| Schedule of Error Corrections and Prior Period Adjustments |
The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022 |
|
|
|
December 31,
2022 |
|
As Previously Reported |
|
Adjustments |
|
As Restated |
| Intangible assets, net |
$ |
12,867,529 |
|
|
$ |
(1,939,234) |
|
|
$ |
10,928,295 |
|
Deferred tax assets |
8,441,713 |
|
|
3,486,439 |
|
|
11,928,152 |
|
| Total assets |
91,943,172 |
|
|
1,547,205 |
|
|
93,490,377 |
|
| Current liabilities: |
|
|
|
|
|
| Deferred franchise and regional development fee revenue, current portion |
2,955,851 |
|
|
(2,955,851) |
|
|
— |
|
Deferred franchise fee revenue, current portion |
— |
|
|
2,468,601 |
|
|
2,468,601 |
|
Upfront regional developer fees, current portion |
— |
|
|
487,250 |
|
|
487,250 |
|
Other current liabilities |
499,250 |
|
|
98,044 |
|
|
597,294 |
|
| Total current liabilities |
23,118,973 |
|
|
98,044 |
|
|
23,217,017 |
|
| Deferred franchise and regional development fee revenue, net of current portion |
15,661,412 |
|
|
(15,661,412) |
|
|
— |
|
Deferred franchise fee revenue, net of current portion |
— |
|
|
14,161,134 |
|
|
14,161,134 |
|
Upfront regional developer fees, net of current portion |
— |
|
|
1,500,278 |
|
|
1,500,278 |
|
Other liabilities |
27,230 |
|
|
1,260,649 |
|
|
1,287,879 |
|
| Total liabilities |
59,543,841 |
|
|
1,358,693 |
|
|
60,902,534 |
|
| Accumulated deficit |
(12,341,892) |
|
|
188,512 |
|
|
(12,153,380) |
|
| Total The Joint Corp. stockholders' equity |
32,374,331 |
|
|
188,512 |
|
|
32,562,843 |
|
| Total equity |
32,399,331 |
|
|
188,512 |
|
|
32,587,843 |
|
| Total liabilities and stockholders' equity |
91,943,172 |
|
|
1,547,205 |
|
|
93,490,377 |
|
The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2022
|
|
|
|
Year Ended December 31,
2022
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
| Revenues: |
|
|
|
|
|
| Regional developer fees |
$ |
659,099 |
|
|
$ |
(659,099) |
|
|
$ |
— |
|
| Total revenues |
101,911,409 |
|
|
(659,099) |
|
|
101,252,310 |
|
| Cost of revenues: |
|
|
|
|
|
| Franchise and regional developer cost of revenues |
8,462,503 |
|
|
(659,099) |
|
|
7,803,404 |
|
| Total cost of revenues |
9,830,162 |
|
|
(659,099) |
|
|
9,171,063 |
|
| Depreciation and amortization |
7,643,980 |
|
|
(997,358) |
|
|
6,646,622 |
|
| General and administrative expenses |
67,987,482 |
|
|
2,245,965 |
|
|
70,233,447 |
|
| Total selling, general and administrative expenses |
89,594,171 |
|
|
1,248,607 |
|
|
90,842,778 |
|
| Income from operations |
2,076,861 |
|
|
(1,248,607) |
|
|
828,254 |
|
| Income before income tax expense (benefit) |
1,943,760 |
|
|
(1,248,607) |
|
|
695,153 |
|
| Income tax expense (benefit) |
766,510 |
|
|
(698,062) |
|
|
68,448 |
|
| Net income |
1,177,250 |
|
|
(550,545) |
|
|
626,705 |
|
| Earnings per share: |
|
|
|
|
|
| Basic earnings per share |
$ |
0.08 |
|
|
$ |
(0.04) |
|
|
$ |
0.04 |
|
| Diluted earnings per share |
$ |
0.08 |
|
|
$ |
(0.04) |
|
|
$ |
0.04 |
|
The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity as of December 31, 2022, December 31, 2021, and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Deficit |
|
Total The Joint Corp. stockholder's equity |
|
Total Equity |
12/31/2020 (as previously reported) |
(20,094,912) |
|
|
21,126,152 |
|
|
21,126,252 |
|
Adjustment due to cumulative error correction |
(250,220) |
|
|
(250,220) |
|
|
(250,220) |
|
12/31/2020 (as restated) |
(20,345,132) |
|
|
20,875,932 |
|
|
20,876,032 |
|
|
|
|
|
|
|
12/31/2021 (as previously reported) |
(13,519,142) |
|
|
29,544,627 |
|
|
29,569,627 |
|
Adjustment due to cumulative error correction |
739,057 |
|
|
739,057 |
|
|
739,057 |
|
12/31/2021 (as restated) |
(12,780,085) |
|
|
30,283,684 |
|
|
30,308,684 |
|
|
|
|
|
|
|
12/31/2022 (as previously reported) |
(12,341,892) |
|
|
32,374,331 |
|
|
32,399,331 |
|
Adjustment due to cumulative error correction |
188,512 |
|
|
188,512 |
|
|
188,512 |
|
12/31/2022 (as restated) |
(12,153,380) |
|
|
32,562,843 |
|
|
32,587,843 |
|
The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2022
|
|
|
|
Year Ended December 31,
2022
