JYNT 10-K & 10-Q changes, risk factors and insider trading

In addition to relief and recovery, our services emphasize preventive and maintenance care, which is generally not a medical necessity, and may be viewed as a discretionary medical expenditure. Discretionary spending is negatively impacted by, among other things, those factors disclosed in this Form 10-K under the caption “Significant Events and/or Recent EventsDevelopments” in Management’s Discussion and Analysis of Financial Condition and Results of Operations -- unfavorable global economic or political conditions, such as labor shortages, inflation and other cost increases, and increases inelevated interest rates. As further disclosed under the aforementioned caption, we anticipate that fiscal 20252026 will continue to be a volatile macroeconomic environment and expect elevated levels of cost inflation to persist for 2025.2026. Reductions in discretionary spending may adversely impact our business, financial condition, or results of operations. RisingElevated interest rates will also willcontinue to make it more expensive for potential franchisees to finance new clinic acquisitions and thus may reduce the pool of available franchisees, which also could adversely impact our business.

Our clinics continue to demonstrate increases in comparable clinic sales even as they mature. Our annual Comp Sales for the full year 2024,2025 forwere clinics that have been open for at least 13 full months, was 4%. However, for clinics that have been open for greater than 48 months, our annual Comp Sales for the full 2024 year was (2)%.flat. As such, we cannot assure you that increases in previous years in comparable clinic sales will continue for our existing clinics or that clinics that are opened in the future will see similar results. In new markets, the length of time before average sales for new clinics stabilize is less predictable and can be longer than we expect because of our limited knowledge of these markets and consumers’ limited awareness of our brand. New clinics may not be profitable, and their sales performance may not follow historical patterns. In addition, our average clinic sales and comparable clinic sales for existing clinics may deteriorate from the rates achieved over the past several years. Our franchisee's ability to operate new franchisee clinics profitably and increase average clinic sales and comparable clinic sales depends on many factors, some of which are beyond our control, including: (i) consumer awareness and understanding of our brand and changes in consumer preferences and discretionary spending; (ii) general economic conditions, which can affect clinic traffic, local rent and labor costs and prices we pay for the supplies we use; (iii) competition, either from our competitors in the chiropractic industry or our own and our franchisees’ clinics; (iv) the identification and availability of attractive sites for new facilities and the anticipated commercial, residential and infrastructure development near our new facilities; (v) changes in government regulation; (vi) in certain regions, decreases in demand for our services due to inclement weather; and (vii) other unanticipated increases in costs, any of which could give rise to delays or cost overruns.

Clinics our franchisees open in new markets may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, occupancy, marketing or operating costs than clinics opened in existing markets, thereby affecting our overall profitability. New markets may have competitive conditions, consumer tastespreferences and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness. If we do not successfully execute our plans to enter new markets, our business, financial condition and results of operations could be materially adversely affected

Our franchise agreements specify a timetable for opening the clinic. Failure by our franchisees to open their clinics within the specified time limit would result in the reduction of royalty payments we would have otherwise received and could result in the termination of the franchise agreement. As of December 31, 2024,2025, we had active licenses and letters-of-intentletters of intent for 145139 clinics which we believe to be developable within the specified time periods, but we cannot be certain of this.

Our regional developers are independent operators. Accordingly, their actions are outside of our control. We depend upon our regional developers to sell a minimum number of franchises within their territories and to assist the purchasers of those franchises to develop and operate their clinics. The failure by regional developers to sell the specified minimum number of franchises within the time limits set forth in their regional developer license agreements would reduce the franchise fees we would otherwise receive, delay the payment of royalties to us and result in a potential event of default under the regional developer license agreement. Of our total of 1615 regional developers as of December 31, 2024,2025, sixfive had not met their minimum franchise sales requirements within the time periods specified in their regional developer agreements.

We previouslyhave identified a material weaknessesweakness in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results, prevent fraud, or maintain investor confidence.

We are subject to the internal control requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which require management to assess the effectiveness of our internal control over financial reporting. Furthermore, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404, since as of December 31, 2023, we became an accelerated filer.

