Climate Change Data

Environmental Metrics

Social Achievements

• Attracted an average of 1,224 new patients per clinic (for all clinics open for the full twelve months of 2019) during the year ended December 31, 2019, as compared to the 2019 chiropractic industry average of 332 new patients per year for traditional insurance-based non-multidisciplinary or integrated practices

Environmental Challenges

• State regulations on corporate practice of chiropractic.
• Major public health concerns, including the outbreak of epidemic or pandemic contagious disease, such as the coronavirus, may adversely affect revenue at our clinics and disrupt financial markets.
• Changes in economic conditions and adverse weather and other unforeseen conditions could materially affect our ability to maintain or increase sales at our clinics or open new clinics.
• Our management services agreements, according to which we provide non-clinical services to affiliated PCs, could be challenged by a state or chiropractor under laws regulating the practice of chiropractic, and some state chiropractic boards have made inquiries concerning our business model.
• Past decisions by the United States National Labor Relations Board expanding the meaning of “joint employer” and evolving state laws mean that we could have liability for employment law violations by our franchisees.
• We, our franchisees and the chiropractor-owned PCs to which we and our franchisees provide management services are subject to extensive federal, state and local laws, rules and regulations
• The healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments.
• Our facilities are subject to extensive federal and state laws and regulations relating to the privacy and security of individually identifiable information.
• Our business model depends on proprietary and third-party management information systems that we use to, among other things, track financial and operating performance of our clinics, and any failure to successfully design and maintain these systems or implement new systems could materially harm our operations.
• If our security systems are breached, 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.
• We are subject to a number of risks related to credit card and debit card payments we accept.
• We, along with our affiliated PCs and their chiropractors, are subject to malpractice and other similar claims and may be unable to obtain or maintain adequate insurance against these claims.
• We could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us to material monetary damages and other remedies.
• We are subject to the risk that our current insurance may not provide adequate levels of coverage against claims.
• Events or rumors relating to our brand names or our ability to defend successfully against intellectual property infringement claims by third parties could significantly impact our business.
• The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the SarbanesOxley Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

Mitigation Strategies

• We believe we are in substantial compliance with all applicable laws relating to the corporate practice of chiropractic.
• We believe that the final DOL rule will be more favorable to us by making it less likely that we will be held accountable for the actions of our franchisees.
• We believe that the final NLRB rule will be more favorable to us by making it less likely that employees of our franchisees can organize, bargain collectively, and require us to participate in collective bargaining with those employees.
• We have established policies and procedures in an effort to ensure compliance with these privacy related requirements.
• We are currently replacing and upgrading our management information systems.
• We have established policies and procedures in an effort to ensure compliance with these privacy related requirements.
• We maintain insurance to cover certain actions and believe that resolution of such litigation will not have a material adverse effect on the Company.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Diversity
• Sustainability

Environmental Achievements

• Clinics have a small footprint (around 1,200 square feet), chiropractic services do not require many materials, sustainable personal protective equipment used when possible, clinic design optimized to lower energy costs and reduce greenhouse gas emissions.

Social Achievements

• Focus on diversifying new hires and leaders, including the Board of Directors. Diversity, equity, and inclusion are formal responsibilities of senior leaders. Improved employee benefits and compensation, implemented new Doctors of Chiropractic onboarding process, improved wellness coordinator compensation plan, reintroduced performance-based incentives in Q4 2022. Doctors of Chiropractic turnover decreased from 56% in 2021 to 35% in 2022.
• Expanded and strengthened relationship with chiropractic colleges to increase engagement with students and applicant flow.

Governance Achievements

• Commitment to expert, objective, proactive administration on behalf of stockholders to drive long-term value. Dedicated to accountability and clear communication with stockholders.

Climate Goals & Targets

Environmental Challenges

• Economic pressures such as consumer uncertainty, inflation, and a tight labor market that caused closed clinic days. 2021 was a record year due to pent-up demand from the initial impact of COVID in 2020, resulting in less pronounced revenue increase from 2021 to 2022 compared to 2020 to 2021.

Mitigation Strategies

• Implemented a corporate-clinic-specific action plan with various tactics to address challenges and fortify the foundation for growth. Redirected and added resources to support corporate clinics; increased compensation for Doctors of Chiropractic and enhanced benefits; implemented new Doctors of Chiropractic onboarding process; improved the wellness coordinator compensation plan; and reintroduced performance-based incentives in Q4 2022. Multiple enhancements to SEO strategy.

Supply Chain Management

Responsible Procurement

• Sustainably focused procurement

Climate-Related Risks & Opportunities

Awards & Recognition

• Entrepreneur magazine: “Top Franchise” in chiropractic services, “Top 10%” of Franchise 500®. Franchise Business Review: “Top Franchise for 2023,” “Most Profitable Franchises,” “Top Franchises for Veterans.” Franchise Times: “2023 Fast & Serious” list (eighth year). FRANdata: TopFUND award (second year), FUND score of 910 out of 950.

Environmental Metrics

ESG Focus Areas

• Diversity, Equity, and Inclusion
• Governance
• Sustainability

Social Achievements

• Integrated DEI into senior leader responsibilities; identified DEI as a pivotal strategic initiative.
• Implemented programs to align staff with patient experience vision; developed lead pipelines for Doctors of Chiropractic; explored enhanced incentives and benefits, including a proprietary continuing education platform.

Governance Achievements

• Formalized and implemented resources for performance and compensation management; established a structured compensation framework and guidelines; expanded training opportunities for employees and managers.

Climate Goals & Targets

Environmental Challenges

• Ongoing uncertainties in patient demographic impacting growth.

Mitigation Strategies

• Implemented enhanced marketing initiatives to bolster new patient counts and increase existing patient engagement; refranchising strategy to increase franchise numbers and improve profitability.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Entrepreneur Magazine: #1 franchise for chiropractic services, #61 for veterans, #83 among top 500 franchises; Franchise Business Review: “Most Profitable Franchises / Top Franchise for Veterans”; Franchise Times: 168 in “Top 400” and “Fast & Serious”; FRANdata: FUND score of 910 out of 950.