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
| Cash flows from operating activities: |
|
|
|
|
|
| Net income |
$ |
1,177,250 |
|
|
(550,545) |
|
|
$ |
626,705 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| Depreciation and amortization |
7,643,980 |
|
|
(997,358) |
|
|
6,646,622 |
|
| Deferred income taxes |
746,921 |
|
|
(1,188,274) |
|
|
(441,353) |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
Upfront regional developer fees |
— |
|
|
(1,288,134) |
|
|
(1,288,134) |
| Deferred revenue |
2,230,041 |
|
|
659,098 |
|
|
2,889,139 |
|
Other liabilities |
409,938 |
|
|
490,213 |
|
|
900,151 |
|
| Net cash provided by operating activities |
11,084,584 |
|
|
(2,875,000) |
|
|
8,209,584 |
|
| Cash flows from investing activities: |
|
|
|
|
|
| Reacquisition and termination of regional developer rights |
(2,875,000) |
|
|
2,875,000 |
|
|
— |
|
| Net cash used in investing activities |
(20,775,115) |
|
|
2,875,000 |
|
|
(17,900,115) |
|
Decrease in cash |
(9,361,921) |
|
|
— |
|
|
(9,361,921) |
|
The following table summarizes the effect of the errors on the Company’s consolidated balance sheet as of December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2021 |
|
|
|
December 31,
2021 |
|
As Previously Reported |
|
Adjustments |
|
As Restated |
| Intangible assets, net |
5,403,390 |
|
|
(690,627) |
|
|
4,712,763 |
|
Deferred tax assets |
9,188,634 |
|
|
2,298,165 |
|
|
11,486,799 |
|
| Total assets |
85,454,209 |
|
|
1,607,538 |
|
|
87,061,747 |
|
| Current liabilities: |
|
|
|
|
|
| Deferred franchise and regional development fee revenue, current portion |
3,191,892 |
|
|
(3,191,892) |
|
|
— |
|
Deferred franchise fee revenue, current portion |
— |
|
|
2,421,721 |
|
|
2,421,721 |
|
Upfront regional developer fees, current portion |
— |
|
|
770,171 |
|
|
770,171 |
|
Other current liabilities |
539,500 |
|
|
— |
|
|
539,500 |
|
| Total current liabilities |
21,438,399 |
|
|
— |
|
|
21,438,399 |
|
| Deferred franchise and regional development fee revenue, net of current portion |
15,458,921 |
|
|
(15,458,921) |
|
|
— |
|
Deferred franchise fee revenue, net of current portion |
— |
|
|
12,953,430 |
|
|
12,953,430 |
|
Upfront regional developer fees, net of current portion |
— |
|
|
2,505,491 |
|
|
2,505,491 |
|
Other liabilities |
27,230 |
|
|
868,481 |
|
|
895,711 |
|
| Total liabilities |
55,884,582 |
|
|
868,481 |
|
|
56,753,063 |
|
| Accumulated deficit |
(13,519,142) |
|
|
739,057 |
|
|
(12,780,085) |
|
| Total The Joint Corp. stockholders' equity |
29,544,627 |
|
|
739,057 |
|
|
30,283,684 |
|
| Total equity |
29,569,627 |
|
|
739,057 |
|
|
30,308,684 |
|
| Total liabilities and stockholders' equity |
85,454,209 |
|
|
1,607,538 |
|
|
87,061,747 |
|
The following table summarizes the effect of the errors on the Company’s consolidated income statement for the year ended December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2021 |
|
|
|
Year Ended December 31, 2021 |
|
As Previously Reported |
|
Adjustments |
|
As Restated |
| Revenues: |
|
|
|
|
|
| Regional developer fees |
848,640 |
|
|
(848,640) |
|
|
— |
|
| Total revenues |
80,859,653 |
|
|
(848,640) |
|
|
80,011,013 |
|
| Cost of revenues: |
|
|
|
|
|
| Franchise and regional developer cost of revenues |
7,408,125 |
|
|
(848,639) |
|
|
6,559,486 |
|
| Total cost of revenues |
8,513,777 |
|
|
(848,639) |
|
|
7,665,138 |
|
| Depreciation and amortization |
6,088,947 |
|
|
(2,167,060) |
|
|
3,921,887 |
|
| General and administrative expenses |
49,453,305 |
|
|
1,393,513 |
|
|
50,846,818 |
|
| Total selling, general and administrative expenses |
66,966,668 |
|
|
(773,547) |
|
|
66,193,121 |
|
| Income from operations |
5,352,419 |
|
|
773,546 |
|
|
6,125,965 |
|
| Income before income tax expense (benefit) |
5,282,541 |
|
|
773,546 |
|
|
6,056,087 |
|
Income tax (benefit) |
(1,293,229) |
|
|
(215,731) |
|
|
(1,508,960) |
|
| Net income |
6,575,770 |
|
|
989,277 |
|
|
7,565,047 |
|
|
|
|
|
|
|
| Earnings per share: |
|
|
|
|
|
| Basic earnings per share |
$ |
0.46 |
|
|
$ |
0.07 |
|
|
$ |
0.53 |
|
| Diluted earnings per share |
$ |
0.44 |
|
|
$ |
0.07 |
|
|
$ |
0.51 |