Internal controls related to the operation of financial reporting and accounting systems are critical to maintaining adequate internal control over financial reporting. As discussed in Part II, Item 9A of this Form 10-K, our management previously concluded that our internal controls over financial reporting were not effective as of December 31, 20222024 due to a material weaknessesweakness in internal controls related to (i) the accounting treatment in significant and complex areas, and (ii) the identification of uncertain tax positions.areas. We did not designdesign, implement and maintain effective controls overto theanalyze accountingand ofaccount for non-routine, unusual or complex areas,transactions. including accounting for revenue recognition andSpecifically, we did not designdesign, implement and maintain effective controls overto timely analyze and account for the identificationimpairment associated with certain assets held for sale within discontinued operations and for the application of uncertainvaluation taxmethodologies positions.impacting Duringimpairment 2023,charges managementrelated to assets held for sale. We have undertaken and implemented our previously disclosed remediation plan that included modifying internal controlsmeasures to address completenessthe ofmaterial documentationweakness, onwhich uncertainmeasures taxwill positions,result revenuein additional resources and acquisitionother relatedcompliance transactions over adoptions of the appropriate respective accounting standards, specifically through the utilization of subject matter experts to review conclusions over complex accounting policies.expenses. During the fourth quarter of 2023,2025, we completed our testing of the operating effectiveness of the implemented controls and found them to be effective. As a result, we have concluded the material weaknessesweakness havehas been remediated as of December 31, 2023.2025.

We have experienced periods of net losses in the past, and while we have achieved profitability from 2018 through 2022, and again in 2025, we have experienced net losses in both 2023 and 2024. As we execute on our refranchising strategy, the total amount of revenue will decrease and our ability to decrease our general and administrative expenses accordingly will drive our ability to achieve profitability in the future. Our ability to achieve profitability will be affected by the other risks and uncertainties described in this section and in Management’s Discussion and Analysis. If we are not able to achieve or sustain profitability, our business willmay be materially adversely affected and the price of our common stock may decline.

We received an ERC pursuant to the CARES Act. Please see Note 11, Employee Retention CreditAct in theMarch Notes to the consolidated financial statements included in Item 8 of this Form 10-K for a description of the ERC.2023. Our eligibility to receive the ERC remains subject to audit by the IRS for a period of five years. If the IRS audits us during that time, it may find that we were not eligible to receive some or all of the ERC, in which case we would be required to return some or all of the ERC to the IRS. Additionally, 20% of the ERC was paid to an outside third party as a consulting fee. In the event we are required to return some or all of the ERC, we may not be able to recoup the consulting fee.

The business of providing chiropractic services is highly competitive in each of the markets in which our clinics operate. The primary basesbasis of such competition are quality of care, reputation, price of services, marketing and advertising strategy implementation, convenience, traffic flow, visibility of office locations, and hours of operation. Our clinics compete with all other chiropractors in their local market. Many of those chiropractors have established practices and reputations in their markets. Some of these competitors and potential competitors may have financial resources, affiliation models, reputations or management expertise that provide them with competitive advantages over us, which may make it difficult to compete against them. Our four largest multi-unit competitors are Airrosti, which currently operates 150154 clinics; HealthSource Chiropractic, which currently operates 133143 clinics; ChiroOne, which currently operates 109 clinics; and 100% Chiropractic, which currently operates 106 clinics; and ChiroOne, which currently operates 10261 clinics. All of these competitors are currently operating under an insurance-based model, including two of which also accept private pay. In addition, a number of other chiropractic franchises and chiropractic practices that are attempting to duplicate or follow our business model are currently operating in our markets and in other parts of the country and may enter our existing markets in the future.

The laws of every state in which we operate contain restrictions on the practice of chiropractic and control over the provision of chiropractic services. The laws of many states where we operate permit a chiropractor to conduct a chiropractic practice only as an individual, a member of a partnership or an employee of a PC, limited liability company or limited liability partnership. These laws typically prohibit chiropractors from splitting fees with non-chiropractors and prohibit non-chiropractic entities, such as chiropractic management services organizations, from owning or operating chiropractic clinics or engaging in the practice of chiropractic and from employing chiropractors. The specific restrictions against the corporate practice of chiropractic, as well as the interpretation of those restrictions by state regulatory authorities, vary from state to state. However, the restrictions are generally designed to prohibit a non-chiropractic entity from controlling or directing clinical care decision-making, engaging chiropractors to practice chiropractic or sharing professional fees. The form of management agreement that we utilize, and that we recommend to our franchisees that are management service organizations, explicitly prohibits the management service organization from controlling or directing clinical care decisions. However, there can be no assurance that all of our franchisees that are management service organizations will strictly follow the provisions in our recommended form of management agreement. The laws of many states also prohibit chiropractic practitioners from paying any portion of fees received for chiropractic services in consideration for the referral of a patient. Any challenge to our contractual relationships with our affiliated PCs by chiropractors or regulatory authorities could result in a finding that could have a material adverse effect on our operations, such as voiding one or more management services agreements. Moreover, the laws and regulatory environment may change to restrict or limit the enforceability of our management services agreements. We could be prevented from affiliating with chiropractor-owned PCs or providing comprehensive business services to them in one or more states. Please see “Part I, Item 1 -– Business -– Regulatory Environment -– State regulationsRegulations on corporateCorporate practicePractice of chiropractic”Chiropractic for a description of certain of these actions by states, including state legislatures, state chiropractic regulatory bodies and a state attorney general, to regulate and restrict the corporate practice of chiropractic.

