jynt-20250630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2025

The Joint Corp.
(Exact Name of Registrant as Specified in Charter)

Delaware001-36724 90-0544160
(State or other jurisdiction(Commission File Number)(IRS Employer
of incorporation)Identification No.)
16767 N. Perimeter Drive, Suite 110
Scottsdale, Arizona 85260
(Address of principal executive offices) (Zip Code)

(480) 245-5960
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001JYNT
The NASDAQ Capital Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 §CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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. ☐

Item 2.01. Completion of Acquisition or Disposition of Assets.

On June 30, 2025, we completed the previously announced sale of the assets of, and the franchise rights to, 31 company-owned and managed clinics located in Arizona and New Mexico (the “Joint Ventures Transaction”) to Joint Ventures, LLC, a Nevada limited liability company and our largest franchisee (“Joint Ventures”), for an aggregate purchase price of $11.13 million, subject to certain adjustments, pursuant to an Asset Purchase Agreement, dated as of June 23, 2025, by and between us and Joint Ventures. In addition, in connection with the Joint Ventures Transaction, we also acquired the regional developer rights to the Northwest Region, which consists of 46 existing franchised clinics and 30 sites for future clinic development in regions of Northern California, Utah, Nevada, Washington and Oregon.

On July 7, 2025, we issued a press release announcing the completion of the Joint Ventures Transaction described in this Item 2.01. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(b)    Unaudited Pro Forma Condensed Consolidated Financial Information.

The following unaudited pro forma condensed financial statements of The Joint Corp. reflecting the sale of 31 clinics to Joint Ventures are filed as Exhibit 99.2 to this Current Report and are incorporated herein by reference:
•Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2025;
•Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and for the years ended December 31, 2025 and 2024;
•Notes to the Unaudited Pro Forma Condensed Consolidated Statements

(d) Exhibits.
Exhibit NumberExhibits
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

THE JOINT CORP.
Date:July 7, 2025By:/s/ Sanjiv Razdan
Sanjiv Razdan
President and Chief Executive Officer

Exhibit 99.1
logoa.jpg

The Joint Corp. Closes Sale of 31 Corporate Clinics in Arizona and New Mexico and Acquires Regional Developer Rights in the Northwest Region
- Proven Operator Grows to 96 Clinics and Commits to Open 10 Additional Clinics -
- Sale Price Included $8.3 Million Plus Regional Developer Rights that Generated $855,000 in Royalties and Franchise Fees over the 12 Months Ended March 31, 2025 -

SCOTTSDALE, Ariz., July 7, 2025 – The Joint Corp. (NASDAQ: JYNT), the nation's largest franchisor of chiropractic care through The Joint Chiropractic® network, closed the sale of 31 corporate owned and managed clinics and associated franchise licenses in Arizona and New Mexico to Joint Ventures, LLC in exchange for $8.3 million in cash and the regional developer (RD) territory rights of the Northwest region that generated $855,000 in royalties and franchise fees over the 12 months ended March 31, 2025.

"Our goal for the refranchising initiative is to strengthen and simplify our business, while ensuring our clinics go to proven franchise operators that can improve performance and grow within their regions,” said The Joint Corp.’s President, Chief Executive Officer and Director Sanjiv Razdan. “We are very happy that Joint Ventures, one of our strongest franchisees, is purchasing 31 clinics in Arizona and New Mexico. As part of the consideration for the clinics, we are acquiring Joint Ventures' regional developer rights for the Northwest region, covering 46 existing franchised clinics and 30 sites for future clinic development. By acquiring RD rights, we will reduce commission obligations and increase operating margin, as these clinics incurred $855,000 in royalties and commissions under these RD rights in the trailing twelve months ended March 31, 2025. By increasing their stake in The Joint, existing franchisees are validating our initiatives to strengthen the patient experience, drive revenue and reduce operational costs. We expect to deploy our expanding working capital to generate value for stockholders.”