|
The following table summarizes the effect of the errors on the Company’s consolidated statement of cash flows for the year ended December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2021 |
|
|
|
Year Ended December 31, 2021 |
|
As Previously Reported |
|
Adjustments |
|
As Restated |
| Cash flows from operating activities: |
|
|
|
|
|
| Net income |
$ |
6,575,770 |
|
|
989,277 |
|
|
$ |
7,565,047 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| Depreciation and amortization |
6,088,947 |
|
|
(2,167,060) |
|
|
3,921,887 |
|
Deferred income taxes |
(1,247,199) |
|
|
(530,958) |
|
|
(1,778,157) |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
Upfront regional developer fees |
— |
|
|
(572,944) |
|
|
(572,944) |
|
| Deferred revenue |
3,624,944 |
|
|
537,265 |
|
|
4,162,209 |
|
Other liabilities |
1,059,507 |
|
|
355,720 |
|
|
1,415,227 |
|
| Net cash provided by operating activities |
15,232,780 |
|
|
(1,388,700) |
|
|
13,844,080 |
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
| Reacquisition and termination of regional developer rights |
(1,388,700) |
|
|
1,388,700 |
|
|
— |
|
| Net cash used in investing activities |
(14,143,369) |
|
|
1,388,700 |
|
|
(12,754,669) |
|
Decrease in cash |
(907,291) |
|
|
— |
|
|
(907,291) |
|
The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2022, June 30, 2022, and September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
March 31, 2022 |
June 30, 2022 |
September 30, 2022 |
|
March 31, 2022 |
June 30, 2022 |
September 30, 2022 |
|
March 31, 2022 |
June 30, 2022 |
September 30, 2022 |
| Intangible assets, net |
$ |
4,829,941 |
|
$ |
9,114,701 |
|
$ |
10,162,506 |
|
|
$ |
(552,911) |
|
$ |
(2,356,584) |
|
$ |
(2,124,740) |
|
|
$ |
4,277,030 |
|
$ |
6,758,117 |
|
$ |
8,037,766 |
|
Deferred tax assets |
9,205,410 |
|
9,116,248 |
|
9,115,231 |
|
|
2,493,018 |
|
3,202,634 |
|
3,333,327 |
|
|
11,698,428 |
|
12,318,882 |
|
12,448,558 |
|
| Total assets |
85,062,449 |
|
86,235,794 |
|
88,291,398 |
|
|
1,940,107 |
|
846,050 |
|
1,208,587 |
|
|
87,002,556 |
|
87,081,844 |
|
89,499,985 |
|
| Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| Deferred franchise and regional development fee revenue, current portion |
3,130,856 |
|
2,981,534 |
|
2,974,993 |
|
|
(3,130,856) |
|
(2,981,534) |
|
(2,974,993) |
|
|
— |
|
— |
|
— |
|
Deferred franchise fee revenue, current portion |
— |
|
— |
|
— |
|
|
2,408,266 |
|
2,393,993 |
|
2,410,951 |
|
|
2,408,266 |
|
2,393,993 |
|
2,410,951 |
|
| Upfront regional developer fees, current portion |
— |
|
— |
|
— |
|
|
722,590 |
|
587,541 |
|
564,042 |
|
|
722,590 |
|
587,541 |
|
564,042 |
|
| Other current liabilities |
541,250 |
|
558,250 |
|
522,500 |
|
|
24,511 |
|
49,022 |
|
73,533 |
|
|
565,761 |
|
607,272 |
|
596,033 |
|
| Total current liabilities |
20,624,047 |
|
20,238,810 |
|
21,637,706 |
|
|
24,511 |
|
49,022 |
|
73,533 |
|
|
20,648,558 |
|
20,287,832 |
|
21,711,239 |
|
| Deferred franchise and regional development fee revenue, net of current portion |
15,410,136 |
|
15,447,554 |
|
15,604,180 |
|
|
(15,410,136) |
|
(15,447,554) |
|
(15,604,180) |
|
|
— |
|
— |
|
— |
|
Deferred franchise fee revenue, net of current portion |
— |
|
— |
|
— |
|
|
13,154,047 |
|
13,584,091 |
|
13,870,401 |
|
|
13,154,047 |
|
13,584,091 |
|
13,870,401 |
|
| Upfront regional developer fees, net of current portion |
— |
|
— |
|
— |
|
|
2,256,089 |
|
1,863,463 |
|
1,733,779 |
|
|
2,256,089 |
|
1,863,463 |
|
1,733,779 |
|
| Other liabilities |
27,230 |
|
27,230 |
|
27,230 |
|
|
966,523 |
|
1,064,565 |
|
1,162,607 |
|
|
993,753 |
|
1,091,795 |
|
1,189,837 |
|
| Total liabilities |
55,328,037 |
|
55,752,399 |
|
56,765,925 |
|
|
991,034 |
|
1,113,587 |
|
1,236,140 |
|
|
56,319,071 |
|
56,865,986 |
|
58,002,065 |
|
| Accumulated deficit |
(13,724,938) |
|
(13,380,196) |
|
(12,889,083) |
|
|
949,073 |
|
(267,537) |
|
(27,553) |
|
|
(12,775,865) |
|
(13,647,733) |
|
(12,916,636) |
|
| Total The Joint Corp. stockholders' equity |
29,709,412 |
|
30,458,395 |
|
31,500,473 |
|
|
949,073 |
|
(267,537) |
|
(27,553) |
|
|
30,658,485 |
|
30,190,858 |
|
