Core Insights - Blue Owl Capital has extended its partnership with Chirisa Technology Parks to support developments totaling $20 billion, which includes $4 billion for CoreWeave projects in Lancaster, Pennsylvania [1][3][4] - The Lancaster facility will be part of CoreWeave's network of AI data centers, aimed at building infrastructure for AI applications across critical economic corridors in the U.S. [2][6] - The partnership emphasizes sustainable development, with a focus on creating high-performance digital campuses that contribute to local economic growth and job creation [4][9] Company Developments - CoreWeave is rapidly expanding its infrastructure footprint, with nearly 1.6 GW under development in the U.S., positioning itself as a leading cloud infrastructure provider for AI workloads [12] - The Lancaster campus will utilize advanced technologies for energy efficiency, including proprietary infrastructure that is nearly twice as energy-efficient as traditional data centers [7][8] - The project will also involve a $200 million investment in local power grid improvements to enhance the electric grid's safety and efficiency in the Lancaster region [9] Strategic Partnerships - The collaboration between Blue Owl, Chirisa Technology Parks, and Machine Investment Group is designed to leverage each partner's strengths in funding, development, and operational expertise [4][13] - Machine Investment Group's focus on repurposing underutilized commercial properties aligns with the strategic goals of the partnership, enhancing the potential for successful project execution [4][13]

Core Viewpoint - Zhibao Technology Inc. has announced a joint venture with Beijing Zhongfang Hongchuang Technology Company Limited and Guangzhou Ruiling Intelligent Technology Co. Ltd. to develop an innovative "Insurance + Technology + Service" model aimed at enhancing risk management and mitigation services across China [2][3][4] Group 1: Joint Venture Details - The joint venture will focus on three core scenarios: government emergency management, corporate workplace safety, and residential disaster prevention and reduction [3] - Zhibao will hold 40% of the shares in the joint venture, while Zhongfang and Ruiling will each own 30% [3] Group 2: Strategic Goals and Innovations - The collaboration aims to redefine insurance services through technology, combining Zhibao's AI-driven risk management platform with CDPA's expertise and data [4] - The joint venture will develop integrated product offerings that leverage Zhibao's technology and CDPA's disaster database resources [6] - A comprehensive digital service ecosystem will be co-developed to provide end-to-end workflows for risk management, including monitoring, risk assessment, insurance coverage, and post-disaster recovery [6] Group 3: Market and Industry Impact - The parties plan to jointly host industry summits and disaster prevention technology forums to stimulate the risk management services market [6] - Collaboration with financial institutions is intended to launch dedicated funds for research and development in disaster monitoring and risk reduction services [6] - The joint venture will work with industry associations to establish standards for risk management services and products [6][7]

Core Viewpoint - Rakovina Therapeutics and NanoPalm Ltd. have signed a non-binding Letter of Intent to form a joint venture aimed at co-developing novel small-molecule oncology therapeutics, starting with the drug kt3283, utilizing NanoPalm's advanced pLNP delivery technology [1][6]. Company Overview - Rakovina Therapeutics is a biopharmaceutical company focused on cancer therapies, leveraging AI-powered drug discovery technologies, including the proprietary Deep Docking™ platform [13]. - NanoPalm Ltd. is a Saudi-based biotechnology company specializing in AI-designed pLNP delivery systems for gene and drug therapies, originally developed for gene therapy applications [11][12]. Joint Venture Details - The joint venture will focus on advancing kt3283, a dual-function PARP-HDAC inhibitor, through late preclinical development and early clinical studies, while also evaluating additional AI-derived drug candidates [6][9]. - The collaboration will be based in Saudi Arabia, with a global development and commercialization mandate, marking the first pLNP-oncology-focused biotech initiative in the region [9][16]. Technology and Innovation - Rakovina's AI-enabled drug discovery engine can rapidly screen billions of molecules against cancer targets, while NanoPalm's pLNP technology enhances therapeutic delivery precision and efficacy [2][4]. - kt3283 has shown strong preclinical activity in Ewing sarcoma, breast, and ovarian cancer models, demonstrating enhanced cytotoxicity compared to existing PARP and HDAC inhibitors [3][4]. Strategic Goals - The partnership aims to create a robust pipeline of novel therapeutics, with plans for global licensing and commercialization opportunities as the development pipeline matures [6][9]. - The joint venture will adhere to international regulatory standards, including those of the FDA, SFDA, and EMA, ensuring compliance and facilitating market entry [9][10].

