Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 01, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36724 | ||
Entity Registrant Name | Joint Corp | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 90-0544160 | ||
Entity Address, Address Line One | 16767 North Perimeter Drive | ||
Entity Address, Address Line Two | Suite 110 | ||
Entity Address, City or Town | Scottsdale | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85260 | ||
City Area Code | 480 | ||
Local Phone Number | 245-5960 | ||
Title of 12(b) Security | Common Stock, $0.001 Par Value Per Share | ||
Trading Symbol | JYNT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 136.9 | ||
Entity Common Stock, Shares Outstanding | 14,570,879 | ||
Documents Incorporated by Reference | Portions of the registrant's Proxy Statement relating to its 2023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission (“SEC”) pursuant to Regulation 14A within 120 days after the registrant’s fiscal year ended December 31, 2022, are incorporated by reference in Part III of this Form 10-K. | ||
Entity Central Index Key | 0001612630 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 243 |
Auditor Name | BDO USA, P.C. |
Auditor Location | Phoenix, Arizona |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 9,745,066 | $ 19,526,119 |
Restricted cash | 805,351 | 386,219 |
Accounts receivable | 3,911,272 | 3,700,810 |
Deferred franchise and regional development costs, current portion | 1,054,060 | 994,587 |
Prepaid expenses and other current assets | 2,098,359 | 2,281,765 |
Total current assets | 17,614,108 | 26,889,500 |
Property and equipment, net | 17,475,152 | 14,388,946 |
Operating lease right-of-use asset | 20,587,199 | 18,425,914 |
Deferred franchise and regional development costs, net of current portion | 5,707,678 | 5,505,420 |
Intangible assets, net | 10,928,295 | 4,712,763 |
Goodwill | 8,493,407 | 5,085,203 |
Deferred tax assets | 11,928,152 | 11,486,799 |
Deposits and other assets | 756,386 | 567,202 |
Total assets | 93,490,377 | 87,061,747 |
Current liabilities: | ||
Accounts payable | 2,966,589 | 1,705,568 |
Accrued expenses | 1,069,610 | 1,809,460 |
Co-op funds liability | 805,351 | 386,219 |
Payroll liabilities ($0.6 million and $0.4 million attributable to VIEs as of December 31, 2022 and 2021) | 2,030,510 | 3,906,317 |
Operating lease liability, current portion | 5,295,830 | 4,613,843 |
Finance lease liability, current portion | 24,433 | 49,855 |
Deferred franchise fee revenue, current portion | 2,468,601 | 2,421,721 |
Deferred revenue from company clinics ($4.7 million and $3.5 million attributable to VIEs as of December 31, 2022 and 2021) | 7,471,549 | 5,235,745 |
Upfront regional developer fees, current portion | 487,250 | 770,171 |
Other current liabilities | 597,294 | 539,500 |
Total current liabilities | 23,217,017 | 21,438,399 |
Operating lease liability, net of current portion | 18,672,719 | 16,872,093 |
Finance lease liability, net of current portion | 63,507 | 87,939 |
Debt under the Credit Agreement | 2,000,000 | 2,000,000 |
Deferred franchise fee revenue, net of current portion | 14,161,134 | 12,953,430 |
Upfront regional developer fees, net of current portion | 1,500,278 | 2,505,491 |
Other liabilities | 1,287,879 | 895,711 |
Total liabilities | 60,902,534 | 56,753,063 |
Commitments and contingencies (note 11) | ||
Stockholders' equity: | ||
Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of December 31, 2022 and 2021 | 0 | 0 |
Common stock, $0.001 par value; 20,000,000 shares authorized, 14,560,353 shares issued and 14,528,487 shares outstanding as of December 31, 2022 and 14,451,355 shares issued and 14,419,712 outstanding as of December 31, 2021 | 14,560 | 14,450 |
Additional paid-in capital | 45,558,305 | 43,900,157 |
Treasury stock 31,866 shares as of December 31, 2022 and 31,643 shares as of December 31, 2021, at cost | (856,642) | (850,838) |
Accumulated deficit | (12,153,380) | (12,780,085) |
Total The Joint Corp. stockholders' equity | 32,562,843 | 30,283,684 |
Non-controlling Interest | 25,000 | 25,000 |
Total equity | 32,587,843 | 30,308,684 |
Total liabilities and stockholders' equity | $ 93,490,377 | $ 87,061,747 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payroll liabilities attributable to VIEs | $ 2,030,510 | $ 3,906,317 |
Deferred franchise fee revenue, current portion | $ 2,468,601 | $ 2,421,721 |
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) | 14,560,353 | 14,451,355 |
Common stock, shares outstanding (in shares) | 14,528,487 | 14,419,712 |
Treasury stock, shares (in shares) | 31,866 | 31,643 |
Variable Interest Entity, Primary Beneficiary | ||
Payroll liabilities attributable to VIEs | $ 600,000 | $ 400,000 |
Deferred franchise fee revenue, current portion | $ 4,700,000 | $ 3,500,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | ||
Total revenues | $ 101,252,310 | $ 80,011,013 |
Cost of revenues: | ||
Total cost of revenues | 9,171,063 | 7,665,138 |
Selling and marketing expenses | 13,962,709 | 11,424,416 |
Depreciation and amortization | 6,646,622 | 3,921,887 |
General and administrative expenses | 70,233,447 | 50,846,818 |
Total selling, general and administrative expenses | 90,842,778 | 66,193,121 |
Net loss on disposition or impairment | 410,215 | 26,789 |
Income from operations | 828,254 | 6,125,965 |
Other expense, net | (133,101) | (69,878) |
Income before income tax expense (benefit) | 695,153 | 6,056,087 |
Income tax expense (benefit) | 68,448 | (1,508,960) |
Net income (as restated) | $ 626,705 | $ 7,565,047 |
Earnings per share: | ||
Basic earnings per share (in dollars per share) | $ 0.04 | $ 0.53 |
Diluted earnings per share (in dollars per share) | $ 0.04 | $ 0.51 |
Basic weighted average shares (in shares) | 14,488,314 | 14,319,448 |
Diluted weighted average shares (in shares) | 14,868,093 | 14,935,577 |
Revenues from company-owned or managed clinics | ||
Revenues: | ||
Total revenues | $ 59,422,294 | $ 44,348,234 |
Royalty fees | ||
Revenues: | ||
Total revenues | 26,190,531 | 22,062,989 |
Franchise fees | ||
Revenues: | ||
Total revenues | 2,441,325 | 2,659,097 |
Cost of revenues: | ||
Franchise and regional developer cost of revenues | 7,803,404 | 6,559,486 |
Advertising fund revenue | ||
Revenues: | ||
Total revenues | 7,456,696 | 6,298,924 |
Software fees | ||
Revenues: | ||
Total revenues | 4,290,739 | 3,383,856 |
Cost of revenues: | ||
Franchise and regional developer cost of revenues | 1,367,659 | 1,105,652 |
Other revenues | ||
Revenues: | ||
Total revenues | $ 1,450,725 | $ 1,257,913 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid In Capital | Treasury Stock | Accumulated Deficit | Total The Joint Corp. stockholder's equity | Non-controlling Interest |
Balance, beginning common stock (in shares) at Dec. 31, 2020 | 14,174,237 | ||||||
Balance, beginning at Dec. 31, 2020 | $ 20,876,032 | $ 14,174 | $ 41,350,001 | $ (143,111) | $ (20,345,132) | $ 20,875,932 | $ 100 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2020 | 17,167 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 1,739,454 | ||||||
Balance, ending at Mar. 31, 2021 | 22,865,008 | (18,605,272) | 22,864,908 | ||||
Balance, beginning common stock (in shares) at Dec. 31, 2020 | 14,174,237 | ||||||
Balance, beginning at Dec. 31, 2020 | 20,876,032 | $ 14,174 | 41,350,001 | $ (143,111) | (20,345,132) | 20,875,932 | 100 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2020 | 17,167 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 4,824,546 | ||||||
Balance, ending at Jun. 30, 2021 | 26,875,043 | (15,520,588) | 26,874,943 | ||||
Balance, beginning common stock (in shares) at Dec. 31, 2020 | 14,174,237 | ||||||
Balance, beginning at Dec. 31, 2020 | 20,876,032 | $ 14,174 | 41,350,001 | $ (143,111) | (20,345,132) | 20,875,932 | 100 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2020 | 17,167 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 7,068,696 | ||||||
Balance, ending at Sep. 30, 2021 | 29,544,539 | (13,301,339) | 29,519,539 | ||||
Balance, beginning common stock (in shares) at Dec. 31, 2020 | 14,174,237 | ||||||
Balance, beginning at Dec. 31, 2020 | 20,876,032 | $ 14,174 | 41,350,001 | $ (143,111) | (20,345,132) | 20,875,932 | 100 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2020 | 17,167 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | 1,056,015 | 1,056,015 | 1,056,015 | ||||
Issuance of restricted stock (in shares) | 17,074 | ||||||
Issuance of restricted stock | 0 | $ 17 | (17) | ||||
Exercise of stock options (in shares) | 260,044 | ||||||
Exercise of stock options | 1,519,317 | $ 259 | 1,519,058 | 1,519,317 | |||
Purchases of treasury stock under employee stock plans (in shares) | 14,476 | ||||||
Purchases of treasury stock under employee stock plans | (707,727) | $ (707,727) | (707,727) | ||||
Change in non-controlling interest | 0 | (24,900) | (24,900) | 24,900 | |||
Net income (as restated) | $ 7,565,047 | 7,565,047 | 7,565,047 | ||||
Balance, ending common stock (in shares) at Dec. 31, 2021 | 14,419,712 | 14,451,355 | |||||
Balance, ending at Dec. 31, 2021 | $ 30,308,684 | $ 14,450 | 43,900,157 | $ (850,838) | (12,780,085) | 30,283,684 | 25,000 |
Balance, ending treasury stock (in shares) at Dec. 31, 2021 | 31,643 | 31,643 | |||||
Balance, beginning at Mar. 31, 2021 | $ 22,865,008 | (18,605,272) | 22,864,908 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 3,084,684 | ||||||
Balance, ending at Jun. 30, 2021 | 26,875,043 | (15,520,588) | 26,874,943 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 2,244,149 | ||||||
Balance, ending at Sep. 30, 2021 | 29,544,539 | (13,301,339) | 29,519,539 | ||||
Balance, beginning at Dec. 31, 2021 | 30,308,684 | $ 14,450 | 43,900,157 | $ (850,838) | (12,780,085) | 30,283,684 | 25,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 4,220 | ||||||
Balance, ending at Mar. 31, 2022 | $ 30,683,485 | (12,775,865) | 30,658,485 | ||||
Balance, beginning common stock (in shares) at Dec. 31, 2021 | 14,419,712 | 14,451,355 | |||||
Balance, beginning at Dec. 31, 2021 | $ 30,308,684 | $ 14,450 | 43,900,157 | $ (850,838) | (12,780,085) | 30,283,684 | 25,000 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2021 | 31,643 | 31,643 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | $ (867,648) | ||||||
Balance, ending at Jun. 30, 2022 | $ 30,215,858 | (13,647,733) | 30,190,858 | ||||
Balance, beginning common stock (in shares) at Dec. 31, 2021 | 14,419,712 | 14,451,355 | |||||
Balance, beginning at Dec. 31, 2021 | $ 30,308,684 | $ 14,450 | 43,900,157 | $ (850,838) | (12,780,085) | 30,283,684 | 25,000 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2021 | 31,643 | 31,643 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | $ (136,551) | ||||||
Balance, ending at Sep. 30, 2022 | $ 31,497,920 | (12,916,636) | 31,472,920 | ||||
Balance, beginning common stock (in shares) at Dec. 31, 2021 | 14,419,712 | 14,451,355 | |||||
Balance, beginning at Dec. 31, 2021 | $ 30,308,684 | $ 14,450 | 43,900,157 | $ (850,838) | (12,780,085) | 30,283,684 | 25,000 |
Balance, beginning treasury stock (in shares) at Dec. 31, 2021 | 31,643 | 31,643 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | $ 1,273,989 | 1,273,989 | 1,273,989 | ||||
Issuance of restricted stock (in shares) | 65,618 | ||||||
Issuance of restricted stock | 0 | $ 66 | (66) | ||||
Exercise of stock options (in shares) | 43,380 | ||||||
Exercise of stock options | 384,269 | $ 44 | 384,225 | 384,269 | |||
Purchases of treasury stock under employee stock plans (in shares) | 223 | ||||||
Purchases of treasury stock under employee stock plans | (5,804) | $ (5,804) | (5,804) | ||||
Net income (as restated) | $ 626,705 | 626,705 | 626,705 | ||||
Balance, ending common stock (in shares) at Dec. 31, 2022 | 14,528,487 | 14,560,353 | |||||
Balance, ending at Dec. 31, 2022 | $ 32,587,843 | $ 14,560 | $ 45,558,305 | $ (856,642) | (12,153,380) | 32,562,843 | $ 25,000 |
Balance, ending treasury stock (in shares) at Dec. 31, 2022 | 31,866 | 31,866 | |||||
Balance, beginning at Mar. 31, 2022 | $ 30,683,485 | (12,775,865) | 30,658,485 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | (871,867) | ||||||
Balance, ending at Jun. 30, 2022 | 30,215,858 | (13,647,733) | 30,190,858 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (as restated) | 731,096 | ||||||
Balance, ending at Sep. 30, 2022 | $ 31,497,920 | $ (12,916,636) | $ 31,472,920 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (as restated) | $ 626,705 | $ 7,565,047 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 6,646,622 | 3,921,887 |
Net loss on disposition or impairment (non-cash portion) | 410,215 | 125,237 |
Net franchise fees recognized upon termination of franchise agreements | (68,537) | (133,007) |
Deferred income taxes | (441,353) | (1,778,157) |
Stock based compensation expense | 1,273,989 | 1,056,015 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (154,672) | (1,637,589) |
Prepaid expenses and other current assets | 183,406 | (715,740) |
Deferred franchise costs | (351,151) | (1,418,235) |
Deposits and other assets | (189,184) | (148,516) |
Accounts payable | 818,265 | (14,373) |
Accrued expenses | (1,170,070) | 886,738 |
Payroll liabilities | (1,875,807) | 1,130,281 |
Upfront regional developer fees | (1,288,134) | (572,944) |
Deferred revenue | 2,889,139 | 4,162,209 |
Other liabilities | 900,151 | 1,415,227 |
Net cash provided by operating activities | 8,209,584 | 13,844,080 |
Cash flows from investing activities: | ||
Proceeds from sale of clinics | 105,200 | 0 |
Purchase of property and equipment | (5,899,080) | (6,989,534) |
Net cash used in investing activities | (17,900,115) | (12,754,669) |
Cash flows from financing activities: | ||
Payments of finance lease obligation | (49,855) | (80,322) |
Purchases of treasury stock under employee stock plans | (5,804) | (707,727) |
Proceeds from exercise of stock options | 384,269 | 1,519,317 |
Repayment of debt under the Paycheck Protection Program | 0 | (2,727,970) |
Net cash provided by (used in) financing activities | 328,610 | (1,996,702) |
Decrease in cash | (9,361,921) | (907,291) |
Cash, cash equivalents and restricted cash, beginning of period | 19,912,338 | 20,819,629 |
Cash, cash equivalents and restricted cash, end of period | 10,550,417 | 19,912,338 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 9,745,066 | 19,526,119 |
Restricted cash | 805,351 | 386,219 |
Cash and cash equivalents and restricted cash | 10,550,417 | 19,912,338 |
AZ Clinics | ||
Cash flows from investing activities: | ||
Acquisition | (6,966,923) | (1,925,000) |
NC Clinics | ||
Cash flows from investing activities: | ||
Acquisition | (3,289,312) | (3,840,135) |
CA clinics | ||
Cash flows from investing activities: | ||
Acquisition | $ (1,850,000) | $ 0 |
Supplemental Disclosure of Non-
Supplemental Disclosure of Non-cash Activity | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Non-cash Activity | During the years ended December 31, 2022 and 2021, cash refunded for income taxes was $369,481 and cash paid for income taxes was $566,808, respectively. During the years ended December 31, 2022 and 2021, cash paid for interest was $71,255 and $69,273, respectively. See notes to consolidated financial statements. Supplemental disclosure of non-cash activity: As of December 31, 2022, accounts payable and accrued expenses included property and equipment purchases of $442,756 and $133,969, respectively. As of December 31, 2021, accounts payable and accrued expenses included property and equipment purchases of $158,293 and $152,501, respectively. In connection with the acquisitions during the years ended December 31, 2022 and December 31, 2021, net deferred revenue of $200,371 and $134,539, respectively, relating to unrecognized net franchise fees collected upon the execution of the franchise agreements reduced the purchase price of the acquisitions. |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Basis of Presentation These financial statements represent the consolidated financial statements of The Joint Corp. (“The Joint”), which includes its variable interest entities (“VIEs”), and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC (collectively, the “Company”). The preparation of financial statements in conformity with accounting principles generally accepted in the Unites States of America (“GAAP”) requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses, other (expenses) income, and income taxes that are reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. For a discussion of significant estimates and judgments made in recognizing revenue, accounting for leases, and accounting for income taxes, see Note 3, "Revenue Disclosures", Note 10, "Income Taxes", and Note 11, "Commitments and Contingencies". Principles of Consolidation The accompanying consolidated financial statements include the accounts of The Joint and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC, which was dormant for all periods presented. The Company consolidates VIEs in which the Company is the primary beneficiary in accordance with Accounting Standards Codification 810, Consolidations (“ASC 810”). Non-controlling interests represent third-party equity ownership interests in VIEs. All significant inter-affiliate accounts and transactions between The Joint and its VIEs have been eliminated in consolidation. Comprehensive Income Net income and comprehensive income are the same for the years ended December 31, 2022 and 2021. Nature of Operations The Joint Corp., a Delaware corporation, was formed on March 10, 2010 for the principal purpose of franchising, developing, selling regional developer rights, supporting the operations of franchised chiropractic clinics, and operating and managing corporate 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 for the years ended December 31, 2022 and 2021: Year Ended December 31, Franchised clinics: 2022 2021 Clinics open at beginning of period 610 515 Opened during the period 121 110 Acquired during the period 2 — Sold during the period (16) (12) Closed during the period (5) (3) Clinics in operation at the end of the period 712 610 Year Ended December 31, Company-owned or managed clinics: 2022 2021 Clinics open at beginning of period 96 64 Opened during the period 16 20 Acquired during the period 16 12 Sold during the period (2) — Closed during the period — — Clinics in operation at the end of the period 126 96 Total clinics in operation at the end of the period 838 706 Clinic licenses sold but not yet developed 197 245 Executed letters of intent for future clinic licenses 38 38 Variable Interest Entities Certain states prohibit the “corporate practice of chiropractic,” which restricts business corporations from practicing chiropractic care by exercising control over clinical decisions by chiropractic doctors. In states which prohibit the corporate practice of chiropractic, the Company typically enters into long-term management services agreements ("MSAs") with professional corporations (“PCs”) that are owned by licensed chiropractic doctors, which, in turn, employ or contract with doctors who provide professional chiropractic care in its clinics. Under these management agreements with PCs, the Company provides, on an exclusive basis, all non-clinical services of the chiropractic practice. The Company has entered into such management agreements with three PCs, including one in Kansas, in connection with the opening of company-managed clinics in August 2022. An entity deemed to be the primary beneficiary of a 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. In accordance with relevant accounting guidance, these PCs were determined to be VIEs. Such PCs are VIEs, as fees paid by the PCs to the Company as its management service provider are considered variable interests because the fees do not meet all the following criteria: 1) The fees are compensation for services provided and are commensurate with the level of effort required to provide those services; 2) The decision maker or service provider does not hold other interests in the VIE that individually, or in the aggregate, would absorb more than an insignificant amount of the VIE’s expected losses or receive more than an insignificant amount of the VIE’s expected residual returns; 3) The service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length. Additionally, the Company has determined that it has the ability to direct the activities that most significantly impact the performance of these PCs and have an obligation to absorb losses or receive benefits which could potentially be significant to the PCs. Accordingly, the PCs are variable interest entities for which the Company is the primary beneficiary and are consolidated by the Company. The revenues of VIEs represent the revenues of Company-managed clinics in states that prohibit the corporate practice of chiropractic. The Company's involvement with VIEs affects its financial performance and cash flows primarily through amounts recorded in Revenues from company-owned or managed clinics and General and administrative expenses, which are principally comprised of payroll and related expenses. The management fees/income provided by the MSAs are considered intercompany transactions and therefore eliminated upon consolidation of VIEs. The VIEs’ total revenue and payroll and related expenses for the year ended December 31, 2022 were $34.8 million and $14.0 million, respectively. The VIE’s total revenue and payroll and related expenses for the year ended December 31, 2021 were $28.6 million and $8.5 million, respectively. The VIEs’ deferred revenue liability balance for amounts collected in advance for membership and wellness packages was $4.7 million and $3.5 million as of December 31, 2022 and December 31, 2021, respectively. The VIEs’ payroll liability balance as of December 31, 2022 and December 31, 2021 was $0.6 million and $0.4 million, respectively. The carrying amount of the other VIEs’ assets and liabilities was immaterial as of December 31, 2022 and December 31, 2021. 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 its cash in short-term bank deposits. The Company had no cash equivalents as of December 31, 2022 and 2021. Restricted Cash Restricted cash relates to cash that franchisees and company-owned or managed clinics contribute to the Company’s National Marketing Fund and cash that 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. While such cash balance is not legally segregated and restricted as to withdrawal or usage, the Company's accounting policy is to classify these funds as restricted cash. Accounts Receivable Accounts receivable primarily represent amounts due from franchisees for royalty and software fees. The Company records an allowance for credit losses as a reduction to its accounts receivables for amounts that the Company does not expect to recover. An allowance for credit losses is determined through assessments of collectability based on historical trends, the financial condition of the Company’s franchisees, including any known or anticipated bankruptcies, and an evaluation of current economic conditions, as well as the Company’s expectations of conditions in the future. Actual losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. As of December 31, 2022, and 2021, the Company had no allowance for credit losses on accounts receivable. Deferred Franchise Costs and Regional Development Costs Deferred franchise and regional development costs represent commissions that are direct and incremental to the Company and are paid in conjunction with the sale of a franchise license or regional development rights. These costs are recognized as an expense, in franchise and regional development cost of revenues when the respective revenue is recognized, which is generally over the term of the related franchise or regional developer agreement. 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, which is generally three Capitalized Software The Company capitalizes certain software development cost, including costs to implement cloud computing arrangements that is a service contract. These capitalized costs are primarily related to 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, which is generally three Leases The Company leases property and equipment under operating and finance leases. The Company leases its corporate office space and the space for each of the company-owned or managed clinic in the portfolio. The Company recognizes a right-of-use ("ROU") asset and lease liability for all leases. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and, as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the right-of-use asset and lease liability. When available, the Company uses the rate implicit in the lease to discount lease payments; however, the rate implicit in the lease is not readily determinable for substantially all of its leases. In such cases, the Company estimates its incremental borrowing rate as the interest rate it would pay to borrow an amount equal to the lease payments over a similar term, with similar collateral as in the lease, and in a similar economic environment. The Company estimates these rates using available evidence such as rates imposed by third-party lenders to the Company in recent financings or observable risk-free interest rate and credit spreads for commercial debt of a similar duration, with credit spreads correlating to the Company’s estimated creditworthiness. For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. Pre-opening costs are recorded as incurred in general and administrative expenses. Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred and are also included in general and administrative expenses on the consolidated income statements. Intangible Assets Intangible assets consist primarily of re-acquired franchise rights and customer relationships. The Company amortizes the fair value of re-acquired franchise rights over the remaining contractual terms of the re-acquired franchise rights at the time of the acquisition, which generally range from one two Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the acquisitions of franchises. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are tested for impairment annually and more frequently if a triggering event occurs that makes it more likely than not that the fair value of a reporting unit is below carrying value. As required, the Company performs an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if a triggering event occurs. No impairments of goodwill were recorded for the years ended December 31, 2022 and 2021. 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 are recoverable. The Company records an impairment loss when the carrying amount of the asset is not recoverable and exceeds its fair value. During the year ended December 31, 2022, an operating lease ROU asset related to a closed clinic with a total carrying amount of approximately $250,000 was written down to zero. As a result, the Company recorded a noncash impairment loss of approximately $250,000 during the year ended December 31, 2022. During the year ended December 31, 2021, certain operating lease right-of-use assets related to closed clinics with a total carrying amount of $0.5 million were written down to their fair value of $0.4 million. As a result, the Company recorded a noncash impairment loss of approximately $0.1 million during the year ended December 31, 2021. In connection with the sale of two company-managed clinics to franchisees, the Company reclassified $288,192 of property and equipment and $359,807 of ROU assets to Assets held for sale and reclassified $428,593 of ROU liability and $54,351 of deferred revenue from company clinics to Liabilities to be disposed of in the consolidated balance sheet as of June 30, 2022. Long-lived assets that meet the held for sale criteria are reported at the lower of their carrying value or fair value, less estimated costs to sell. As a result, the Company recorded a valuation allowance of $79,400 to adjust the carrying value of the disposal group to fair value less cost to sell during the year ended December 31, 2022. One of the two clinics was sold during August 2022, and the second clinic was sold in October 2022. Advertising Fund The Company has established an advertising fund for national or 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 a related expense. Such costs are included in selling and marketing expenses on the consolidated income statements. 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 Co-Op Marketing Funds collected are segregated and used for the purposes specified by the Co-Ops’ officers. The Co-Op Marketing Funds are included in restricted cash on the Company’s consolidated balance sheets. Revenue Recognition The Company generates revenue primarily through its company-owned and managed clinics and through royalties, franchise fees, advertising fund contributions, IT related income and computer software fees from its franchisees. Revenues from Company-Owned or Managed Clinics. The Company earns revenues from clinics that it owns and operates or manages throughout the United States. Revenues are recognized when services are performed. The Company offers a variety of membership and wellness packages which feature discounted pricing as compared with its single-visit pricing. Amounts collected in advance for membership and wellness packages are recorded as deferred revenue and recognized when the service is performed. Any unused visits associated with monthly memberships are recognized on a month-to-month basis. The Company recognizes a contract liability (or a deferred revenue liability) related to the prepaid treatment plans for which the Company has an ongoing performance obligation. The Company derecognizes this contract liability, and recognizes revenue, as the patient consumes his or her visits related to the package and the Company transfers its services. If the Company determines that it is not subject to unclaimed property laws for the portion of wellness package that it does not expect to be redeemed (referred to as “breakage”) then it recognizes breakage revenue in proportion to the pattern of exercised rights by the patient. Royalties and Advertising Fund Revenue. The Company collects royalties, as stipulated in the franchise agreement, equal to 7% of gross sales, and a marketing and advertising fee currently equal to 2% of gross sales. Royalties, including franchisee contributions to advertising funds, are calculated as a percentage of clinic sales over the term of the franchise agreement. The revenue accounting standard provides an exception for the recognition of sales-based royalties promised in exchange for a license (which generally requires a reporting entity to estimate the amount of variable consideration to which it will be entitled in the transaction price). As the franchise agreement royalties, inclusive of advertising fund contributions, represent sales-based royalties that are related entirely to the Company’s performance obligation under the franchise agreement, such sales-based royalties are recognized as franchisee clinic level sales occur. Royalties are collected semi-monthly, two working days after each sales period has ended. Franchise Fees. The Company requires the entire non-refundable initial franchise fee to be paid upon execution of a franchise agreement, which typically has an initial term of ten years. Initial franchise fees are recognized ratably on a straight-line basis over the term of the franchise agreement. The Company’s services under the franchise agreement include training of franchisees and staff, site selection, construction/vendor management and ongoing operations support. The Company provides no financing to franchisees and offers no guarantees on their behalf. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation. Renewal franchise fees, as well as transfer fees, are also recognized as revenue on a straight-line basis over the term of the respective franchise agreement. Software Fees. The Company collects a monthly fee from its franchisees for use of its proprietary chiropractic software, computer support, and internet services support. These fees are recognized ratably on a straight-line basis over the term of the respective franchise agreement. Capitalized Sales Commissions. Sales commissions earned by the regional developers and the Company’s sales force are considered incremental and recoverable costs of obtaining a franchise agreement with a franchisee. These costs are deferred and then amortized as the respective franchise fees are recognized ratably on a straight-line basis over the term of the franchise agreement. Upfront Regional Developer Rights Fees (as restated) The Company has a regional developer program where regional developers are granted an exclusive geographical territory and commit to a minimum development obligation within that defined territory. Upon granting of the exclusive rights to develop a territory, a regional developer will pay an upfront fee to the Company. Upfront regional developer fees represent consideration received from a vendor to act as the Company’s agent within an exclusive territory. The upfront regional developer rights fee is accounted for as a reduction of cost of revenues, in franchise and regional development cost of revenues, to offset the respective future commissions paid to the regional developer. The fees are ratably recognized over the term of the related regional developer agreement. Regional developers receive fees which are funded by the initial franchise fees collected from franchisees upon the sale of franchises within their exclusive geographical territory and a royalty of 3% of sales generated by franchised clinics in their exclusive geographical territory. Initial fees related to the sale of franchises within their exclusive geographical territory are initially deferred as deferred franchise costs and are recognized as an expense in franchise cost of revenues when the respective revenue is recognized, which is generally over the term of the related franchise agreement. Royalties of 3% of sales generated by franchised clinics in their regions are also recognized as franchise cost of revenues as franchisee clinic level sales occur. This 3% fee is funded by the 7% royalties we collect from the franchisees in their regions. Certain regional developer agreements result in the regional developer acquiring the rights to existing royalty streams from clinics already open in the respective territory. In those instances, fees collected from the sale of the royalty stream is recognized as a decrease to franchise and regional developer cost of revenues over the remaining life of the respective franchise agreements. Regional Developer Rights Contract Termination Costs (as restated) From time to time, subject to the Company’s strategy, regional developer rights are reacquired by the Company, resulting in a termination of the contract. The termination costs to reacquire the regional developer rights are recognized at fair value, less any unrecognized upfront regional developer fee liability balance, as a general and administrative expense in the period in which the contract is terminated in accordance with the contract terms and are recorded within general and administrative expenses. Advertising Costs Advertising costs are advertising and marketing expenses incurred by the Company, primarily through advertising funds. The Company expenses production costs of commercial advertising upon first airing and expenses the costs of communicating the advertising in the period in which the advertising occurs. Advertising expenses were $5,163,381 and $4,116,740, for the years ended December 31, 2022 and 2021, respectively. Income Taxes (as restated) Income taxes are accounted for using a balance sheet approach known as the asset and liability method. The asset and liability method accounts for deferred income taxes by applying the statutory tax rates in effect at the date of the consolidated balance sheets to differences between the book basis and the tax basis of assets and liabilities. 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. The differences relate principally to depreciation of property and equipment and treatment of revenue for franchise fees and regional developer fees collected. Tax positions are reviewed at least quarterly and adjusted as new information becomes available. The recoverability of deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These estimates of future taxable income inherently require significant judgment. To the extent it is considered more likely than not that a deferred tax asset will be not recovered, a valuation allowance is established. 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 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. The Company has identified $1.3 million and $1.3 million in uncertain tax positions as of December 31, 2022 and 2021, respectively. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. With exceptions due to the generation and utilization of net operating losses or credits, as of December 31, 2022, the Company is no longer subject to federal and state examinations by taxing authorities for tax years before 2018 and 2017, respectively. Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed by giving effect to all potentially dilutive common shares including restricted stock and stock options. Year Ended December 31, 2022 2021 (As Restated) (As Restated) Net income $ 626,705 $ 7,565,047 Weighted average common shares outstanding - basic 14,488,314 14,319,448 Effect of dilutive securities: Unvested restricted stock and stock options 379,779 616,129 Weighted average common shares outstanding - diluted 14,868,093 14,935,577 Basic earnings per share $ 0.04 $ 0.53 Diluted earnings per share $ 0.04 $ 0.51 Potentially dilutive securities excluded from the calculation of diluted net income per common share as the effect would be anti-dilutive were as follows: Year Ended December 31, 2022 2021 Unvested restricted stock — 58 Stock options 40,349 4,658 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 the closing price on the date of the grant and the grant-date fair value of stock options using the Black-Scholes-Merton model. In order to calculate the fair value of the options, certain assumptions are made regarding the components of the model, including risk-free interest rate, volatility, expected dividend yield and expected option life. 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. Forfeitures are estimated based on historical and forecasted turnover, which is approximately 5%. Retirement Benefit Plan Employees of the Company are eligible to participate in a defined contribution retirement plan, the Joint Corp. 401(k) Retirement Plan (the “401(k) Plan”), under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, employees may contribute their eligible compensation, not to exceed the annual limits set by the IRS. The 401(k) Plan allows the Company to match participants’ contributions in an amount determined at the sole discretion of the Company. The Company matched participants’ contributions for the years ended December 31, 2022 and 2021, up to a maximum of 4% of the employee’s eligible compensation. Employer contributions totaled $478,277 and $346,561, for the years ended December 31, 2022 and 2021, respectively. Loss Contingencies ASC Topic 450 governs the disclosure of loss contingencies and accrual of loss contingencies in respect of litigation and other claims. The Company records an accrual for a potential loss when it is probable that a loss will occur and the amount of the loss can be reasonably estimated. When the reasonable estimate of the potential loss is within a range of amounts, the minimum of the range of potential loss is accrued, unless a higher amount within the range is a better estimate than any other amount within the range. Moreover, even if an accrual is not required, the Company provides additional disclosure related to litigation and other claims when it is reasonably possible (i.e., more than remote) that the outcomes of such litigation and other claims include potential material adverse impacts on the Company. Legal costs to be incurred in connection with a loss contingency are expensed as such costs are incurred. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Items subject to significant estimates and assumptions include loss contingencies, share-based compensations, useful lives and realizability of long-lived assets, deferred revenue and revenue recognition related to breakage, deferred franchise costs, calculation of ROU assets and liabilities related to leases, realizability of deferred tax assets, impairment of goodwill, intangible assets, other long-lived assets, and purchase price allocations and related valuations. Recently Adopted Accounting Guidance and Accounting Pronouncements Not Yet Adopted None. |
