Nature of Operations and Summary of Significant Accounting Policies (Tables)
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9 Months Ended |
Sep. 30, 2024 |
Accounting Policies [Abstract] |
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Schedule of Franchisor Disclosure |
The following table summarizes the number of clinics in operation under franchise agreements and as company-owned or managed clinics for the three and nine months ended September 30, 2024 and 2023:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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Franchised clinics: |
2024 |
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2023 |
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2024 |
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2023 |
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Clinics open at beginning of period |
829 |
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756 |
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800 |
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712 |
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Opened during the period |
14 |
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24 |
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46 |
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76 |
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Acquired during the period |
1 |
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— |
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3 |
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— |
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Sold during the period |
— |
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— |
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— |
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(3) |
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Closed during the period |
(6) |
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(2) |
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(11) |
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(7) |
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Clinics in operation at the end of the period |
838 |
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778 |
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838 |
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778 |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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Company-owned or managed clinics: |
2024 |
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2023 |
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2024 |
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2023 |
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Clinics open at beginning of period |
131 |
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134 |
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135 |
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126 |
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Opened during the period |
— |
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2 |
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— |
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9 |
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Acquired during the period |
— |
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— |
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— |
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3 |
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Sold during the period |
(1) |
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— |
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(3) |
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— |
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Closed during the period |
(5) |
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— |
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(7) |
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(2) |
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Clinics in operation at the end of the period |
125 |
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136 |
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125 |
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136 |
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Total clinics in operation at the end of the period |
963 |
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914 |
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963 |
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914 |
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Clinic licenses sold but not yet developed |
102 |
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155 |
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102 |
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155 |
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Future clinic licenses subject to executed letters of intent |
46 |
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42 |
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46 |
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42 |
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Schedule of Variable Interest Entities |
VIE total revenue, general and administrative expenses and income tax expense for the three and nine months ended September 30, 2024 and 2023 were as follows:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenues |
$ |
10,242,319 |
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$ |
10,688,500 |
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$ |
30,739,977 |
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$ |
30,997,617 |
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General and administrative expenses |
4,527,176 |
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4,525,305 |
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13,749,229 |
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13,614,211 |
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Income tax expense |
109,693 |
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129,849 |
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322,562 |
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217,655 |
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The carrying amount of the VIEs’ assets and liabilities was immaterial as of September 30, 2024 and December 31, 2023, except for the balances as follows:
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September 30, 2024 |
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December 31, 2023 |
Deferred tax assets |
1,088,802 |
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1,088,802 |
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Payroll liabilities |
710,914 |
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728,130 |
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Deferred revenue from company managed clinics |
3,183,397 |
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1,558,178 |
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Liabilities to be disposed of |
1,378,295 |
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3,622,481 |
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Other liabilities |
1,235,241 |
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1,235,241 |
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Schedule of Loss on Long-Lived Assets Held and Used |
During the three months ended September 30, 2024, property and equipment, net, and ROU assets related to asset groups determined to not be recoverable were written down from their carrying values to their respective fair values resulting in the following non-cash impairment losses:
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Three Months Ended September 30, 2024 |
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Carrying Value |
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Fair Value |
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Net loss on disposition or impairment |
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Property and equipment, net |
$ |
600,223 |
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$ |
476,270 |
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$ |
123,953 |
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Operating lease right-of-use asset |
1,663,127 |
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1,301,787 |
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361,340 |
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Total Net loss on disposition or impairment |
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$ |
485,293 |
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During the nine months ended September 30, 2024, property and equipment, net, ROU assets and franchise rights related to asset groups determined to not be recoverable were written down from their carrying values to their respective fair values resulting in the following non-cash impairment losses:
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Nine Months Ended September 30, 2024 |
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Carrying Value |
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Fair Value |
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Net loss on disposition or impairment |
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Property and equipment, net |
$ |
2,500,915 |
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$ |
1,865,255 |
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$ |
635,660 |
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Operating lease right-of-use asset |
2,100,591 |
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1,731,402 |
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369,189 |
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Intangible assets, net |
$ |
298,510 |
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$ |
252,746 |
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45,764 |
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Total Net loss on disposition or impairment |
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$ |
1,050,613 |