PART I FINANCIAL INFORMATION Presents the unaudited condensed consolidated financial statements and detailed notes for the reporting periods [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of specific dates | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $29,811,667 | $25,051,355 | | Total current assets | $63,752,556 | $74,577,448 | | Total assets | $73,183,401 | $83,154,408 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $35,510,684 | $49,042,087 | | Total liabilities | $49,921,658 | $62,476,289 | | Total equity | $23,261,743 | $20,678,119 | [Condensed Consolidated Income Statements](index=8&type=section&id=Condensed%20Consolidated%20Income%20Statements) Details the company's revenues, costs, and net income or loss for the specified reporting periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $13,270,270 | $12,610,036 | $26,347,860 | $24,794,752 | | Total cost of revenues | $2,772,607 | $2,812,389 | $5,744,733 | $5,516,901 | | Loss from operations | $(1,138,167) | $(1,779,325) | $(1,816,701) | $(2,205,921) | | Net loss from continuing operations | $(989,635) | $(1,710,023) | $(1,495,656) | $(2,108,942) | | Net income (loss) from discontinued operations | $1,082,998 | $(1,886,375) | $2,556,815 | $(540,477) | | Net income (loss) | $93,363 | $(3,596,398) | $1,061,159 | $(2,649,419) | | Basic EPS (Net income (loss)) | $0.01 | $(0.24) | $0.07 | $(0.18) | | Diluted EPS (Net income (loss)) | $0.01 | $(0.24) | $0.07 | $(0.18) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines changes in equity over the period, driven by net income and stock-based activities - Total The Joint Corp. stockholders' equity increased from **$20,653,119** at December 31, 2024, to **$23,236,743** at June 30, 2025. This increase was primarily driven by net income of **$967,796** for the period ending March 31, 2025, and **$93,363** for the period ending June 30, 2025, along with stock-based compensation expense and proceeds from stock option exercises[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the reporting periods | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(2,832,005) | $1,836,874 | | Net cash provided by (used in) investing activities | $6,941,742 | $(433,350) | | Net cash provided by (used in) financing activities | $893,182 | $(1,970,095) | | Increase (decrease) in cash, cash equivalents and restricted cash | $5,002,919 | $(566,571) | | Cash, cash equivalents and restricted cash, end of period | $30,999,355 | $18,647,721 | - Net cash used in operating activities decreased by **$4.7 million** to **$2.8 million** for the six months ended June 30, 2025, compared to net cash provided by operating activities of **$1.8 million** for the prior year period. This was mainly due to changes in accrued expenses, accounts receivable, prepaid expenses, and payroll liabilities[164](index=164&type=chunk) - Net cash provided by investing activities significantly increased to **$6.9 million** for the six months ended June 30, 2025, primarily driven by **$7.8 million** in proceeds from clinic sales, partially offset by **$0.8 million** in property and equipment purchases[165](index=165&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1: Nature of Operations and Summary of Significant Accounting Policies](index=12&type=section&id=Note%201:%20Nature%20of%20Operations%20and%20Summary%20of%20Significant%20Accounting%20Policies) Describes the company's business, operational structure, and key accounting principles - The Company's unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain disclosures condensed or omitted. The results of operations for the periods ended June 30, 2025 and 2024, are not necessarily indicative of expected operating results for the full year[23](index=23&type=chunk) - The corporate clinic segment's results are reported as discontinued operations, and related assets and liabilities are classified as such in the balance sheets. Cash flows related to discontinued operations are included in the consolidated statement of cash flows[25](index=25&type=chunk) | Clinic Type | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Franchised clinics in operation | 885 | 829 | | Company-owned or managed clinics in operation | 82 | 131 | | Total clinics in operation | 967 | 960 | | Clinic licenses sold but not yet developed | 92 | 113 | | Future clinic licenses subject to executed letters of intent | 60 | 45 | - The Company consolidates Variable Interest Entities (VIEs), primarily professional corporations (PCs) in states prohibiting corporate practice of chiropractic, where it acts as the primary beneficiary by directing activities and absorbing significant losses or benefits[30](index=30&type=chunk) - Restricted cash includes funds contributed by franchisees to the National Marketing Fund and regional Co-Op Marketing Funds, which are classified as restricted cash despite not being legally segregated[34](index=34&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) on January 1, 2024, with no material effect. It plans to adopt ASU 2023-09 (Income Taxes) for the year ending December 31, 2025, and is evaluating the impact of ASU 2024-03 (Expense Disaggregation Disclosures) for the annual period ending December 31, 2027[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Note 2: Revenue Disclosures](index=21&type=section&id=Note%202:%20Revenue%20Disclosures) Details the company's revenue sources, recognition policies, and contract liabilities - The Company's primary revenue sources are royalties, franchise fees, advertising fund contributions, and software fees from its **885** franchised clinics. Initial franchise fees are recognized ratably over the 10-year franchise agreement term, while royalties and advertising fees are recognized as franchisee sales occur[69](index=69&type=chunk)[75](index=75&type=chunk) | Revenue Recognition Timing | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue recognized at a point in time | $11,020,509 | $10,475,897 | $21,807,613 | $20,617,963 | | Revenue recognized over time | $2,249,761 | $2,134,139 | $4,540,247 | $4,176,789 | | Total revenue | $13,270,270 | $12,610,036 | $26,347,860 | $24,794,752 | | Contract Liabilities (Deferred Franchise Fees) | Amount | | :--------------------------------------------- | :------------- | | Balance at December 31, 2024 | $14,997,105 | | Revenue recognized from beginning of year liability | $(1,662,396) | | Net increase during six months ended June 30, 2025 | $1,181,468 | | Balance at June 30, 2025 | $14,516,177 | [Note 3: Divestitures](index=23&type=section&id=Note%203:%20Divestitures) Explains the refranchising strategy for corporate clinics and the financial impact of these divestitures - The Company initiated a plan in 2023 to refranchise its