The Joint Corp.

11/07/2025 | Press release | Distributed by Public on 11/07/2025 05:03

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statementsand related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our amended and restated Annual Report on Form 10-K/A for the year ended December 31, 2024, filed with the SEC on August 12, 2025.
Overview
We are a rapidly growing franchisor that uses a private pay, non-insurance, cash-based model. We will continue our rapid and franchised focused expansion of chiropractic clinics in key markets throughout North America, and potentially abroad, as we seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry.
Key Performance Measures.We receive monthly performance reports from our system and our clinics that include key performance indicators per clinic, including gross sales, comparable same-store sales growth, or "Comp Sales," number of new patients, conversion percentage and membership attrition. In addition, we review monthly reporting related to system-wide sales, clinic openings, clinic license sales, adjusted EBITDA (Refer to Non-GAAP Financial Measuresfor more information on adjusted EBITDA) and various earnings metrics in the aggregate and per clinic. We believe these indicators provide us with useful data with which to measure our performance and to measure our franchisees' and clinics' performance. Comp Sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open for at least 13 full months and exclude any clinics that have closed. System-wide sales include sales at all clinics, whether operated by us or by franchisees. While franchised clinic sales are not recorded as revenues by us, management believes the information is important in understanding the overall brand's financial performance, because these sales are the basis on which we calculate and record royalty fees and are indicative of the financial health of the franchisee base.
Key Clinic Development Trends. As of September 30, 2025, we and our franchisees operated or managed 962 clinics, of which 884 were operated or managed by franchisees and 78 were operated as company-owned or managed clinics. Our franchisees opened nine clinics in the third quarter of 2025, compared to 14 clinics in the third quarter of 2024.
Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023, our Board of Directors authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics. During the third quarter of 2024, we expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped primarily by geographic location. This refined strategy will leverage our greatest strength - our capacity to build a franchise - to drive long-term growth for both our franchisees and The Joint as a public company. We have created a robust framework for the refranchising effort, organizing clinics into clusters, and generating comprehensive disclosure packets for marketing efficiency. We had given initial preference to existing franchisees and, in the third quarter of 2024, we expanded the marketing efforts to larger multi-unit, multi-brand operators and certain private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets. During the first quarter of 2025, we received draft letters of intent ("LOIs") for our full portfolio of company-owned or managed clinics. During the second quarter of 2025, we refranchised 37 clinics. During the third quarter of 2025, we refranchised one clinic and we continue to remain actively engaged in refranchising the balance of the corporate portfolio. The largest cluster remaining in the corporate portfolio is the Southern California region.
On June 30, 2025, we closed on the sale of 31 company-owned or managed clinics and associated franchise licenses in Arizona and New Mexico to an existing franchisee, Joint Ventures, LLC, in exchange for $8.3 million in cash and the regional developer territory rights of the Northwest region. We carried an upfront regional developer fee liability balance associated with this transaction of $42,035, representing the unrecognized fee collected upon the execution of the regional developer agreement. We accounted for the reacquisition of the regional developer rights as a release of liability and were included as part of the total consideration received to calculate the gain or loss on the sale. Losses on the sale were included with the loss on the sale of assets included in Net loss on disposition or impairment from discontinued operations. As part of the sale, Joint Ventures, LLC agreed to open another 10 clinics in the same region. Additionally, on June 23, 2025, we closed the sale of five clinics along with future development rights in the Kansas City region to an existing franchisee, Chiro 93 LLC.
On November 2, 2025, we entered into an Asset Purchase Agreement with Elite Chiro Group, as buyer, and Emein, an individual, as guarantor, pursuant to which the Company will sell to Elite Chiro Group the assets of, and grant franchise rights to, 45 company-owned or managed clinics located in Southern California (the "Elite Chiro Group Transaction") for an aggregate
purchase price of $4.5 million, subject to certain adjustments. The Elite Chiro Group Transaction is subject to customary closing conditions and we continue to negotiate certain terms in the Elite Chiro Group Transaction.
Our goal will be to generate significant processes that will provide us with value creating capital allocation opportunities. These opportunities could include, but are not limited to, reinvestment in the brand and related marketing, continued investment in our IT platforms, the repurchase of regional development territories, certain merger or acquisition opportunities and/or additional stock repurchase programs.
The number of franchise licenses sold for the third quarter of 2025 was eight, compared with seven licenses sold for the third quarter of 2024. We ended the third quarter of 2025 with 15 regional developers who were responsible for 25% of the eight licenses sold during the period. We will continue to leverage the power of the regional developer program to accelerate the number of clinics sold, and eventually opened, across the country.
