INFOCURE CORP, S-3/A, 1999-02-26

INFOCURE CORP
S-3/A, 1999-02-26
PREPACKAGED SOFTWARE

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<PAGE>

As filed with the Securities and Exchange Commission on February 26, 1999
Registration No. 333-71109
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------

AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933

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INFOCURE CORPORATION
(Exact Name of Registrant as Specified in its Charter)

Delaware 7372 58-2271614
(State or other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction of Classification Code Number) Identification Number)
Incorporation or
Organization)

----------------
1765 The Exchange, Suite 450
Atlanta, Georgia 30339
(770) 221-9990
(Address, Including Zip Code and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)

----------------

Lance B. Cornell
Senior Vice President--Finance
Chief Financial Officer
1765 The Exchange, Suite 450
Atlanta, Georgia 30339
(770) 221-9990
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)

----------------

Copies to:
Oby T. Brewer III, Esq. John J. Kelley III, Esq.
Richard L. Haury, Jr., Esq. KING & SPALDING
Lauren Z. Burnham, Esq. 191 Peachtree Street, N.E.
MORRIS, MANNING & MARTIN, L.L.P. Atlanta, Georgia 30303
1600 Atlanta Financial Center Telephone: (404) 572-4600
3343 Peachtree Road, N.E. Facsimile: (404) 572-5100
Atlanta, Georgia 30326
Telephone: (404) 233-7000
Facsimile: (404) 365-9532

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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.

If the only securities being registered in this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]

If any of the securities being registered on this Form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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- -------------------------------------------------------------------------------
<PAGE>

SUBJECT TO COMPLETION, DATED , 1999

4,039,398 Shares

[INFOCURE LOGO]

Common Stock

----------

InfoCure Corporation is offering 3,000,000 shares of its common stock and the
selling stockholders are offering an additional 1,039,398 shares. InfoCure's
common stock is traded on the Nasdaq Stock Market under the symbol "INCX." The
last reported sale price of the common stock on the Nasdaq Stock Market on
, 1999 was $ per share.

----------

Investing in the common stock involves certain risks. See "Risk Factors"
beginning on page 7.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

----------

<TABLE>
<CAPTION>
Per
Share Total
----- -------
<S> <C> <C>
Public offering price.......................................... $ $
Underwriting discount.......................................... $ $
Proceeds to InfoCure........................................... $ $
Proceeds to the selling stockholders........................... $ $
</TABLE>

InfoCure has granted the underwriters a 30-day option to purchase up to an
additional 600,000 shares of common stock to cover over-allotments.

The underwriters are offering the shares subject to various conditions. The
underwriters expect to deliver the shares to purchasers on or about ,
1999.

----------

The Robinson-Humphrey Company

SG Cowen

Sanders Morris Mundy

, 1999
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell securities, and we are not soliciting offers to buy these +
+securities, in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
<PAGE>

[Inside front cover; Artwork and descriptions to come]

Rovak(R), Micro-Designs Software Corporation(R), WinMED(R), and WinOMS(R) are
registered trademarks of InfoCure. Micro*Star(TM), Ideal(TM), OPMS(TM),
Sentinel(TM) and InfoMine(TM) are service marks of InfoCure. This prospectus
also includes trademarks, service marks, trade names and references to
intellectual property owned by other companies.

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<PAGE>

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
It is not complete and may not contain all of the information that you should
consider before investing in our common stock. We encourage you to read the
entire prospectus carefully, including the section entitled "Risk Factors" and
the financial statements and the notes to those financial statements. In this
prospectus, "InfoCure," "we," "our" and "us" refer to InfoCure Corporation and
its consolidated subsidiaries.

Our Business

We are a leading national provider of healthcare practice management software
products and services. Our wide range of practice management software automates
the administrative, financial and clinical information management functions for
doctors, dentists and other healthcare practitioners. We also provide our
customers with ongoing maintenance and support, training and electronic data
interchange, or "EDI," services. Our goal is to become the leading provider of
practice management systems to targeted healthcare practice specialties. These
specialties include anesthesiology, emergency medicine, oral and maxillofacial
surgery, orthodontics, pathology, podiatry and radiology. We believe that our
ability to offer state-of-the-art software products that serve the specific
needs of these healthcare practice specialties and our ability to sell
additional products and services to our existing customer base will help us
achieve this goal. As of February 24, 1999, 11,650 customer sites had installed
InfoCure systems. These sites represent approximately 66,000 healthcare
providers, and we have systems installed in all 50 states.

Our business model is designed to grow the sales of software systems and to
increase recurring revenue from ongoing maintenance and support and EDI
services. As a result of this model, approximately 50% of total revenue is
currently recurring in nature. We focus on growing our installed customer base
through new system sales and acquisitions. Since October 1997, we have acquired
eleven practice management systems vendors, increasing our pro forma revenue to
approximately $117.0 million for the year ended December 31, 1998.

Our Industry is Growing

Federal and state governments, insurance carriers and other third-party
payors, such as managed care organizations, have moved aggressively to control
rising healthcare costs. More restrictive reimbursement practices have
increased the complexity of accounting, billing and collecting for healthcare
services. To address these challenges, healthcare providers are increasingly
using computers to make their practices more efficient and profitable.
Expenditures on healthcare practice management systems have grown at a compound
annual rate of approximately 26% from 1993 through 1997 and are projected to
grow at a comparable rate through 2000.

Our Products and Services

Our systems provide significant benefits that enable customers to manage
their practices more efficiently. Our customers are able to choose from a menu
of features and functions most essential to their practices, primarily in the
following areas:

. Administrative management;
. Financial management; and
. Clinical information management.

This approach of providing a menu of features and functions enables
healthcare practitioners to configure products that serve their specific needs.
In addition, we have significant opportunities to sell additional products and
services to our installed customer base.

We have recently commenced a program emphasizing and broadening the EDI
service capabilities we provide to our customers. EDI allows practitioners to
verify insurance eligibility, receive appropriate referrals, submit claims and
receive reimbursement electronically. We believe that greater utilization of
EDI and the

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resulting increase in the number of "paperless" transactions will improve the
efficiency of healthcare providers. We believe this presents us with the
opportunity to generate significant additional recurring revenue. In addition
to EDI services, we have recently begun to offer InfoMine decision support
software. Using InfoMine, practitioners can quickly analyze the performance of
their practices, including the profitability of contractual relationships with
third-party payors.

Strategies

Our objective is to become the leading provider of advanced, specialty-
specific practice management systems within targeted healthcare specialties.
Our principal strategies to achieve this objective include:

. Continue to take advantage of niche market opportunities;
. Cross-sell our services and pursue opportunities with existing customers;
. Expand the features of products and services offered;
. Establish a national marketing identity; and
. Take advantage of economies of scale.

Our principal offices are located at 1765 The Exchange, Suite 450, Atlanta,
Georgia 30339, and our telephone number is (770) 221-9990.

The Offering

<TABLE>
<S> <C>
Common stock offered:
By InfoCure..................... 3,000,000 shares
By the selling stockholders..... 1,039,398 shares
Common stock to be outstanding
after the offering............... 12,942,150 shares. See "Capitalization."
Use of proceeds................... For repayment of indebtedness incurred to
finance prior acquisitions, working capital
and other general corporate purposes,
including possible future acquisitions. See
"Use of Proceeds."
Nasdaq Stock Market symbol........ INCX
</TABLE>

Unless otherwise stated, all information in this prospectus reflects the
conversion of our Series A Preferred Stock into 1,000,070 shares of our common
stock and assumes that the underwriters will not exercise their over-allotment
option.

4
<PAGE>

Summary Historical Consolidated and Unaudited Pro Forma Financial Data
(in thousands, except per share data)

<TABLE>
<CAPTION>
Year Ended December 31, 1998
-----------------------------------
Pro Forma
As Adjusted
Consolidated Statement Actual(1) Pro Forma(2) (2)(3)
of Operations Data: --------- ------------ -----------
<S> <C> <C> <C>
Revenue:
Systems and software....................... $ 34,492 $ 63,372 $ 63,372
Maintenance, support and services ......... 29,231 53,518 53,518
-------- -------- --------
Total revenue............................... 63,723 116,890 116,890
Operating expense:
Hardware and other items purchased for
resale.................................... 12,567 22,980 22,980
Selling, general and administrative........ 34,685 66,452 66,452
Depreciation and amortization.............. 4,328 7,121 7,121
Purchased research and development......... 9,000 9,000 9,000
Compensatory stock awards.................. 57 6,447 6,447
Asset impairment, restructuring and special
charges................................... 1,874 2,624 2,624
-------- -------- --------
Total operating expense.................... 62,511 114,624 114,624
Operating income (loss)..................... 1,212 2,266 2,266
Other expense (income):
Interest, net.............................. 3,488 8,453 378
Other, net................................. (81) (145) (145)
-------- -------- --------
Income (loss) before income taxes........... (2,195) (6,042) 2,033
Income taxes (benefit)...................... (334) (1,796) 1,272
-------- -------- --------
Net income (loss)........................... (1,861) (4,246) 761
Accretive dividend.......................... 800 800 800
-------- -------- --------
Net (loss) available to common
stockholders............................... $ (2,661) $ (5,046) $ (39)
======== ======== ========
Net (loss) per share:
Basic and diluted.......................... $ (0.39) $ (0.58) $ --
Shares used in computing net (loss) per
share:
Basic and diluted.......................... 6,780 8,726 12,611
Other data:
EBITDA(4)................................... $ 16,552 $ 27,603 $ 27,603
<CAPTION>
December 31, 1998
-----------------------------------
Pro Forma
As
Actual Pro Forma(5) Adjusted(5)
--------- ------------ -----------
(unaudited, in thousands)
<S> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents................... $ 8,552 $ 9,069 $ 14,427
Working capital............................. 481 1,543 19,159
Total assets................................ 127,784 132,121 132,972
Long-term debt, less current portion........ 68,358 69,553 3,451
Convertible, redeemable preferred stock..... 8,500 8,500 --
Stockholders' equity........................ 16,255 17,158 104,867
</TABLE>

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<PAGE>

- ------------
(1) As described under "The Company," InfoCure completed the contemporaneous
acquisition of the Founding Companies on July 10, 1997, and subsequently
made several other acquisitions. The historical consolidated financial
statements of operations data reflect the operations of each of these
acquisitions from the effective date of each such acquisition, except for
the acquisition of Radiology Management Systems, Inc. which was accounted
for as a pooling of interests and is reflected retroactively for all
periods presented. See "The Company," "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Business," and Notes 1
and 3 to the Consolidated Financial Statements of InfoCure.
(2) Unaudited pro forma combined statement of operations data for the year
ended December 31, 1998 give pro forma effect to the following as if they
had occurred on January 1, 1998: (i) the acquisition of the Healthcare
Systems Division ("HSD") of The Reynolds and Reynolds Company; (ii) the
borrowing of $40.0 million under our credit facility, which borrowings were
used to fund the payment of a portion of the purchase price for the HSD
acquisition (the "Line of Credit Borrowings"); (iii) the issuance of notes
payable to fund the balance of the purchase price for the HSD acquisition;
and (iv) the February 1999 merger with OMSystems, Inc. in exchange for
1,143,999 shares of common stock. See "The Company," "Use of Proceeds" and
unaudited Pro Forma Combined Financial Statements of InfoCure.
(3) Unaudited pro forma combined statement of operations data as adjusted for
the year ended December 31, 1998 give effect to the reduction of interest
expense resulting from the proceeds of this offering used to repay our
credit facility and other indebtedness incurred in connection with the HSD
acquisition, the number of shares of common stock issued and sold in this
offering, the conversion of our Series A Preferred Stock, and the issuance
of 99,255 shares of common stock which are issuable upon conversion of a
note payable and other convertible obligations (the "Convertible
Obligations"), as if each occurred on January 1, 1998. See "Use of
Proceeds," "Capitalization" and unaudited Pro Forma Combined Financial
Statements of InfoCure.
(4) Represents earnings before interest expense, provision (benefit) for income
taxes, depreciation and amortization, purchased research and development,
compensatory stock awards and asset impairment, restructuring and special
charges ("EBITDA"). EBITDA is not a measurement in accordance with
generally accepted accounting principles ("GAAP") and should not be
considered an alternative to, or more meaningful than, income from
operations, net income or cash flows as defined by GAAP or as a measure of
our profitability or liquidity. All registrants do not calculate EBITDA in
the same manner and, accordingly, EBITDA may not be comparable with other
registrants. We have included information concerning EBITDA because
management believes EBITDA provides a useful measure of our performance.
(5) Unaudited pro forma consolidated balance sheet data as of December 31, 1998
give effect to the HSD acquisition, including the related Line of Credit
Borrowings and issuance of other notes payable, and the merger with
OMSystems, Inc. as if completed as of December 31, 1998. See "The Company."
Unaudited pro forma consolidated balance sheet data, as adjusted, as of
December 31, 1998 give effect to the issuance and sale of the 3,000,000
shares of common stock offered hereby at an assumed offering price of
$29.75 per share and the application of the estimated net proceeds
therefrom, the issuance of 1,000,070 shares of common stock upon conversion
of our Series A Preferred Stock, the issuance of 99,255 shares of common
stock which are issuable upon conversion of the Convertible Obligations, as
if each was completed as of December 31, 1998.