corporate-owned or managed clinics, expanding in Q3 2024 to include the full portfolio. This refranchising plan is considered a strategic shift, leading to the corporate clinic segment being reported as discontinued operations[80](index=80&type=chunk)[81](index=81&type=chunk) | Metric (Discontinued Operations) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues from company-owned or managed clinics | $16,642,013 | $17,650,525 | $33,548,363 | $35,187,976 | | Net income (loss) from discontinued operations | $1,082,998 | $(1,886,375) | $2,556,815 | $(540,477) | | Net loss on disposition or impairment | $1,752,494 | $1,434,658 | $2,885,852 | $1,796,486 | - As of June 30, 2025, the estimated fair value of the corporate clinic portfolio expected to be sold within one year was **$6.4 million**. The Company recorded an estimated loss on disposal of **$1.4 million** for the six months ended June 30, 2025, and maintains a valuation allowance of **$5.7 million**[83](index=83&type=chunk)[84](index=84&type=chunk) - During the six months ended June 30, 2025, the Company sold **$16.1 million** in assets held for sale (net of a **$1.0 million** valuation allowance) and **$7.2 million** in liabilities to be disposed of, generating **$7.8 million** in sales proceeds. This resulted in a **$0.6 million** loss on sale[86](index=86&type=chunk) [Note 4: Property and Equipment](index=25&type=section&id=Note%204:%20Property%20and%20Equipment) Provides a breakdown of property and equipment, along with related depreciation and amortization | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Office and computer equipment | $976,441 | $937,551 | | Leasehold improvements | $1,588,391 | $1,585,609 | | Software developed | $6,702,368 | $5,914,254 | | Accumulated depreciation and amortization | $(6,660,324) | $(5,982,533) | | Construction in progress | $568,554 | $751,873 | | Property and equipment, net | $3,175,430 | $3,206,754 | - Depreciation expense increased to **$0.8 million** for the six months ended June 30, 2025, from **$0.7 million** in the prior year, primarily due to internal use software enhancements and developments, including a new mobile app[88](index=88&type=chunk)[147](index=147&type=chunk) [Note 5: Fair Value Measurements](index=26&type=section&id=Note%205:%20Fair%20Value%20Measurements) Discusses fair value hierarchy and measurement of financial and non-financial assets and liabilities - The Company's financial instruments, excluding debt under the Credit Agreement, approximate fair value due to short maturities. Debt under the Credit Agreement approximates fair value and is considered a Level 2 fair value measurement[90](index=90&type=chunk) - Non-financial assets, including goodwill, intangible assets, property, plant and equipment, and operating lease ROU assets, are assessed for impairment periodically. Impairment charges are recorded to write down assets to fair value, which is considered Level 3 within the fair value hierarchy[92](index=92&type=chunk) - Assets held for sale are reported at the lower of carrying value or fair value less estimated cost to sell. As of June 30, 2025, the fair value measurement of assets held for sale was **$0.1 million** based on Level 2 inputs and **$6.3 million** based on Level 3 inputs, with a **$5.7 million** valuation allowance[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 6: Debt](index=27&type=section&id=Note%206:%20Debt) Outlines the company's credit facility, borrowing terms, and compliance with covenants - The Company's 2022 Credit Facility provides a **$20 million** Revolver for working capital, general corporate purposes, acquisitions, development, and capital improvements. Borrowings bear interest at adjusted SOFR plus 0.10% plus 1.75%, or ABR plus 1.00%[98](index=98&type=chunk) - The 2022 Credit Facility terminates on February 28, 2027. As of June 30, 2025, the Company was in compliance with all covenants, and there was no outstanding balance on the debt, following a **$2 million** paydown on January 17, 2024[98](index=98&type=chunk)[99](index=99&type=chunk) [Note 7: Stock-Based Compensation](index=28&type=section&id=Note%207:%20Stock-Based%20Compensation) Details stock-based award plans, activity, and related compensation expense - The Company grants stock-based awards under its 2024 Incentive Stock Plan, including non-qualified stock options, incentive stock options, and restricted stock. Compensation expense is recognized ratably over the service period[100](index=100&type=chunk) | Stock Option Activity | Number of Shares | Weighted Average Exercise Price | | :-------------------------- | :--------------- | :------------------------------ | | Outstanding at Dec 31, 2024 | 281,977 | $11.80 | | Exercised | (3,000) | $3.07 | | Forfeited | (432) | $45.39 | | Expired | (71,023) | $17.78 | | Outstanding at June 30, 2025 | 207,522 | $9.80 | | Exercisable at June 30, 2025 | 169,293 | $9.57 | | Restricted Stock Awards | Shares | Weighted Average Grant-Date Fair Value per Award | | :-------------------------- | :----- | :----------------------------------------------- | | Non-vested at Dec 31, 2024 | 305,982 | $11.97 | | Granted | 263,798 | $10.80 | | Vested | (91,347) | $12.90 | | Forfeited | (95,169) | $11.55 | | Non-vested at June 30, 2025 | 383,264 | $11.04 | - Stock-based compensation expense for restricted stock awards decreased to **$586,248** for the six months ended June 30, 2025, from **$943,685** in the prior year period[106](index=106&type=chunk) [Note 8: Income Taxes](index=29&type=section&id=Note%208:%20Income%20Taxes) Presents income tax expense and factors influencing the effective tax rate | Income Tax Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | From continuing operations | $11,390 | $11,169 | $24,794 | $19,751 | | From discontinued operations | $100,201 | $167,153 | $203,613 | $337,498 | - The Company's effective tax rate differs from the federal statutory rate primarily due to changes in valuation allowance and state taxes. Income tax expense increased for both three and six months ended June 30, 2025, mainly due to higher estimated state income taxes[107](index=107&type=chunk)[152](index=152&type=chunk) [Note 9: Commitments and Contingencies](index=29&type=section&id=Note%209:%20Commitments%20and%20Contingencies) Discloses operating lease commitments, guarantees, and legal claims | Operating Lease Costs | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative expenses | $91,577 | $64,289 | $172,758 | $128,577 | - The Company has guaranteed **29** future operating lease commitments assumed by buyers in connection with clinic sales, totaling **$4.3 million** in undiscounted maximum remaining lease payments as of June 30, 2025. No liability has been recorded as payment