Forward-Looking Statements This press release contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of industry trends, our future financial and operating performance and our growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Words such as, "anticipates," "believes," "continues," "estimates," "expects," "goal," "objectives," "intends," "may," "opportunity," "plans," "potential," "near-term," "long-term," "projections," "assumptions," "projects," "guidance," "forecasts," "outlook," "target," "trends," "should," "could," "would," "will," and similar expressions are intended to identify such forward-looking statements. Specific forward looking statements made in this press release include, among others, our goal for the refranchising initiative to strengthen and simplify our business, while ensuring our clinics go to proven franchise operators that can improve performance and grow within their regions; our belief that by increasing their stake in The Joint, existing franchisees are validating our initiatives to strengthen the patient experience, drive revenue and reduce operational costs; our belief that by acquiring RD rights, we will reduce commission obligations, increase operating margin; and our expectation to deploy our expanding working capital to generate value for stockholders. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future


results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include, but are not limited to, our inability to identify and recruit enough qualified chiropractors and other personnel to staff our clinics, due in part to the nationwide labor shortage and an increase in operating expenses due to measures we may need to take to address such shortage; inflation, which has increased our costs and which could otherwise negatively impact our business; our failure to profitably operate company-owned or managed clinics; our failure to refranchise as planned; short-selling strategies and negative opinions posted on the internet, which could drive down the market price of our common stock and result in class action lawsuits; our failure to remediate future material weaknesses in our internal control over financial reporting, which could negatively impact our ability to accurately report our financial results, prevent fraud, or maintain investor confidence; and other factors described in our filings with the SEC, including in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 14, 2025 and subsequently filed current and quarterly reports. We qualify any forward-looking statements entirely by these cautionary factors. We assume no obligation to update or revise any forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.


About The Joint Corp. (NASDAQ: JYNT)

The Joint Corp. (NASDAQ: JYNT) revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, it is the nation’s largest operator, manager and franchisor of chiropractic clinics through The Joint Chiropractic network. The company is making quality care convenient and affordable, while eliminating the need for insurance, for millions of patients seeking pain relief and ongoing wellness. With over 950 locations nationwide and more than 14 million patient visits annually, The Joint Chiropractic is a key leader in the chiropractic industry. The brand is consistently named to Franchise Times’ annual “Top 400” and “Fast & Serious” list of 40 smartest growing brands. Entrepreneur named The Joint “No. 1 in Chiropractic Services,” and is regularly ranked on the publication’s “Franchise 500,” the “Fastest-Growing Franchises,” the “Best of the Best” lists, as well as its “Top Franchise for Veterans” and “Top Brands for Multi-Unit Owners.” SUCCESS named the company as one of the “Top 50 Franchises” in 2024. The Joint Chiropractic is an innovative force, where healthcare meets retail. For more information, visit www.thejoint.com. To learn about franchise opportunities, visit www.thejointfranchise.com.

The Joint Business Structure

The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, District of Columbia, Florida, Illinois, Kansas, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wyoming, The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices.


Media Contact:
Margie Wojciechowski, The Joint Corp., [email protected]

Investor Contact:
Kirsten Chapman, Alliance Advisors IR, 415-433-3777, [email protected]

Exhibit 99.2
The Joint Corp.
Unaudited Pro Forma Condensed Consolidated Financial Information

On June 23, 2025, we entered into an Asset Purchase Agreement with Joint Ventures, LLC, a Nevada limited liability company and our largest franchisee (“Joint Ventures”), pursuant to which we agreed to sell to Joint Ventures the assets of, and grant franchise rights to, 31 company-owned and managed clinics located in Arizona and New Mexico (the “Clinic Sales Transaction”) for an aggregate purchase price of $11.13 million, subject to certain adjustments. In addition, in connection with the Clinic Sales Transaction, we agreed to acquire the regional developer ("RD") rights to the Northwest Region, which consists of 46 existing franchised clinics and 30 sites for future clinic development in regions of Northern California, Utah, Nevada, Washington and Oregon (the "RD Termination Costs"), (together the "Joint Ventures Transaction"). On June 30, 2025, we completed the Joint Ventures Transaction.
Our estimates for the sale as presented in the attached pro forma condensed consolidated financial information are preliminary and actual results could differ from these estimates as we finalize the disposition accounting to be reported in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, as well as our Annual Report on Form 10-K for the year ending December 31, 2025.
The unaudited pro forma condensed consolidated financial statements presented below consist of an Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2025 and Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and for the years ended December 31, 2024 and 2023.
The following unaudited pro forma condensed consolidated financial information is intended to show how the sale of our company-owned and managed clinics and the acquisition of the regional developer rights might have affected our historical financial statements if the Joint Ventures Transaction had been completed at an earlier time as indicated herein. The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and were derived from our historical consolidated financial statements and are being presented to give effect to the sale of our company-owned and managed clinics and the acquisition of the regional developer rights. The unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read in conjunction with:
•Our audited historical financial statements the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on March 14, 2025; and
•Our unaudited interim historical consolidated financial statements and the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2025 filed with the SEC on May 9, 2025.
The unaudited pro forma condensed consolidated financial statements are based on available information and assumptions that our management believes are reasonable as of the date of this filing. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2025 adjusts our assets, liabilities, and stockholders' equity to reflect the sale of our company-owned and managed clinics and the acquisition of the regional developer rights as of March 31, 2025. In addition, the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and for the years ended December 31, 2024 and 2023, reflect certain Pro Forma Adjustments that are incremental to those related to the sale of our company-owned and managed clinics and the acquisition of the regional developer rights. The Pro Forma Adjustments in the unaudited pro forma condensed consolidated statements of operations are reflected as if the Joint Ventures Transaction had occurred on January 1, 2023.
The unaudited pro forma condensed consolidated financial information is provided for informational purposes only and does not purport to represent our actual financial condition or results of operations had the sale of our company-owned and managed clinics and the acquisition of the regional developer rights occurred on the dates indicated nor does it project our results of operations or financial condition for any future period or date. We have prepared the unaudited pro forma condensed financial information based on available information using certain assumptions that we believe are reasonable. As a result, the actual results reported by us in periods following the sale of our company-owned and managed clinics and the acquisition of the regional developer rights may differ materially from this unaudited pro forma condensed financial information.