Please see “Part I, Item 1 -– Business -– Regulatory Environment – Joint Employer Rules” for a detailed description of the background and current status of federal and state “joint employer” laws and regulations.

Recently, there has been an increased focus on unfair franchise practices. A policy from NASAA rejects the use of required representations or waivers of claims by franchisees in franchise agreements for the purpose of insulating a franchisor from liability in disputes related to alleged fraud or misrepresentations during the offer and sale of a franchise. It is expected that state regulators will follow NASAA’s guidance and limit their use, as California has already done. We risk exposure to unfair trade practice claims by state regulators if we try to use a franchisee’s representations in a manner that offends NASAA’s policy. The use of such offending representations also could increase the likelihood of successful lawsuits against us by our franchisees over claims of fraud or misrepresentation. Bills also have been introduced in Congress from time to time providing for protections of franchisee rights, including certain currently pending bills seeking to establish what are described as fair franchise practices. Compliance with new, complex and changing laws may cause our expenses to increase, and non-compliance with such laws could result in penalties or enforcement actions against us. Please see “Part I, Item 1 - Business - Regulatory Environment – Regulation relatingRelating to franchising”Franchising for a description of other federal and state regulation related to franchising.

We, our franchisees and the chiropractor-owned PCs to which we and our franchisees provide management services are subject to extensive federal, state and local laws, rules and regulations, including: (i) federal and state laws governing the franchisor-franchisee relationship; (ii) state regulations on the corporate practice of chiropractic; (iii) federal and state laws governing the collection, dissemination, use, security and confidentiality of sensitive personal information; (iv) federal and state laws which contain anti-kickback and fee-splitting provisions and restrictions on referrals; (v) the federal Fair Debt Collection Practices Act and similar state laws that restrict the methods that we and third-party collection companies may use to contact and seek payment from patients regarding past due accounts; and (vvi) federal and state labor laws, including wage and hour laws.

In addition, many states impose restrictions related to the confidentiality of personal information that apply more broadly than HIPAA. Please see “Part I, Item 1 – Business – Regulatory Environment – HIPAA and State Privacy and Breach Notification Rules” for a description of some of these state privacy rules. Such information may include certain identifying information and financial information of our patients. These state laws may impose notification requirements in the event of a breach of such personal information. Violations of these laws may result in criminal, civil and administrative sanctions and also may provide individuals with a private right of action with respect to disclosures of personal information. Failure to comply with such data confidentiality, security and breach notification laws may result in substantial monetary penalties or awards of damages.

We increasingly use electronic means to interact with our customers and collect, maintain and store individually identifiable information, including, but not limited to, personal financial information and health-related information. Despite the security measures we have in place to ensure compliance with applicable laws and rules, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of cyber terrorism, vandalism or theft, computer viruses, misplaced or lost data, programming and/or human errors or other similar events. Please see “Part I, Item 1 – Business – Regulatory Environment – HIPAA and State Privacy and Breach Notification Rules” for a description of the November 2022 data breach suffered by one of our vendors, which resulted in the release of certain information with respect to our patients and employees. Additionally, the collection, maintenance, use, disclosure and disposal of individually identifiable data by our businesses are regulated at the federal and state levels as well as by certain financial industry groups, such as the Payment Card Industry organization. Federal, state and financial industry groups may also consider from time-to-time new privacy and security requirements that may apply to our businesses. Compliance with evolving privacy and security laws, requirements, and regulations may result in cost increases due to necessary systems changes, new limitations or constraints on our business models and the development of new administrative processes. They also may impose further restrictions on our collection, disclosure and use of individually identifiable information that is housed in one or more of our databases. Noncompliance with privacy laws, financial industry group requirements or a security breach involving the misappropriation, loss or other unauthorized disclosure of personal, sensitive and/or confidential information, whether by us or by one of our vendors, could have material adverse effects on our business, operations, reputation and financial condition, including decreased revenue;