under these guarantees is not probable[110](index=110&type=chunk) - During Q1 2025, the Company settled a medical injury claim for **$3.4 million**, accrued in discontinued operations current liabilities. This was offset by a **$1.9 million** receivable from the Company's insurance[113](index=113&type=chunk) [Note 10: Segment Reporting](index=31&type=section&id=Note%2010:%20Segment%20Reporting) Describes operating segments and financial performance, focusing on Franchise Operations - Historically, the Company had two operating segments: Corporate Clinics and Franchise Operations. Following the refranchising strategy, the Corporate Clinic segment is now reported as discontinued operations, leaving Franchise Operations as the sole reportable segment since December 31, 2024[115](index=115&type=chunk) - The Franchise Operations segment, comprising **885** clinics as of June 30, 2025, derives revenue from franchise licenses, royalties, and software fees. The CEO uses Net Income, Gross Profit, Operating Income, and Adjusted EBITDA to assess performance and allocate resources[116](index=116&type=chunk) | Segment Financials | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $13,270,270 | $12,610,036 | $26,347,860 | $24,794,752 | | Franchise and regional developer cost of revenues | $2,350,613 | $2,458,186 | $4,901,848 | $4,799,951 | | Selling and marketing expenses | $3,483,844 | $3,440,391 | $6,988,994 | $5,677,974 | | Segment loss | $(989,635) | $(1,710,023) | $(1,495,656) | $(2,108,942) | [Note 11: Related Party Transactions](index=32&type=section&id=Note%2011:%20Related%20Party%20Transactions) Identifies transactions with related parties, including a board director's family member - Jefferson Gramm, a beneficial holder of over **5%** of common stock and a Board Director, has a family member (Marshall Gramm) who owns four franchise licenses. These transactions were on terms no less favorable than those with unaffiliated parties[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Note 12: Subsequent Events](index=32&type=section&id=Note%2012:%20Subsequent%20Events) Reports significant events occurring after the reporting period, such as new legislation - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, allowing more favorable deductibility of certain business expenses (e.g., R&D, bonus depreciation) starting in 2025. The Company is evaluating the financial impact, which was not reflected in the Q2 2025 income tax provision[123](index=123&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operations, key performance indicators, and liquidity [Overview](index=33&type=section&id=Overview) Introduces The Joint Corp.'s business model and key performance indicators - The Joint Corp. is a rapidly growing franchisor using a private pay, non-insurance, cash-based model, aiming to be the leading provider of chiropractic care in North America and potentially abroad[125](index=125&type=chunk) - Key performance indicators include gross sales, comparable same-store sales growth (Comp Sales), new patients, conversion percentage, membership attrition, system-wide sales, clinic openings, clinic license sales, and Adjusted EBITDA[126](index=126&type=chunk) [Key Clinic Development Trends](index=33&type=section&id=Key%20Clinic%20Development%20Trends) Details clinic growth strategy, refranchising efforts, and franchise sales - As of June 30, 2025, the Company and its franchisees operated **967** clinics (**885** franchised, **82** company-owned/managed). Seven franchised clinics opened in Q2 2025, down from nine in Q2 2024[127](index=127&type=chunk) - The Company's strategy is to grow through franchise sales and development, including refranchising its entire portfolio of company-owned/managed clinics. In Q2 2025, **37** clinics were refranchised, with significant interest from multi-unit operators and private equity firms[128](index=128&type=chunk) - On June 30, 2025, **31** corporate clinics in Arizona and New Mexico were sold to an existing franchisee for **$8.3 million** cash, including regional developer territory rights. Another five clinics in Kansas City were sold on June 23, 2025[129](index=129&type=chunk) - The Company sold **13** franchise licenses in Q2 2025, compared to **7** in Q2 2024, and plans to continue leveraging its regional developer program to accelerate clinic sales and openings[131](index=131&type=chunk) [Recent Events](index=34&type=section&id=Recent%20Events) Discusses the impact of global economic conditions, inflation, and labor costs - Unfavorable global economic or political conditions, labor shortages, inflation, and other cost increases are expected to impact the business, with 2025 anticipated to be a volatile macroeconomic environment[133](index=133&type=chunk) - Labor costs are the primary inflationary factor, leading to increased general and administrative expenses in 2024 due to shortages and wage increases. Increased interest rates may also reduce patient discretionary spending[134](index=134&type=chunk)[135](index=135&type=chunk) [Other Significant Events and/or Recent Developments](index=34&type=section&id=Other%20Significant%20Events%20and/or%20Recent%20Developments) Highlights recent operational performance metrics, including comparable same-store and system-wide sales - For the three months ended June 30, 2025, comparable same-store sales (clinics open 13+ months) increased by **1.4%**, while comp sales for mature clinics (48+ months) decreased by **2.0%**. System-wide sales grew **2.6%** to **$129.6 million**[139](index=139&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Analyzes changes in revenues and expenses for current and prior reporting periods [Total Revenues - Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024](index=35&type=section&id=Total%20Revenues%20-%20Three%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Three%20Months%20Ended%20June%2030,%202024) Compares total revenues and their components for the three months ended June 30, 2025 and 2024 | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | Percent Change | | :--------------------------------- | :--------------------------- | :--------------------------- | :----- | :------------- | | Royalty fees | $8,133,122 | $7,846,328 | $286,794 | 3.7% | | Franchise fees | $768,100 | $719,103 | $48,997 | 6.8% | | Advertising fund revenue | $2,332,695 | $2,240,839 | $91,856 | 4.1% | | IT-related income and software fees | $1,481,661 | $1,415,036 | $66,625 | 4.7% | | Other revenues | $554,692 | $388,730 | $165,962 | 42.7% | | Total revenues | $13,270,270 | $12,610,036 | $660,234 | 5.2% | - Total revenues increased by **$0.7 million (5.2%)** for the three months ended June 30, 2025, primarily due to the expansion and revenue growth of the