jynt-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to _________________

Commission file number: 001-36724

The Joint Corp.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)			90-0544160 (IRS Employer Identification No.)


16767 N. Perimeter Drive, Suite 110, Scottsdale Arizona (Address of principal executive offices)			85260 (Zip Code)

(480) 245-5960

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value Per Share	JYNT	The NASDAQ Capital Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☑

Accelerated filer

☐

Non- accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of April 25, 2022, the registrant had 14,461,332 shares of Common Stock ($0.001 par value) outstanding.

Table of Contents

THE JOINT CORP.

FORM 10-Q

TABLE OF CONTENTS


		PAGE NO.
PART I FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	1
	Condensed Consolidated Income Statements for the Three Months Ended March 31, 2022 and 2021 (unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3 .	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 6.	Exhibits	34

EXHIBIT INDEX		35

SIGNATURES		36

Part II, Items 3, 4, and 5 - Not applicable

Table of Contents

PART I: FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


	March 31, 2022		December 31, 2021
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	18,251,194	$	19,526,119
Restricted cash	594,717		386,219
Accounts receivable, net	3,612,802		3,700,810
Deferred franchise and regional development costs, current portion	985,557		994,587
Prepaid expenses and other current assets	2,426,409		2,281,765
Total current assets	25,870,679		26,889,500
Property and equipment, net	14,880,942		14,388,946
Operating lease right-of-use asset	18,927,052		18,425,914
Deferred franchise and regional development costs, net of current portion	5,601,142		5,505,420
Intangible assets, net	4,829,941		5,403,390
Goodwill	5,085,203		5,085,203
Deferred tax assets	9,205,410		9,188,634
Deposits and other assets	662,080		567,202
Total assets	$	85,062,449	$	85,454,209

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,874,911	$	1,705,568
Accrued expenses	1,644,709		1,809,460
Co-op funds liability	594,717		386,219
Payroll liabilities ($0.7 million and $0.4 million attributable to VIE)	2,383,977		3,906,317
Operating lease liability, current portion	4,872,292		4,613,843
Finance lease liability, current portion	34,479		49,855
Deferred franchise and regional developer fee revenue, current portion	3,130,856		3,191,892
Deferred revenue from company clinics ($3.6 million and $3.5 million attributable to VIE)	5,546,856		5,235,745
Other current liabilities	541,250		539,500
Total current liabilities	20,624,047		21,438,399
Operating lease liability, net of current portion	17,184,696		16,872,093
Finance lease liability, net of current portion	81,928		87,939
Debt under the Credit Agreement	2,000,000		2,000,000
Deferred franchise and regional developer fee revenue, net of current portion	15,410,136		15,458,921
Other liabilities	27,230		27,230
Total liabilities	55,328,037		55,884,582
Commitments and contingencies
Stockholders' equity:
Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of March 31, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value; 20,000,000 shares authorized, 14,493,049 shares issued and 14,461,332 shares outstanding as of March 31, 2022 and 14,451,355 shares issued and 14,419,712 outstanding as of December 31, 2021	14,492		14,450
Additional paid-in capital	44,273,294		43,900,157
Treasury stock 31,717 shares as of March 31, 2022 and 31,643 shares as of December 31, 2021, at cost	(853,436)		(850,838)
Accumulated deficit	(13,724,938)		(13,519,142)
Total The Joint Corp. stockholders' equity	29,709,412		29,544,627
Non-controlling Interest	25,000		25,000
Total equity	29,734,412		29,569,627
Total liabilities and stockholders' equity	$	85,062,449	$	85,454,209

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited)


	Three Months Ended March 31,
	2022		2021
Revenues:
Revenues from company-owned or managed clinics	$	12,606,999	$	9,466,083
Royalty fees	6,008,932		4,769,246
Franchise fees	640,965		695,427
Advertising fund revenue	1,710,717		1,374,741
Software fees	956,998		760,537
Regional developer fees	201,787		217,956
Other revenues	312,140		263,975
Total revenues	22,438,538		17,547,965
Cost of revenues:
Franchise and regional development cost of revenues	2,002,813		1,624,572
IT cost of revenues	309,958		140,745
Total cost of revenues	2,312,771		1,765,317
Selling and marketing expenses	3,287,488		2,489,279
Depreciation and amortization	1,629,176		1,169,866
General and administrative expenses	15,378,623		10,087,060
Total selling, general and administrative expenses	20,295,287		13,746,205
Net loss on disposition or impairment	6,906		64,767
(Loss) income from operations	(176,426)		1,971,676
Other expense, net	(16,147)		(21,537)
(Loss) income before income tax benefit	(192,573)		1,950,139
Income tax expense (benefit)	13,224		(364,148)
Net (loss) income	$	(205,797)	$	2,314,287
Earnings per share:
Basic (loss) earnings per share	$	(0.01)	$	0.16
Diluted (loss) earnings per share	$	(0.01)	$	0.16
Basic weighted average shares	14,432,652		14,178,542
Diluted weighted average shares	14,432,652		14,854,809

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(unaudited)


	Common Stock			Additional Paid In Capital		Treasury Stock			Accumulated Deficit		Total The Joint Corp. stockholders' equity		Non-controlling interest		Total
	Shares	Amount				Shares	Amount
Balances, December 31, 2021	14,451,355	$	14,450	$	43,900,157	31,643	$	(850,838)	$	(13,519,141)	$	29,544,628	$	25,000	$	29,569,628
Stock-based compensation expense	—	—		323,556		—	—		—		323,556		—		323,556
Issuance of restricted stock	36,722	37		(37)		—	—		—		—		—		—
Exercise of stock options	4,972	5		49,618		—	—		—		49,623		—		49,623
Purchases of treasury stock under employee stock plans	—	—		—		74	(2,598)		—		(2,598)		—		(2,598)
Net loss	—	—		—		—	—		(205,797)		(205,797)		—		(205,797)
Balances, March 31, 2022 (unaudited)	14,493,049	$	14,492	$	44,273,294	31,717	$	(853,436)	$	(13,724,938)	$	29,709,412	$

SEC Form 10-Q filed by The Joint Corp.