We believe that we continue to have a sound business concept and will benefit from the fundamental changes taking place in the manner in which Americans access chiropractic care and their growing interest in seeking effective, affordable natural solutions for general wellness. These trends join with the preference we have seen among chiropractic doctors to reject the insurance-based model resulting in a combination that benefits the consumer and the service provider alike. We believe that these forces create an important opportunity to accelerate the growth of our network.
Recent Events
Recent events that may impact our business include unfavorable global economic or political conditions, the financial impact of the U.S. government shutdown, labor shortages, and inflation and other cost increases. We anticipate that 2025 will continue to be a volatile macroeconomic environment.
The primary inflationary factor affecting our operations is labor costs. In 2024, clinics owned or managed by us or our franchisees were negatively impacted by labor shortages and wage increases, which increased our general and administrative expenses. Further, should we fail to continue to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our patient service to suffer. While we anticipate that these continued headwinds can be partially mitigated by pricing actions, there can be no assurance that we will be able to continue to take such pricing actions. A continued increase in labor costs could have an adverse effect on our operating costs, financial condition and results of operations.
In addition, although lowered slightly in recent months, the expectation that interest rates will continue to remain elevated may adversely affect patients' financial conditions, resulting in reduced spending on our services. While the impact of these factors continues to remain uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition, or results of operations. These and other uncertainties with respect to these recent events could result in changes to our current expectations.
Stock Repurchase Program
On June 3, 2025, our Board of Directors approved the 2025 SRP to repurchase up to $5.0 million of our common stock, par value $0.001 per share, from time to time until June 3, 2027 or such other date as we have exhausted, or the Board of Directors otherwise terminates, the repurchase authorization. The timing, volume, price, and terms of the repurchases will depend on market and business conditions, applicable legal requirements, and other factors. The repurchases may be made on the open market, in privately negotiated transactions, or in such other manner (e.g., accelerated share repurchase transactions, block trades, derivatives, or otherwise) that complies with the terms of applicable federal and state securities laws and regulations.
During the third quarter of 2025, we repurchased 227,810 shares of our common stock for approximately $2.3 million. Shares repurchased during the third quarter of 2025 represented 1.5% of outstanding common stock at June 30, 2025. All shares of common stock that were repurchased are held as treasury stock. As of September 30, 2025, we had a remaining $2.7 million authorized for repurchasing shares of our common stock under the 2025 SRP.
Subsequent to September 30, 2025, we purchased an additional 312,571 shares of our common stock through October 21, 2025, completing the repurchase of $5.0 million under the 2025 SRP as originally authorized.
On November 4, 2025, the Board of Directors authorized an additional $12.0 million under the 2025 SRP and extended the repurchase date through November 4, 2027.
Other Significant Events and/or Recent Developments
For the three months ended September 30, 2025, compared to the prior year period:
•Comp sales of clinics that have been open for at least 13 full months decreased 2.0%;
•Comp sales for mature clinics open 48 months or more decreased 4.9%; and
•System-wide sales for all clinics open for any amount of time decreased 1.5% to $127.3 million.
Factors Affecting Our Performance
Our operating results may fluctuate significantly as a result of a variety of factors, including the timing of new clinic sales, openings, closures, markets in which they are contained and related expenses, general economic conditions, cost inflation, labor shortages, consumer confidence in the economy, consumer preferences, competitive factors, and disease epidemics and other health-related concerns.
Critical Accounting Estimates
There were no changes in our critical accounting estimates during the three months ended September 30, 2025, from those set forth in "Significant Accounting Policies and Estimates" in our amended and restated Annual Report on Form 10-K/A for the year ended December 31, 2024.
Results of Operations
The following discussion and analysis of our financial results encompasses the results of our Franchise Operations business segment for the three and nine months ended September 30, 2025, compared with the three and nine months ended September 30, 2024. All financial results and metrics discussed below are on a continuing operations basis.
Total Revenues - Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024
Components of revenues were as follows:
Three Months Ended
September 30,
2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Revenues:
Royalty fees $ 8,106,915 $ 7,870,033 $ 236,882 3.0 %
Franchise fees 964,796 697,688 267,108 38.3
Advertising fund revenue 2,344,833 2,247,663 97,170 4.3
IT-related income and software fees 1,545,331 1,431,321 114,010 8.0
Other revenues 418,810 407,691 11,119 2.7
Total revenues $ 13,380,685 $ 12,654,396 $ 726,289 5.7
Total revenues increased by $0.7 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
•Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics. As of September 30, 2025 and 2024, there were 884 and 838 franchised clinics in operation, respectively.
