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, 2026

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, 2026 and 2025:


	Line Items in our Condensed Consolidated Income Statements	Three Months Ended March 31,
		2026		2025




Operating lease costs:
Operating lease costs	General and administrative expenses	$	91,577	$	81,181
Total lease costs		$	91,577	$	81,181

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


	March 31, 2026			December 31, 2025
Operating Leases:
Operating lease right-of -use asset	$	1,513,179		$	1,572,173
Operating lease liability - current portion	280,253			194,179
Operating lease liability - net of current portion	1,762,036			1,815,527
Total operating lease liability	$	2,042,289		$	2,009,706







Weighted average remaining lease term (in years):
Operating leases	5.2			5.4

Weighted average discount rate:
Operating leases	6.5		%	6.5		%

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


	Three Months Ended March 31,
	2026		2025
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	—	$	115,014



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

Maturities of lease liabilities as of March 31, 2026 are as follows, excluding amounts related to leases classified as discontinued operations:


	Operating Leases
2026 (remainder)	$	268,762
2027	467,453
2028	479,129
2029	491,077
2030	503,374
Thereafter	211,904
Total lease payments	$	2,421,699
Less: Imputed interest	(379,410)
Total lease obligations	$	2,042,289
Less: Current obligations	(280,253)
Long-term lease obligation	$	1,762,036

Guaranties in Connection with the Sale of the Divested Business

In connection with the sale of company-owned or managed clinics, we have guaranteed 36 future operating lease commitments assumed by the buyers. We are obligated to perform under the guaranties if the buyers fail to perform under the lease agreements at any time during the remainder of the term of the lease agreements, the latest of which expires on December 31, 2033. As of March 31, 2026, the undiscounted maximum remaining lease payments totaled $4.6 million. We have not recorded a liability with respect to our obligations under the guaranties as of March 31, 2026, as we concluded that payment under the lease guaranties was not probable.

Litigation

In the normal course of business, we are party to litigation and claims from time to time. We maintain insurance to cover certain litigation and claims.

During the second quarter of 2024, we entered into settlement agreements from litigation related to employment matters of $1.5 million that was outside the normal course of business, which we have accrued for in discontinued operations current liabilities as of December 31, 2025 and March 31, 2026. The settlement is expected to be paid out during the second quarter of 2026.

During the first quarter of 2025, litigation related to a medical injury claim between a patient ("the Claimant") and us filed on September 5, 2023 reached a settlement agreement on February 25, 2025. Per the terms of the settlement agreement, we were required to pay the Claimant $3.4 million with our insurance. We 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 our insurance for $1.9 million as of December 31, 2024. The settlement was paid in full during the first quarter of 2025.

In 2025, we determined that the likelihood of a loss related to multiple lawsuits, including three cases consolidated into one class action lawsuit (but not yet certified), six individual cases related to each other and two unrelated individual cases, all filed against us and a chiropractor employed by the professional corporation providing clinical services in 2024, 2025 and 2026 in the State of California became probable. The initial lawsuit was filed against us on June 6, 2024 with the Superior Court of California in Los

Angeles County. The lawsuits allege, among other claims, an invasion of privacy, negligence, emotional distress, sexual harassment, unlawful recording, failure to provide a safe environment and trespass on person at one of our company-owned or managed clinics. The lawsuits are currently in discovery and trial is scheduled to begin in early 2027. We intend to continue to defend these cases vigorously, but it is not possible at this time to reasonably estimate the outcome of or any potential liability from these cases and therefore, no accrual exists as of March 31, 2026, with the exception of two individual cases related to the matter where we have booked an accrual that represents our insurance coverage deductible. We also note that our exposure to these cases may be limited by our insurance coverage, but the potential exposure is undetermined as of March 31, 2026.