying Amortized intangible assets: Reacquired franchise rights $ 1,741,076 $ 310,266 $ 1,430,810 Customer relationships 648,875 337,158 311,717 Reacquired development rights 1,162,000 177,295 984,705 $ 3,551,951 $ 824,719 $ 2,727,232 Unamortized intangible assets: Goodwill 2,945,263 Total intangible assets $ 5,672,495 Amortization expense was $174,882 and $348,559 for the three and six months ended June 30, 2016, respectively. Amortization expense was $88,947 and $125,614 for the three and six months ended June 30, 2015, respectively. Estimated amortization expense for 2016 and subsequent years is as follows: 2016 (remaining) $ 373,709 2017 556,919 2018 438,542 2019 422,981 2020 422,981 Thereafter 512,100 Total $ 2,727,232 |
Note 6 - Notes Payable
Note 6 - Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 6: Notes Payable During 2015, the Company delivered 12 notes payable totaling $800,350 as a portion of the consideration paid in connection with the Company’s various acquisitions. Interest rates range from 1.5% to 5.25% with maturities through February of 2017. During 2016, the Company delivered two notes payable totaling $186,000 as a portion of the consideration paid in connection with the Company’s various acquisitions. Interest rates for both notes are 4.25% with maturities through May of 2017. Repayments during the three and six months ended June 30, 2016 totaled $96,950 and $217,450, respectively. Maturities of notes payable are as follows as of June 30, 2016: Remainder of 2016 $ 284,400 2017 266,000 Total $ 550,400 |
Note 7 - Equity
Note 7 - Equity | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 7: Equity Public Offerings of Common Stock The Company completed its IPO 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. On November 25, 2015 the Company closed its follow-on offering of 2,272,727 shares of common stock, at a price to the public of $5.50 per share. On December 30, 2015 the Company’s underwriters exercised their over-allotment option to purchase an additional 340,909 shares of common stock at a public offering price of $5.50 per share. After giving effect to the exercise of the over-allotment option, the total number of shares offered and sold in the Company’s follow-on public offering increased to 2,613,636 shares. With the exercise of the over-allotment option, the Company received aggregate net proceeds of approximately $13.0 million. Stock Options In the six months ended June 30, 2016, the Company granted 390,000 stock options to employees with exercise prices ranging from $3.07 - $4.11. 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, 2016 and 2015, using the following assumptions: Six Months Ended June 30, 2016 2015 Expected volatility 44% - 45% 46% - 47% Expected dividends None None Expected term (years) 7 5 - 6.25 Risk-free rate 1.47% to 1.68% 1.32% - 1.74% Forfeiture rate 20% 20% The information below summarizes the stock options: Number of Weighted Weighted Weighted Outstanding at December 31, 2015 477,459 $ 4.30 $ 2.01 8.7 Granted at market price 390,000 3.86 Exercised (33,374 ) 1.97 Cancelled (46,130 ) 2.59 Outstanding at June 30, 2016 787,955 $ 4.28 $ 2.07 8.1 Exercisable at June 30, 2016 315,775 $ 3.63 $ 2.22 8.2 The intrinsic value of the Company’s stock options outstanding was $159,955 at June 30, 2016. For the three and six months ended June 30, 2016, stock based compensation expense for stock options was $171,152, and $338,911, respectively. For the three and six months ended June 30, 2015, stock based compensation expense for stock options was $67,468, and $110,996, respectively. Unrecognized stock-based compensation expense for stock options as of June 30, 2016 was $799,768, which is expected to be recognized ratably over the next 3.42 years. Restricted Stock The information below summaries the restricted stock activity: Restricted Stock Awards Shares Outstanding at December 31, 2015 670,375 Restricted stock awards granted 86,415 Awards forfeited or exercised (115,436 ) Outstanding at June 30, 2016 641,354 For the three and six months ended June 30, 2016, stock based compensation expense for restricted stock was $391,373, and $418,483, respectively. For the three and six months ended June 30, 2015, stock based compensation expense for restricted stock was $89,744, and $178,503, respectively. Unrecognized stock based compensation expense for restricted stock awards as of June 30, 2016 was $642,962 to be recognized ratably over the next 1.87 years. Modifications During the three months ended June 30, 2016, the Company accelerated the vesting of all unvested stock options and restricted stock awards granted to the Company’s former chief development officer in relation to his separation from the Company. In addition, the Company modified the post-employment exercise period of the stock options previously granted, extending the exercise period to December 31, 2017. During the three months ended June 30, 2016, the Company modified the post-employment exercise period of stock options previously granted to the Company’s former chief executive officer in relation to his separation from the Company. The modification extended the exercise period to May 13, 2020. In addition, the Company accelerated the vesting of 9,733 shares of the previously granted restricted stock awards that were scheduled to vest in July 2016. The remaining unvested restricted stock awards were forfeited upon separation. These modifications resulted in an approximately $412,000 increase in stock-based compensation for the three months ended June 30, 2016. |
Note 8 - Income Taxes
Note 8 - Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 8: Income Taxes During the three and six months ended June 30, 2016, the Company recorded income tax expense of approximately $73,000 and $118,000, respectively, due to a revised estimate for the valuation allowance on the company’s deferred tax assets, as well as state tax expense as a result of current year state income taxes and a lower estimate of income tax refunds available through net operating loss (NOL) carrybacks. |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