    


THE JOINT CORP.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of March 31, 2025
Historical (as reported)Clinic Sales TransactionNotesRD Termination CostsNotesPro Forma
ASSETS
Current assets:
Cash and cash equivalents$21,918,175 $11,130,000 $(2,820,000)$30,228,175 
Restricted cash979,384 — — 979,384 
Accounts receivable, net2,970,097 — — 2,970,097 
Deferred franchise and regional development costs, current portion1,045,497 — (20,000)1,025,497 
Prepaid expenses and other current assets3,739,832 — — 3,739,832 
Discontinued operations current assets37,178,393 (13,613,000)— 23,565,393 
Total current assets67,831,378 (2,483,000)(2,840,000)62,508,378 
Property and equipment, net3,061,663 — — 3,061,663 
Operating lease right-of-use asset1,742,749 — — 1,742,749 
Deferred franchise and regional development costs, net of current portion4,268,991 — (57,000)4,211,991 
Deposits and other assets289,212 — — 289,212 
Total assets$77,193,993 $(2,483,000)$(2,897,000)$71,813,993 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$1,022,141 $— $— $1,022,141 
Accrued expenses2,005,609 445,000 (1)— 2,450,609 
Co-op funds liability998,765 — — 998,765 
Payroll liabilities2,188,667 — — 2,188,667 
Operating lease liability, current portion240,889 — — 240,889 
Deferred franchise fee revenue, current portion2,525,924 90,000 — 2,615,924 
Upfront regional developer fees, current portion284,561 (5,000)279,561 
Other current liabilities687,651 60,000 — 747,651 
Discontinued operations current liabilities32,752,879 (6,411,000)— 26,341,879 
Total current liabilities42,707,086 (5,816,000)(5,000)36,886,086 
Operating lease liability, net of current portion2,009,705 — — 2,009,705 
Deferred franchise fee revenue, net of current portion11,936,488 807,000 — 12,743,488 
Upfront regional developer fees, net of current portion602,638 (38,000)564,638 
Total liabilities57,255,917 (5,009,000)(43,000)52,203,917 
Stockholders' equity:
Common stock15,344 — — 15,344 
Additional paid-in capital50,410,220 — — 50,410,220 
Treasury stock(878,498)— — (878,498)
Accumulated deficit(29,633,990)2,526,000 (2)(2,854,000)(2)(29,961,990)
Total The Joint Corp. stockholders' equity19,913,076 2,526,000 (2,854,000)19,585,076 
Non-controlling Interest25,000 — — 25,000 
Total equity19,938,076 2,526,000 (2,854,000)19,610,076 
Total liabilities and stockholders' equity$77,193,993 $(2,483,000)$(2,897,000)$71,813,993 

    


THE JOINT CORP.
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)

