JOINT VENTURE MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed
consolidated financial statements and related notes included in this Quarterly
Report on Form 10-Q and the audited consolidated financial statements and notes
thereto as of and for the year ended December 31, 2021 and the related
Management's Discussion and Analysis of Financial Condition and Results of
Operations, both of which are contained in our Annual Report on Form 10-K.

Forward-looking statements

This Quarterly Report on Form 10-Q, especially in this Management's Discussion
and Analysis or MD&A, contains forward-looking statements and information within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, ("the Exchange
Act"), which are subject to the "safe harbor" created by those sections. These
forward-looking statements include, but are not limited to, statements
concerning our strategy, future operations, future financial position, future
revenues, projected costs, prospects and plans and objectives of management; and
accounting estimates and the impact of new or recently issued accounting
pronouncements. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "should," "could," "predicts,"
"potential," "continue," "would" and similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements
contain these identifying words. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking statements and you
should not place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements that we make. The
forward-looking statements are applicable only as of the date on which they are
made, and we do not assume any obligation to update any forward-looking
statements. All forward-looking statements in this Form 10-Q are made based on
our current expectations, forecasts, estimates and assumptions, and involve
risks, uncertainties and other factors that could cause results or events to
differ materially from those expressed in the forward-looking statements. In
evaluating these statements, you should specifically consider various factors,
uncertainties and risks that could affect our future results or operations as
described from time to time in our SEC reports, including those risks outlined
under "Risk Factors" which are contained in Part I, Item 1A of our Form 10-K for
the year ended December 31, 2021 and in Part II, Item 1A of this Form 10-Q.
These factors, uncertainties and risks may cause our actual results to differ
materially from any forward-looking statement set forth in this Form 10-Q. You
should carefully consider these risks and uncertainties and other information
contained in the reports we file with or furnish to the SEC before making any
investment decision with respect to our securities. All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by this cautionary statement. Some of the important
factors contained in Part I, Item 1A of our Form 10-K for the year ended
December 31, 2021 and in Part II, Item 1A of this Form 10-Q that could cause our
actual results to differ materially from those projected in any forward-looking
statements include, but are not limited to, the following:

• major public health issues, including outbreaks of epidemics or pandemic contagious diseases, may adversely affect our clinics’ revenues and disrupt financial markets, adversely affecting our stock price;

•the impact of the COVID-19 pandemic on the economy and our operations, including the measures taken by governmental authorities to deal with it, may precipitate or exacerbate other risks and/or uncertainties;

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• inflation, exacerbated by COVID-19 and the current war in Ukraine (the “Ukrainian War”), has resulted in increased labor costs and interest rates and may result in reduced discretionary spending, which may adversely impact our business;

•we may not be able to successfully implement our growth strategy if we or our franchisees are unable to locate and secure suitable sites for clinic locations, obtain favorable rental terms and to attract patients to our clinics;

•we have limited experience operating company-owned or managed clinics in those
geographic areas where we currently have few or no clinics, and we may not be
able to duplicate the success of some of our franchisees;

•we may not be able to acquire operating clinics from existing franchisees or expand company-owned or operated clinics on attractive terms;

•we may not be able to identify, recruit and train enough qualified chiropractors and other personnel to staff our clinics, particularly in light of the current workforce shortages nationwide national level, which could limit our ability to implement our growth strategy;

•short selling strategies and negative opinions posted on the Internet may lower the price of our common stock and result in class action lawsuits;

•we may fail to remediate the current or future material weaknesses in our
internal controls over financial reporting or may otherwise be unable to
maintain an effective system of internal control over financial reporting, which
might negatively impact our ability to accurately report our financial results,
prevent fraud, or maintain investor confidence;

•we may fail to design and maintain our proprietary and third-party management information systems or implement new systems;

•we may not properly maintain the integrity of our data or strategically implement, upgrade or consolidate existing information systems;

• franchised clinic acquisitions that we make could disrupt our business and
harm our financial condition if we cannot continue their operational success or
successfully integrate them;

•we may not be able to continue to sell franchises to qualified franchisees, and our franchisees may fail to develop profitable territories and clinics;

• new clinics may not reach the point of profitability, and we may not be able to maintain or improve the revenues and franchise fees of existing franchise clinics;

•the chiropractic industry is highly competitive, with many well-established
independent competitors, which could prevent us from increasing our market share
or result in reduction in our market share;

•state administrative actions and rulings regarding the corporate practice of
chiropractic and federal and state laws and regulations regarding joint employer
responsibility may jeopardize our business model;

•negative publicity or damage to our reputation, which could arise from concerns
expressed by opponents of chiropractic and by chiropractors operating under
traditional service models, could adversely impact our operations and financial
position;

•our security systems may be breached, and we may face civil liability and
public perception of our security measures could be diminished, either of which
would negatively affect our ability to attract and retain patients; and

•Legislation, regulations and new medical procedures and techniques could reduce or eliminate our competitive advantages.