franchise base, including increased royalty fees, advertising fund revenue, and software fees from a larger franchised clinic base (**885** clinics in 2025 vs. **829** in 2024). Other revenues saw a significant **42.7%** increase mainly from **$150,000** in sponsorship payments for the annual conference[140](index=140&type=chunk)[142](index=142&type=chunk) [Total Revenues - Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024](index=35&type=section&id=Total%20Revenues%20-%20Six%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Six%20Months%20Ended%20June%2030,%202024) Compares total revenues and their components for the six months ended June 30, 2025 and 2024 | Revenue Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | Percent Change | | :--------------------------------- | :--------------------------- | :--------------------------- | :----- | :------------- | | Royalty fees | $16,204,107 | $15,433,874 | $770,233 | 5.0% | | Franchise fees | $1,596,619 | $1,374,977 | $221,642 | 16.1% | | Advertising fund revenue | $4,640,197 | $4,407,311 | $232,886 | 5.3% | | IT-related income and software fees | $2,943,628 | $2,801,812 | $141,816 | 5.1% | | Other revenues | $963,309 | $776,778 | $186,531 | 24.0% | | Total revenues | $26,347,860 | $24,794,752 | $1,553,108 | 6.3% | - Total revenues increased by **$1.6 million (6.3%)** for the six months ended June 30, 2025, driven by continued expansion and sales growth in the franchise base. Royalty fees, advertising fund revenue, and software fees all increased due to a larger franchised clinic base. Other revenues increased by **$150,000** from annual conference sponsorship payments[141](index=141&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [Cost of Revenues](index=36&type=section&id=Cost%20of%20Revenues) Analyzes changes in the cost of revenues for the three and six months ended June 30, 2025 and 2024 | Cost of Revenues | 2025 | 2024 | Change | Percent Change | | :----------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $2,772,607 | $2,812,389 | $(39,782) | (1.4)% | | Six Months Ended June 30, | $5,744,733 | $5,516,901 | $227,832 | 4.1% | - Cost of revenues decreased by **1.4%** for the three months ended June 30, 2025, primarily due to a reduction in regional developer sales commissions. For the six months, it increased by **4.1%** due to more franchised clinics and sales growth in regional developer regions, partially offset by the commission reduction[145](index=145&type=chunk) [Selling and Marketing Expenses](index=36&type=section&id=Selling%20and%20Marketing%20Expenses) Examines the trends and drivers behind selling and marketing expenses for the specified periods | Selling and Marketing Expenses | 2025 | 2024 | Change | Percent Change | | :------------------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $3,483,844 | $3,440,391 | $43,453 | 1.3% | | Six Months Ended June 30, | $6,988,994 | $5,677,974 | $1,311,020 | 23.1% | - Selling and marketing expenses increased by **1.3%** for the three months and **23.1%** for the six months ended June 30, 2025, primarily due to increased expenses associated with digital marketing transformation efforts incurred in Q1 2025[146](index=146&type=chunk) [Depreciation and Amortization Expenses](index=36&type=section&id=Depreciation%20and%20Amortization%20Expenses) Reviews changes in depreciation and amortization expenses, primarily due to software development | Depreciation and Amortization Expenses | 2025 | 2024 | Change | Percent Change | | :--------------------------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $402,295 | $342,454 | $59,841 | 17.5% | | Six Months Ended June 30, | $764,225 | $672,088 | $92,137 | 13.7% | - Depreciation and amortization expenses increased by **17.5%** for the three months and **13.7%** for the six months ended June 30, 2025, mainly due to depreciation related to internal use software enhancements and the launch of a new mobile app[147](index=147&type=chunk) [General and Administrative Expenses](index=36&type=section&id=General%20and%20Administrative%20Expenses) Discusses fluctuations in general and administrative expenses, including payroll and employee compensation | General and Administrative Expenses | 2025 | 2024 | Change | Percent Change | | :------------------------------------ | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $7,745,251 | $7,793,465 | $(48,214) | (0.6)% | | Six Months Ended June 30, | $14,660,196 | $15,132,773 | $(472,577) | (3.1)% | - General and administrative expenses decreased by **0.6%** for the three months and **3.1%** for the six months ended June 30, 2025, primarily due to a decrease in payroll and other employee compensation expenses, reflecting fewer employees and the departure of long-tenure employees with stock-based compensation[148](index=148&type=chunk) - As a percentage of revenue, general and administrative expenses decreased from **62%** to **58%** for the three months, and from **61%** to **56%** for the six months ended June 30, 2025[149](index=149&type=chunk) [Loss from Operations](index=37&type=section&id=Loss%20from%20Operations) Analyzes the company's operating loss and factors contributing to its change over the periods | Loss from Operations | 2025 | 2024 | Change | Percent Change | | :----------------------- | :------------- | :------------- | :------- | :------------- | | Three Months Ended June 30, | $(1,138,167) | $(1,779,325) | $641,158 | 36.0% | | Six Months Ended June 30, | $(1,816,701) | $(2,205,921) | $389,220 | 17.6% | - Loss from operations decreased by **$0.6 million (36.0%)** for the three months and **$0.4 million (17.6%)** for the six months ended June 30, 2025, driven by increased total revenues, a slight decrease in total cost of revenues, and reduced general and administrative expenses, partially offset by higher selling and marketing expenses[150](index=150&type=chunk)[154](index=154&type=chunk) [Other Income (Expense), Net](index=37&type=section&id=Other%20Income%20(Expense),%20Net) Details components of other income and expense, primarily interest income | Other Income (Expense), Net | 2025 | 2024 | Change | Percent Change | | :---------------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $159,922 | $80,471 | $79,451 | (98.7)% | | Six Months Ended June 30, | $345,839 | $116,730 | $229,109 | (196.3)% | - Other income (expense), net increased significantly for both three and six months ended June 30, 2025, primarily due to higher interest income from deploying additional cash and cash equivalents into higher interest rate savings products[151](index=151&type=chunk) [Income Tax Expense](index=37&type=section&id=Income%20Tax%20Expense) Explains income tax expense and reasons for its changes | Income Tax Expense | 2025 | 