The Joint Corp. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Commitments and Contingencies

Commitments and Contingencies

3 Months Ended

Mar. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

Leases

The table below summarizes the components of lease expense and income statement location for the three months ended March 31, 2025, and 2024:


	Line Items in the Company's Condensed Consolidated	Three Months Ended March 31,
	Income Statements	2025		2024




Operating lease costs:
Operating lease costs	General and administrative expenses	81,181		64,289
Total lease costs		$	81,181	$	64,289

Supplemental information and balance sheet location related to leases (excluding amounts related to leases classified as discontinued operations) was as follows:


	March 31, 2025		December 31, 2024
Operating Leases:
Operating lease right-of -use asset	$1,742,749		$245,384
Operating lease liability - current portion	$240,889		$448,285
Operating lease liability - net of current portion	2,009,705		—
Total operating lease liability	$2,250,594		$448,285







Weighted average remaining lease term (in years):
Operating leases	6.2		1.0

Weighted average discount rate:
Operating leases	6.5	%	5.7	%

Supplemental cash flow information related to leases (excluding amounts related to leases classified as discontinued operations) was as follows:


	Three Months Ended March 31, 2025		Three Months Ended March 31, 2024
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	115,014	$	112,202



Non-cash transactions: ROU assets obtained in exchange for lease liabilities
Operating lease	$	1,554,504	$	—

Maturities of lease liabilities as of March 31, 2025 are as follows, excluding amounts related to leases classified as discontinued operations:


	Operating Leases
2025 (remainder)	$	345,042
2026	268,762
2027	467,453
2028	479,129
2029	491,077
Thereafter	715,278
Total lease payments	$	2,766,741
Less: Imputed interest	(516,147)
Total lease obligations	2,250,594
Less: Current obligations	(240,889)
Long-term lease obligation	$	2,009,705

Guarantee in Connection with the Sale of the Divested Business

In connection with the sale of company-managed clinics in 2022, 2024, and 2025, the Company guaranteed four future operating lease commitments assumed by the buyers. The Company is obligated to perform under the guarantees if the buyers fail to perform under the lease agreements at any time during the remainder of the lease agreements, which expire on October 31, 2025, May 31, 2027, and November 30, 2030. At the dates of sale, the undiscounted maximum potential future payments totaled $0.8 million. As of March 31, 2025, the undiscounted remaining lease payments under the agreements totaled $0.7 million. The Company had not recorded a liability with respect to the guarantee obligations as of March 31, 2025, as the Company concluded that payment under the lease guarantees was not probable.

Litigation

In the normal course of business, the Company is party to litigation and claims from time to time. The Company maintains insurance to cover certain litigation and claims.

During the second quarter of 2024, the Company entered into settlement agreements from litigation related to employment matters of $1.5 million that was outside the normal course of business, which the Company has accrued for in discontinued operations current liabilities as of December 31, 2024, and March 31, 2025.

Additionally, litigation related to a medical injury claim between a patient ("the Claimant") and the Company filed on September 5, 2023, reached a settlement agreement on February 25, 2025. Per the terms of the settlement agreement, the Company and the Company's insurance were to pay the Claimant $3.4 million. The Company accrued the settlement recorded in discontinued operations current liabilities for $3.4 million as of December 31, 2024. The expense of the accrual was offset by a receivable recorded as discontinued operations current assets from the Company's insurance for $1.9 million as of December 31, 2024. The settlement was paid in full during the first quarter of 2025.