Revenue Disclosures
Revenue Disclosures | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disclosures | Revenue Disclosures Company-owned or Managed Clinics The Company earns revenues from clinics that it owns and operates or manages throughout the United States. Revenues are recognized when services are performed. The Company offers a variety of membership and wellness packages which feature discounted pricing as compared with its single-visit pricing. Amounts collected in advance for membership and wellness packages are recorded as deferred revenue and recognized when the service is performed in accordance with the Company’s breakage policy, as discussed in Note 1, Revenue Recognition. Franchising Fees, Royalty Fees, Advertising Fund Revenue, and Software Fees The Company currently franchises its concept across 39 states. The franchise arrangement is documented in the form of a franchise agreement. The franchise arrangement requires the Company to perform various activities to support the brand that do not directly transfer goods and services to the franchisee, but instead represent a single performance obligation, which is the transfer of the franchise license. The intellectual property subject to the franchise license is symbolic intellectual property as it does not have significant standalone functionality, and substantially all of the utility is derived from its association with the Company’s past or ongoing activities. The nature of the Company’s promise in granting the franchise license is to provide the franchisee with access to the brand’s symbolic intellectual property over the term of the license. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation. The transaction price in a standard franchise arrangement primarily consists of (a) initial franchise fees; (b) continuing franchise fees (royalties); (c) advertising fees; and (d) software fees. Generally, the revenue accounting standard requires the reporting entity to estimate the amount of variable consideration to which it will be entitled in the transaction price. However, the revenue accounting standard provides an exception, and it allows a reporting entity to recognize revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property only when (or as) the later of the following events occurs: (i) the subsequent sale or usage occurs, (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). In accordance with the revenue accounting standard exception, royalty and advertising revenue are recognized when the franchisee's sales occur. The Company recognizes the primary components of the transaction price as follows: • Initial and renewal franchise fees, as well as transfer fees, are recognized as revenue ratably on a straight-line basis over the term of the respective franchise agreement commencing with the execution of the franchise, renewal, or transfer agreement. As these fees are typically received in cash at or near the beginning of the contract term, the cash received is initially recorded as a contract liability until recognized as revenue over time. • The Company is entitled to royalties and advertising fees based on a percentage of the franchisee's gross sales as defined in the franchise agreement. Royalty and advertising revenue are recognized when the franchisee's sales occur. Depending on timing within a fiscal period, the recognition of revenue results in either what is considered a contract asset (unbilled receivable) or, once billed, accounts receivable, on the consolidated balance sheet. • The Company is entitled to a software fee, which is charged monthly. The Company recognizes revenue related to software fees ratably on a straight-line basis over the term of the franchise agreement. In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment as it is based on either the franchise term or the reported sales of the franchisee, neither of which requires estimation. The Company believes its franchising arrangements do not contain a significant financing component. The Company recognizes advertising fees received under franchise agreements as advertising fund revenue. Disaggregation of Revenue The Company believes that the captions contained on the consolidated income statements appropriately reflect the disaggregation of its revenue by major type for the years ended December 31, 2022 and 2021. Other revenues primarily consist of merchant income associated with credit card transactions. The following table shows the Company's revenues disaggregated according to the timing of transfer of services: December 31, 2022 2021 (As Restated) (As Restated) Revenue recognized at a point in time $ 94,520,246 $ 73,968,060 Revenue recognized over time $ 6,732,064 $ 6,042,953 Total Revenue $ 101,252,310 $ 80,011,013 Rollforward of Contract Liabilities and Contract Costs Changes in the Company's contract liability for deferred franchise fees during the years ended December 31, 2022 and 2021 were as follows: Deferred Revenue (As Restated) Balance at December 31, 2020 $ 12,655,508 Revenue recognized that was included in the contract liability at the beginning of the year (2,619,098) Net increase during the year ended December 31, 2021 5,338,741 Balance at December 31, 2021 $ 15,375,151 Revenue recognized that was included in the contract liability at the beginning of the year (2,250,471) Net increase during the year ended December 31, 2022 3,505,055 Balance at December 31, 2022 $ 16,629,735 The Company's deferred franchise and development costs represent capitalized sales commissions. Changes during the years ended December 31, 2022 and 2021 were as follows: Deferred Franchise and Development Costs Balance at December 31, 2020 $ 5,238,307 Recognized as cost of revenue during the year (1,099,892) Net increase during the year ended December 31, 2021 2,361,592 Balance at December 31, 2021 $ 6,500,007 Recognized as cost of revenue during the year (938,736) Net increase during the year ended December 31, 2022 1,200,467 Balance at December 31, 2022 $ 6,761,738 The following table illustrates revenues expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of December 31, 2022: Amount Contract liabilities expected to be recognized in (As Restated) 2023 $ 2,468,601 2024 2,354,521 2025 2,208,462 2026 2,112,532 2027 2,033,031 Thereafter 5,452,588 Total $ 16,629,735 |
Restatement of Previously Issue
Restatement of Previously Issued Annual Consolidated Financial Statements for the Fiscal Years Ended December 31, 2022 and December 31, 2021 | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Annual Consolidated Financial Statements for the Fiscal Years Ended December 31, 2022 and December 31, 2021 | Restatement of Previously Issued Annual Consolidated Financial Statements for the Fiscal Years Ended December 31, 2022 and December 31, 2021 Subsequent to the issuance of the Company's consolidated financial statements as of and for the year ended December 31, 2022, included in the Form 10-K filed with the SEC on March 10, 2023, the following errors were identified: – The Company has historically recorded the re-acquired Regional Developer Rights as an intangible asset and amortized the re-acquired Regional Developer Rights over the contractual terms under the RD Agreement remaining at the time of the re-acquisition. The Company has concluded that this treatment was incorrect in accordance with U.S. GAAP. The Company should not have capitalized the re-acquired Regional Developer Rights but instead should have recognized the full cost of the re-acquisition as an expense in the respective period. – The Company has historically recorded the upfront fee paid by the regional developer as a deferred liability, which was then recognized ratably to revenue as the regional developer performed various service obligations. However, the Company concluded that the deferred liability should be ratably recognized against cost of revenue as an offset against future commissions instead of revenue. – The Company has historically charged the VIEs a management fee for the benefit of the Company providing non-clinical administrative services needed by the professional corporation chiropractic practice. The economic compensation or profitability resulting from an intercompany transaction between two or more parties is based on each party’s relative contribution to the economic activity under analysis. The standalone professional corporations have not historically been profitable from an income tax perspective and are fully valuing their deferred tax assets and related attributes for ASC 740 purposes. The professional corporations' earned annual losses were not consistent with their function, risk, and asset profile for transfer pricing. As such, the Company has estimated transfer pricing adjustments which were computed based on assumed targets of profitability. The resulting operating profit, after incorporating estimated transfer pricing adjustments, were further used as a means for computing overall potential tax exposure and correlative benefit. The Company assessed the impact of these errors on its previously issued financial statements and determined them to be quantitatively and qualitatively material to 2022 and 2021 based on its analysis of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”. These errors have been corrected in the accompanying consolidated balance sheets as of December 31, 2022 and 2021 and the consolidated income statements, statements of changes in stockholders’ equity, and statements of cash flows for the years then ended. The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2022: December 31, December 31, As Previously Reported Adjustments As Restated Intangible assets, net $ 12,867,529 $ (1,939,234) $ 10,928,295 Deferred tax assets 8,441,713 3,486,439 11,928,152 Total assets 91,943,172 1,547,205 93,490,377 Current liabilities: Deferred franchise and regional development fee revenue, current portion 2,955,851 (2,955,851) — Deferred franchise fee revenue, current portion — 2,468,601 2,468,601 Upfront regional developer fees, current portion — 487,250 487,250 Other current liabilities 499,250 98,044 597,294 Total current liabilities 23,118,973 98,044 23,217,017 Deferred franchise and regional development fee revenue, net of current portion 15,661,412 (15,661,412) — Deferred franchise fee revenue, net of current portion — 14,161,134 14,161,134 Upfront regional developer fees, net of current portion — 1,500,278 1,500,278 Other liabilities 27,230 1,260,649 1,287,879 Total liabilities 59,543,841 1,358,693 60,902,534 Accumulated deficit (12,341,892) 188,512 (12,153,380) Total The Joint Corp. stockholders' equity 32,374,331 188,512 32,562,843 Total equity 32,399,331 188,512 32,587,843 Total liabilities and stockholders' equity 91,943,172 1,547,205 93,490,377 The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2022: Year Ended December 31, 2022 Year Ended December 31, 2022 As Previously Reported Adjustments As Restated Revenues: Regional developer fees $ 659,099 $ (659,099) $ — Total revenues 101,911,409 (659,099) 101,252,310 Cost of revenues: Franchise and regional developer cost of revenues 8,462,503 (659,099) 7,803,404 Total cost of revenues 9,830,162 (659,099) 9,171,063 Depreciation and amortization 7,643,980 (997,358) 6,646,622 General and administrative expenses 67,987,482 2,245,965 70,233,447 Total selling, general and administrative expenses 89,594,171 1,248,607 90,842,778 Income from operations 2,076,861 (1,248,607) 828,254 Income before income tax expense (benefit) 1,943,760 (1,248,607) 695,153 Income tax expense (benefit) 766,510 (698,062) 68,448 Net income 1,177,250 (550,545) 626,705 Earnings per share: Basic earnings per share $ 0.08 $ (0.04) $ 0.04 Diluted earnings per share $ 0.08 $ (0.04) $ 0.04 The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity as of December 31, 2022, December 31, 2021, and December 31, 2020: Accumulated Total The Joint Corp. stockholder's equity Total Equity 12/31/2020 (as previously reported) (20,094,912) 21,126,152 21,126,252 Adjustment due to cumulative error correction (250,220) (250,220) (250,220) 12/31/2020 (as restated) (20,345,132) 20,875,932 20,876,032 12/31/2021 (as previously reported) (13,519,142) 29,544,627 29,569,627 Adjustment due to cumulative error correction 739,057 739,057 739,057 12/31/2021 (as restated) (12,780,085) 30,283,684 30,308,684 12/31/2022 (as previously reported) (12,341,892) 32,374,331 32,399,331 Adjustment due to cumulative error correction 188,512 188,512 188,512 12/31/2022 (as restated) (12,153,380) 32,562,843 32,587,843 The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2022: Year Ended December 31, 2022 Year Ended December 31, 2022 As Previously Reported Adjustments As Restated Cash flows from operating activities: Net income $ 1,177,250 (550,545) $ 626,705 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,643,980 (997,358) 6,646,622 Deferred income taxes 746,921 (1,188,274) (441,353) Changes in operating assets and liabilities: Upfront regional developer fees — (1,288,134) (1,288,134) Deferred revenue 2,230,041 659,098 2,889,139 Other liabilities 409,938 490,213 900,151 Net cash provided by operating activities 11,084,584 (2,875,000) 8,209,584 Cash flows from investing activities: Reacquisition and termination of regional developer rights (2,875,000) 2,875,000 — Net cash used in investing activities (20,775,115) 2,875,000 (17,900,115) Decrease in cash (9,361,921) — (9,361,921) The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2021: December 31, December 31, As Previously Reported Adjustments As Restated Intangible assets, net 5,403,390 (690,627) 4,712,763 Deferred tax assets 9,188,634 2,298,165 11,486,799 Total assets 85,454,209 1,607,538 87,061,747 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,191,892 (3,191,892) — Deferred franchise fee revenue, current portion — 2,421,721 2,421,721 Upfront regional developer fees, current portion — 770,171 770,171 Other current liabilities 539,500 — 539,500 Total current liabilities 21,438,399 — 21,438,399 Deferred franchise and regional development fee revenue, net of current portion 15,458,921 (15,458,921) — Deferred franchise fee revenue, net of current portion — 12,953,430 12,953,430 Upfront regional developer fees, net of current portion — 2,505,491 2,505,491 Other liabilities 27,230 868,481 895,711 Total liabilities 55,884,582 868,481 56,753,063 Accumulated deficit (13,519,142) 739,057 (12,780,085) Total The Joint Corp. stockholders' equity 29,544,627 739,057 30,283,684 Total equity 29,569,627 739,057 30,308,684 Total liabilities and stockholders' equity 85,454,209 1,607,538 87,061,747 The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2021: Year Ended December 31, 2021 Year Ended December 31, 2021 As Previously Reported Adjustments As Restated Revenues: Regional developer fees 848,640 (848,640) — Total revenues 80,859,653 (848,640) 80,011,013 Cost of revenues: Franchise and regional developer cost of revenues 7,408,125 (848,639) 6,559,486 Total cost of revenues 8,513,777 (848,639) 7,665,138 Depreciation and amortization 6,088,947 (2,167,060) 3,921,887 General and administrative expenses 49,453,305 1,393,513 50,846,818 Total selling, general and administrative expenses 66,966,668 (773,547) 66,193,121 Income from operations 5,352,419 773,546 6,125,965 Income before income tax expense (benefit) 5,282,541 773,546 6,056,087 Income tax (benefit) (1,293,229) (215,731) (1,508,960) Net income 6,575,770 989,277 7,565,047 Earnings per share: Basic earnings per share $ 0.46 $ 0.07 $ 0.53 Diluted earnings per share $ 0.44 $ 0.07 $ 0.51 The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2021: Year Ended December 31, 2021 Year Ended December 31, 2021 As Previously Reported Adjustments As Restated Cash flows from operating activities: Net income $ 6,575,770 989,277 $ 7,565,047 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,088,947 (2,167,060) 3,921,887 Deferred income taxes (1,247,199) (530,958) (1,778,157) Changes in operating assets and liabilities: Upfront regional developer fees — (572,944) (572,944) Deferred revenue 3,624,944 537,265 4,162,209 Other liabilities 1,059,507 355,720 1,415,227 Net cash provided by operating activities 15,232,780 (1,388,700) 13,844,080 Cash flows from investing activities: Reacquisition and termination of regional developer rights (1,388,700) 1,388,700 — Net cash used in investing activities (14,143,369) 1,388,700 (12,754,669) Decrease in cash (907,291) — (907,291) |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2022 Acquisitions On May 19, 2022, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller four operating franchises in Arizona. The Company operates the franchises as company-owned clinics. The total purchase price for the transaction was $5,761,256, less $70,484 of net deferred revenue, resulting in total purchase consideration of $5,690,772. On July 5, 2022, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller one operating franchise in Arizona (collectively, including the May 19th purchase, the “AZ Clinics Purchase”). The Company operates the franchise as a company-owned clinic. The total purchase price for the transaction was $1,205,667, less $13,241 of net deferred revenue, resulting in total purchase consideration of $1,192,426. Based on the terms of the purchase agreements, the AZ Clinics Purchase has been treated as a business combination under U.S. GAAP using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The allocation of the total purchase price of AZ Clinics Purchase was as follows: Property and equipment $ 241,511 Operating lease right-of-use asset 912,937 Intangible assets 3,689,100 Total assets acquired 4,843,548 Goodwill 3,408,205 Deferred revenue (455,317) Operating lease liability - current portion (128,516) Operating lease liability - net of current portion (784,722) Net purchase consideration $ 6,883,198 Intangible assets in the table above consist of re-acquired franchise rights of $2,892,100, amortized over estimated useful lives of approximately four two The valuation method involved the use of significant estimates and assumptions primarily related to forecasted revenue growth rates, gross margin, contributory asset charges, customer attrition rates, and market-participant discount rates. These measures are based on significant Level 3 inputs not observable in the market. Key assumptions developed based on the Company’s historical experience, future projections and comparable market data include future cash flows, long-term growth rates, attrition rates and discount rates Goodwill represents the excess of the purchase consideration over the fair value of the underlying acquired net tangible and intangible assets. The factors that contributed to the recognition of goodwill included synergies and benefits expected to be gained from leveraging the Company’s existing operations and infrastructures, as well as the expected associated revenue and cash flow projections. Goodwill has been allocated to the Company’s Corporate Clinics segment based on such expected benefits. Goodwill related to the acquisition is expected to be deductible for income tax purposes over 15 years. The Company completed the purchase price allocation during the fourth quarter of 2022. On July 29, 2022, the Company entered into Asset and Franchise Purchase Agreements under which the Company repurchased from the sellers three operating franchises in North Carolina. The Company operates the franchises as company-managed clinics. The total purchase price for the transactions was $1,317,312, less $31,647 of net deferred revenue, resulting in total purchase consideration of $1,285,665. On October 13, 2022, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller an operating franchise in North Carolina. The Company operates the franchise as a company- managed clinic. The total purchase price for the transaction was $761,384, less $5,108 of net deferred revenue, resulting in total purchase consideration of $756,276. On October 24, 2022, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller an operating franchise in North Carolina (collectively, including the July 29th and October 13th purchases, the "NC Clinics Purchase"). The Company operates the franchise as a company-managed clinic. The total purchase price for the transaction was $1,391,112, less $9,262 of net deferred revenue, resulting in total purchase consideration of $1,381,850. On December 23, 2022, the Company entered into Asset and Franchise Purchase Agreements under which the Company repurchased from the sellers six operating franchises and one undeveloped clinic in California (the “CA Clinics Purchase”). The Company operates the franchises as company-managed clinics. The total purchase price for the transactions was $1,965,755, less $70,628 of net deferred revenue, resulting in total purchase consideration of $1,895,127. Based on the terms of the purchase agreement, the NC and CA Clinics Purchases have been treated as asset purchases under U.S. GAAP as there were no outputs or processes to generate outputs acquired as part of these transactions. Under an asset purchase, assets are recognized based on their cost to the acquiring entity. Cost is allocated to the individual assets acquired or liabilities assumed based on their relative fair values and does not give rise to goodwill. The allocation of the total purchase price of NC Clinics Purchase was as follows: Property and equipment $ 198,236 Operating lease right-of-use asset 521,222 Intangible assets 3,544,456 Total assets acquired 4,263,914 Deferred revenue (326,332) Operating lease liability - current portion (146,255) Operating lease liability - net of current portion (367,536) Net purchase consideration $ 3,423,791 Intangible assets in the table above consist of reacquired franchise rights of $2,042,658 amortized over their estimated useful lives of two two The allocation of the total purchase price of CA Clinics Purchase was as follows: Property and equipment $ 677,518 Tenant improvement allowance 55,790 Operating lease right-of-use asset 1,520,353 Intangible assets 1,480,359 Total assets acquired 3,734,020 Deferred revenue (215,555) Operating lease liability - current portion (200,877) Operating lease liability - net of current portion (1,422,461) Net purchase consideration $ 1,895,127 Intangible assets in the table above primarily consist of reacquired franchise rights of $1,151,272 amortized over their estimated useful lives of six Pro Forma Results of Operations (Unaudited) The following table summarizes selected unaudited pro forma consolidated income statements for the years ended December 31, 2022 and 2021 for all 2022 acquisitions, as if the AZ Clinics Purchase (which has been accounted for as a business combination) and the NC and CA Clinics Purchases (which have been accounted for as asset purchases) in 2022 had been completed on January 1, 2021. Year Ended December 31, (Restated) 2022 2021 Revenues, net $ 107,022,047 $ 87,280,590 Net (loss) income 171,315 6,424,015 The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the purchases had taken place on January 1, 2021 or of results that may occur in the future. For 2022, this information includes actual data recorded in the Company’s consolidated financial statements for the period subsequent to the date of the acquisition. The Company’s consolidated income statements for the year ended December 31, 2022 include net revenue and net income, excluding corporate clinics segment overhead costs, of the acquired clinics in Arizona, North Carolina, and California as follows: Year Ended December 31, 2022 Revenues, net $ 3,351,521 Net income 947,551 2021 Acquisitions On April 1, 2021, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller two operating franchises in Phoenix, Arizona (the “2021 AZ Clinics Purchase”). The Company operates the franchises as company-owned clinics. The total purchase price for the transaction was $1,925,000, less $29,417 of net deferred revenue, resulting in total purchase consideration of $1,895,583. Based on the terms of the purchase agreement, the 2021 AZ Clinics Purchase has been treated as a business combination under U.S. GAAP using the acquisition method of accounting. The allocation of the purchase price was as follows: Property and equipment $ 4,928 Operating lease right-of-use asset 651,197 Intangible assets 1,579,500 Total assets acquired 2,235,625 Goodwill 459,599 Deferred revenue (123,976) Operating lease liability - current portion (49,303) Operating lease liability - net of current portion (626,362) Net purchase consideration $ 1,895,583 Intangible assets in the table above consist of re-acquired franchise rights of $1,376,400 amortized over an estimated useful life of eight On April 1, 2021, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller six operating franchises in North Carolina. The Company operates the franchises as company-managed clinics. The total purchase price for the transaction was $2,568,028, less $58,441 of net deferred revenue, resulting in total purchase consideration of $2,509,587. On November 1, 2021, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller four operating franchises in North Carolina (collectively, including the April 1 2021 purchase, the “2021 NC Clinics Purchase”). The Company operates the franchises as company-managed clinics. The total purchase price for the transaction was $1,272,107, less $46,681 of net deferred revenue, resulting in total purchase consideration of $1,225,426. Based on the terms of the purchase agreement, the 2021 NC Clinics Purchase has been treated as an asset purchase under U.S. GAAP as there were no outputs or processes to generate outputs acquired as part of this transaction. The allocation of the purchase price for the six North Carolina clinics on April 1, 2021 was as follows: Property and equipment $ 524,046 Operating lease right-of-use asset 865,813 Intangible assets 2,187,472 Total assets acquired 3,577,331 Deferred revenue (244,998) Operating lease liability - current portion (185,181) Operating lease liability - net of current portion (637,565) Net purchase consideration $ 2,509,587 Intangible assets in the table above consist of reacquired franchise rights of $1,195,327 amortized over an estimated useful life of three The allocation of the purchase price for the four North Carolina clinics on November 1, 2021 was as follows: Property and equipment $ 252,631 Operating lease right-of-use asset 1,341,482 Intangible assets 1,092,341 Total assets acquired 2,686,454 Deferred revenue (144,383) Operating lease liability - current portion (135,784) Operating lease liability - net of current portion (1,180,861) Net purchase consideration $ 1,225,426 Intangible assets in the table above primarily consist of reacquired franchise rights of $977,244 amortized over an estimated useful life of four In 2022 and 2021, acquisition-related costs were not significant. These costs are included in general and administrative expenses on the consolidated income statements. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and EquipmentProperty and equipment consist of the following: December 31, 2022 2021 Office and computer equipment $ 5,207,833 $ 3,704,425 Leasehold improvements 17,842,901 13,457,765 Internally developed software 5,843,758 5,044,339 Finance lease assets 151,396 267,252 29,045,888 22,473,780 Accumulated depreciation and amortization (12,675,085) (9,184,932) 16,370,803 13,288,847 Construction in progress 1,104,349 1,100,099 Property and Equipment, net $ 17,475,152 $ 14,388,946 Depreciation expense was $4,092,669 and $2,329,697 for the years ended December 31, 2022 and 2021, respectively. Amortization expense related to finance lease assets was $55,572 and $85,300 for the years ended December 31, 2022 and 2021, respectively. Construction in progress at December 31, 2022 principally related to development and construction costs for the Company-owned or managed clinics. Construction in progress at December 31, 2021 principally relate to development costs for software used by clinics for operations and by the Company for the management of operations. |
Fair Value Consideration
