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The Company has included in Part 1, Item 1A of Part 1 of its Annual Report on Form 10-K for the year ended December 31, 2025, a description of certain risks and uncertainties that could affect the Company's business, future performance or financial condition (the “Risk Factors”).
−Removed: There have been no material changes to the Risk Factors, except as described below and as set forth in our Form 10-Q for the quarter ended March 31, 2025 under the caption Item 1.A.
−Removed: Risk factors, which disclosure is incorporated by reference herein.
+Added: There have been no material changes to the Risk Factors, except as described below.
Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.
−Removed: Disruptions in the availability of financing for current or prospective franchisees, including the current U.S.
−Removed: federal government shutdown, could adversely affect our business, results of operations, cash flows and financial condition.
−Removed: Any decline in the capital markets, increases in financing costs, or limits on credit availability may negatively affect the ability of current or prospective franchisees to access the financial or management resources that they need to open or continue operating the studios contemplated by their agreements with us.
−Removed: Franchisees generally depend upon financing from banks or other financial institutions in order to construct and open new studios and to provide working capital.
−Removed: The ongoing U.S.
−Removed: federal government shutdown has affected, and continues to affect, prospective and current franchisees’ ability to secure Small Business Administration (SBA) loans, which are a common source of financing for franchisees.
−Removed: If there is a decline in the credit environment or if the federal government shutdown is prolonged, financing may become difficult to obtain for some or all of our current and prospective franchisees.
−Removed: If current or prospective franchisees face difficulty obtaining financing, the number of our franchised studios may decrease, franchise fee revenues and royalty revenues could decline and our planned growth may slow, which would negatively impact our business, results of operations, cash flows and financial condition.
−Removed: The majority of new franchisees’ studio development is funded by franchisee investment and, therefore, our growth strategy is dependent on the ability of franchisees or prospective franchisees to access funds to finance such development.
−Removed: If franchisees (or prospective franchisees) are unable to obtain financing at commercially reasonable rates, or at all, they may be unwilling or unable to invest in the development of new studios, and our future growth could be adversely affected.
−Removed: In addition, if we offer financing and franchisees are unable to repay the amounts borrowed, our business, results of operations, cash flows and financial condition could be adversely affected.
+Added: Our review of strategic alternatives may not result in a transaction and could adversely affect our business, operations and stock price.
+Added: As previously disclosed in the Company's current report on Form 8-K filed on April 7, 2026, our Board of Directors has initiated a review of strategic alternatives intended to maximize stockholder value, which may include a sale of the Company, a merger, or another strategic or financial transaction.
+Added: This review is ongoing and there can be no assurance that the process will result in the consummation of any transaction, or that any transaction that may be completed will be on terms favorable to our stockholders, or at all.
+Added: The strategic review process may cause uncertainty among our employees, franchisees, lenders, business partners and other stakeholders, which could adversely affect our ability to retain and motivate personnel, maintain franchisee engagement, or execute our operational initiatives.
+Added: In addition, the process may divert the attention of our Board and management from the ongoing operation of the business at a time when consistent execution remains critical to our performance.
+Added: Speculation regarding the outcome of the strategic review, including the possibility that no transaction will be completed, may also contribute to increased volatility in the market price of our Class A common stock.
+Added: Further, if the review does not result in a transaction, we may be subject to negative perceptions from investors or other stakeholders regarding our strategic direction.
+Added: The availability, timing and valuation of any strategic alternative may be adversely affected by our operating performance, franchisee economics, brand concentration, regulatory exposure and other risks described in this Quarterly Report and in our Annual Report on Form 10‑K, any of which could limit perceived strategic options or reduce potential transaction value.
+Added: Our recent Board and management changes, including a reduced number of independent directors, could disrupt our governance, strategic review process and overall business operations.
+Added: We have experienced significant changes in the composition of our Board of Directors and senior management over recent periods, including the departure of multiple directors and executive officers.
+Added: As a result, our Board currently operates with a smaller number of directors, including a reduced pool of independent directors, and relies on a limited number of individuals to satisfy applicable independence and committee composition requirements.
+Added: While we believe our current Board composition satisfies applicable requirements, any additional departures of independent directors could require us to reconstitute Board committees, seek waivers or extensions from the New York Stock Exchange, or otherwise take remedial action, which could disrupt our governance processes and create uncertainty.
+Added: These risks may be heightened during the pendency of our review of strategic alternatives, when continuity, independence and availability of directors are particularly important.
+Added: Further, frequent or unexpected changes in Board or management composition may adversely affect the consistency of our strategic direction, internal controls, decision‑making processes and oversight of management, and could negatively impact investor, franchisee or employee confidence in the Company.
Unregistered Sales of Equit y Securities and Use of Proceeds.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.