6
<PAGE>

RISK FACTORS

You should carefully consider the following factors and other information in
this prospectus before deciding to purchase shares of our common stock.

We May Face Difficulties Integrating Acquired Businesses

The successful integration of the businesses we acquire is critical to our
future success. Integrating the management and operations of the businesses we
acquire is time consuming, and we cannot guarantee that we will achieve any of
the anticipated synergies and other benefits expected to be realized from the
acquisitions, including those reflected in our unaudited pro forma combined
financial data. We may face difficulties executing our acquisition strategy,
including any one or more of the following:

. difficulty integrating the financial, operational and administrative
functions of acquired businesses;

. difficulty integrating the products of acquired businesses;

. delays in realizing the benefits of our strategies for an acquired
business;

. diversion of management's attention from our existing operations;

. difficulty operating in markets in which we have little prior experience;
or

. inability to retain key employees necessary to continue the operations of
the acquired businesses.

We may incur significant costs associated with acquisitions, principally in
the quarter in which we complete them. We expect such costs to include:

. the direct costs of acquisitions, including fees to financial advisors,
legal counsel and independent auditors;

. the costs of integrating the operations of the businesses we acquire; and

. charges related to the elimination of overlapping operations and products
(including in process research and development).

Our Products May Not Be Year 2000 Ready

. review products that we will continue to market and support to determine
how they process dates;

. design and complete modifications to fix any date processing issues that
we identify for these products;

. test products to determine that they can process dates on or after
January 1, 2000; and

. deliver these modifications to our customers for installation and use.

We have designed our Year 2000 readiness tests in a way that we believe will
identify most Year 2000 readiness issues. We have concluded tests for
substantially all of our products that we will continue to sell or support. We
have determined that a majority of these products are Year 2000 ready. We
believe that all products that we will continue to sell or support will be Year
2000 ready by July 1999, but we cannot assure you that they will be. We could
experience delays or failures in developing or implementing modifications
necessary to make a product Year 2000 ready. For older products that we no
longer sell or support, we have attempted to notify all known users of these
products that these products generally are not Year 2000 ready and will not be
made Year 2000 ready. We cannot guarantee that we will be able to contact all
such users.

As part of our effort to make our products Year 2000 ready and to help our
customers to make their systems that use our products Year 2000 ready, we have
offered our customers various alternative forms of

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products and assistance, including generally available Year 2000 information
and diagnostic tools (through our InfoTour 2000 customer assistance program),
software patches, product upgrades and replacement products. We cannot
guarantee that these tools, patches, upgrades or replacement products will
solve all material Year 2000 problems with our products or our customers'
systems or that claims will not be brought against us alleging that we harmed
customers by failing to provide all of the information, tools, patches,
upgrades or replacement products required to resolve all material Year 2000
readiness problems with our products or our customers' systems.

We have substantially completed an assessment of the Year 2000 readiness of
the software and hardware systems that we use in our business. We believe that
almost all of our internal software and hardware systems are Year 2000 ready.
We have contacted several third parties that we do business with to assess
whether the products and systems that they use in their businesses are Year
2000 ready. We intend to complete this assessment by contacting the remainder
of the third parties that we regularly do business with and by developing
strategies that will help us make sure that no material business disruptions
will result from third-party Year 2000 problems. These strategies may include
obtaining assurances that current business partners achieve timely Year 2000
readiness for the products they use in their businesses. If we do not obtain
these assurances we may be required to contract with alternate third parties or
develop a temporary solution. For a more detailed discussion of Year 2000
readiness issues, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Costs Related to Year 2000 Readiness."

We May Have Charges Associated with Acquisitions and Other Events

At times, we have terminated the use of software products, personnel and
facilities of businesses that we have acquired. This has resulted in
substantial charges for discontinued products, impairment of goodwill, employee
terminations and termination of leases and other contracts. Our financial
statements for the year ended December 31, 1998 reflect charges for such items
totaling $1.9 million. Additionally, we expensed $9.0 million related to the
purchase of in process research and development for the HSD acquisition
completed in October 1998. In February 1999, we completed a merger with
OMSystems, Inc. in a transaction accounted for as a pooling of interests. As a
result, our historical financial results will retroactively reflect the effects
of the pooling. For 1998, OMSystems, Inc. reported a net loss of $3.3 million
including a one-time, non-cash charge of $6.4 million for compensatory stock
awards. We may write off similar charges in connection with future
acquisitions. Recently, the Securities and Exchange Commission (the
"Commission") has required companies to reduce the amount of such charges and
to restate previously issued financial statements. If the Commission were to
require us to restate its financial statements, the announcement of such a
restatement could have an adverse effect on the trading price of our common
stock.

In addition, we plan to prepay the outstanding balance on our Line of Credit
which may result in a charge of as much as $5.1 million for the early
extinguishment of this debt by the first or second quarter of 1999.

In June 1998, the Board of Directors approved restricted stock awards for
35,000 shares to Mr. Fine, 30,000 shares to Mr. Price and 30,000 shares to Mr.
Perlman. The total value of these restricted stock awards was approximately
$1.1 million on the date of grant. The restricted stock awards vest ratably
over a ten-year term but vesting can be accelerated upon the occurrence of
certain events. One-half of the shares subject to the restricted stock awards
vested in the first quarter of 1999 when the average closing price of our
common stock was $25.00 or more for 20 consecutive trading days. We will incur
an estimated compensation charge of $500,000 in the first quarter of 1999
related to the restricted stock awards to reflect this accelerated vesting. The
remaining shares will vest immediately at the time the average closing price of
our common stock is $40.00 or more for 20 consecutive trading days. It is
possible that we will incur an additional charge of up to $580,000 if this
second accelerated vesting occurs. We do not expect to grant additional
restricted stock awards in the future and therefore do not expect to incur
compensation charges relating to restricted stock awards in the future.

We May Have Difficulties Managing Our Growth

Our growth places a significant strain on our management and operations. Our
future growth will depend, in part, on our ability to implement and expand
financial control systems, train and manage our employee base,

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<PAGE>

and provide support and services to an increasing customer base. Key personnel
have recently joined InfoCure, and none of our officers has had significant
experience in managing a large, public company. Our success is dependent to a
significant degree on our ability to hire, retain and motivate sales, marketing
and technical employees. We believe that there is a shortage of, and
significant competition for, personnel with the advanced technological,
managerial and marketing skills necessary in our business. Our ability to
implement our growth strategy could be adversely affected by an inability to
hire and retain additional qualified personnel.

We May Face Difficulties Implementing Our Acquisition Strategy

We intend to pursue acquisitions of businesses, product lines and
technologies that are complementary to our business. These acquisitions will
enable us to achieve our objective of becoming the leading provider of
advanced, specialty-specific practice management systems. Our ability to grow
through acquisitions will depend upon:

. the availability of suitable acquisition candidates at acceptable
acquisition prices;

. the availability of capital to complete acquisitions; and

. the market value of our common stock.

We may experience increased competition for acquisition candidates. This
would mean that fewer acquisition opportunities would be available to us and
that acquisition prices could be higher.

Future acquisitions also could have a significant impact on our financial
condition and capital needs, creating substantial fluctuations in our quarterly
and annual results of operations. Furthermore, future acquisitions may require
us to issue additional equity securities, incur additional debt, amortize the
costs of goodwill and intangible assets, and write off in process research and
development. Additionally, businesses that we acquire could experience problems
that we are not aware of at the time of the acquisitions. Such problems might
include unknown liabilities, Year 2000 problems, software bugs or adverse
litigation and claims. Any one of these risks could have a material adverse
effect on our business. See "--We May Face Difficulties Integrating Acquired
Businesses," "Business--Industry Overview" and "--Strategy."

We are a Relatively New Company

We have conducted our operations on a consolidated basis since July 10, 1997.
We have only recently implemented company-wide systems and procedures designed
to manage our combined enterprise. We cannot guarantee that we will ultimately
be able to integrate successfully the operations of all of our acquired
businesses. The inability to successfully integrate our acquisitions and reduce
our operating expenses could have a material adverse effect on future results
and could negatively impact our ability to acquire other businesses or
otherwise execute our business strategy. As a result of this growth through
acquisitions, a year-to-year comparison of our historical financial statements
does not accurately reflect future results.

Our Quarterly Operating Results May Vary and in the Past We Have Experienced
Losses

Our operating results may vary significantly from quarter to quarter. In
addition, we have experienced historical losses. Our operating results are
influenced by such factors as:

. the timing of and charges associated with completed acquisitions or other
events;

. changes in customer purchasing patterns;

. competition;

. the timing of sales;

. the timing of and cost related to new product introductions and upgrades;

. the length of sales cycles;

. the time required to install products; and

. the levels of advertising and promotional expenditures.

Our sales cycle is influenced by such factors as the size of the transaction,
size of the customer, changing business plans of the customer, pace of the
customers' decision-making process and general economic

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conditions. Therefore, it is difficult to forecast revenue from system sales.
The sales and installation efforts for our AS/400 products are more expensive
and require more time than for our Windows-based products. Moreover, sales of
AS/400 products occur less frequently than sales of our Windows-based products,
but typically result in greater revenue per sale. In addition, we recognize
substantially lower margins on hardware sales relative to software sales.
Fluctuations in sales of hardware relative to sales of software may negatively
affect our operating margins in a particular quarter.

We operate without any significant backlog of product orders. A majority of
the revenue realized in a quarter results from orders received or services
rendered in that quarter. Thus, operating results for any particular quarter
are not necessarily an indication of future results. Uncertainties associated
with the introduction of new products and with general market trends may limit
our ability to forecast accurately short-term results of operations.
Additionally, substantially all of our expenses are relatively fixed, including
costs of personnel, facilities and communications, and are not susceptible to
rapid reduction.

Competition Could Reduce Revenue from Our Products and Services

Currently, the practice management systems industry in the United States is
characterized by a large number of relatively small, regionally-focused
companies and a few national vendors. We believe that the primary competitive
factors in this market are:

. product features;

. ability to customize products by practice specialty;

. customer service, support and satisfaction;

. price;

. ongoing product enhancements; and

. reputation and stability of the vendor.

Our principal competitors include both national and regional practice
management systems vendors. Some of our national competitors have greater
financial, development, technical, marketing and sales resources than we have.
If competition in the practice management systems industry intensifies, we may
be required to lower the prices we charge for our products and services. This
may have a material adverse effect on future results. It is anticipated that
additional competitors are likely to enter the practice management systems
market as it expands.

Our Success Depends On Our Ability to Protect the Confidentiality of Our
Software

We rely on a combination of trade secrets, copyright and trademark laws,
license agreements, nondisclosure and other contractual provisions and
technical measures to protect our proprietary rights. Our software technology
is not patented and existing copyright laws offer only limited practical
protection. In addition, we generally have not entered into confidentiality
agreements with our employees. We cannot guarantee that the legal protections
that we rely on will be adequate to prevent misappropriation of our technology.
Also, these protections do not prevent independent third-party development of
competitive products or services. We believe that our products, trademarks and
other proprietary rights do not infringe upon the proprietary rights of third
parties. However, we cannot guarantee that third parties will not assert
infringement claims against us in the future or that any such assertion will
not require us to enter into a license agreement or royalty agreement with the
party asserting a claim. Regardless of the outcome of any such legal
proceedings, responding to and defending against any such infringement claim
may require significant management resources and otherwise have a material
adverse effect on future results.

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<PAGE>

Our Products May Not Be Accepted By Customers

Evolving healthcare industry standards, technological advances in software
and hardware, and changes in customer demands require significant ongoing
expenditures for the development and timely introduction of new products and
enhancements. We cannot guarantee that we will successfully develop new
products or enhancements of existing products that will satisfy the needs of
customers. Further, products or technologies developed by others may render our
products and technologies noncompetitive or obsolete. In either case, our
failure to gain market acceptance of new products and enhancements by both
existing customers and new customers would adversely affect our revenue. For
example, we have only recently begun to emphasize our EDI service capabilities
and we do not know whether this service will be accepted by our customers. In
addition, we have only recently begun to offer InfoMine decision software to
the anesthesiology market. We do not know whether this software will be
accepted by our anesthesiology customers or whether we will be able to offer
the product to other healthcare practice specialties.

