Quarterly report [Sections 13 or 15(d)]

Segment Reporting

v3.26.3
Segment Reporting
 9 Months Ended
Sep. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (the “CODM”) to evaluate performance and make operating decisions. We have identified the CODM as our Chief Executive Officer.
Historically, we have had two operating business segments: (1) Corporate Clinics, and (2) Franchise Operations. The Corporate Clinics segment is comprised of the activities of the company-owned or managed clinics. In the fourth quarter of 2024, as part of our refranchising strategy, the Corporate Clinic segment met the criteria to be reported as discontinued operations (Refer to Note 3, Divestitures for financial information on the discontinued operating Corporate Clinics segment). Therefore, since December 31, 2024, we have had only one reportable segment: Franchise Operations. In accordance with ASC 205-20, Discontinued Operations, expenses that in prior periods were partially allocated to the Corporate Clinic segment that are not wholly related to the activity of the segment have been recast to be presented in continuing operations, which is now Franchise Operations. Additionally, any expenses previously identified as Corporate Unallocated have been allocated entirely to the Franchise Operations segment.
The Franchise Operations segment is comprised of the operating activities of the franchise business unit. The Franchise Operations segment derives revenue primarily from customers by providing access to our franchise license, which represents symbolic intellectual property (See Note 2, Revenue Disclosures for additional details). The Franchise Operations segment is managed on a consolidated basis because all operations are located within a similar economic and regulatory environment, provide the same services and share the same business model and pricing strategies. As of September 30, 2026, the franchise system consisted of 915 clinics in operation. The accounting policies for the franchise segment are the same as those described in Note 1, Nature of Operations and Summary of Significant Accounting Policies. The CODM uses Net Income, Gross Profit, Operating Income, and Adjusted EBITDA as metrics in assessing performance and determining how to allocate resources. Net Income, Gross Profit, and Operating Income are reported on the condensed consolidated statements of operations. Adjusted EBITDA is presented in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures and is reconciled back to Net income (loss) from continuing operations on the condensed consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets, excluding discontinued operations current assets. The CODM uses these financial measures to evaluate income generated from segment
assets (return on assets) in deciding whether to reinvest profits in the Franchise Segment or into other parts of the entity, such as new products or services, new geographic territories, acquisitions or reacquisitions, or stock repurchases. Net Income and Adjusted EBITDA are used to monitor budget versus actual results. The CODM also uses Net Income and Adjusted EBITDA in conjunction with certain non-financial metrics in competitive analysis by benchmarking to our competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.
The following table summarizes total revenue and significant expense categories and amounts for our reportable segment that aligns with the segment level information that is regularly provided to the CODM:
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2026 2025 2026 2025
Revenue $ 13,551,708  $ 13,380,685  $ 43,553,855  $ 39,728,545 
Less:
Franchise and regional developer cost of revenues 1,980,494  2,232,419  6,320,591  7,134,267 
IT cost of revenues 423,074  428,815  1,282,882  1,271,700 
Selling and marketing expenses 2,704,777  2,816,081  11,307,832  9,805,075 
Adjusted general and administrative expenses 6,175,404  6,380,991  18,694,390  19,860,681 
Stock-based compensation expense 335,572  346,209  1,038,752  971,138 
Other segment items, net (a)
204,219  428,718  1,490,002  644,869 
Depreciation and amortization expense 261,779  446,736  1,081,333  1,210,961 
Income tax expense 10,069  10,346  30,289  35,140 
Segment income (loss) $ 1,456,320  $ 290,370  $ 2,307,784  $ (1,205,286)
Reconciliation of (loss) income
Net income (loss) from continuing operations $ 1,456,320  $ 290,370  $ 2,307,784  $ (1,205,286)
Net (loss) income from discontinued operations (1,573,680) 564,639  (472,988) 3,121,454 
Net (loss) income $ (117,360) $ 855,009  $ 1,834,796  $ 1,916,168 
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(a) Other segment items, net includes other (income) loss, net, acquisition-related expenses, net loss on disposition or impairment, costs related to restatement filings, restructuring costs and litigation expenses.