Fair Value Consideration | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Consideration | Fair Value Consideration The Company’s financial instruments include cash, restricted cash, accounts receivable, notes receivable, accounts payable, accrued expenses and debt under the Credit Agreement. The carrying amounts of its financial instruments, excluding the debt under the Credit Agreement, approximate their fair value due to their short maturities. The carrying value of the Company’s debt under the Credit Agreement approximates fair value due to its interest rate being calculated from observable quoted prices for similar instruments, which is considered a Level 2 fair value measurement. Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on reliability of the inputs as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. As of December 31, 2022 and 2021, the Company did not have any financial instruments that were measured on a recurring basis as Level 1, 2 or 3. The Company’s non-financial assets, which primarily consist of goodwill, intangible assets, property, plant and equipment, and operating lease right-of-use assets, are not required to be measured at fair value on a recurring basis, and instead are reported at their carrying amount. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying amount may not be fully recoverable (and at least annually for goodwill), non-financial assets are assessed for impairment. If the fair value is determined to be lower than the carrying amount, an impairment charge is recorded to write down the asset to its fair value, which is considered Level 3 within the fair value hierarchy. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill During 2022, the Company recognized $6.1 million, $1.7 million, and $0.9 million of reacquired franchise rights, customer relationships, and assembled workforce, respectively, from the acquisitions (reference Note 4). Intangible assets consisted of the following: December 31, 2022 (As Restated) Gross Carrying Accumulated Net Carrying Intangible assets subject to amortization: Reacquired franchise rights $ 12,881,894 $ 4,755,286 $ 8,126,608 Customer relationships 4,330,365 2,352,500 1,977,865 Assembled workforce 959,837 136,015 823,822 $ 18,172,096 $ 7,243,801 $ 10,928,295 December 31, 2021 (As Restated) Gross Carrying Accumulated Net Carrying Intangible assets subject to amortization: Reacquired franchise rights $ 6,795,865 $ 3,153,037 $ 3,642,828 Customer relationships 2,603,006 1,587,443 1,015,563 Assembled workforce 59,311 4,939 54,372 $ 9,458,182 $ 4,745,419 $ 4,712,763 The following is the weighted average amortization period for the Company's intangible assets (as restated): Amortization (Years) Reacquired franchise rights 5.8 Customer relationships 2.6 Assembled workforce 2.0 All intangible assets 4.8 Restated amortization expense related to the Company’s intangible assets was $2,498,390 and $1,506,881 for the years ended December 31, 2022 and 2021, respectively. Estimated amortization expense for 2023 and subsequent years is as follows (as restated): 2023 $ 3,643,736 2024 2,578,510 2025 1,542,251 2026 1,225,152 2027 670,120 Thereafter 1,268,526 Total $ 10,928,295 The changes in the carrying amount of goodwill were as follows: Corporate Clinic Segment Balance as of December 31, 2021 Goodwill, gross $ 5,140,197 Accumulated impairment losses (54,994) Goodwill, net 5,085,203 2022 acquisition 3,408,204 Balance as of December 31, 2022 Goodwill, gross 8,548,401 Accumulated impairment losses (54,994) Goodwill, net $ 8,493,407 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Agreement On February 28, 2020, the Company entered into a Credit Agreement (the “Credit Agreement”), with JPMorgan Chase Bank, N.A., individually, and as Administrative Agent and Issuing Bank (“JPMorgan Chase” or the “Lender”). The Credit Agreement provided for senior secured credit facilities (the "Credit Facilities") in the amount of $7,500,000, including a $2,000,000 revolver (the "Revolver") and $5,500,000 development line of credit (the "Line of Credit"). The Revolver included amounts available for letters of credit of up to $1,000,000 and an uncommitted additional amount of $2,500,000. All outstanding principal and interest on the Revolver were due on February 28, 2022. On February 28, 2022, the Company entered into an amendment to its Credit Facilities (as amended, the “2022 Credit Facility”) with the Lender. Under the 2022 Credit Facility, the Revolver increased to $20,000,000 (from $2,000,000), the portion of the Revolver available for letters of credit increased to $5,000,000 (from $1,000,000), the uncommitted additional amount increased to $30,000,000 (from $2,500,000) and the developmental line of credit of $5,500,000 was terminated. The Revolver will be used for working capital needs, general corporate purposes and for acquisitions, development and capital improvement uses. At the option of the Company, borrowings under the 2022 Credit Facility bear interest at: (i) the adjusted Secured Overnight Financing Rate ("SOFR"), which is the daily simple SOFR, plus 0.10%, plus 1.75%, payable on the last day of the selected interest period of one, three or six months, and on the three-month anniversary of the beginning of any six-month interest period, if applicable; or (ii) an Alternative Base Rate (ABR), plus 1.00%, payable monthly. The ABR is the greatest of: (A) the prime rate (as published by the Wall Street Journal), (B) the Federal Reserve Bank of New York rate, plus 0.5%, and (C) the adjusted one-month term SOFR rate. Amounts outstanding under the Revolver on February 28, 2022 continued to bear interest at the rate selected under the Credit Facilities prior to the amendment until the last day of the interest period in effect, at which time, if not repaid, the amounts outstanding under the Revolver will bear interest at the 2022 Credit Facility rate. As a result of this refinance, $2,000,000 of current maturity of long-term debt has been reclassified to long-term as of December 31, 2021. The 2022 Credit Facility will terminate and all principal and interest will become due and payable on the fifth anniversary of the amendment (February 28, 2027). The Credit Facilities contain customary events of default, including but not limited to nonpayment; material inaccuracy of representations and warranties; violations of covenants; certain bankruptcies and liquidations; cross-default to material indebtedness; certain material judgments; and certain fundamental changes such as a merger or sale of substantially all assets (as further defined in the Credit Facilities). The Credit Facilities require the Company to comply with customary affirmative, negative and financial covenants, including minimum interest coverage and maximum net leverage. A breach of any of these operating or financial covenants would result in a default under the Credit Facilities. If an event of default occurs and is continuing, the lenders could elect to declare all amounts then outstanding, together with accrued interest, to be immediately due and payable. The Credit Facilities are collateralized by substantially all of the Company’s assets, including the assets in the Company’s company-owned or managed clinics. The Company intends to use the Revolver for general working capital needs and for acquiring and developing new chiropractic clinics. The interest rate on funds borrowed under the Revolver as of December 31, 2022 was 6.43%. As of December 31, 2022, the Company was in compliance with all applicable financial and non-financial covenants under the Credit Agreement, and $2,000,000 remains outstanding as of December 31, 2022. In connection with the issuance of the Credit Facilities and the 2022 Credit Facility, the Company incurred debt issuance costs of $52,648 and $76,415, respectively. Interest expense and amortization expense related to debt issuance costs are being amortized to “Other expense, net” and was $129,118 and $60,178 for the years ended December 31, 2022 and 2021, respectively. Paycheck Protection Program Loan On April 10, 2020, the Company received a loan in the amount of approximately $2.7 million from JPMorgan Chase Bank, N.A. (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”) administered by the United States Small Business Administration. The PPP is part of the Coronavirus Aid, Relief, and Economic Security Act, which provides for forgiveness of up to the full principal amount and accrued interest of qualifying loans guaranteed under the PPP. The Loan was granted pursuant to a Note dated April 9, 2020 issued by the Company. The Note had a maturity date of April 11, 2022 and bore interest at a rate of 0.98% per annum. On March 4, 2021, the Company elected to repay the full principal and accrued interest on the PPP Loan of approximately $2.7 million without prepayment penalty, in accordance with the terms of the PPP loan. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company grants stock-based awards under its 2014 Incentive Stock Plan (the “2014 Plan”). The shares issued as a result of stock-based compensation transactions generally have been funded with the issuance of new shares of the Company’s common stock. The Company may grant the following types of incentive awards under the 2014 Plan: (i) non-qualified stock options; (ii) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; and (v) restricted stock units. Each award granted under the 2014 Plan is subject to an award agreement that incorporates, as applicable, the exercise price, the term of the award, the periods of restriction, the number of shares to which the award pertains, and such other terms and conditions as the plan committee determines. Awards granted under the 2014 Plan are classified as equity awards, which are recorded in stockholders’ equity in the Company’s consolidated balance sheets. Through December 31, 2022, the Company has granted under the 2014 Plan (i) non-qualified stock options; (ii) incentive stock options; and (iii) restricted stock. There were no stock appreciation rights and restricted stock units granted under the 2014 Plan as of December 31, 2022. Stock Options The Company’s closing price on the date of grant is 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, the Company uses available historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term. The Company uses the simplified method to calculate the expected term of stock option grants to employees as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees. Accordingly, the expected life of the options granted is based on the average of the vesting term, which is generally four years and the contractual term, which is generally ten years. The Company will continue to evaluate the appropriateness of utilizing such method. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. Forfeitures are estimated based on historical and forecasted turnover, which is approximately 5%. The Company did not grant options during the year ended December 31, 2022. The Company has computed the fair value of all options granted using the Black-Scholes-Merton model during the year ended December 31, 2021, using the following assumptions: Year Ended December 31, 2021 Expected volatility 57% Expected dividends None Expected term (years) 7 Risk-free rate 0.97% to 1.27% The information below summarizes the stock options activity: Number of Weighted Weighted Aggregate Intrinsic Value Outstanding at December 31, 2020 835,601 $ 6.65 6.6 $ 16,153,117 Granted at market price 48,192 47.01 Exercised (260,044) 5.84 $ 15,244,054 Cancelled (28,660) 18.17 Outstanding at December 31, 2021 595,089 $ 9.72 5.9 $ 33,336,794 Granted at market price — Exercised (43,380) 8.86 $ 657,058 Expired (2,795) 28.45 Cancelled (16,991) 24.96 Outstanding at December 31, 2022 531,923 $ 9.20 4.7 $ 3,797,904 Exercisable at December 31, 2022 454,315 $ 6.43 4.3 $ 3,772,164 Vested and expected to vest at December 31, 2022 528,981 $ 9.07 4.7 $ 3,797,670 The weighted-average grant-date fair value of the Company’s stock options granted during 2021 was $26.40. The aggregate fair value of the Company’s stock options vested during 2022 and 2021 was $631,512 and $481,404, respectively. The Company recognizes compensation costs ratably over the period of service using the straight-line method. Forfeitures are estimated based on historical and forecasted turnover, which is approximately 5%. For the years ended December 31, 2022 and 2021, stock-based compensation expense for stock options was $515,279 and $625,291, respectively. Unrecognized stock-based compensation expense for stock options as of December 31, 2022 was $712,933, which is expected to be recognized ratably over the next 1.9 years. Restricted Stock Restricted stock awards granted to employees generally vest in four equal annual installments. Restricted stock awards granted to non-employee directors vest on the earlier of (i) one year from the grant date and (ii) the date of the next annual meeting of the shareholders of the Company occurring after the date of grant. The information below summaries the restricted stock activity: Restricted Stock Awards Shares Weighted Average Grant-Date Fair Value per Award Non-vested at December 31, 2020 45,595 $ 13.13 Granted 10,010 58.25 Vested (26,143) 13.61 Cancelled (1,742) 20.63 Non-vested at December 31, 2021 27,720 28.51 Granted 68,125 29.47 Vested (17,240) 29.13 Cancelled (8,293) 30.51 Non-vested at December 31, 2022 70,312 $ 29.05 For the years ended December 31, 2022 and 2021, stock-based compensation expense for restricted stock was $758,710 and $430,724, respectively. Unrecognized stock-based compensation expense for restricted stock awards as of December 31, 2022 was $1,492,530 to be recognized ratably over 2.8 years. Tax Benefits Net income for 2022 and 2021 included pre-tax expense related to stock-based compensation of $1.3 million and $1.1 million, respectively. The company recognized income tax benefits of $0.1 million and $3.3 million from the exercises of stock options and restricted stock awards for 2022 and 2021, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense (benefit) reported in the consolidated income statements is comprised of the following: December 31, 2022 2021 (As Restated) (As Restated) Current expense (benefit): Federal $ 377,281 $ 241,243 State, net of state tax credits 132,520 27,954 Total current expense (benefit) 509,801 269,197 Deferred expense (benefit): Federal (295,011) (1,376,812) State (146,342) (401,345) Total deferred expense (benefit) (441,353) (1,778,157) Total income tax expense (benefit) $ 68,448 $ (1,508,960) The following are the components of the Company’s deferred tax assets (liabilities) for federal and state income taxes: December 31, 2022 2021 (As Restated) (As Restated) Deferred income tax assets: Accrued expenses $ 97,148 $ 938,916 Deferred revenue 5,338,821 4,546,130 Lease liability 6,582,122 5,839,233 Goodwill - component 2 72,033 53,946 Nonqualified stock options 339,075 255,921 Interest expense limitation 35,031 — Net operating loss carryforwards 5,285,726 5,461,650 Tax credits 35,850 35,850 Intangibles 3,166,533 1,906,947 Total deferred income tax assets 20,952,339 19,038,593 Deferred income tax liabilities: Lease right-of-use asset (5,694,797) (5,022,052) Deferred franchise costs (100,558) (122,431) Goodwill - component 1 (537,421) (405,964) Asset basis difference related to property and equipment (2,545,455) (1,902,389) Restricted stock compensation (145,956) (98,958) Total deferred income tax liabilities (9,024,187) (7,551,794) Valuation allowance Net deferred tax asset $ 11,928,152 $ 11,486,799 Federal tax effected of these net operating losses were $4.5 million and $4.5 million as of December 31, 2022 and 2021, respectively. $11.1 million of the federal net operating loss is subject to a 20-year carryforward, with a portion beginning to expire in 2036. $10.5 million of the federal net operating loss has an indefinite carryforward period. The Joint Corp., without its consolidated VIEs, has state tax effected net operating loss carryforwards of $0.7 million and $0.9 million as of December 31, 2022 and 2021, respectively. The determination of the state net operating loss carryforwards is dependent upon apportionment percentages and state laws that can change from year to year and impact the amount of such carryforwards. If such net operating loss carryforwards are not utilized, they will begin to expire in 2025. The Joint Corp. has research and development credits of $14,229 that will begin to expire in 2031 and $21,621 California AMT credits that do not expire. The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net income, compared to the income tax benefit in the consolidated income statements: For the Years Ended December 31, 2022 2021 (As Restated) (As Restated) Amount Percent Amount Percent Expected federal tax expense (benefit) $ 145,982 21.0 % $ 1,280,282 21.0 % State tax provision (benefit), net of federal benefit 41,660 6.0 % (332,169) (5.5) % Other permanent differences 15,458 2.2 % 72,794 1.2 % Stock compensation (91,454) (13.2) % (2,519,083) (41.4) % Change in tax rate (64,756) (9.3) % — — % Other adjustments 21,558 3.1 % (10,784) (0.2) % Expense (Benefit) $ 68,448 9.8 % $ (1,508,960) (24.9) % Changes in the Company’s income tax expense (benefit) relate primarily to state taxes and stock-based compensation, as well as changes in pre-tax income during the year ended December 31, 2022, as compared to the year ended December 31, 2021. For the years ended December 31, 2022 and December 31, 2021, effective tax rates were 9.8% and (24.9)%, respectively. The difference between the statutory federal income tax rate and the Company’s effective tax rate was primarily due to state taxes, stock-based compensation, and other permanent differences. For the years ended December 31, 2022 and December 31, 2021, the Company had gross uncertain tax positions of $1.3 million and $1.3 million, respectively. December 31, 2022 2021 (As Restated) (As Restated) Beginning balances $ 1,314,351 $ 729,837 Increases related to tax positions taken during a prior year — — Decreases related to tax positions taken during a prior year — — Increases related to tax positions taken during a current year — 584,514 Decreases related to settlements with taxing authorities — — Decreases related to expiration of the statute of limitations — — Ending balances $ 1,314,351 $ 1,314,351 At December 31, 2022 and December 31, 2021, there were $19,433 and $19,433, respectively of unrecognized tax benefits that if recognized would affect the annual effective tax rate. Interest and penalties associated with tax positions for the years ended December 31, 2022 and December 31, 2021 were $0 and $40,491, respectively and are recorded in the period assessed as general and administrative expenses. Accrued interest and penalties was $143,584 for both the years ended December 31, 2022 and December 31, 2021 and recorded as other liabilities. With exceptions due to the generation and utilization of net operating losses or credits, as of December 31, 2022, the Company is no longer subject to federal and state examinations by taxing authorities for tax years before 2019 and 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The table below summarizes the components of lease expense and income statement location for the years ended December 31, 2022 and December 31, 2021: Years Ended December 31, Line Item in the Company’s Consolidated Income Statements 2022 2021 Finance lease costs: Amortization of assets Depreciation and amortization $ 55,572 $ 85,300 Interest on lease liabilities Other expense, net 4,516 9,012 Total finance lease costs $ 60,088 $ 94,312 Operating lease costs General and administrative expenses $ 5,647,185 $ 4,590,571 Total lease costs $ 5,707,273 $ 4,684,883 Supplemental information and balance sheet location related to leases for the years ended December 31, 2022 and December 31, 2021 was as follows: Years Ended December 31, 2022 2021 Operating Leases: Operating lease right-of -use asset $ 20,587,199 $ 18,425,914 Operating lease liability, current portion $ 5,295,830 $ 4,613,843 Operating lease liability, net of current portion 18,672,719 16,872,093 Total operating lease liability $ 23,968,549 $ 21,485,936 Finance Leases: Property and equipment, at cost $ 151,396 $ 267,252 Less accumulated amortization (87,652) (147,937) Property and equipment, net $ 63,744 $ 119,315 Finance lease liability, current portion $ 24,433 $ 49,855 Finance lease liability, net of current portion 63,507 87,939 Total finance lease liabilities $ 87,940 $ 137,794 Weighted average remaining lease term (in years): Operating leases 5.4 5.4 Finance lease 3.4 3.6 Weighted average discount rate: Operating leases 4.8 % 4.6 % Finance leases 4.3 % 4.8 % Supplemental cash flow information related to leases for the years ended December 31, 2022 and December 31, 2021 were as follows: Years Ended December 31, 2022 2021 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 5,931,114 $ 4,484,737 Operating cash flows from finance leases 4,516 9,012 Financing cash flows from finance leases 49,855 80,322 Non-cash transactions: ROU assets obtained in exchange for lease liabilities Operating lease 7,222,822 10,007,188 Finance lease — 15,140 Maturities of lease liabilities as of December 31, 2022 were as follows: Operating Leases Finance Lease 2023 $ 6,280,108 $ 27,600 2024 5,689,672 27,600 2025 5,084,585 27,600 2026 3,264,579 11,500 2027 2,268,960 — Thereafter 4,561,694 — Total lease payments 27,149,598 94,300 Less: Imputed interest (3,181,049) (6,360) Total lease obligations 23,968,549 87,940 Less: Current obligations (5,295,830) (24,433) Long-term lease obligation $ 18,672,719 $ 63,507 The Company entered into various operating leases for its new corporate clinics’ spaces that had not yet commenced as of the year ended December 31, 2022. These leases are expected to result in additional ROU asset and liability of approximately $1.5 million. These leases are expected to commence during the first and second quarter of 2023, with lease terms of five Guarantee in Connection with the Sale of the Divested Business In connection with the sale of a company-managed clinic in 2022, the Company guaranteed one future operating lease commitment assumed by the buyers. The Company is obligated to perform under the guarantee if the buyers fail to perform under the lease agreement at any time during the remainder of the lease agreement, which expires on May 31, 2027. At the date of sale, the undiscounted maximum potential future payments totaled $247,296. As of the year ended December 31, 2022, the undiscounted remaining lease payments under the agreement totaled $234,696. The Company had not recorded a liability with respect to the guarantee obligation as of December 31, 2022, as the Company concluded that payment under the lease guarantee was not probable. Litigation |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | 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. The Company has identified its CODM as the Chief Executive Officer. The Company has two operating business segments. The Corporate Clinics segment is comprised of the operating activities of the company-owned or managed clinics. As of December 31, 2022, the Company operated or managed 126 clinics under this segment. The Franchise Operations segment is comprised of the operating activities of the franchise business unit. As of December 31, 2022, the franchise system consisted of 712 clinics in operation. Corporate is a non-operating segment that develops and implements strategic initiatives and supports the Company’s two operating business segments by centralizing key administrative functions such as finance and treasury, information technology, insurance and risk management, legal 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 the Company’s two operating business segments. Year Ended December 31, 2022 2021 (As Restated) (As Restated) Revenues: Corporate clinics $ 59,422,294 $ 44,348,234 Franchise operations 41,830,016 35,662,779 Total revenues $ 101,252,310 $ 80,011,013 Depreciation and amortization: Corporate clinics $ 5,557,494 $ 3,279,603 Franchise operations 744,172 334,945 Corporate administration 344,956 307,339 Total depreciation and amortization $ 6,646,622 $ 3,921,887 Segment operating income: Corporate clinics $ 110,257 $ 6,599,932 Franchise operations 17,340,402 15,353,621 Unallocated corporate (16,622,405) (15,827,588) Total segment operating income $ 828,254 $ 6,125,965 Reconciliation of total segment operating income to consolidated earnings before income taxes: Total segment operating income $ 828,254 $ 6,125,965 Other (expense), net (133,101) (69,878) Income before income tax expense (benefit) $ 695,153 $ 6,056,087 December 31, 2022 December 31, 2021 (As Restated) (As Restated) Segment assets: Corporate clinics $ 56,008,234 $ 40,032,271 Franchise operations 12,360,878 12,593,912 Total segment assets $ 68,369,112 $ 52,626,183 Unallocated cash and cash equivalents and restricted cash $ 10,550,417 $ 19,912,338 Unallocated property and equipment 915,216 857,176 Other unallocated assets 13,655,632 13,666,050 Total assets $ 93,490,377 $ 87,061,747 |
Related _Party_ Transaction
Related Party Transaction | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party TransactionIn December 2020, we sold two franchise licenses at $39,900 and $29,900 each (which reflects the $10,000 multi-unit discount for the second license per the Franchise Disclosure Document) to Marshall Gramm, who is a family member of the Managing Partner of Bandera Partners LLC. Bandera Partners LLC was a significant shareholder of more than 5% of our outstanding common stock (approximately 17% as of December 31, 2022). The transaction involved terms no less favorable to us than those that would have been obtained in the absence of such affiliation. Although we have no way of estimating the aggregate amount of franchise fees, royalties, advertising fund fees, IT related income and computer software fees that Mr. Gramm will pay over the life of the franchise licenses, Mr. Gramm is subject to such fees under the same terms and conditions as all other franchisees. Mr. Gramm paid $34,262 and $11,046 in 2022 and 2021, respectively, for such royalties and other fees. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited and Restated) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited and Restated) | Quarterly Financial Data (Unaudited and Restated) The Company is providing restated quarterly and year-to-date unaudited consolidated financial information for interim periods occurring within the years ended December 31, 2022 and December 31, 2021. See Note 2, Restatement of Previously Issued Consolidated Financial Statements for further background concerning the events preceding the restatement of financial information in this Comprehensive Form 10-K/A. The Company assessed the impact of these errors on its previously issued interim financial statements and determined them to be quantitatively and qualitatively material to interim periods for 2022 and 2021 based on its analysis of Staff Accounting Bulletin (“SAB”) No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”. The impact of these errors is summarized in the tables that follow. The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2022, June 30, 2022, and September 30, 2022: As Previously Reported Adjustments As Restated March 31, 2022 June 30, 2022 September 30, 2022 March 31, 2022 June 30, 2022 September 30, 2022 March 31, 2022 June 30, 2022 September 30, 2022 Intangible assets, net $ 4,829,941 $ 9,114,701 $ 10,162,506 $ (552,911) $ (2,356,584) $ (2,124,740) $ 4,277,030 $ 6,758,117 $ 8,037,766 Deferred tax assets 9,205,410 9,116,248 9,115,231 2,493,018 3,202,634 3,333,327 11,698,428 12,318,882 12,448,558 Total assets 85,062,449 86,235,794 88,291,398 1,940,107 846,050 1,208,587 87,002,556 87,081,844 89,499,985 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,130,856 2,981,534 2,974,993 (3,130,856) (2,981,534) (2,974,993) — — — Deferred franchise fee revenue, current portion — — — 2,408,266 2,393,993 2,410,951 2,408,266 2,393,993 2,410,951 Upfront regional developer fees, current portion — — — 722,590 587,541 564,042 722,590 587,541 564,042 Other current liabilities 541,250 558,250 522,500 24,511 49,022 73,533 565,761 607,272 596,033 Total current liabilities 20,624,047 20,238,810 21,637,706 24,511 49,022 73,533 20,648,558 20,287,832 21,711,239 Deferred franchise and regional development fee revenue, net of current portion 15,410,136 15,447,554 15,604,180 (15,410,136) (15,447,554) (15,604,180) — — — Deferred franchise fee revenue, net of current portion — — — 13,154,047 13,584,091 13,870,401 13,154,047 13,584,091 13,870,401 Upfront regional developer fees, net of current portion — — — 2,256,089 1,863,463 1,733,779 2,256,089 1,863,463 1,733,779 Other liabilities 27,230 27,230 27,230 966,523 1,064,565 1,162,607 993,753 1,091,795 1,189,837 Total liabilities 55,328,037 55,752,399 56,765,925 991,034 1,113,587 1,236,140 56,319,071 56,865,986 58,002,065 Accumulated deficit (13,724,938) (13,380,196) (12,889,083) 949,073 (267,537) (27,553) (12,775,865) (13,647,733) (12,916,636) Total The Joint Corp. stockholders' equity 29,709,412 30,458,395 31,500,473 949,073 (267,537) (27,553) 30,658,485 30,190,858 31,472,920 Total equity 29,734,412 30,483,395 31,525,473 949,073 (267,537) (27,553) 30,683,485 30,215,858 31,497,920 Total liabilities and stockholders' equity 85,062,449 86,235,794 88,291,398 1,940,107 846,050 1,208,587 87,002,556 87,081,844 89,499,985 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2022 (Q1), June 30, 2022 (Q2), and September 30, 2022 (Q3): As Previously Reported Adjustments As Restated Q1'22 Q2'22 Q3'22 Q1'22 Q2'22 Q3'22 Q1'22 Q2'22 Q3'22 Revenues: Regional developer fees $ 201,787 $ 169,953 $ 153,181 $ (201,787) $ (169,953) $ (153,181) $ — $ — $ — Total revenues 22,438,538 25,057,318 26,603,000 (201,787) (169,953) (153,181) 22,236,751 24,887,365 26,449,819 Cost of revenues: Franchise and regional developer cost of revenues 2,002,813 2,074,889 2,141,945 (201,787) (169,953) (153,181) 1,801,026 1,904,936 1,988,764 Total cost of revenues 2,312,771 2,427,045 2,490,276 (201,787) (169,953) (153,181) 2,110,984 2,257,092 2,337,095 Depreciation and amortization 1,629,176 1,700,476 2,011,768 (292,520) (238,606) (231,844) 1,336,656 1,461,870 1,779,924 General and administrative expenses 15,378,623 16,528,022 17,796,806 154,803 2,042,279 — 15,533,426 18,570,301 17,796,806 Total selling, general and administrative expenses 20,295,287 22,068,222 23,347,861 (137,717) 1,803,673 (231,844) 20,157,570 23,871,895 23,116,017 Income from operations (176,426) 473,207 500,472 137,717 (1,803,673) 231,844 (38,709) (1,330,466) 732,316 Income before income tax expense (benefit) (192,573) 453,921 475,237 137,717 (1,803,673) 231,844 (54,856) (1,349,752) 707,081 Income tax expense (benefit) 13,224 109,179 (15,876) (72,300) (587,064) (8,139) (59,076) (477,885) (24,015) Net income (loss) (205,797) 344,742 491,113 210,017 (1,216,609) 239,983 4,220 (871,867) 731,096 Earnings per share: Basic earnings (loss) per share $ (0.01) $ 0.02 $ 0.03 $ 0.01 $ (0.08) $ 0.02 $ — $ (0.06) $ 0.05 Diluted earnings (loss) per share $ (0.01) $ 0.02 $ 0.03 $ 0.01 $ (0.08) $ 0.02 $ — $ (0.06) $ 0.05 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2022 and the nine-month period ended September 30, 2022: As Previously Reported Adjustments As Restated Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Revenues: Regional developer fees $ 371,740 $ 524,923 $ (371,740) $ (524,923) $ — $ — Total revenues 47,495,856 74,098,856 (371,740) (524,923) 47,124,116 73,573,933 Cost of revenues: Franchise and regional developer cost of revenues 4,077,701 6,219,646 (371,740) (524,923) 3,705,961 5,694,723 Total cost of revenues 4,739,816 7,230,092 (371,740) (524,923) 4,368,076 6,705,169 Depreciation and amortization 3,329,653 5,341,420 (531,126) (762,970) 2,798,527 4,578,450 General and administrative expenses 31,906,644 49,703,451 2,197,082 2,197,082 34,103,726 51,900,533 Total selling, general and administrative expenses 42,363,509 65,711,371 1,665,956 1,434,112 44,029,465 67,145,483 Income from operations 296,782 797,253 (1,665,956) (1,434,112) (1,369,174) (636,859) Income before income tax expense (benefit) 261,348 736,585 (1,665,956) (1,434,112) (1,404,608) (697,527) Income tax expense (benefit) 122,403 106,527 (659,363) (667,503) (536,960) (560,976) Net income (loss) 138,945 630,058 (1,006,593) (766,609) (867,648) (136,551) Earnings per share: Basic earnings (loss) per share $ 0.01 $ 0.04 $ (0.07) $ (0.05) $ (0.06) $ (0.01) Diluted earnings (loss) per share $ 0.01 $ 0.04 $ (0.07) $ (0.05) $ (0.06) $ (0.01) The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2022: Accumulated Total The Joint Corp. stockholder's equity Total Equity Balances, December 31, 2021 (as previously reported) $ (13,519,142) $ 29,544,627 $ 29,569,627 Adjustment due to cumulative error correction 739,057 739,057 739,057 12/31/2021 (as restated) $ (12,780,085) $ 30,283,684 $ 30,308,684 Balances, March 31, 2022 (as previously reported) $ (13,724,938) $ 29,709,412 $ 29,734,412 Adjustment due to cumulative error correction 949,073 949,073 949,073 Balances, March 31, 2022 (as restated) $ (12,775,865) $ 30,658,485 $ 30,683,485 Balances, June 30, 2022 (as previously reported) $ (13,380,196) $ 30,458,395 $ 30,483,395 Adjustment due to cumulative error correction (267,537) (267,537) (267,537) Balances, June 30, 2022 (as restated) $ (13,647,733) $ 30,190,858 $ 30,215,858 Balances, September 30, 2022 (as previously reported) $ (12,889,083) $ 31,500,473 $ 31,525,473 Adjustment due to cumulative error correction (27,553) (27,553) (27,553) Balances, September 30, 2022 (as restated) $ (12,916,636) $ 31,472,920 $ 31,497,920 The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2022, the six-month period ended June 30, 2022, and the nine-month period ended September 30, 2022: As Previously Reported Adjustments As Restated Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Cash flows from operating activities: Net income (loss) $ (205,797) $ 138,945 $ 630,058 210,017 (1,006,593) (766,609) $ 4,220 $ (867,648) $ (136,551) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,629,176 3,329,653 5,341,420 (292,520) (531,126) (762,970) 1,336,656 2,798,527 4,578,450 Deferred income taxes (16,776) 72,386 73,403 (194,853) (904,469) (1,035,162) (211,629) (832,083) (961,759) Changes in operating assets and liabilities: Upfront regional developer fees — — — (296,983) (824,658) (977,841) (296,983) (824,658) (977,841) Deferred revenue 296,487 492,473 636,470 201,786 371,740 524,923 498,273 864,213 1,161,393 Other liabilities 280,162 404,329 360,790 122,553 245,106 367,659 402,715 649,435 728,449 Net cash provided by (used in) operating activities 447,878 1,465,160 5,682,415 (250,000) (2,650,000) (2,650,000) 197,878 (1,184,840) 3,032,415 Cash flows from investing activities: Reacquisition and termination of regional developer rights (250,000) (2,650,000) (2,650,000) 250,000 2,650,000 2,650,000 — — — Net cash used in investing activities (1,539,943) (11,414,961) (14,938,929) 250,000 2,650,000 2,650,000 (1,289,943) (8,764,961) (12,288,929) Decrease in cash (1,066,427) (9,876,748) (8,944,196) — — — (1,066,427) (9,876,748) (8,944,196) The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2021, June 30, 2021, and September 30, 2021: As Previously Reported Adjustments As Restated March 31, 2021 June 30, 2021 September 30, 2021 March 31, 2021 June 30, 2021 September 30, 2021 March 31, 2021 June 30, 2021 September 30, 2021 Intangible assets, net $ 3,444,538 $ 6,176,429 $ 5,280,024 $ (2,315,922) $ (1,774,158) $ (1,232,393) $ 1,128,616 $ 4,402,271 $ 4,047,631 Deferred tax assets 8,360,245 9,322,066 9,850,676 2,092,559 2,040,446 1,894,666 10,452,804 11,362,512 11,745,342 Total assets 67,054,083 78,211,226 81,044,983 (223,364) 266,288 662,273 66,830,719 78,477,514 81,707,256 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,045,868 3,162,710 3,198,750 (3,045,868) (3,162,710) (3,198,750) — — — Deferred franchise fee revenue, current portion — — — 2,229,101 2,347,990 2,405,300 2,229,101 2,347,990 2,405,300 Upfront regional developer fees, current portion — — — 816,767 814,720 793,450 816,767 814,720 793,450 Other current liabilities 707,763 551,035 404,901 — — — 707,763 551,035 404,901 Total current liabilities 17,414,714 21,778,714 20,934,744 — — — 17,414,714 21,778,714 20,934,744 Deferred franchise and regional development fee revenue, net of current portion 13,560,449 14,708,216 15,349,878 (13,560,449) (14,708,216) (15,349,878) — — — Deferred franchise fee revenue, net of current portion — — — 10,672,244 11,887,275 12,671,068 10,672,244 11,887,275 12,671,068 Upfront regional developer fees, net of current portion — — — 2,888,205 2,820,941 2,678,810 2,888,205 2,820,941 2,678,810 Other liabilities 27,230 27,230 27,231 601,690 690,621 779,551 628,920 717,851 806,782 Total liabilities 43,364,021 50,911,850 51,383,166 601,690 690,621 779,551 43,965,711 51,602,471 52,162,717 Accumulated deficit (17,780,218) (15,096,255) (13,184,061) (825,054) (424,333) (117,278) (18,605,272) (15,520,588) (13,301,339) Total The Joint Corp. stockholders' equity 23,689,962 27,299,276 29,636,817 (825,054) (424,333) (117,278) 22,864,908 26,874,943 29,519,539 Total equity 23,690,062 27,299,376 29,661,817 (825,054) (424,333) (117,278) 22,865,008 26,875,043 29,544,539 Total liabilities and stockholders' equity 67,054,083 78,211,226 81,044,983 (223,364) 266,288 662,273 66,830,719 78,477,514 81,707,256 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2021, June 30, 2021, and September 30, 2021: As Previously Reported Adjustments As Restated Q1'21 Q2'21 Q3'21 Q1'21 Q2'21 Q3'21 Q1'21 Q2'21 Q3'21 Revenues: Regional developer fees $ 217,956 $ 214,434 $ 209,651 $ (217,956) $ (214,434) $ (209,651) $ — $ — $ — Total revenues 17,547,965 20,218,798 20,991,621 (217,956) (214,434) (209,651) 17,330,009 20,004,364 20,781,970 Cost of revenues: Franchise and regional developer cost of revenues 1,624,572 1,786,833 1,907,874 (217,956) (214,434) (209,651) 1,406,616 1,572,399 1,698,223 Total cost of revenues 1,765,317 2,038,538 2,300,122 (217,956) (214,434) (209,651) 1,547,361 1,824,104 2,090,471 Depreciation and amortization 1,169,866 1,443,018 1,662,255 (541,765) (541,765) (541,764) 628,101 901,253 1,120,491 General and administrative expenses 10,087,060 11,614,444 12,812,331 1,363,144 10,123 10,123 11,450,204 11,624,567 12,822,454 Total selling, general and administrative expenses 13,746,205 16,190,177 17,356,161 821,379 (531,642) (531,641) 14,567,584 15,658,535 16,824,520 Income from operations 1,971,676 2,034,343 1,338,878 (821,379) 531,642 531,641 1,150,297 2,565,985 1,870,519 Income before income tax expense (benefit) 