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 and transaction related activities of the Company. Amounts paid to or for the benefit of these stockholders was approximately $118,000 and $310,000 for the three and six months ended June 30, 2016, respectively. 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. |
Note 10 - Commitments and Conti
Note 10 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | Note 10: Commitments and Contingencies Operating Leases The Company leases its corporate office space and the space for each of the company-owned or managed clinics in the portfolio. Total rent expense for the three and six months ended June 30, 2016 was $854,516 and $1,607,011, respectively. Total rent expense for the three and six months ended June 30, 2015 was $236,137 and $354,617, respectively. Future minimum annual lease payments are as follows: 2016 (remaining) $ 1,662,566 2017 3,345,151 2018 2,763,018 2019 2,426,739 2020 2,163,963 Thereafter 10,133,376 $ 22,494,813 Litigation In the normal course of business, the Company is party to litigation from time to time. On July 7, 2015, a group of six franchisees, who formerly owned a total of 8 franchise licenses that were terminated by the Company due to defaults in performance, commenced a collective arbitration proceeding before the American Arbitration Association 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 sought, but appear to have abandoned, “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, the arbitration proceeding was moved to Phoenix, Arizona, pursuant to the franchise agreements in dispute, which include clauses that make it mandatory for any arbitration proceeding to be conducted in this locale. The Company has also asserted counterclaims against each of the claimants for unpaid termination fees due to the premature termination of their licenses. In April 2016, one of the franchisee’s claims was voluntarily dismissed, thereby leaving a total of five claimants with a collective total of 16 former licenses remaining as part of the arbitration proceeding. On August 8, 2016, the claimants filed a Second Amended Addendum to Demand in which they seek, among other things, rescission of all franchise investment- related fees and alleged losses on behalf of all remaining claimants. There is an evidentiary hearing presently set to commence on December 5, 2016. The Company is vigorously defending the arbitration proceeding. |
Note 11 - Segment Reporting
Note 11 - Segment Reporting | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | Note 11: Segment Reporting An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), to evaluate performance and make operating decisions. We have identified our CODM as the Chief Executive Officer. The Company operates two business segments. The Corporate Clinics segment is comprised of the operating activities of the company-owned or managed clinics. As of June 30, 2016, we operated or managed 61 clinics under this segment. The Franchise Operations segment is comprised of the operating activities of the franchise business unit. As of June 30, 2016, the franchise system consisted of 280 clinics in operation. Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating segments by centralizing key administrative functions such as finance and treasury, information technology, insurance and risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support the Company as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the operating segments. The tables below present financial information for our two reportable operating segments (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Revenues: Corporate clinics $ 2,137 $ 624 $ 3,796 $ 1,011 Franchise operations 2,837 2,802 5,443 4,924 Total revenues $ 4,974 $ 3,426 $ 9,239 $ 5,935 Segment operating income (loss): Corporate clinics $ (1,651 ) $ (588 ) $ (3,335 ) $ (584 ) Franchise operations 1,013 1,117 2,080 1,791 Total segment operating income (loss) $ (638 ) $ 529 $ (1,255 ) $ 1,207 Depreciation and amortization: Corporate clinics $ 534 $ 199 $ 1,027 $ 257 Franchise operations - - - - Corporate administration 103 80 186 144 Total depreciation and amortization $ 637 $ 279 $ 1,213 $ 401 Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands): Total segment operating income (loss) $ (638 ) $ 529 $ (1,255 ) $ 1,207 Unallocated corporate (2,553 ) (2,375 ) (5,421 ) (4,968 ) Consolidated loss from operations (3,191 ) (1,846 ) (6,676 ) (3,761 ) Other income (expense), net 3 (10 ) 8 2 Loss before income tax (expense) benefit $ (3,188 ) $ (1,856 ) $ (6,668 ) $ (3,759 ) June 30, December 31, Segment assets: Corporate clinics $ 14,954 $ 12,426 Franchise operations 2,264 2,580 Total segment assets 17,218 15,006 Unallocated cash and cash equivalents 6,684 17,178 Unallocated property and equipment 1,020 802 Other unallocated assets 335 376 Total assets $ 25,257 $ 33,362 “Unallocated cash and cash equivalents” relates primarily to corporate cash and cash equivalents, “unallocated property and equipment” relates primarily to corporate fixed assets, and “other unallocated assets” relates primarily to deposits, prepaid and other assets. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
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. 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 our 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, 2016 and 2015 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, 2016 and 2015 is unaudited. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of The Joint Corp. and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC, 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, 2016 and 2015. |