2024 | Change | Percent Change | | :------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $11,390 | $11,169 | $221 | 2.0% | | Six Months Ended June 30, | $24,794 | $19,751 | $5,043 | 25.5% | - Income tax expense increased for both three and six months ended June 30, 2025, primarily due to an increase in estimated state income taxes[152](index=152&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) Presents and reconciles non-GAAP financial measures like EBITDA and Adjusted EBITDA for performance evaluation | Non-GAAP Financial Data | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net (Loss) income | $93,363 | $(3,596,398) | $1,061,159 | $(2,649,419) | | EBITDA | $464,447 | $(1,974,173) | $1,751,695 | $520,008 | | Adjusted EBITDA | $3,239,193 | $2,126,162 | $6,094,181 | $5,632,876 | - Adjusted EBITDA from continuing operations increased to **$88,049** for the three months and **$134,443** for the six months ended June 30, 2025, compared to **$(380,434)** and **$44,274** respectively in the prior year, used to evaluate ongoing operating results and trends, excluding items like interest, taxes, depreciation, amortization, and certain non-recurring expenses[156](index=156&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses cash position, cash flow activities, and ability to meet financial obligations - As of June 30, 2025, the Company had **$29.8 million** in unrestricted cash and short-term bank deposits, with management believing existing cash, anticipated cash flows from operations, and available credit will be sufficient for the next 12 months, despite potential liquidity risks from global economic conditions[160](index=160&type=chunk)[161](index=161&type=chunk) - Net cash used in operating activities for both continuing and discontinued operations decreased by **$4.7 million** to **$2.8 million** for the six months ended June 30, 2025, compared to net cash provided by operating activities of **$1.8 million** for the prior year period[164](index=164&type=chunk) - Net cash provided by investing activities was **$6.9 million** for the six months ended June 30, 2025, primarily from **$7.8 million** in clinic sales proceeds. Net cash provided by financing activities was **$0.9 million**, mainly from stock option exercises[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures since the December 31, 2024 Annual Report on Form 10-K/A - No material changes to quantitative and qualitative disclosures about market risk as of June 30, 2025, compared to the December 31, 2024 Annual Report on Form 10-K/A[168](index=168&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in complex transaction accounting - The CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness[170](index=170&type=chunk) - The material weakness identified as of December 31, 2024, and continuing as of June 30, 2025, is the inadequate design, implementation, and maintenance of effective controls to analyze and account for non-routine, unusual, or complex transactions, particularly impairment of assets held for sale[171](index=171&type=chunk)[172](index=172&type=chunk) - The remediation plan includes designing, implementing, and maintaining enhanced internal controls for timely analysis and accounting of complex transactions and reviewing valuation methodologies for impairment charges[173](index=173&type=chunk)[179](index=179&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control during the quarter ended June 30, 2025, other than the ongoing material weakness[174](index=174&type=chunk) PART II OTHER INFORMATION Contains disclosures on legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is detailed in Note 9, Commitments and Contingencies - Legal proceedings information is detailed in Note 9, Commitments and Contingencies[175](index=175&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors since the December 31, 2024 Annual Report on Form 10-K/A - No material changes to risk factors since the filing of the amended and restated Annual Report on Form 10-K/A for the year ended December 31, 2024[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported - No unregistered sales of equity securities or use of proceeds were reported[177](index=177&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[178](index=178&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include Employment Agreement (10.1), Asset Purchase Agreement (10.2), Certifications of Principal Executive Officer (31.1) and Principal Financial Officer (31.2), Certifications pursuant to 18 U.S.C. Section 1350 (32), and XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[181](index=181&type=chunk) SIGNATURES Confirms the official signing of the Quarterly Report on Form 10-Q by the principal executive and financial officers - The Quarterly Report on Form 10-Q was signed on August 11, 2025, by Sanjiv Razdan, Chief Executive Officer and President, and Scott J. Bowman, Chief Financial Officer[185](index=185&type=chunk)

Core Insights - The Walt Disney Company is integrating its streaming service Hulu into Disney+, while Hulu will still be a separate category within the Disney+ menu [1][2] - Disney will cease reporting subscriber numbers and average revenue per user (ARPU) for both Disney+ and Hulu, which are key metrics for investors [2][11] Financial Performance - For fiscal Q3 2025, Disney reported revenue of $23.7 billion and an adjusted per-share profit of $1.61, up from $1.39 year-over-year, exceeding earnings expectations of $1.47 per share [3] - The company's cable television revenue declined by 15%, leading to a 28% drop in operating income for the cable TV segment [4] - Disney's streaming revenue grew by 6% year-over-year to nearly $6.2 billion, resulting in an operating profit of $346 million, compared to a slight loss in the same quarter of 2024 [5] Subscriber Growth - Disney+ added 1.4 million subscribers in the last quarter, with 1 million from the U.S.-Canada region, while Hulu gained 1.3 million subscribers but lost a few hundred thousand from its live-TV service [7][8] Strategic Changes - CEO Bob Iger stated that the decision to stop reporting subscriber metrics aligns with changes in the media landscape and reflects how management evaluates business performance [11][12] - The integration of Hulu into Disney+ is expected to streamline operations and enhance the user experience, with a slight increase in subscription costs [16][18] Market Position - Combined, Hulu and Disney+ are as popular in the U.S. as Netflix and Amazon Prime, and both platforms gained U.S. viewing time in Q2 of this year [19] - Disney's direct-to-consumer business accounts for about one-fourth of its total revenue, indicating that other segments are performing well [20] Investment Outlook - The recent stock decline presents a potential buying opportunity, with analysts rating Disney stock as a strong buy and a consensus price target of $135.12, representing a 17% upside from current levels [21]