•Franchise fees increased due primarily to the impact of accelerated revenue recognition resulting from terminated franchise license agreements and related fees, with 12 and 4 franchise license agreements terminated during the three months ended September 30, 2025 and 2024, respectively.
•IT-related income and software fees revenue increased due to an increase in our franchised clinic base and the related revenue recognition over the term of the franchise agreement as described above.
Total Revenues - Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Components of revenues were as follows:
Nine Months Ended
September 30,
2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Revenues:
Royalty fees $ 24,311,022 $ 23,303,907 $ 1,007,115 4.3 %
Franchise fees 2,561,415 2,072,665 488,750 23.6
Advertising fund revenue 6,985,030 6,654,974 330,056 5.0
IT-related income and software fees 4,488,959 4,233,133 255,826 6.0
Other revenues 1,382,119 1,184,469 197,650 16.7
Total revenues $ 39,728,545 $ 37,449,148 $ 2,279,397 6.1
Total revenues increased by $2.3 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
•Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics. As of September 30, 2025, and 2024, there were 884 and 838 franchised clinics in operation, respectively.
•Franchise fees increased due primarily to the impact of accelerated revenue recognition resulting from terminated franchise license agreements and related fees, with 30 and 9 franchise license agreements terminated during the nine months ended September 30, 2025 and 2024, respectively.
•IT-related and software fees revenue increased due to an increase in our franchised clinic base and the related revenue recognition over the term of the franchise agreement as described above.
•Other revenues primarily consisted of a $150,000 increase due to sponsorship payments for our annual conference held in April 2025.
Cost of Revenues
Cost of Revenues 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 2,661,234 $ 2,814,963 $ (153,729) (5.5) %
Nine Months Ended September 30, 8,405,967 8,331,864 74,103 0.9
For the three months ended September 30, 2025, as compared with the three months ended September 30, 2024, the total cost of revenues decreased primarily due to a reduction in regional developer royalties. For the nine months ended September 30, 2025, as compared with the nine months ended September 30, 2024, the total cost of revenues increased primarily due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics in regional developer regions, partially offset by the reduction in regional developer royalties as mentioned above.
Selling and Marketing Expenses
Selling and Marketing Expenses 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 2,816,081 $ 2,504,168 $ 311,913 12.5 %
Nine Months Ended September 30, 9,805,075 8,182,142 1,622,933 19.8
For the three and nine months ended September 30, 2025, as compared with the three and nine months ended September 30, 2024, selling and marketing expenses increased due to an increase in expenses associated with our digital marketing transformation efforts primarily incurred during the first and third quarters in 2025.
Depreciation and Amortization Expenses
Depreciation and Amortization Expenses 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 446,736 $ 345,835 $ 100,901 29.2 %
Nine Months Ended September 30, 1,210,961 1,017,923 193,038 19.0
Depreciation and amortization expenses increased for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, primarily due to depreciation expenses related to internal use software enhancements and developments, including the launch of our new mobile app.
General and Administrative Expenses
General and Administrative Expenses 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 7,295,719 $ 7,478,669 $ (182,950) (2.4) %
Nine Months Ended September 30, 21,955,915 22,611,442 (655,527) (2.9)
For the three months ended September 30, 2025, as compared with the three months ended September 30, 2024, general and administrative expenses decreased primarily due to a decrease in payroll and other employee compensation expenses, partially offset by an increase due to a legal contingency accrual of $0.1 million. For the nine months ended September 30, 2025, as compared with the nine months ended September 30, 2024, general and administrative expenses decreased primarily due to a decrease in payroll and other employee compensation expenses reflective of fewer employees in the first three quarters of 2025 compared to the first three quarters of 2024, including the departure of long-tenure employees with stock-based compensation during 2025, partially offset by the legal contingency accrual of $0.1 million. As a percentage of revenue, general and administrative expenses during the three months ended September 30, 2025 and 2024 were 55% and 59%, respectively. As a percentage of revenue, general and administrative expenses during the nine months ended September 30, 2025 and 2024 were 55% and 60%, respectively.
Gain (Loss) from Operations
Loss from Operations 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 160,915 $ (492,820) $ 653,735 132.7 %
Nine Months Ended September 30, (1,655,786) (2,698,741) 1,042,955 38.6
Gain (loss) from operations decreased by $0.7 million for the three months ended September 30, 2025, compared with the three months ended September 30, 2024. The decrease in the loss to a gain was primarily due to:
•an increase of $0.7 million in total revenues;
•a decrease of $0.2 million in our total cost of revenues; and
•a decrease of $0.2 million in general and administrative expenses; partially offset by
•an increase of $0.3 million in selling and marketing expenses; and
•an increase of $0.1 million in depreciation and amortization expenses.