Insight

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Our primary business is to develop, own, operate, support and manage chiropractic clinics through direct ownership, management arrangements, franchises and regional developers across United States.

We seek to be the leading provider of chiropractic care in the markets we serve
and to become the most recognized brand in our industry through the rapid and
focused expansion of chiropractic clinics in key markets throughout North
America and potentially abroad.

Key Performance Measures. We receive monthly performance reports from our system
and our clinics which include key performance indicators per clinic including
gross sales, comparable same-store sales growth, or "Comp Sales," number of new
patients, conversion percentage, and membership attrition. In addition, we
review monthly reporting related to system-wide sales, clinic openings, clinic
license sales, adjusted EBITDA, and various earnings metrics in the aggregate
and per clinic. We believe these indicators provide us with useful data with
which to measure our performance and to measure our franchisees' and clinics'
performance. Comp Sales include the sales from both company-owned or managed
clinics and franchised clinics that in each case have been open at least 13 full
months and exclude any clinics that have closed. System-wide sales include sales
at all clinics, whether operated by us or by franchisees. While franchised sales
are not recorded as revenues by us, management believes the information is
important in understanding the overall brand's financial performance, because
these sales are the basis on which we calculate and record royalty fees and are
indicative of the financial health of the franchisee base. Adjusted EBITDA
consists of net income before interest, income taxes, depreciation and
amortization, acquisition related expenses, stock-based compensation expense,
bargain purchase gain, and (gain) loss on disposition or impairment. There was
no bargain purchase gain for the three months ended March 31, 2022 and 2021.

Key Clinic Development Trends.  As of March 31, 2022, we and our franchisees
operated or managed 736 clinics, of which 636 were operated or managed by
franchisees and 100 were operated as company-owned or managed clinics. Of the
100 company-owned or managed clinics, 47 were constructed and developed by us,
and 53 were acquired from franchisees.

Our current strategy is to grow through the sale and development of additional
franchises, build upon our regional developer strategy, and continue to expand
our corporate clinic portfolio within clustered locations. The number of
franchise licenses sold for the year ended December 31, 2021 was 156, compared
with 121 and 126 licenses for the years ended December 31, 2020 and 2019,
respectively. We ended the first three months of 2022 with 20 regional
developers who were responsible for 77% of the 22 licenses sold during the
period. This strong result reflects the power of the regional developer program
to accelerate the number of clinics sold, and eventually opened, across the
country.

In addition, we believe that we can accelerate the development of, and revenue
generation from, company-owned or managed clinics through the accelerated
development of greenfield units and the further selective acquisition of
existing franchised clinics. We will seek to acquire existing franchised clinics
that meet our criteria for demographics, site attractiveness, proximity to other
clinics and additional suitability factors. During the quarter ended March 31,
2022, we opened four greenfield clinics, and as of March 31, 2022, we executed
10 leases for future greenfield clinic locations for further greenfield
expansion.

We believe that The Joint has a sound concept, which was further validated
through its resiliency during the pandemic and will benefit from the fundamental
changes taking place in the manner in which Americans access chiropractic care
and their growing interest in seeking effective, affordable natural solutions
for general wellness. These trends join with the preference we have seen among
chiropractic doctors to reject the insurance-based model to produce a
combination that benefits the consumer and the service provider alike. We
believe that these forces create an important opportunity to accelerate the
growth of our network.

Recent Events and COVID-19 Update

Recent events that may impact our business include unfavorable global economic
or political conditions, such as the ongoing COVID-19 pandemic, the Ukraine War,
and inflation and other cost increases. We anticipate that fiscal 2022 will
continue to be a volatile macroeconomic environment. While we expect the impacts
of COVID-19 on our business to moderate, there still remains uncertainty around
the pandemic, its effect on labor or other macroeconomic factors, the severity
and duration of the pandemic, the continued availability and effectiveness of
vaccines and actions taken by government authorities, including restrictions,
laws or regulations, and other third parties in response to the pandemic.