We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply. Based on the self-assessment completed as of MarchFebruary 3, 2025,2026, we are currently in compliance with the Payment Card Industry Data Security Standard, or PCI DSS, the payment card industry’s security standard for companies that collect, store or transmit certain data regarding credit and debit cards, credit and debit card holders and credit and debit card transactions. There is no guarantee that we will maintain PCI DSS compliance. Our failure to comply fully with PCI DSS in the future could violate payment card association operating rules, federal and state laws and regulations and the terms of our contracts with payment processors and merchant banks. Such failure to comply fully also could subject us to fines, penalties, damages and civil liability and could result in the suspension or loss of our ability to accept credit and debit card payments. Although we do not store credit card information and we do not have access to our patients’ credit card information, there is no guarantee that PCI DSS compliance will prevent illegal or improper use of our payment systems or the theft, loss, or misuse of data pertaining to credit and debit cards, credit and debit card holders and credit and debit card transactions.

We have restated our priorPreviously consolidatedIssued financialFinancial statements,Statements, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price.

On SeptemberAugust 26,12, 2023,2025, we restated our consolidated financial statements as of and for the years ended December 31, 20222024 and 20212023 and for the quarterly periods within the fiscal yearsperiod ended DecemberMarch 31, 2022 and 20212025 (the “2024/2025 Restated Periods”). The determination to restate the financial statements for the 2024/2025 Restated Periods was made by our Audit Committee and our Board of Directors upon management’s recommendation following the identification of errorsan error over the application of asset valuation accounting related to ourassets method of accountingheld for thesale reacquisitionreported ofin regionaldiscontinued developeroperations rightsthat andimpacted transferimpairment pricing adjustments for our VIEs.charges. Our management, after consultation with our independent registered accountants, concluded that our previouslyPreviously issuedIssued financialFinancial statementsStatements for the 2024/2025 Restated Periods should no longer be relied upon. Our Annual Report on Form 10-K for the years ended December 31, 20222024 and 20212023 has been amended by Form 10-K/A filed on SeptemberAugust 26,12, 20232025 and our Quarterly Report on Form 10-Q for the quarters ended March 2025 and 2024 has been amended by Form 10-Q/A filed on August 12, 2025 to, among other things, reflect the restatement of our financial statements for the 2024/2025 Restated Periods.

Short selling occurs when an investor borrows a security and sells it on the open market, with the intention of buying identical securities at a later date to return to the lender. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares. Because it is in the short seller’s best interests for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding an issuer, its business prospects, and similar matters which may create a negative depiction of theour company. This information is often widely distributed, including through platforms that mainly serve as hosts seeking advertising revenue. Issuers who have limited trading volumes and are thus susceptible to higher volatility levels than large-cap stocks can be particularly vulnerable to such short seller attacks.

We are a rapidly growing franchisor that uses a private pay, non-insurance, cash-based model. We seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry. We delivered over 14.4 million patient visits in 2025, down from 14.7 million patient visits in 2024, up from 13.6 million patient visits in 2023, generating over $530.3$532.4 million and $488$530.3 million of system-wide sales, respectively, across our highly franchised network. We will continue the rapid and franchised focusedfranchise-focused expansion of chiropractic clinics in key markets throughout North America and potentially abroad. We saw 957,000797,100 new patients in 2025, and according to our patient survey conducted in 2024, with approximately 36% of new patients were visiting a chiropractor for the first time. We are not only increasing our percentage of market share, but are also expanding the chiropractic market.

Key Performance Measures. We receive monthly performance reports from our system and our clinics, which include key performance indicators per clinic, including gross sales, Comp Sales, number of new patients, conversion percentage and member attrition. In addition, we review monthly reporting related to system-wide sales, clinic openings, clinic license sales and various earnings metrics in the aggregate and per clinic. We believe these indicators provide us with useful data with which to measure our performance and to measure our franchisees’ and clinics’ performance. System-wide Comp Sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed. While grossSystem-wide sales fromare franchisedneither required by, nor presented in accordance with, GAAP. System-wide sales are the sum of company-owned or managed clinics areand clinics operated by our franchisees. Our GAAP total revenue in our consolidated statements of income is limited to company-owned or managed clinic revenue and franchise revenue from our franchisees. Accordingly, system-wide sales should not recordedbe considered in isolation or as revenuesa bysubstitute us,for managementour results reported under GAAP. Management believes the information is important in understanding the overall brand’s financial performance, because these sales are the basis on which we calculate and record royalty fees and are indicative of the financial health of the franchisee base.