We May Have Liability if Our Products are Defective

Our products perform functions for a healthcare provider's financial records,
patient medical records and treatment plans. If our products fail to provide
accurate, confidential and other timely information, including failures related
to the Year 2000, we may incur liability or face other claims. We cannot
guarantee that we will not be subject to such claims in the future or that
contractual limitations on liability will be enforceable. We currently maintain
product liability insurance on all of our products. We cannot guarantee that
such insurance will adequately cover any specific claim asserted against us or
that our insurance carrier will not deny coverage. A successful claim brought
against us in excess of our insurance coverage could have a material adverse
effect on future results. Even unsuccessful claims could result in substantial
cost, divert management's attention from our operations and decrease or delay
market acceptance of our products.

While we test our products, they may contain defects or problems. These
defects or problems could result in the failure of our customers' systems or
the inability of those systems to perform properly. Our contracts with our
customers contain provisions that limit our liability for those types of
defects or problems; however, these provisions may not be enforceable and may
not protect us from liability. While we have general liability insurance that
we believe is adequate, including coverage for errors and omissions, we may not
be able to maintain this insurance on reasonable terms in the future. In
addition, our insurance coverage may not be sufficient to cover large claims
and our insurer could disclaim coverage on claims. If we are liable for an
uninsured or underinsured claim or if our premiums increase significantly, our
financial condition could be adversely affected.

Our Stock Price is Volatile

The trading price of our common stock has been highly volatile at relatively
low trading volumes since our initial public offering and we expect significant
fluctuations to continue. These fluctuations are driven by factors including:

. quarterly variations in operating results;

. announcements of acquisitions, technological innovations or new product
releases by us or our competitors; and

. changes in prices of our products or of competitors' products.

Statements made by industry analysts relating to our competitors have
resulted in an immediate adverse effect on the market price of our common stock
in the past and could have a similar result in the future. Statements by
industry analysts regarding our business or markets could contribute to
volatility in the market price of our common stock. In addition, the stock
market has from time to time experienced extreme price and volume fluctuations
which have particularly affected the market price for the securities of many
healthcare

11
<PAGE>

information systems companies. These broad market fluctuations may adversely
affect the market price of our common stock.

We May Need Acquisition Financing in the Future

We intend to use proceeds from this offering to repay indebtedness, including
indebtedness incurred to finance prior acquisitions. We expect to finance
future acquisitions, if any, through cash from operations, our commercial line
of credit or other indebtedness, issuances of common stock or other securities,
or any combination of these sources. We cannot guarantee that capital will be
available on terms acceptable to us, or at all. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Our Success Depends on Our Key Executives

Our business depends on the continued efforts of our executive officers and
senior managers. Our strategy has been to retain the most talented personnel of
our acquired businesses. We will also likely be dependent on members of the
senior management of any business that we acquire in the future. If any of
these persons becomes unable or unwilling to continue his or her role with us,
or if we are unable to attract or retain other qualified employees, future
results could be adversely impacted. Although we have entered into employment
agreements with key executives, we cannot guarantee that any individual will
continue in his present capacity with us for any particular period of time.

The Consolidation of the Healthcare Industry Could Adversely Affect Our Results

Many healthcare providers are consolidating into larger practice groups with
greater market presence. As a result, these providers have greater bargaining
power which may lead to declining prices for our products. This could have an
adverse effect on our future results. In addition, the consolidation of smaller
practice groups may require the resulting larger group to unify its practice
management systems. We believe that once a healthcare provider has chosen a
particular practice management systems vendor, it will rely on that vendor for
its future practice management systems requirements. Thus, the vendor with the
broadest market share will have a competitive advantage as consolidation
continues. An inability to make initial sales of practice management systems to
healthcare providers prior to consolidation or to maintain our existing
customer base subsequent to consolidation may have a material adverse effect on
future results.

We May be Subject to Changing Government Regulations

The confidentiality of patient records and the circumstances under which such
information may be used or released are subject to increasing state and federal
regulation. Regulations governing electronic healthcare data transmissions are
evolving rapidly and are often unclear and difficult to apply. The Health
Insurance Portability and Accountability Act of 1996 mandates the establishment
of national standards for certain types of electronic healthcare information
transactions to ensure the integrity and confidentiality of such information.
We cannot guarantee that such standards will not materially restrict the
ability of our customers to obtain or disseminate patient information through
the use of our products. Any material restriction on the ability of healthcare
providers to obtain or disseminate patient information could adversely affect
our business and future results.

The U.S. Food and Drug Administration ("FDA") has jurisdiction to regulate
computer products and software as medical devices if they are intended for use
in the diagnosis, cure, mitigation, treatment or prevention of disease. We have
not determined the extent to which our practice management software products
would be deemed to be medical devices subject to FDA regulation. Noncompliance
with applicable FDA requirements can result in such things as fines,
injunctions, suspension of production, revocation of approvals or clearances
previously granted, and criminal prosecution. FDA policies, or other laws or
regulations concerning the manufacture or marketing of healthcare information
systems, may increase the cost and time required to deliver new or existing
products and therefore may have a material adverse effect on future results.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Government Regulation."

12
<PAGE>

Our Management and Major Stockholders Can Influence Stockholder Actions Through
Their Share Ownership

Taking into account all of the shares of common stock outstanding after this
offering, directors, executive officers and major stockholders will
beneficially own approximately 14% of the outstanding shares of common stock.
Although these persons do not presently have any agreements to act in concert,
any such agreement would make it difficult for others to elect the entire Board
of Directors and to control the disposition of any matter submitted to a vote
of stockholders. See "Principal and Selling Stockholders."

Future Sales Of Shares Could Affect Our Stock Price

The market price for our common stock could fall dramatically if our
stockholders sell large amounts of our common stock in the public market. These
sales, or the possibility that these sales may occur, could make it more
difficult for us to sell equity or equity-related securities in the future.

Upon completion of the offering, there will be 12,942,150 shares of common
stock outstanding. Of these shares, shares (including the 4,039,398 shares
sold in this offering) will be freely tradable upon completion of this
offering, subject to the lock-up agreements discussed below and Rule 144
restrictions under the Securities Act of 1933, as amended, described in the
section captioned "Shares Eligible for Future Sale." Of the remaining shares
of common stock outstanding, 3,954,078 are subject to a resale registration
statement on Form S-3 (the "Resale Registration Statement") and also will be
freely tradable upon completion of this offering, subject to lock-up agreements
discussed below and Rule 144 restrictions. The remaining shares of common
stock outstanding are "restricted securities" under Rule 144.

Our shares will become eligible for sale in the public market as follows:

<TABLE>
<CAPTION>
Date Shares Become Eligible for Resale in the Public
Number of Shares: Market:
----------------- ----------------------------------------------------
<C> <S>
......... These shares will be freely tradable without restriction
immediately as of the date of this prospectus (including
the shares sold in this offering).

124,342......... These shares are subject to 30-day lock-up agreements and
will be freely tradable without restriction commencing 31
days after the date of this prospectus. None of the
holders of these shares are "affiliates" of InfoCure as
defined in Rule 144 and none of these shares will be
subject to Rule 144 restrictions.

......... These shares are subject to 90-day lock-up agreements and
will be freely tradable without restriction commencing 91
days after the date of this prospectus, provided that
of such shares are held by affiliates and are subject to
the provisions of Rule 144 that limit the amount of
securities that may be sold in any three month period.

......... These shares are restricted securities and may be sold
pursuant to Rule 144. Of these shares, will be
eligible to be sold immediately upon completion of this
offering and the remainder will become eligible for sale
on various dates thereafter.
</TABLE>

The lock-up agreements provide that the holders of the shares may not sell or
otherwise dispose of their shares for a period of 30 or 90 days after the date
of this prospectus without the prior written consent of The Robinson-Humphrey
Company, LLC. In addition, we have agreed not to sell any additional shares of
common stock for 90 days after the date of this prospectus without the prior
written consent of The Robinson-Humphrey Company, LLC. The Robinson-Humphrey
Company, LLC may release us or the stockholders from these restrictions, in
whole or in part, at any time in its sole discretion. If holders of our common
stock sell a large number of shares in the public market, our stock price could
fall significantly. See "Shares Eligible for Future Sale."

13
<PAGE>

Our Certificate of Incorporation and Bylaws and Delaware Law May Inhibit a
Takeover of InfoCure

Certain provisions of Delaware law, our Certificate of Incorporation and
Bylaws could, together or separately, have the effect of delaying, deferring or
preventing an acquisition of InfoCure and limit the price that investors might
be willing to pay in the future for our common stock. These provisions, among
other things: (a) authorize our Board of Directors to issue, without further
stockholder approval, preferred stock with rights and preferences senior to the
rights associated with the common stock; (b) classify the Board of Directors
into three classes of directors with each class serving staggered three year
terms; and (c) limit stockholders' ability to call or make proposals at
stockholder meetings.

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus contain forward-looking
information. These statements are found in the sections entitled "Prospectus
Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business." They
include statements concerning:

. our growth and operating strategy;

. liquidity and capital expenditures;

. use of proceeds of the offering;

. our financing plans;

. trends in our industry and in healthcare generally;

. trends in government regulation; and

. payment of dividends.

You can identify these statements by forward-looking words such as "expect,"
"believe," "goal," "plan," "intend," "estimate," "may" and "will" or similar
words. You should be aware that those statements are subject to known and
unknown risks, uncertainties and other factors, including those discussed in
the section entitled "Risk Factors," that could cause the actual results to
differ materially from those suggested by the forward-looking statements.

14
<PAGE>

THE COMPANY

InfoCure was incorporated in Delaware in November 1996. Prior to July 10,
1997, InfoCure conducted no significant operations and generated no revenue. On
July 10, 1997, InfoCure completed the acquisitions of: American Medcare
Corporation ("AMC") (including its subsidiaries, International Computer
Solutions, Inc. ("ICS"), Health Care Division, Inc. and Millard-Wayne, Inc.
("Millard-Wayne")); DR Software, Inc. ("DR Software"); KComp Management
Systems, Inc. ("KComp"); and Rovak, Inc. ("Rovak"). These companies are
collectively referred to herein as the "Founding Companies." On July 10, 1997,
InfoCure also completed its initial public offering of 1.4 million shares of
common stock at a price to the public of $5.50 per share, resulting in net
proceeds to InfoCure of approximately $6.0 million.

Acquisitions

Effective October 1, 1997, InfoCure acquired SoftEasy, Inc. ("SoftEasy"),
Commercial Computers, Inc. ("CCI") and Professional On-Line Computers, Inc.
("POLCI"). SoftEasy provided practice management systems for podiatrists. CCI
provided UNIX- and Windows-based practice management systems for mid-size and
large medical practices and clinics. POLCI provided AS/400-based practice
management systems to hospital-affiliated physician practices, large non-
hospital physician clinics, radiology practices and management service
organizations.

Effective November 1, 1997, InfoCure acquired PACE Financial Corporation
("PACE") and effective December 1, 1997, InfoCure acquired the orthodontic
business unit of HALIS Services, Inc. ("OPMS"). PACE provided AS/400 practice
management systems. OPMS provided Windows-based software solutions for
orthodontists.

Effective January 1, 1998, InfoCure acquired Micro-Software Designs, Inc.
("MDI") and Medical Software Integrators, Inc. ("MSI"). MDI provided Windows-
based client/server practice management software, with an emphasis on oral and
maxillofacial surgery practices. MSI provided practice management systems to
independent anesthesiology practices.

On October 23, 1998, InfoCure acquired substantially all of the assets and
assumed certain liabilities of the Healthcare Systems Division ("HSD") of The
Reynolds and Reynolds Company (the "HSD Acquisition"). HSD provided healthcare
practice management systems principally to radiology, anesthesiology and
enterprise-wide medical practices. With the HSD Acquisition, InfoCure entered
the radiology market and increased its presence in anesthesiology and among
larger general medical practices utilizing AS/400 systems. The installed
customer base of HSD included 1,580 practice sites, representing 35,020
physicians. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Shares Eligible for Future Sale" and Unaudited Pro
Forma Combined Financial Statements of InfoCure.

On December 23, 1998, InfoCure completed a merger with Radiology Management
Systems, Inc. ("RADMAN"), a provider of practice management systems for
radiologists. The merger with RADMAN added approximately 2,000 radiologists to
InfoCure's customer base and strengthened its position as the largest provider
of healthcare information systems to radiology practices in the United States.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Shares Eligible for Future Sale" and Unaudited Pro Forma Combined
Financial Statements of InfoCure.

The acquisitions of SoftEasy, CCI, POLCI, PACE, OPMS, MDI, MSI, HSD and
RADMAN are referred to herein as the "Subsequent Acquisitions."