31,472,920 |
|
| Total equity |
29,734,412 |
|
30,483,395 |
|
31,525,473 |
|
|
949,073 |
|
(267,537) |
|
(27,553) |
|
|
30,683,485 |
|
30,215,858 |
|
31,497,920 |
|
| Total liabilities and stockholders' equity |
85,062,449 |
|
86,235,794 |
|
88,291,398 |
|
|
1,940,107 |
|
846,050 |
|
1,208,587 |
|
|
87,002,556 |
|
87,081,844 |
|
89,499,985 |
|
The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2022 (Q1), June 30, 2022 (Q2), and September 30, 2022 (Q3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
Q1'22 |
Q2'22 |
Q3'22 |
|
Q1'22 |
Q2'22 |
Q3'22 |
|
Q1'22 |
Q2'22 |
Q3'22 |
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
| Regional developer fees |
$ |
201,787 |
|
$ |
169,953 |
|
$ |
153,181 |
|
|
$ |
(201,787) |
|
$ |
(169,953) |
|
$ |
(153,181) |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
| Total revenues |
22,438,538 |
|
25,057,318 |
|
26,603,000 |
|
|
(201,787) |
|
(169,953) |
|
(153,181) |
|
|
22,236,751 |
|
24,887,365 |
|
26,449,819 |
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
| Franchise and regional developer cost of revenues |
2,002,813 |
|
2,074,889 |
|
2,141,945 |
|
|
(201,787) |
|
(169,953) |
|
(153,181) |
|
|
1,801,026 |
|
1,904,936 |
|
1,988,764 |
|
| Total cost of revenues |
2,312,771 |
|
2,427,045 |
|
2,490,276 |
|
|
(201,787) |
|
(169,953) |
|
(153,181) |
|
|
2,110,984 |
|
2,257,092 |
|
2,337,095 |
|
| Depreciation and amortization |
1,629,176 |
|
1,700,476 |
|
2,011,768 |
|
|
(292,520) |
|
(238,606) |
|
(231,844) |
|
|
1,336,656 |
|
1,461,870 |
|
1,779,924 |
|
| General and administrative expenses |
15,378,623 |
|
16,528,022 |
|
17,796,806 |
|
|
154,803 |
|
2,042,279 |
|
— |
|
|
15,533,426 |
|
18,570,301 |
|
17,796,806 |
|
| Total selling, general and administrative expenses |
20,295,287 |
|
22,068,222 |
|
23,347,861 |
|
|
(137,717) |
|
1,803,673 |
|
(231,844) |
|
|
20,157,570 |
|
23,871,895 |
|
23,116,017 |
|
| Income from operations |
(176,426) |
|
473,207 |
|
500,472 |
|
|
137,717 |
|
(1,803,673) |
|
231,844 |
|
|
(38,709) |
|
(1,330,466) |
|
732,316 |
|
| Income before income tax expense (benefit) |
(192,573) |
|
453,921 |
|
475,237 |
|
|
137,717 |
|
(1,803,673) |
|
231,844 |
|
|
(54,856) |
|
(1,349,752) |
|
707,081 |
|
| Income tax expense (benefit) |
13,224 |
|
109,179 |
|
(15,876) |
|
|
(72,300) |
|
(587,064) |
|
(8,139) |
|
|
(59,076) |
|
(477,885) |
|
(24,015) |
|
Net income (loss) |
(205,797) |
|
344,742 |
|
491,113 |
|
|
210,017 |
|
(1,216,609) |
|
239,983 |
|
|
4,220 |
|
(871,867) |
|
731,096 |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
(0.01) |
|
$ |
0.02 |
|
$ |
0.03 |
|
|
$ |
0.01 |
|
$ |
(0.08) |
|
$ |
0.02 |
|
|
$ |
— |
|
$ |
(0.06) |
|
$ |
0.05 |
|
Diluted earnings (loss) per share |
$ |
(0.01) |
|
$ |
0.02 |
|
$ |
0.03 |
|
|
$ |
0.01 |
|
$ |
(0.08) |
|
$ |
0.02 |
|
|
$ |
— |
|
$ |
(0.06) |
|
$ |
0.05 |
|
The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2022 and the nine-month period ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
Six Months Ended June 30, 2022 |
Nine Months Ended September 30, 2022 |
|
Six Months Ended June 30, 2022 |
Nine Months Ended September 30, 2022 |
|
Six Months Ended June 30, 2022 |
Nine Months Ended September 30, 2022 |
| Revenues: |
|
|
|
|
|
|
|
|
| Regional developer fees |
$ |
371,740 |
|
$ |
524,923 |
|
|
$ |
(371,740) |
|
$ |
(524,923) |
|
|
$ |
— |
|
$ |
— |
|
| Total revenues |
47,495,856 |
|
74,098,856 |
|
|
(371,740) |
|
(524,923) |
|
|
47,124,116 |
|
73,573,933 |
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
| Franchise and regional developer cost of revenues |
4,077,701 |
|
6,219,646 |
|
|
(371,740) |
|
(524,923) |
|
|
3,705,961 |
|
5,694,723 |
|
| Total cost of revenues |
4,739,816 |
|
7,230,092 |
|
|
(371,740) |
|
(524,923) |
|
|
4,368,076 |
|
6,705,169 |
|
| Depreciation and amortization |
3,329,653 |
|
5,341,420 |
|
|
(531,126) |
|
(762,970) |
|
|
2,798,527 |
|
4,578,450 |
|
| General and administrative expenses |
31,906,644 |
|
49,703,451 |
|
|
2,197,082 |
|
2,197,082 |
|
|
34,103,726 |
|
51,900,533 |
|
| Total selling, general and administrative expenses |
42,363,509 |
|
65,711,371 |
|
|
