Item 1.01. Entry into a Material Definitive Agreement.
On December 31, 2020, The Joint Corp. (the "Company") entered into a North
Carolina Regional Developer License Purchase Agreement (the "North Carolina
Purchase Agreement") by and among the Company as purchaser, Wellness
Incorporated, a North Carolina corporation as seller, and Paul Trindel as
guarantor, under which the Company repurchased the right to develop The Joint
franchises in the following counties located in North Carolina: Alamance,
Buncombe, Cabarrus, Catawba, Cumberland, Durham, Forsyth, Gaston, Guilford,
Hendersonville, Mecklenburg, Moore, New Hanover, Onslow, Orange, Pit, Union,
Wake, Watauga and Wayne (the "North Carolina Repurchase Transaction"). The total
consideration of $1,029,500 for the North Carolina Repurchase Transaction was
paid in cash at the closing on December 31, 2020. The reacquired intangible
asset will be amortized over the next 24 months, which is the remaining life of
the terminated regional developer agreement.
On January 1, 2021, the Company entered into a Georgia Regional Developer
License Purchase Agreement (the "Georgia Purchase Agreement," and together with
the North Carolina Purchase Agreement, the "Purchase Agreements") by and among
the Company as purchaser, Midtown Health Solutions, Inc., a Georgia corporation
as seller, and Dr. Patrick Greco as guarantor, under which the Company
repurchased the right to develop The Joint franchises in the following counties
located in Georgia: Barrow, Bartow, Bryan, Butts, Camden, Carroll, Catoosa,
Chambers, Chatham, Cherokee, Clayton, Cobb, Columbia, Coweta, Dade, Dawson,
DeKalb, Douglas, Effingham, Fayette, Forsyth, Fulton, Glynn, Gwinnet, Hall,
Haralson, Heard, Henry, Jasper, Lamar, Liberty, McIntosh, Meriweather, Newton,
Paulding, Pickens, Pike, Polk, Putnam, Richmond, Rockdale, Spalding, Upson,
Walker, Walton and Whitfield (the "Georgia Repurchase Transaction" and together
with the North Carolina Repurchase Transaction, the "Repurchase Transactions").
The total consideration of $1,388,700 for the Georgia Repurchase Transaction was
paid in cash at the closing on or around January 1, 2021. The reacquired
intangible asset will be amortized over the next 12 months, which is the
remaining life of the terminated regional developer agreement.
Prior to the Repurchase Transactions, each of the sellers were regional
developers for the Company pursuant to regional developer agreements and
guarantees entered into by the Company, the applicable seller and the applicable
guarantor. Under its regional developer program, the Company sells each regional
developer the rights to open a minimum number of clinics in a defined territory.
The regional developers in turn help the Company to identify and qualify
potential new franchisees in that territory and assist the Company in providing
field training, clinic openings and ongoing support. In return, the Company
shares part of the initial franchise fee and pays the regional developer 3% of
the 7% ongoing royalties the Company collects from the franchisees in their
protected territory.
Item 7.01. Regulation FD Disclosure.
On January 5, 2021, the Company published a press release describing the
Repurchase Transactions. A copy of the press release is being furnished herewith
as Exhibit 99.1.
The information furnished in this Item 7.01 and Exhibit 99.1 shall not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liabilities of that section, nor shall it be incorporated by reference in
any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
99.1 Press Release dated January 5, 2021
104 Cover Page Interactive Data File (embedded within the Inline
XBRL document)
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