On February 12, 1999, InfoCure completed a merger with Macon Systems
Management, LLC, the parent of Medical Software Management, Inc. ("MSM"), a
provider of practice management systems for dermatologists (the "MSM Merger").
With the MSM Merger, InfoCure entered the dermatology market. On February 16,
1999, InfoCure completed a merger with OMSystems, Inc. ("OMS"), a provider of
practice management systems for orthodontists (the "OMS Merger"). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Shares Eligible for Future Sale" and the Unaudited Pro Forma
Combined Financial Statements of InfoCure.

15
<PAGE>

Series A Preferred Stock Issuance

On February 9, 1998, InfoCure completed the private placement of 850,060
shares of its Convertible, Redeemable Preferred Stock Series A (the "Series A
Preferred"), resulting in gross proceeds to InfoCure of $8.5 million and net
proceeds of approximately $7.8 million after payment of selling commissions to
the placement agent for the offering and other expenses of the offering.
InfoCure granted to the placement agent a warrant to acquire 100,000 shares of
InfoCure's common stock at an exercise price of $9.00 per share. The
Consolidated Financial Statements of InfoCure reflect an accretive dividend
attributable to the preferred stockholders in the amount of $800,000
representing the issuance costs and the fair market value of the warrant
related to the Series A Preferred. The Series A Preferred will convert to
1,000,070 shares of common stock upon the completion of this offering.

The Institutional Placement

On September 28, 1998, InfoCure completed the sale of 203,338 shares (the
"Institutional Placement") of common stock in a private placement to an
institutional investor (the "Investor") for $2.5 million. The Investor
committed to invest up to an additional $7.5 million upon the exercise by
InfoCure of options ("Put Options") through February 28, 2000. Generally, upon
exercise of a Put Option, the Investor must tender the amount designated by
InfoCure (the "Investment Amount"). The number of shares to be issued upon
exercise of a Put Option is determined by dividing the Investment Amount by an
amount (the "Subscription Date Price") equal to 92.5% of the average of the
lowest three consecutive trading day closing sale prices of the common stock
during the 22 trading days immediately preceding exercise of such Put Option.
Generally, Put Options may be exercised only once every 30 days and only if
defined conditions are met, including minimum average daily trading volumes for
InfoCure's common stock and a minimum Subscription Date Price of $10.00.
Additionally, InfoCure issued the Investor a five-year warrant to purchase
100,000 shares of common stock at an exercise price of $23.00 per share.

Since September 28, 1998, InfoCure has exercised two additional Put Options
and has issued to the Investor an aggregate 431,322 shares for a total
investment of $7.0 million. Of the 531,322 shares acquired by the Investor to
date and issuable upon exercise of the Investor's warrant, 250,000 shares are
offered hereby and 281,322 shares are offered pursuant to the Resale
Registration Statement, subject to a 90-day lock-up agreement.

InfoCure is required to file a registration statement to register for resale
by the Investor any shares of common stock issuable upon exercise of subsequent
Put Options. Each subsequent registration statement must be declared effective
not later than 90 days from the corresponding Put Option closing. If a
registration statement is not declared effective within the applicable period,
InfoCure must pay a cash penalty of 1.5% of the Investment Amount per month
until the registration statement is declared effective. The Investor signed a
lock-up agreement pursuant to which it agreed not to sell any common stock
(other than common stock offered by the Investor in this offering) for a period
of 90 days from the date of this prospectus. See "Shares Eligible for Future
Sale."

With respect to any Put Option, the Investor is entitled to receive
additional shares of common stock ("Adjustment Shares") if the amount
determined as 92.5% of the average of the lowest three consecutive trading day
closing sales prices of the common stock during the 22 trading days immediately
preceding the effective date of any registration statement relating to the
shares issued upon exercise of such Put Option (the "Effective Date Price") is
lower than the Subscription Date Price. In such event, the Investor will
receive that number of Adjustment Shares determined by subtracting (x) the
Investment Amount divided by the Subscription Date Price from (y) the
Investment Amount divided by the Effective Date Price. InfoCure has the right
to pay cash in lieu of the issuance of Adjustment Shares if the closing sales
price of the common stock on the Effective Date is lower than $10.00.

To date, InfoCure has paid an aggregate of $237,500 to the Investor for fees
relating to the exercised Put Options and is required to pay an additional cash
fee of 1.25% of the amount invested pursuant to any subsequent exercise of a
Put Option.

16
<PAGE>

USE OF PROCEEDS

The net proceeds to InfoCure from the sale of the 3,000,000 shares of common
stock offered hereby are estimated to be approximately $83.6 million, assuming
an offering price of $29.75 per share, the last reported sales price of the
common stock on the Nasdaq Stock Market on February 24, 1999, and after
deducting estimated underwriting discounts and commissions and estimated
expenses payable by InfoCure in connection with this offering. InfoCure will
not receive any proceeds from the sale of common stock by the selling
stockholders.

InfoCure will use approximately $77.6 million of the net proceeds of this
offering to repay amounts outstanding under its commercial loan agreement (the
"Line of Credit") and amounts outstanding under a $10.0 million acquisition
note to the former owner of HSD incurred in connection with the HSD
Acquisition. The balance of the net proceeds of this offering will be used by
InfoCure for working capital and other general corporate purposes, including
potential future acquisitions.

As of December 31, 1998, the aggregate outstanding balance under the Line of
Credit was $68.4 million, which was borrowed primarily to fund the cash portion
of the purchase price for several of the Subsequent Acquisitions. The Line of
Credit comprises three loans, a $40.0 million bridge loan, a $20.0 million
acquisition loan and a $10.0 million term loan. The interest rates on the $10.0
million term loan and the $40.0 million bridge loan are fixed at 9.50% per
year. The interest rate on the $20.0 million acquisition loan is the lender's
base rate plus 1% and is currently 8.75% per year. The Line of Credit must be
paid in full not later than October 28, 2002. The $10.0 million note payable to
the former owner of HSD bears interest at rates increasing from 8.0% to 14.0%
and is payable in equal installments of principal over five years, maturing in
October 2003. Of amounts outstanding under the Line of Credit, approximately
$41.2 million was used to fund a portion of the purchase price of HSD and the
balance was used to fund prior acquisitions.

Pending application of the net proceeds as described above, InfoCure intends
to invest the net proceeds of the offering in short-term, investment-grade,
interest-bearing securities. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

17
<PAGE>

PRICE RANGE OF COMMON STOCK

On January 29, 1999 InfoCure's common stock commenced trading on the Nasdaq
Stock Market under the symbol "INCX." From July 10, 1997 until January 29, 1999
the common stock was traded on the American Stock Exchange under the symbol
"INC." The following table sets forth the high and low closing sale prices per
share of the common stock for the periods indicated, as reported on the
American Stock Exchange or the Nasdaq Stock Market, as the case may be.

<TABLE>
<CAPTION>
Year Ended December 31, 1997 High Low
---------------------------- ---- ----
<S> <C> <C>
Third Quarter (beginning July 10, 1997)................. $ 5 5/8 $ 3 15/16
Fourth Quarter.......................................... 9 1/2 5 3/4
<CAPTION>
Year Ended December 31, 1998 High Low
---------------------------- ---- ----
<S> <C> <C>
First Quarter........................................... $17 1/16 $ 8 1/4
Second Quarter.......................................... 16 3/16 10 15/16
Third Quarter........................................... 16 15/16 12 3/4
Fourth Quarter.......................................... 32 3/4 11 5/8
Year Ended December 31, 1999 High Low
---------------------------- ---- ----
First Quarter (through February 24, 1999)............... $36 $27 3/4
</TABLE>

On February 24, 1999, the last reported sales price for the common stock was
$29 3/4 per share. As of February 24, 1999 there were approximately 350
stockholders of record of the common stock based on transfer agent reports.

DIVIDEND POLICY

InfoCure has neither declared nor paid any cash dividends on its common stock
or its preferred stock and does not anticipate paying any cash dividends in the
foreseeable future. The Line of Credit generally prohibits InfoCure from
declaring or paying any dividends or other distributions with respect to its
capital stock.

18
<PAGE>

CAPITALIZATION

The following table sets forth, as of December 31, 1998, the short-term debt
and capitalization of InfoCure. The pro forma capitalization of InfoCure gives
effect to: (a) the OMS Merger and (b) the issuance of 80,000 shares of common
stock (subject to adjustment) in the Institutional Placement. The pro forma as
adjusted capitalization of InfoCure represents the pro forma capitalization
adjusted to give effect to: (a) the issuance and sale by InfoCure of the
3,000,000 shares of common stock offered hereby at an assumed offering price of
$29.75 per share (the last reported sale price on February 24, 1999), after
deducting underwriting discounts and commissions and estimated offering
expenses payable by InfoCure; (b) the application of the estimated net proceeds
to InfoCure of this offering; (c) the conversion of the Series A Preferred; and
(d) the issuance of an estimated 99,255 shares of common stock upon the
conversion of a note payable and other obligations. See "Use of Proceeds." This
table should be read in conjunction with the Consolidated Financial Statements
of InfoCure and Notes thereto appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
December 31, 1998
--------------------------------
Pro Forma
Actual Pro Forma As Adjusted
-------- --------- -----------
(in thousands)
<S> <C> <C> <C>
Short-term debt, including current portion of
long-term debt................................ $ 14,884 $ 14,998 $ 2,890
======== ======== ========
Long-term debt, excluding current portion...... $ 68,358 $ 69,553 $ 3,451
-------- -------- --------
Preferred Stock, $0.001 par value; 2,000,000
shares authorized; 850,060 shares of
Convertible, Redeemable Preferred Stock,
Series A, liquidation preference $10.00 per
share (subject to adjustment in certain
circumstances), issued and outstanding, actual
and pro forma; no shares outstanding pro forma
as adjusted................................... 8,500 8,500 --
-------- -------- --------
Stockholders' equity:
Common Stock, $0.001 par value; 15,000,000
shares authorized;
7,622,148 shares issued and 7,581,705 shares
outstanding, actual......................... 8
8,846,147 shares issued and 8,805,704 shares
outstanding, pro forma(1)(3)................ 9
12,945,472 shares issued and 12,905,029
shares outstanding, pro forma as
adjusted(2)(3).............................. 13
Common stock issuable........................ 1,975 -- --
Additional paid-in capital................... 31,358 39,723 132,537
Accumulated deficit.......................... (15,781) (21,269) (26,376)
Deferred compensation........................ (1,083) (1,083) (1,083)
Treasury stock, at cost...................... (222) (222) (222)
-------- -------- --------
Total stockholders' equity................. 16,255 17,158 104,869
-------- -------- --------
Total capitalization....................... $ 93,113 $ 95,211 $108,320
======== ======== ========
</TABLE>
- --------
(1) Common stock outstanding--pro forma includes (a) 7,581,705 shares
outstanding at December 31, 1998; (b) 80,000 shares issued in January 1999
to an institutional investor; and (c) 1,143,999 shares issued in February
1999 in connection with the OMS Merger. See "The Company."
(2) Common stock outstanding--pro forma as adjusted includes the shares listed
in footnote (1) above plus (a) 3,000,000 shares issuable in connection with
this offering; (b) 1,000,070 shares issuable upon conversion of the Series
A Preferred; and (c) 99,255 shares issuable upon conversion of the
Convertible Obligations. See Notes 8 and 11 to Consolidated Financial
Statements of InfoCure.
(3) Excludes: (a) 83,232 shares issued in connection with the MSM Merger; (b)
3,344,882 shares issuable upon the exercise of stock options and warrants
outstanding as of December 31, 1998, at a weighted average exercise price
of $9.72 per share; and (c) an additional 1,389 shares issuable upon
conversion of the Convertible Obligations assuming conversion on April 1,
1999. See "Management--Employee Benefit Plans" and Note 11 to the
Consolidated Financial Statements of InfoCure.

19
<PAGE>

DILUTION

The tangible book value (deficit) of InfoCure at December 31, 1998 was
approximately $(63.3) million, or approximately $(8.34) per share of common
stock. Net tangible book value (deficit) per share represents the amount of
InfoCure's tangible assets less total liabilities, divided by the total number
of shares of common stock outstanding. After giving effect to the OMS Merger
and the January 1999 issuance of shares relating to the Put Option exercised by
InfoCure in December 1998, the tangible book value (deficit) of InfoCure on a
pro forma basis at December 31, 1998 was approximately $(62.4) million or
approximately $(7.08) per share of common stock.

Dilution per share represents the difference between the amount per share
paid by investors in this offering and the net tangible book value (deficit)
per share at December 31, 1998 adjusted to give effect to this offering. After
giving effect to the sale of the shares of common stock by InfoCure hereby at
an assumed offering price of $29.75 per share (the last reported sales price of
InfoCure's common stock on the Nasdaq Stock Market on February 24, 1999) and
after receipt and application of the estimated net proceeds therefrom of $83.6
million (after deducting the underwriting discounts and commissions and
estimated offering expenses payable by InfoCure), the net tangible book value
of InfoCure on a pro forma as adjusted basis as of December 31, 1998 would have
been $29.9 million or $2.31 per share of common stock. This represents an
immediate increase in net tangible book value of $9.39 per share to existing
stockholders and an immediate dilution of $27.44 per share to purchasers in
this offering.

