jynt-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to _________________

Commission file number: 001-36724

The Joint Corp.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)			90-0544160 (IRS Employer Identification No.)


16767 N. Perimeter Drive, Suite 110, Scottsdale Arizona (Address of principal executive offices)			85260 (Zip Code)

(480) 245-5960

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value Per Share	JYNT	The NASDAQ Capital Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☐

Accelerated filer

☐

Non- accelerated filer

☑

Smaller reporting company

☑

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of May 1, 2023, the registrant had 14,678,848 shares of Common Stock ($0.001 par value) outstanding.

Table of Contents

THE JOINT CORP.

FORM 10-Q

TABLE OF CONTENTS


		PAGE NO.
PART I FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	1
	Condensed Consolidated Income Statements for the Three Months Ended March 31, 2023 and 2022 (unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 6.	Exhibits	32

EXHIBIT INDEX		33

SIGNATURES		34

Part II, Items 3, 4, and 5 - Not applicable

Table of Contents

PART I: FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


	March 31, 2023		December 31, 2022
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	14,773,225	$	9,745,066
Restricted cash	731,379		805,351
Accounts receivable, net	3,525,643		3,911,272
Deferred franchise and regional development costs, current portion	1,059,126		1,054,060
Prepaid expenses and other current assets	3,468,749		2,098,359
Total current assets	23,558,122		17,614,108
Property and equipment, net	17,500,027		17,475,152
Operating lease right-of-use asset	22,451,137		20,587,199
Deferred franchise and regional development costs, net of current portion	5,678,935		5,707,678
Intangible assets, net	11,905,176		12,867,529
Goodwill	8,493,407		8,493,407
Deferred tax assets	7,708,323		8,441,713
Deposits and other assets	755,585		756,386
Total assets	$	98,050,712	$	91,943,172

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,836,853	$	2,966,589
Accrued expenses	1,996,427		1,069,610
Co-op funds liability	731,379		805,351
Payroll liabilities ($0.9 million and $0.6 million attributable to VIE)	3,571,008		2,030,510
Operating lease liability, current portion	5,622,576		5,295,830
Finance lease liability, current portion	24,693		24,433
Deferred franchise and regional developer fee revenue, current portion	2,978,937		2,955,851
Deferred revenue from company clinics ($4.9 million and $4.7 million attributable to VIE)	7,713,735		7,471,549
Other current liabilities	494,250		499,250
Total current liabilities	24,969,858		23,118,973
Operating lease liability, net of current portion	20,211,159		18,672,719
Finance lease liability, net of current portion	57,235		63,507
Debt under the Credit Agreement	2,000,000		2,000,000
Deferred franchise and regional developer fee revenue, net of current portion	15,682,833		15,661,412
Other liabilities	27,230		27,230
Total liabilities	62,948,315		59,543,841
Commitments and contingencies
Stockholders' equity:
Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of March 31, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value; 20,000,000 shares authorized, 14,671,360 shares issued and 14,639,325 shares outstanding as of March 31, 2023 and 14,560,353 shares issued and 14,528,487 outstanding as of December 31, 2022	14,671		14,560
Additional paid-in capital	45,962,861		45,558,305
Treasury stock 32,035 shares as of March 31, 2023 and 31,866 shares as of December 31, 2022, at cost	(859,279)		(856,642)
Accumulated deficit	(10,040,856)		(12,341,892)
Total The Joint Corp. stockholders' equity	35,077,397		32,374,331
Non-controlling Interest	25,000		25,000
Total equity	35,102,397		32,399,331
Total liabilities and stockholders' equity	$	98,050,712	$	91,943,172

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited)


	Three Months Ended March 31,
	2023		2022
Revenues:
Revenues from company-owned or managed clinics	$	17,127,957	$	12,606,999
Royalty fees	6,866,023		6,008,932
Franchise fees	754,425		640,965
Advertising fund revenue	1,952,406		1,710,717
Software fees	1,210,005		956,998
Regional developer fees	149,478		201,787
Other revenues	390,004		312,140
Total revenues	28,450,298		22,438,538
Cost of revenues:
Franchise and regional development cost of revenues	2,290,313		2,002,813
IT cost of revenues	333,850		309,958
Total cost of revenues	2,624,163		2,312,771
Selling and marketing expenses	4,160,244		3,287,488
Depreciation and amortization	2,342,544		1,629,176
General and administrative expenses	19,936,115		15,378,623
Total selling, general and administrative expenses	26,438,903		20,295,287
Net loss on disposition or impairment	65,469		6,906
Loss from operations	(678,237)		(176,426)
Other income (expense), net	3,821,162		(16,147)
Income (loss) before income tax benefit	3,142,925		(192,573)
Income tax expense	841,889		13,224
Net income (loss)	$	2,301,036	$	(205,797)
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.16	$	(0.01)
Diluted earnings (loss) per share	$	0.15	$	(0.01)
Basic weighted average shares	14,566,185		14,432,652
Diluted weighted average shares	14,861,734		14,432,652

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(unaudited)


	Common Stock			Additional Paid In Capital		Treasury Stock			Accumulated Deficit		Total The Joint Corp. stockholders' equity		Non-controlling interest		Total
	Shares	Amount				Shares	Amount
Balances, December 31, 2022	14,560,353	$	14,560	$	45,558,305	31,866	$	(856,642)	$	(12,341,892)	$	32,374,331	$	25,000	$	32,399,331
Stock-based compensation expense	—	—		266,210		—	—		—		266,210		—		266,210
Issuance of restricted stock	95,386	95		(95)		—	—		—		—		—		—
Exercise of stock options	15,621	16		138,441		—	—		—		138,457		—		138,457
Purchases of treasury stock under employee stock plans	—	—		—		169	(2,637)		—		(2,637)		—		(2,637)
Net income	—	—		—		—	—		2,301,036		2,301,036		—		2,301,036
Balances, March 31, 2023 (unaudited)	14,671,360	$	14,671	$	45,962,861	32,035	$	(859,279)	$	(10,040,856)	$	35,077,397	$	25,000	$	35,102,397


	Common Stock			Additional Paid In Capital		Treasury Stock			Accumulated Deficit		Total The Joint Corp. stockholders' equity		Non-controlling interest
	Shares	Amount				Shares	Amount								Total
Balances, December 31, 2021, as revised	14,451,355	$	14,450	$	43,900,157	31,643	$	(850,838)	$	(13,519,141)	$	29,544,628	$	25,000	$	29,569,628
Stock-based compensation expense	—	—		323,556		—	—

SEC Form 10-Q filed by The Joint Corp.