The primary inflationary factor affecting our operations is labor costs. In the
fourth quarter of 2021 and the first quarter of 2022, company-owned or managed
clinics were negatively impacted by wage increases, which increased our general
and administrative expenses. Further, should we fail to increase our wages
competitively in response to increasing wage rates, the quality of our workforce
could decline, causing our patient service to suffer. We expect elevated levels
of cost inflation to persist throughout 2022. While we anticipate that these
headwinds will be partially mitigated by pricing actions in response to
inflation, there can be
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no assurance that we will be able to continue to do so in the future. A
continued increase in labor costs could have an adverse effect on our operating
costs, financial condition and results of operations.

Also, the Ukraine War and the sanctions imposed on Russia in response to this
conflict have increased global economic and political uncertainty. While the
impact of these factors remains uncertain, we will continue to evaluate the
extent to which these factors will impact our business, financial condition, or
results of operations. These and other uncertainties with respect to these
recent events could result in changes to our current expectations.
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Other significant events and/or recent developments

For the three months ended March 31, 2022compared to the period of the previous year:

• Comp Sales for clinics that have been open for at least 13 full months increased by 15%.

• Add-on sales for mature clinics that have been open for 48 months or more increased by 11%.

• System-wide sales for all clinics open at all times increased by 27%.

On April 1, 2022, we entered into an agreement under which we repurchased the
right to develop franchises in various counties in California. The total
consideration for the transaction was $2,400,000. We carried a deferred revenue
balance associated with this transaction of $357,721, representing the
unrecognized fee collected upon the execution of the regional developer
agreement. We accounted for the termination of development rights associated
with unsold or undeveloped franchises as a cancellation, and the associated
deferred revenue was netted against the aggregate purchase price. We recognized
the net amount of $2,042,279 as reacquired development rights on April 1, 2022,
which is amortized over the remaining original contract period of approximately
5.3 years.

On March 18, 2022, we entered into an agreement under which we repurchased the
right to develop franchises in various counties in New Jersey. The total
consideration for the transaction was $250,000. We carried a deferred revenue
balance associated with this transaction of $95,197, representing the
unrecognized fee collected upon the execution of the regional developer
agreement. We accounted for the termination of development rights associated
with unsold or undeveloped franchises as a cancellation, and the associated
deferred revenue was netted against the aggregate purchase price. We recognized
the net amount of $154,803 as reacquired development rights on March 18, 2022,
which is amortized over the remaining original contract period of approximately
5.5 years.

On February 28, 2022, we entered into an amendment to our Credit Facilities (as
amended, the "2022 Credit Facility") with the Lender. Under the 2022 Credit
Facility, the Revolver increased to $20,000,000 (from $2,000,000), the portion
of the Revolver available for letters of credit increased to $5,000,000 (from
$1,000,000), the uncommitted additional amount increased to $30,000,000 (from
$2,500,000) and the developmental line of credit of $5,500,000 was terminated.
The Revolver will be used for working capital needs, general corporate purposes
and for acquisitions, development and capital improvement uses.

For the three months ended March 31, 2022we have built and developed four new corporate clinics.



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Outlook for 2022

•We now expect our revenues to be between $98 million and $102 million, compared
to $80.9 million in 2021.
•We now expect our adjusted EBITDA to be between $12 million and $14 million,
compared to $12.6 million in 2021.
•We expect franchised clinic openings to be between 110 and 130, compared to 110
in 2021.
•We expect Company-owned or managed clinics, through a combination of both
greenfields and buybacks, to increase by between 30 and 40, compared to 32 in
2021.

We believe we are well positioned to achieve our goal to have 1,000 clinics by
the end of 2023 due to, among other things, our resilient business model,
planned new clinic openings and expansion of company-owned or managed clinics.
However, the long-term impact of COVID-19 on our operational and financial
performance will depend on certain developments including the duration, spread,
severity, and trajectory of the virus and economic conditions. These potential
developments are uncertain and cannot be predicted, and as such, the extent to
which COVID-19 will impact our business, operations, financial condition and
results of operations over the long term is unknown.