The following table illustrates the dilution per share as described above:

<TABLE>
<S> <C> <C>
Assumed public offering price per share.................... $29.75
------
Net tangible book value (deficit) per share--historic ... $(8.34)
Increase in net tangible book value (deficit) per share
attributable to pro forma adjustments................... 1.26
------
Net tangible book value (deficit) per share--pro forma .. (7.08)
Increase in net tangible book value per share
attributable to offering adjustments.................... 9.39
------
Net tangible book value per share after the offering..... 2.31
------
Dilution per share to new investors........................ $27.44
======
</TABLE>

20
<PAGE>

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The selected historical consolidated financial data of InfoCure set forth
below is qualified in its entirety by, and should be read in conjunction with,
the Consolidated Financial Statements of InfoCure, including the Notes thereto,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The consolidated statements
of operations data for the years ended January 31, 1995 and 1996 and the
consolidated balance sheet data as of January 31, 1995, 1996 and 1997 are
derived from the audited financial statements of AMC which are not included in
this prospectus. The consolidated statements of operations data for the year
ended January 31, 1997, the eleven months ended December 31, 1997 and the year
ended December 31, 1998, and the consolidated balance sheet data as of December
31, 1997 and December 31, 1998 are derived from, and are qualified by reference
to, the consolidated financial statements included elsewhere in this
prospectus. The financial statements for all periods presented give retroactive
effect to pooling of interests treatment for the merger with RADMAN completed
December 23, 1998. See the Consolidated Financial Statements of InfoCure.
<TABLE>
<CAPTION>
Eleven
Months
Year Ended January 31, Ended Year Ended
------------------------- December 31, December 31,
1995 1996 1997 1997 1998
------- ------- ------- ------------ ------------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Statement of Operations
Data (1):
Revenue:
Systems and software................. $ 3,595 $ 3,998 $ 3,857 $ 9,733 $34,492
Maintenance, support and services ... 2,789 2,074 2,494 8,541 29,231
------- ------- ------- ------- -------
Total revenue.......................... 6,384 6,072 6,351 18,274 63,723
Operating expense:
Hardware and other items purchased
for resale.......................... 1,558 1,240 1,192 4,327 12,567
Selling, general and administrative.. 5,268 5,368 5,427 11,653 34,685
Depreciation and amortization........ 188 238 237 1,092 4,328
Purchased research and development... -- -- -- -- 9,000
Compensatory stock awards............ -- -- -- -- 57
Asset impairment and restructuring
costs............................... -- -- -- 11,136 1,874
------- ------- ------- ------- -------
Total operating expense.............. 7,014 6,846 6,856 28,208 62,511
Operating income (loss)................ (630) (774) (505) (9,934) 1,212
Other expense (income):
Interest, net........................ 54 69 82 344 3,488
Other, net........................... (21) (122) (5) (223) (81)
------- ------- ------- ------- -------
(Loss) before income taxes............. (663) (721) (582) (10,055) (2,195)
Income tax benefit..................... (64) (227) (868) (1,324) (334)
------- ------- ------- ------- -------
Net income (loss)...................... (599) (494) 286 (8,731) (1,861)
Accretive dividend..................... -- -- -- -- 800
------- ------- ------- ------- -------
Net income (loss) available to common
stockholders.......................... $ (599) $ (494) $ 286 $(8,731) $(2,661)
======= ======= ======= ======= =======
Net (loss) per share:
Basic and diluted.................... $ (1.79) $ (0.39)
Shares used in computing net (loss) per
share:
Basic and diluted.................... 4,880 6,780

Other Data:
EBITDA(2).............................. $ (421) $ (414) $ (263) $ 2,517 $16,552
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
January 31, December 31,
------------------------- -----------------
1995 1996 1997 1997 1998
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Consolidated Balance Sheet
Data:
Cash and cash equivalents.... $ 9 $ 254 $ 216 $ 1,626 $ 8,552
Working capital.............. (1,847) (1,599) (1,841) (4,266) 481
Total assets................. 2,106 2,251 5,682 31,125 127,784
Long-term debt, less current
portion..................... 839 399 1,265 7,289 68,358
Convertible, redeemable
preferred stock............. -- -- -- -- 8,500
Stockholders' equity......... (2,076) (2,590) (768) 3,631 16,255
</TABLE>
- --------
(1) On July 10, 1997, InfoCure completed the contemporaneous acquisition of the
Founding Companies. For accounting purposes, AMC is the predecessor to
InfoCure and the "accounting acquirer" of the Founding Companies. For
periods prior to July 10, 1997, the historical consolidated financial
statement of operations data reflect the operations of AMC. For periods
subsequent to July 10, 1997, the historical consolidated financial
statement of operations data reflect the operations of InfoCure and each of
InfoCure's acquisitions from the effective date of each such acquisition,
except for the RADMAN acquisition which was accounted for as a pooling of
interests and is reflected retroactively for all periods presented. See
"The Company," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Business" and Notes 1 and 3 to the
Consolidated Financial Statements of InfoCure.
(2) Represents earnings before interest expense, provision (benefit) for income
taxes, depreciation and amortization, purchased research and development,
compensatory stock awards and asset impairment and restructuring charges
("EBITDA"). EBITDA is not a measurement in accordance with generally
accepted accounting principles ("GAAP") and should not be considered an
alternative to, or more meaningful than, income from operations, net income
or cash flows as defined by GAAP or as a measure of InfoCure's
profitability or liquidity. All registrants do not calculate EBITDA in the
same manner and, accordingly, EBITDA may not be comparable with other
registrants. InfoCure has included information concerning EBITDA herein
because management believes EBITDA provides a useful measure of InfoCure's
performance.

22
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Unaudited Pro
Forma Combined Financial Statements of InfoCure and Notes thereto, and the
Consolidated Financial Statements of InfoCure and Notes thereto included
elsewhere in this prospectus.

Overview

InfoCure is a leading national provider of healthcare practice management
software products and services to targeted healthcare specialties. InfoCure
derives revenue from the sale of practice management software, the resale of
related hardware and the provision of customer support and services. Software
sales include the license of new software products and software upgrades.
InfoCure resells hardware components in connection with a portion of its
software sales. Customer support and services include ongoing product
maintenance and support, the installation of new and upgraded software and
hardware, customer training and EDI. Customer support and services typically
are provided either pursuant to renewable annual contracts or on a fee basis.
InfoCure derives revenue from both customers and third-party clearinghouses by
providing EDI services through contractual arrangements with such parties.

InfoCure bases its revenue recognition policies for sales of software on the
provisions of the American Institute of Certified Public Accountants'
("AICPA's") Statement of Position ("SOP") 97-2 "Software Revenue Recognition."
Revenue from software sales is recognized upon shipment in instances where
InfoCure has evidence of a contract, the fee charged is fixed and determinable
and collection is probable. Hardware resales are recognized upon product
shipment. Revenue from support and maintenance contracts, which are typically
one year in length, is recognized ratably over the life of the contract.
Revenue from other services is recognized as the services are provided.

Depreciation and amortization expense results primarily from the amortization
of goodwill, which represents the excess of the consideration paid by InfoCure
over the fair value of the net assets acquired in acquisitions accounted for
under the purchase method of accounting. As of December 31, 1998, InfoCure had
goodwill, net of accumulated amortization, of $72.2 million. Goodwill is
amortized over its estimated useful life of 15 years. This goodwill results in
an amortization expense estimated to total approximately $5.0 million per year.
Depreciation and amortization expense also includes depreciation of property
and equipment and amortization of software development costs. Property and
equipment are assigned lives ranging from three to five years. Software
development costs are expensed until technological feasibility is achieved.
Costs incurred after achievement of technological feasibility and before
general release are capitalized and generally amortized over a four-year life.
Costs incurred after general release are expensed as incurred.

InfoCure completed nine acquisitions of practice management software vendors
between July 10, 1997 and December 31, 1998. These acquisitions were the
primary source of the substantial growth in InfoCure's revenue and other
components of its operating results. Therefore, a year to year comparison of
InfoCure's results of operations for the prior two years is not necessarily
indicative of future results.

Restructuring Plan

Effective December 1, 1997, InfoCure adopted a plan (the "Restructuring
Plan") to restructure its operations by consolidating existing facilities and
acquired operations. In connection with the Restructuring Plan, which was
completed in the second quarter of 1998, InfoCure took restructuring charges
totaling $13.0 million, of which $11.1 million was recorded in the fourth
quarter of 1997 and $1.9 million was recorded in the first six months of 1998.
As a result of the Restructuring Plan, InfoCure wrote down approximately:

. $7.8 million representing an impairment of goodwill associated with prior
acquisitions and capitalized software for discontinued products of
approximately $6.3 million and $1.5 million, respectively;

. $3.3 million reflecting the recognition of contingent consideration
earned or deemed payable under the terms of certain acquisition agreements
for acquired companies affected by the Restructuring Plan;

23
<PAGE>

. $1.1 million representing severance and other termination benefits for
the termination of certain redundant staff positions;

. $461,000 reflecting the elimination of redundant facilities and
cancellation of leases and other contracts; and

. $296,000 representing other asset write downs and costs associated with
the Restructuring Plan.

For a more detailed discussion of these restructuring charges, see Note 4 to
the Consolidated Financial Statements of InfoCure.

Change in Fiscal Year

In the first quarter of 1998, InfoCure changed its fiscal year end from
January 31 to December 31. As a result, InfoCure's fiscal year beginning
February 1, 1997 ended on December 31, 1997 and reflected eleven months of
operations. The consolidated financial data provided herein reports InfoCure's
financial statements as of and for the fiscal year ended December 31, 1998 and
eleven months ended December 31, 1997.

In Process Research and Development Write-off

On October 23, 1998, InfoCure acquired the assets of HSD, a former division
of The Reynolds and Reynolds Company. In connection with the HSD Acquisition,
InfoCure retained an independent appraiser to complete a valuation of the
assets of HSD, including valuation of certain in process research and
development. InfoCure identified three projects for which technological
feasibility had not been achieved as of the acquisition date and for which
there was no alternative future use. The products include POWERRmanager, a next
generation physician practice management system, the Year 2000 ready version of
ProMed, a Unix-based practice management system, and the Year 2000 ready
version of Kredo, a practice management system running on the IBM AS/400
platform.

The value associated with these projects was determined using a discounted
cashflow model with a risk adjusted discount rate of 30%. The model reflects
revenue to be generated beginning in the later part of 1999 and continuing
through 2003 for ProMed and Kredo and 2004 for POWERRmanager. The valuation
also incorporated a stage of completion methodology where the value was
adjusted based on the technology's percentage of completion.

As of the acquisition date, the majority of the core modules of POWERRmanager
had been coded. Product testing began in the fourth quarter of 1998, and
InfoCure estimates completion of testing and documentation in the first quarter
of 1999 and initial beta testing in the second quarter of 1999. The ProMed and
Kredo products are expected to be completed in the first quarter of 1999.
Upgrades for the existing customer base will occur in the second and third
quarter of 1999. The schedule below details the status of each product as of
the acquisition date and its appraised in process research and development
("IPRD") value (dollar amounts in thousands).

<TABLE>
<CAPTION>
Post-acquisition
Estimated Pre-acquisition Costs to Percentage of
Project Completion Costs Complete Completion IPRD Value
------- ------------- --------------- ---------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
POWERRmanager 2nd Qtr. 1999 $9,001 $474 95% $4,800
Y2K Compliant
ProMed 1st Qtr. 1999 76 47 62 3,100
Y2K Compliant
Kredo 1st Qtr. 1999 848 357 70 1,300
------ ---- --- ------
Total $9,925 $878 92% $9,200
====== ==== === ======
</TABLE>

Based on the results of the appraisal, $9.0 million was attributed to the in
process research and development purchased in the HSD Acquisition and expensed
in the fourth quarter of 1998 when the acquisition was completed.