1,665,956 |
|
1,434,112 |
|
|
44,029,465 |
|
67,145,483 |
|
| Income from operations |
296,782 |
|
797,253 |
|
|
(1,665,956) |
|
(1,434,112) |
|
|
(1,369,174) |
|
(636,859) |
|
| Income before income tax expense (benefit) |
261,348 |
|
736,585 |
|
|
(1,665,956) |
|
(1,434,112) |
|
|
(1,404,608) |
|
(697,527) |
|
| Income tax expense (benefit) |
122,403 |
|
106,527 |
|
|
(659,363) |
|
(667,503) |
|
|
(536,960) |
|
(560,976) |
|
| Net income (loss) |
138,945 |
|
630,058 |
|
|
(1,006,593) |
|
(766,609) |
|
|
(867,648) |
|
(136,551) |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
| Basic earnings (loss) per share |
$ |
0.01 |
|
$ |
0.04 |
|
|
$ |
(0.07) |
|
$ |
(0.05) |
|
|
$ |
(0.06) |
|
$ |
(0.01) |
|
| Diluted earnings (loss) per share |
$ |
0.01 |
|
$ |
0.04 |
|
|
$ |
(0.07) |
|
$ |
(0.05) |
|
|
$ |
(0.06) |
|
$ |
(0.01) |
|
The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Deficit |
|
Total The Joint Corp. stockholder's equity |
|
Total Equity |
Balances, December 31, 2021 (as previously reported) |
$ |
(13,519,142) |
|
|
$ |
29,544,627 |
|
|
$ |
29,569,627 |
|
Adjustment due to cumulative error correction |
739,057 |
|
|
739,057 |
|
|
739,057 |
|
12/31/2021 (as restated) |
$ |
(12,780,085) |
|
|
$ |
30,283,684 |
|
|
$ |
30,308,684 |
|
|
|
|
|
|
|
Balances, March 31, 2022 (as previously reported) |
$ |
(13,724,938) |
|
|
$ |
29,709,412 |
|
|
$ |
29,734,412 |
|
Adjustment due to cumulative error correction |
949,073 |
|
|
949,073 |
|
|
949,073 |
|
Balances, March 31, 2022 (as restated) |
$ |
(12,775,865) |
|
|
$ |
30,658,485 |
|
|
$ |
30,683,485 |
|
|
|
|
|
|
|
Balances, June 30, 2022 (as previously reported) |
$ |
(13,380,196) |
|
|
$ |
30,458,395 |
|
|
$ |
30,483,395 |
|
Adjustment due to cumulative error correction |
(267,537) |
|
|
(267,537) |
|
|
(267,537) |
|
Balances, June 30, 2022 (as restated) |
$ |
(13,647,733) |
|
|
$ |
30,190,858 |
|
|
$ |
30,215,858 |
|
|
|
|
|
|
|
Balances, September 30, 2022 (as previously reported) |
$ |
(12,889,083) |
|
|
$ |
31,500,473 |
|
|
$ |
31,525,473 |
|
Adjustment due to cumulative error correction |
(27,553) |
|
|
(27,553) |
|
|
(27,553) |
|
Balances, September 30, 2022 (as restated) |
$ |
(12,916,636) |
|
|
$ |
31,472,920 |
|
|
$ |
31,497,920 |
|
The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2022, the six-month period ended June 30, 2022, and the nine-month period ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
Three Months Ended March, 31, 2022 |
Six Months Ended June 30, 2022 |
Nine Months Ended September 30, 2022 |
|
Three Months Ended March, 31, 2022 |
Six Months Ended June 30, 2022 |
Nine Months Ended September 30, 2022 |
|
Three Months Ended March, 31, 2022 |
Six Months Ended June 30, 2022 |
Nine Months Ended September 30, 2022 |
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(205,797) |
|
$ |
138,945 |
|
$ |
630,058 |
|
|
210,017 |
|
(1,006,593) |
|
(766,609) |
|
|
$ |
4,220 |
|
$ |
(867,648) |
|
$ |
(136,551) |
|
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
1,629,176 |
|
3,329,653 |
|
5,341,420 |
|
|
(292,520) |
|
(531,126) |
|
(762,970) |
|
|
1,336,656 |
|
2,798,527 |
|
4,578,450 |
|
| Deferred income taxes |
(16,776) |
|
72,386 |
|
73,403 |
|
|
(194,853) |
|
(904,469) |
|
(1,035,162) |
|
|
(211,629) |
|
(832,083) |
|
(961,759) |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Upfront regional developer fees |
— |
|
— |
|
— |
|
|
(296,983) |
|
(824,658) |
|
(977,841) |
|
|
(296,983) |
|
(824,658) |
|
(977,841) |
|
| Deferred revenue |
296,487 |
|
492,473 |
|
636,470 |
|
|
201,786 |
|
371,740 |
|
524,923 |
|
|
498,273 |
|
864,213 |
|
1,161,393 |
|
Other liabilities |
280,162 |
|
404,329 |
|
360,790 |
|
|
122,553 |
|
245,106 |
|
367,659 |
|
|
402,715 |
|
649,435 |
|
728,449 |
|
Net cash provided by (used in) operating activities |
447,878 |
|
1,465,160 |
|
5,682,415 |
|
|
(250,000) |
|
(2,650,000) |
|
(2,650,000) |
|
|
197,878 |
|
(1,184,840) |
|
3,032,415 |
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| Reacquisition and termination of regional developer rights |
(250,000) |
|
(2,650,000) |
|
(2,650,000) |
|
|
250,000 |
|