Financial Data and Key Metrics Changes - System wide sales increased to $129.6 million, up 2.6% compared to Q2 2024 [10] - Comp sales for clinics open for at least 13 months rose by 1.4% for the quarter [10] - Revenue from continuing operations grew by 5% to $13.3 million [23] - Consolidated adjusted EBITDA reached $3.2 million, a 52% increase compared to Q2 2024 [10][25] - Unrestricted cash and equivalents as of June 30, 2025, were $30 million [11] Business Line Data and Key Metrics Changes - The company refranchised 37 clinics, reducing corporate clinics from 13% to 8% of the portfolio [12] - The refranchising included the sale of 31 corporate clinics in Arizona and New Mexico for $11.1 million [12] - The company opened 7 franchise clinics and closed 6 during the quarter [22] Market Data and Key Metrics Changes - The company noted macroeconomic headwinds affecting new patient counts, impacting overall performance [14] - The focus on pain relief messaging is expected to attract more patients, as 80% of new patients cite pain as their reason for visiting [15][56] Company Strategy and Development Direction - The company aims to become a pure play franchisor and is pursuing "The Joint 2.0" strategy to enhance profitability and patient experience [9] - Initiatives include a shift in marketing focus from general wellness to pain relief, enhancing digital marketing, and optimizing pricing strategies [9][15] - The company plans to explore additional revenue streams and new markets in the future [28][80] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softer sales trends and macroeconomic challenges but expressed confidence in addressing these through marketing and pricing strategies [27][39] - The company revised its 2025 guidance for system wide sales to a range of $530 million to $550 million, down from previous estimates [27] - Management emphasized the importance of brand awareness and targeted marketing to improve patient acquisition [15][56] Other Important Information - The company plans to continue its stock repurchase program, authorizing up to $5 million through June 2027 [26] - Two new directors were added to the board, enhancing governance and strategic oversight [30] Q&A Session Summary Question: Details on the lowered comp guide - Management noted recent trends showed softness mainly in new patient counts, despite improved conversion rates and consistent attrition [36][39] Question: Impact of pricing increases - Management confirmed ongoing dynamic revenue management strategies, including smaller, more frequent price increases to maintain affordability [43][73] Question: Breakdown of EBITDA guidance - Management typically does not split guidance between continuing and discontinued operations but noted ongoing efforts to manage G&A expenses [45][46] Question: Effect of recent clinic sales on back office expenses - Management indicated potential reductions in G&A expenses as clinics transition to franchise operations, with long-term savings expected [70][71] Question: Exploration of additional products and services - Management is committed to exploring incremental products and services related to pain management while maintaining operational simplicity [78][80]

Financial Performance - The Joint Corp's Q2 2025 consolidated Adjusted EBITDA increased by 52% compared to Q2 2024[30, 34] - Q2 2025 comp sales increased by 14%[30] - Q2 2025 system-wide sales increased by 26%[30] - The company reported revenue of $133 million for the three months ended June 30, 2025, a 5% increase compared to $126 million for the same period in 2024[34] - Net loss from continuing operations decreased by 42%, from $17 million in Q2 2024 to $10 million in Q2 2025[34] - Consolidated net income was $01 million, a significant improvement from a net loss of $36 million in the same period last year[34] Clinic Network - Franchised clinics now represent 92% of the company's portfolio[32] - The company refranchised 37 clinics[15] - Total clinics open increased from 842 in 2024 to 885 in Q2 2025[33] 2025 Guidance - System-wide sales are projected to be between $530 million and $550 million[40] - Consolidated Adjusted EBITDA is expected to be between $108 million and $118 million[40] - The company anticipates opening 30 to 35 new franchised clinics, excluding the impact of refranchised clinics[40] Liquidity - The company's unrestricted cash balance as of June 30, 2025, was $298 million[36] - The company has access to a $20 million line of credit with JP Morgan Chase, available through February 2027[36, 38]

[Form 8-K Current Report](index=1&type=section&id=Form%208-K%20Current%20Report) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition.) The Joint Corp. issued a press release on July 30, 2025, detailing anticipated financial results related to upcoming restatements, with the information furnished but not filed under the Exchange Act - A press release was issued on July 30, 2025, with anticipated financial results connected to the financial restatements described in Item 4.02[5](index=5&type=chunk) - The information provided in the press release (Exhibit 99.1) is not considered "filed" for the purposes of Section 18 of the Exchange Act, nor is it subject to the liabilities of that section[6](index=6&type=chunk) [Item 4.02 Non-Reliance on Previously Issued Financial Statements](index=2&type=section&id=Item%204.02.%20Non-Reliance%20on%20Previously%20Issued%20Financial%20Statements%20or%20a%20Related%20Audit%20Report%20or%20Completed%20Interim%20Review.) The company determined its FY2024 and Q1 2025 financial statements contain material errors due to misapplied accounting principles for assets held for sale, requiring restatement and leading to a material weakness in internal controls - The company concluded that its audited financial statements for the year ended December 31, 2024, and unaudited statements for the quarter ended March 31, 2025, contained material errors and must be restated[7](index=7&type=chunk) - Investors are formally advised not to rely on the previously issued financial statements, earnings releases, or investor presentations for these periods[7](index=7&type=chunk) - The company expects to report a material weakness in its internal control over financial reporting and ineffective disclosure controls for the affected periods[16](index=16&type=chunk) [Background and Nature of Errors](index=2&type=section&id=Background) Accounting errors stem from an incorrect GAAP-non-compliant valuation methodology for company-owned clinics classified as assets