24
<PAGE>

Results of Operations

The following table sets forth certain statement of operations data as a
percentage of gross revenue for the periods indicated:

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January 31, 1997 December 31, 1997 December 31, 1998
---------------- ----------------- -----------------
<S> <C> <C> <C>
Consolidated Statement of
Operations Data:
Revenue:
Systems and software..... 60.7 % 53.3 % 54.1 %
Maintenance, support and
services................ 39.3 46.7 45.9
----- ----- -----
Total revenue............. 100.0 100.0 100.0
Operating expense:
Hardware and other items
purchased for resale.... 18.8 23.7 19.7
Selling, general and
administrative.......... 85.5 63.8 54.5
Depreciation and
amortization............ 3.7 6.0 6.8
Purchased research and
development............. -- -- 14.1
Asset impairment and
restructuring costs..... -- 60.9 2.9
----- ----- -----
Total operating expense... 108.0 154.4 98.0
Operating income (loss)... (8.0) (54.4) 2.0
Other expense (income):
Interest, net............ 1.3 1.9 5.5
Other, net............... (0.1) (1.3) (0.1)
----- ----- -----
Loss before income taxes.. (9.2) (55.0) (3.4)
Income tax benefit........ (13.7) (7.2) (0.5)
----- ----- -----
Net income (loss)......... 4.5 % (47.8)% (2.9)%
===== ===== =====
</TABLE>

Year Ended December 31, 1998 Compared To Eleven Months Ended December 31, 1997

Total Revenue. Total revenue for the year ended December 31, 1998 was $63.7
million compared to total revenue of $18.3 million for the eleven months ended
December 31, 1997. The increase of $45.4 million in total revenue reflects
primarily the combined revenue of the Founding Companies for the entire twelve
month period in 1998 and revenue from the Subsequent Acquisitions as of their
respective effective dates, except for the RADMAN acquisition which was
accounted for as a pooling of interests and is reflected retroactively for all
periods presented. Revenue for periods prior to July 10, 1997 includes only
revenue of InfoCure's predecessor, AMC, its consolidated subsidiaries and
RADMAN. Systems and software revenue was $34.5 million for the year ended
December 31, 1998, or 54.1% of total revenue, compared to $9.7 million, or
53.3% of total revenue, for the eleven months ended December 31, 1997. The
increase as a percentage of total revenue was primarily a result of a higher
percentage mix of systems and software revenue among acquired companies and
relatively strong demand for several of InfoCure's software products in the
year ended December 31, 1998. Maintenance, support and services revenue was
$29.2 million, or 45.9% of total revenue for the year ended December 31, 1998,
compared to $8.5 million, or 46.7% of total revenue, for the eleven months
ended December 31, 1997. Management anticipates that maintenance, support and
services revenue will increase as a percentage of total revenue in future
periods.

Hardware and Other Items Purchased for Resale. Hardware and other items
purchased for resale consist of costs incurred to purchase hardware, and
include costs of forms and postage, outsourced hardware maintenance, third-
party software and other items for resale in connection with sales of new
systems and software. The costs required to install such systems and to perform
software maintenance and support services are reported in selling, general and
administrative expenses. For the year ended December 31, 1998, cost of hardware
and other items purchased for resale was $12.6 million, or 19.7% of revenue,
compared to $4.3 million, or 23.7% of revenue, for the eleven months ended
December 31, 1997. The increase in cost of hardware and other items purchased
for resale reflects primarily the increase resulting from InfoCure's
acquisitions. The decrease in cost of hardware and other items purchased for
resale as a percentage of revenue reflects a lower percentage of revenue from
sales of hardware.

25
<PAGE>

Selling, General and Administrative. Selling, general and administrative
expense includes salaries and benefits, product development expense, product
maintenance and support expense, variable commissions and bonuses,
advertisement and promotional marketing materials, travel, communications,
facilities, insurance and other administrative expense. Selling, general and
administrative expense increased to $34.7 million, or 54.5% of revenue, for the
year ended December 31, 1998 compared to $11.7 million, or 63.8% of revenue,
for the eleven months ended December 31, 1997. This increase reflects primarily
an increase in the marketing and administrative personnel and other selling and
administrative costs necessary to support the consolidated businesses of the
acquired companies. The decrease in selling, general and administrative expense
as a percentage of revenue reflects InfoCure's ability to take advantage of
economies of scale resulting from the larger installed customer base and a
higher base of revenue realized from its acquisitions.

Depreciation and Amortization. Depreciation and amortization expense was $4.3
million, or 6.8% of revenue, for the year ended December 31, 1998 compared to
$1.1 million or 6.0% of revenue, for the eleven months ended December 31, 1997.
Increased depreciation and amortization expense represents primarily the
significant increase in goodwill arising from InfoCure's acquisitions.

Purchased Research and Development. Purchased research and development
expense was $9.0 million, or 14.1% of total revenue, for the year ended
December 31, 1998. This expense represents charges related to the write-off of
certain in process research and development costs associated with the HSD
Acquisition.

Asset Impairment and Restructuring Costs. Asset impairment and restructuring
costs were $1.9 million, or 2.9% of total revenue for the year ended December
31, 1998 compared to $11.1 million, or 60.9% of total revenue for the eleven
months ended December 31, 1997. This decrease represents the completion of the
Restructuring Plan in the second quarter of 1998.

Operating Income (Loss). Income from operations was $1.2 million, or 2.0% of
revenue, for the year ended December 31, 1998 compared to a loss of $9.9
million, or 54.4% of revenue, for the eleven months ended December 31, 1997.
This increase represents primarily the profitable results of operations of
InfoCure's acquisitions, as well as efficiencies realized by InfoCure from a
larger installed customer base and higher total revenue.

Interest, Net. Net interest expense increased to $3.5 million for the year
ended December 31, 1998 compared to $344,000 for the eleven months ended
December 31, 1997. This increase reflects primarily increases in interest
expense associated with indebtedness incurred to complete InfoCure's
acquisitions.

Other, Net. Net other income decreased to $81,000 for the year ended December
31, 1998 compared to $223,000 for the eleven months ended December 31, 1997.
This decrease relates primarily to one-time other income related to the RADMAN
merger.

Income Tax Benefit. The benefit for income taxes was $334,000 for the year
ended December 31, 1998 compared to $1.3 million for the eleven months ended
December 31, 1997.

Eleven Months Ended December 31, 1997 Compared to Year Ended January 31, 1997

Total Revenue. Total revenue for the eleven months ended December 31, 1997
was $18.3 million compared to total revenue of $6.4 million for the year ended
January 31, 1997. This increase of $11.9 million in total revenue primarily
reflects the completion of the acquisition of the Founding Companies and
Subsequent Acquisitions completed in 1997 as of their respective effective
dates. Revenue for periods prior to July 10, 1997 included only revenue of
InfoCure's predecessor, AMC, and its consolidated subsidiaries. Systems and
software revenue was $9.7 million for the eleven months ended December 31,
1997, or 53.3% of revenue, compared to $3.9 million, or 60.7% of revenue, for
the year ended January 31, 1997. Maintenance, support and services revenue was
$8.5 million for the eleven months ended December 31, 1997, or 46.7% of
revenue, compared to $2.5 million, or 39.3% of revenue, for the year ended
January 31, 1997.

Hardware and Other Items Purchased for Resale. For the eleven months ended
December 31, 1997, cost of hardware and other items purchased for resale was
$4.3 million, or 23.7% of total revenue, compared to $1.2 million, or 18.8% of
total revenue, for the year ended January 31, 1997. The increase in cost of

26
<PAGE>

hardware and other items purchased for resale reflects primarily the increase
resulting from InfoCure's acquisitions. The increase in cost of hardware and
other items purchased for resale as a percentage of revenue reflects increased
revenue from sales of hardware as a percentage of total revenue.

Selling, General and Administrative. Selling, general and administrative
expense increased to $11.7 million, or 63.8% of revenue, for the eleven months
ended December 31, 1997, compared to $5.4 million, or 85.5% of revenue, for the
year ended January 31, 1997. This increase reflects primarily additional
marketing and administrative personnel and other selling and administrative
costs necessary to support the significantly expanded business associated with
InfoCure's acquisitions completed during the eleven months ended December 31,
1997. The decrease in selling, general and administrative expense as a
percentage of revenue reflects InfoCure's ability to take advantage of
economies of scale resulting from the larger installed customer base and a
higher base of revenue realized from its acquisitions.

Depreciation and Amortization. Depreciation and amortization expense was $1.1
million, or 6.0% of revenue, for the eleven months ended December 31, 1997,
compared to $237,000, or 3.7% of revenue, for the year ended January 31, 1997.
Increased depreciation and amortization expense represents primarily the
significant increase in goodwill resulting from InfoCure's acquisitions
completed during the eleven months ended December 31, 1997.

Asset Impairment and Restructuring Costs. In the eleven months ended December
31, 1997, InfoCure incurred a cost of $11.1 million associated with the
Restructuring Plan.

Operating Income (Loss). Loss from operations was $9.9 million, or 54.4% of
revenue, for the eleven months ended December 31, 1997, compared to the loss
from operations of $505,000, or 8.0% of revenue, for the year ended January 31,
1997. The loss from operations resulted primarily from the costs associated
with the Restructuring Plan.

Interest, Net. Net interest expense increased to $344,000 for the eleven
months ended December 31, 1997 compared to $82,000 for the year ended January
31, 1997. This increase reflects primarily increases in interest expense
associated with indebtedness incurred to complete InfoCure's acquisitions.

Other, Net. Other, net increased to $223,000 for the eleven months ended
December 31, 1997, compared to $5,000 for the year ended January 31, 1997. This
increase relates primarily to one-time other income related to the RADMAN
merger.

Income Taxes (Benefit). InfoCure realized income tax benefits in the amounts
of $1.3 million and $868,000 for the eleven months ended December 31, 1997 and
the year ended January 31, 1997, respectively.

Liquidity and Capital Resources

Since its inception, InfoCure has financed its operations through a
combination of commercial borrowings, cash generated from operations and sales
of equity. As of December 31, 1998, InfoCure had cash and cash equivalents of
$8.6 million and working capital of $481,000. During the year ended December
31, 1998, InfoCure generated $6.1 million of cash from operating activities,
representing principally a net loss of $1.9 million plus non-cash charges of
$9.0 million and $1.9 million for in process research and development and asset
impairment, respectively, and non-cash depreciation and amortization expenses
of $4.3 million offset by an increase in accounts receivable of $7.5 million.

During the year ended December 31, 1998, cash used in investing activities
was $65.9 million, representing primarily cash used for acquisitions of $60.2
million and property and equipment purchases of $2.6 million. Of the cash
invested in acquisitions, $42.0 million, $12.8 million and $5.3 million were
used to acquire HSD, MDI and MSI, respectively. The HSD Acquisition provided
InfoCure with radiology, anesthesiology and enterprise-wide medical practice
and practice management systems for management service organizations. The MDI
acquisition provided InfoCure with its Windows-based client/server practice

27
<PAGE>

management software serving oral and maxillofacial surgery practices. This
software is being further developed by InfoCure as a core product serving these
and other specialties. The MSI acquisition provided InfoCure with a leading
position among office-based anesthesiology practices. A substantial portion of
the property and equipment costs represented InfoCure's investment in its
telecommunications infrastructure.

During the year ended December 31, 1998, InfoCure generated cash from
financing activities of $66.7 million, including $55.2 million net proceeds
from the Line of Credit, $7.8 million net proceeds from the issuance of the
Series A Preferred and $6.8 million net proceeds from the Institutional
Placement. These net proceeds were principally used to fund InfoCure's
acquisitions of PACE, MDI and MSI. The PACE acquisition provided InfoCure with
its Ideal core software product for larger general medical practices utilizing
AS/400 systems. In October 1998, InfoCure used $41.2 million from the Line of
Credit to fund a portion of the purchase price for HSD.

The Line of Credit is comprised of (a) a $10.0 million term loan (the "Term
Loan"); (b) a $20.0 million acquisition loan (the "Acquisition Loan"); and (c)
a $40.0 million convertible bridge loan (the "Convertible Bridge Loan").
Outstanding principal amounts under the Term Loan and Acquisition Loan are due
in 16 equal quarterly installments commencing January 1999 as follows: for the
Term Loan, installments of $527,000 each and for the Acquisition Loan,
installments of $1.2 million each. Outstanding principal amounts under the
Convertible Bridge Loan are due quarterly commencing April 1, 1999, and are
payable as follows: four payments of $1.0 million each; eight payments of $2.0
million each; two payments of $4.0 million each; and one payment in the amount
of the balance outstanding. The Convertible Bridge Loan must be repaid to the
extent of proceeds received by InfoCure from any public offering of securities.
Additionally, the lender has the right to demand a $10.0 million prepayment of
the Convertible Bridge Loan at any time before May 22, 1999 and is entitled to
certain additional annual prepayments based on InfoCure's excess cash flow.
Prepayment premiums ranging from 1% to 3% of principal outstanding apply to
early payment of principal amounts under the Term Loan and the Acquisition
Loan. The interest rates on the Term Loan and the Convertible Bridge Loan are
fixed at 9.50% per year. The interest rate on the Acquisition Loan is the
lender's base rate plus 1% through March 31, 1999. After March 31, 1999, the
rate is the lender's base rate plus a percentage based on InfoCure's senior
debt service coverage ratio. Interest on all three loans is due quarterly, in
arrears, on the same dates as the principal payments. The Line of Credit must
be paid in full not later than October 28, 2002. The Line of Credit is secured
by substantially all of InfoCure's assets. InfoCure plans to prepay the
outstanding balance on the Line of Credit with the proceeds from this offering,
which may result in a charge of as much as $5.1 million for the early
extinguishment of this debt in the first or second quarter of 1999. See "Risk
Factors--We May Have Charges Associated with Acquisitions and Other Events."