Loss from operations decreased by $1.0 million for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The decrease was primarily due to:
•an increase of $2.3 million in total revenues; and
•a decrease of $0.7 million in general and administrative expenses; partially offset by
•an increase in selling and marketing expenses of $1.6 million;
•an increase of $0.1 million in our total cost of revenues; and
•an increase of $0.2 million in depreciation and amortization expenses.
Other Income, Net
Other Income, Net 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 139,801 $ 83,828 $ 55,973 66.8 %
Nine Months Ended September 30, 485,640 200,558 285,082 142.1
Other income, net increased during the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily due to the deployment of additional cash and cash equivalents into higher interest rate money market funds resulting in increased interest income.
Income Tax Expense
Income Tax Expense 2025 2024 Change from
Prior Year 		Percent Change
from Prior Year
Three Months Ended September 30, $ 10,346 $ 5,391 $ 4,955 91.9 %
Nine Months Ended September 30, 35,140 25,142 9,998 39.8
Income tax expense increased during the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily due to an increase in estimated state income taxes.
Recent Accounting Pronouncements
See Note 1, Nature of Operations and Summary of Significant Accounting Policies,to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for information regarding recently issued accounting pronouncements that may impact our financial statements.
Non-GAAP Financial Measures
The tables below reconcile net income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
2025 2024
From Continuing Operations From Discontinued Operations Net Operations From Continuing Operations From Discontinued Operations Net Operations
Non-GAAP Financial Data:
Net income (loss) $ 290,370 $ 564,639 $ 855,009 $ (414,383) $ (2,750,756) $ (3,165,139)
Net interest (income) expense (253,277) - (253,277) (83,828) 496 (83,332)
Depreciation and amortization expense 446,736 16,310 463,046 345,835 893,398 1,239,233
Income tax expense 10,346 99,630 109,976 5,391 57,194 62,585
EBITDA 494,175 680,579 1,174,754 (146,985) (1,799,668) (1,946,653)
Stock compensation expense 346,209 - 346,209 430,250 - 430,250
Net loss on disposition or impairment - 860,598 860,598 3,581 3,801,637 3,805,218
Costs related to restatement filings 113,477 - 113,477 - - -
Restructuring costs 355,042 102,024 457,066 (25,000) 178,182 153,182
Litigation expenses 100,000 250,000 350,000 - (9,000) (9,000)
Adjusted EBITDA $ 1,408,903 $ 1,893,201 $ 3,302,104 $ 261,846 $ 2,171,151 $ 2,432,997
Nine Months Ended September 30,
2025 2024
From Continuing Operations From Discontinued Operations Net Operations From Continuing Operations From Discontinued Operations Net Operations
Non-GAAP Financial Data:
Net (loss) income $ (1,205,286) $ 3,121,454 $ 1,916,168 $ (2,523,325) $ (3,291,233) $ (5,814,558)
Net interest (income) expense (599,116) 239 (598,877) (200,558) 1,685 (198,873)
Depreciation and amortization expense 1,210,961 59,815 1,270,776 1,017,923 3,149,029 4,166,952
Income tax expense 35,140 303,243 338,383 25,142 394,692 419,834
EBITDA (558,301) 3,484,751 2,926,450 (1,680,818) 254,173 (1,426,645)
Stock compensation expense 971,138 - 971,138 1,475,710 - 1,475,710
Acquisition-related expenses - - - 478,710 - 478,710
Net loss on disposition or impairment 6,413 3,746,449 3,752,862 4,518 5,598,123 5,602,641
Costs related to restatement filings 113,477 - 113,477 - - -
Restructuring costs 910,619 371,739 1,282,358 28,000 426,457 454,457
Litigation expenses 100,000 250,000 350,000 - 1,481,000 1,481,000
Adjusted EBITDA $ 1,543,346 $ 7,852,939 $ 9,396,285 $ 306,120 $ 7,759,753 $ 8,065,873
Adjusted EBITDA from continuing operations consists of net loss from continuing operations before interest, income taxes, depreciation and amortization, acquisition-related expenses (which includes contract termination costs associated with reacquired regional developer rights), stock-based compensation expense, bargain purchase gain, (gain) loss on disposition or impairment, costs related to restatement filings, restructuring costs (consisting of non-recurring refranchising costs of all company-owned or managed clinics and non-recurring expenses related to changes to our senior leadership team), and litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the normal course of our business). We have provided Adjusted EBITDA, a non-GAAP measure of financial performance, because it is commonly used for comparing companies in our industry. You should not consider Adjusted EBITDA as a substitute for operating profit as an indicator of our operating
performance or as an alternative to cash flows from operating activities as a measure of liquidity. We may calculate Adjusted EBITDA differently from other companies.