Nature of Operations Policy [Policy Text Block] | Nature of Operations The Joint Corp. (“The Joint”), a Delaware corporation, was formed on March 10, 2010 for the principal purpose of franchising and developing chiropractic clinics, selling regional developer rights and supporting the operations of franchised chiropractic clinics at locations throughout the United States of America. The franchising of chiropractic clinics is regulated by the Federal Trade Commission and various state authorities. The following table summarizes the number of clinics in operation under franchise agreements and as company-owned or managed clinics for the three and six months ended June 30, 2016 and 2015: Three Months Ended Six Months Ended Franchised clinics: 2016 2015 2016 2015 Clinics open at beginning of period 277 241 265 242 Opened during the period 11 10 25 23 Acquired during the period (6 ) (11 ) (6 ) (21 ) Closed during the period (2 ) (1 ) (4 ) (5 ) Clinics in operation at the end of the period 280 239 280 239 Three Months Ended Six Months Ended Company-owned or managed clinics: 2016 2015 2016 2015 Clinics open at beginning of period 54 12 47 4 Opened during the period 1 - 8 - Acquired during the period 6 11 6 21 Closed during the period - - - (2 ) Clinics in operation at the end of the period 61 23 61 23 Total clinics in operation at the end of the period 341 262 341 262 Clinics licenses sold but not yet developed 134 230 134 230 |
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. Such PCs are VIEs. 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 PCs. As such, the activity of the PCs is not included in the Company’s condensed 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 its cash in short-term bank deposits. The Company had no cash equivalents as of June 30, 2016 and December 31, 2015. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash relates to cash franchisees and company-owned or managed 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 Company’s 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 monitors the financial condition of the franchisees to reduce credit risk. As of June 30, 2016 and December 31, 2015, three PC entities and six franchisees represented 40% and 31%, respectively, of outstanding accounts receivable. The Company did not have any customers that represented greater than 10% of its revenues during the three and six months ended June 30, 2016 and 2015. |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable Accounts receivable represent amounts due from franchisees for initial franchise fees, royalty fees, marketing and advertising expenses, working capital advances due from PCs, and tenant improvement allowances due from landlords. The Company considers a reserve for doubtful accounts based on the creditworthiness of the entity. 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 that the Company tracks on an ongoing basis. Actual losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. As of June 30, 2016 and December 31, 2015, the Company had an allowance for doubtful accounts of $131,830. |
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 or for property acquired as part of franchise acquisitions at fair value at the date of closing. Depreciation is computed using the straight-line method over 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 certain 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, 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 five years. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets Intangible assets consist primarily of re-acquired franchise and regional developer 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 range from six to eight years. In the case of regional developer rights the Company amortizes the acquired regional developer rights over seven years. The fair value of customer relationships is amortized over their estimated useful life of two 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. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. As required, the Company performs an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. No impairments of goodwill were recorded for the three and six months ended June 30, 2016 and 2015. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company reviews its 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 three and six months ended June 30, 2016 and 2015. |
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 is 2% of clinic sales. 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. Amounts collected in excess of marketing expenditures are included in restricted cash on the Company’s condensed 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 condensed consolidated balance sheets. |
Lease, Policy [Policy Text Block] | Deferred Rent The Company leases office space for its corporate offices and company-owned or 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 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. |
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 Advertising costs are expensed as incurred. Advertising expenses were $747,797 and $1,169,895 for the three and six months ended June 30, 2016, respectively. Advertising expenses were $207,483 and $475,988 for the three and six months ended June 30, 2015, respectively. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company uses an estimated annual effective tax rate method in computing its interim tax provision. This effective tax rate is based on forecasted annual pre-tax income, permanent tax differences and statutory tax rates. Deferred income taxes are recognized 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, 2016 and December 31, 2015, the Company maintained a liability for income taxes for uncertain tax positions of approximately $49,300 and $66,000, respectively, of which $32,000 and $33,000, 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 2012 through the current period for 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 2016 2015 2016 2015 Net loss $ (3,261,382 ) $ (1,855,870 ) $ (6,786,515 ) $ (3,759,593 ) Weighted average common shares outstanding - basic 12,672,974 9,768,230 12,620,438 9,734,115 Effect of dilutive securities: Stock options - - - - Weighted average common shares outstanding - diluted 12,672,974 9,768,230 12,620,438 9,734,115 Basic and diluted loss per share $ (0.26 ) $ (0.19 ) $ (0.54 ) $ (0.39 ) 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 2016 2015 2016 2015 Unvested restricted stock 151,806 116,818 151,806 453,846 Stock options 787,955 271,895 787,955 376,275 Warrants 90,000 90,000 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 Company’s initial public offering (“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 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, 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 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. In January 2016, the FASB issued ASU No. 2016-01, “ Financial Instruments - Overall (Subtopic 825-10) In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842). In March 2016, the FASB issued ASU 2016-09, “ Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients |
Note 1 - Nature of Operations19
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Franchisor Disclosure [Table Text Block] | Three Months Ended Six Months Ended Franchised clinics: 2016 2015 2016 2015 Clinics open at beginning of period 277 241 265 242 Opened during the period 11 10 25 23 Acquired during the period (6 ) (11 ) (6 ) (21 ) Closed during the period (2 ) (1 ) (4 ) (5 ) Clinics in operation at the end of the period 280 239 280 239 Three Months Ended Six Months Ended Company-owned or managed clinics: 2016 2015 2016 2015 Clinics open at beginning of period 54 12 47 4 Opened during the period 1 - 8 - Acquired during the period 6 11 6 21 Closed during the period - - - (2 ) Clinics in operation at the end of the period 61 23 61 23 Total clinics in operation at the end of the period 341 262 341 262 Clinics licenses sold but not yet developed 134 230 134 230 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Six Months Ended 2016 2015 2016 2015 Net loss $ (3,261,382 ) $ (1,855,870 ) $ (6,786,515 ) $ (3,759,593 ) Weighted average common shares outstanding - basic 12,672,974 9,768,230 12,620,438 9,734,115 Effect of dilutive securities: Stock options - - - - Weighted average common shares outstanding - diluted 12,672,974 9,768,230 12,620,438 9,734,115 Basic and diluted loss per share $ (0.26 ) $ (0.19 ) $ (0.54 ) $ (0.39 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Three Months Ended Six Months Ended 2016 2015 2016 2015 Unvested restricted stock 151,806 116,818 151,806 453,846 Stock options 787,955 271,895 787,955 376,275 Warrants 90,000 90,000 90,000 90,000 |
Note 2 - Acquisitions (Tables)
Note 2 - Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Property and equipment $ 296,571 Intangible assets 294,772 Goodwill 478,326 Total assets acquired 1,069,669 Deferred membership revenue (72,218 ) Net assets acquired 997,451 Deferred tax liability - Net purchase price $ 997,451 Property and equipment $ 1,504,169 Intangible assets 1,942,180 Favorable leases 521,825 Goodwill 1,830,833 Total assets acquired 5,799,007 Unfavorable leases (49,077 ) Deferred membership revenue (106,908 ) Net assets acquired 5,643,022 Deferred tax liability (168,000 ) Bargain purchase gain (261,147 ) Net purchase price $ 5,213,875 |
Business Acquisition, Pro Forma Information [Table Text Block] | Pro Forma for the Three Months Ended Pro Forma for the Six Months Ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Revenues, net $ 4,954,003 $ 4,099,994 $ 9,219,436 $ 7,695,781 Net loss $ (3,224,469 ) $ (2,052,405 ) $ (6,728,596 ) $ (4,293,283 ) |
Note 4 - Property and Equipme21
Note 4 - Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | June 30, December 31, Office and computer equipment $ 1,198,214 $ 963,299 Leasehold improvements 7,846,212 4,672,582 Software developed 830,646 691,827 9,875,072 6,327,708 Accumulated depreciation and amortization (1,962,538 ) (1,098,438 ) 7,912,534 5,229,270 Construction in progress 258,781 1,909,476 $ 8,171,315 $ 7,138,746 |
Note 5 - Intangible Assets (Tab
Note 5 - Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | As of June 30, 2016 Gross Carrying Accumulated Net Carrying Amortized intangible assets: Reacquired franchise rights $ 1,741,076 $ 310,266 $ 1,430,810 Customer relationships 648,875 337,158 311,717 Reacquired development rights 1,162,000 177,295 984,705 $ 3,551,951 $ 824,719 $ 2,727,232 Unamortized intangible assets: Goodwill 2,945,263 Total intangible assets $ 5,672,495 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2016 (remaining) $ 373,709 2017 556,919 2018 438,542 2019 422,981 2020 422,981 Thereafter 512,100 Total $ 2,727,232 |
Note 6 - Notes Payable (Tables)
Note 6 - Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Maturities of Long-term Debt [Table Text Block] | Remainder of 2016 $ 284,400 2017 266,000 Total $ 550,400 |
Note 7 - Equity (Tables)
Note 7 - Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Six Months Ended June 30, 2016 2015 Expected volatility 44% - 45% 46% - 47% Expected dividends None None Expected term (years) 7 5 - 6.25 Risk-free rate 1.47% to 1.68% 1.32% - 1.74% Forfeiture rate 20% 20% |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Weighted Weighted Weighted Outstanding at December 31, 2015 477,459 $ 4.30 $ 2.01 8.7 Granted at market price 390,000 3.86 Exercised (33,374 ) 1.97 Cancelled (46,130 ) 2.59 Outstanding at June 30, 2016 787,955 $ 4.28 $ 2.07 8.1 Exercisable at June 30, 2016 315,775 $ 3.63 $ 2.22 8.2 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Restricted Stock Awards Shares Outstanding at December 31, 2015 670,375 Restricted stock awards granted 86,415 Awards forfeited or exercised (115,436 ) Outstanding at June 30, 2016 641,354 |
Note 10 - Commitments and Con25
Note 10 - Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 2016 (remaining) $ 1,662,566 2017 3,345,151 2018 2,763,018 2019 2,426,739 2020 2,163,963 Thereafter 10,133,376 $ 22,494,813 |
Note 11 - Segment Reporting (Ta
