The Joint Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Nature of Operations and Summary of Significant Accounting Policies (Tables)

Nature of Operations and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

The following table summarizes the number of clinics in operation under franchise agreements and as company-owned or managed clinics for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended June 30,		Six Months Ended June 30,
Franchised clinics:	2024	2023	2024	2023
Clinics open at beginning of period	819	740	800	712
Opened during the period	9	23	32	52
Acquired during the period	2	—	2	—
Sold during the period	—	(3)	—	(3)
Closed during the period	(1)	(4)	(5)	(5)
Clinics in operation at the end of the period	829	756	829	756

	Three Months Ended June 30,		Six Months Ended June 30,
Company-owned or managed clinics:	2024	2023	2024	2023
Clinics open at beginning of period	135	130	135	126
Opened during the period	—	3	—	7
Acquired during the period	—	3	—	3
Sold during the period	(2)	—	(2)	—
Closed during the period	(2)	(2)	(2)	(2)
Clinics in operation at the end of the period	131	134	131	134

Total clinics in operation at the end of the period	960	890	960	890

Clinic licenses sold but not yet developed	113	171	113	171
Future clinic licenses subject to executed letters of intent	45	43	45	43

Schedule of Variable Interest Entities

VIE total revenue and general and administrative expenses for the three and six months ended June 30, 2024 and 2023 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Revenues	$	10,286,078	$	10,426,826	$	20,497,658	$	20,309,117
General and administrative expenses	4,649,404		4,491,638		9,222,053		9,088,906

The carrying amount of the VIEs’ assets and liabilities was immaterial as of June 30, 2024 and December 31, 2023, except for the balances as follows:


	June 30, 2024		December 31, 2023
Deferred tax assets	$	1,088,802	$	1,088,802
Payroll liabilities	746,266		728,130
Deferred revenue from company managed clinics	2,249,927		1,558,178
Liabilities to be disposed of	2,819,436		3,622,481
Other liabilities	1,235,241		1,235,241

Schedule of Earnings (loss) per Common Share


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Net (loss) income	$	(3,596,398)	$	(320,489)	$	(2,649,419)	$	2,005,675

Weighted average common shares outstanding - basic	14,950,082		14,684,035		14,875,718		14,625,435
Effect of dilutive securities:
Unvested restricted stock and stock options	256,156		268,328		235,018		282,158
Weighted average common shares outstanding - diluted	15,206,238		14,952,363		15,110,736		14,907,593

Basic (loss) earnings per share	$	(0.24)	$	(0.02)	$	(0.18)	$	0.14
Diluted (loss) earnings per share	$	(0.24)	$	(0.02)	$	(0.18)	$	0.13

The following common stock equivalents were excluded from the computation of diluted earnings (loss) per share for the periods presented because including them would have been antidilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
Weighted average dilutive securities:	2024	2023	2024	2023
Restricted stocks	—	—	—	—
Stock options	80,132	87,983	82,722	90,953

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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