Key Clinic Development Trends. As of December 31, 2024,2025, we and our franchisees operated or managed 967960 clinics, of which 842885 were operated or managed by franchisees and 12575 were operated as company-owned or managed clinics. Our franchisees opened 5729 clinics during 2024.2025. This compares to 11457 clinics opened in 2023,2024, 104all of which were franchised clinics and 10 company-owned or managed clinics. Of the 12575 company-owned or managed clinics at December 31, 2024,2025, 5830 were constructed and developed by us, and 6745 were acquired from franchisees.

Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023 the boardBoard of Directors authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics. During the third quarter of 2024, we, with the Companyauthorization of the Board of Directors, expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped by geographic territory. This refined strategy will leverage our greatest strength — our capacity to build a franchise — to drive long-term growth for both our franchisees and The Joint as a public company. We have created a robust framework for the refranchising effort, organizing clinics into clusters, and generating comprehensive disclosure packets for marketing efficiency. We had given initial preference to existing franchisees and in the third quarter of 2024 expanded the marketing efforts to larger multi-unit, multi-brand operators and certain private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets. SubsequentIn toearly the balance sheet date,2025, we have received draft letters of intent (“LOIs”) for our full portfolio of company-owned or managed clinics and as of the filing of this Form 10-K are in the financial stages of LOI term negotiations.clinics.

Our goal will be to generate significant processesproceeds that will provide us with value creating capital allocation opportunities. These opportunities could include, but are not limited to, reinvestment in the brand and related marketing, continued investment in our IT platforms, the repurchase of RDregional developer territories, certain merger or acquisition opportunities and/or afurther stockrepurchases repurchaseof program.our outstanding common stock.

Effective OctoberJune 14,10, 2024,2025, the Board of Directors of the Company appointed SanjivScott RazdanJ. Bowman as President andour Chief ExecutiveFinancial Officer of the Company and as a member of the Company’s Board of Directors.Officer.

SignificantCritical Accounting Polices and Estimates

The preparation of consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. We base our accounting estimates on historical experience and other factors that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. We have discussed the development and selection of significantcritical accounting policies and estimates with our Audit Committee.

Intangible assets consist primarily of reacquired franchise rights and customer relationships. We amortize the fair value of reacquired franchise rights over the remaining contractual terms of the reacquired franchise rights at the time of the acquisition, which range from one to ten years. The fair value of customer relationships is amortized over their estimated useful life which ranges from two to four years. Intangible assets are attributable entirely to discontinued operations.

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 treated as a business combination under GAAP. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. As required, we perform an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. No impairments of goodwill were recorded for the years ended December 31, 20242025 and 2023.2024. Goodwill is attributable entirely to discontinued operations.

We generate revenue through royalties, franchise fees, advertising fund contributions, IT-related income and computer software fees from our franchisees. Additionally, as we execute on our strategy to refranchise and divest from all of our company-owned andor managed clinics, werevenue generate revenuegenerated through our company-owned or managed clinics is included in LossIncome (loss) from discontinued operations before income tax expense.

Revenues from Company-Owned or Managed Clinics. We earn revenue from clinics that we own and operate or manage throughout the United States. In those states where we own and operate the clinic, revenues are recognized when services are performed. We offer a variety of membership and wellness packages which feature discounted pricing as compared with our 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. We recognize a contract liability (or a deferred revenue liability) related to the prepaid treatment plans for which we have an ongoing performance obligation. We recognize this contract liability, and recognize revenue, as the patient consumes his or her visits related to the package and we perform the services. If we determine that it is not subject to unclaimed property laws for the portion of wellnessthe package that we do not expect to be redeemed (referred to as “breakage”), then we recognize breakage revenue in proportion to the pattern of exercised rights by the patient.

Franchise Fees. We require the entire non-refundable initial franchise fee to be paid upon execution of a franchise agreement, which typically has an initial term of 10 years. Initial franchise fees are recognized ratably on a straight-line basis over the term of the franchise agreement. Our services under the franchise agreement include training of franchisees and staff, site selection, construction/vendor management and ongoing operations support. We provide no financing to franchisees and generally offer no guarantees on their behalf. The services we provide are highly interrelated with the franchise license and as such are considered to represent a single performance obligation.

Accounting Standards Codification 450, Contingencies (“ASC 450”), governs the disclosure of loss contingencies and accrual of loss contingencies in respect of litigation and other claims. We record 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, we provide 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 us. Legal costs to be incurred in connection with a loss contingency are expensed as such costs are incurred.

The following discussion and analysis of our financial results encompasses our consolidated results and results of our business segment: Franchise Operations. All financial results and metrics discussed below are on a continuing operationoperations basis.