Note 11 - Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended Six Months Ended 2016 2015 2016 2015 Revenues: Corporate clinics $ 2,137 $ 624 $ 3,796 $ 1,011 Franchise operations 2,837 2,802 5,443 4,924 Total revenues $ 4,974 $ 3,426 $ 9,239 $ 5,935 Segment operating income (loss): Corporate clinics $ (1,651 ) $ (588 ) $ (3,335 ) $ (584 ) Franchise operations 1,013 1,117 2,080 1,791 Total segment operating income (loss) $ (638 ) $ 529 $ (1,255 ) $ 1,207 Depreciation and amortization: Corporate clinics $ 534 $ 199 $ 1,027 $ 257 Franchise operations - - - - Corporate administration 103 80 186 144 Total depreciation and amortization $ 637 $ 279 $ 1,213 $ 401 Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands): Total segment operating income (loss) $ (638 ) $ 529 $ (1,255 ) $ 1,207 Unallocated corporate (2,553 ) (2,375 ) (5,421 ) (4,968 ) Consolidated loss from operations (3,191 ) (1,846 ) (6,676 ) (3,761 ) Other income (expense), net 3 (10 ) 8 2 Loss before income tax (expense) benefit $ (3,188 ) $ (1,856 ) $ (6,668 ) $ (3,759 ) |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | June 30, December 31, Segment assets: Corporate clinics $ 14,954 $ 12,426 Franchise operations 2,264 2,580 Total segment assets 17,218 15,006 Unallocated cash and cash equivalents 6,684 17,178 Unallocated property and equipment 1,020 802 Other unallocated assets 335 376 Total assets $ 25,257 $ 33,362 |
Supplemental Disclosure of No27
Supplemental Disclosure of Non-cash Information (Details Textual) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2014 | |
Accounts Payable [Member] | |||
Capital Expenditures Incurred but Not yet Paid | $ 258,696 | ||
Franchise Fees [Member] | |||
Deferred Revenue | 29,000 | $ 928,000 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 296,571 | 1,346,766 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 294,772 | 1,070,500 | |
Goodwill, Acquired During Period | 478,326 | 2,111,564 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | 72,218 | 107,555 | |
Payments to Acquire Businesses, Net of Cash Acquired | 839,000 | 4,242,975 | |
Business Combination, Consideration Transferred, Liabilities Incurred | 186,000 | 644,000 | |
Deferred Franchise Costs Netted Against Aggregate Purchase Price | 1,450 | 461,900 | |
Income Taxes Paid | 0 | 0 | |
Interest Paid | 3,550 | 135 | |
Deferred Revenue | 224,750 | 688,750 | |
Payments to Acquire Businesses, Net of Cash Acquired | $ 811,451 | 4,242,975 | |
Deposit Assets | $ 507,500 | ||
Intangible Assets Reclassified from Deposits | $ 507,500 |
Note 1 - Nature of Operations28
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Three PC Entities [Member] | |||||
Number of PC Entities | 3 | 3 | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Six Franchisees [Member] | |||||
Number of Franchises | 6 | ||||
Concentration Risk, Percentage | 40.00% | 31.00% | |||
Minimum [Member] | Franchise Rights [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||||
Minimum [Member] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Regional Developers, Franchise Fees Collected Upon Sale of Franchise | $ 14,500 | $ 14,500 | |||
Maximum [Member] | Franchise Rights [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||||
Maximum [Member] | |||||
Property, Plant and Equipment, Useful Life | 7 years | ||||
Regional Developers, Franchise Fees Collected Upon Sale of Franchise | 19,950 | $ 19,950 | |||
Computer Software, Intangible Asset [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||
Development Rights [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
Other Liabilities [Member] | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 32,000 | $ 32,000 | $ 33,000 | ||
Allowance for Doubtful Accounts Receivable | 131,830 | 131,830 | 131,830 | ||
Cash Equivalents, at Carrying Value | 0 | 0 | 0 | ||
Impairment of Long-Lived Assets Held-for-use | 0 | $ 0 | 0 | $ 0 | |
Goodwill, Impairment Loss | 0 | 0 | $ 0 | 0 | |
Franchise Monthly Marketing Fee Gross Sales Percentage | 2.00% | ||||
Regional Developers License Fee | 7,250 | $ 7,250 | |||
Regional Developers License Fee Current Franchise Fee Percentage | 25.00% | ||||
Regional Developers Royalty Sales Generated by Franchises Percentage | 3.00% | ||||
Franchise Royalty Gross Sales Percentage | 7.00% | ||||
Advertising Expense | 747,797 | $ 207,483 | $ 1,169,895 | $ 475,988 | |
Liability for Uncertainty in Income Taxes, Current | $ 49,300 | $ 49,300 | $ 66,000 |
Note 1 - Clinics in Operation U
Note 1 - Clinics in Operation Under Franchise Agreements or Company-owned or Managed (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Franchised Units [Member] | ||||||
Clinics open at beginning of period | 277 | 241 | 265 | 242 | ||
Opened during the period | 11 | 10 | 25 | 23 | ||
Acquired during the period | (6) | (11) | (6) | (21) | ||
Closed during the period | (2) | (1) | (4) | (5) | ||
Clinics in operation at the end of the period | 280 | 239 | 280 | 239 | ||
Acquired during the period | 6 | 11 | 6 | 21 | ||
Number of Stores | 277 | 241 | 265 | 242 | 280 | 239 |
Entity Operated Units [Member] | ||||||
Clinics open at beginning of period | 54 | 12 | 47 | 4 | ||
Opened during the period | 1 | 8 | ||||
Acquired during the period | (6) | (11) | (6) | (21) | ||
Closed during the period | (2) | |||||
Clinics in operation at the end of the period | 61 | 23 | 61 | 23 | ||
Acquired during the period | 6 | 11 | 6 | 21 | ||
Number of Stores | 54 | 12 | 47 | 4 | 61 | 23 |
Clinics in operation at the end of the period | 341 | 262 | 341 | 262 | ||
Number of Stores | 341 | 262 | 341 | 262 | 341 | 262 |
Clinics licenses sold but not yet developed | 134 | 230 |
Note 1 - Earnings (Loss) Per Co
Note 1 - Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net loss | $ (3,261,382) | $ (1,855,870) | $ (6,786,515) | $ (3,759,593) |
Weighted average common shares outstanding - basic (in shares) | 12,672,974 | 9,768,230 | 12,620,438 | 9,734,115 |
Stock options (in shares) | ||||
Weighted average common shares outstanding - diluted (in shares) | 12,672,974 | 9,768,230 | 12,620,438 | 9,734,115 |
Basic and diluted loss per share (in dollars per share) | $ (0.26) | $ (0.19) | $ (0.54) | $ (0.39) |
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restricted Stock [Member] | ||||
Anti-dilutive Securities (in shares) | 151,806 | 116,818 | 151,806 | 453,846 |
Employee Stock Option [Member] | ||||
Anti-dilutive Securities (in shares) | 787,955 | 271,895 | 787,955 | 376,275 |
Warrant [Member] | ||||
Anti-dilutive Securities (in shares) | 90,000 | 90,000 | 90,000 | 90,000 |
Note 2 - Acquisitions (Details