1,950,139 2,017,970 1,322,739 (821,379) 531,642 531,641 1,128,760 2,549,612 1,854,380 Income tax expense (benefit) (364,148) (665,992) (614,356) (246,546) 130,920 224,587 (610,694) (535,072) (389,769) Net income 2,314,287 2,683,962 1,937,095 (574,833) 400,722 307,054 1,739,454 3,084,684 2,244,149 Earnings per share: Basic earnings per share $ 0.16 $ 0.19 $ 0.13 $ (0.04) $ 0.03 $ 0.03 $ 0.12 $ 0.22 $ 0.16 Diluted earnings per share $ 0.16 $ 0.18 $ 0.13 $ (0.04) $ 0.03 $ 0.02 $ 0.12 $ 0.21 $ 0.15 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2021 and the nine-month period ended September 30, 2021: As Previously Reported Adjustments As Restated Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Revenues: Regional developer fees $ 432,390 $ 642,041 $ (432,390) $ (642,041) $ — $ — Total revenues 37,766,762 58,758,383 (432,390) (642,041) 37,334,372 58,116,342 Cost of revenues: Franchise and regional developer cost of revenues 3,411,404 5,319,278 (432,390) (642,041) 2,979,014 4,677,237 Total cost of revenues 3,803,854 6,103,976 (432,390) (642,041) 3,371,464 5,461,935 Depreciation and amortization 2,612,884 4,275,140 (1,083,530) (1,625,295) 1,529,354 2,649,845 General and administrative expenses 21,701,047 34,513,378 1,373,267 1,383,389 23,074,314 35,896,767 Total selling, general and administrative expenses 29,935,974 47,292,135 289,737 (241,906) 30,225,711 47,050,229 Income from operations 4,006,426 5,345,305 (289,737) 241,906 3,716,689 5,587,211 Income before income tax expense (benefit) 3,968,517 5,291,255 (289,737) 241,906 3,678,780 5,533,161 Income tax expense (benefit) (1,030,140) (1,644,496) (115,626) 108,961 (1,145,766) (1,535,535) Net income 4,998,657 6,935,751 (174,111) 132,945 4,824,546 7,068,696 Earnings per share: Basic earnings per share $ 0.35 $ 0.49 $ (0.01) $ — $ 0.34 $ 0.49 Diluted earnings per share $ 0.34 $ 0.46 $ (0.02) $ 0.01 $ 0.32 $ 0.47 The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2021: Accumulated Total The Joint Corp. stockholder's equity Total Equity Balances, December 31, 2020 (as previously reported) $ (20,094,912) $ 21,126,152 $ 21,126,252 Adjustment due to cumulative error correction (250,220) (250,220) (250,220) Balances, December 31, 2020 (as restated) $ (20,345,132) $ 20,875,932 $ 20,876,032 Balances, March 31, 2021 (as previously reported) $ (17,780,218) $ 23,689,962 $ 23,690,062 Adjustment due to cumulative error correction (825,054) (825,054) (825,054) Balances, March 31, 2021 (as restated) $ (18,605,272) $ 22,864,908 $ 22,865,008 Balances, June 30, 2021 (as previously reported) $ (15,096,255) $ 27,299,276 $ 27,299,376 Adjustment due to cumulative error correction (424,333) (424,333) (424,333) Balances, June 30, 2021 (as restated) $ (15,520,588) $ 26,874,943 $ 26,875,043 Balances, September 30, 2021 (as previously reported) $ (13,184,061) $ 29,636,817 $ 29,661,817 Adjustment due to cumulative error correction (117,278) (117,278) (117,278) Balances, September 30, 2021 (as restated) $ (13,301,339) $ 29,519,539 $ 29,544,539 The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2021, the six-month period ended June 30, 2021, and the nine-month period ended September 30, 2021: As Previously Reported Adjustments As Restated Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Cash flows from operating activities: Net income $ 2,314,287 $ 4,998,657 $ 6,935,751 $ (574,833) $ (174,111) $ 132,945 $ 1,739,454 $ 4,824,546 $ 7,068,696 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,169,866 2,612,884 4,275,140 (541,765) (1,083,530) (1,625,295) 628,101 1,529,354 2,649,845 Deferred income taxes (418,810) (1,380,631) (1,909,241) (325,352) (273,239) (127,459) (744,162) (1,653,870) (2,036,700) Changes in operating assets and liabilities: Upfront regional developer fees — — — (143,634) (212,945) (376,346) (143,634) (212,945) (376,346) Deferred revenue 329,383 1,757,294 2,410,202 107,955 177,266 340,666 437,338 1,934,560 2,750,868 Other liabilities 235,116 565,779 852,924 88,929 177,859 266,789 324,045 743,638 1,119,713 Net cash provided by operating activities 2,271,448 9,014,529 12,451,587 (1,388,700) (1,388,700) (1,388,700) 882,748 7,625,829 11,062,887 Cash flows from investing activities: Reacquisition and termination of regional developer rights (1,388,700) (1,388,700) (1,388,700) 1,388,700 1,388,700 1,388,700 — — — Net cash used in investing activities (2,340,341) (8,877,659) (11,264,585) 1,388,700 1,388,700 1,388,700 (951,641) (7,488,959) (9,875,885) Decrease in cash (2,812,479) (1,985,284) (827,347) — — — (2,812,479) (1,985,284) (827,347) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The employee retention credit ("ERC"), as originally enacted through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) on March 27, 2020, is a refundable credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees from March 17, 2020 to December 31, 2020. The Disaster Tax Relief Act, enacted on December 27, 2020, extended the employee retention credit for qualified wages paid from January 1, 2021 to June 30, 2021, and the credit was increased to 70% of qualified wages an eligible employer paid to employees during the extended period. The American Rescue Plan Act of 2021, enacted on March 11, 2021, further extended the employee retention credit through December 31, 2021. In October 2022, the Company filed an application with the IRS for the ERC. Employers are eligible for the credit if they experienced full or partial suspension or modification of operations during any calendar quarter because of governmental orders due to the pandemic or a significant decline in gross receipts based on a comparison of quarterly revenue results for 2020 and/or 2021 with the comparable quarter in 2019. The Company’s ERC application was equal to 70% of qualified wages paid to employees during the period from January 1, 2021 to June 30, 2021 for a maximum quarterly credit of $7,000 per employee. In March 2023, the Company received notice from the IRS related to the overpayment of Federal Employment Tax plus interest in the amount of $4.8 million related to the ERC application. The $4.8 million ERC is subject to a 20% consulting fee. The Company's eligibility remains subject to audit by the IRS for a period of five years. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThese financial statements represent the consolidated financial statements of The Joint Corp. (“The Joint”), which includes its variable interest entities (“VIEs”), and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC (collectively, the “Company”). The preparation of financial statements in conformity with accounting principles generally accepted in the Unites States of America (“GAAP”) requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses, other (expenses) income, and income taxes that are reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. |
Principles of Consolidation | Principles of ConsolidationThe accompanying consolidated financial statements include the accounts of The Joint and its wholly owned subsidiary, The Joint Corporate Unit No. 1, LLC, which was dormant for all periods presented. The Company consolidates VIEs in which the Company is the primary beneficiary in accordance with Accounting Standards Codification 810, Consolidations (“ASC 810”). Non-controlling interests represent third-party equity ownership interests in VIEs. All significant inter-affiliate accounts and transactions between The Joint and its VIEs have been eliminated in consolidation. |
Comprehensive Income | Comprehensive Income Net income and comprehensive income are the same for the years ended December 31, 2022 and 2021. |
Nature of Operations | Nature of Operations The Joint Corp., a Delaware corporation, was formed on March 10, 2010 for the principal purpose of franchising, developing, selling regional developer rights, supporting the operations of franchised chiropractic clinics, and operating and managing corporate 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. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe 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 its cash in short-term bank deposits. |
Restricted Cash | Restricted Cash Restricted cash relates to cash that franchisees and company-owned or managed clinics contribute to the Company’s National Marketing Fund and cash that 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. While such cash balance is not legally segregated and restricted as to withdrawal or usage, the Company's accounting policy is to classify these funds as restricted cash. |
Accounts Receivable | Accounts ReceivableAccounts receivable primarily represent amounts due from franchisees for royalty and software fees. The Company records an allowance for credit losses as a reduction to its accounts receivables for amounts that the Company does not expect to recover. An allowance for credit losses is determined through assessments of collectability based on historical trends, the financial condition of the Company’s franchisees, including any known or anticipated bankruptcies, and an evaluation of current economic conditions, as well as the Company’s expectations of conditions in the future. Actual losses ultimately could differ materially in the near term from the amounts estimated in determining the allowance. |
Deferred Franchise Costs and Regional Development Costs | Deferred Franchise Costs and Regional Development Costs Deferred franchise and regional development costs represent commissions that are direct and incremental to the Company and are paid in conjunction with the sale of a franchise license or regional development rights. These costs are recognized as an expense, in franchise and regional development cost of revenues when the respective revenue is recognized, which is generally over the term of the related franchise or regional developer agreement. |
Property and Equipment | 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, which is generally three |
Capitalized Software | Capitalized Software The Company capitalizes certain software development cost, including costs to implement cloud computing arrangements that is a service contract. These capitalized costs are primarily related to 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, which is generally three |
Leases | Leases The Company leases property and equipment under operating and finance leases. The Company leases its corporate office space and the space for each of the company-owned or managed clinic in the portfolio. The Company recognizes a right-of-use ("ROU") asset and lease liability for all leases. Certain leases include one or more renewal options, generally for the same period as the initial term of the lease. The exercise of lease renewal options is generally at the Company’s sole discretion and, as such, the Company typically determines that exercise of these renewal options is not reasonably certain. As a result, the Company does not include the renewal option period in the expected lease term and the associated lease payments are not included in the measurement of the right-of-use asset and lease liability. When available, the Company uses the rate implicit in the lease to discount lease payments; however, the rate implicit in the lease is not readily determinable for substantially all of its leases. In such cases, the Company estimates its incremental borrowing rate as the interest rate it would pay to borrow an amount equal to the lease payments over a similar term, with similar collateral as in the lease, and in a similar economic environment. The Company estimates these rates using available evidence such as rates imposed by third-party lenders to the Company in recent financings or observable risk-free interest rate and credit spreads for commercial debt of a similar duration, with credit spreads correlating to the Company’s estimated creditworthiness. For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. Pre-opening costs are recorded as incurred in general and administrative expenses. Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred and are also included in general and administrative expenses on the consolidated income statements. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of re-acquired franchise rights and customer relationships. The Company amortizes the fair value of re-acquired franchise rights over the remaining contractual terms of the re-acquired franchise rights at the time of the acquisition, which generally range from one two |
Goodwill | GoodwillGoodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the acquisitions of franchises. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are tested for impairment annually and more frequently if a triggering event occurs that makes it more likely than not that the fair value of a reporting unit is below carrying value. As required, the Company performs an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if a triggering event occurs. |
Long-Lived Assets | 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 are recoverable. The Company records an impairment loss when the carrying amount of the asset is not recoverable and exceeds its fair value. During the year ended December 31, 2022, an operating lease ROU asset related to a closed clinic with a total carrying amount of approximately $250,000 was written down to zero. As a result, the Company recorded a noncash impairment loss of approximately $250,000 during the year ended December 31, 2022. During the year ended December 31, 2021, certain operating lease right-of-use assets related to closed clinics with a total carrying amount of $0.5 million were written down to their fair value of $0.4 million. As a result, the Company recorded a noncash impairment loss of approximately $0.1 million during the year ended December 31, 2021. In connection with the sale of two company-managed clinics to franchisees, the Company reclassified $288,192 of property and equipment and $359,807 of ROU assets to Assets held for sale and reclassified $428,593 of ROU liability and $54,351 of deferred revenue from company clinics to Liabilities to be disposed of in the consolidated balance sheet as of June 30, 2022. Long-lived assets that meet the held for sale criteria are reported at the lower of their carrying value or fair value, less estimated costs to sell. As a result, the Company recorded a valuation allowance of $79,400 to adjust the carrying value of the disposal group to fair value less cost to sell during the year ended December 31, 2022. One of the two clinics was sold during August 2022, and the second clinic was sold in October 2022. |
Advertising Fund | Advertising Fund The Company has established an advertising fund for national or 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 |
Co-Op Marketing Funds | 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 Co-Op Marketing Funds collected are segregated and used for the purposes specified by the Co-Ops’ officers. The Co-Op Marketing Funds are included in restricted cash on the Company’s consolidated balance sheets. |
Revenue Recognition | Revenue Recognition The Company generates revenue primarily through its company-owned and managed clinics and through royalties, franchise fees, advertising fund contributions, IT related income and computer software fees from its franchisees. Revenues from Company-Owned or Managed Clinics. The Company earns revenues from clinics that it owns and operates or manages throughout the United States. Revenues are recognized when services are performed. The Company offers a variety of membership and wellness packages which feature discounted pricing as compared with its single-visit pricing. Amounts collected in advance for membership and wellness packages are recorded as deferred revenue and recognized when the service is performed. Any unused visits associated with monthly memberships are recognized on a month-to-month basis. The Company recognizes a contract liability (or a deferred revenue liability) related to the prepaid treatment plans for which the Company has an ongoing performance obligation. The Company derecognizes this contract liability, and recognizes revenue, as the patient consumes his or her visits related to the package and the Company transfers its services. If the Company determines that it is not subject to unclaimed property laws for the portion of wellness package that it does not expect to be redeemed (referred to as “breakage”) then it recognizes breakage revenue in proportion to the pattern of exercised rights by the patient. Royalties and Advertising Fund Revenue. The Company collects royalties, as stipulated in the franchise agreement, equal to 7% of gross sales, and a marketing and advertising fee currently equal to 2% of gross sales. Royalties, including franchisee contributions to advertising funds, are calculated as a percentage of clinic sales over the term of the franchise agreement. The revenue accounting standard provides an exception for the recognition of sales-based royalties promised in exchange for a license (which generally requires a reporting entity to estimate the amount of variable consideration to which it will be entitled in the transaction price). As the franchise agreement royalties, inclusive of advertising fund contributions, represent sales-based royalties that are related entirely to the Company’s performance obligation under the franchise agreement, such sales-based royalties are recognized as franchisee clinic level sales occur. Royalties are collected semi-monthly, two working days after each sales period has ended. Franchise Fees. The Company requires the entire non-refundable initial franchise fee to be paid upon execution of a franchise agreement, which typically has an initial term of ten years. Initial franchise fees are recognized ratably on a straight-line basis over the term of the franchise agreement. The Company’s services under the franchise agreement include training of franchisees and staff, site selection, construction/vendor management and ongoing operations support. The Company provides no financing to franchisees and offers no guarantees on their behalf. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation. Renewal franchise fees, as well as transfer fees, are also recognized as revenue on a straight-line basis over the term of the respective franchise agreement. Software Fees. The Company collects a monthly fee from its franchisees for use of its proprietary chiropractic software, computer support, and internet services support. These fees are recognized ratably on a straight-line basis over the term of the respective franchise agreement. Capitalized Sales Commissions. Sales commissions earned by the regional developers and the Company’s sales force are considered incremental and recoverable costs of obtaining a franchise agreement with a franchisee. These costs are deferred and then amortized as the respective franchise fees are recognized ratably on a straight-line basis over the term of the franchise agreement. Upfront Regional Developer Rights Fees (as restated) The Company has a regional developer program where regional developers are granted an exclusive geographical territory and commit to a minimum development obligation within that defined territory. Upon granting of the exclusive rights to develop a territory, a regional developer will pay an upfront fee to the Company. Upfront regional developer fees represent consideration received from a vendor to act as the Company’s agent within an exclusive territory. The upfront regional developer rights fee is accounted for as a reduction of cost of revenues, in franchise and regional development cost of revenues, to offset the respective future commissions paid to the regional developer. The fees are ratably recognized over the term of the related regional developer agreement. Regional developers receive fees which are funded by the initial franchise fees collected from franchisees upon the sale of franchises within their exclusive geographical territory and a royalty of 3% of sales generated by franchised clinics in their exclusive geographical territory. Initial fees related to the sale of franchises within their exclusive geographical territory are initially deferred as deferred franchise costs and are recognized as an expense in franchise cost of revenues when the respective revenue is recognized, which is generally over the term of the related franchise agreement. Royalties of 3% of sales generated by franchised clinics in their regions are also recognized as franchise cost of revenues as franchisee clinic level sales occur. This 3% fee is funded by the 7% royalties we collect from the franchisees in their regions. Certain regional developer agreements result in the regional developer acquiring the rights to existing royalty streams from clinics already open in the respective territory. In those instances, fees collected from the sale of the royalty stream is recognized as a decrease to franchise and regional developer cost of revenues over the remaining life of the respective franchise agreements. Regional Developer Rights Contract Termination Costs (as restated) From time to time, subject to the Company’s strategy, regional developer rights are reacquired by the Company, resulting in a termination of the contract. The termination costs to reacquire the regional developer rights are recognized at fair value, less any unrecognized upfront regional developer fee liability balance, as a general and administrative expense in the period in which the contract is terminated in accordance with the contract terms and are recorded within general and administrative expenses. |
Advertising Costs | Advertising CostsAdvertising costs are advertising and marketing expenses incurred by the Company, primarily through advertising funds. The Company expenses production costs of commercial advertising upon first airing and expenses the costs of communicating the advertising in the period in which the advertising occurs. |
Income Taxes | Income Taxes (as restated) Income taxes are accounted for using a balance sheet approach known as the asset and liability method. The asset and liability method accounts for deferred income taxes by applying the statutory tax rates in effect at the date of the consolidated balance sheets to differences between the book basis and the tax basis of assets and liabilities. 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. The differences relate principally to depreciation of property and equipment and treatment of revenue for franchise fees and regional developer fees collected. Tax positions are reviewed at least quarterly and adjusted as new information becomes available. The recoverability of deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These estimates of future taxable income inherently require significant judgment. To the extent it is considered more likely than not that a deferred tax asset will be not recovered, a valuation allowance is established. 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 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. The Company has identified $1.3 million and $1.3 million in uncertain tax positions as of December 31, 2022 and 2021, respectively. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. With exceptions due to the generation and utilization of net operating losses or credits, as of December 31, 2022, the Company is no longer subject to federal and state examinations by taxing authorities for tax years before 2018 and 2017, respectively. |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed by giving effect to all potentially dilutive common shares including restricted stock and stock options. |
Stock-Based Compensation | 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 the closing price on the date of the grant and the grant-date fair value of stock options using the Black-Scholes-Merton model. In order to calculate the fair value of the options, certain assumptions are made regarding the components of the model, including risk-free interest rate, volatility, expected dividend yield and expected option life. 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. Forfeitures are estimated based on historical and forecasted turnover, which is approximately 5%. |
Retirement Benefit Plan | Retirement Benefit PlanEmployees of the Company are eligible to participate in a defined contribution retirement plan, the Joint Corp. 401(k) Retirement Plan (the “401(k) Plan”), under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, employees may contribute their eligible compensation, not to exceed the annual limits set by the IRS. The 401(k) Plan allows the Company to match participants’ contributions in an amount determined at the sole discretion of the Company. The Company matched participants’ contributions for the years ended December 31, 2022 and 2021, up to a maximum of 4% of the employee’s eligible compensation. |
Loss Contingencies | Loss Contingencies ASC Topic 450 governs the disclosure of loss contingencies and accrual of loss contingencies in respect of litigation and other claims. The Company records an accrual for a potential loss when it is probable that a loss will occur and the amount of the loss can be reasonably estimated. When the reasonable estimate of the potential loss is within a range of amounts, the minimum of the range of potential loss is accrued, unless a higher amount within the range is a better estimate than any other amount within the range. Moreover, even if an accrual is not required, the Company provides additional disclosure related to litigation and other claims when it is reasonably possible (i.e., more than remote) that the outcomes of such litigation and other claims include potential material adverse impacts on the Company. Legal costs to be incurred in connection with a loss contingency are expensed as such costs are incurred. |
Use of Estimates | Use of EstimatesThe preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Items subject to significant estimates and assumptions include loss contingencies, share-based compensations, useful lives and realizability of long-lived assets, deferred revenue and revenue recognition related to breakage, deferred franchise costs, calculation of ROU assets and liabilities related to leases, realizability of deferred tax assets, impairment of goodwill, intangible assets, other long-lived assets, and purchase price allocations and related valuations. |
Recently Adopted Accounting Guidance and Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Guidance and Accounting Pronouncements Not Yet Adopted None. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Franchisor Disclosure | The following table summarizes the number of clinics in operation under franchise agreements and as company-owned or managed for the years ended December 31, 2022 and 2021: Year Ended December 31, Franchised clinics: 2022 2021 Clinics open at beginning of period 610 515 Opened during the period 121 110 Acquired during the period 2 — Sold during the period (16) (12) Closed during the period (5) (3) Clinics in operation at the end of the period 712 610 Year Ended December 31, Company-owned or managed clinics: 2022 2021 Clinics open at beginning of period 96 64 Opened during the period 16 20 Acquired during the period 16 12 Sold during the period (2) — Closed during the period — — Clinics in operation at the end of the period 126 96 Total clinics in operation at the end of the period 838 706 Clinic licenses sold but not yet developed 197 245 Executed letters of intent for future clinic licenses 38 38 |
Schedule of Earnings per Common Share | Year Ended December 31, 2022 2021 (As Restated) (As Restated) Net income $ 626,705 $ 7,565,047 Weighted average common shares outstanding - basic 14,488,314 14,319,448 Effect of dilutive securities: Unvested restricted stock and stock options 379,779 616,129 Weighted average common shares outstanding - diluted 14,868,093 14,935,577 Basic earnings per share $ 0.04 $ 0.53 Diluted earnings per share $ 0.04 $ 0.51 Potentially dilutive securities excluded from the calculation of diluted net income per common share as the effect would be anti-dilutive were as follows: Year Ended December 31, 2022 2021 Unvested restricted stock — 58 Stock options 40,349 4,658 |
Revenue Disclosures (Tables)
Revenue Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table shows the Company's revenues disaggregated according to the timing of transfer of services: December 31, 2022 2021 (As Restated) (As Restated) Revenue recognized at a point in time $ 94,520,246 $ 73,968,060 Revenue recognized over time $ 6,732,064 $ 6,042,953 Total Revenue $ 101,252,310 $ 80,011,013 |
Schedule of Changes in Contract Asset and Liability | Changes in the Company's contract liability for deferred franchise fees during the years ended December 31, 2022 and 2021 were as follows: Deferred Revenue (As Restated) Balance at December 31, 2020 $ 12,655,508 Revenue recognized that was included in the contract liability at the beginning of the year (2,619,098) Net increase during the year ended December 31, 2021 5,338,741 Balance at December 31, 2021 $ 15,375,151 Revenue recognized that was included in the contract liability at the beginning of the year (2,250,471) Net increase during the year ended December 31, 2022 3,505,055 Balance at December 31, 2022 $ 16,629,735 The Company's deferred franchise and development costs represent capitalized sales commissions. Changes during the years ended December 31, 2022 and 2021 were as follows: Deferred Franchise and Development Costs Balance at December 31, 2020 $ 5,238,307 Recognized as cost of revenue during the year (1,099,892) Net increase during the year ended December 31, 2021 2,361,592 Balance at December 31, 2021 $ 6,500,007 Recognized as cost of revenue during the year (938,736) Net increase during the year ended December 31, 2022 1,200,467 Balance at December 31, 2022 $ 6,761,738 |
Schedule of Revenue Expected to be Recognized Related to Performance Obligations | The following table illustrates revenues expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of December 31, 2022: Amount Contract liabilities expected to be recognized in (As Restated) 2023 $ 2,468,601 2024 2,354,521 2025 2,208,462 2026 2,112,532 2027 2,033,031 Thereafter 5,452,588 Total $ 16,629,735 |
Restatement of Previously Iss_2
Restatement of Previously Issued Annual Consolidated Financial Statements for the Fiscal Years Ended December 31, 2022 and December 31, 2021 (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2022: December 31, December 31, As Previously Reported Adjustments As Restated Intangible assets, net $ 12,867,529 $ (1,939,234) $ 10,928,295 Deferred tax assets 8,441,713 3,486,439 11,928,152 Total assets 91,943,172 1,547,205 93,490,377 Current liabilities: Deferred franchise and regional development fee revenue, current portion 2,955,851 (2,955,851) — Deferred franchise fee revenue, current portion — 2,468,601 2,468,601 Upfront regional developer fees, current portion — 487,250 487,250 Other current liabilities 499,250 98,044 597,294 Total current liabilities 23,118,973 98,044 23,217,017 Deferred franchise and regional development fee revenue, net of current portion 15,661,412 (15,661,412) — Deferred franchise fee revenue, net of current portion — 14,161,134 14,161,134 Upfront regional developer fees, net of current portion — 1,500,278 1,500,278 Other liabilities 27,230 1,260,649 1,287,879 Total liabilities 59,543,841 1,358,693 60,902,534 Accumulated deficit (12,341,892) 188,512 (12,153,380) Total The Joint Corp. stockholders' equity 32,374,331 188,512 32,562,843 Total equity 32,399,331 188,512 32,587,843 Total liabilities and stockholders' equity 91,943,172 1,547,205 93,490,377 The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2022: Year Ended December 31, 2022 Year Ended December 31, 2022 As Previously Reported Adjustments As Restated Revenues: Regional developer fees $ 659,099 $ (659,099) $ — Total revenues 101,911,409 (659,099) 101,252,310 Cost of revenues: Franchise and regional developer cost of revenues 8,462,503 (659,099) 7,803,404 Total cost of revenues 9,830,162 (659,099) 9,171,063 Depreciation and amortization 7,643,980 (997,358) 6,646,622 General and administrative expenses 67,987,482 2,245,965 70,233,447 Total selling, general and administrative expenses 89,594,171 1,248,607 90,842,778 Income from operations 2,076,861 (1,248,607) 828,254 Income before income tax expense (benefit) 1,943,760 (1,248,607) 695,153 Income tax expense (benefit) 766,510 (698,062) 68,448 Net income 1,177,250 (550,545) 626,705 Earnings per share: Basic earnings per share $ 0.08 $ (0.04) $ 0.04 Diluted earnings per share $ 0.08 $ (0.04) $ 0.04 The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity as of December 31, 2022, December 31, 2021, and December 31, 2020: Accumulated Total The Joint Corp. stockholder's equity Total Equity 12/31/2020 (as previously reported) (20,094,912) 21,126,152 21,126,252 Adjustment due to cumulative error correction (250,220) (250,220) (250,220) 12/31/2020 (as restated) (20,345,132) 20,875,932 20,876,032 12/31/2021 (as previously reported) (13,519,142) 29,544,627 29,569,627 Adjustment due to cumulative error correction 739,057 739,057 739,057 12/31/2021 (as restated) (12,780,085) 30,283,684 30,308,684 12/31/2022 (as previously reported) (12,341,892) 32,374,331 32,399,331 Adjustment due to cumulative error correction 188,512 188,512 188,512 12/31/2022 (as restated) (12,153,380) 32,562,843 32,587,843 The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2022: Year Ended December 31, 2022 Year Ended December 31, 2022 As Previously Reported Adjustments As Restated Cash flows from operating activities: Net income $ 1,177,250 (550,545) $ 626,705 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,643,980 (997,358) 6,646,622 Deferred income taxes 746,921 (1,188,274) (441,353) Changes in operating assets and liabilities: Upfront regional developer fees — (1,288,134) (1,288,134) Deferred revenue 2,230,041 659,098 2,889,139 Other liabilities 409,938 490,213 900,151 Net cash provided by operating activities 11,084,584 (2,875,000) 8,209,584 Cash flows from investing activities: Reacquisition and termination of regional developer rights (2,875,000) 2,875,000 — Net cash used in investing activities (20,775,115) 2,875,000 (17,900,115) Decrease in cash (9,361,921) — (9,361,921) The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2021: December 31, December 31, As Previously Reported Adjustments As Restated Intangible assets, net 5,403,390 (690,627) 4,712,763 Deferred tax assets 9,188,634 2,298,165 11,486,799 Total assets 85,454,209 1,607,538 87,061,747 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,191,892 (3,191,892) — Deferred franchise fee revenue, current portion — 2,421,721 2,421,721 Upfront regional developer fees, current portion — 770,171 770,171 Other current liabilities 539,500 — 539,500 Total current liabilities 21,438,399 — 21,438,399 Deferred franchise and regional development fee revenue, net of current portion 15,458,921 (15,458,921) — Deferred franchise fee revenue, net of current portion — 12,953,430 12,953,430 Upfront regional developer fees, net of current portion — 2,505,491 2,505,491 Other liabilities 27,230 868,481 895,711 Total liabilities 55,884,582 868,481 56,753,063 Accumulated deficit (13,519,142) 739,057 (12,780,085) Total The Joint Corp. stockholders' equity 29,544,627 739,057 30,283,684 Total equity 29,569,627 739,057 30,308,684 Total liabilities and stockholders' equity 85,454,209 1,607,538 87,061,747 The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2021: Year Ended December 31, 2021 Year Ended December 31, 2021 As Previously Reported Adjustments As Restated Revenues: Regional developer fees 848,640 (848,640) — Total revenues 80,859,653 (848,640) 80,011,013 Cost of revenues: Franchise and regional developer cost of revenues 7,408,125 (848,639) 6,559,486 Total cost of revenues 