Quarterly report [Sections 13 or 15(d)]

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

v3.26.1
Nature of Operations and Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
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 six months ended June 30, 2026 and 2025:
Three Months Ended
June 30,		 Six Months Ended
June 30,
Franchised clinics: 2026 2025 2026 2025
Clinics open at the beginning of the period 868  847  885  842 
Opened during the period 5  7  8  12 
Acquired during the period 29  37  29  39 
Closed during the period (6) (6) (26) (8)
Clinics in operation at the end of the period 896  885  896  885 
Three Months Ended
June 30,		 Six Months Ended
June 30,
Company-owned or managed clinics: 2026 2025 2026 2025
Clinics open at the beginning of the period 75  122  75  125 
Sold during the period (29) (37) (29) (39)
Closed during the period (1) (3) (1) (4)
Clinics in operation at the end of the period 45  82  45  82 
Total clinics in operation at the end of the period 941  967  941  967 
Clinic licenses sold but not yet developed at the end of the period 52  92  52  92 
Future clinic licenses subject to executed letters of intent at the end of the period 58  60  58  60 
Schedule of Variable Interest Entities
VIE net income (including the management fee) for the three and six months ended June 30, 2026 and 2025, respectively, is included in Income from discontinued operations before income tax expense and Income tax (benefit) expense from discontinued operations in the condensed consolidated statements of operations as follows:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2026 2025 2026 2025
Income from discontinued operations before income tax $ 1,872,609  $ 427,212  $ 2,598,648  $ 814,499 
Income tax (benefit) expense from discontinued operations (2,559) 100,201  179,810  203,613 
Net income $ 1,875,168  $ 327,011  $ 2,418,838  $ 610,886 
The carrying amount of the VIEs’ assets and liabilities is included in discontinued operations as of June 30, 2026 and December 31, 2025 in the condensed consolidated balance sheets as follows:
June 30,
2026		 December 31,
2025
Discontinued operations current assets $ 994,138  $ 994,138 
Discontinued operations current liabilities 3,219,152  6,079,903 
Schedule of Allowance for Credit Losses
The following table provides a reconciliation of the activity related to our allowance for credit losses:
Allowance for
Credit Losses
Balance at December 31, 2024 $ 220,893 
  Bad debt expense recognized during the year 286,232 
  Write-off of uncollectible amounts (77,638)
Balance at December 31, 2025 $ 429,487 
  Bad debt expense recognized during the period 122,823 
  Write-off of uncollectible amounts (75,920)
Balance at June 30, 2026 $ 476,390 
Schedule of Impairment Losses and Disposal Gains and Losses Recorded in Income from Discontinued Operations As a result of our 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, we recorded an estimated net loss on disposal, which is included in Income from discontinued operations before income tax expense in the condensed consolidated statements of operations as follows:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2026 2025 2026 2025
Net loss on disposition or impairment related to discontinued operations $ 1,408,035  $ 439,831  $ 1,816,267  $ 1,422,765 
The following table shows a reconciliation of our impairment and disposal losses recorded in Income from discontinued operations before income tax expense for the three and six months ended June 30, 2026 and 2025:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2026 2025 2026 2025
Impairment on assets held for sale
Assets held for sale $ 1,408,035  $ 439,831  $ 1,816,267  $ 1,422,765 
Loss (gain) on disposal of assets other than by sale
Property and equipment, net 1,734  257,922  2,550  267,164 
Operating lease right-of-use asset (281,122) 233,695  (274,638) 425,778 
(Gain) loss on the sale of assets (312,181) 821,046  (349,949) 770,145 
Total net loss on disposition or impairment related to discontinued operations $ 816,466  $ 1,752,494  $ 1,194,230  $ 2,885,852 
The key components of Net income from discontinued operations that were included in our condensed consolidated statements of operations are as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Revenues:
Revenues from company-owned or managed clinics $ 7,591,917  $ 16,642,013  $ 16,946,108  $ 33,548,363 