On February 9, 1998, InfoCure completed the private placement of 850,060
shares of Series A Preferred, resulting in gross proceeds to InfoCure of $8.5
million and net proceeds of approximately $7.8 million after payment of selling
commissions to the placement agent for the offering and other expenses of the
offering. InfoCure granted to the placement agent a warrant to acquire 100,000
shares of InfoCure's common stock at an exercise price of $9.00 per share. The
Consolidated Financial Statements of InfoCure reflect an accretive dividend
attributable to the preferred stockholders in the amount of $800,000 with
respect to the issuance costs and the fair market value of the warrant related
to the Series A Preferred. The Series A Preferred will convert to 1,000,070
shares of common stock upon the completion of this offering.

On September 28, 1998, InfoCure completed the sale of 203,338 shares of
common stock for $2.5 million in the Institutional Placement. The Investor
committed to invest an additional $7.5 million, which must be invested from
time to time at the request of InfoCure in its sole discretion and subject to
certain price and trading volume limitations, upon the exercise of Put Options
through March 28, 2000. Subsequently, InfoCure completed the sale of 147,984
shares of common stock for $2.5 million completed in December 1998 and the sale
of 80,000 shares of common stock for $2.0 million in January 1999. See "The
Company" and Note 11 to the Consolidated Financial Statements of InfoCure.

28
<PAGE>

In connection with the HSD Acquisition, InfoCure delivered to The Reynolds
and Reynolds Company a $10.0 million, five-year, convertible promissory note,
bearing interest per annum at rates commencing at 8.0% and increasing each year
to a maximum of 14.0%. The note is convertible at the option of InfoCure during
the first year of the term into common stock at a price based on the price of
the common stock in an underwritten public offering or the average market value
of the common stock over a period of time prior to the conversion date. In
addition, InfoCure delivered to The Reynolds and Reynolds Company a $2.0
million subordinated promissory note payable within 120 days of the closing of
the HSD Acquisition. See Note 14 to the Consolidated Financial Statements of
InfoCure.

InfoCure believes that the proceeds of this offering, together with its
operating cash flow and available funds under the Line of Credit and the
Institutional Placement, will be sufficient to fund InfoCure's working capital
requirements through at least the next twelve months. InfoCure currently
intends to use proceeds from this offering to repay indebtedness under the Line
of Credit and the $10.0 million note payable to the former owner of HSD.
InfoCure expects to finance future acquisitions, if any, through one or more of
the following sources: cash from operations, the Line of Credit or other
indebtedness, and issuances of common stock or other securities. No assurance
can be given that InfoCure will generate cash from operations or that external
capital will be available on terms acceptable to InfoCure, or at all. See "Use
of Proceeds."

New Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income. SFAS No. 130 requires companies to display, with the same
prominence as other financial statements, the components of other comprehensive
income. SFAS No. 130 requires that an enterprise classify items of other
comprehensive income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of the balance
sheet. SFAS No. 130 was adopted in 1998 but does not have any impact on
InfoCure's consolidated financial statements.

In June 1997, the FASB issued SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information, which supersedes SFAS No. 14, Financial
Reporting for Segments of a Business Enterprise. SFAS No. 131 establishes
standards for the way that public companies report information about operating
segments in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements issued to
the public. It also establishes standards for disclosures regarding products
and services, geographic areas and major customers. SFAS No. 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. SFAS No. 131 was adopted in 1998 but had no effect on InfoCure's
financial statements.

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 requires companies to
recognize all derivative contracts as either assets or liabilities on the
balance sheet and to measure them at fair value. If certain conditions are met,
a derivative may be specifically designated as a hedge, the objective of which
is to match the timing of gain or loss recognition on the hedging derivative
with the recognition of (i) the changes in the fair value of the hedged asset
or liability that are attributable to the hedged risk, or (ii) the earnings
effect of the hedged forecasted transaction. For a derivative not designated as
a hedging instrument, the gain or loss is recognized as income in the period of
change. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. Historically, InfoCure has not entered into
derivative contracts either to hedge existing risks or for speculative
purposes. Accordingly, InfoCure does not expect adoption of the new standard on
January 1, 2000 to affect its financial statements.

Statement of Position ("SOP") 97-2, Software Revenue Recognition, issued in
October 1997, superseded SOP 91-1 and was effective for InfoCure for
transactions entered into after December 31, 1997. This statement provides
guidance on applying GAAP in recognizing revenue on software transactions and
establishes certain criteria for revenue recognition. InfoCure adopted SOP 97-2
in the first quarter of 1998. The adoption of this statement did not have a
significant impact on InfoCure's consolidated financial statements and is not
expected to have a significant impact in the future.

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<PAGE>

SOP 98-1, Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use, issued in April 1998, provides guidance on accounting for the
costs of computer software developed or obtained for internal use and
determining whether computer software is for internal use. This statement is
effective for fiscal years beginning after December 15, 1998. Adoption of this
statement is not expected to have a significant impact on InfoCure's financial
statements.

Costs Related to Year 2000 Readiness

Many installed computer systems and software products are designed to accept
and process year codes with only two digits in their date fields. These systems
and products may not be "Year 2000 ready" because they may not operate properly
when requested to distinguish dates beginning in the year 2000. InfoCure has
implemented a plan in which it assesses, modifies and tests its products to
determine their Year 2000 readiness. As a result of these assessments,
modifications and tests, InfoCure believes that a majority of its products are
Year 2000 ready. For those of its products that it intends to support, InfoCure
has implemented a program for developing and installing modifications that
address date processing issues. In general, these modifications represent
relatively short segments of software code. Customers that are on current
maintenance contracts qualify to receive these modifications. InfoCure believes
that it will complete its Year 2000 readiness program by July 1999, but
InfoCure cannot be certain that it will do so. InfoCure could experience delays
or failures developing or implementing Year 2000 readiness modifications.
InfoCure also may be required to hire additional technical personnel to address
Year 2000 readiness issues, and InfoCure cannot guarantee that such additional
personnel will be available. In addition, customers may not install software
solutions received by us in a proper or timely manner, and InfoCure may not be
able to locate affected customers that are not currently a party to a
maintenance contract. Further, because a customer's products are often
interfaced with the customer's existing third-party applications, its products,
and potentially InfoCure's products, may not operate properly due to the
failure of such third-party applications to be Year 2000 ready. InfoCure
estimates that the remaining costs to complete its Year 2000 readiness program
are approximately $400,000. These estimates are based on assumptions that
InfoCure believes to be reasonable at this time; however, no assurance can be
given that these assumptions will remain accurate. While InfoCure does not
expect that the failure of any of its products to be Year 2000 ready will have
a material adverse effect on its business or results of operations, InfoCure
cannot guarantee that any such failure would not have such an effect.

Multiple lawsuits relating to Year 2000 issues have been filed against
certain of InfoCure's competitors. The plaintiffs in these lawsuits have sought
compensatory damages and equitable and injunctive relief. InfoCure has taken
measures to avoid these types of lawsuits. However, one of InfoCure's customers
has initiated an arbitration claim against InfoCure claiming that software it
purchased from InfoCure is not Year 2000 ready. InfoCure is no longer selling
or supporting this software and is attempting to resolve this dispute. InfoCure
believes that this arbitration, regardless of its outcome, will not result in a
material adverse effect on InfoCure. As InfoCure develops and implements its
Year 2000 readiness plan, InfoCure cannot guarantee that additional Year 2000
related claims will not be brought against it in the future, that the assertion
of such claims will not result in litigation or that InfoCure would prevail in
such litigation. Litigation, regardless of its outcome, could result in
substantial costs, divert management's attention from its operations and impact
customer purchasing decisions. Any such litigation could have a material
adverse effect on future results.

The Year 2000 problem also creates a risk of unforeseen problems in the
computer systems InfoCure uses in its business and in the systems of third
parties with whom InfoCure conducts business. InfoCure has substantially
completed its assessment of its software and hardware systems and InfoCure
believes that the substantial majority of its products are Year 2000 ready.
InfoCure also has contacted parties with whom InfoCure conducts a material
amount of business to assess the Year 2000 readiness of the software and
systems in their businesses. InfoCure intends to complete its determination of
Year 2000 readiness by these third parties by March 1999 and to develop
strategies to assure that no material business disruptions result from third-
party Year 2000 problems. These strategies may include demanding assurance that
current business partners achieve timely Year 2000 readiness or, in the absence
of such assurance, contracting with alternate third parties or developing
solutions to work around any such third-party Year 2000 readiness issues.
Because InfoCure has not yet determined the expense and related potential
effect of Year 2000 readiness by its third-party business partners, InfoCure
cannot guarantee that non-readiness by these third parties will not have a
material adverse effect on future results.

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<PAGE>

BUSINESS

InfoCure is a leading national provider of healthcare practice management
software products and services to targeted healthcare practice specialties.
InfoCure's systems are used primarily by small to mid-size medical practices
within the following specialty practice areas: anesthesiology, emergency
medicine, oral and maxillofacial surgery, orthodontics, pathology, podiatry and
radiology. In addition, InfoCure is the leading provider of software products
and services to larger medical practices utilizing the IBM AS/400 computer
platform. Our systems include software and related hardware, ongoing training
and support and electronic data interchange, or "EDI," services. These systems
are designed to increase the quality and reduce the cost of providing care by
allowing physicians to manage their practices more efficiently, contain costs
and reduce the administrative burdens created by an increasingly complex
healthcare environment.

InfoCure generates revenue primarily through the sale of practice management
software, the resale of related hardware and the provision of ongoing
maintenance, support and EDI services under contractual arrangements. As of
February 24, 1999, InfoCure had an installed base of 11,650 customer sites
representing an estimated 66,000 healthcare providers and had systems installed
in all 50 states. Since October 1997, InfoCure has acquired eleven practice
management vendors, increasing its pro forma revenue to approximately
$117.0 million for the year ended December 31, 1998. As a result of InfoCure's
business model, which includes contractually recurring fees for ongoing
maintenance, support and EDI services, approximately 50% of total revenue is
recurring in nature.

Industry Overview

Healthcare costs in the United States have risen dramatically over the past
two decades and now represent approximately $1.0 trillion or 14% of the annual
gross domestic product. Federal and state governments, insurance carriers and
other third-party payors have moved aggressively to control these rising costs.
One of the ways in which these entities have managed rising costs has been to
employ alternative reimbursement models to replace the fee-for-service
reimbursement model which has been the traditional basis for payment for
healthcare services. Such alternative reimbursement models include managed
care, fixed-fee and capitated models of reimbursement. The result of these
generally more restrictive reimbursement practices has been a dramatic increase
in the complexity of accounting, billing and collecting payment for healthcare
services.

To address these challenges, healthcare providers are increasingly utilizing
information technology, including practice management systems. While spending
for information technology within the healthcare industry has historically been
below that of other industries, healthcare information technology expenditures
are expected to grow from $13.6 billion in 1997 to $21.0 billion by 2000.
Although the practice management segment of the healthcare industry has
historically lagged behind the healthcare industry as a whole in spending for
information technology, expenditures on practice management systems have grown
at a compound annual rate of approximately 26% from 1993 through 1997 and are
projected to grow at a comparable rate through 2000.

Practice management systems include a range of software products and services
for physicians and other healthcare providers. Most practice management systems
provide several common functions, including practice administration functions,
such as patient scheduling; financial functions, such as patient billing and
receivables management; and may include clinical functions, such as
preventative care notification. Beyond these common functions, the continued
evolution of information and telecommunication technologies has led to the
development of electronic commerce tools for integration with practice
management systems. These tools can help to improve a healthcare practice's
cash flow by facilitating EDI, thereby enabling more accurate and rapid
submission of claims to third-party payors and more rapid receipt of
corresponding reimbursements.

Currently, nearly half of the total health claims submitted in the United
States annually are processed manually. Paper claims require more time and are
significantly more expensive to prepare, file and process than

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<PAGE>

electronically-submitted claims. Recent industry statistics suggest that the
combined costs to payors and providers of processing a manual claim total
approximately 15% of the average claim amount. EDI transactions, on the other
hand, can be processed directly with third-party payors or channeled through
processing clearinghouses at significantly lower costs to the provider and the
payor. Because of these significant cost savings, some payors are beginning to
require practitioners to submit reimbursement claims electronically.

Providers have also recognized a growing need for decision support tools that
access and analyze the increasing volume of financial and clinical information
generated by their practices. As the continued evolution of managed care
requires physicians to be "at risk" for the costs associated with providing
healthcare services, individual physicians will need advanced information
technology to aggregate and evaluate financial and clinical information in an
effort to manage their practices more efficiently and profitably.