8,513,777 (848,639) 7,665,138 Depreciation and amortization 6,088,947 (2,167,060) 3,921,887 General and administrative expenses 49,453,305 1,393,513 50,846,818 Total selling, general and administrative expenses 66,966,668 (773,547) 66,193,121 Income from operations 5,352,419 773,546 6,125,965 Income before income tax expense (benefit) 5,282,541 773,546 6,056,087 Income tax (benefit) (1,293,229) (215,731) (1,508,960) Net income 6,575,770 989,277 7,565,047 Earnings per share: Basic earnings per share $ 0.46 $ 0.07 $ 0.53 Diluted earnings per share $ 0.44 $ 0.07 $ 0.51 The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2021: Year Ended December 31, 2021 Year Ended December 31, 2021 As Previously Reported Adjustments As Restated Cash flows from operating activities: Net income $ 6,575,770 989,277 $ 7,565,047 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,088,947 (2,167,060) 3,921,887 Deferred income taxes (1,247,199) (530,958) (1,778,157) Changes in operating assets and liabilities: Upfront regional developer fees — (572,944) (572,944) Deferred revenue 3,624,944 537,265 4,162,209 Other liabilities 1,059,507 355,720 1,415,227 Net cash provided by operating activities 15,232,780 (1,388,700) 13,844,080 Cash flows from investing activities: Reacquisition and termination of regional developer rights (1,388,700) 1,388,700 — Net cash used in investing activities (14,143,369) 1,388,700 (12,754,669) Decrease in cash (907,291) — (907,291) The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2022, June 30, 2022, and September 30, 2022: As Previously Reported Adjustments As Restated March 31, 2022 June 30, 2022 September 30, 2022 March 31, 2022 June 30, 2022 September 30, 2022 March 31, 2022 June 30, 2022 September 30, 2022 Intangible assets, net $ 4,829,941 $ 9,114,701 $ 10,162,506 $ (552,911) $ (2,356,584) $ (2,124,740) $ 4,277,030 $ 6,758,117 $ 8,037,766 Deferred tax assets 9,205,410 9,116,248 9,115,231 2,493,018 3,202,634 3,333,327 11,698,428 12,318,882 12,448,558 Total assets 85,062,449 86,235,794 88,291,398 1,940,107 846,050 1,208,587 87,002,556 87,081,844 89,499,985 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,130,856 2,981,534 2,974,993 (3,130,856) (2,981,534) (2,974,993) — — — Deferred franchise fee revenue, current portion — — — 2,408,266 2,393,993 2,410,951 2,408,266 2,393,993 2,410,951 Upfront regional developer fees, current portion — — — 722,590 587,541 564,042 722,590 587,541 564,042 Other current liabilities 541,250 558,250 522,500 24,511 49,022 73,533 565,761 607,272 596,033 Total current liabilities 20,624,047 20,238,810 21,637,706 24,511 49,022 73,533 20,648,558 20,287,832 21,711,239 Deferred franchise and regional development fee revenue, net of current portion 15,410,136 15,447,554 15,604,180 (15,410,136) (15,447,554) (15,604,180) — — — Deferred franchise fee revenue, net of current portion — — — 13,154,047 13,584,091 13,870,401 13,154,047 13,584,091 13,870,401 Upfront regional developer fees, net of current portion — — — 2,256,089 1,863,463 1,733,779 2,256,089 1,863,463 1,733,779 Other liabilities 27,230 27,230 27,230 966,523 1,064,565 1,162,607 993,753 1,091,795 1,189,837 Total liabilities 55,328,037 55,752,399 56,765,925 991,034 1,113,587 1,236,140 56,319,071 56,865,986 58,002,065 Accumulated deficit (13,724,938) (13,380,196) (12,889,083) 949,073 (267,537) (27,553) (12,775,865) (13,647,733) (12,916,636) Total The Joint Corp. stockholders' equity 29,709,412 30,458,395 31,500,473 949,073 (267,537) (27,553) 30,658,485 30,190,858 31,472,920 Total equity 29,734,412 30,483,395 31,525,473 949,073 (267,537) (27,553) 30,683,485 30,215,858 31,497,920 Total liabilities and stockholders' equity 85,062,449 86,235,794 88,291,398 1,940,107 846,050 1,208,587 87,002,556 87,081,844 89,499,985 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2022 (Q1), June 30, 2022 (Q2), and September 30, 2022 (Q3): As Previously Reported Adjustments As Restated Q1'22 Q2'22 Q3'22 Q1'22 Q2'22 Q3'22 Q1'22 Q2'22 Q3'22 Revenues: Regional developer fees $ 201,787 $ 169,953 $ 153,181 $ (201,787) $ (169,953) $ (153,181) $ — $ — $ — Total revenues 22,438,538 25,057,318 26,603,000 (201,787) (169,953) (153,181) 22,236,751 24,887,365 26,449,819 Cost of revenues: Franchise and regional developer cost of revenues 2,002,813 2,074,889 2,141,945 (201,787) (169,953) (153,181) 1,801,026 1,904,936 1,988,764 Total cost of revenues 2,312,771 2,427,045 2,490,276 (201,787) (169,953) (153,181) 2,110,984 2,257,092 2,337,095 Depreciation and amortization 1,629,176 1,700,476 2,011,768 (292,520) (238,606) (231,844) 1,336,656 1,461,870 1,779,924 General and administrative expenses 15,378,623 16,528,022 17,796,806 154,803 2,042,279 — 15,533,426 18,570,301 17,796,806 Total selling, general and administrative expenses 20,295,287 22,068,222 23,347,861 (137,717) 1,803,673 (231,844) 20,157,570 23,871,895 23,116,017 Income from operations (176,426) 473,207 500,472 137,717 (1,803,673) 231,844 (38,709) (1,330,466) 732,316 Income before income tax expense (benefit) (192,573) 453,921 475,237 137,717 (1,803,673) 231,844 (54,856) (1,349,752) 707,081 Income tax expense (benefit) 13,224 109,179 (15,876) (72,300) (587,064) (8,139) (59,076) (477,885) (24,015) Net income (loss) (205,797) 344,742 491,113 210,017 (1,216,609) 239,983 4,220 (871,867) 731,096 Earnings per share: Basic earnings (loss) per share $ (0.01) $ 0.02 $ 0.03 $ 0.01 $ (0.08) $ 0.02 $ — $ (0.06) $ 0.05 Diluted earnings (loss) per share $ (0.01) $ 0.02 $ 0.03 $ 0.01 $ (0.08) $ 0.02 $ — $ (0.06) $ 0.05 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2022 and the nine-month period ended September 30, 2022: As Previously Reported Adjustments As Restated Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Revenues: Regional developer fees $ 371,740 $ 524,923 $ (371,740) $ (524,923) $ — $ — Total revenues 47,495,856 74,098,856 (371,740) (524,923) 47,124,116 73,573,933 Cost of revenues: Franchise and regional developer cost of revenues 4,077,701 6,219,646 (371,740) (524,923) 3,705,961 5,694,723 Total cost of revenues 4,739,816 7,230,092 (371,740) (524,923) 4,368,076 6,705,169 Depreciation and amortization 3,329,653 5,341,420 (531,126) (762,970) 2,798,527 4,578,450 General and administrative expenses 31,906,644 49,703,451 2,197,082 2,197,082 34,103,726 51,900,533 Total selling, general and administrative expenses 42,363,509 65,711,371 1,665,956 1,434,112 44,029,465 67,145,483 Income from operations 296,782 797,253 (1,665,956) (1,434,112) (1,369,174) (636,859) Income before income tax expense (benefit) 261,348 736,585 (1,665,956) (1,434,112) (1,404,608) (697,527) Income tax expense (benefit) 122,403 106,527 (659,363) (667,503) (536,960) (560,976) Net income (loss) 138,945 630,058 (1,006,593) (766,609) (867,648) (136,551) Earnings per share: Basic earnings (loss) per share $ 0.01 $ 0.04 $ (0.07) $ (0.05) $ (0.06) $ (0.01) Diluted earnings (loss) per share $ 0.01 $ 0.04 $ (0.07) $ (0.05) $ (0.06) $ (0.01) The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2022: Accumulated Total The Joint Corp. stockholder's equity Total Equity Balances, December 31, 2021 (as previously reported) $ (13,519,142) $ 29,544,627 $ 29,569,627 Adjustment due to cumulative error correction 739,057 739,057 739,057 12/31/2021 (as restated) $ (12,780,085) $ 30,283,684 $ 30,308,684 Balances, March 31, 2022 (as previously reported) $ (13,724,938) $ 29,709,412 $ 29,734,412 Adjustment due to cumulative error correction 949,073 949,073 949,073 Balances, March 31, 2022 (as restated) $ (12,775,865) $ 30,658,485 $ 30,683,485 Balances, June 30, 2022 (as previously reported) $ (13,380,196) $ 30,458,395 $ 30,483,395 Adjustment due to cumulative error correction (267,537) (267,537) (267,537) Balances, June 30, 2022 (as restated) $ (13,647,733) $ 30,190,858 $ 30,215,858 Balances, September 30, 2022 (as previously reported) $ (12,889,083) $ 31,500,473 $ 31,525,473 Adjustment due to cumulative error correction (27,553) (27,553) (27,553) Balances, September 30, 2022 (as restated) $ (12,916,636) $ 31,472,920 $ 31,497,920 The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2022, the six-month period ended June 30, 2022, and the nine-month period ended September 30, 2022: As Previously Reported Adjustments As Restated Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Cash flows from operating activities: Net income (loss) $ (205,797) $ 138,945 $ 630,058 210,017 (1,006,593) (766,609) $ 4,220 $ (867,648) $ (136,551) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,629,176 3,329,653 5,341,420 (292,520) (531,126) (762,970) 1,336,656 2,798,527 4,578,450 Deferred income taxes (16,776) 72,386 73,403 (194,853) (904,469) (1,035,162) (211,629) (832,083) (961,759) Changes in operating assets and liabilities: Upfront regional developer fees — — — (296,983) (824,658) (977,841) (296,983) (824,658) (977,841) Deferred revenue 296,487 492,473 636,470 201,786 371,740 524,923 498,273 864,213 1,161,393 Other liabilities 280,162 404,329 360,790 122,553 245,106 367,659 402,715 649,435 728,449 Net cash provided by (used in) operating activities 447,878 1,465,160 5,682,415 (250,000) (2,650,000) (2,650,000) 197,878 (1,184,840) 3,032,415 Cash flows from investing activities: Reacquisition and termination of regional developer rights (250,000) (2,650,000) (2,650,000) 250,000 2,650,000 2,650,000 — — — Net cash used in investing activities (1,539,943) (11,414,961) (14,938,929) 250,000 2,650,000 2,650,000 (1,289,943) (8,764,961) (12,288,929) Decrease in cash (1,066,427) (9,876,748) (8,944,196) — — — (1,066,427) (9,876,748) (8,944,196) The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2021, June 30, 2021, and September 30, 2021: As Previously Reported Adjustments As Restated March 31, 2021 June 30, 2021 September 30, 2021 March 31, 2021 June 30, 2021 September 30, 2021 March 31, 2021 June 30, 2021 September 30, 2021 Intangible assets, net $ 3,444,538 $ 6,176,429 $ 5,280,024 $ (2,315,922) $ (1,774,158) $ (1,232,393) $ 1,128,616 $ 4,402,271 $ 4,047,631 Deferred tax assets 8,360,245 9,322,066 9,850,676 2,092,559 2,040,446 1,894,666 10,452,804 11,362,512 11,745,342 Total assets 67,054,083 78,211,226 81,044,983 (223,364) 266,288 662,273 66,830,719 78,477,514 81,707,256 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,045,868 3,162,710 3,198,750 (3,045,868) (3,162,710) (3,198,750) — — — Deferred franchise fee revenue, current portion — — — 2,229,101 2,347,990 2,405,300 2,229,101 2,347,990 2,405,300 Upfront regional developer fees, current portion — — — 816,767 814,720 793,450 816,767 814,720 793,450 Other current liabilities 707,763 551,035 404,901 — — — 707,763 551,035 404,901 Total current liabilities 17,414,714 21,778,714 20,934,744 — — — 17,414,714 21,778,714 20,934,744 Deferred franchise and regional development fee revenue, net of current portion 13,560,449 14,708,216 15,349,878 (13,560,449) (14,708,216) (15,349,878) — — — Deferred franchise fee revenue, net of current portion — — — 10,672,244 11,887,275 12,671,068 10,672,244 11,887,275 12,671,068 Upfront regional developer fees, net of current portion — — — 2,888,205 2,820,941 2,678,810 2,888,205 2,820,941 2,678,810 Other liabilities 27,230 27,230 27,231 601,690 690,621 779,551 628,920 717,851 806,782 Total liabilities 43,364,021 50,911,850 51,383,166 601,690 690,621 779,551 43,965,711 51,602,471 52,162,717 Accumulated deficit (17,780,218) (15,096,255) (13,184,061) (825,054) (424,333) (117,278) (18,605,272) (15,520,588) (13,301,339) Total The Joint Corp. stockholders' equity 23,689,962 27,299,276 29,636,817 (825,054) (424,333) (117,278) 22,864,908 26,874,943 29,519,539 Total equity 23,690,062 27,299,376 29,661,817 (825,054) (424,333) (117,278) 22,865,008 26,875,043 29,544,539 Total liabilities and stockholders' equity 67,054,083 78,211,226 81,044,983 (223,364) 266,288 662,273 66,830,719 78,477,514 81,707,256 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2021, June 30, 2021, and September 30, 2021: As Previously Reported Adjustments As Restated Q1'21 Q2'21 Q3'21 Q1'21 Q2'21 Q3'21 Q1'21 Q2'21 Q3'21 Revenues: Regional developer fees $ 217,956 $ 214,434 $ 209,651 $ (217,956) $ (214,434) $ (209,651) $ — $ — $ — Total revenues 17,547,965 20,218,798 20,991,621 (217,956) (214,434) (209,651) 17,330,009 20,004,364 20,781,970 Cost of revenues: Franchise and regional developer cost of revenues 1,624,572 1,786,833 1,907,874 (217,956) (214,434) (209,651) 1,406,616 1,572,399 1,698,223 Total cost of revenues 1,765,317 2,038,538 2,300,122 (217,956) (214,434) (209,651) 1,547,361 1,824,104 2,090,471 Depreciation and amortization 1,169,866 1,443,018 1,662,255 (541,765) (541,765) (541,764) 628,101 901,253 1,120,491 General and administrative expenses 10,087,060 11,614,444 12,812,331 1,363,144 10,123 10,123 11,450,204 11,624,567 12,822,454 Total selling, general and administrative expenses 13,746,205 16,190,177 17,356,161 821,379 (531,642) (531,641) 14,567,584 15,658,535 16,824,520 Income from operations 1,971,676 2,034,343 1,338,878 (821,379) 531,642 531,641 1,150,297 2,565,985 1,870,519 Income before income tax expense (benefit) 1,950,139 2,017,970 1,322,739 (821,379) 531,642 531,641 1,128,760 2,549,612 1,854,380 Income tax expense (benefit) (364,148) (665,992) (614,356) (246,546) 130,920 224,587 (610,694) (535,072) (389,769) Net income 2,314,287 2,683,962 1,937,095 (574,833) 400,722 307,054 1,739,454 3,084,684 2,244,149 Earnings per share: Basic earnings per share $ 0.16 $ 0.19 $ 0.13 $ (0.04) $ 0.03 $ 0.03 $ 0.12 $ 0.22 $ 0.16 Diluted earnings per share $ 0.16 $ 0.18 $ 0.13 $ (0.04) $ 0.03 $ 0.02 $ 0.12 $ 0.21 $ 0.15 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2021 and the nine-month period ended September 30, 2021: As Previously Reported Adjustments As Restated Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Revenues: Regional developer fees $ 432,390 $ 642,041 $ (432,390) $ (642,041) $ — $ — Total revenues 37,766,762 58,758,383 (432,390) (642,041) 37,334,372 58,116,342 Cost of revenues: Franchise and regional developer cost of revenues 3,411,404 5,319,278 (432,390) (642,041) 2,979,014 4,677,237 Total cost of revenues 3,803,854 6,103,976 (432,390) (642,041) 3,371,464 5,461,935 Depreciation and amortization 2,612,884 4,275,140 (1,083,530) (1,625,295) 1,529,354 2,649,845 General and administrative expenses 21,701,047 34,513,378 1,373,267 1,383,389 23,074,314 35,896,767 Total selling, general and administrative expenses 29,935,974 47,292,135 289,737 (241,906) 30,225,711 47,050,229 Income from operations 4,006,426 5,345,305 (289,737) 241,906 3,716,689 5,587,211 Income before income tax expense (benefit) 3,968,517 5,291,255 (289,737) 241,906 3,678,780 5,533,161 Income tax expense (benefit) (1,030,140) (1,644,496) (115,626) 108,961 (1,145,766) (1,535,535) Net income 4,998,657 6,935,751 (174,111) 132,945 4,824,546 7,068,696 Earnings per share: Basic earnings per share $ 0.35 $ 0.49 $ (0.01) $ — $ 0.34 $ 0.49 Diluted earnings per share $ 0.34 $ 0.46 $ (0.02) $ 0.01 $ 0.32 $ 0.47 The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2021: Accumulated Total The Joint Corp. stockholder's equity Total Equity Balances, December 31, 2020 (as previously reported) $ (20,094,912) $ 21,126,152 $ 21,126,252 Adjustment due to cumulative error correction (250,220) (250,220) (250,220) Balances, December 31, 2020 (as restated) $ (20,345,132) $ 20,875,932 $ 20,876,032 Balances, March 31, 2021 (as previously reported) $ (17,780,218) $ 23,689,962 $ 23,690,062 Adjustment due to cumulative error correction (825,054) (825,054) (825,054) Balances, March 31, 2021 (as restated) $ (18,605,272) $ 22,864,908 $ 22,865,008 Balances, June 30, 2021 (as previously reported) $ (15,096,255) $ 27,299,276 $ 27,299,376 Adjustment due to cumulative error correction (424,333) (424,333) (424,333) Balances, June 30, 2021 (as restated) $ (15,520,588) $ 26,874,943 $ 26,875,043 Balances, September 30, 2021 (as previously reported) $ (13,184,061) $ 29,636,817 $ 29,661,817 Adjustment due to cumulative error correction (117,278) (117,278) (117,278) Balances, September 30, 2021 (as restated) $ (13,301,339) $ 29,519,539 $ 29,544,539 The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2021, the six-month period ended June 30, 2021, and the nine-month period ended September 30, 2021: As Previously Reported Adjustments As Restated Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Cash flows from operating activities: Net income $ 2,314,287 $ 4,998,657 $ 6,935,751 $ (574,833) $ (174,111) $ 132,945 $ 1,739,454 $ 4,824,546 $ 7,068,696 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,169,866 2,612,884 4,275,140 (541,765) (1,083,530) (1,625,295) 628,101 1,529,354 2,649,845 Deferred income taxes (418,810) (1,380,631) (1,909,241) (325,352) (273,239) (127,459) (744,162) (1,653,870) (2,036,700) Changes in operating assets and liabilities: Upfront regional developer fees — — — (143,634) (212,945) (376,346) (143,634) (212,945) (376,346) Deferred revenue 329,383 1,757,294 2,410,202 107,955 177,266 340,666 437,338 1,934,560 2,750,868 Other liabilities 235,116 565,779 852,924 88,929 177,859 266,789 324,045 743,638 1,119,713 Net cash provided by operating activities 2,271,448 9,014,529 12,451,587 (1,388,700) (1,388,700) (1,388,700) 882,748 7,625,829 11,062,887 Cash flows from investing activities: Reacquisition and termination of regional developer rights (1,388,700) (1,388,700) (1,388,700) 1,388,700 1,388,700 1,388,700 — — — Net cash used in investing activities (2,340,341) (8,877,659) (11,264,585) 1,388,700 1,388,700 1,388,700 (951,641) (7,488,959) (9,875,885) Decrease in cash (2,812,479) (1,985,284) (827,347) — — — (2,812,479) (1,985,284) (827,347) |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The allocation of the total purchase price of AZ Clinics Purchase was as follows: Property and equipment $ 241,511 Operating lease right-of-use asset 912,937 Intangible assets 3,689,100 Total assets acquired 4,843,548 Goodwill 3,408,205 Deferred revenue (455,317) Operating lease liability - current portion (128,516) Operating lease liability - net of current portion (784,722) Net purchase consideration $ 6,883,198 The allocation of the total purchase price of NC Clinics Purchase was as follows: Property and equipment $ 198,236 Operating lease right-of-use asset 521,222 Intangible assets 3,544,456 Total assets acquired 4,263,914 Deferred revenue (326,332) Operating lease liability - current portion (146,255) Operating lease liability - net of current portion (367,536) Net purchase consideration $ 3,423,791 The allocation of the total purchase price of CA Clinics Purchase was as follows: Property and equipment $ 677,518 Tenant improvement allowance 55,790 Operating lease right-of-use asset 1,520,353 Intangible assets 1,480,359 Total assets acquired 3,734,020 Deferred revenue (215,555) Operating lease liability - current portion (200,877) Operating lease liability - net of current portion (1,422,461) Net purchase consideration $ 1,895,127 The allocation of the purchase price was as follows: Property and equipment $ 4,928 Operating lease right-of-use asset 651,197 Intangible assets 1,579,500 Total assets acquired 2,235,625 Goodwill 459,599 Deferred revenue (123,976) Operating lease liability - current portion (49,303) Operating lease liability - net of current portion (626,362) Net purchase consideration $ 1,895,583 The allocation of the purchase price for the six North Carolina clinics on April 1, 2021 was as follows: Property and equipment $ 524,046 Operating lease right-of-use asset 865,813 Intangible assets 2,187,472 Total assets acquired 3,577,331 Deferred revenue (244,998) Operating lease liability - current portion (185,181) Operating lease liability - net of current portion (637,565) Net purchase consideration $ 2,509,587 The allocation of the purchase price for the four North Carolina clinics on November 1, 2021 was as follows: Property and equipment $ 252,631 Operating lease right-of-use asset 1,341,482 Intangible assets 1,092,341 Total assets acquired 2,686,454 Deferred revenue (144,383) Operating lease liability - current portion (135,784) Operating lease liability - net of current portion (1,180,861) Net purchase consideration $ 1,225,426 |
Schedule of Unaudited Pro Forma Information | The following table summarizes selected unaudited pro forma consolidated income statements for the years ended December 31, 2022 and 2021 for all 2022 acquisitions, as if the AZ Clinics Purchase (which has been accounted for as a business combination) and the NC and CA Clinics Purchases (which have been accounted for as asset purchases) in 2022 had been completed on January 1, 2021. Year Ended December 31, (Restated) 2022 2021 Revenues, net $ 107,022,047 $ 87,280,590 Net (loss) income 171,315 6,424,015 The Company’s consolidated income statements for the year ended December 31, 2022 include net revenue and net income, excluding corporate clinics segment overhead costs, of the acquired clinics in Arizona, North Carolina, and California as follows: Year Ended December 31, 2022 Revenues, net $ 3,351,521 Net income 947,551 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property Plant and Equipment | Property and equipment consist of the following: December 31, 2022 2021 Office and computer equipment $ 5,207,833 $ 3,704,425 Leasehold improvements 17,842,901 13,457,765 Internally developed software 5,843,758 5,044,339 Finance lease assets 151,396 267,252 29,045,888 22,473,780 Accumulated depreciation and amortization (12,675,085) (9,184,932) 16,370,803 13,288,847 Construction in progress 1,104,349 1,100,099 Property and Equipment, net $ 17,475,152 $ 14,388,946 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: December 31, 2022 (As Restated) Gross Carrying Accumulated Net Carrying Intangible assets subject to amortization: Reacquired franchise rights $ 12,881,894 $ 4,755,286 $ 8,126,608 Customer relationships 4,330,365 2,352,500 1,977,865 Assembled workforce 959,837 136,015 823,822 $ 18,172,096 $ 7,243,801 $ 10,928,295 December 31, 2021 (As Restated) Gross Carrying Accumulated Net Carrying Intangible assets subject to amortization: Reacquired franchise rights $ 6,795,865 $ 3,153,037 $ 3,642,828 Customer relationships 2,603,006 1,587,443 1,015,563 Assembled workforce 59,311 4,939 54,372 $ 9,458,182 $ 4,745,419 $ 4,712,763 |
Schedule of Finite-lived Intangible Assets Amortization Expense | The following is the weighted average amortization period for the Company's intangible assets (as restated): Amortization (Years) Reacquired franchise rights 5.8 Customer relationships 2.6 Assembled workforce 2.0 All intangible assets 4.8 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for 2023 and subsequent years is as follows (as restated): 2023 $ 3,643,736 2024 2,578,510 2025 1,542,251 2026 1,225,152 2027 670,120 Thereafter 1,268,526 Total $ 10,928,295 |
Schedule of Goodwill | The changes in the carrying amount of goodwill were as follows: Corporate Clinic Segment Balance as of December 31, 2021 Goodwill, gross $ 5,140,197 Accumulated impairment losses (54,994) Goodwill, net 5,085,203 2022 acquisition 3,408,204 Balance as of December 31, 2022 Goodwill, gross 8,548,401 Accumulated impairment losses (54,994) Goodwill, net $ 8,493,407 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company has computed the fair value of all options granted using the Black-Scholes-Merton model during the year ended December 31, 2021, using the following assumptions: Year Ended December 31, 2021 Expected volatility 57% Expected dividends None Expected term (years) 7 Risk-free rate 0.97% to 1.27% |
Share-based Compensation, Stock Options, Activity | The information below summarizes the stock options activity: Number of Weighted Weighted Aggregate Intrinsic Value Outstanding at December 31, 2020 835,601 $ 6.65 6.6 $ 16,153,117 Granted at market price 48,192 47.01 Exercised (260,044) 5.84 $ 15,244,054 Cancelled (28,660) 18.17 Outstanding at December 31, 2021 595,089 $ 9.72 5.9 $ 33,336,794 Granted at market price — Exercised (43,380) 8.86 $ 657,058 Expired (2,795) 28.45 Cancelled (16,991) 24.96 Outstanding at December 31, 2022 531,923 $ 9.20 4.7 $ 3,797,904 Exercisable at December 31, 2022 454,315 $ 6.43 4.3 $ 3,772,164 Vested and expected to vest at December 31, 2022 528,981 $ 9.07 4.7 $ 3,797,670 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The information below summaries the restricted stock activity: Restricted Stock Awards Shares Weighted Average Grant-Date Fair Value per Award Non-vested at December 31, 2020 45,595 $ 13.13 Granted 10,010 58.25 Vested (26,143) 13.61 Cancelled (1,742) 20.63 Non-vested at December 31, 2021 27,720 28.51 Granted 68,125 29.47 Vested (17,240) 29.13 Cancelled (8,293) 30.51 Non-vested at December 31, 2022 70,312 $ 29.05 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) reported in the consolidated income statements is comprised of the following: December 31, 2022 2021 (As Restated) (As Restated) Current expense (benefit): Federal $ 377,281 $ 241,243 State, net of state tax credits 132,520 27,954 Total current expense (benefit) 509,801 269,197 Deferred expense (benefit): Federal (295,011) (1,376,812) State (146,342) (401,345) Total deferred expense (benefit) (441,353) (1,778,157) Total income tax expense (benefit) $ 68,448 $ (1,508,960) |
Schedule of Deferred Tax Assets and Liabilities | The following are the components of the Company’s deferred tax assets (liabilities) for federal and state income taxes: December 31, 2022 2021 (As Restated) (As Restated) Deferred income tax assets: Accrued expenses $ 97,148 $ 938,916 Deferred revenue 5,338,821 4,546,130 Lease liability 6,582,122 5,839,233 Goodwill - component 2 72,033 53,946 Nonqualified stock options 339,075 255,921 Interest expense limitation 35,031 — Net operating loss carryforwards 5,285,726 5,461,650 Tax credits 35,850 35,850 Intangibles 3,166,533 1,906,947 Total deferred income tax assets 20,952,339 19,038,593 Deferred income tax liabilities: Lease right-of-use asset (5,694,797) (5,022,052) Deferred franchise costs (100,558) (122,431) Goodwill - component 1 (537,421) (405,964) Asset basis difference related to property and equipment (2,545,455) (1,902,389) Restricted stock compensation (145,956) (98,958) Total deferred income tax liabilities (9,024,187) (7,551,794) Valuation allowance Net deferred tax asset $ 11,928,152 $ 11,486,799 |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net income, compared to the income tax benefit in the consolidated income statements: For the Years Ended December 31, 2022 2021 (As Restated) (As Restated) Amount Percent Amount Percent Expected federal tax expense (benefit) $ 145,982 21.0 % $ 1,280,282 21.0 % State tax provision (benefit), net of federal benefit 41,660 6.0 % (332,169) (5.5) % Other permanent differences 15,458 2.2 % 72,794 1.2 % Stock compensation (91,454) (13.2) % (2,519,083) (41.4) % Change in tax rate (64,756) (9.3) % — — % Other adjustments 21,558 3.1 % (10,784) (0.2) % Expense (Benefit) $ 68,448 9.8 % $ (1,508,960) (24.9) % |
Schedule of Uncertain Tax Positions Roll Forward | December 31, 2022 2021 (As Restated) (As Restated) Beginning balances $ 1,314,351 $ 729,837 Increases related to tax positions taken during a prior year — — Decreases related to tax positions taken during a prior year — — Increases related to tax positions taken during a current year — 584,514 Decreases related to settlements with taxing authorities — — Decreases related to expiration of the statute of limitations — — Ending balances $ 1,314,351 $ 1,314,351 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease, Cost | The table below summarizes the components of lease expense and income statement location for the years ended December 31, 2022 and December 31, 2021: Years Ended December 31, Line Item in the Company’s Consolidated Income Statements 2022 2021 Finance lease costs: Amortization of assets Depreciation and amortization $ 55,572 $ 85,300 Interest on lease liabilities Other expense, net 4,516 9,012 Total finance lease costs $ 60,088 $ 94,312 Operating lease costs General and administrative expenses $ 5,647,185 $ 4,590,571 Total lease costs $ 5,707,273 $ 4,684,883 |
Schedule of Assets And Liabilities, Lessee | Supplemental information and balance sheet location related to leases for the years ended December 31, 2022 and December 31, 2021 was as follows: Years Ended December 31, 2022 2021 Operating Leases: Operating lease right-of -use asset $ 20,587,199 $ 18,425,914 Operating lease liability, current portion $ 5,295,830 $ 4,613,843 Operating lease liability, net of current portion 18,672,719 16,872,093 Total operating lease liability $ 23,968,549 $ 21,485,936 Finance Leases: Property and equipment, at cost $ 151,396 $ 267,252 Less accumulated amortization (87,652) (147,937) Property and equipment, net $ 63,744 $ 119,315 Finance lease liability, current portion $ 24,433 $ 49,855 Finance lease liability, net of current portion 63,507 87,939 Total finance lease liabilities $ 87,940 $ 137,794 Weighted average remaining lease term (in years): Operating leases 5.4 5.4 Finance lease 3.4 3.6 Weighted average discount rate: Operating leases 4.8 % 4.6 % Finance leases 4.3 % 4.8 % Supplemental cash flow information related to leases for the years ended December 31, 2022 and December 31, 2021 were as follows: Years Ended December 31, 2022 2021 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 5,931,114 $ 4,484,737 Operating cash flows from finance leases 4,516 9,012 Financing cash flows from finance leases 49,855 80,322 Non-cash transactions: ROU assets obtained in exchange for lease liabilities Operating lease 7,222,822 10,007,188 Finance lease — 15,140 |
Schedule of Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2022 were as follows: Operating Leases Finance Lease 2023 $ 6,280,108 $ 27,600 2024 5,689,672 27,600 2025 5,084,585 27,600 2026 3,264,579 11,500 2027 2,268,960 — Thereafter 4,561,694 — Total lease payments 27,149,598 94,300 Less: Imputed interest (3,181,049) (6,360) Total lease obligations 23,968,549 87,940 Less: Current obligations (5,295,830) (24,433) Long-term lease obligation $ 18,672,719 $ 63,507 |
Schedule of Finance Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2022 were as follows: Operating Leases Finance Lease 2023 $ 6,280,108 $ 27,600 2024 5,689,672 27,600 2025 5,084,585 27,600 2026 3,264,579 11,500 2027 2,268,960 — Thereafter 4,561,694 — Total lease payments 27,149,598 94,300 Less: Imputed interest (3,181,049) (6,360) Total lease obligations 23,968,549 87,940 Less: Current obligations (5,295,830) (24,433) Long-term lease obligation $ 18,672,719 $ 63,507 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The tables below present financial information for the Company’s two operating business segments. Year Ended December 31, 2022 2021 (As Restated) (As Restated) Revenues: Corporate clinics $ 59,422,294 $ 44,348,234 Franchise operations 41,830,016 35,662,779 Total revenues $ 101,252,310 $ 80,011,013 Depreciation and amortization: Corporate clinics $ 5,557,494 $ 3,279,603 Franchise operations 744,172 334,945 Corporate administration 344,956 307,339 Total depreciation and amortization $ 6,646,622 $ 3,921,887 Segment operating income: Corporate clinics $ 110,257 $ 6,599,932 Franchise operations 17,340,402 15,353,621 Unallocated corporate (16,622,405) (15,827,588) Total segment operating income $ 828,254 $ 6,125,965 Reconciliation of total segment operating income to consolidated earnings before income taxes: Total segment operating income $ 828,254 $ 6,125,965 Other (expense), net (133,101) (69,878) Income before income tax expense (benefit) $ 695,153 $ 6,056,087 |