Factors affecting our performance

Our operating results may fluctuate significantly as a result of a variety of
factors, including the timing of new clinic sales, openings, closures, markets
in which they are contained and related expenses, general economic conditions,
cost inflation, labor shortages, consumer confidence in the economy, consumer
preferences, competitive factors, and disease epidemics and other health-related
concerns, such as the current COVID-19 outbreak.

Significant accounting policies and estimates

There have been no changes in our significant accounting policies and estimates during the three months ended March 31, 2022 those set forth in the “Significant Accounting Policies and Estimates” section of our Annual Report on Form 10-K for the year ended December 31, 2021.

Operating results

The following discussion and analysis of our financial results encompasses our
consolidated results and results of our two business segments: Corporate Clinics
and Franchise Operations.

Total revenue – three months ended March 31, 2022 compared to the three months ended March 31, 2021

The revenue components were as follows:

                                                       Three Months Ended
                                                            March 31,
                                                                                           Change from          Percent Change
                                                   2022                  2021               Prior Year         from Prior Year
Revenues:
Revenues from company-owned or managed
clinics                                       $ 12,606,999          $  9,466,083          $ 3,140,916                   33.2  %
Royalty fees                                     6,008,932             4,769,246          $ 1,239,686                   26.0  %
Franchise fees                                     640,965               695,427          $   (54,462)                  (7.8) %
Advertising fund revenue                         1,710,717             1,374,741          $   335,976                   24.4  %
IT related income and software fees                956,998               760,537          $   196,461                   25.8  %
Regional developer fees                            201,787               217,956          $   (16,169)                  (7.4) %
Other revenues                                     312,140               263,975          $    48,165                   18.2  %
Total revenues                                $ 22,438,538          $ 17,547,965          $ 4,890,573                   27.9  %

Consolidated results

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Total revenue increased by $4.9 millionprimarily due to the continued expansion and revenue growth of our franchise base and the continued revenue growth and expansion of our portfolio of corporately owned or managed clinics.

Corporate clinics

Revenues from corporately owned and operated clinics increased primarily due to improved comparable store sales growth, as well as the expansion of our portfolio of corporately owned and operated clinics. From March 31, 2022 and 2021, there were 100 and 65 company-owned or company-operated clinics, respectively.

Franchise operations

•Royalty fees and advertising fund revenue increased due to an increase in the
number of franchised clinics in operation during the current period, along with
continued sales growth in existing franchised clinics. As of March 31, 2022 and
2021, there were 636 and 527 franchised clinics in operation, respectively.

•Franchise fees decreased due to the impact of accelerated revenue recognition
resulting from the terminated franchise license agreements in the prior year
period. There were no such comparable events during the first quarter of 2022 .

• Software fee revenue increased due to an increase in our base of franchised clinics and the recognition of related revenue over the term of the franchise agreement, as described above.

• Regional developer fee revenue decreased due to the impact of the regional developer rights buyout in the first quarter of 2022.

•Other revenues primarily consist of merchant income associated with credit card
transactions.

                                                                     Change from       Percent Change
  Three Months Ended March 31,          2022            2021          Prior Year       from Prior Year

        Cost of Revenues             2,312,771       1,765,317      $    547,454                31.0  %


For the three months ended March 31, 2022, as compared with the three months
ended March 31, 2021, the total cost of revenues increased primarily due to an
increase in regional developer royalties of $0.4 million and an increase in
website hosting costs of $0.2 million.

Sales and marketing expenses

                                                                     Change 

from percent change

  Three Months Ended March 31,          2022            2021          Prior 

Year of previous year

Selling and marketing expenses 3,287,488 2,489,279 $798,209

                32.1  %



Selling and marketing expenses increased for the three months ended March 31,
2022, as compared to the three months ended March 31, 2021, driven by: (i) an
increase in advertising fund expenditures from a larger franchise base, (ii) an
increase in local marketing expenditures by the company-owned or managed
clinics, and (iii) the timing of the national marketing fund spend and the new
brand campaign.

Depreciation and amortization

                                                                                                 Change from          Percent Change
        Three Months Ended March 31,                    2022                  2021               Prior Year          from Prior Year

   Depreciation and Amortization Expenses             1,629,176             1,169,866          $    459,310                   39.3  %


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Depreciation and amortization expenses increased for the three months ended
March 31, 2022, as compared to the three months ended March 31, 2021, primarily
due to the depreciation expenses associated with the expansion of our
corporate-owned or managed clinics portfolio in 2021 and 2022 and depreciation
expenses associated with the new IT platform used by clinics for operations and
for the management of operations, which went live in July 2021.