Note 2 - Acquisitions (Details Textual) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jan. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Reacquisitions of Franchises Throughout California and New Mexico [Member} | General and Administrative Expense [Member] | |||||
Business Combination, Acquisition Related Costs | $ 49,000 | ||||
Reacquisitions of Franchises Throughout California and New Mexico [Member} | Franchise Rights [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||||
Reacquisitions of Franchises Throughout California and New Mexico [Member} | Franchise Rights [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||||
Reacquisitions of Franchises Throughout California and New Mexico [Member} | Franchise Rights [Member] | |||||
Finite-lived Intangible Assets Acquired | $ 201,409 | ||||
Reacquisitions of Franchises Throughout California and New Mexico [Member} | Customer Relationships [Member] | |||||
Finite-lived Intangible Assets Acquired | $ 93,363 | ||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
Reacquisitions of Franchises Throughout California and New Mexico [Member} | |||||
Number of Developed Franchises Reacquired During Period | 6 | ||||
Number of Undeveloped Franchises Reacquired During the Period | 1 | ||||
Business Combination, Consideration Transferred | $ 1,025,000 | ||||
Payments to Acquire Businesses, Gross | 839,000 | ||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 186,000 | ||||
Number of Reacquired Developed Franchises Operated as Company-owned or Managed Clinics | 6 | ||||
Deferred Revenue | $ 29,000 | ||||
Deferred Franchise Costs | 1,450 | ||||
Business Combination, Consideration Transferred, Net of Deferred Revenue and Deferred Franchise Costs | 997,451 | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | General and Administrative Expense [Member] | |||||
Business Combination, Acquisition Related Costs | $ 393,069 | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | Franchise Rights [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | Franchise Rights [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | Franchise Rights [Member] | |||||
Finite-lived Intangible Assets Acquired | $ 1,458,667 | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | Customer Relationships [Member] | |||||
Finite-lived Intangible Assets Acquired | $ 483,513 | ||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | Tempe, AZ [Member] | |||||
Business Combination, Consideration Transferred | $ 25,000 | ||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 233,804 | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | San Diego, CA [Member] | |||||
Number of Developed Franchises Reacquired During Period | 2 | ||||
Number of Undeveloped Franchises Reacquired During the Period | 7 | ||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 27,343 | ||||
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | |||||
Number of Developed Franchises Reacquired During Period | 24 | ||||
Number of Undeveloped Franchises Reacquired During the Period | 35 | ||||
Business Combination, Consideration Transferred | $ 5,725,875 | ||||
Payments to Acquire Businesses, Gross | 4,925,525 | ||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 800,350 | ||||
Number of Reacquired Developed Franchises Operated as Company-owned or Managed Clinics | 22 | ||||
Deferred Revenue | $ 1,005,500 | ||||
Deferred Franchise Costs | 493,500 | ||||
Business Combination, Consideration Transferred, Net of Deferred Revenue and Deferred Franchise Costs | $ 5,213,875 | ||||
Number of Franchises Closed | 2 | ||||
Number of Reacquired Undeveloped Franchises that Have Been Terminated and May Be Relocated | 35 | ||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 261,147 | ||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 1,900,000 | $ 3,500,000 | |||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | 300,000 | $ 400,000 | |||
Franchise Rights [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||||
Franchise Rights [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||||
Deferred Revenue | $ 688,750 | $ 224,750 | $ 688,750 |
Note 2 - Assets Acquired and Li
Note 2 - Assets Acquired and Liabilities Assumed (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Reacquisitions of Franchises Throughout California and New Mexico [Member} | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | $ 296,571 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 294,772 | |
Goodwill | 478,326 | |
Total assets acquired | 1,069,669 | |
Deferred membership revenue | (72,218) | |
Net assets acquired | 997,451 | |
Net purchase price | 997,451 | |
Total assets acquired | 1,069,669 | |
Deferred membership revenue | (72,218) | |
Net assets acquired | 997,451 | |
Business Combination, Consideration Transferred, Net of Deferred Revenue and Deferred Franchise Costs | 997,451 | |
Reacquisitions of Franchises Throughout Arizona, California and New York [Member] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | $ 1,504,169 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 1,942,180 | |
Goodwill | 1,830,833 | |
Total assets acquired | 5,799,007 | |
Deferred membership revenue | (106,908) | |
Net assets acquired | 5,643,022 | |
Net purchase price | 5,213,875 | |
Favorable leases | 521,825 | |
Total assets acquired | 5,799,007 | |
Unfavorable leases | (49,077) | |
Deferred membership revenue | (106,908) | |
Net assets acquired | 5,643,022 | |
Deferred tax liability | (168,000) | |
Bargain purchase gain | (261,147) | |
Business Combination, Consideration Transferred, Net of Deferred Revenue and Deferred Franchise Costs | 5,213,875 | |
Goodwill | $ 2,945,263 | $ 2,466,937 |
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues, net | $ 4,954,003 | $ 4,099,994 | $ 9,219,436 | $ 7,695,781 |
Net loss | $ (3,224,469) | $ (2,052,405) | $ (6,728,596) | $ (4,293,283) |
Note 3 - Notes Receivable (Deta
Note 3 - Notes Receivable (Details Textual) | 1 Months Ended | ||||
May 31, 2016USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2012USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Company-owned Clinic [Member] | |||||
