Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events Divestitures
On April 20, 2026, we entered into an Asset Purchase Agreement (the “Elite Chiro Group Purchase Agreement”) with Elite Chiro Group, a California corporation (“Elite Chiro Group”), as buyer, and Gadi Emein, an individual, as guarantor, 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 (the “Elite Chiro Group Transaction”) for an aggregate purchase price of $2.3 million, subject to certain adjustments (the “Purchase Price”). 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. The Elite Chiro Group Transaction is also subject to customary closing conditions.
On April 27, 2026, we closed on 13 clinics in the Elite Chiro Group Transaction, with Elite Chiro Group assuming ownership on such date. In addition, on April 27, 2026, Elite Chiro Group also assumed business operations for the remaining 32 clinics in the Elite Chiro Group Transaction pursuant to a Management Service Agreement until such time as lease assignments are obtained and we are able to close on such remaining clinics.
Debt
On May 1, 2026, we entered into a waiver and fourth amendment to the Credit Agreement (as amended, the “2026 Credit Facility”) with the Lender. Among other things, the 2026 Credit Facility waives the existing default of our Credit Facilities due to a violation of our fixed charge coverage ratio covenant and modifies the fixed charge coverage ratio covenant to allow for stock repurchases, which constitute restricted payments. The 2026 Credit Facility also extends the maturity date of the Credit Facilities to August 31, 2029. As of May 7, 2026, we were in compliance with all applicable financial and non-financial covenants under the 2026 Credit Facility, and we have restored our ability to draw upon our $20.0 million Revolver with the Lender.
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