Three Months Ended March 31, 2025
Historical
(as reported)		Clinic Sales TransactionNotesRD Termination CostsNotesPro Forma AdjustmentsNotesPro Forma
Revenues:
Royalty fees$8,070,985 $— $— $361,000 (6)$8,431,985 
Franchise fees828,519 — — 22,000 (7)850,519 
Advertising fund revenue2,307,502 — — 103,000 (8)2,410,502 
Software fees1,461,967 — — 56,000 (9)1,517,967 
Other revenues408,617 — — — 408,617 
Total revenues13,077,590 — — 542,000 13,619,590 
Cost of revenues:
Franchise and regional development cost of revenues2,551,235 — (212,000)(5)— 2,339,235 
IT cost of revenues420,891 — — — 420,891 
Total cost of revenues2,972,126 — (212,000)— 2,760,126 
Selling and marketing expenses3,505,150 — — — 3,505,150 
Depreciation and amortization361,930 — — — 361,930 
General and administrative expenses6,914,945 — — — 6,914,945 
Total selling, general and administrative expenses10,782,025 — — — 10,782,025 
Net loss on disposition or impairment1,973 — — — 1,973 
Income (loss) from operations(678,534)— 212,000 542,000 75,466 
Other income (expense), net185,917 — — — 185,917 
Income (loss) before income tax expense(492,617)— 212,000 542,000 261,383 
Income tax expense (benefit)13,404 — 45,000 (4)114,000 (4)172,404 
Net income (loss) from continuing operations(506,021)— 167,000 428,000 88,979 
Discontinued operations:
Income (loss) from discontinued operations before income tax expense1,410,863 (1,394,000)(3)— — 16,863 
Income tax expense (benefit) from discontinued operations103,412 (293,000)(4)— — (189,588)
Net income (loss) from discontinued operations1,307,451 (1,101,000)— — 206,451 
Net income (loss)$801,430 $(1,101,000)$167,000 $428,000 $295,430 
Net loss from continuing operations per common share:
Basic$(0.03)$0.01 
Diluted$(0.03)$0.01 
Net income from discontinued operations per common share:
Basic$0.09 $0.01 
Diluted$0.09 $0.01 
Net income per common share:
Basic$0.05 $0.02 
Diluted$0.05 $0.02 
Basic weighted average shares15,186,420 15,186,420 
Diluted weighted average shares15,263,152 15,263,152 

    


THE JOINT CORP.
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
Year ended December 31, 2024
Historical
(as reported)		Clinic Sales TransactionNotesRD Termination CostsNotesPro Forma AdjustmentsNotesPro Forma
Revenues:
Royalty fees$32,144,796 $— $— $1,471,000 (6)$33,615,796 
Franchise fees2,997,850 — — 84,000 (7)3,081,850 
Advertising fund revenue9,180,281 — — 420,000 (8)9,600,281 
Software fees5,687,326 — — 223,000 (9)5,910,326 
Other revenues1,886,352 — — — 1,886,352 
Total revenues51,896,605 — — 2,198,000 54,094,605 
Cost of revenues:
Franchise and regional development cost of revenues10,063,644 — (865,000)(5)— 9,198,644 
IT cost of revenues1,453,011 — — — 1,453,011 
Total cost of revenues11,516,655 — (865,000)— 10,651,655 
Selling and marketing expenses10,923,342 — — — 10,923,342 
Depreciation and amortization1,363,453 — — — 1,363,453 
General and administrative expenses29,833,570 — — — 29,833,570 
Total selling, general and administrative expenses42,120,365 — — — 42,120,365 
Net loss on disposition or impairment14,642 — — — 14,642 
Income (loss) from operations(1,755,057)— 865,000 2,198,000 1,307,943 
Other income (expense), net(280,287)— — — (280,287)
Income (loss) before income tax expense(1,474,770)— 865,000 2,198,000 1,588,230 
Income tax expense (benefit)62,142 — 182,000 (4)462,000 (4)706,142 
Net income (loss) from continuing operations(1,536,912)— 683,000 1,736,000 882,088 
Discontinued operations:
(Loss) income from discontinued operations before income tax expense(6,780,289)(5,020,000)(3)— — (11,800,289)
Income tax expense (benefit) from discontinued operations212,642 (1,054,000)(4)— — (841,358)
Net income (loss) from discontinued operations(6,992,931)(3,966,000)— — (10,958,931)
Net income (loss)$(8,529,843)$(3,966,000)$683,000 $1,736,000 $(10,076,843)
Net loss from continuing operations per common share:
Basic$(0.10)$0.06 
Diluted$(0.10)$0.06 
Net income from discontinued operations per common share:
Basic$(0.47)$(0.73)
Diluted$(0.46)$(0.72)
Net income per common share:
Basic$(0.57)$(0.68)
Diluted$(0.56)$(0.67)
Basic weighted average shares14,919,091 14,919,091 
Diluted weighted average shares15,147,247 15,147,247 