Schedule of Reconciliation of Assets from Segment to Consolidated | December 31, 2022 December 31, 2021 (As Restated) (As Restated) Segment assets: Corporate clinics $ 56,008,234 $ 40,032,271 Franchise operations 12,360,878 12,593,912 Total segment assets $ 68,369,112 $ 52,626,183 Unallocated cash and cash equivalents and restricted cash $ 10,550,417 $ 19,912,338 Unallocated property and equipment 915,216 857,176 Other unallocated assets 13,655,632 13,666,050 Total assets $ 93,490,377 $ 87,061,747 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited and Restated) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2022: December 31, December 31, As Previously Reported Adjustments As Restated Intangible assets, net $ 12,867,529 $ (1,939,234) $ 10,928,295 Deferred tax assets 8,441,713 3,486,439 11,928,152 Total assets 91,943,172 1,547,205 93,490,377 Current liabilities: Deferred franchise and regional development fee revenue, current portion 2,955,851 (2,955,851) — Deferred franchise fee revenue, current portion — 2,468,601 2,468,601 Upfront regional developer fees, current portion — 487,250 487,250 Other current liabilities 499,250 98,044 597,294 Total current liabilities 23,118,973 98,044 23,217,017 Deferred franchise and regional development fee revenue, net of current portion 15,661,412 (15,661,412) — Deferred franchise fee revenue, net of current portion — 14,161,134 14,161,134 Upfront regional developer fees, net of current portion — 1,500,278 1,500,278 Other liabilities 27,230 1,260,649 1,287,879 Total liabilities 59,543,841 1,358,693 60,902,534 Accumulated deficit (12,341,892) 188,512 (12,153,380) Total The Joint Corp. stockholders' equity 32,374,331 188,512 32,562,843 Total equity 32,399,331 188,512 32,587,843 Total liabilities and stockholders' equity 91,943,172 1,547,205 93,490,377 The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2022: Year Ended December 31, 2022 Year Ended December 31, 2022 As Previously Reported Adjustments As Restated Revenues: Regional developer fees $ 659,099 $ (659,099) $ — Total revenues 101,911,409 (659,099) 101,252,310 Cost of revenues: Franchise and regional developer cost of revenues 8,462,503 (659,099) 7,803,404 Total cost of revenues 9,830,162 (659,099) 9,171,063 Depreciation and amortization 7,643,980 (997,358) 6,646,622 General and administrative expenses 67,987,482 2,245,965 70,233,447 Total selling, general and administrative expenses 89,594,171 1,248,607 90,842,778 Income from operations 2,076,861 (1,248,607) 828,254 Income before income tax expense (benefit) 1,943,760 (1,248,607) 695,153 Income tax expense (benefit) 766,510 (698,062) 68,448 Net income 1,177,250 (550,545) 626,705 Earnings per share: Basic earnings per share $ 0.08 $ (0.04) $ 0.04 Diluted earnings per share $ 0.08 $ (0.04) $ 0.04 The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity as of December 31, 2022, December 31, 2021, and December 31, 2020: Accumulated Total The Joint Corp. stockholder's equity Total Equity 12/31/2020 (as previously reported) (20,094,912) 21,126,152 21,126,252 Adjustment due to cumulative error correction (250,220) (250,220) (250,220) 12/31/2020 (as restated) (20,345,132) 20,875,932 20,876,032 12/31/2021 (as previously reported) (13,519,142) 29,544,627 29,569,627 Adjustment due to cumulative error correction 739,057 739,057 739,057 12/31/2021 (as restated) (12,780,085) 30,283,684 30,308,684 12/31/2022 (as previously reported) (12,341,892) 32,374,331 32,399,331 Adjustment due to cumulative error correction 188,512 188,512 188,512 12/31/2022 (as restated) (12,153,380) 32,562,843 32,587,843 The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2022: Year Ended December 31, 2022 Year Ended December 31, 2022 As Previously Reported Adjustments As Restated Cash flows from operating activities: Net income $ 1,177,250 (550,545) $ 626,705 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,643,980 (997,358) 6,646,622 Deferred income taxes 746,921 (1,188,274) (441,353) Changes in operating assets and liabilities: Upfront regional developer fees — (1,288,134) (1,288,134) Deferred revenue 2,230,041 659,098 2,889,139 Other liabilities 409,938 490,213 900,151 Net cash provided by operating activities 11,084,584 (2,875,000) 8,209,584 Cash flows from investing activities: Reacquisition and termination of regional developer rights (2,875,000) 2,875,000 — Net cash used in investing activities (20,775,115) 2,875,000 (17,900,115) Decrease in cash (9,361,921) — (9,361,921) The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2021: December 31, December 31, As Previously Reported Adjustments As Restated Intangible assets, net 5,403,390 (690,627) 4,712,763 Deferred tax assets 9,188,634 2,298,165 11,486,799 Total assets 85,454,209 1,607,538 87,061,747 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,191,892 (3,191,892) — Deferred franchise fee revenue, current portion — 2,421,721 2,421,721 Upfront regional developer fees, current portion — 770,171 770,171 Other current liabilities 539,500 — 539,500 Total current liabilities 21,438,399 — 21,438,399 Deferred franchise and regional development fee revenue, net of current portion 15,458,921 (15,458,921) — Deferred franchise fee revenue, net of current portion — 12,953,430 12,953,430 Upfront regional developer fees, net of current portion — 2,505,491 2,505,491 Other liabilities 27,230 868,481 895,711 Total liabilities 55,884,582 868,481 56,753,063 Accumulated deficit (13,519,142) 739,057 (12,780,085) Total The Joint Corp. stockholders' equity 29,544,627 739,057 30,283,684 Total equity 29,569,627 739,057 30,308,684 Total liabilities and stockholders' equity 85,454,209 1,607,538 87,061,747 The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2021: Year Ended December 31, 2021 Year Ended December 31, 2021 As Previously Reported Adjustments As Restated Revenues: Regional developer fees 848,640 (848,640) — Total revenues 80,859,653 (848,640) 80,011,013 Cost of revenues: Franchise and regional developer cost of revenues 7,408,125 (848,639) 6,559,486 Total cost of revenues 8,513,777 (848,639) 7,665,138 Depreciation and amortization 6,088,947 (2,167,060) 3,921,887 General and administrative expenses 49,453,305 1,393,513 50,846,818 Total selling, general and administrative expenses 66,966,668 (773,547) 66,193,121 Income from operations 5,352,419 773,546 6,125,965 Income before income tax expense (benefit) 5,282,541 773,546 6,056,087 Income tax (benefit) (1,293,229) (215,731) (1,508,960) Net income 6,575,770 989,277 7,565,047 Earnings per share: Basic earnings per share $ 0.46 $ 0.07 $ 0.53 Diluted earnings per share $ 0.44 $ 0.07 $ 0.51 The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2021: Year Ended December 31, 2021 Year Ended December 31, 2021 As Previously Reported Adjustments As Restated Cash flows from operating activities: Net income $ 6,575,770 989,277 $ 7,565,047 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,088,947 (2,167,060) 3,921,887 Deferred income taxes (1,247,199) (530,958) (1,778,157) Changes in operating assets and liabilities: Upfront regional developer fees — (572,944) (572,944) Deferred revenue 3,624,944 537,265 4,162,209 Other liabilities 1,059,507 355,720 1,415,227 Net cash provided by operating activities 15,232,780 (1,388,700) 13,844,080 Cash flows from investing activities: Reacquisition and termination of regional developer rights (1,388,700) 1,388,700 — Net cash used in investing activities (14,143,369) 1,388,700 (12,754,669) Decrease in cash (907,291) — (907,291) The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2022, June 30, 2022, and September 30, 2022: As Previously Reported Adjustments As Restated March 31, 2022 June 30, 2022 September 30, 2022 March 31, 2022 June 30, 2022 September 30, 2022 March 31, 2022 June 30, 2022 September 30, 2022 Intangible assets, net $ 4,829,941 $ 9,114,701 $ 10,162,506 $ (552,911) $ (2,356,584) $ (2,124,740) $ 4,277,030 $ 6,758,117 $ 8,037,766 Deferred tax assets 9,205,410 9,116,248 9,115,231 2,493,018 3,202,634 3,333,327 11,698,428 12,318,882 12,448,558 Total assets 85,062,449 86,235,794 88,291,398 1,940,107 846,050 1,208,587 87,002,556 87,081,844 89,499,985 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,130,856 2,981,534 2,974,993 (3,130,856) (2,981,534) (2,974,993) — — — Deferred franchise fee revenue, current portion — — — 2,408,266 2,393,993 2,410,951 2,408,266 2,393,993 2,410,951 Upfront regional developer fees, current portion — — — 722,590 587,541 564,042 722,590 587,541 564,042 Other current liabilities 541,250 558,250 522,500 24,511 49,022 73,533 565,761 607,272 596,033 Total current liabilities 20,624,047 20,238,810 21,637,706 24,511 49,022 73,533 20,648,558 20,287,832 21,711,239 Deferred franchise and regional development fee revenue, net of current portion 15,410,136 15,447,554 15,604,180 (15,410,136) (15,447,554) (15,604,180) — — — Deferred franchise fee revenue, net of current portion — — — 13,154,047 13,584,091 13,870,401 13,154,047 13,584,091 13,870,401 Upfront regional developer fees, net of current portion — — — 2,256,089 1,863,463 1,733,779 2,256,089 1,863,463 1,733,779 Other liabilities 27,230 27,230 27,230 966,523 1,064,565 1,162,607 993,753 1,091,795 1,189,837 Total liabilities 55,328,037 55,752,399 56,765,925 991,034 1,113,587 1,236,140 56,319,071 56,865,986 58,002,065 Accumulated deficit (13,724,938) (13,380,196) (12,889,083) 949,073 (267,537) (27,553) (12,775,865) (13,647,733) (12,916,636) Total The Joint Corp. stockholders' equity 29,709,412 30,458,395 31,500,473 949,073 (267,537) (27,553) 30,658,485 30,190,858 31,472,920 Total equity 29,734,412 30,483,395 31,525,473 949,073 (267,537) (27,553) 30,683,485 30,215,858 31,497,920 Total liabilities and stockholders' equity 85,062,449 86,235,794 88,291,398 1,940,107 846,050 1,208,587 87,002,556 87,081,844 89,499,985 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2022 (Q1), June 30, 2022 (Q2), and September 30, 2022 (Q3): As Previously Reported Adjustments As Restated Q1'22 Q2'22 Q3'22 Q1'22 Q2'22 Q3'22 Q1'22 Q2'22 Q3'22 Revenues: Regional developer fees $ 201,787 $ 169,953 $ 153,181 $ (201,787) $ (169,953) $ (153,181) $ — $ — $ — Total revenues 22,438,538 25,057,318 26,603,000 (201,787) (169,953) (153,181) 22,236,751 24,887,365 26,449,819 Cost of revenues: Franchise and regional developer cost of revenues 2,002,813 2,074,889 2,141,945 (201,787) (169,953) (153,181) 1,801,026 1,904,936 1,988,764 Total cost of revenues 2,312,771 2,427,045 2,490,276 (201,787) (169,953) (153,181) 2,110,984 2,257,092 2,337,095 Depreciation and amortization 1,629,176 1,700,476 2,011,768 (292,520) (238,606) (231,844) 1,336,656 1,461,870 1,779,924 General and administrative expenses 15,378,623 16,528,022 17,796,806 154,803 2,042,279 — 15,533,426 18,570,301 17,796,806 Total selling, general and administrative expenses 20,295,287 22,068,222 23,347,861 (137,717) 1,803,673 (231,844) 20,157,570 23,871,895 23,116,017 Income from operations (176,426) 473,207 500,472 137,717 (1,803,673) 231,844 (38,709) (1,330,466) 732,316 Income before income tax expense (benefit) (192,573) 453,921 475,237 137,717 (1,803,673) 231,844 (54,856) (1,349,752) 707,081 Income tax expense (benefit) 13,224 109,179 (15,876) (72,300) (587,064) (8,139) (59,076) (477,885) (24,015) Net income (loss) (205,797) 344,742 491,113 210,017 (1,216,609) 239,983 4,220 (871,867) 731,096 Earnings per share: Basic earnings (loss) per share $ (0.01) $ 0.02 $ 0.03 $ 0.01 $ (0.08) $ 0.02 $ — $ (0.06) $ 0.05 Diluted earnings (loss) per share $ (0.01) $ 0.02 $ 0.03 $ 0.01 $ (0.08) $ 0.02 $ — $ (0.06) $ 0.05 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2022 and the nine-month period ended September 30, 2022: As Previously Reported Adjustments As Restated Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Revenues: Regional developer fees $ 371,740 $ 524,923 $ (371,740) $ (524,923) $ — $ — Total revenues 47,495,856 74,098,856 (371,740) (524,923) 47,124,116 73,573,933 Cost of revenues: Franchise and regional developer cost of revenues 4,077,701 6,219,646 (371,740) (524,923) 3,705,961 5,694,723 Total cost of revenues 4,739,816 7,230,092 (371,740) (524,923) 4,368,076 6,705,169 Depreciation and amortization 3,329,653 5,341,420 (531,126) (762,970) 2,798,527 4,578,450 General and administrative expenses 31,906,644 49,703,451 2,197,082 2,197,082 34,103,726 51,900,533 Total selling, general and administrative expenses 42,363,509 65,711,371 1,665,956 1,434,112 44,029,465 67,145,483 Income from operations 296,782 797,253 (1,665,956) (1,434,112) (1,369,174) (636,859) Income before income tax expense (benefit) 261,348 736,585 (1,665,956) (1,434,112) (1,404,608) (697,527) Income tax expense (benefit) 122,403 106,527 (659,363) (667,503) (536,960) (560,976) Net income (loss) 138,945 630,058 (1,006,593) (766,609) (867,648) (136,551) Earnings per share: Basic earnings (loss) per share $ 0.01 $ 0.04 $ (0.07) $ (0.05) $ (0.06) $ (0.01) Diluted earnings (loss) per share $ 0.01 $ 0.04 $ (0.07) $ (0.05) $ (0.06) $ (0.01) The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2022: Accumulated Total The Joint Corp. stockholder's equity Total Equity Balances, December 31, 2021 (as previously reported) $ (13,519,142) $ 29,544,627 $ 29,569,627 Adjustment due to cumulative error correction 739,057 739,057 739,057 12/31/2021 (as restated) $ (12,780,085) $ 30,283,684 $ 30,308,684 Balances, March 31, 2022 (as previously reported) $ (13,724,938) $ 29,709,412 $ 29,734,412 Adjustment due to cumulative error correction 949,073 949,073 949,073 Balances, March 31, 2022 (as restated) $ (12,775,865) $ 30,658,485 $ 30,683,485 Balances, June 30, 2022 (as previously reported) $ (13,380,196) $ 30,458,395 $ 30,483,395 Adjustment due to cumulative error correction (267,537) (267,537) (267,537) Balances, June 30, 2022 (as restated) $ (13,647,733) $ 30,190,858 $ 30,215,858 Balances, September 30, 2022 (as previously reported) $ (12,889,083) $ 31,500,473 $ 31,525,473 Adjustment due to cumulative error correction (27,553) (27,553) (27,553) Balances, September 30, 2022 (as restated) $ (12,916,636) $ 31,472,920 $ 31,497,920 The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2022, the six-month period ended June 30, 2022, and the nine-month period ended September 30, 2022: As Previously Reported Adjustments As Restated Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended March, 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Cash flows from operating activities: Net income (loss) $ (205,797) $ 138,945 $ 630,058 210,017 (1,006,593) (766,609) $ 4,220 $ (867,648) $ (136,551) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,629,176 3,329,653 5,341,420 (292,520) (531,126) (762,970) 1,336,656 2,798,527 4,578,450 Deferred income taxes (16,776) 72,386 73,403 (194,853) (904,469) (1,035,162) (211,629) (832,083) (961,759) Changes in operating assets and liabilities: Upfront regional developer fees — — — (296,983) (824,658) (977,841) (296,983) (824,658) (977,841) Deferred revenue 296,487 492,473 636,470 201,786 371,740 524,923 498,273 864,213 1,161,393 Other liabilities 280,162 404,329 360,790 122,553 245,106 367,659 402,715 649,435 728,449 Net cash provided by (used in) operating activities 447,878 1,465,160 5,682,415 (250,000) (2,650,000) (2,650,000) 197,878 (1,184,840) 3,032,415 Cash flows from investing activities: Reacquisition and termination of regional developer rights (250,000) (2,650,000) (2,650,000) 250,000 2,650,000 2,650,000 — — — Net cash used in investing activities (1,539,943) (11,414,961) (14,938,929) 250,000 2,650,000 2,650,000 (1,289,943) (8,764,961) (12,288,929) Decrease in cash (1,066,427) (9,876,748) (8,944,196) — — — (1,066,427) (9,876,748) (8,944,196) The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2021, June 30, 2021, and September 30, 2021: As Previously Reported Adjustments As Restated March 31, 2021 June 30, 2021 September 30, 2021 March 31, 2021 June 30, 2021 September 30, 2021 March 31, 2021 June 30, 2021 September 30, 2021 Intangible assets, net $ 3,444,538 $ 6,176,429 $ 5,280,024 $ (2,315,922) $ (1,774,158) $ (1,232,393) $ 1,128,616 $ 4,402,271 $ 4,047,631 Deferred tax assets 8,360,245 9,322,066 9,850,676 2,092,559 2,040,446 1,894,666 10,452,804 11,362,512 11,745,342 Total assets 67,054,083 78,211,226 81,044,983 (223,364) 266,288 662,273 66,830,719 78,477,514 81,707,256 Current liabilities: Deferred franchise and regional development fee revenue, current portion 3,045,868 3,162,710 3,198,750 (3,045,868) (3,162,710) (3,198,750) — — — Deferred franchise fee revenue, current portion — — — 2,229,101 2,347,990 2,405,300 2,229,101 2,347,990 2,405,300 Upfront regional developer fees, current portion — — — 816,767 814,720 793,450 816,767 814,720 793,450 Other current liabilities 707,763 551,035 404,901 — — — 707,763 551,035 404,901 Total current liabilities 17,414,714 21,778,714 20,934,744 — — — 17,414,714 21,778,714 20,934,744 Deferred franchise and regional development fee revenue, net of current portion 13,560,449 14,708,216 15,349,878 (13,560,449) (14,708,216) (15,349,878) — — — Deferred franchise fee revenue, net of current portion — — — 10,672,244 11,887,275 12,671,068 10,672,244 11,887,275 12,671,068 Upfront regional developer fees, net of current portion — — — 2,888,205 2,820,941 2,678,810 2,888,205 2,820,941 2,678,810 Other liabilities 27,230 27,230 27,231 601,690 690,621 779,551 628,920 717,851 806,782 Total liabilities 43,364,021 50,911,850 51,383,166 601,690 690,621 779,551 43,965,711 51,602,471 52,162,717 Accumulated deficit (17,780,218) (15,096,255) (13,184,061) (825,054) (424,333) (117,278) (18,605,272) (15,520,588) (13,301,339) Total The Joint Corp. stockholders' equity 23,689,962 27,299,276 29,636,817 (825,054) (424,333) (117,278) 22,864,908 26,874,943 29,519,539 Total equity 23,690,062 27,299,376 29,661,817 (825,054) (424,333) (117,278) 22,865,008 26,875,043 29,544,539 Total liabilities and stockholders' equity 67,054,083 78,211,226 81,044,983 (223,364) 266,288 662,273 66,830,719 78,477,514 81,707,256 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2021, June 30, 2021, and September 30, 2021: As Previously Reported Adjustments As Restated Q1'21 Q2'21 Q3'21 Q1'21 Q2'21 Q3'21 Q1'21 Q2'21 Q3'21 Revenues: Regional developer fees $ 217,956 $ 214,434 $ 209,651 $ (217,956) $ (214,434) $ (209,651) $ — $ — $ — Total revenues 17,547,965 20,218,798 20,991,621 (217,956) (214,434) (209,651) 17,330,009 20,004,364 20,781,970 Cost of revenues: Franchise and regional developer cost of revenues 1,624,572 1,786,833 1,907,874 (217,956) (214,434) (209,651) 1,406,616 1,572,399 1,698,223 Total cost of revenues 1,765,317 2,038,538 2,300,122 (217,956) (214,434) (209,651) 1,547,361 1,824,104 2,090,471 Depreciation and amortization 1,169,866 1,443,018 1,662,255 (541,765) (541,765) (541,764) 628,101 901,253 1,120,491 General and administrative expenses 10,087,060 11,614,444 12,812,331 1,363,144 10,123 10,123 11,450,204 11,624,567 12,822,454 Total selling, general and administrative expenses 13,746,205 16,190,177 17,356,161 821,379 (531,642) (531,641) 14,567,584 15,658,535 16,824,520 Income from operations 1,971,676 2,034,343 1,338,878 (821,379) 531,642 531,641 1,150,297 2,565,985 1,870,519 Income before income tax expense (benefit) 1,950,139 2,017,970 1,322,739 (821,379) 531,642 531,641 1,128,760 2,549,612 1,854,380 Income tax expense (benefit) (364,148) (665,992) (614,356) (246,546) 130,920 224,587 (610,694) (535,072) (389,769) Net income 2,314,287 2,683,962 1,937,095 (574,833) 400,722 307,054 1,739,454 3,084,684 2,244,149 Earnings per share: Basic earnings per share $ 0.16 $ 0.19 $ 0.13 $ (0.04) $ 0.03 $ 0.03 $ 0.12 $ 0.22 $ 0.16 Diluted earnings per share $ 0.16 $ 0.18 $ 0.13 $ (0.04) $ 0.03 $ 0.02 $ 0.12 $ 0.21 $ 0.15 The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2021 and the nine-month period ended September 30, 2021: As Previously Reported Adjustments As Restated Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Revenues: Regional developer fees $ 432,390 $ 642,041 $ (432,390) $ (642,041) $ — $ — Total revenues 37,766,762 58,758,383 (432,390) (642,041) 37,334,372 58,116,342 Cost of revenues: Franchise and regional developer cost of revenues 3,411,404 5,319,278 (432,390) (642,041) 2,979,014 4,677,237 Total cost of revenues 3,803,854 6,103,976 (432,390) (642,041) 3,371,464 5,461,935 Depreciation and amortization 2,612,884 4,275,140 (1,083,530) (1,625,295) 1,529,354 2,649,845 General and administrative expenses 21,701,047 34,513,378 1,373,267 1,383,389 23,074,314 35,896,767 Total selling, general and administrative expenses 29,935,974 47,292,135 289,737 (241,906) 30,225,711 47,050,229 Income from operations 4,006,426 5,345,305 (289,737) 241,906 3,716,689 5,587,211 Income before income tax expense (benefit) 3,968,517 5,291,255 (289,737) 241,906 3,678,780 5,533,161 Income tax expense (benefit) (1,030,140) (1,644,496) (115,626) 108,961 (1,145,766) (1,535,535) Net income 4,998,657 6,935,751 (174,111) 132,945 4,824,546 7,068,696 Earnings per share: Basic earnings per share $ 0.35 $ 0.49 $ (0.01) $ — $ 0.34 $ 0.49 Diluted earnings per share $ 0.34 $ 0.46 $ (0.02) $ 0.01 $ 0.32 $ 0.47 The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2021: Accumulated Total The Joint Corp. stockholder's equity Total Equity Balances, December 31, 2020 (as previously reported) $ (20,094,912) $ 21,126,152 $ 21,126,252 Adjustment due to cumulative error correction (250,220) (250,220) (250,220) Balances, December 31, 2020 (as restated) $ (20,345,132) $ 20,875,932 $ 20,876,032 Balances, March 31, 2021 (as previously reported) $ (17,780,218) $ 23,689,962 $ 23,690,062 Adjustment due to cumulative error correction (825,054) (825,054) (825,054) Balances, March 31, 2021 (as restated) $ (18,605,272) $ 22,864,908 $ 22,865,008 Balances, June 30, 2021 (as previously reported) $ (15,096,255) $ 27,299,276 $ 27,299,376 Adjustment due to cumulative error correction (424,333) (424,333) (424,333) Balances, June 30, 2021 (as restated) $ (15,520,588) $ 26,874,943 $ 26,875,043 Balances, September 30, 2021 (as previously reported) $ (13,184,061) $ 29,636,817 $ 29,661,817 Adjustment due to cumulative error correction (117,278) (117,278) (117,278) Balances, September 30, 2021 (as restated) $ (13,301,339) $ 29,519,539 $ 29,544,539 The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2021, the six-month period ended June 30, 2021, and the nine-month period ended September 30, 2021: As Previously Reported Adjustments As Restated Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Three Months Ended March, 31, 2021 Six Months Ended June 30, 2021 Nine Months Ended September 30, 2021 Cash flows from operating activities: Net income $ 2,314,287 $ 4,998,657 $ 6,935,751 $ (574,833) $ (174,111) $ 132,945 $ 1,739,454 $ 4,824,546 $ 7,068,696 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,169,866 2,612,884 4,275,140 (541,765) (1,083,530) (1,625,295) 628,101 1,529,354 2,649,845 Deferred income taxes (418,810) (1,380,631) (1,909,241) (325,352) (273,239) (127,459) (744,162) (1,653,870) (2,036,700) Changes in operating assets and liabilities: Upfront regional developer fees — — — (143,634) (212,945) (376,346) (143,634) (212,945) (376,346) Deferred revenue 329,383 1,757,294 2,410,202 107,955 177,266 340,666 437,338 1,934,560 2,750,868 Other liabilities 235,116 565,779 852,924 88,929 177,859 266,789 324,045 743,638 1,119,713 Net cash provided by operating activities 2,271,448 9,014,529 12,451,587 (1,388,700) (1,388,700) (1,388,700) 882,748 7,625,829 11,062,887 Cash flows from investing activities: Reacquisition and termination of regional developer rights (1,388,700) (1,388,700) (1,388,700) 1,388,700 1,388,700 1,388,700 — — — Net cash used in investing activities (2,340,341) (8,877,659) (11,264,585) 1,388,700 1,388,700 1,388,700 (951,641) (7,488,959) (9,875,885) Decrease in cash (2,812,479) (1,985,284) (827,347) — — — (2,812,479) (1,985,284) (827,347) |
Supplemental Disclosure of No_2
Supplemental Disclosure of Non-cash Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Proceeds from income tax refunds | $ 369,481 | ||
Income taxes paid, net | $ 566,808 | ||
Cash paid for interest | 71,255 | 69,273 | |
Net deferred revenue | 16,629,735 | 15,375,151 | $ 12,655,508 |
Assets and Franchise Agreement | |||
Net deferred revenue | 200,371 | 134,539 | |
Purchase of Property, Plant and Equipment Included in Accounts Payable | |||
Capital expenditures incurred but not yet paid | 442,756 | 158,293 | |
Purchase of Property, Plant and Equipment Included in Accrued Expenses | |||
Capital expenditures incurred but not yet paid | $ 133,969 | $ 152,501 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Clinics in Operation Under Franchise Agreements or Company-Owned or Managed (Details) - clinic | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information, Franchised Clinics, Company-Owned Or Managed Clinics, Activity [Roll Forward] | ||
Clinics open at beginning of period | 706 | |
Clinics in operation at the end of the period | 838 | 706 |
Clinic licenses sold but not yet developed | 197 | 245 |
Executed letters of intent for future clinic licenses | 38 | 38 |
Franchised Clinics | ||
Product Information, Franchised Clinics, Company-Owned Or Managed Clinics, Activity [Roll Forward] | ||
Clinics open at beginning of period | 610 | 515 |
Opened during the period | 121 | 110 |
Acquired during the period | 2 | 0 |
Sold during the period | (16) | (12) |
Closed during the period | (5) | (3) |
Clinics in operation at the end of the period | 712 | 610 |
Company-Owned or Managed Clinics | ||
Product Information, Franchised Clinics, Company-Owned Or Managed Clinics, Activity [Roll Forward] | ||
Clinics open at beginning of period | 96 | 64 |
Opened during the period | 16 | 20 |
Acquired during the period | 16 | 12 |
Sold during the period | (2) | 0 |
Closed during the period | 0 | 0 |
Clinics in operation at the end of the period | 126 | 96 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) clinic | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) clinic | Jun. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) option corporation | Dec. 31, 2021 USD ($) | Oct. 31, 2022 clinic | Dec. 31, 2020 USD ($) | |
Product Information [Line Items] | ||||||||||||||
Number of agreements with PCs | corporation | 3 | |||||||||||||
Total revenues | $ 26,449,819 | $ 24,887,365 | $ 22,236,751 | $ 20,781,970 | $ 20,004,364 | $ 17,330,009 | $ 47,124,116 | $ 37,334,372 | $ 73,573,933 | $ 58,116,342 | $ 101,252,310 | $ 80,011,013 | ||
Deferred franchise fee revenue, current portion | $ 2,410,951 | $ 2,393,993 | $ 2,408,266 | $ 2,405,300 | $ 2,347,990 | $ 2,229,101 | $ 2,393,993 | $ 2,347,990 | $ 2,410,951 | $ 2,405,300 | 2,468,601 | 2,421,721 | ||
Payroll liabilities attributable to VIEs | 2,030,510 | 3,906,317 | ||||||||||||
Cash equivalents | 0 | 0 | ||||||||||||
Allowance for doubtful accounts | $ 0 | 0 | ||||||||||||
Number of lease renewal options | option | 1 | |||||||||||||
Impairments of goodwill | $ 0 | 0 | ||||||||||||
Operating lease right-of-use asset | 20,587,199 | 18,425,914 | ||||||||||||
Operating lease impairment | $ 250,000 | 100,000 | ||||||||||||
Monthly marketing fee | 2% | |||||||||||||
Royalties percentage | 7% | |||||||||||||
Franchise agreement term | 10 years | |||||||||||||
Royalty sales generated by franchises percentage | 3% | |||||||||||||
Advertising expense | $ 5,163,381 | 4,116,740 | ||||||||||||
Uncertain tax positions | $ 1,314,351 | $ 1,314,351 | $ 729,837 | |||||||||||
Forecasted turnover percentage | 5% | |||||||||||||
Company matching contribution (maximum) | 4% | 4% | ||||||||||||
Employer contributions | $ 478,277 | $ 346,561 | ||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Number of clinics sold | clinic | 2 | 2 | ||||||||||||
Property and equipment, net | $ 288,192 | $ 288,192 | ||||||||||||
Operating lease right-of-use asset | 359,807 | 359,807 | ||||||||||||
Operating lease liability, current and non-current | 428,593 | 428,593 | ||||||||||||
Deferred revenue from company clinics | $ 54,351 | $ 54,351 | ||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Sale Of Company-Managed Clinics | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Number of clinics sold | clinic | 2 | |||||||||||||
Valuation allowance to adjust carrying value to fair value | $ 79,400 | |||||||||||||
NORTH CAROLINA | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Number of agreements with PCs | corporation | 1 | |||||||||||||
Reported Value Measurement | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Operating lease right-of-use asset | $ 250,000 | 500,000 | ||||||||||||
Estimate of Fair Value Measurement | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Operating lease right-of-use asset | $ 0 | 400,000 | ||||||||||||
Minimum | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Useful life, property and equipment | 3 years | |||||||||||||
Minimum | Computer Software | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Intangible assets, useful life | 3 years | |||||||||||||
Minimum | Reacquired franchise rights | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Intangible assets, useful life | 1 year | |||||||||||||
Minimum | Customer relationships | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Intangible assets, useful life | 2 years | |||||||||||||
Maximum | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Useful life, property and equipment | 10 years | |||||||||||||
Maximum | Computer Software | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Intangible assets, useful life | 5 years | |||||||||||||
Maximum | Reacquired franchise rights | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Intangible assets, useful life | 9 years | |||||||||||||
Maximum | Customer relationships | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Intangible assets, useful life | 4 years | |||||||||||||
Variable Interest Entity, Primary Beneficiary | ||||||||||||||
Product Information [Line Items] | ||||||||||||||
Total revenues | $ 34,800,000 | 28,600,000 | ||||||||||||
Payroll and related expenses | 14,000,000 | 8,500,000 | ||||||||||||
Deferred franchise fee revenue, current portion | 4,700,000 | 3,500,000 | ||||||||||||
Payroll liabilities attributable to VIEs | $ 600,000 | $ 400,000 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||||||||||
Net income (as restated) | $ 626,705 | $ 7,565,047 | ||||||||||
Weighted average common shares outstanding - basic (in shares) | 14,488,314 | 14,319,448 | ||||||||||
Effect of dilutive securities: | ||||||||||||
Unvested restricted stock and stock options (in shares) | 379,779 | 616,129 | ||||||||||
Weighted average common shares outstanding - diluted (in shares) | 14,868,093 | 14,935,577 | ||||||||||
Basic earnings per share (in dollars per share) | $ 0.05 | $ (0.06) | $ 0 | $ 0.16 | $ 0.22 | $ 0.12 | $ (0.06) | $ 0.34 | $ (0.01) | $ 0.49 | $ 0.04 | $ 0.53 |
Diluted earnings per share (in dollars per share) | $ 0.05 | $ (0.06) | $ 0 | $ 0.15 | $ 0.21 | $ 0.12 | $ (0.06) | $ 0.32 | $ (0.01) | $ 0.47 | $ 0.04 | $ 0.51 |
Unvested restricted stock | ||||||||||||
Effect of dilutive securities: | ||||||||||||
Potentially dilutive securities excluded from calculation of diluted net income per common share (in shares) | 0 | 58 | ||||||||||
Stock options | ||||||||||||
Effect of dilutive securities: | ||||||||||||
Potentially dilutive securities excluded from calculation of diluted net income per common share (in shares) | 40,349 | 4,658 |
Revenue Disclosures - Disaggreg
Revenue Disclosures - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||||||||||
Total revenues | $ 26,449,819 | $ 24,887,365 | $ 22,236,751 | $ 20,781,970 | $ 20,004,364 | $ 17,330,009 | $ 47,124,116 | $ 37,334,372 | $ 73,573,933 | $ 58,116,342 | $ 101,252,310 | $ 80,011,013 |
Revenue recognized at a point in time | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Total revenues | 94,520,246 | 73,968,060 | ||||||||||
Revenue recognized over time | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Total revenues | $ 6,732,064 | $ 6,042,953 |
Revenue Disclosures - Changes i
Revenue Disclosures - Changes in Contract Assets and Contract Liabilities (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) state | Dec. 31, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of states with franchised concepts | state | 39 | |
Deferred Revenue short and long-term | ||
Beginning balance, contract liabilities | $ 15,375,151 | $ 12,655,508 |
Revenue recognized that was included in the contract liability at the beginning of the year | (2,250,471) | (2,619,098) |
Net increase during the year ended | 3,505,055 | 5,338,741 |
Ending balance, contract liabilities | 16,629,735 | 15,375,151 |
Deferred Franchise and Development Costs short and long-term | ||
Balance, contract assets | 6,500,007 | 5,238,307 |
Recognized as cost of revenue during the year | (938,736) | (1,099,892) |
Net increase during the period | 1,200,467 | 2,361,592 |
Balance, contract assets | $ 6,761,738 | $ 6,500,007 |
Revenue Disclosures - Revenue R
Revenue Disclosures - Revenue Related to Performance Obligations - Maturity (Details) | Dec. 31, 2022 USD ($) |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 16,629,735 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 2,468,601 |
Revenue expected to be recognized, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 2,354,521 |
Revenue expected to be recognized, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 2,208,462 |
Revenue expected to be recognized, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 2,112,532 |
Revenue expected to be recognized, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 2,033,031 |
Revenue expected to be recognized, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Disaggregation of Revenue [Line Items] | |
Revenue expected to be recognized, amount | $ 5,452,588 |
Revenue expected to be recognized, period |
Restatement of Previously Iss_3
Restatement of Previously Issued Annual Consolidated Financial Statements for the Fiscal Years Ended December 31, 2022 and December 31, 2021 (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ASSETS | |||||||||||||
Intangible assets, net | $ 8,037,766 | $ 6,758,117 | $ 4,277,030 | $ 4,047,631 | $ 4,402,271 | $ 1,128,616 | $ 6,758,117 | $ 4,402,271 | $ 8,037,766 | $ 4,047,631 | $ 10,928,295 | $ 4,712,763 | |
Deferred tax assets | 12,448,558 | 12,318,882 | 11,698,428 | 11,745,342 | 11,362,512 | 10,452,804 | 12,318,882 | 11,362,512 | 12,448,558 | 11,745,342 | 11,928,152 | 11,486,799 | |
Total assets | 89,499,985 | 87,081,844 | 87,002,556 | 81,707,256 | 78,477,514 | 66,830,719 | 87,081,844 | 78,477,514 | 89,499,985 | 81,707,256 | 93,490,377 | 87,061,747 | |
Current liabilities: | |||||||||||||
Deferred franchise and regional development fee revenue, current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Deferred franchise fee revenue, current portion | 2,410,951 | 2,393,993 | 2,408,266 | 2,405,300 | 2,347,990 | 2,229,101 | 2,393,993 | 2,347,990 | 2,410,951 | 2,405,300 | 2,468,601 | 2,421,721 | |
Upfront regional developer fees, current portion | 564,042 | 587,541 | 722,590 | 793,450 | 814,720 | 816,767 | 587,541 | 814,720 | 564,042 | 793,450 | 487,250 | 770,171 | |
Other current liabilities | 596,033 | 607,272 | 565,761 | 404,901 | 551,035 | 707,763 | 607,272 | 551,035 | 596,033 | 404,901 | 597,294 | 539,500 | |
Total current liabilities | 21,711,239 | 20,287,832 | 20,648,558 | 20,934,744 | 21,778,714 | 17,414,714 | 20,287,832 | 21,778,714 | 21,711,239 | 20,934,744 | 23,217,017 | 21,438,399 | |
Deferred franchise and regional development fee revenue, net of current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Deferred franchise fee revenue, net of current portion | 13,870,401 | 13,584,091 | 13,154,047 | 12,671,068 | 11,887,275 | 10,672,244 | 13,584,091 | 11,887,275 | 13,870,401 | 12,671,068 | 14,161,134 | 12,953,430 | |
Upfront regional developer fees, net of current portion | 1,733,779 | 1,863,463 | 2,256,089 | 2,678,810 | 2,820,941 | 2,888,205 | 1,863,463 | 2,820,941 | 1,733,779 | 2,678,810 | 1,500,278 | 2,505,491 | |
Other liabilities | 1,189,837 | 1,091,795 | 993,753 | 806,782 | 717,851 | 628,920 | 1,091,795 | 717,851 | 1,189,837 | 806,782 | 1,287,879 | 895,711 | |
Liabilities | 58,002,065 | 56,865,986 | 56,319,071 | 52,162,717 | 51,602,471 | 43,965,711 | 56,865,986 | 51,602,471 | 58,002,065 | 52,162,717 | 60,902,534 | 56,753,063 | |
Stockholders' equity: | |||||||||||||
Accumulated deficit | (12,916,636) | (13,647,733) | (12,775,865) | (13,301,339) | (15,520,588) | (18,605,272) | (13,647,733) | (15,520,588) | (12,916,636) | (13,301,339) | (12,153,380) | (12,780,085) | |
Total The Joint Corp. stockholders' equity | 31,472,920 | 30,190,858 | 30,658,485 | 29,519,539 | 26,874,943 | 22,864,908 | 30,190,858 | 26,874,943 | 31,472,920 | 29,519,539 | 32,562,843 | 30,283,684 | |
Total equity | 31,497,920 | 30,215,858 | 30,683,485 | 29,544,539 | 26,875,043 | 22,865,008 | 30,215,858 | 26,875,043 | 31,497,920 | 29,544,539 | 32,587,843 | 30,308,684 | $ 20,876,032 |
Total liabilities and stockholders' equity | 89,499,985 | 87,081,844 | 87,002,556 | 81,707,256 | 78,477,514 | 66,830,719 | 87,081,844 | 78,477,514 | 89,499,985 | 81,707,256 | 93,490,377 | 87,061,747 | |
Revenues: | |||||||||||||
Total revenues | 26,449,819 | 24,887,365 | 22,236,751 | 20,781,970 | 20,004,364 | 17,330,009 | 47,124,116 | 37,334,372 | 73,573,933 | 58,116,342 | 101,252,310 | 80,011,013 | |
Cost of revenues: | |||||||||||||
Total cost of revenues | 2,337,095 | 2,257,092 | 2,110,984 | 2,090,471 | 1,824,104 | 1,547,361 | 4,368,076 | 3,371,464 | 6,705,169 | 5,461,935 | 9,171,063 | 7,665,138 | |
Depreciation and amortization | 1,779,924 | 1,461,870 | 1,336,656 | 1,120,491 | 901,253 | 628,101 | 2,798,527 | 1,529,354 | 4,578,450 | 2,649,845 | 6,646,622 | 3,921,887 | |
General and administrative expenses | 17,796,806 | 18,570,301 | 15,533,426 | 12,822,454 | 11,624,567 | 11,450,204 | 34,103,726 | 23,074,314 | 51,900,533 | 35,896,767 | 70,233,447 | 50,846,818 | |
Total selling, general and administrative expenses | 23,116,017 | 23,871,895 | 20,157,570 | 16,824,520 | 15,658,535 | 14,567,584 | 44,029,465 | 30,225,711 | 67,145,483 | 47,050,229 | 90,842,778 | 66,193,121 | |
Income from operations | 732,316 | (1,330,466) | (38,709) | 1,870,519 | 2,565,985 | 1,150,297 | (1,369,174) | 3,716,689 | (636,859) | 5,587,211 | 828,254 | 6,125,965 | |
Income before income tax expense (benefit) | 707,081 | (1,349,752) | (54,856) | 1,854,380 | 2,549,612 | 1,128,760 | (1,404,608) | 3,678,780 | (697,527) | 5,533,161 | 695,153 | 6,056,087 | |
Income tax expense (benefit) | (24,015) | (477,885) | (59,076) | (389,769) | (535,072) | (610,694) | (536,960) | (1,145,766) | (560,976) | (1,535,535) | 68,448 | (1,508,960) | |
Net income (as restated) | $ 731,096 | $ (871,867) | $ 4,220 | $ 2,244,149 | $ 3,084,684 | $ 1,739,454 | $ (867,648) | $ 4,824,546 | $ (136,551) | $ 7,068,696 | $ 626,705 | $ 7,565,047 | |
Earnings per share: | |||||||||||||
Basic earnings per share (in dollars per share) | $ 0.05 | $ (0.06) | $ 0 | $ 0.16 | $ 0.22 | $ 0.12 | $ (0.06) | $ 0.34 | $ (0.01) | $ 0.49 | $ 0.04 | $ 0.53 | |
Diluted earnings per share (in dollars per share) | $ 0.05 | $ (0.06) | $ 0 | $ 0.15 | $ 0.21 | $ 0.12 | $ (0.06) | $ 0.32 | $ (0.01) | $ 0.47 | $ 0.04 | $ 0.51 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | $ 31,497,920 | $ 30,215,858 | $ 30,683,485 | $ 29,544,539 | $ 26,875,043 | $ 22,865,008 | $ 30,215,858 | $ 26,875,043 | $ 31,497,920 | $ 29,544,539 | $ 32,587,843 | $ 30,308,684 | 20,876,032 |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 731,096 | (871,867) | 4,220 | 2,244,149 | 3,084,684 | 1,739,454 | (867,648) | 4,824,546 | (136,551) | 7,068,696 | 626,705 | 7,565,047 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 1,779,924 | 1,461,870 | 1,336,656 | 1,120,491 | 901,253 | 628,101 | 2,798,527 | 1,529,354 | 4,578,450 | 2,649,845 | 6,646,622 | 3,921,887 | |
Deferred income taxes | (441,353) | (1,778,157) | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Upfront regional developer fees | (296,983) | (143,634) | (824,658) | (212,945) | (977,841) | (376,346) | (1,288,134) | (572,944) | |||||
Deferred revenue | 498,273 | 437,338 | 864,213 | 1,934,560 | 1,161,393 | 2,750,868 | 2,889,139 | 4,162,209 | |||||
Other liabilities | 402,715 | 324,045 | 649,435 | 743,638 | 728,449 | 1,119,713 | 900,151 | 1,415,227 | |||||
Net cash provided by operating activities | 197,878 | 882,748 | (1,184,840) | 7,625,829 | 3,032,415 | 11,062,887 | 8,209,584 | 13,844,080 | |||||