As discussed further in Note 3, Acquisitions and Divestitures, in the Notes to consolidated financial statements, duringsince the fourth quarter of 2024, thewe Companyhave classified itsour corporate clinic business segment as held for sale. The results of operations of the corporate clinic business segment are reported in Income (Lossloss) income from discontinued operations before income tax expense in itsthe consolidated income statementstatements for all periods presented and the related assets and liabilities associated with discontinued operations are classified as discontinued operation assets and liabilities, current and net of current,liabilities in the consolidated balance sheetsheets for all periods presented. The consolidated statement of cash flows includes cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3, Acquisitions and Divestitures,Divestitures in the Notes to consolidated financial statements.

•Total revenues increased by $4.9$2.7 million, primarily due to the continued expansion and revenue growth of our franchise base.base, and included:

•Franchise fees revenue increased due to the continued increase in active franchise licenses and the impact of accelerated revenue recognition resulting from the terminated franchise license agreements, with 2434 and 2124 franchise license agreements terminated during the years ended December 31, 20242025 and 2023,2024, respectively.

•Software fees revenue increased due to an increase in our franchised clinic base and the related revenue recognition over the term of the franchise agreement as described above.

For the year ended December 31, 2024,2025, as compared with the year ended December 31, 2023,2024, the total cost of revenues increaseddecreased due to ana increasereduction in regional developer royalties and sales commissions. We ended 2025 with 15 regional developers, as compared to 16 regional developers in 2024.

Selling and marketing expenses increased $2.2$2.3 million for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, driven by an increase in advertisingexpenses fundassociated expenditureswith fromour digital marketing transformation efforts and the impact of a larger franchise base and increased marketing expenditures expanding our franchise marketing efforts.base.

Depreciation and amortization expenses increased $0.1$0.3 million for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, primarily due to depreciation expenses related to development of internal use software madeenhancements availableand fordevelopments, use inincluding the first halflaunch of 2024.our official mobile app.

General and administrative expenses increaseddecreased during the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024, primarily due to thea increasesdecrease in theprofessional followingfees, expensespartially tooffset supportby thean Company’s continued effortsincrease in executing on its strategy to become a pure-play franchisor: (i) payroll and related expenses of $1.3 million; (ii) restructuring costs of $0.6 million; (iii) professional and advisory fees of $1.2 million primarily related to additional IT outsourced resources to support the Company’s proprietary chiropractic software and help desk; and (iv) accounting services expenses of $0.4 million.expenses. As a percentage of revenue, general and administrative expenses were 57%54% and 56%58% during the year ended December 31, 20242025 and 2023,2024, respectively.

Net Loss (Gain) on Disposition or Impairment

We are a growing franchisor that uses a private pay, non-insurance, cash-based model. We will continue our rapid and franchised focused expansion of chiropractic clinics in key markets throughout North America, and potentially abroad, as we seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry.

Key Clinic Development Trends. As of MarchJune 31,30, 2026, we and our franchisees operated or managed 943941 clinics, of which 868896 were operated or managed by franchisees and 7545 were operated as company-owned or managed clinics. Our franchisees opened threefive clinics in the firstsecond quarter of 2026, compared to fiveseven clinics in the firstsecond quarter of 2025.

Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023, our Board of Directors authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics. During the third quarter of 2024, we expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped primarily by geographic location. This refined strategy will leverage our greatest strength -– our capacity to build a franchise -– to drive long-term growth for both our franchisees and The Joint as a public company. We have created a robust framework for the refranchising effort, organizing clinics into clusters, and generating comprehensive disclosure packets for marketing efficiency. We had given initial preference to existing franchisees and, in the third quarter of 2024, we expanded the marketing efforts to larger multi-unit, multi-brand operators and certain private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets. During the first quarter of 2025, we received draft letters of intent (“LOIs”) for our full portfolio of company-owned or managed clinics. During the second quarter of 2025, we refranchised 37 clinics. During the third quarter of 2025, we refranchised one clinic and we continue to remain actively engaged in refranchising the balance of the corporate portfolio. The largest cluster remaining in the corporate portfolio is the Southern California region.