    


THE JOINT CORP.
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)

Year Ended December 31, 2023
Historical
(as reported)		Clinic Sales TransactionNotesRD Rights Termination CostsNotesPro Forma AdjustmentsNotesPro Forma
Revenues:
Royalty fees$29,160,832 $— $— $1,438,000 (6)$30,598,832 
Franchise fees2,882,895 — — 84,000 (7)2,966,895 
Advertising fund revenue8,321,043 — — 411,000 (8)8,732,043 
Software fees5,086,562 — — 223,000 (9)5,309,562 
Other revenues1,526,145 — — — 1,526,145 
Total revenues46,977,477 — — 2,156,000 49,133,477 
Cost of revenues:
Franchise and regional development cost of revenues9,063,375 — (842,000)(5)— 8,221,375 
IT cost of revenues1,417,270 — — — 1,417,270 
Total cost of revenues10,480,645 — (842,000)— 9,638,645 
Selling and marketing expenses8,689,664 — — — 8,689,664 
Depreciation and amortization1,278,148 — — — 1,278,148 
General and administrative expenses26,231,615 — — — 26,231,615 
Total selling, general and administrative expenses36,199,427 — — — 36,199,427 
Net (gain) on disposition or impairment(20,894)— — — (20,894)
Income (loss) from operations318,299 — 842,000 2,156,000 3,316,299 
Other income (expense), net64,293 — — — 64,293 
Income (loss) before income tax expense254,006 — 842,000 2,156,000 3,252,006 
Income tax expense (benefit)11,023,411 — 177,000 (4)453,000 (4)11,653,411 
Net income (loss) from continuing operations(10,769,405)— 665,000 1,703,000 (8,401,405)
Discontinued operations:
Income (loss) from discontinued operations before income tax expense1,384,750 (5,200,000)(3)— — (3,815,250)
Income tax expense (benefit) from discontinued operations367,542 (1,092,000)(4)— — (724,458)
Net income (loss) from discontinued operations1,017,208 (4,108,000)— — (3,090,792)
Net income (loss)$(9,752,197)$(4,108,000)$665,000 $1,703,000 $(11,492,197)
Net loss from continuing operations per common share:
Basic$(0.73)$(0.57)
Diluted$(0.72)$(0.56)
Net income from discontinued operations per common share:
Basic$0.07 $(0.21)
Diluted$0.07 $(0.21)
Net income per common share:
Basic$(0.66)$(0.78)
Diluted$(0.65)$(0.77)
Basic weighted average shares14,688,115 14,688,115 
Diluted weighted average shares14,935,217 14,935,217 

    


The Joint Corp.
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2025, and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and for the years ended December 31, 2024 and 2023 include the following adjustments:

(1)    Represents the estimated brokerage fees associated with the Joint Ventures Transaction.
(2) For purposes of the unaudited pro forma condensed consolidated balance sheet, the estimated gains recognized in retained earnings (accumulated deficit) is based on the net carrying value of the assets sold in the Joint Ventures Transaction as of March 31, 2025 rather than as of the closing date of the Joint Ventures Transaction. As a result, the estimated loss reflected herein may differ materially from the actual gain or loss on the Joint Ventures Transaction as of the closing date because of the differences in the carrying value of assets and liabilities at the closing date.
(3)    Reflects the recognized impact of the 31 clinics on the condensed consolidated statements of income for each respective period.
(4)    Reflects the estimated income tax impact of the adjustments at the applicable statutory income tax rates in effect for the periods presented.
(5) Reflects the recognized regional developer fees recognized for the Northwest Region for each respective period.        
(6)    Reflects the estimated royalties equal to seven percent of gross sales for the 31 clinics sold to Joint Ventures for each respective period.
(7)    Reflects the estimated franchise fees for the 31 clinics sold to Joint Ventures recognized ratably on a straight-line basis over the typical 10-year franchise agreement term.
(8)    Reflects the estimated advertising fund fees equal to two percent of gross sales for the 31 clinics sold to Joint Ventures for each respective period.
(9)    Reflects the estimated monthly software fees for the 31 clinics sold to Joint Ventures for each respective period.