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The following table shows a reconciliation of the Company’s impairment losses and disposal gains and losses recorded in net loss on disposition or impairment for the three and nine months ended September 30, 2024 and 2023t:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Impairment on long-lived assets held for use |
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Property and equipment, net |
$ |
123,953 |
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$ |
— |
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$ |
635,660 |
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$ |
— |
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Operating lease right-of-use asset |
361,340 |
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80,495 |
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369,189 |
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80,499 |
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Intangible assets, net |
— |
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— |
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45,764 |
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— |
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Impairment on assets held for sale |
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Assets held for sale |
1,865,124 |
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756,228 |
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2,570,461 |
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816,429 |
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Impairment on long-lived assets previously held for sale reclassified as held for use |
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Property and equipment, net |
528,849 |
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— |
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528,849 |
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— |
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Operating lease right-of-use asset |
876,224 |
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— |
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876,224 |
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— |
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Loss on disposal of assets |
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Property and equipment, net |
3,549 |
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68,200 |
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196,457 |
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217,810 |
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Operating lease right-of-use asset |
32,775 |
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— |
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406,039 |
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— |
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Loss (gain) on sale of assets |
13,404 |
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(26,002) |
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Total Net loss on disposition or impairment |
$ |
3,805,218 |
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$ |
904,923 |
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$ |
5,602,641 |
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$ |
1,114,738 |
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Schedule of Loss Assets and Liabilities Held-for-Sale |
As a result of its evaluation of the recoverability of the carrying value of the assets and liabilities held for sale relative to the agreed upon sales prices or the clinics estimated fair values, the Company recorded an estimated net loss on disposal in loss on disposition or impairment in its condensed consolidated income statement as follows:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net loss on disposition or impairment |
$ |
1,865,124 |
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$ |
756,228 |
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$ |
2,570,461 |
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$ |
816,429 |
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The following table shows a reconciliation of the Company’s impairment losses and disposal gains and losses recorded in net loss on disposition or impairment for the three and nine months ended September 30, 2024 and 2023t:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Impairment on long-lived assets held for use |
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Property and equipment, net |
$ |
123,953 |
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$ |
— |
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$ |
635,660 |
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$ |
— |
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Operating lease right-of-use asset |
361,340 |
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80,495 |
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369,189 |
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80,499 |
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Intangible assets, net |
— |
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— |
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45,764 |
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— |
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Impairment on assets held for sale |
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Assets held for sale |
1,865,124 |
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756,228 |
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2,570,461 |
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816,429 |
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Impairment on long-lived assets previously held for sale reclassified as held for use |
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Property and equipment, net |
528,849 |
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— |
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528,849 |
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— |
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Operating lease right-of-use asset |
876,224 |
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— |
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876,224 |
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— |
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Loss on disposal of assets |
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Property and equipment, net |
3,549 |
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68,200 |
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196,457 |
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217,810 |
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Operating lease right-of-use asset |
32,775 |
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— |
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406,039 |
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— |
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Loss (gain) on sale of assets |
13,404 |
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(26,002) |
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Total Net loss on disposition or impairment |
$ |
3,805,218 |
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$ |
904,923 |
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$ |
5,602,641 |
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$ |
1,114,738 |
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Schedule of Earnings (loss) per Common Share |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net (loss) income |
$ |
(3,165,139) |
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$ |
(716,273) |
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$ |
(5,814,558) |
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$ |
1,289,402 |
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Weighted average common shares outstanding - basic |
14,959,132 |
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14,790,663 |
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14,903,726 |
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14,666,222 |
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Effect of dilutive securities: |
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Unvested restricted stock and stock options |
233,247 |
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225,290 |
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234,422 |
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265,252 |
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Weighted average common shares outstanding - diluted |
15,192,379 |
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15,015,953 |
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15,138,148 |
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14,931,474 |
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Basic (loss) earnings per share |
$ |
(0.21) |
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$ |
(0.05) |
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$ |
(0.39) |
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$ |
0.09 |
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Diluted (loss) earnings per share |
$ |
(0.21) |
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$ |
(0.05) |
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$ |
(0.39) |
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$ |
0.09 |
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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:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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Weighted average dilutive securities: |
2024 |
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2023 |
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2024 |
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2023 |
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Restricted stocks |
— |
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— |
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— |
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— |
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Stock options |
78,764 |
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121,699 |
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81,363 |
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89,883 |
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