Financing Receivable, Net | $ 90,000 | $ 64,827 | $ 76,731 | ||
Notes Receivable, Interest Rate | 6.00% | ||||
Notes Receivable, Contractual Term | 4 years 180 days | ||||
Notes Receivable, Principal and Interest, Term | 3 years 180 days | ||||
Number of License Transfer Agreements | 2 | ||||
Non-interest Bearing Unsecured Promissory Note 1 [Member] | |||||
Financing Receivable, Net | $ 10,000 | ||||
Non-interest Bearing Unsecured Promissory Note 2 [Member] | |||||
Financing Receivable, Net | $ 29,925 | ||||
Notes Receivable, Contractual Term | 2 years | ||||
Interest Bearing Unsecured Promissory Note [Member] | |||||
Financing Receivable, Net | $ 29,925 | ||||
Notes Receivable, Interest Rate | 4.00% | ||||
Notes Receivable, Contractual Term | 1 year | ||||
Non-interest Bearing Unsecured Promissory Note Maturing October 1, 2017 [Member] | |||||
Financing Receivable, Net | $ 7,500 | ||||
Notes Receivable, Contractual Term | 180 days | ||||
Number of License Transfer Agreements | 3 | ||||
Number of Unsecured Promissory Notes | 3 |
Note 4 - Property and Equipme36
Note 4 - Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Depreciation | $ 462,233 | $ 189,555 | $ 864,100 | $ 275,484 |
Note 4 - Property and Equipme37
Note 4 - Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Office Equipment [Member] | ||
Property and Equipment, Gross | $ 1,198,214 | $ 963,299 |
Leasehold Improvements [Member] | ||
Property and Equipment, Gross | 7,846,212 | 4,672,582 |
Software Development [Member] | ||
Property and Equipment, Gross | 830,646 | 691,827 |
Property Plant and Equipment, Excluding Construction in Progress [Member] | ||
Property and Equipment, Net | 7,912,534 | 5,229,270 |
Property and Equipment, Gross | 9,875,072 | 6,327,708 |
Accumulated depreciation and amortization | (1,962,538) | (1,098,438) |
Property and Equipment, Net | 8,171,315 | 7,138,746 |
Construction in progress | $ 258,781 | $ 1,909,476 |
Note 5 - Intangible Assets (Det
Note 5 - Intangible Assets (Details Textual) - USD ($) | Jun. 01, 2016 | Jan. 01, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Regional Developer Rights in Los Angeles County, San Diego, and New Jersey [Member] | Franchises [Member] | ||||||
Deferred Revenue | $ 36,250 | $ 36,250 | ||||
Regional Developer Rights in Los Angeles County, San Diego, and New Jersey [Member] | ||||||
Repurchase Right to Develop Franchises, Consideration | $ 275,000 | |||||
Regional Developer Rights in Virginia [Member] | Franchises [Member] | ||||||
Deferred Revenue | $ 188,500 | |||||
Regional Developer Rights in Virginia [Member] | ||||||
Repurchase Right to Develop Franchises, Consideration | $ 50,000 | |||||
Deferred Revenue | 224,750 | $ 688,750 | 224,750 | $ 688,750 | ||
Amortization of Intangible Assets | $ 174,882 | $ 88,947 | $ 348,559 | $ 125,614 |
Note 5 - Intangible Assets Acqu
Note 5 - Intangible Assets Acquired (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Franchise Rights [Member] | ||
Gross Carrying Amount | $ 1,741,076 | |
Accumulated Amortization | 310,266 | |
Net Carrying Value | 1,430,810 | |
Customer Relationships [Member] | ||
Gross Carrying Amount | 648,875 | |
Accumulated Amortization | 337,158 | |
Net Carrying Value | 311,717 | |
Development Rights [Member] | ||
Gross Carrying Amount | 1,162,000 | |
Accumulated Amortization | 177,295 | |
Net Carrying Value | 984,705 | |
Gross Carrying Amount | 3,551,951 | |
Accumulated Amortization | 824,719 | |
Net Carrying Value | 2,727,232 | |
Goodwill | 2,945,263 | $ 2,466,937 |
Total Intangible assets | $ 5,672,495 |
Note 5 - Estimated Amortization
Note 5 - Estimated Amortization Expense (Details) | Jun. 30, 2016USD ($) |
2016 (remaining) | $ 373,709 |
2,017 | 556,919 |
2,018 | 438,542 |
2,019 | 422,981 |
2,020 | 422,981 |
Thereafter | 512,100 |
Total | $ 2,727,232 |
Note 6 - Notes Payable (Details
Note 6 - Notes Payable (Details Textual) | 1 Months Ended | 6 Months Ended |
Feb. 28, 2015USD ($) | Jun. 30, 2016USD ($) | |
Notes Payable Delivered as a Portion of the Consideration Paid in Connection With Acquisitions [Member] | Minimum [Member] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | |
Notes Payable Delivered as a Portion of the Consideration Paid in Connection With Acquisitions [Member] | Maximum [Member] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | |
Notes Payable Delivered as a Portion of the Consideration Paid in Connection With Acquisitions [Member] | ||
Debt Instrument, Face Amount | $ 800,350 | $ 186,000 |
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | |
Number of Notes Payable Delivered as a Portion of the Consideration Paid in Connection With Acquisitions | 12 | 2 |
Note 6 - Maturities of Notes Pa
Note 6 - Maturities of Notes Payable (Details) | Jun. 30, 2016USD ($) |
Remainder of 2016 | $ 284,400 |
2,017 | 266,000 |
Total | $ 550,400 |
Note 7 - Equity (Details Textua
Note 7 - Equity (Details Textual) - USD ($) | Dec. 30, 2015 | Nov. 25, 2015 | Nov. 14, 2014 | Dec. 30, 2015 | Nov. 30, 2012 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
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 | ||||||||
Secondary Offering [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 2,272,727 | ||||||||
Share Price | $ 5.50 | ||||||||
Over-Allotment Option [Member] | |||||||||
Share Price | $ 5.50 | $ 5.50 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 340,909 | ||||||||
Minimum [Member] | |||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Exercise Price | $ 3.07 | ||||||||
Maximum [Member] | |||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Exercise Price | $ 4.11 | ||||||||
The 2012 Plan [Member] | |||||||||
Share-based Compensation Arrangement, Award Plan Term | 10 years | ||||||||
Employee Stock Option [Member] | |||||||||
Allocated Share-based Compensation Expense | $ 171,152 | $ 67,468 | $ 338,911 | $ 110,996 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 799,768 | $ 799,768 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 153 days | ||||||||
Restricted Stock [Member] | Former Chief Executive Officer [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number | 9,733 | ||||||||