General and administrative expenses

                                                                                                    Change from          Percent Change
         Three Months Ended March 31,                      2022                   2021               Prior Year         from Prior Year

     General and Administrative Expenses                15,378,623             10,087,060          $ 5,291,563                   52.5  %


General and administrative expenses increased during the three months ended
March 31, 2022 compared to the three months ended March 31, 2021, primarily due
to the increases in the following to support continued clinic count and revenue
growth in both operating segments: (i) payroll and related expenses of $3.4
million, (ii) general overhead and administrative expenses of $1.1 million,
(iii) professional and advisory fees of $0.6 million, and (iv) software and
maintenance expense of $0.2 million. As a percentage of revenue, general and
administrative expenses during the three months ended March 31, 2022 and 2021
were 69% and 57%, respectively.

(loss) Operating result

                                                                     Change 

from percent change

  Three Months Ended March 31,          2022            2021          Prior 

Year of previous year

(Loss) Operating income (176,426) 1,971,676 $(2,148,102)

             (108.9) %


Consolidated Results

Consolidated income from operations decreased by $2.1 million for the three
months ended March 31, 2022 compared to the three months ended March 31, 2021,
primarily due to the increased expenses in the corporate clinics and unallocated
corporate segments discussed below.

Corporate clinics

Our corporate clinics segment had loss from operations of $0.4 million for the
three months ended March 31, 2022, a decrease of $1.8 million compared to income
from operations of $1.3 million for the prior year period. The decrease was
primarily due to:

•A $4.9 million increase in operating expenses due to the increases in the
following: (i) payroll-related expenses of $3.4 million due to a higher head
count to support the expansion of our corporate clinic portfolio and general
wage increases to remain competitive in the current labor market, (ii)
depreciation and administration expense associated with the expansion of our
corporate-owned or managed clinics portfolio in 2021 and 2022 and new IT
platform discussed above of $0.3 million, (iii) selling and marketing expenses
due to increased local marketing expenditures by the company-owned or managed
clinics of $0.4 million, and (iv) general overhead and administrative expenses
to support the expansion of our corporate clinic portfolio of $0.8 million;
partially offset by

• An increase in revenue of $3.1 million from clinics owned or operated by the company.

Franchise operations

Our franchise operations segment had income from operations of $4.4 million for
the three months ended March 31, 2022, an increase of $0.6 million, compared to
income from operations of $3.8 million for the prior year period. This increase
was primarily due to:

• An augmentation of $1.7 million in total income; partially offset by

•An increase of $0.6 million in cost of revenues primarily due to an increase in
regional developer royalties and website hosting costs and an increase of $0.6
million in operating expenses, primarily due to an increase in selling and
marketing
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expenses resulting from a larger franchise base of $0.4 million, as well as due
to an increase in depreciation and administration expense associated with the
new IT platform discussed above of $0.2 million.

Unallocated company

Unallocated corporate expenses for the three months ended March 31, 2022
increased by $0.9 million compared to the prior year period, mainly due to the increase in: (i) professional and consulting fees of $0.5 million(ii) general and administrative expenses of $0.2 millionand (iii) maintenance expenses for our new software discussed above from $0.2 million.

Non-GAAP Financial Measures

The table below reconciles net income (loss) to Adjusted EBITDA for the three months ended March 31, 2022 and 2021.

                                                Three Months Ended March 31,
                                                   2022                  2021
Non-GAAP Financial Data:
  Net (loss) income                       $      (205,797)           $ 2,314,287
  Net interest expense                             15,859                 21,537
  Depreciation and amortization expense         1,629,176              1,169,866
  Tax expense (benefit)                            13,224               (364,148)
   EBITDA                                       1,452,462              3,141,542
  Stock compensation expense                      323,556                246,494
  Acquisition related expenses                          -                  

5,974

  Loss on disposition or impairment                 6,906                 64,767
   Adjusted EBITDA                        $     1,782,924            $ 3,458,777


Adjusted EBITDA consists of net income before interest, income taxes,
depreciation and amortization, acquisition related expenses, stock-based
compensation expense, bargain purchase gain, and (gain) loss on disposition or
impairment. There was no bargain purchase gain for the three months ended
March 31, 2022 and 2021. We have provided Adjusted EBITDA because it is a
non-GAAP measure of financial performance commonly used for comparing companies
in our industry. You should not consider Adjusted EBITDA as a substitute for
operating profit as an indicator of our operating performance or as an
alternative to cash flows from operating activities as a measure of liquidity.
We may calculate Adjusted EBITDA differently from other companies.