2,650,000 |
|
2,650,000 |
|
|
— |
|
— |
|
— |
|
| Net cash used in investing activities |
(1,539,943) |
|
(11,414,961) |
|
(14,938,929) |
|
|
250,000 |
|
2,650,000 |
|
2,650,000 |
|
|
(1,289,943) |
|
(8,764,961) |
|
(12,288,929) |
|
Decrease in cash |
(1,066,427) |
|
(9,876,748) |
|
(8,944,196) |
|
|
— |
|
— |
|
— |
|
|
(1,066,427) |
|
(9,876,748) |
|
(8,944,196) |
|
The following table summarizes the effect of the errors on the Company’s consolidated balance sheets as of March 31, 2021, June 30, 2021, and September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
March 31, 2021 |
June 30, 2021 |
September 30, 2021 |
|
March 31, 2021 |
June 30, 2021 |
September 30, 2021 |
|
March 31, 2021 |
June 30, 2021 |
September 30, 2021 |
| Intangible assets, net |
$ |
3,444,538 |
|
$ |
6,176,429 |
|
$ |
5,280,024 |
|
|
$ |
(2,315,922) |
|
$ |
(1,774,158) |
|
$ |
(1,232,393) |
|
|
$ |
1,128,616 |
|
$ |
4,402,271 |
|
$ |
4,047,631 |
|
Deferred tax assets |
8,360,245 |
|
9,322,066 |
|
9,850,676 |
|
|
2,092,559 |
|
2,040,446 |
|
1,894,666 |
|
|
10,452,804 |
|
11,362,512 |
|
11,745,342 |
|
| Total assets |
67,054,083 |
|
78,211,226 |
|
81,044,983 |
|
|
(223,364) |
|
266,288 |
|
662,273 |
|
|
66,830,719 |
|
78,477,514 |
|
81,707,256 |
|
| Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| Deferred franchise and regional development fee revenue, current portion |
3,045,868 |
|
3,162,710 |
|
3,198,750 |
|
|
(3,045,868) |
|
(3,162,710) |
|
(3,198,750) |
|
|
— |
|
— |
|
— |
|
Deferred franchise fee revenue, current portion |
— |
|
— |
|
— |
|
|
2,229,101 |
|
2,347,990 |
|
2,405,300 |
|
|
2,229,101 |
|
2,347,990 |
|
2,405,300 |
|
| Upfront regional developer fees, current portion |
— |
|
— |
|
— |
|
|
816,767 |
|
814,720 |
|
793,450 |
|
|
816,767 |
|
814,720 |
|
793,450 |
|
| Other current liabilities |
707,763 |
|
551,035 |
|
404,901 |
|
|
— |
|
— |
|
— |
|
|
707,763 |
|
551,035 |
|
404,901 |
|
| Total current liabilities |
17,414,714 |
|
21,778,714 |
|
20,934,744 |
|
|
— |
|
— |
|
— |
|
|
17,414,714 |
|
21,778,714 |
|
20,934,744 |
|
| Deferred franchise and regional development fee revenue, net of current portion |
13,560,449 |
|
14,708,216 |
|
15,349,878 |
|
|
(13,560,449) |
|
(14,708,216) |
|
(15,349,878) |
|
|
— |
|
— |
|
— |
|
Deferred franchise fee revenue, net of current portion |
— |
|
— |
|
— |
|
|
10,672,244 |
|
11,887,275 |
|
12,671,068 |
|
|
10,672,244 |
|
11,887,275 |
|
12,671,068 |
|
| Upfront regional developer fees, net of current portion |
— |
|
— |
|
— |
|
|
2,888,205 |
|
2,820,941 |
|
2,678,810 |
|
|
2,888,205 |
|
2,820,941 |
|
2,678,810 |
|
| Other liabilities |
27,230 |
|
27,230 |
|
27,231 |
|
|
601,690 |
|
690,621 |
|
779,551 |
|
|
628,920 |
|
717,851 |
|
806,782 |
|
| Total liabilities |
43,364,021 |
|
50,911,850 |
|
51,383,166 |
|
|
601,690 |
|
690,621 |
|
779,551 |
|
|
43,965,711 |
|
51,602,471 |
|
52,162,717 |
|
| Accumulated deficit |
(17,780,218) |
|
(15,096,255) |
|
(13,184,061) |
|
|
(825,054) |
|
(424,333) |
|
(117,278) |
|
|
(18,605,272) |
|
(15,520,588) |
|
(13,301,339) |
|
| Total The Joint Corp. stockholders' equity |
23,689,962 |
|
27,299,276 |
|
29,636,817 |
|
|
(825,054) |
|
(424,333) |
|
(117,278) |
|
|
22,864,908 |
|
26,874,943 |
|
29,519,539 |
|
| Total equity |
23,690,062 |
|
27,299,376 |
|
29,661,817 |
|
|
(825,054) |
|
(424,333) |
|
(117,278) |
|
|
22,865,008 |
|
26,875,043 |
|
29,544,539 |
|
| Total liabilities and stockholders' equity |
67,054,083 |
|
78,211,226 |
|
81,044,983 |
|
|
(223,364) |
|
266,288 |
|
662,273 |
|
|
66,830,719 |
|
78,477,514 |
|
81,707,256 |
|
The following table summarizes the effect of the errors on the Company’s consolidated income statements for the three-month periods ended March 31, 2021, June 30, 2021, and September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
Q1'21 |
Q2'21 |
Q3'21 |
|
Q1'21 |
Q2'21 |
Q3'21 |
|
Q1'21 |
Q2'21 |
Q3'21 |
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
| Regional developer fees |
$ |
217,956 |
|
$ |
214,434 |
|
$ |
209,651 |
|
|
$ |
(217,956) |
|
$ |
(214,434) |
|
$ |
(209,651) |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