On December 5, 2025, we entered into an Asset Purchase Agreement with Addisco Value, LLC, a North Carolina limited liability company, Triangle Chiropractic Associates P.C., a North Carolina professional corporation, and Bluffton TJ, LLC, a South Carolina limited liability company, collectively as buyers, and Alex Klaus, an individual, Todd Wegerski, DC, an individual, Lisa Ezell, an individual, Andrew Michael Evec, an individual, and Susan Ruth Train, an individual, collectively as guarantors, pursuant to which we will sell the assets of, and grant franchise rights to, 22 company-owned or managed clinics located in Virginia, North Carolina and South Carolina for an aggregate purchase price of approximately $1.5 million, subject to certain adjustments. In mid-December 2025, the buyers assumed business operations under Management Service Agreements that will remain in effect until lease reassignments are completed to permit ownership transfer. During the quarter ended June 30, 2026, we closed on the sale of one clinic included in the transaction. As of MarchJune 31,30, 2026, the transaction as a whole had not officially closed and therefore, the net assets and liabilities of the 22remaining clinics remain in our consolidated balance sheets.

On April 20, 2026, we entered into the Elite Chiro Group Purchase Agreement with Elite Chiro Group, pursuant to which we will sell to Elite Chiro Group the assets of, and grant franchise rights to, 45 company-owned or managed clinics located in Southern California for an aggregate purchase price of $2.3 million, subject to certain adjustments. The Purchase Price includes prorated franchise fees pursuant to 45 separate franchise agreements to be entered into between us and Elite Chiro Group and the non-exclusive development rights for 10 clinics to be developed in the metropolitan statistical areas of a development area to be agreed upon by us and Elite Chiro Group in accordance with the schedule set forth in the Elite Chiro Group Purchase Agreement. The closing of each clinic as part of the Elite Chiro Group Transaction is expressly conditioned upon the assignment of the existing lease for such clinic. On April 27, 2026, we closed on the sale of 13 clinics included in the Elite Chiro Group Transaction, withat which time ownership of such clinics transferred to Elite Chiro GroupGroup. assuming ownership on such date. In addition, onOn April 27, 2026, Elite Chiro Group also assumed business operations for the remaining 32 clinics included in the Elite Chiro Group Transaction pursuant to a Management Service AgreementAgreement. untilDuring suchthe timequarter ended June 30, 2026, we closed on the sale of 15 additional clinics included in the Elite Chiro Group Transaction. As of June 30, 2026, the Elite Chiro Group Transaction as leasea assignmentswhole arehad obtainednot officially closed and wetherefore, arethe ablenet toassets closeand onliabilities suchof the remaining clinics.clinics remain in our consolidated balance sheets.

The number of franchise licenses sold for the firstsecond quarter of 2026 was zero,10, compared with seven13 licenses sold for the firstsecond quarter of 2025. We ended the firstsecond quarter of 2026 with 1411 regional developers. We will continue to leverage the power of the regional developer program to accelerate the number of clinics sold, and eventually opened, across the country.

Recent events that may impact our business include unfavorable global economic or political conditions, continued labor shortages, elevated gas prices, and inflation and other cost increases. We anticipate that 2026 will continue to be a volatile macroeconomic environment.

During the first quarterhalf of 2026, we repurchased 137,088219,293 shares of our common stock for approximately $1.1$1.8 million. Shares repurchased during the first quarterhalf of 2026 represented 1.0%1.6% of outstanding common stock at December 31, 2025. All shares of common stock that were repurchased are held as treasury stock. As of MarchJune 31,30, 2026, we had a remaining $4.5$3.8 million authorized for repurchasing shares of our common stock under the 2025 SRP.

There were no changes in our critical accounting policies and estimates during the three months ended MarchJune 31,30, 2026, from those set forth in “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025.

The following discussion and analysis of our financial results encompasses the results of our Franchise Operations business segment for the three and six months ended MarchJune 31,30, 2026, compared with the three and six months ended MarchJune 31,30, 2025. All financial results and metrics discussed below are on a continuing operations basis.

Total Revenues - Three Months Ended MarchJune 31,30, 2026 Compared with Three Months Ended MarchJune 31,30, 2025

•Other revenues increased primarily due to increasedan merchantincrease incomein associatedsponsorship withrevenue creditrelated cardto transactions.our annual conference held in April 2026.

For the three and six months ended MarchJune 31,30, 2026, as compared with the three and six months ended MarchJune 31,30, 2025, the total cost of revenues decreased primarily due to a reduction in regional developer royalties.royalties driven by the five regional developer territory rights acquired since June 30, 2025.

For the three and six months ended MarchJune 31,30, 2026, as compared with the three and six months ended MarchJune 31,30, 2025, selling and marketing expenses increased due to an increase in expenses associated with our national marketing campaign efforts, which began late in the fourth quarter of 2025.

