The Joint Corp. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Commitments and Contingencies

Commitments and Contingencies

9 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

Leases

The table below summarizes the components of lease expense and income statement location for the three and nine months ended September 30, 2025 and 2024:


	Line Items in the Company's Condensed Consolidated Income Statements	Three Months Ended September 30,				Nine Months Ended September 30,
		2025		2024		2025		2024




Operating lease costs:
Operating lease costs	General and administrative expenses	$	91,577	$	64,289	$	264,335	$	192,866
Total lease costs		$	91,577	$	64,289	$	264,335	$	192,866

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


	September 30, 2025			December 31, 2024
Operating Leases:
Operating lease right-of -use asset	$	1,630,228		$	555,536
Operating lease liability - current portion	191,641			483,337
Operating lease liability - net of current portion	1,899,557			311,689
Total operating lease liability	$	2,091,198		$	795,026







Weighted average remaining lease term (in years):
Operating leases	5.7			3.6

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:


	Nine Months Ended September 30, 2025		Nine Months Ended September 30, 2024
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	345,042	$	336,607



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

Maturities of lease liabilities as of September 30, 2025 are as follows, excluding amounts related to leases classified as discontinued operations:


	Operating Leases
2025 (remainder)	$	115,014
2026	268,762
2027	467,453
2028	479,129
2029	491,077
Thereafter	715,278
Total lease payments	$	2,536,713
Less: Imputed interest	(445,515)
Total lease obligations	$	2,091,198
Less: Current obligations	(191,641)
Long-term lease obligation	$	1,899,557

Guarantee in Connection with the Sale of the Divested Business

In connection with the sale of company-owned or managed clinics, the Company has guaranteed 40 future operating lease commitments assumed by the buyers. The Company is obligated to perform under the guarantees if the buyers fail to perform under the lease agreements at any time during the remainder of the lease agreements, the latest of which expires on December 31, 2033. As of September 30, 2025, the undiscounted maximum remaining lease payments totaled $5.4 million. The Company has not recorded a liability with respect to the guarantee obligations as of September 30, 2025, as the Company concluded that payment under the lease guarantees was not probable.

Litigation

In the normal course of business, the Company is party to litigation and claims from time to time. The Company maintains insurance to cover certain litigation and claims.

During the second quarter of 2024, the Company entered into settlement agreements from litigation related to employment matters of $1.5 million that was outside the normal course of business, which the Company has accrued for in discontinued operations current liabilities as of December 31, 2024 and September 30, 2025. The settlement is expected to be paid out during the first quarter of 2026.

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

During the third quarter of 2025, the Company determined that the likelihood of a loss related to multiple lawsuits filed against the Company in 2024 and 2025 in the State of California became probable. The initial lawsuit was filed against the Company on June 6, 2024 with the Superior Court of California in Los Angeles County. The lawsuits, among other allegations, allege an invasion of privacy, breach of fiduciary duty and failure to provide a safe environment at one of its company-owned or managed clinics. The Company intends 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 September 30, 2025. The Company also notes that its exposure to these cases may be limited by its insurance coverage, but the recoverable amount is undetermined as of September 30, 2025.