| Total revenues |
17,547,965 |
|
20,218,798 |
|
20,991,621 |
|
|
(217,956) |
|
(214,434) |
|
(209,651) |
|
|
17,330,009 |
|
20,004,364 |
|
20,781,970 |
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
| Franchise and regional developer cost of revenues |
1,624,572 |
|
1,786,833 |
|
1,907,874 |
|
|
(217,956) |
|
(214,434) |
|
(209,651) |
|
|
1,406,616 |
|
1,572,399 |
|
1,698,223 |
|
| Total cost of revenues |
1,765,317 |
|
2,038,538 |
|
2,300,122 |
|
|
(217,956) |
|
(214,434) |
|
(209,651) |
|
|
1,547,361 |
|
1,824,104 |
|
2,090,471 |
|
| Depreciation and amortization |
1,169,866 |
|
1,443,018 |
|
1,662,255 |
|
|
(541,765) |
|
(541,765) |
|
(541,764) |
|
|
628,101 |
|
901,253 |
|
1,120,491 |
|
| General and administrative expenses |
10,087,060 |
|
11,614,444 |
|
12,812,331 |
|
|
1,363,144 |
|
10,123 |
|
10,123 |
|
|
11,450,204 |
|
11,624,567 |
|
12,822,454 |
|
| Total selling, general and administrative expenses |
13,746,205 |
|
16,190,177 |
|
17,356,161 |
|
|
821,379 |
|
(531,642) |
|
(531,641) |
|
|
14,567,584 |
|
15,658,535 |
|
16,824,520 |
|
| Income from operations |
1,971,676 |
|
2,034,343 |
|
1,338,878 |
|
|
(821,379) |
|
531,642 |
|
531,641 |
|
|
1,150,297 |
|
2,565,985 |
|
1,870,519 |
|
| Income before income tax expense (benefit) |
1,950,139 |
|
2,017,970 |
|
1,322,739 |
|
|
(821,379) |
|
531,642 |
|
531,641 |
|
|
1,128,760 |
|
2,549,612 |
|
1,854,380 |
|
| Income tax expense (benefit) |
(364,148) |
|
(665,992) |
|
(614,356) |
|
|
(246,546) |
|
130,920 |
|
224,587 |
|
|
(610,694) |
|
(535,072) |
|
(389,769) |
|
| Net income |
2,314,287 |
|
2,683,962 |
|
1,937,095 |
|
|
(574,833) |
|
400,722 |
|
307,054 |
|
|
1,739,454 |
|
3,084,684 |
|
2,244,149 |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
0.16 |
|
$ |
0.19 |
|
$ |
0.13 |
|
|
$ |
(0.04) |
|
$ |
0.03 |
|
$ |
0.03 |
|
|
$ |
0.12 |
|
$ |
0.22 |
|
$ |
0.16 |
|
| Diluted earnings per share |
$ |
0.16 |
|
$ |
0.18 |
|
$ |
0.13 |
|
|
$ |
(0.04) |
|
$ |
0.03 |
|
$ |
0.02 |
|
|
$ |
0.12 |
|
$ |
0.21 |
|
$ |
0.15 |
|
The following table summarizes the effect of the errors on the Company’s consolidated income statements for the six-month period ended June 30, 2021 and the nine-month period ended September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
Six Months Ended June 30, 2021 |
Nine Months Ended September 30, 2021 |
|
Six Months Ended June 30, 2021 |
Nine Months Ended September 30, 2021 |
|
Six Months Ended June 30, 2021 |
Nine Months Ended September 30, 2021 |
| Revenues: |
|
|
|
|
|
|
|
|
| Regional developer fees |
$ |
432,390 |
|
$ |
642,041 |
|
|
$ |
(432,390) |
|
$ |
(642,041) |
|
|
$ |
— |
|
$ |
— |
|
| Total revenues |
37,766,762 |
|
58,758,383 |
|
|
(432,390) |
|
(642,041) |
|
|
37,334,372 |
|
58,116,342 |
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
| Franchise and regional developer cost of revenues |
3,411,404 |
|
5,319,278 |
|
|
(432,390) |
|
(642,041) |
|
|
2,979,014 |
|
4,677,237 |
|
| Total cost of revenues |
3,803,854 |
|
6,103,976 |
|
|
(432,390) |
|
(642,041) |
|
|
3,371,464 |
|
5,461,935 |
|
| Depreciation and amortization |
2,612,884 |
|
4,275,140 |
|
|
(1,083,530) |
|
(1,625,295) |
|
|
1,529,354 |
|
2,649,845 |
|
| General and administrative expenses |
21,701,047 |
|
34,513,378 |
|
|
1,373,267 |
|
1,383,389 |
|
|
23,074,314 |
|
35,896,767 |
|
| Total selling, general and administrative expenses |
29,935,974 |
|
47,292,135 |
|
|
289,737 |
|
(241,906) |
|
|
30,225,711 |
|
47,050,229 |
|
| Income from operations |
4,006,426 |
|
5,345,305 |
|
|
(289,737) |
|
241,906 |
|
|
3,716,689 |
|
5,587,211 |
|
| Income before income tax expense (benefit) |
3,968,517 |
|
5,291,255 |
|
|
(289,737) |
|
241,906 |
|
|
3,678,780 |
|
5,533,161 |
|
| Income tax expense (benefit) |
(1,030,140) |
|
(1,644,496) |
|
|
(115,626) |
|
108,961 |
|
|
(1,145,766) |
|
(1,535,535) |
|
| Net income |
4,998,657 |
|
6,935,751 |
|
|
(174,111) |
|
132,945 |
|
|
4,824,546 |
|
7,068,696 |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
0.35 |
|
$ |
0.49 |
|
|
$ |
(0.01) |
|
$ |
— |
|
|
$ |
0.34 |
|
$ |
0.49 |
|
| Diluted earnings per share |
$ |
0.34 |