Depreciation and amortization expenses increased for the three and six months ended MarchJune 31,30, 2026, as compared to the three and six months ended MarchJune 31,30, 2025, primarily due to depreciation expenses related to internal use software enhancements and developments, including the launch of our new mobile app during the third quarter of 2025.

For the three months ended MarchJune 31,30, 2026, as compared with the three months ended MarchJune 31,30, 2025, general and administrative expenses increaseddecreased primarily due to an increase in workers' compensation insurance and professional services expenses, partially offset by a decrease in payroll and other employee compensation expenses including workers' compensation insurance driven by additional progress in our refranchising strategy, partially offset by an increase in professional services, litigation and acquisition-related expenses. As a percentage of revenue, general and administrative expenses during the three months ended MarchJune 31,30, 2026 and 2025 were 48%50% and 53%,58%, respectively.

Included in general and administrative expenses from continuing operations above are expenses of $0.4$0.3 million and $0.1$0.5 million related to workers’ compensation insurance for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, of which we believe that approximately $0.3 million and $0.1$0.4 million, respectively, relate to expenses that will not be incurred upon the completion of our refranchising strategy.

Income (Loss) Income from Operations

Income (loss)Loss from operations increaseddecreased by $1.6$0.8 million for the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025. The increasedecrease fromin the loss to a gain was primarily due to:

•an increase of $1.7$1.9 million in total revenues; and

•a decrease of $0.3 million in our total cost of revenues; partially offset byand

•ana increasedecrease of $0.2 million in general and administrative expenses.expenses; partially offset by

Other income, net increased duringFor the three months ended MarchJune 31,30, 2026, as compared towith the three months ended MarchJune 31,30, 2025, other income decreased primarily due to thelower deployment of additionalaverage cash and cash equivalentsequivalent intobalances higherin interest rateour money market funds resulting in increaseddecreased interest income.

Income tax expense decreased during the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, primarily due to a decrease in estimated state income taxes.

The table below reconcile net income (loss) income to Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025:

As of MarchJune 31,30, 2026, we had unrestricted cash and short-term bank deposits of $20.7$22.2 million. We usedgenerated $1.5$0.7 million of cash flow from operating activities from both continuing and discontinued operations in the threesix months ended MarchJune 31,30, 2026. While unfavorable global economic or political conditions create potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our line of credit will be sufficient to fund our anticipated operating and investment needs for at least the next 12 months.

While the interruptions, delays and/or cost increases resulting from political instability and geopolitical tensions, adverse weather conditions, economic weakness, inflationary pressures, elevated interest ratesrates, elevated gas prices and other factors have created uncertainty as to general economic conditions for the remainder of 2026, as of the date of this Quarterly Report on Form 10-Q, we believe that we have adequate capital resources and we have sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. For the remainder of 2026, we expect to use or redeploy our cash resources to support our business within the context of prevailing market conditions, which, given the ongoing uncertainties described above, could rapidly and materially deteriorate or otherwise change. Our long-term capital requirements, primarily for corporate initiatives, could be dependent on our ability to access additional funds through the debt and/or equity markets. If the equity and credit markets deteriorate, including as a result of economic weakness, political unrest or war, or any other reason, it may make any necessary equity or debt financing more difficult to obtain in a timely manner and on favorable terms, if at all, and if obtained, it may be more costly or more dilutive. From time to time, we consider and evaluate transactions related to our portfolio and capital structure, including debt financings, equity issuances, purchases and sales of assets, and other transactions. Given the ongoing uncertainties described above, the levels of our cash flows from operations for the remainder of 2026 may be impacted. There can be no assurance that we will be able to generate sufficient cash flows or obtain the capital necessary to meet our short and long-term capital requirements.

Net cash usedprovided inby operating activities for both continuing and discontinued operations decreasedincreased by $2.2$3.5 million to $1.5$0.7 million for the threesix months ended MarchJune 31,30, 2026, compared to net cash used in operating activities of $3.7$2.8 million for the threesix months ended MarchJune 31,30, 2025. The decreaseincrease in net cash used in operating activities was primarily attributable to a change in accrued expenses of $3.5$3.9 million primarily related to the settlement of a medical injury claim during the first quarter of 2025, which was partially offset by a related change in accounts receivable of $1.0 million for insurance recoveries, a change in payroll liabilities of $1.0$1.1 million related to the increased payout of our annual bonuses andbonuses, a change in prepaid expenses and other current assets of $0.8$0.9 million related to lower insurance premiums due to fewer company-owned or managed clinics in 2026 as compared to 2025.2025, and a change in other liabilities related to our asset purchase agreements that are pending final closure.