We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other outpatient medical clinics, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating Adjusted EBITDA in the future we may incur unadjusted expenses similar to those currently excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate Adjusted EBITDA in the same manner.
Our management does not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. These limitations include, but are not limited to, the following:
•Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;
•Adjusted EBITDA does not reflect the (gain) loss on disposition or impairment, which represents the impairment of assets as of the reporting date. We do not consider this to be indicative of our ongoing operations; and
•While not included in the presented periods, Adjusted EBITDA would not reflect any bargain purchase gain, which would represent the excess of the fair value of net assets acquired over the purchase consideration.
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. You should review the reconciliation of Net income (loss) to Adjusted EBITDA above and not rely on any single financial measure to evaluate our business.
Liquidity and Capital Resources
Sources of Liquidity
As of September 30, 2025, we had unrestricted cash and short-term bank deposits of $29.7 million. We used $1.1 million of cash flow from operating activities from both continuing and discontinued operations in the nine months ended September 30, 2025. While unfavorable global economic or political conditions create potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our line of credit will be sufficient to fund our anticipated operating and investment needs for at least the next 12 months.
While the interruptions, delays and/or cost increases resulting from political instability and geopolitical tensions, adverse weather conditions, economic weakness, inflationary pressures, elevated interest rates and other factors have created uncertainty as to general economic conditions for the remainder of 2025, as of the date of this Quarterly Report on Form 10-Q, we believe that we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. For the remainder of 2025, we expect to use or redeploy our cash resources to support our business within the context of prevailing market conditions, which, given the ongoing uncertainties described above, could rapidly and materially deteriorate or otherwise change. Our long-term capital requirements, primarily for acquisitions and other corporate initiatives, could be dependent on our ability to access additional funds through the debt and/or equity markets. If the equity and credit markets deteriorate, including as a result of economic weakness, political unrest or war, or any other reason, it may make any necessary equity or debt financing more difficult to obtain in a timely manner and on favorable terms, if at all, and if obtained, it may be more costly or more dilutive. From time to time, we consider and evaluate transactions related to our portfolio and capital structure, including debt financings, equity issuances, purchases and sales of assets, and other transactions. Given the ongoing uncertainties described above, the levels of our cash flows from operations for the remainder of 2025 may be impacted. There can be no assurance that
we will be able to generate sufficient cash flows or obtain the capital necessary to meet our short and long-term capital requirements.
Analysis of Cash Flows
Net cash used in operating activities for both continuing and discontinued operations decreased by $6.3 million to $1.1 million for the nine months ended September 30, 2025, compared to net cash provided by operating activities of $5.3 million for the nine months ended September 30, 2024. The decrease in net cash was primarily attributable to a change in accrued expenses of $3.4 million related to the settlement of a medical injury claim during the first quarter of 2025, which was partially offset by a related change in accounts receivable of $1.9 million for insurance recoveries, a change in prepaid expenses and other current assets of $0.4 million due to the payment of our annual director and officers insurance premiums during the first quarter of 2025 and a change in accounts payable of $0.6 million primarily due to the timing of payments during the third quarter of 2025.
Net cash provided by investing activities was $6.6 million and net cash used by investing activities was $0.5 million for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025, this included proceeds from sales of clinics of $7.8 million, partially offset by purchases of property and equipment of $1.2 million. For the nine months ended September 30, 2024, this included purchases of property and equipment of $0.9 million and proceeds from sales of clinics of $0.4 million.
Net cash used in financing activities for the nine months ended September 30, 2025 was $0.8 million, compared to $2.0 million in net cash used in financing activities for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, net cash used in financing activities included $2.3 million of common stock purchases under the 2025 SRP, partially offset by cash receipts from stock option exercises of $1.5 million. For the nine months ended September 30, 2024, net cash used in financing activities included the pay down of the outstanding balance on our Debt under the Credit Agreement in the amount of $2.0 million.
Capital Composition
As discussed in the "Recent Events" section of this MD&A, our Board of Directors approved the 2025 SRP to repurchase up to $5.0 million of our common stock. During the three and nine months ended September 30, 2025, we repurchased 227,810 shares under the 2025 SRP. Refer to the "Recent Events" section above for more information and Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" of this Quarterly Report on Form 10-Q for our monthly repurchase activity during the three months ended September 30, 2025.
Off-Balance Sheet Arrangements
During the nine months ended September 30, 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
The Joint Corp. published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 11:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]