held for sale within discontinued operations - The errors are linked to the impairment calculation on the carrying values of clinics classified as held for sale and part of discontinued operations[8](index=8&type=chunk) - The company misapplied GAAP, specifically regarding the valuation methodology for the fair value measurement of these assets[8](index=8&type=chunk) [Preliminary Estimated Impact of Restatement](index=2&type=section&id=Preliminary%20Estimated%20Impact) Restatement is expected to reduce FY2024 net loss by approximately **$2.2 million** and increase Q1 2025 net income by **$0.5 million**, without impacting Adjusted EBITDA or cash Estimated Impact of Restatement on Financial Statements | Period | Estimated Impact on Pre-Tax Income/Loss from Discontinued Operations (USD) | Estimated Impact on Net Income/Loss (USD) | | :--- | :--- | :--- | | Year Ended Dec 31, 2024 | ~$2.2 million reduction in loss | ~$2.2 million decrease in net loss | | Quarter Ended Mar 31, 2025 | ~$0.5 million increase in income | ~$0.5 million increase in net income | - The carrying value of assets held for sale is expected to increase by an estimated **$2.2 million** as of Dec 31, 2024, and by a cumulative **$2.7 million** as of March 31, 2025[11](index=11&type=chunk)[13](index=13&type=chunk) - The restatement is not expected to have any impact on Adjusted EBITDA, cash, cash equivalents, or restricted cash for the affected periods[12](index=12&type=chunk)[14](index=14&type=chunk) [Remediation and Future Filings](index=3&type=section&id=Remediation%20and%20Future%20Filings) The Joint Corp. plans to file amended reports with restated financials, expects to identify a material weakness in internal controls, and is implementing remedial actions - The company will file an amended Annual Report on Form 10-K/A and an amended Quarterly Report on Form 10-Q/A to reflect the restated financials[15](index=15&type=chunk) - An evaluation of internal controls is underway and is expected to result in the identification of a material weakness and a conclusion that disclosure controls were ineffective[16](index=16&type=chunk) [Forward Looking Statements](index=3&type=section&id=Forward%20Looking%20Statements) The report contains forward-looking statements regarding restatement timing and financial impact, subject to risks including labor shortages, inflation, operational profitability, and internal control remediation - The report contains forward-looking statements regarding the timing of restatement filings and the anticipated effects of the accounting errors[18](index=18&type=chunk) - Identified risks that could affect future results include: inability to recruit qualified personnel, inflation, failure to profitably operate company-owned clinics, and failure to remediate material weaknesses in internal controls[19](index=19&type=chunk) - The company states it has no obligation to update or revise any forward-looking statements[19](index=19&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=4&type=section&id=Item%209.01.%20Financial%20Statements%20and%20Exhibits.) This section lists exhibits filed with the Form 8-K, primarily Exhibit 99.1, the press release detailing the financial restatement, and Exhibit 104, the Cover Page Interactive Data File Exhibits Filed | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release, dated July 30, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

Core Insights - The Joint Corp. is transitioning to a pure play franchisor model, with 92% of its clinics now franchised, and has acquired rights to the Northwest regional developer territory [4][6]. Financial Highlights - Revenue for Q2 2025 increased by 5% to $13.3 million compared to $12.6 million in Q2 2024 [6][8]. - System-wide sales rose by 2.6% to $129.6 million, with comparable sales reporting a growth of 1.4% [8]. - Consolidated net income was $93,000, a significant improvement from a net loss of $3.6 million in Q2 2024 [8][9]. - Adjusted EBITDA for consolidated operations increased by 52% to $3.2 million, while Adjusted EBITDA from continuing operations improved to $88,000 from a loss of $380,000 in Q2 2024 [8][9]. Operating Highlights - The company refranchised 37 clinics for $11.2 million and sold 13 franchise licenses in Q2 2025, compared to seven sold in Q2 2024 [8]. - The clinic count reached 967 as of June 30, 2025, with 885 franchised and 82 corporate clinics [8]. Cost Management - Selling and marketing expenses increased by 1% to $3.5 million, driven by digital marketing transformation efforts [7]. - General and administrative expenses decreased by 1% to $7.7 million due to cost reduction efforts related to refranchising [7]. Balance Sheet and Cash Flow - Unrestricted cash was $29.8 million at June 30, 2025, up from $25.1 million at the end of 2024 [10]. 2025 Guidance - The company revised its guidance for system-wide sales to range from $530 million to $550 million, down from $550 million to $570 million [16]. - Expected comp sales for clinics open 13 months or more are now projected to be in the low-single digit range [16]. - Consolidated Adjusted EBITDA guidance has been increased to a range of $10.8 million to $11.8 million [16].

Core Viewpoint - Flux Power Holdings, Inc. is collaborating with Delta-Q Technologies to host a webinar aimed at guiding OEMs and fleet operators in transitioning to lithium-ion energy solutions for warehouse and ground support equipment operations [1][2]. Group 1: Webinar Details - The webinar titled "Electrifying Warehouse & GSE Operations: A Guide to Lithium-Ion Transition" is scheduled for August 27, 2025, at 8:00 AM PT / 11:00 AM ET [1]. - The session will focus on the integration of smart battery and charging technologies, which are essential for the electrification and automation of material handling and GSE industries [2]. Group 2: Key Topics and Insights - Key topics include evaluating readiness for lithium-ion adoption, maximizing efficiency through space reclamation and energy reduction, and innovations in charging solutions [7]. - Flux Power aims to simplify the electrification process for OEMs and fleet operators, providing a technical roadmap for efficient transitions [3]. - Delta-Q emphasizes the importance of system-level thinking in electrification, highlighting the need for engineered battery systems and charging solutions to unlock the full potential of lithium power [4]. Group 3: Company Backgrounds - Delta-Q Technologies specializes in electrification solutions for various vehicles, offering battery chargers ranging from 350 W to 36 kW [5]. - Flux Power designs and manufactures advanced lithium-ion energy storage solutions, focusing on sectors such as material handling and airport ground support equipment [6][8].