The Joint (JYNT) - 2025 Q2 - Quarterly Results

Form 8-K Current Report Item 2.02 Results of Operations and Financial Condition 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] - 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] Item 4.02 Non-Reliance on Previously Issued Financial Statements 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] - Investors are formally advised not to rely on the previously issued financial statements, earnings releases, or investor presentations for these periods[7] - The company expects to report a material weakness in its internal control over financial reporting and ineffective disclosure controls for the affected periods[16] Background and Nature of Errors 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] - The company misapplied GAAP, specifically regarding the valuation methodology for the fair value measurement of these assets[8] Preliminary Estimated Impact of Restatement 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][13] - The restatement is not expected to have any impact on Adjusted EBITDA, cash, cash equivalents, or restricted cash for the affected periods[12][14] Remediation and Future Filings 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] - 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] Forward Looking Statements 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] - 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] - The company states it has no obligation to update or revise any forward-looking statements[19] Item 9.01 Financial Statements and Exhibits 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) |