|
$ |
0.46 |
|
|
$ |
(0.02) |
|
$ |
0.01 |
|
|
$ |
0.32 |
|
$ |
0.47 |
|
The following table summarizes the effect of the errors on the Company’s consolidated statements of stockholders' equity for the first through third fiscal quarters of 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Deficit |
|
Total The Joint Corp. stockholder's equity |
|
Total Equity |
Balances, December 31, 2020 (as previously reported) |
$ |
(20,094,912) |
|
|
$ |
21,126,152 |
|
|
$ |
21,126,252 |
|
Adjustment due to cumulative error correction |
(250,220) |
|
|
(250,220) |
|
|
(250,220) |
|
Balances, December 31, 2020 (as restated) |
$ |
(20,345,132) |
|
|
$ |
20,875,932 |
|
|
$ |
20,876,032 |
|
|
|
|
|
|
|
Balances, March 31, 2021 (as previously reported) |
$ |
(17,780,218) |
|
|
$ |
23,689,962 |
|
|
$ |
23,690,062 |
|
Adjustment due to cumulative error correction |
(825,054) |
|
|
(825,054) |
|
|
(825,054) |
|
Balances, March 31, 2021 (as restated) |
$ |
(18,605,272) |
|
|
$ |
22,864,908 |
|
|
$ |
22,865,008 |
|
|
|
|
|
|
|
Balances, June 30, 2021 (as previously reported) |
$ |
(15,096,255) |
|
|
$ |
27,299,276 |
|
|
$ |
27,299,376 |
|
Adjustment due to cumulative error correction |
(424,333) |
|
|
(424,333) |
|
|
(424,333) |
|
Balances, June 30, 2021 (as restated) |
$ |
(15,520,588) |
|
|
$ |
26,874,943 |
|
|
$ |
26,875,043 |
|
|
|
|
|
|
|
Balances, September 30, 2021 (as previously reported) |
$ |
(13,184,061) |
|
|
$ |
29,636,817 |
|
|
$ |
29,661,817 |
|
Adjustment due to cumulative error correction |
(117,278) |
|
|
(117,278) |
|
|
(117,278) |
|
Balances, September 30, 2021 (as restated) |
$ |
(13,301,339) |
|
|
$ |
29,519,539 |
|
|
$ |
29,544,539 |
|
The following table summarizes the effect of the errors on the Company’s consolidated statements of cash flows for the three-month period ended March 31, 2021, the six-month period ended June 30, 2021, and the nine-month period ended September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Previously Reported |
|
Adjustments |
|
As Restated |
|
Three Months Ended March, 31, 2021 |
Six Months Ended June 30, 2021 |
Nine Months Ended September 30, 2021 |
|
Three Months Ended March, 31, 2021 |
Six Months Ended June 30, 2021 |
Nine Months Ended September 30, 2021 |
|
Three Months Ended March, 31, 2021 |
Six Months Ended June 30, 2021 |
Nine Months Ended September 30, 2021 |
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
2,314,287 |
|
$ |
4,998,657 |
|
$ |
6,935,751 |
|
|
$ |
(574,833) |
|
$ |
(174,111) |
|
$ |
132,945 |
|
|
$ |
1,739,454 |
|
$ |
4,824,546 |
|
$ |
7,068,696 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
1,169,866 |
|
2,612,884 |
|
4,275,140 |
|
|
(541,765) |
|
(1,083,530) |
|
(1,625,295) |
|
|
628,101 |
|
1,529,354 |
|
2,649,845 |
|
| Deferred income taxes |
(418,810) |
|
(1,380,631) |
|
(1,909,241) |
|
|
(325,352) |
|
(273,239) |
|
(127,459) |
|
|
(744,162) |
|
(1,653,870) |
|
(2,036,700) |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Upfront regional developer fees |
— |
|
— |
|
— |
|
|
(143,634) |
|
(212,945) |
|
(376,346) |
|
|
(143,634) |
|
(212,945) |
|
(376,346) |
|
| Deferred revenue |
329,383 |
|
1,757,294 |
|
2,410,202 |
|
|
107,955 |
|
177,266 |
|
340,666 |
|
|
437,338 |
|
1,934,560 |
|
2,750,868 |
|
| Other liabilities |
235,116 |
|
565,779 |
|
852,924 |
|
|
88,929 |
|
177,859 |
|
266,789 |
|
|
324,045 |
|
743,638 |
|
1,119,713 |
|
| Net cash provided by operating activities |
2,271,448 |
|
9,014,529 |
|
12,451,587 |
|
|
(1,388,700) |
|
(1,388,700) |
|
(1,388,700) |
|
|
882,748 |
|
7,625,829 |
|
11,062,887 |
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| Reacquisition and termination of regional developer rights |
(1,388,700) |
|
(1,388,700) |
|
(1,388,700) |
|
|
1,388,700 |
|
1,388,700 |
|
1,388,700 |
|
|
— |
|
— |
|
— |
|
| Net cash used in investing activities |
(2,340,341) |
|
(8,877,659) |
|
(11,264,585) |
|
|
1,388,700 |
|
1,388,700 |
|
1,388,700 |
|
|
(951,641) |
|
(7,488,959) |
|
(9,875,885) |
|
Decrease in cash |
(2,812,479) |
|
(1,985,284) |
|
(827,347) |
|
|
— |
|
— |
|
— |
|
|
(2,812,479) |
|
(1,985,284) |
|
(827,347) |
|
|