Total revenues 7,591,917  16,642,013  16,946,108  33,548,363 
Cost of revenues:
IT cost of revenues 4,906  5,551  11,087  11,723 
Total cost of revenues 4,906  5,551  11,087  11,723 
Selling and marketing expenses 733,897  1,825,654  1,741,199  3,718,400 
Depreciation and amortization 1,690  17,120  9,447  43,505 
General and administrative expenses 5,133,125  11,857,995  12,697,626  24,128,217 
Total selling, general and administrative expenses 5,868,712  13,700,769  14,448,272  27,890,122 
Net loss on disposition or impairment from discontinued operations 816,466  1,752,494  1,194,230  2,885,852 
Income from discontinued operations 901,833  1,183,199  1,292,519  2,760,666 
Other expense, net 44  —  12,017  238 
Income before income tax expense 901,789  1,183,199  1,280,502  2,760,428 
Income tax (benefit) expense from discontinued operations (2,559) 100,201  179,810  203,613 
Net income from discontinued operations $ 904,348  $ 1,082,998  $ 1,100,692  $ 2,556,815 
The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in our condensed consolidated balance sheets:
June 30,
2026		 December 31,
2025
ASSETS
Restricted cash $ 824,163  $ — 
Accounts receivable 181,144  315,201 
Prepaid expenses and other current assets 253,803  581,504 
Assets held for sale, net of valuation allowance 12,280,539  20,051,965 
Property and equipment, net —  67,779 
Deferred tax assets (attributable to VIEs) 994,138  994,138 
Deposits and other assets 227,194  235,731 
Total assets, discontinued operations $ 14,760,981  $ 22,246,318 
LIABILITIES
Accounts payable $ 26,981  $ 83,503 
Accrued expenses 2,870,060  2,519,433 
Payroll liabilities ($0.1 million and $0.6 million attributable to VIEs, respectively)
 345,312  988,865 
Operating lease liability, current portion 5,424  651,844 
Other current liabilities ($0.8 million attributable to VIEs)
 1,580,646  756,483 
Liabilities to be disposed of ($2.3 million and $4.7 million attributable to VIEs, respectively)
 9,351,816  16,368,318 
Total liabilities, discontinued operations $ 14,180,239  $ 21,368,446 
The key components of cash flows from discontinued operations are as follows:
Six Months Ended June 30,
2026 2025
Significant operating and investing non-cash items:
Depreciation and amortization $ 9,447  $ 43,505 
Net loss on disposition or impairment
 1,194,230  2,885,852 
Capital expenditures:
Purchase of property and equipment 15,753  73,535 
The principal components of the held for sale assets and liabilities to be disposed of as of June 30, 2026 and December 31, 2025 were as follows:
June 30, 2026 December 31, 2025
ASSETS
Property and equipment, net
 $ 3,139,305  $ 4,497,545 
Operating lease right-of-use asset 9,313,107  14,111,081 
Intangible assets, net 4,195,177  4,288,265 
Goodwill 2,927,597  3,482,718 
Valuation allowance (7,294,647) (6,327,644)
Total assets held for sale, net $ 12,280,539  $ 20,051,965 
LIABILITIES
Operating lease liability, current and non-current $ 6,422,252  $ 11,065,542 
Deferred revenue from company-owned or managed clinics 2,929,564  5,302,776 
Total liabilities to be disposed of $ 9,351,816  $ 16,368,318 
Schedule of Earnings (loss) per Common Share
Three Months Ended
June 30,		 Six Months Ended
June 30,
2026 2025 2026 2025
Net (loss) income from continuing operations $ (251,327) $ (989,635) $ 851,464  $ (1,495,656)
Net income from discontinued operations 904,348  1,082,998  1,100,692  2,556,815 
Net income $ 653,021  $ 93,363  $ 1,952,156  $ 1,061,159 
Weighted average common shares outstanding - basic 14,244,929  15,326,317  14,213,195  15,256,755 
Effect of dilutive securities:
Unvested restricted stock and stock options 2,064  74,091  3,037  71,443 
Weighted average common shares outstanding - diluted 14,246,993  15,400,408  14,216,232  15,328,198 
(Loss) income earnings per share:
Basic (loss) income earnings per share:
Continuing operations $ (0.01) $ (0.06) $ 0.06  $ (0.10)
Discontinued operations 0.06  0.07  0.08  0.17 
Net income per basic share $ 0.05  $ 0.01  $ 0.14  $ 0.07 
Diluted (loss) income earnings per share
Continuing operations $ (0.01) $ (0.06) $ 0.06  $ (0.10)
Discontinued operations 0.06  0.07  0.08  0.17 
Net income per diluted share $ 0.05  $ 0.01  $ 0.14  $ 0.07 
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,
2026 2025 2026 2025
Stock options 49,890  81,153  50,978  76,825