Cash flows from investing activities: | |||||||||||||
Reacquisition and termination of regional developer rights | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Net cash used in investing activities | (1,289,943) | (951,641) | (8,764,961) | (7,488,959) | (12,288,929) | (9,875,885) | (17,900,115) | (12,754,669) | |||||
Decrease in cash | (1,066,427) | (2,812,479) | (9,876,748) | (1,985,284) | (8,944,196) | (827,347) | (9,361,921) | (907,291) | |||||
Accumulated Deficit | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (12,916,636) | (13,647,733) | (12,775,865) | (13,301,339) | (15,520,588) | (18,605,272) | (13,647,733) | (15,520,588) | (12,916,636) | (13,301,339) | (12,153,380) | (12,780,085) | (20,345,132) |
Cost of revenues: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (12,916,636) | (13,647,733) | (12,775,865) | (13,301,339) | (15,520,588) | (18,605,272) | (13,647,733) | (15,520,588) | (12,916,636) | (13,301,339) | (12,153,380) | (12,780,085) | (20,345,132) |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Total The Joint Corp. stockholder's equity | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | 31,472,920 | 30,190,858 | 30,658,485 | 29,519,539 | 26,874,943 | 22,864,908 | 30,190,858 | 26,874,943 | 31,472,920 | 29,519,539 | 32,562,843 | 30,283,684 | 20,875,932 |
Cost of revenues: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | 31,472,920 | 30,190,858 | 30,658,485 | 29,519,539 | 26,874,943 | 22,864,908 | 30,190,858 | 26,874,943 | 31,472,920 | 29,519,539 | 32,562,843 | 30,283,684 | 20,875,932 |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Regional developer fees | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Franchise | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 2,441,325 | 2,659,097 | |||||||||||
Cost of revenues: | |||||||||||||
Franchise and regional developer cost of revenues | 1,988,764 | 1,904,936 | 1,801,026 | 1,698,223 | 1,572,399 | 1,406,616 | 3,705,961 | 2,979,014 | 5,694,723 | 4,677,237 | 7,803,404 | 6,559,486 | |
As Previously Reported | |||||||||||||
ASSETS | |||||||||||||
Intangible assets, net | 10,162,506 | 9,114,701 | 4,829,941 | 5,280,024 | 6,176,429 | 3,444,538 | 9,114,701 | 6,176,429 | 10,162,506 | 5,280,024 | 12,867,529 | 5,403,390 | |
Deferred tax assets | 9,115,231 | 9,116,248 | 9,205,410 | 9,850,676 | 9,322,066 | 8,360,245 | 9,116,248 | 9,322,066 | 9,115,231 | 9,850,676 | 8,441,713 | 9,188,634 | |
Total assets | 88,291,398 | 86,235,794 | 85,062,449 | 81,044,983 | 78,211,226 | 67,054,083 | 86,235,794 | 78,211,226 | 88,291,398 | 81,044,983 | 91,943,172 | 85,454,209 | |
Current liabilities: | |||||||||||||
Deferred franchise and regional development fee revenue, current portion | 2,974,993 | 2,981,534 | 3,130,856 | 3,198,750 | 3,162,710 | 3,045,868 | 2,981,534 | 3,162,710 | 2,974,993 | 3,198,750 | 2,955,851 | 3,191,892 | |
Deferred franchise fee revenue, current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Upfront regional developer fees, current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Other current liabilities | 522,500 | 558,250 | 541,250 | 404,901 | 551,035 | 707,763 | 558,250 | 551,035 | 522,500 | 404,901 | 499,250 | 539,500 | |
Total current liabilities | 21,637,706 | 20,238,810 | 20,624,047 | 20,934,744 | 21,778,714 | 17,414,714 | 20,238,810 | 21,778,714 | 21,637,706 | 20,934,744 | 23,118,973 | 21,438,399 | |
Deferred franchise and regional development fee revenue, net of current portion | 15,604,180 | 15,447,554 | 15,410,136 | 15,349,878 | 14,708,216 | 13,560,449 | 15,447,554 | 14,708,216 | 15,604,180 | 15,349,878 | 15,661,412 | 15,458,921 | |
Deferred franchise fee revenue, net of current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Upfront regional developer fees, net of current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Other liabilities | 27,230 | 27,230 | 27,230 | 27,231 | 27,230 | 27,230 | 27,230 | 27,230 | 27,230 | 27,231 | 27,230 | 27,230 | |
Liabilities | 56,765,925 | 55,752,399 | 55,328,037 | 51,383,166 | 50,911,850 | 43,364,021 | 55,752,399 | 50,911,850 | 56,765,925 | 51,383,166 | 59,543,841 | 55,884,582 | |
Stockholders' equity: | |||||||||||||
Accumulated deficit | (12,889,083) | (13,380,196) | (13,724,938) | (13,184,061) | (15,096,255) | (17,780,218) | (13,380,196) | (15,096,255) | (12,889,083) | (13,184,061) | (12,341,892) | (13,519,142) | |
Total The Joint Corp. stockholders' equity | 31,500,473 | 30,458,395 | 29,709,412 | 29,636,817 | 27,299,276 | 23,689,962 | 30,458,395 | 27,299,276 | 31,500,473 | 29,636,817 | 32,374,331 | 29,544,627 | |
Total equity | 31,525,473 | 30,483,395 | 29,734,412 | 29,661,817 | 27,299,376 | 23,690,062 | 30,483,395 | 27,299,376 | 31,525,473 | 29,661,817 | 32,399,331 | 29,569,627 | 21,126,252 |
Total liabilities and stockholders' equity | 88,291,398 | 86,235,794 | 85,062,449 | 81,044,983 | 78,211,226 | 67,054,083 | 86,235,794 | 78,211,226 | 88,291,398 | 81,044,983 | 91,943,172 | 85,454,209 | |
Revenues: | |||||||||||||
Total revenues | 26,603,000 | 25,057,318 | 22,438,538 | 20,991,621 | 20,218,798 | 17,547,965 | 47,495,856 | 37,766,762 | 74,098,856 | 58,758,383 | 101,911,409 | 80,859,653 | |
Cost of revenues: | |||||||||||||
Total cost of revenues | 2,490,276 | 2,427,045 | 2,312,771 | 2,300,122 | 2,038,538 | 1,765,317 | 4,739,816 | 3,803,854 | 7,230,092 | 6,103,976 | 9,830,162 | 8,513,777 | |
Depreciation and amortization | 2,011,768 | 1,700,476 | 1,629,176 | 1,662,255 | 1,443,018 | 1,169,866 | 3,329,653 | 2,612,884 | 5,341,420 | 4,275,140 | 7,643,980 | 6,088,947 | |
General and administrative expenses | 17,796,806 | 16,528,022 | 15,378,623 | 12,812,331 | 11,614,444 | 10,087,060 | 31,906,644 | 21,701,047 | 49,703,451 | 34,513,378 | 67,987,482 | 49,453,305 | |
Total selling, general and administrative expenses | 23,347,861 | 22,068,222 | 20,295,287 | 17,356,161 | 16,190,177 | 13,746,205 | 42,363,509 | 29,935,974 | 65,711,371 | 47,292,135 | 89,594,171 | 66,966,668 | |
Income from operations | 500,472 | 473,207 | (176,426) | 1,338,878 | 2,034,343 | 1,971,676 | 296,782 | 4,006,426 | 797,253 | 5,345,305 | 2,076,861 | 5,352,419 | |
Income before income tax expense (benefit) | 475,237 | 453,921 | (192,573) | 1,322,739 | 2,017,970 | 1,950,139 | 261,348 | 3,968,517 | 736,585 | 5,291,255 | 1,943,760 | 5,282,541 | |
Income tax expense (benefit) | (15,876) | 109,179 | 13,224 | (614,356) | (665,992) | (364,148) | 122,403 | (1,030,140) | 106,527 | (1,644,496) | 766,510 | (1,293,229) | |
Net income (as restated) | $ 491,113 | $ 344,742 | $ (205,797) | $ 1,937,095 | $ 2,683,962 | $ 2,314,287 | $ 138,945 | $ 4,998,657 | $ 630,058 | $ 6,935,751 | $ 1,177,250 | $ 6,575,770 | |
Earnings per share: | |||||||||||||
Basic earnings per share (in dollars per share) | $ 0.03 | $ 0.02 | $ (0.01) | $ 0.13 | $ 0.19 | $ 0.16 | $ 0.01 | $ 0.35 | $ 0.04 | $ 0.49 | $ 0.08 | $ 0.46 | |
Diluted earnings per share (in dollars per share) | $ 0.03 | $ 0.02 | $ (0.01) | $ 0.13 | $ 0.18 | $ 0.16 | $ 0.01 | $ 0.34 | $ 0.04 | $ 0.46 | $ 0.08 | $ 0.44 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | $ 31,525,473 | $ 30,483,395 | $ 29,734,412 | $ 29,661,817 | $ 27,299,376 | $ 23,690,062 | $ 30,483,395 | $ 27,299,376 | $ 31,525,473 | $ 29,661,817 | $ 32,399,331 | $ 29,569,627 | 21,126,252 |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 491,113 | 344,742 | (205,797) | 1,937,095 | 2,683,962 | 2,314,287 | 138,945 | 4,998,657 | 630,058 | 6,935,751 | 1,177,250 | 6,575,770 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 2,011,768 | 1,700,476 | 1,629,176 | 1,662,255 | 1,443,018 | 1,169,866 | 3,329,653 | 2,612,884 | 5,341,420 | 4,275,140 | 7,643,980 | 6,088,947 | |
Deferred income taxes | 746,921 | (1,247,199) | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Upfront regional developer fees | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Deferred revenue | 296,487 | 329,383 | 492,473 | 1,757,294 | 636,470 | 2,410,202 | 2,230,041 | 3,624,944 | |||||
Other liabilities | 280,162 | 235,116 | 404,329 | 565,779 | 360,790 | 852,924 | 409,938 | 1,059,507 | |||||
Net cash provided by operating activities | 447,878 | 2,271,448 | 1,465,160 | 9,014,529 | 5,682,415 | 12,451,587 | 11,084,584 | 15,232,780 | |||||
Cash flows from investing activities: | |||||||||||||
Reacquisition and termination of regional developer rights | (250,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,875,000) | (1,388,700) | |||||
Net cash used in investing activities | (1,539,943) | (2,340,341) | (11,414,961) | (8,877,659) | (14,938,929) | (11,264,585) | (20,775,115) | (14,143,369) | |||||
Decrease in cash | (1,066,427) | (2,812,479) | (9,876,748) | (1,985,284) | (8,944,196) | (827,347) | (9,361,921) | (907,291) | |||||
As Previously Reported | Accumulated Deficit | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (12,889,083) | (13,380,196) | (13,724,938) | (13,184,061) | (15,096,255) | (17,780,218) | (13,380,196) | (15,096,255) | (12,889,083) | (13,184,061) | (12,341,892) | (13,519,142) | (20,094,912) |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (12,889,083) | (13,380,196) | (13,724,938) | (13,184,061) | (15,096,255) | (17,780,218) | (13,380,196) | (15,096,255) | (12,889,083) | (13,184,061) | (12,341,892) | (13,519,142) | (20,094,912) |
As Previously Reported | Total The Joint Corp. stockholder's equity | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | 31,500,473 | 30,458,395 | 29,709,412 | 29,636,817 | 27,299,276 | 23,689,962 | 30,458,395 | 27,299,276 | 31,500,473 | 29,636,817 | 32,374,331 | 29,544,627 | 21,126,152 |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | 31,500,473 | 30,458,395 | 29,709,412 | 29,636,817 | 27,299,276 | 23,689,962 | 30,458,395 | 27,299,276 | 31,500,473 | 29,636,817 | 32,374,331 | 29,544,627 | 21,126,152 |
As Previously Reported | Regional developer fees | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 153,181 | 169,953 | 201,787 | 209,651 | 214,434 | 217,956 | 371,740 | 432,390 | 524,923 | 642,041 | 659,099 | 848,640 | |
As Previously Reported | Franchise | |||||||||||||
Cost of revenues: | |||||||||||||
Franchise and regional developer cost of revenues | 2,141,945 | 2,074,889 | 2,002,813 | 1,907,874 | 1,786,833 | 1,624,572 | 4,077,701 | 3,411,404 | 6,219,646 | 5,319,278 | 8,462,503 | 7,408,125 | |
Adjustments | |||||||||||||
ASSETS | |||||||||||||
Intangible assets, net | (2,124,740) | (2,356,584) | (552,911) | (1,232,393) | (1,774,158) | (2,315,922) | (2,356,584) | (1,774,158) | (2,124,740) | (1,232,393) | (1,939,234) | (690,627) | |
Deferred tax assets | 3,333,327 | 3,202,634 | 2,493,018 | 1,894,666 | 2,040,446 | 2,092,559 | 3,202,634 | 2,040,446 | 3,333,327 | 1,894,666 | 3,486,439 | 2,298,165 | |
Total assets | 1,208,587 | 846,050 | 1,940,107 | 662,273 | 266,288 | (223,364) | 846,050 | 266,288 | 1,208,587 | 662,273 | 1,547,205 | 1,607,538 | |
Current liabilities: | |||||||||||||
Deferred franchise and regional development fee revenue, current portion | (2,974,993) | (2,981,534) | (3,130,856) | (3,198,750) | (3,162,710) | (3,045,868) | (2,981,534) | (3,162,710) | (2,974,993) | (3,198,750) | (2,955,851) | (3,191,892) | |
Deferred franchise fee revenue, current portion | 2,410,951 | 2,393,993 | 2,408,266 | 2,405,300 | 2,347,990 | 2,229,101 | 2,393,993 | 2,347,990 | 2,410,951 | 2,405,300 | 2,468,601 | 2,421,721 | |
Upfront regional developer fees, current portion | 564,042 | 587,541 | 722,590 | 793,450 | 814,720 | 816,767 | 587,541 | 814,720 | 564,042 | 793,450 | 487,250 | 770,171 | |
Other current liabilities | 73,533 | 49,022 | 24,511 | 0 | 0 | 0 | 49,022 | 0 | 73,533 | 0 | 98,044 | 0 | |
Total current liabilities | 73,533 | 49,022 | 24,511 | 0 | 0 | 0 | 49,022 | 0 | 73,533 | 0 | 98,044 | 0 | |
Deferred franchise and regional development fee revenue, net of current portion | (15,604,180) | (15,447,554) | (15,410,136) | (15,349,878) | (14,708,216) | (13,560,449) | (15,447,554) | (14,708,216) | (15,604,180) | (15,349,878) | (15,661,412) | (15,458,921) | |
Deferred franchise fee revenue, net of current portion | 13,870,401 | 13,584,091 | 13,154,047 | 12,671,068 | 11,887,275 | 10,672,244 | 13,584,091 | 11,887,275 | 13,870,401 | 12,671,068 | 14,161,134 | 12,953,430 | |
Upfront regional developer fees, net of current portion | 1,733,779 | 1,863,463 | 2,256,089 | 2,678,810 | 2,820,941 | 2,888,205 | 1,863,463 | 2,820,941 | 1,733,779 | 2,678,810 | 1,500,278 | 2,505,491 | |
Other liabilities | 1,162,607 | 1,064,565 | 966,523 | 779,551 | 690,621 | 601,690 | 1,064,565 | 690,621 | 1,162,607 | 779,551 | 1,260,649 | 868,481 | |
Liabilities | 1,236,140 | 1,113,587 | 991,034 | 779,551 | 690,621 | 601,690 | 1,113,587 | 690,621 | 1,236,140 | 779,551 | 1,358,693 | 868,481 | |
Stockholders' equity: | |||||||||||||
Accumulated deficit | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | |
Total The Joint Corp. stockholders' equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | |
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Total liabilities and stockholders' equity | 1,208,587 | 846,050 | 1,940,107 | 662,273 | 266,288 | (223,364) | 846,050 | 266,288 | 1,208,587 | 662,273 | 1,547,205 | 1,607,538 | |
Revenues: | |||||||||||||
Total revenues | (153,181) | (169,953) | (201,787) | (209,651) | (214,434) | (217,956) | (371,740) | (432,390) | (524,923) | (642,041) | (659,099) | (848,640) | |
Cost of revenues: | |||||||||||||
Total cost of revenues | (153,181) | (169,953) | (201,787) | (209,651) | (214,434) | (217,956) | (371,740) | (432,390) | (524,923) | (642,041) | (659,099) | (848,639) | |
Depreciation and amortization | (231,844) | (238,606) | (292,520) | (541,764) | (541,765) | (541,765) | (531,126) | (1,083,530) | (762,970) | (1,625,295) | (997,358) | (2,167,060) | |
General and administrative expenses | 0 | 2,042,279 | 154,803 | 10,123 | 10,123 | 1,363,144 | 2,197,082 | 1,373,267 | 2,197,082 | 1,383,389 | 2,245,965 | 1,393,513 | |
Total selling, general and administrative expenses | (231,844) | 1,803,673 | (137,717) | (531,641) | (531,642) | 821,379 | 1,665,956 | 289,737 | 1,434,112 | (241,906) | 1,248,607 | (773,547) | |
Income from operations | 231,844 | (1,803,673) | 137,717 | 531,641 | 531,642 | (821,379) | (1,665,956) | (289,737) | (1,434,112) | 241,906 | (1,248,607) | 773,546 | |
Income before income tax expense (benefit) | 231,844 | (1,803,673) | 137,717 | 531,641 | 531,642 | (821,379) | (1,665,956) | (289,737) | (1,434,112) | 241,906 | (1,248,607) | 773,546 | |
Income tax expense (benefit) | (8,139) | (587,064) | (72,300) | 224,587 | 130,920 | (246,546) | (659,363) | (115,626) | (667,503) | 108,961 | (698,062) | (215,731) | |
Net income (as restated) | $ 239,983 | $ (1,216,609) | $ 210,017 | $ 307,054 | $ 400,722 | $ (574,833) | $ (1,006,593) | $ (174,111) | $ (766,609) | $ 132,945 | $ (550,545) | $ 989,277 | |
Earnings per share: | |||||||||||||
Basic earnings per share (in dollars per share) | $ 0.02 | $ (0.08) | $ 0.01 | $ 0.03 | $ 0.03 | $ (0.04) | $ (0.07) | $ (0.01) | $ (0.05) | $ 0 | $ (0.04) | $ 0.07 | |
Diluted earnings per share (in dollars per share) | $ 0.02 | $ (0.08) | $ 0.01 | $ 0.02 | $ 0.03 | $ (0.04) | $ (0.07) | $ (0.02) | $ (0.05) | $ 0.01 | $ (0.04) | $ 0.07 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | $ (27,553) | $ (267,537) | $ 949,073 | $ (117,278) | $ (424,333) | $ (825,054) | $ (267,537) | $ (424,333) | $ (27,553) | $ (117,278) | $ 188,512 | $ 739,057 | (250,220) |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 239,983 | (1,216,609) | 210,017 | 307,054 | 400,722 | (574,833) | (1,006,593) | (174,111) | (766,609) | 132,945 | (550,545) | 989,277 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | (231,844) | (238,606) | (292,520) | (541,764) | (541,765) | (541,765) | (531,126) | (1,083,530) | (762,970) | (1,625,295) | (997,358) | (2,167,060) | |
Deferred income taxes | (1,188,274) | (530,958) | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Upfront regional developer fees | (296,983) | (143,634) | (824,658) | (212,945) | (977,841) | (376,346) | (1,288,134) | (572,944) | |||||
Deferred revenue | 201,786 | 107,955 | 371,740 | 177,266 | 524,923 | 340,666 | 659,098 | 537,265 | |||||
Other liabilities | 122,553 | 88,929 | 245,106 | 177,859 | 367,659 | 266,789 | 490,213 | 355,720 | |||||
Net cash provided by operating activities | (250,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,875,000) | (1,388,700) | |||||
Cash flows from investing activities: | |||||||||||||
Reacquisition and termination of regional developer rights | 250,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,875,000 | 1,388,700 | |||||
Net cash used in investing activities | 250,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,875,000 | 1,388,700 | |||||
Decrease in cash | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Adjustments | Accumulated Deficit | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Adjustments | Total The Joint Corp. stockholder's equity | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | $ (250,220) |
Adjustments | Regional developer fees | |||||||||||||
Revenues: | |||||||||||||
Total revenues | (153,181) | (169,953) | (201,787) | (209,651) | (214,434) | (217,956) | (371,740) | (432,390) | (524,923) | (642,041) | (659,099) | (848,640) | |
Adjustments | Franchise | |||||||||||||
Cost of revenues: | |||||||||||||
Franchise and regional developer cost of revenues | $ (153,181) | $ (169,953) | $ (201,787) | $ (209,651) | $ (214,434) | $ (217,956) | $ (371,740) | $ (432,390) | $ (524,923) | $ (642,041) | $ (659,099) | $ (848,639) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | 12 Months Ended | ||||||||||
Dec. 23, 2022 USD ($) clinic franchise | Oct. 24, 2022 USD ($) | Oct. 13, 2022 USD ($) | Jul. 29, 2022 USD ($) franchise | Jul. 05, 2022 USD ($) franchise | May 19, 2022 USD ($) franchise | Nov. 01, 2021 USD ($) franchise | Apr. 01, 2021 USD ($) franchise | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |||||||||||
Net deferred revenue | $ 16,629,735 | $ 15,375,151 | $ 12,655,508 | ||||||||
Reacquired franchise rights | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 1 year | ||||||||||
Reacquired franchise rights | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 9 years | ||||||||||
Customer relationships | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 2 years | ||||||||||
Customer relationships | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 4 years | ||||||||||
AZ Clinics | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of businesses acquired | franchise | 1 | 4 | |||||||||
Purchase price | $ 1,205,667 | $ 5,761,256 | |||||||||
Net deferred revenue | 13,241 | 70,484 | |||||||||
Net purchase consideration | $ 1,192,426 | 5,690,772 | |||||||||
Intangible assets | 3,689,100 | ||||||||||
AZ Clinics | Reacquired franchise rights | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 2,892,100 | $ 6,100,000 | |||||||||
AZ Clinics | Reacquired franchise rights | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 4 years | ||||||||||
AZ Clinics | Reacquired franchise rights | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 8 years | ||||||||||
AZ Clinics | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 797,000 | 1,700,000 | |||||||||
AZ Clinics | Customer relationships | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 2 years | ||||||||||
AZ Clinics | Customer relationships | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 3 years | ||||||||||
AZ Clinics | Assembled workforce | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 900,000 | ||||||||||
NC Clinics | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of businesses acquired | franchise | 3 | 4 | 6 | ||||||||
Purchase price | $ 1,391,112 | $ 761,384 | $ 1,317,312 | $ 1,272,107 | $ 2,568,028 | ||||||
Net deferred revenue | 9,262 | 5,108 | 31,647 | 46,681 | 58,441 | ||||||
Net purchase consideration | $ 1,381,850 | $ 756,276 | 1,285,665 | 1,225,426 | 2,509,587 | ||||||
Intangible assets | 3,544,456 | 1,092,341 | 2,187,472 | ||||||||
NC Clinics | Reacquired franchise rights | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 2,042,658 | $ 977,244 | $ 1,195,327 | ||||||||
NC Clinics | Reacquired franchise rights | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 2 years | 4 years | 3 years | ||||||||
NC Clinics | Reacquired franchise rights | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 9 years | 9 years | 4 years | ||||||||
NC Clinics | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 909,828 | $ 55,786 | $ 992,145 | ||||||||
Intangible assets, useful life | 2 years | 3 years | |||||||||
NC Clinics | Customer relationships | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 2 years | ||||||||||
NC Clinics | Customer relationships | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 3 years | ||||||||||
NC Clinics | Assembled workforce | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 591,970 | ||||||||||
Intangible assets, useful life | 2 years | ||||||||||
CA clinics | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of businesses acquired | franchise | 6 | ||||||||||
Purchase price | $ 1,965,755 | ||||||||||
Net deferred revenue | 70,628 | ||||||||||
Net purchase consideration | 1,895,127 | ||||||||||
Intangible assets | $ 1,480,359 | ||||||||||
Number of undeveloped clinics | clinic | 1 | ||||||||||
CA clinics | Reacquired franchise rights | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 1,151,272 | ||||||||||
CA clinics | Reacquired franchise rights | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 6 years | ||||||||||
CA clinics | Reacquired franchise rights | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 7 years | ||||||||||
CA clinics | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 20,531 | ||||||||||
Intangible assets, useful life | 2 years | ||||||||||
CA clinics | Assembled workforce | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 308,556 | ||||||||||
Intangible assets, useful life | 2 years | ||||||||||
2021 AZ Clinics Purchase | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of businesses acquired | franchise | 2 | ||||||||||
Purchase price | $ 1,925,000 | ||||||||||
Net deferred revenue | 29,417 | ||||||||||
Net purchase consideration | 1,895,583 | ||||||||||
Intangible assets | 1,579,500 | ||||||||||
2021 AZ Clinics Purchase | Reacquired franchise rights | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 1,376,400 | ||||||||||
2021 AZ Clinics Purchase | Reacquired franchise rights | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 8 years | ||||||||||
2021 AZ Clinics Purchase | Reacquired franchise rights | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets, useful life | 9 years | ||||||||||
2021 AZ Clinics Purchase | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 203,100 | ||||||||||
Intangible assets, useful life | 3 years |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) | Dec. 31, 2022 | Dec. 23, 2022 | Jul. 29, 2022 | May 19, 2022 | Dec. 31, 2021 | Nov. 01, 2021 | Apr. 01, 2021 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 8,493,407 | $ 5,085,203 | |||||
AZ Clinics | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment | $ 241,511 | ||||||
Operating lease right-of-use asset | 912,937 | ||||||
Intangible assets | 3,689,100 | ||||||
Total assets acquired | 4,843,548 | ||||||
Goodwill | 3,408,205 | ||||||
Deferred revenue | (455,317) | ||||||
Operating lease liability - current portion | (128,516) | ||||||
Operating lease liability - net of current portion | (784,722) | ||||||
Net purchase consideration | $ 6,883,198 | ||||||
NC Clinics | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment | $ 198,236 | $ 252,631 | $ 524,046 | ||||
Operating lease right-of-use asset | 521,222 | 1,341,482 | 865,813 | ||||
Intangible assets | 3,544,456 | 1,092,341 | 2,187,472 | ||||
Total assets acquired | 4,263,914 | 2,686,454 | 3,577,331 | ||||
Deferred revenue | (326,332) | (144,383) | (244,998) | ||||
Operating lease liability - current portion | (146,255) | (135,784) | (185,181) | ||||
Operating lease liability - net of current portion | (367,536) | (1,180,861) | (637,565) | ||||
Net purchase consideration | $ 3,423,791 | $ 1,225,426 | 2,509,587 | ||||
CA clinics | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment | $ 677,518 | ||||||
Tenant improvement allowance | 55,790 | ||||||
Operating lease right-of-use asset | 1,520,353 | ||||||
Intangible assets | 1,480,359 | ||||||
Total assets acquired | 3,734,020 | ||||||
Deferred revenue | (215,555) | ||||||
Operating lease liability - current portion | (200,877) | ||||||
Operating lease liability - net of current portion | (1,422,461) | ||||||
Net purchase consideration | $ 1,895,127 | ||||||
2021 AZ Clinics Purchase | |||||||
Business Acquisition [Line Items] | |||||||
Property and equipment | 4,928 | ||||||
Operating lease right-of-use asset | 651,197 | ||||||
Intangible assets | 1,579,500 | ||||||
Total assets acquired | 2,235,625 | ||||||
Goodwill | 459,599 | ||||||
Deferred revenue | (123,976) | ||||||
Operating lease liability - current portion | (49,303) | ||||||
Operating lease liability - net of current portion | (626,362) | ||||||
Net purchase consideration | $ 1,895,583 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Information (Details) - Assets and Franchise Agreement - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Revenues, net | $ 107,022,047 | $ 87,280,590 |
Net (loss) income | 171,315 | $ 6,424,015 |
Revenues, net | 3,351,521 | |
Net income | $ 947,551 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Finance lease assets | $ 151,396 | $ 267,252 |
Property and Equipment, net | 17,475,152 | 14,388,946 |
Construction in progress | 1,104,349 | 1,100,099 |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,207,833 | 3,704,425 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,842,901 | 13,457,765 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,843,758 | 5,044,339 |
Finance lease assets | ||
Property, Plant and Equipment [Line Items] | ||
Finance lease assets | 151,396 | 267,252 |
Property Plant and Equipment, Excluding Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 29,045,888 | 22,473,780 |
Accumulated depreciation and amortization | (12,675,085) | (9,184,932) |
Property and Equipment, net | $ 16,370,803 | $ 13,288,847 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 4,092,669 | $ 2,329,697 |
Amortization of assets | $ 55,572 | $ 85,300 |
Fair Value Consideration (Detai
Fair Value Consideration (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Operating lease right-of-use asset | $ 20,587,199 | $ 18,425,914 |
Operating lease impairment | 250,000 | 100,000 |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Operating lease right-of-use asset | 250,000 | 500,000 |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Operating lease right-of-use asset | $ 0 | $ 400,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | May 19, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 2,498,390 | $ 1,506,881 | |
AZ Clinics | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 3,689,100 | ||
Reacquired franchise rights | AZ Clinics | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 6,100,000 | 2,892,100 | |
Customer relationships | AZ Clinics | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 1,700,000 | $ 797,000 | |
Assembled workforce | AZ Clinics | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 900,000 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Intangible Assets Acquired (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 18,172,096 | $ 9,458,182 |
Accumulated Amortization | 7,243,801 | 4,745,419 |
Net Carrying Value | 10,928,295 | 4,712,763 |
Reacquired franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,881,894 | 6,795,865 |
Accumulated Amortization | 4,755,286 | 3,153,037 |
Net Carrying Value | 8,126,608 | 3,642,828 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,330,365 | 2,603,006 |
Accumulated Amortization | 2,352,500 | 1,587,443 |
Net Carrying Value | 1,977,865 | 1,015,563 |
Assembled workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 959,837 | 59,311 |
Accumulated Amortization | 136,015 | 4,939 |
Net Carrying Value | $ 823,822 | $ 54,372 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Finite-lived Intangible Assets Amortization Expense (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |
All intangible assets | 4 years 9 months 18 days |
Reacquired franchise rights | |
Finite-Lived Intangible Assets [Line Items] | |
All intangible assets | 5 years 9 months 18 days |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
All intangible assets | 2 years 7 months 6 days |
Assembled workforce | |
Finite-Lived Intangible Assets [Line Items] | |
All intangible assets | 2 years |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Estimated Amortization Expense (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 3,643,736 | |
2024 | 2,578,510 | |
2025 | 1,542,251 | |
2026 | 1,225,152 | |
2027 | 670,120 | |
Thereafter | 1,268,526 | |
Net Carrying Value | $ 10,928,295 | $ 4,712,763 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Schedule of Carrying Amount of Goodwill (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning | $ 5,140,197 |
Accumulated impairment losses, beginning | (54,994) |
Goodwill, net, beginning | 5,085,203 |
2022 acquisition | 3,408,204 |
Goodwill, gross, ending | 8,548,401 |
Accumulated impairment losses, ending | (54,994) |
Goodwill, net, ending | $ 8,493,407 |
Debt (Details)
Debt (Details) - USD ($) | 12 Months Ended | ||||||
Feb. 28, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 04, 2021 | Apr. 10, 2020 | Apr. 09, 2020 | Feb. 28, 2020 | |
Reclassification | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 2,000,000 | ||||||
Paycheck Protection Program CARES Act | JPMORGAN CHASE BANK N.A. | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 2,700,000 | $ 2,700,000 | |||||
Interest rate | 0.98% | ||||||
Line of Credit | Credit Facilities | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 7,500,000 | ||||||
Additional amount | $ 2,500,000 | 2,500,000 | |||||
Line of Credit | Credit Facilities | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 2,000,000 | 2,000,000 | |||||
Interest rate on funds borrowed under the Revolver | 6.43% | ||||||
Line of Credit | Credit Facilities | Development Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 5,500,000 | 5,500,000 | |||||
Line of Credit | Credit Facilities | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 1,000,000 | $ 1,000,000 | |||||
Line of Credit | 2022 Credit Facility | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Additional amount | 30,000,000 | ||||||
Line of Credit | 2022 Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 20,000,000 | ||||||
Debt issuance costs | $ 52,648 | 76,415 | |||||
Amortization of debt issuance costs | $ 129,118 | $ 60,178 | |||||
Line of Credit | 2022 Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate | 0.10% | ||||||
Line of Credit | 2022 Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate | 1.75% | ||||||
Line of Credit | 2022 Credit Facility | Revolving Credit Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate | 1% | ||||||
Line of Credit | 2022 Credit Facility | Revolving Credit Facility | Federal Reserve Bank Of New York Rate | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate | 0.50% | ||||||
Line of Credit | 2022 Credit Facility | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 5,000,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) installment | Dec. 31, 2021 USD ($) $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Forecasted turnover percentage | 5% | |
Granted, weighted-average grant-date fair value | $ / shares | $ 26.40 | |
Fair value of stock options vested | $ 631,512 | $ 481,404 |
Stock based compensation expense | 1,273,989 | 1,056,015 |
Income tax benefit from exercise of stock options and restricted stock awards | $ 100,000 | 3,300,000 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Contractual term | 10 years | |
Forecasted turnover percentage | 5% | |
Share-based compensation expense | $ 515,279 | 625,291 |
Unrecognized stock-based compensation expense | $ 712,933 | |
Unrecognized stock-based compensation, period of recognition | 1 year 10 months 24 days | |
Unvested restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Share-based compensation expense | $ 758,710 | $ 430,724 |
Unrecognized stock-based compensation expense | $ 1,492,530 | |
Unrecognized stock-based compensation, period of recognition | 2 years 9 months 18 days | |
Number of equal annual installments | installment | 4 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions of Options Granted (Details) - Stock options | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 7 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 57% |
Risk-free rate | 1.27% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free rate | 0.97% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Activity (Details) - Stock options - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding, beginning (in shares) | 595,089 | 835,601 | |
Granted at market price (in shares) | 0 | 48,192 | |
Exercised (in shares) | (43,380) | (260,044) | |
Expired (in shares) | (2,795) | ||
Cancelled (in shares) | (16,991) | (28,660) | |
Outstanding, ending (in shares) | 531,923 | 595,089 | 835,601 |
Exercisable, number of shares (in shares) | 454,315 | ||
Vested and expected to vest (in shares) | 528,981 | ||
Weighted Average Exercise Price | |||
Outstanding, weighted average exercise price, beginning (in dollars per share) | $ 9.72 | $ 6.65 | |
Granted at market price, weighted average exercise price (in dollars per share) | 47.01 | ||
Exercised, weighted average exercise price (in dollars per share) | 8.86 | 5.84 | |
Expired, weighted average exercise price (in dollars per share) | 28.45 | ||
Cancelled, weighted average exercise price (in dollars per share) | 24.96 | 18.17 | |
Outstanding, weighted average exercise price, ending (in dollars per share) | 9.20 | $ 9.72 | $ 6.65 |
Exercisable, weighted average exercise price (in dollars per share) | 6.43 | ||
Vested and expected to vest , weighted average exercise price (in dollars per share) | $ 9.07 | ||
Weighted Average Remaining Contractual Life | |||
Outstanding, weighted average remaining contractual life (in year) | 4 years 8 months 12 days | 5 years 10 months 24 days | 6 years 7 months 6 days |
Exercisable, weighted average remaining contractual life (in year) | 4 years 3 months 18 days | ||
Vested and expected to vest , weighted average remaining contractual life (in year) | 4 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Outstanding, aggregate intrinsic value | $ 3,797,904 | $ 33,336,794 | $ 16,153,117 |
Exercised, aggregate intrinsic value | 657,058 | $ 15,244,054 | |
Exercisable, aggregate intrinsic value | 3,772,164 | ||
Vested and expected to vest, aggregate intrinsic value | $ 3,797,670 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Unvested restricted stock - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Awards | ||
Non-vested (in shares) | 27,720 | 45,595 |
Granted (in shares) | 68,125 | 10,010 |
Vested (in shares) | (17,240) | (26,143) |
Cancelled (in shares) | (8,293) | (1,742) |
Non-vested (in shares) | 70,312 | 27,720 |
Weighted Average Grant-Date Fair Value per Award | ||
Non-vested (in dollar per share) | $ 28.51 | $ 13.13 |
Granted (in dollars per share) | 29.47 | 58.25 |
Vested (in dollars per share) | 29.13 | 13.61 |
Cancelled (in dollars per share) | 30.51 | 20.63 |
Non-vested (in dollar per share) | $ 29.05 | $ 28.51 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current expense (benefit): | ||||||||||||
Federal | $ 377,281 | $ 241,243 | ||||||||||
State, net of state tax credits | 132,520 | 27,954 | ||||||||||
Total current expense (benefit) | 509,801 | 269,197 | ||||||||||
Deferred expense (benefit): | ||||||||||||
Federal | (295,011) | (1,376,812) | ||||||||||
State | (146,342) | (401,345) | ||||||||||
Total deferred expense (benefit) | $ (211,629) | $ (744,162) | $ (832,083) | $ (1,653,870) | $ (961,759) | $ (2,036,700) | (441,353) | (1,778,157) | ||||