Restricted Stock [Member] | |||||||||
Allocated Share-based Compensation Expense | $ 391,373 | $ 89,744 | $ 418,483 | 178,503 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 317 days | ||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | 642,962 | $ 642,962 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | 412,000 | ||||||||
Stock Issued During Period, Shares, New Issues | 2,613,636 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 33,374 | ||||||||
Proceeds from Stock Options Exercised | $ 65,592 | ||||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 13,000,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 390,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 159,955 | $ 159,955 |
Note 7 - Fair Value Assumptions
Note 7 - Fair Value Assumptions of Options Granted (Details) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Minimum [Member] | ||
Expected volatility | 44.00% | 46.00% |
Expected term (years) | 5 years | |
Risk-free rate | 1.47% | 1.32% |
Maximum [Member] | ||
Expected volatility | 45.00% | 47.00% |
Expected term (years) | 6 years 91 days | |
Risk-free rate | 1.68% | 1.74% |
Expected volatility | ||
Expected dividends | 0.00% | 0.00% |
Expected term (years) | 7 years | |
Forfeiture rate | 20.00% | 20.00% |
Note 7 - Stock Options Activity
Note 7 - Stock Options Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Outstanding, Number of Shares (in shares) | 477,459 | |
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 4.30 | |
Outstanding, Weighted Average Fair Value (in dollars per share) | $ 2.07 | $ 2.01 |
Outstanding, Weighted Average Remaining Contractual Life | 8 years 36 days | 8 years 255 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 390,000 | |
Granted at Market Price, Weighted Average Exercise Price (in dollars per share) | $ 3.86 | |
Exercised, Number of Shares (in shares) | (33,374) | |
Exercised, Weighted Average Exercise Price (in dollars per share) | $ 1.97 | |
Cancelled, Number of Shares (in shares) | (46,130) | |
Cancelled, Weighted Average Exercise Price (in dollars per share) | $ 2.59 | |
Outstanding, Number of Shares (in shares) | 787,955 | 477,459 |
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 4.28 | $ 4.30 |
Exercisable, Number of Shares (in shares) | 315,775 | |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 3.63 | |
Exercisable, Weighted Average Fair Value (in dollars per share) | $ 2.22 | |
Exercisable, Weighted Average Remaining Contractual Life | 8 years 73 days |
Note 7 - Restricted Stock Activ
Note 7 - Restricted Stock Activity (Details) - Restricted Stock [Member] | 6 Months Ended |
Jun. 30, 2016shares | |
Outstanding at December 31, 2015 (in shares) | 670,375 |
Restricted stock awards granted (in shares) | 86,415 |
Awards forfeited or exercised (in shares) | (115,436) |
Outstanding at June 30, 2016 (in shares) | 641,354 |
Note 8 - Income Taxes (Details
Note 8 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Expense (Benefit) | $ 73,470 | $ 117,867 |
Note 9 - Related Party Transa48
Note 9 - Related Party Transactions (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transaction, Amounts of Transaction | $ 118,000 | $ 349,000 | $ 310,000 | $ 558,000 |
Note 10 - Commitments and Con49
Note 10 - Commitments and Contingencies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Leases, Rent Expense | $ 854,516 | $ 236,137 | $ 1,607,011 | $ 354,617 |
Note 10 - Summary of Future Min
Note 10 - Summary of Future Minimum Rental Payments for Operating Leases (Details) | Jun. 30, 2016USD ($) |
2016 (remaining) | $ 1,662,566 |
2,017 | 3,345,151 |
2,018 | 2,763,018 |
2,019 | 2,426,739 |
2,020 | 2,163,963 |
Thereafter | 10,133,376 |
$ 22,494,813 |
Note 11 - Segment Reporting (De
Note 11 - Segment Reporting (Details Textual) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Corporate Clinics [Member] | ||
Number of Stores | 61 | |
Franchise Operations [Member] | ||
Number of Stores | 280 | |
Number of Operating Segments | 2 | |
Number of Stores | 341 | 262 |
Number of Reportable Segments | 2 |
Note 11 - Segment Reporting Fin
Note 11 - Segment Reporting Financial Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Corporate Clinics [Member] | ||||
Corporate clinics | $ 2,137,000 | $ 624,000 | $ 3,796,000 | $ 1,011,000 |
Corporate clinics | (1,651,000) | (588,000) | (3,335,000) | (584,000) |
Depreciation and amortization | 534,000 | 199,000 | 1,027,000 | 257,000 |
Franchise Operations [Member] | ||||
Corporate clinics | 2,837,000 | 2,802,000 | 5,443,000 | 4,924,000 |
Corporate clinics | 1,013,000 | 1,117,000 | 2,080,000 | 1,791,000 |
Depreciation and amortization | ||||
Corporate Segment [Member] | ||||
Depreciation and amortization | 103,000 | 80,000 | 186,000 | 144,000 |
Operating Segments [Member] | ||||
Corporate clinics | (638,000) | 529,000 | (1,255,000) | 1,207,000 |
Corporate, Non-Segment [Member] | ||||
Corporate clinics | (2,553,000) | (2,375,000) | (5,421,000) | (4,968,000) |
Corporate clinics | 4,974,041 | 3,426,746 | 9,239,077 | 5,934,645 |
Corporate clinics | (3,190,987) | (1,846,059) | (6,676,647) | (3,761,282) |
Depreciation and amortization | 637,115 | 278,502 | 1,212,659 | 401,098 |
Other income (expense), net | 3,000 | (10,000) | 8,000 | 2,000 |
Loss before income tax (expense) benefit | $ (3,187,912) | $ (1,855,870) | $ (6,668,648) | $ (3,759,593) |
Note 11 - Segment Reporting Inf
Note 11 - Segment Reporting Information, Assets (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Corporate Clinics [Member] | ||||
Corporate clinics | $ 14,954,000 | $ 12,426,000 | ||
Franchise Operations [Member] | ||||
Corporate clinics | 2,264,000 | 2,580,000 | ||
Operating Segments [Member] | ||||
Corporate clinics | 17,218,000 | 15,006,000 | ||
Unallocated cash and cash equivalents | 6,684,000 | 17,178,000 | ||
Property and Equipment, Net | 1,020,000 | 802,000 | ||
Other unallocated assets | 335,000 | 376,000 | ||
Corporate clinics | 25,256,690 | 33,362,328 | ||
Unallocated cash and cash equivalents | 6,118,763 | 16,792,850 | $ 12,579,991 | $ 20,796,783 |
Property and Equipment, Net | $ 8,171,315 | $ 7,138,746 |