We believe that the use of Adjusted EBITDA provides an additional tool for
investors to use in evaluating ongoing operating results and trends and in
comparing our financial measures with other outpatient medical clinics, which
may present similar non-GAAP financial measures to investors. In addition, you
should be aware when evaluating Adjusted EBITDA that in the future we may incur
expenses similar to those excluded when calculating these measures. Our
presentation of these measures should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring items. Our
computation of Adjusted EBITDA may not be comparable to other similarly titled
measures computed by other companies, because all companies do not calculate
Adjusted EBITDA in the same manner.

Cash and capital resources

As of March 31, 2022, we had unrestricted cash and short-term bank deposits of
$18.3 million and $18 million of available capacity under the development line
of credit. While the ongoing COVID-19 pandemic and the Ukraine War create
potential liquidity risks, as discussed further below, we believe that our
existing cash and cash equivalents, our anticipated cash flows from operations
and amounts available under our development line of credit will be sufficient to
fund our anticipated operating and investment needs for at least the next twelve
months.

While the interruptions, delays and/or cost increases resulting from the ongoing
COVID-19 pandemic, political instability or geopolitical tensions, such as the
Ukraine War, economic weakness, inflationary pressures or other factors have
created uncertainty as to general economic conditions for the remainder of 2022
and beyond, as of the date of this report, we believe we have adequate capital
resources and sufficient access to external financing sources to satisfy our
current and reasonably anticipated requirements for funds to conduct our
operations and meet other needs in the ordinary course of our business. For the
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remainder of 2022, we expect to use or redeploy our cash resources to support
our business within the context of prevailing market conditions, which, given
the ongoing uncertainties described above, could rapidly and materially
deteriorate or otherwise change. Our long-term capital requirements, primarily
for acquisitions and other corporate initiatives, could be dependent on our
ability to access additional funds through the debt and/or equity markets. If
the equity and credit markets deteriorate, including as a result of economic
weakness, a resurgence of COVID-19, political unrest or war, including the
Ukraine War, or any other reason, it may make any necessary equity or debt
financing more difficult to obtain in a timely manner and on favorable terms, if
at all, and if obtained, it may be more costly or more dilutive. From time to
time, we consider and evaluate transactions related to our portfolio and capital
structure, including debt financings, equity issuances, purchases and sales of
assets, and other transactions. Given the ongoing uncertainties described above,
the levels of our cash flows from operations for 2022 may be impacted. There can
be no assurance that we will be able to generate sufficient cash flows or obtain
the capital necessary to meet our short and long-term capital requirements.

Cash flow analysis

Net cash provided by operating activities decreased by $1.8 million to $0.4
million for the three months ended March 31, 2022, compared to $2.3 million for
the three months ended March 31, 2021. The decrease was primarily attributable
to an increase in general and administrative expenses over the prior year
period, which was partially offset by an increase in revenue over the prior year
period.

Net cash used in investing activities was $1.5 million and $2.3 million for the
three months ended March 31, 2022 and 2021, respectively. For the three months
ended March 31, 2022, this included purchases of property and equipment of $1.3
million and reacquisition and termination of regional developer rights for $0.3
million. For the three months ended March 31, 2021, this included purchases of
property and equipment of $1.0 million and reacquisition and termination of
regional developer rights for $1.4 million.

Net cash used in financing activities for the three months ended March 31, 2022
was less than $50 thousand, compared to $2.7 million for the three months ended
March 31, 2021. For the three months ended March 31, 2021, this included
repayment of the PPP loan of $2.7 million and purchases of treasury stock for
$0.6 million, which were partially offset by the proceeds from the exercise of
stock options of $0.6 million.

Recent accounting pronouncements

See Note 1, Nature of Operations and Summary of Significant Accounting
Policies, to our condensed consolidated financial statements included in this
report for information regarding recently issued accounting pronouncements that
may impact our financial statements.

Off-balance sheet arrangements

During the three months ended March 31, 2022, we did not have any relationships
with unconsolidated organizations or financial partnerships, such as structured
finance or special purpose entities that would have been established for the
purpose of facilitating off-balance sheet arrangements.

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