Total income tax expense (benefit) | $ (24,015) | $ (477,885) | $ (59,076) | $ (389,769) | $ (535,072) | $ (610,694) | $ (536,960) | $ (1,145,766) | $ (560,976) | $ (1,535,535) | $ 68,448 | $ (1,508,960) |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Taxes (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets: | ||
Accrued expenses | $ 97,148 | $ 938,916 |
Deferred revenue | 5,338,821 | 4,546,130 |
Lease liability | 6,582,122 | 5,839,233 |
Goodwill - component 2 | 72,033 | 53,946 |
Nonqualified stock options | 339,075 | 255,921 |
Interest expense limitation | 35,031 | 0 |
Net operating loss carryforwards | 5,285,726 | 5,461,650 |
Tax credits | 35,850 | 35,850 |
Intangibles | 3,166,533 | 1,906,947 |
Total deferred income tax assets | 20,952,339 | 19,038,593 |
Deferred income tax liabilities: | ||
Lease right-of-use asset | (5,694,797) | (5,022,052) |
Deferred franchise costs | (100,558) | (122,431) |
Goodwill - component 1 | (537,421) | (405,964) |
Asset basis difference related to property and equipment | (2,545,455) | (1,902,389) |
Restricted stock compensation | (145,956) | (98,958) |
Total deferred income tax liabilities | (9,024,187) | (7,551,794) |
Valuation allowance | ||
Net deferred tax asset | $ 11,928,152 | $ 11,486,799 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | |||
Provision (benefit) | 9.80% | (24.90%) | |
Uncertain tax positions | $ 1,314,351 | $ 1,314,351 | $ 729,837 |
Unrecognized tax benefits that if recognized would affect the annual effective tax rate | 19,433 | 19,433 | |
Interest and penalties associated with tax positions | 0 | 40,491 | |
Accrued interest and penalties | 143,584 | 143,584 | |
Research Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit | 14,229 | ||
California Alternative Minimum Tax Credit | |||
Income Tax Contingency [Line Items] | |||
Tax credit | 21,621 | ||
Domestic Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Net operating losses | 4,500,000 | 4,500,000 | |
Federal net operating loss | 11,100,000 | ||
Federal net operating loss has an indefinite carryforward | 10,500,000 | ||
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Net operating losses | $ 700,000 | $ 900,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Federal Income Tax Rate (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Amount | ||||||||||||
Expected federal tax expense (benefit) | $ 145,982 | $ 1,280,282 | ||||||||||
State tax provision (benefit), net of federal benefit | 41,660 | (332,169) | ||||||||||
Other permanent differences | 15,458 | 72,794 | ||||||||||
Stock compensation | (91,454) | (2,519,083) | ||||||||||
Change in tax rate | (64,756) | 0 | ||||||||||
Other adjustments | 21,558 | (10,784) | ||||||||||
Total income tax expense (benefit) | $ (24,015) | $ (477,885) | $ (59,076) | $ (389,769) | $ (535,072) | $ (610,694) | $ (536,960) | $ (1,145,766) | $ (560,976) | $ (1,535,535) | $ 68,448 | $ (1,508,960) |
Percent | ||||||||||||
Expected federal tax expense (benefit) | 21% | 21% | ||||||||||
State tax provision (benefit), net of federal benefit | 6% | (5.50%) | ||||||||||
Other permanent differences | 2.20% | 1.20% | ||||||||||
Stock compensation | (13.20%) | (41.40%) | ||||||||||
Change in tax rate | (9.30%) | 0% | ||||||||||
Other adjustments | 3.10% | (0.20%) | ||||||||||
Expense (Benefit) | 9.80% | (24.90%) |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Position Rollforward (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balances | $ 1,314,351 | $ 729,837 |
Increases related to tax positions taken during a prior year | 0 | 0 |
Decreases related to tax positions taken during a prior year | 0 | 0 |
Increases related to tax positions taken during a prior year | 0 | 584,514 |
Decreases related to settlements with taxing authorities | 0 | 0 |
Decreases related to expiration of the statute of limitations | 0 | 0 |
Ending balances | $ 1,314,351 | $ 1,314,351 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Expense and Supplemental Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finance lease costs: | ||
Amortization of assets | $ 55,572 | $ 85,300 |
Interest on lease liabilities | 4,516 | 9,012 |
Total finance lease costs | 60,088 | 94,312 |
Operating lease costs | 5,647,185 | 4,590,571 |
Total lease costs | 5,707,273 | 4,684,883 |
Operating Leases: | ||
Operating lease right-of-use asset | 20,587,199 | 18,425,914 |
Operating lease liability, current portion | 5,295,830 | 4,613,843 |
Operating lease liability, net of current portion | 18,672,719 | 16,872,093 |
Total operating lease liability | 23,968,549 | 21,485,936 |
Finance Leases: | ||
Finance lease assets | 151,396 | 267,252 |
Less accumulated amortization | (87,652) | (147,937) |
Property and equipment, net | 63,744 | 119,315 |
Finance lease liability, current portion | 24,433 | 49,855 |
Finance lease liability, net of current portion | 63,507 | 87,939 |
Total finance lease liabilities | $ 87,940 | $ 137,794 |
Weighted average remaining lease term (in years): | ||
Operating leases | 5 years 4 months 24 days | 5 years 4 months 24 days |
Finance lease | 3 years 4 months 24 days | 3 years 7 months 6 days |
Weighted average discount rate: | ||
Operating leases | 4.80% | 4.60% |
Finance leases | 4.30% | 4.80% |
Cash paid for amounts included in measurement of liabilities: | ||
Operating cash flows from operating leases | $ 5,931,114 | $ 4,484,737 |
Operating cash flows from finance leases | 4,516 | 9,012 |
Financing cash flows from finance leases | 49,855 | 80,322 |
Non-cash transactions: ROU assets obtained in exchange for lease liabilities | ||
Operating lease | 7,222,822 | 10,007,188 |
Finance lease | $ 0 | $ 15,140 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Maturities of Lease Liabilities and Obligations (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 6,280,108 | |
2024 | 5,689,672 | |
2025 | 5,084,585 | |
2026 | 3,264,579 | |
2027 | 2,268,960 | |
Thereafter | 4,561,694 | |
Total lease payments | 27,149,598 | |
Less: Imputed interest | (3,181,049) | |
Total lease obligations | 23,968,549 | $ 21,485,936 |
Less: Current obligations | (5,295,830) | (4,613,843) |
Long-term lease obligation | 18,672,719 | 16,872,093 |
Finance Lease | ||
2023 | 27,600 | |
2024 | 27,600 | |
2025 | 27,600 | |
2026 | 11,500 | |
2027 | 0 | |
Thereafter | 0 | |
Total lease payments | 94,300 | |
Less: Imputed interest | (6,360) | |
Total lease obligations | 87,940 | 137,794 |
Less: Current obligations | (24,433) | (49,855) |
Long-term lease obligation | $ 63,507 | $ 87,939 |
Commitments and Contingencies_3
Commitments and Contingencies - Narrative (Details) | Dec. 31, 2022 USD ($) lease |
Lessee, Lease, Description [Line Items] | |
Leases not yet commenced, liability | $ 1,500,000 |
Number of future operating leases committed | lease | 1 |
Guarantor obligations, maximum exposure, undiscounted | $ 247,296 |
Guarantor obligations, remaining exposure, undiscounted | $ 234,696 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of leases not yet commenced | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of leases not yet commenced | 10 years |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 clinic segment | Dec. 31, 2021 clinic | Dec. 31, 2020 clinic | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 2 | ||
Number of stores | 838 | 706 | |
Company-Owned or Managed Clinics | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 126 | 96 | 64 |
Franchised Clinics | |||
Segment Reporting Information [Line Items] | |||
Number of stores | 712 | 610 | 515 |
Segment Reporting - Segment Rep
Segment Reporting - Segment Reporting Financial Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 101,252,310 | $ 80,011,013 | ||||||||||
Depreciation and amortization | 6,646,622 | 3,921,887 | ||||||||||
Income from operations | $ 732,316 | $ (1,330,466) | $ (38,709) | $ 1,870,519 | $ 2,565,985 | $ 1,150,297 | $ (1,369,174) | $ 3,716,689 | $ (636,859) | $ 5,587,211 | 828,254 | 6,125,965 |
Other expense, net | (133,101) | (69,878) | ||||||||||
Income before income tax expense (benefit) | $ 707,081 | $ (1,349,752) | $ (54,856) | $ 1,854,380 | $ 2,549,612 | $ 1,128,760 | $ (1,404,608) | $ 3,678,780 | $ (697,527) | $ 5,533,161 | 695,153 | 6,056,087 |
Segment operating income: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Income from operations | 828,254 | 6,125,965 | ||||||||||
Unallocated corporate | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Income from operations | (16,622,405) | (15,827,588) | ||||||||||
Corporate clinics | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 59,422,294 | 44,348,234 | ||||||||||
Depreciation and amortization | 5,557,494 | 3,279,603 | ||||||||||
Corporate clinics | Segment operating income: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Income from operations | 110,257 | 6,599,932 | ||||||||||
Franchise operations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 41,830,016 | 35,662,779 | ||||||||||
Depreciation and amortization | 744,172 | 334,945 | ||||||||||
Franchise operations | Segment operating income: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Income from operations | 17,340,402 | 15,353,621 | ||||||||||
Corporate administration | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Depreciation and amortization | $ 344,956 | $ 307,339 |
Segment Reporting - Segment R_2
Segment Reporting - Segment Reporting Information, Assets (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 |
Segment Reporting Information [Line Items] | ||||||||
Total assets | $ 93,490,377 | $ 89,499,985 | $ 87,081,844 | $ 87,002,556 | $ 87,061,747 | $ 81,707,256 | $ 78,477,514 | $ 66,830,719 |
Unallocated cash and cash equivalents and restricted cash | 9,745,066 | 19,526,119 | ||||||
Segment operating income: | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total assets | 68,369,112 | 52,626,183 | ||||||
Unallocated cash and cash equivalents and restricted cash | 10,550,417 | 19,912,338 | ||||||
Unallocated property and equipment | 915,216 | 857,176 | ||||||
Other unallocated assets | 13,655,632 | 13,666,050 | ||||||
Corporate clinics | Segment operating income: | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total assets | 56,008,234 | 40,032,271 | ||||||
Franchise operations | Segment operating income: | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total assets | $ 12,360,878 | $ 12,593,912 |
Related _Party_ Transaction (De
Related Party Transaction (Details) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2020 USD ($) franchise | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Director | Franchise Licenses | |||
Related Party Transaction [Line Items] | |||
Number of franchises | franchise | 2 | ||
Director | Franchise Licenses One | |||
Related Party Transaction [Line Items] | |||
Amount of related party transaction | $ 39,900 | ||
Director | Franchise Licenses Two | |||
Related Party Transaction [Line Items] | |||
Amount of related party transaction | 29,900 | ||
Discount per the franchise disclosure document | $ 10,000 | ||
Director | Bandera Partners LLC | Franchise Licenses | |||
Related Party Transaction [Line Items] | |||
Investment, ownership percentage | 5% | 17% | |
Mr. Gramm | |||
Related Party Transaction [Line Items] | |||
Revenue from Related Parties | $ 34,262 | $ 11,046 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited and Restated) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ASSETS | |||||||||||||
Intangible assets, net | $ 8,037,766 | $ 6,758,117 | $ 4,277,030 | $ 4,047,631 | $ 4,402,271 | $ 1,128,616 | $ 6,758,117 | $ 4,402,271 | $ 8,037,766 | $ 4,047,631 | $ 10,928,295 | $ 4,712,763 | |
Deferred tax assets | 12,448,558 | 12,318,882 | 11,698,428 | 11,745,342 | 11,362,512 | 10,452,804 | 12,318,882 | 11,362,512 | 12,448,558 | 11,745,342 | 11,928,152 | 11,486,799 | |
Total assets | 89,499,985 | 87,081,844 | 87,002,556 | 81,707,256 | 78,477,514 | 66,830,719 | 87,081,844 | 78,477,514 | 89,499,985 | 81,707,256 | 93,490,377 | 87,061,747 | |
Current liabilities: | |||||||||||||
Deferred franchise and regional development fee revenue, current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Deferred franchise fee revenue, current portion | 2,410,951 | 2,393,993 | 2,408,266 | 2,405,300 | 2,347,990 | 2,229,101 | 2,393,993 | 2,347,990 | 2,410,951 | 2,405,300 | 2,468,601 | 2,421,721 | |
Upfront regional developer fees, current portion | 564,042 | 587,541 | 722,590 | 793,450 | 814,720 | 816,767 | 587,541 | 814,720 | 564,042 | 793,450 | 487,250 | 770,171 | |
Other current liabilities | 596,033 | 607,272 | 565,761 | 404,901 | 551,035 | 707,763 | 607,272 | 551,035 | 596,033 | 404,901 | 597,294 | 539,500 | |
Total current liabilities | 21,711,239 | 20,287,832 | 20,648,558 | 20,934,744 | 21,778,714 | 17,414,714 | 20,287,832 | 21,778,714 | 21,711,239 | 20,934,744 | 23,217,017 | 21,438,399 | |
Deferred franchise and regional development fee revenue, net of current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Deferred franchise fee revenue, net of current portion | 13,870,401 | 13,584,091 | 13,154,047 | 12,671,068 | 11,887,275 | 10,672,244 | 13,584,091 | 11,887,275 | 13,870,401 | 12,671,068 | 14,161,134 | 12,953,430 | |
Upfront regional developer fees, net of current portion | 1,733,779 | 1,863,463 | 2,256,089 | 2,678,810 | 2,820,941 | 2,888,205 | 1,863,463 | 2,820,941 | 1,733,779 | 2,678,810 | 1,500,278 | 2,505,491 | |
Other liabilities | 1,189,837 | 1,091,795 | 993,753 | 806,782 | 717,851 | 628,920 | 1,091,795 | 717,851 | 1,189,837 | 806,782 | 1,287,879 | 895,711 | |
Liabilities | 58,002,065 | 56,865,986 | 56,319,071 | 52,162,717 | 51,602,471 | 43,965,711 | 56,865,986 | 51,602,471 | 58,002,065 | 52,162,717 | 60,902,534 | 56,753,063 | |
Stockholders' equity: | |||||||||||||
Accumulated deficit | (12,916,636) | (13,647,733) | (12,775,865) | (13,301,339) | (15,520,588) | (18,605,272) | (13,647,733) | (15,520,588) | (12,916,636) | (13,301,339) | (12,153,380) | (12,780,085) | |
Total The Joint Corp. stockholders' equity | 31,472,920 | 30,190,858 | 30,658,485 | 29,519,539 | 26,874,943 | 22,864,908 | 30,190,858 | 26,874,943 | 31,472,920 | 29,519,539 | 32,562,843 | 30,283,684 | |
Total equity | 31,497,920 | 30,215,858 | 30,683,485 | 29,544,539 | 26,875,043 | 22,865,008 | 30,215,858 | 26,875,043 | 31,497,920 | 29,544,539 | 32,587,843 | 30,308,684 | $ 20,876,032 |
Total liabilities and stockholders' equity | 89,499,985 | 87,081,844 | 87,002,556 | 81,707,256 | 78,477,514 | 66,830,719 | 87,081,844 | 78,477,514 | 89,499,985 | 81,707,256 | 93,490,377 | 87,061,747 | |
Revenues: | |||||||||||||
Total revenues | 26,449,819 | 24,887,365 | 22,236,751 | 20,781,970 | 20,004,364 | 17,330,009 | 47,124,116 | 37,334,372 | 73,573,933 | 58,116,342 | 101,252,310 | 80,011,013 | |
Cost of revenues: | |||||||||||||
Total cost of revenues | 2,337,095 | 2,257,092 | 2,110,984 | 2,090,471 | 1,824,104 | 1,547,361 | 4,368,076 | 3,371,464 | 6,705,169 | 5,461,935 | 9,171,063 | 7,665,138 | |
Depreciation and amortization | 1,779,924 | 1,461,870 | 1,336,656 | 1,120,491 | 901,253 | 628,101 | 2,798,527 | 1,529,354 | 4,578,450 | 2,649,845 | 6,646,622 | 3,921,887 | |
General and administrative expenses | 17,796,806 | 18,570,301 | 15,533,426 | 12,822,454 | 11,624,567 | 11,450,204 | 34,103,726 | 23,074,314 | 51,900,533 | 35,896,767 | 70,233,447 | 50,846,818 | |
Total selling, general and administrative expenses | 23,116,017 | 23,871,895 | 20,157,570 | 16,824,520 | 15,658,535 | 14,567,584 | 44,029,465 | 30,225,711 | 67,145,483 | 47,050,229 | 90,842,778 | 66,193,121 | |
Income from operations | 732,316 | (1,330,466) | (38,709) | 1,870,519 | 2,565,985 | 1,150,297 | (1,369,174) | 3,716,689 | (636,859) | 5,587,211 | 828,254 | 6,125,965 | |
Income before income tax expense (benefit) | 707,081 | (1,349,752) | (54,856) | 1,854,380 | 2,549,612 | 1,128,760 | (1,404,608) | 3,678,780 | (697,527) | 5,533,161 | 695,153 | 6,056,087 | |
Income tax expense (benefit) | (24,015) | (477,885) | (59,076) | (389,769) | (535,072) | (610,694) | (536,960) | (1,145,766) | (560,976) | (1,535,535) | 68,448 | (1,508,960) | |
Net income (as restated) | $ 731,096 | $ (871,867) | $ 4,220 | $ 2,244,149 | $ 3,084,684 | $ 1,739,454 | $ (867,648) | $ 4,824,546 | $ (136,551) | $ 7,068,696 | $ 626,705 | $ 7,565,047 | |
Earnings per share: | |||||||||||||
Basic earnings per share (in dollars per share) | $ 0.05 | $ (0.06) | $ 0 | $ 0.16 | $ 0.22 | $ 0.12 | $ (0.06) | $ 0.34 | $ (0.01) | $ 0.49 | $ 0.04 | $ 0.53 | |
Diluted earnings per share (in dollars per share) | $ 0.05 | $ (0.06) | $ 0 | $ 0.15 | $ 0.21 | $ 0.12 | $ (0.06) | $ 0.32 | $ (0.01) | $ 0.47 | $ 0.04 | $ 0.51 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | $ 31,497,920 | $ 30,215,858 | $ 30,683,485 | $ 29,544,539 | $ 26,875,043 | $ 22,865,008 | $ 30,215,858 | $ 26,875,043 | $ 31,497,920 | $ 29,544,539 | $ 32,587,843 | $ 30,308,684 | 20,876,032 |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 731,096 | (871,867) | 4,220 | 2,244,149 | 3,084,684 | 1,739,454 | (867,648) | 4,824,546 | (136,551) | 7,068,696 | 626,705 | 7,565,047 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 1,779,924 | 1,461,870 | 1,336,656 | 1,120,491 | 901,253 | 628,101 | 2,798,527 | 1,529,354 | 4,578,450 | 2,649,845 | 6,646,622 | 3,921,887 | |
Deferred income taxes | (211,629) | (744,162) | (832,083) | (1,653,870) | (961,759) | (2,036,700) | (441,353) | (1,778,157) | |||||
Changes in operating assets and liabilities: | |||||||||||||
Upfront regional developer fees | (296,983) | (143,634) | (824,658) | (212,945) | (977,841) | (376,346) | (1,288,134) | (572,944) | |||||
Deferred revenue | 498,273 | 437,338 | 864,213 | 1,934,560 | 1,161,393 | 2,750,868 | 2,889,139 | 4,162,209 | |||||
Other liabilities | 402,715 | 324,045 | 649,435 | 743,638 | 728,449 | 1,119,713 | 900,151 | 1,415,227 | |||||
Net cash provided by operating activities | 197,878 | 882,748 | (1,184,840) | 7,625,829 | 3,032,415 | 11,062,887 | 8,209,584 | 13,844,080 | |||||
Cash flows from investing activities: | |||||||||||||
Reacquisition and termination of regional developer rights | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Net cash used in investing activities | (1,289,943) | (951,641) | (8,764,961) | (7,488,959) | (12,288,929) | (9,875,885) | (17,900,115) | (12,754,669) | |||||
Decrease in cash | (1,066,427) | (2,812,479) | (9,876,748) | (1,985,284) | (8,944,196) | (827,347) | (9,361,921) | (907,291) | |||||
Accumulated Deficit | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (12,916,636) | (13,647,733) | (12,775,865) | (13,301,339) | (15,520,588) | (18,605,272) | (13,647,733) | (15,520,588) | (12,916,636) | (13,301,339) | (12,153,380) | (12,780,085) | (20,345,132) |
Cost of revenues: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (12,916,636) | (13,647,733) | (12,775,865) | (13,301,339) | (15,520,588) | (18,605,272) | (13,647,733) | (15,520,588) | (12,916,636) | (13,301,339) | (12,153,380) | (12,780,085) | (20,345,132) |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Total The Joint Corp. stockholder's equity | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | 31,472,920 | 30,190,858 | 30,658,485 | 29,519,539 | 26,874,943 | 22,864,908 | 30,190,858 | 26,874,943 | 31,472,920 | 29,519,539 | 32,562,843 | 30,283,684 | 20,875,932 |
Cost of revenues: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | 31,472,920 | 30,190,858 | 30,658,485 | 29,519,539 | 26,874,943 | 22,864,908 | 30,190,858 | 26,874,943 | 31,472,920 | 29,519,539 | 32,562,843 | 30,283,684 | 20,875,932 |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 626,705 | 7,565,047 | |||||||||||
Regional developer fees | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Franchise | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 2,441,325 | 2,659,097 | |||||||||||
Cost of revenues: | |||||||||||||
Franchise and regional developer cost of revenues | 1,988,764 | 1,904,936 | 1,801,026 | 1,698,223 | 1,572,399 | 1,406,616 | 3,705,961 | 2,979,014 | 5,694,723 | 4,677,237 | 7,803,404 | 6,559,486 | |
As Previously Reported | |||||||||||||
ASSETS | |||||||||||||
Intangible assets, net | 10,162,506 | 9,114,701 | 4,829,941 | 5,280,024 | 6,176,429 | 3,444,538 | 9,114,701 | 6,176,429 | 10,162,506 | 5,280,024 | 12,867,529 | 5,403,390 | |
Deferred tax assets | 9,115,231 | 9,116,248 | 9,205,410 | 9,850,676 | 9,322,066 | 8,360,245 | 9,116,248 | 9,322,066 | 9,115,231 | 9,850,676 | 8,441,713 | 9,188,634 | |
Total assets | 88,291,398 | 86,235,794 | 85,062,449 | 81,044,983 | 78,211,226 | 67,054,083 | 86,235,794 | 78,211,226 | 88,291,398 | 81,044,983 | 91,943,172 | 85,454,209 | |
Current liabilities: | |||||||||||||
Deferred franchise and regional development fee revenue, current portion | 2,974,993 | 2,981,534 | 3,130,856 | 3,198,750 | 3,162,710 | 3,045,868 | 2,981,534 | 3,162,710 | 2,974,993 | 3,198,750 | 2,955,851 | 3,191,892 | |
Deferred franchise fee revenue, current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Upfront regional developer fees, current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Other current liabilities | 522,500 | 558,250 | 541,250 | 404,901 | 551,035 | 707,763 | 558,250 | 551,035 | 522,500 | 404,901 | 499,250 | 539,500 | |
Total current liabilities | 21,637,706 | 20,238,810 | 20,624,047 | 20,934,744 | 21,778,714 | 17,414,714 | 20,238,810 | 21,778,714 | 21,637,706 | 20,934,744 | 23,118,973 | 21,438,399 | |
Deferred franchise and regional development fee revenue, net of current portion | 15,604,180 | 15,447,554 | 15,410,136 | 15,349,878 | 14,708,216 | 13,560,449 | 15,447,554 | 14,708,216 | 15,604,180 | 15,349,878 | 15,661,412 | 15,458,921 | |
Deferred franchise fee revenue, net of current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Upfront regional developer fees, net of current portion | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Other liabilities | 27,230 | 27,230 | 27,230 | 27,231 | 27,230 | 27,230 | 27,230 | 27,230 | 27,230 | 27,231 | 27,230 | 27,230 | |
Liabilities | 56,765,925 | 55,752,399 | 55,328,037 | 51,383,166 | 50,911,850 | 43,364,021 | 55,752,399 | 50,911,850 | 56,765,925 | 51,383,166 | 59,543,841 | 55,884,582 | |
Stockholders' equity: | |||||||||||||
Accumulated deficit | (12,889,083) | (13,380,196) | (13,724,938) | (13,184,061) | (15,096,255) | (17,780,218) | (13,380,196) | (15,096,255) | (12,889,083) | (13,184,061) | (12,341,892) | (13,519,142) | |
Total The Joint Corp. stockholders' equity | 31,500,473 | 30,458,395 | 29,709,412 | 29,636,817 | 27,299,276 | 23,689,962 | 30,458,395 | 27,299,276 | 31,500,473 | 29,636,817 | 32,374,331 | 29,544,627 | |
Total equity | 31,525,473 | 30,483,395 | 29,734,412 | 29,661,817 | 27,299,376 | 23,690,062 | 30,483,395 | 27,299,376 | 31,525,473 | 29,661,817 | 32,399,331 | 29,569,627 | 21,126,252 |
Total liabilities and stockholders' equity | 88,291,398 | 86,235,794 | 85,062,449 | 81,044,983 | 78,211,226 | 67,054,083 | 86,235,794 | 78,211,226 | 88,291,398 | 81,044,983 | 91,943,172 | 85,454,209 | |
Revenues: | |||||||||||||
Total revenues | 26,603,000 | 25,057,318 | 22,438,538 | 20,991,621 | 20,218,798 | 17,547,965 | 47,495,856 | 37,766,762 | 74,098,856 | 58,758,383 | 101,911,409 | 80,859,653 | |
Cost of revenues: | |||||||||||||
Total cost of revenues | 2,490,276 | 2,427,045 | 2,312,771 | 2,300,122 | 2,038,538 | 1,765,317 | 4,739,816 | 3,803,854 | 7,230,092 | 6,103,976 | 9,830,162 | 8,513,777 | |
Depreciation and amortization | 2,011,768 | 1,700,476 | 1,629,176 | 1,662,255 | 1,443,018 | 1,169,866 | 3,329,653 | 2,612,884 | 5,341,420 | 4,275,140 | 7,643,980 | 6,088,947 | |
General and administrative expenses | 17,796,806 | 16,528,022 | 15,378,623 | 12,812,331 | 11,614,444 | 10,087,060 | 31,906,644 | 21,701,047 | 49,703,451 | 34,513,378 | 67,987,482 | 49,453,305 | |
Total selling, general and administrative expenses | 23,347,861 | 22,068,222 | 20,295,287 | 17,356,161 | 16,190,177 | 13,746,205 | 42,363,509 | 29,935,974 | 65,711,371 | 47,292,135 | 89,594,171 | 66,966,668 | |
Income from operations | 500,472 | 473,207 | (176,426) | 1,338,878 | 2,034,343 | 1,971,676 | 296,782 | 4,006,426 | 797,253 | 5,345,305 | 2,076,861 | 5,352,419 | |
Income before income tax expense (benefit) | 475,237 | 453,921 | (192,573) | 1,322,739 | 2,017,970 | 1,950,139 | 261,348 | 3,968,517 | 736,585 | 5,291,255 | 1,943,760 | 5,282,541 | |
Income tax expense (benefit) | (15,876) | 109,179 | 13,224 | (614,356) | (665,992) | (364,148) | 122,403 | (1,030,140) | 106,527 | (1,644,496) | 766,510 | (1,293,229) | |
Net income (as restated) | $ 491,113 | $ 344,742 | $ (205,797) | $ 1,937,095 | $ 2,683,962 | $ 2,314,287 | $ 138,945 | $ 4,998,657 | $ 630,058 | $ 6,935,751 | $ 1,177,250 | $ 6,575,770 | |
Earnings per share: | |||||||||||||
Basic earnings per share (in dollars per share) | $ 0.03 | $ 0.02 | $ (0.01) | $ 0.13 | $ 0.19 | $ 0.16 | $ 0.01 | $ 0.35 | $ 0.04 | $ 0.49 | $ 0.08 | $ 0.46 | |
Diluted earnings per share (in dollars per share) | $ 0.03 | $ 0.02 | $ (0.01) | $ 0.13 | $ 0.18 | $ 0.16 | $ 0.01 | $ 0.34 | $ 0.04 | $ 0.46 | $ 0.08 | $ 0.44 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | $ 31,525,473 | $ 30,483,395 | $ 29,734,412 | $ 29,661,817 | $ 27,299,376 | $ 23,690,062 | $ 30,483,395 | $ 27,299,376 | $ 31,525,473 | $ 29,661,817 | $ 32,399,331 | $ 29,569,627 | 21,126,252 |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 491,113 | 344,742 | (205,797) | 1,937,095 | 2,683,962 | 2,314,287 | 138,945 | 4,998,657 | 630,058 | 6,935,751 | 1,177,250 | 6,575,770 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 2,011,768 | 1,700,476 | 1,629,176 | 1,662,255 | 1,443,018 | 1,169,866 | 3,329,653 | 2,612,884 | 5,341,420 | 4,275,140 | 7,643,980 | 6,088,947 | |
Deferred income taxes | (16,776) | (418,810) | 72,386 | (1,380,631) | 73,403 | (1,909,241) | |||||||
Changes in operating assets and liabilities: | |||||||||||||
Upfront regional developer fees | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Deferred revenue | 296,487 | 329,383 | 492,473 | 1,757,294 | 636,470 | 2,410,202 | 2,230,041 | 3,624,944 | |||||
Other liabilities | 280,162 | 235,116 | 404,329 | 565,779 | 360,790 | 852,924 | 409,938 | 1,059,507 | |||||
Net cash provided by operating activities | 447,878 | 2,271,448 | 1,465,160 | 9,014,529 | 5,682,415 | 12,451,587 | 11,084,584 | 15,232,780 | |||||
Cash flows from investing activities: | |||||||||||||
Reacquisition and termination of regional developer rights | (250,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,875,000) | (1,388,700) | |||||
Net cash used in investing activities | (1,539,943) | (2,340,341) | (11,414,961) | (8,877,659) | (14,938,929) | (11,264,585) | (20,775,115) | (14,143,369) | |||||
Decrease in cash | (1,066,427) | (2,812,479) | (9,876,748) | (1,985,284) | (8,944,196) | (827,347) | (9,361,921) | (907,291) | |||||
As Previously Reported | Accumulated Deficit | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (12,889,083) | (13,380,196) | (13,724,938) | (13,184,061) | (15,096,255) | (17,780,218) | (13,380,196) | (15,096,255) | (12,889,083) | (13,184,061) | (12,341,892) | (13,519,142) | (20,094,912) |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (12,889,083) | (13,380,196) | (13,724,938) | (13,184,061) | (15,096,255) | (17,780,218) | (13,380,196) | (15,096,255) | (12,889,083) | (13,184,061) | (12,341,892) | (13,519,142) | (20,094,912) |
As Previously Reported | Total The Joint Corp. stockholder's equity | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | 31,500,473 | 30,458,395 | 29,709,412 | 29,636,817 | 27,299,276 | 23,689,962 | 30,458,395 | 27,299,276 | 31,500,473 | 29,636,817 | 32,374,331 | 29,544,627 | 21,126,152 |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | 31,500,473 | 30,458,395 | 29,709,412 | 29,636,817 | 27,299,276 | 23,689,962 | 30,458,395 | 27,299,276 | 31,500,473 | 29,636,817 | 32,374,331 | 29,544,627 | 21,126,152 |
As Previously Reported | Regional developer fees | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 153,181 | 169,953 | 201,787 | 209,651 | 214,434 | 217,956 | 371,740 | 432,390 | 524,923 | 642,041 | 659,099 | 848,640 | |
As Previously Reported | Franchise | |||||||||||||
Cost of revenues: | |||||||||||||
Franchise and regional developer cost of revenues | 2,141,945 | 2,074,889 | 2,002,813 | 1,907,874 | 1,786,833 | 1,624,572 | 4,077,701 | 3,411,404 | 6,219,646 | 5,319,278 | 8,462,503 | 7,408,125 | |
Adjustments | |||||||||||||
ASSETS | |||||||||||||
Intangible assets, net | (2,124,740) | (2,356,584) | (552,911) | (1,232,393) | (1,774,158) | (2,315,922) | (2,356,584) | (1,774,158) | (2,124,740) | (1,232,393) | (1,939,234) | (690,627) | |
Deferred tax assets | 3,333,327 | 3,202,634 | 2,493,018 | 1,894,666 | 2,040,446 | 2,092,559 | 3,202,634 | 2,040,446 | 3,333,327 | 1,894,666 | 3,486,439 | 2,298,165 | |
Total assets | 1,208,587 | 846,050 | 1,940,107 | 662,273 | 266,288 | (223,364) | 846,050 | 266,288 | 1,208,587 | 662,273 | 1,547,205 | 1,607,538 | |
Current liabilities: | |||||||||||||
Deferred franchise and regional development fee revenue, current portion | (2,974,993) | (2,981,534) | (3,130,856) | (3,198,750) | (3,162,710) | (3,045,868) | (2,981,534) | (3,162,710) | (2,974,993) | (3,198,750) | (2,955,851) | (3,191,892) | |
Deferred franchise fee revenue, current portion | 2,410,951 | 2,393,993 | 2,408,266 | 2,405,300 | 2,347,990 | 2,229,101 | 2,393,993 | 2,347,990 | 2,410,951 | 2,405,300 | 2,468,601 | 2,421,721 | |
Upfront regional developer fees, current portion | 564,042 | 587,541 | 722,590 | 793,450 | 814,720 | 816,767 | 587,541 | 814,720 | 564,042 | 793,450 | 487,250 | 770,171 | |
Other current liabilities | 73,533 | 49,022 | 24,511 | 0 | 0 | 0 | 49,022 | 0 | 73,533 | 0 | 98,044 | 0 | |
Total current liabilities | 73,533 | 49,022 | 24,511 | 0 | 0 | 0 | 49,022 | 0 | 73,533 | 0 | 98,044 | 0 | |
Deferred franchise and regional development fee revenue, net of current portion | (15,604,180) | (15,447,554) | (15,410,136) | (15,349,878) | (14,708,216) | (13,560,449) | (15,447,554) | (14,708,216) | (15,604,180) | (15,349,878) | (15,661,412) | (15,458,921) | |
Deferred franchise fee revenue, net of current portion | 13,870,401 | 13,584,091 | 13,154,047 | 12,671,068 | 11,887,275 | 10,672,244 | 13,584,091 | 11,887,275 | 13,870,401 | 12,671,068 | 14,161,134 | 12,953,430 | |
Upfront regional developer fees, net of current portion | 1,733,779 | 1,863,463 | 2,256,089 | 2,678,810 | 2,820,941 | 2,888,205 | 1,863,463 | 2,820,941 | 1,733,779 | 2,678,810 | 1,500,278 | 2,505,491 | |
Other liabilities | 1,162,607 | 1,064,565 | 966,523 | 779,551 | 690,621 | 601,690 | 1,064,565 | 690,621 | 1,162,607 | 779,551 | 1,260,649 | 868,481 | |
Liabilities | 1,236,140 | 1,113,587 | 991,034 | 779,551 | 690,621 | 601,690 | 1,113,587 | 690,621 | 1,236,140 | 779,551 | 1,358,693 | 868,481 | |
Stockholders' equity: | |||||||||||||
Accumulated deficit | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | |
Total The Joint Corp. stockholders' equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | |
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Total liabilities and stockholders' equity | 1,208,587 | 846,050 | 1,940,107 | 662,273 | 266,288 | (223,364) | 846,050 | 266,288 | 1,208,587 | 662,273 | 1,547,205 | 1,607,538 | |
Revenues: | |||||||||||||
Total revenues | (153,181) | (169,953) | (201,787) | (209,651) | (214,434) | (217,956) | (371,740) | (432,390) | (524,923) | (642,041) | (659,099) | (848,640) | |
Cost of revenues: | |||||||||||||
Total cost of revenues | (153,181) | (169,953) | (201,787) | (209,651) | (214,434) | (217,956) | (371,740) | (432,390) | (524,923) | (642,041) | (659,099) | (848,639) | |
Depreciation and amortization | (231,844) | (238,606) | (292,520) | (541,764) | (541,765) | (541,765) | (531,126) | (1,083,530) | (762,970) | (1,625,295) | (997,358) | (2,167,060) | |
General and administrative expenses | 0 | 2,042,279 | 154,803 | 10,123 | 10,123 | 1,363,144 | 2,197,082 | 1,373,267 | 2,197,082 | 1,383,389 | 2,245,965 | 1,393,513 | |
Total selling, general and administrative expenses | (231,844) | 1,803,673 | (137,717) | (531,641) | (531,642) | 821,379 | 1,665,956 | 289,737 | 1,434,112 | (241,906) | 1,248,607 | (773,547) | |
Income from operations | 231,844 | (1,803,673) | 137,717 | 531,641 | 531,642 | (821,379) | (1,665,956) | (289,737) | (1,434,112) | 241,906 | (1,248,607) | 773,546 | |
Income before income tax expense (benefit) | 231,844 | (1,803,673) | 137,717 | 531,641 | 531,642 | (821,379) | (1,665,956) | (289,737) | (1,434,112) | 241,906 | (1,248,607) | 773,546 | |
Income tax expense (benefit) | (8,139) | (587,064) | (72,300) | 224,587 | 130,920 | (246,546) | (659,363) | (115,626) | (667,503) | 108,961 | (698,062) | (215,731) | |
Net income (as restated) | $ 239,983 | $ (1,216,609) | $ 210,017 | $ 307,054 | $ 400,722 | $ (574,833) | $ (1,006,593) | $ (174,111) | $ (766,609) | $ 132,945 | $ (550,545) | $ 989,277 | |
Earnings per share: | |||||||||||||
Basic earnings per share (in dollars per share) | $ 0.02 | $ (0.08) | $ 0.01 | $ 0.03 | $ 0.03 | $ (0.04) | $ (0.07) | $ (0.01) | $ (0.05) | $ 0 | $ (0.04) | $ 0.07 | |
Diluted earnings per share (in dollars per share) | $ 0.02 | $ (0.08) | $ 0.01 | $ 0.02 | $ 0.03 | $ (0.04) | $ (0.07) | $ (0.02) | $ (0.05) | $ 0.01 | $ (0.04) | $ 0.07 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | $ (27,553) | $ (267,537) | $ 949,073 | $ (117,278) | $ (424,333) | $ (825,054) | $ (267,537) | $ (424,333) | $ (27,553) | $ (117,278) | $ 188,512 | $ 739,057 | (250,220) |
Cash flows from operating activities: | |||||||||||||
Net income (as restated) | 239,983 | (1,216,609) | 210,017 | 307,054 | 400,722 | (574,833) | (1,006,593) | (174,111) | (766,609) | 132,945 | (550,545) | 989,277 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | (231,844) | (238,606) | (292,520) | (541,764) | (541,765) | (541,765) | (531,126) | (1,083,530) | (762,970) | (1,625,295) | (997,358) | (2,167,060) | |
Deferred income taxes | (194,853) | (325,352) | (904,469) | (273,239) | (1,035,162) | (127,459) | |||||||
Changes in operating assets and liabilities: | |||||||||||||
Upfront regional developer fees | (296,983) | (143,634) | (824,658) | (212,945) | (977,841) | (376,346) | (1,288,134) | (572,944) | |||||
Deferred revenue | 201,786 | 107,955 | 371,740 | 177,266 | 524,923 | 340,666 | 659,098 | 537,265 | |||||
Other liabilities | 122,553 | 88,929 | 245,106 | 177,859 | 367,659 | 266,789 | 490,213 | 355,720 | |||||
Net cash provided by operating activities | (250,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,650,000) | (1,388,700) | (2,875,000) | (1,388,700) | |||||
Cash flows from investing activities: | |||||||||||||
Reacquisition and termination of regional developer rights | 250,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,875,000 | 1,388,700 | |||||
Net cash used in investing activities | 250,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,650,000 | 1,388,700 | 2,875,000 | 1,388,700 | |||||
Decrease in cash | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Adjustments | Accumulated Deficit | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Adjustments | Total The Joint Corp. stockholder's equity | |||||||||||||
Stockholders' equity: | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | (250,220) |
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Total equity | (27,553) | (267,537) | 949,073 | (117,278) | (424,333) | (825,054) | (267,537) | (424,333) | (27,553) | (117,278) | 188,512 | 739,057 | $ (250,220) |
Adjustments | Regional developer fees | |||||||||||||
Revenues: | |||||||||||||
Total revenues | (153,181) | (169,953) | (201,787) | (209,651) | (214,434) | (217,956) | (371,740) | (432,390) | (524,923) | (642,041) | (659,099) | (848,640) | |
Adjustments | Franchise | |||||||||||||
Cost of revenues: | |||||||||||||
Franchise and regional developer cost of revenues | $ (153,181) | $ (169,953) | $ (201,787) | $ (209,651) | $ (214,434) | $ (217,956) | $ (371,740) | $ (432,390) | $ (524,923) | $ (642,041) | $ (659,099) | $ (848,639) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Mar. 10, 2023 USD ($) |
Subsequent Event [Line Items] | |
Overpayment amount | $ 4.8 |
Consulting fee | 20% |