The practice management systems industry in the United States is highly
fragmented, with a large number of relatively small, regionally focused
companies and few national vendors. Most of these smaller competitors lack the
financial and technical resources to develop, effectively market and support
the advanced software products demanded by the marketplace. Many of these
vendors are increasingly willing to combine with larger practice management
systems vendors that have substantially greater financial, technical and
managerial resources.

Strategy

InfoCure's objective is to become the leading provider of advanced,
specialty-specific practice management systems within targeted healthcare
specialties. InfoCure's principal strategies to achieve this objective include:

Continue to take advantage of niche market opportunities. InfoCure has
developed significant market share within targeted niche healthcare
specialties. These specialties are attractive to InfoCure because they have
specific needs requiring related practice expertise. In addition, these
segments are highly fragmented with several significant, but typically not
dominant, players. InfoCure plans to continue to enhance its leadership
position within the markets it currently serves while broadening its presence
in new market niches through both internal marketing initiatives and additional
strategic acquisitions.

Cross-sell services and pursue opportunities with existing customers. With
over 11,600 customer sites, InfoCure has the ability to generate significant
growth by cross-selling additional products and services to its installed base.
In addition, InfoCure provides its customers with ongoing maintenance, support
and EDI services. These services are important sources of recurring revenue to
InfoCure. InfoCure intends to focus attention on cross-selling its advanced,
value-added products, such as EDI services and InfoMine, to these existing
customers. InfoCure believes that its strong relationship with customers
positions InfoCure to be the vendor of choice within its client base.

Expand the features of products and services offered. Through both internal
development and acquisitions, InfoCure intends to continue to provide
increasingly advanced technology solutions and additional customized services.
InfoCure believes this will allow InfoCure not only to capture new customers
but also to offer additional products and services to InfoCure's existing
customer base.

Establish a national marketing identity. InfoCure has implemented efforts to
create a strong brand identity within the physician practice management
software industry. InfoCure has done so by tying all of its products together
with common marketing materials under one corporate name. In addition, InfoCure
has commenced InfoTour, a seminar program which enables InfoCure to meet face-
to-face with customers to strengthen its relationship with them while apprising
them of the new products and features available within InfoCure's core

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<PAGE>

suite of products. InfoCure believes these continuing efforts will increase
awareness of its latest technologies within its targeted market niches.

Take advantage of economies of scale. InfoCure has made significant
investments in its employees and the facilities and equipment necessary to
support them. InfoCure recently implemented a company-wide rollout of advanced
communications, accounting and client tracking systems. As a result, InfoCure
has built an infrastructure that it believes can support a level of business
significantly larger than currently exists. InfoCure intends to continue to
leverage this investment in infrastructure through both internal growth and
strategic acquisitions.

Products and Information Services

InfoCure offers a wide range of practice management software products to
healthcare providers in targeted specialty markets. These products are designed
to automate the administrative, financial and clinical information management
functions of office-based, hospital-based and enterprise-wide healthcare
practices. In addition to providing standard practice management features, many
of InfoCure's software products offer advanced features that serve the specific
needs of InfoCure's targeted healthcare practice specialties. For example,
anesthesiologists are required to bill their services on the basis of time
units; oral and maxillofacial surgeons must have the capability to process both
medical and dental claims; orthodontists must have the ability to offer their
patients contract billing alternatives; and radiologists require specialized
scheduling, film tracking and image delivery capabilities. InfoCure also offers
decision support software, add-on software modules and EDI services.

Specialty Markets

As of February 24, 1999, InfoCure had an installed base of 11,650 customer
sites representing an estimated 66,000 healthcare providers and had systems
installed in 50 states. The number of customer sites and the estimated number
of providers in InfoCure's targeted specialties are set forth in the table
below. InfoCure has focused its product development and marketing efforts on
these practice specialties.

<TABLE>
<CAPTION>
Number of Estimated Number
Practice Specialty Customer Sites of Providers
------------------ -------------- ----------------
<S> <C> <C>
Anesthesiology........................... 163 5,000
Dental................................... 832 1,600
Dermatology.............................. 260 500
Emergency Medicine....................... 56 5,500
General Medical.......................... 1,431 7,300
Larger Medical Practices Utilizing AS/400
Technologies............................ 457 8,000
Oral and Maxillofacial Surgery........... 1,745 4,000
Orthodontics............................. 2,476 3,400
Pathology................................ 28 500
Podiatry................................. 3,471 4,800
Radiology................................ 731 25,400
------ ------
Total................................ 11,650 66,000
====== ======
</TABLE>

Principal Products

InfoCure classifies its principal practice management software products as
either "core" or "classic." Core products offer advanced functionality and
operate with the latest generation of operating systems and hardware platforms.
In addition, core products are the primary products currently offered to
InfoCure's targeted practice specialties and are the focus of InfoCure's
ongoing product development and marketing efforts. Classic products, while
continuing to offer adequate functionality, typically lack the most advanced
practice

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<PAGE>

management features and are not designed for the latest generation of operating
systems. Currently, InfoCure actively markets eleven core products and supports
20 classic products. Approximately 15% of InfoCure's practice sites use core
products, while approximately 80% use classic products. InfoCure believes there
is a significant opportunity to provide system upgrades to those customers
utilizing classic and other non-core products by providing a migration path to
its core products. While InfoCure no longer actively markets its classic
products, it will continue to provide customer support for its classic products
until it determines that it is no longer cost effective to do so. Additionally,
approximately 5% of InfoCure's customers currently are using products that were
written for operating systems or hardware platforms that are generally no
longer supported by their respective vendors. InfoCure is actively promoting
the migration of customers utilizing these products to newer products and
intends to retire these products at the earliest possible opportunity.

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<PAGE>

The following chart describes how the Company's principal products serve the
specialties and practice areas targeted by the Company:

<TABLE>
<CAPTION>
Specialties and Practice
Areas Served Principal Products Practice Specific Features
<S> <C> <C>
Anesthesiology Micro*Star . Time and unit billing
. Single entry physician/CRNA(/1/)
charge creation
. Integrated procedure and
diagnostic coding
. Automated concurrency calculation
. Billing for treatment of acute or
chronic pain
. Quality outcomes measurements
- ----------------------------------------------------------------------------------------
Dermatology Kiron . Open item patient and insurance
processing
Wisdom . Encounter form scanning
. Cross-coding integration
. Automatic modifier generation
. Multi-resource scheduling
- ----------------------------------------------------------------------------------------
General Medical WinMED CS . Open item patient and insurance
processing
Wisdom . Patient charting via progress
notes, billing, narrative history
and correspondence history
. Multi-facility management, billing
and reporting
. Prescription tracking and
processing
. Customizable insurance and
statement form templates
- ----------------------------------------------------------------------------------------
Larger Medical Practices Ideal . Multi-clinic capabilities/roll-up
reporting
Utilizing AS/400 . Global patient records across
clinics
Technologies . Preventative care and outcomes
analysis
. Occupational medicine capabilities
. Laboratory requisition
. Chart tracking with bar code
capability
. Integrated medical records
- ----------------------------------------------------------------------------------------
Oral and Maxillofacial WinOMS CS . Medical and dental claim
Surgery processing and cross-coding
. Surgery narrative reporting
. Surgery stage tracking
. Implant tracking
. Pretreatment estimating and
treatment planning
. Image integration into patient
records
- ----------------------------------------------------------------------------------------
Orthodontics OPMS/32 . Contract billing via payment
coupons
Orthotrac . Time scheduling by units of doctor
and assistant time per procedure
. Treatment charting
. Diagnostic and treatment planning
. Automatic patient treatment
milestone tracking
. Imaging
- ----------------------------------------------------------------------------------------
Podiatry Wisdom . Open item patient and insurance
processing
. Medicare-specific podiatry
requirements
. Progress notes, histories and
physician operating reports and
correspondence
. Integrated speech recognition
. Customizable insurance and
statement form templates
- ----------------------------------------------------------------------------------------
Hospital-based Sentinel . Automatic calculation of weekly
Providers: treatments
Emergency Medicine . Capability to upload transcription
Pathology from outside sources
Radiology . Bar code payment posting
. Integrated managed care features
to monitor contracts and verify
eligibility
</TABLE>
- --------
(1) Certified Registered Nurse Anesthetist

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<PAGE>

InfoCure has designed its core software products to offer advanced
functionality and to operate with the latest generation of operating systems
and hardware platforms. InfoCure believes that PC-based practice management
systems are standardizing on the Windows family of operating systems.
InfoCure's PC-based core products use Microsoft Corporation's relational
database software (such as SQL Server and Access), operating system software
(such as Windows 95, Windows 98 and WindowsNT) and networking software (such as
Windows Terminal Server). InfoCure has adopted 32-bit client/server technology
in its PC-based core products, maximizing their scalability in local and wide
area network environments.

Many larger healthcare practices including clinics, hospital-based practices
and other enterprise-wide providers utilize mid-range computer platforms. There
are several mid-range computer platforms that are used by these larger
healthcare practices. InfoCure believes that AS/400-based systems will continue
to represent a significant portion of installed mid-range computer platforms.
InfoCure's mid-range core product, Ideal, is written for the AS/400 platform.

InfoCure's systems provide customers with significant benefits that enable
them to manage their practices more efficiently. Our customers are able to
choose from a menu of features and functions most essential to their practices,
primarily in the following areas:

. Administrative management--appointment scheduling, patient correspondence
and referral analysis;

. Financial management--payor billing, patient billing and accounts
receivable management; and

. Clinical information management--patient medical history, treatment
planning and hospital interface.

In addition to the standard and specialty-specific features of its core
products, InfoCure has recently introduced InfoMine, a decision support tool
designed to be compatible with all of InfoCure's core products and to further
supplement their analytical features. InfoMine enables a provider to access,
sort and display data according to any data element selected by the user,
including payor, referral source, reimbursement rate, time interval or other
variable. InfoMine provides the customer with the ability to consolidate
reporting in a flexible format, to analyze the relationship between variables
and to view such reports in real time. InfoMine offers practitioners a
computerized solution for rapidly analyzing the performance of their practices,
including the ability to analyze the profitability of various contractual
relationships with payors. Currently, InfoMine is only available as part of
InfoCure's anesthesiology product. InfoCure expects to offer InfoMine as part
of its products for other practice specialties during 1999.

InfoCure also develops add-on software modules providing enhanced
functionality. Current add-on software modules include:

. a scanning system that uses optical scanning technology to automate
routine data entry tasks;

. a voice-activated medical records application that translates dictation
directly into InfoCure's software thereby permitting the on-site creation
of accurate patient clinical reports;

. a digital record keeping application that allows a practice to store and
merge radiographic and photographic images with correspondence and
clinical medical records; and

. an interface that enables hospital-based physician practices to download
patient data from hospital systems into InfoCure's practice management
system.

Information Services

InfoCure's core software products enable transaction-based EDI functions,
including patient billing and insurance claims submission and remittance. The
use of EDI can improve a healthcare practice's cash flow by

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<PAGE>

enabling more accurate and rapid submission of claims to third-party payors and
more rapid receipt of corresponding reimbursements. EDI services currently
include the following:

. Electronic Patient Billing--electronically submits patient billing
information from practices by dial-up modem or via the Internet to
InfoCure's printing center or to independent national clearinghouses which
process, print and mail invoices and provide billing reports to the
practice.

. Electronic Claims Submission--electronically submits insurance claims
from practices to payors, either directly or through independent national
clearinghouses.

. Electronic Claims Remittance--electronically remits insurance payment and
automatically posts explanation of benefits into the practice management
system.

InfoCure generates revenues by facilitating EDI transactions, currently
processing more than 2.0 million EDI transactions each month through
clearinghouse arrangements. InfoCure believes that clearinghouse arrangements
serve customers better than EDI transactions directly with third-party payors
because of a clearinghouse's ability to administer the creation and submission
of claims, properly format data and facilitate reimbursements from multiple
payors. Accordingly, InfoCure actively encourages its customers to enter into
clearinghouse arrangements for their EDI transactions. InfoCure intends to
offer additional EDI services, such as eligibility verification, referral
authorization, precertification and claims status services.

Support Services

InfoCure believes that customer satisfaction with ongoing support and
services is critical to its success. InfoCure assists customers with the
initial installation of systems and offers several alternatives for training
and data conversion services. InfoCure's customer service and support groups
are organized both by computer platform and practice specialty. In addition to
providing on-site training for certain of its product lines, InfoCure maintains
classroom-based training facilities in twelve locations throughout the United
States. InfoCure sponsors continuing education programs, periodic newsletters
and user group conferences, providing the user with current information, as
well as an opportunity for InfoCure to demonstrate the features of new and
enhanced products.

InfoCure provides its customers with ongoing software support and services
under annual agreements that typically have automatically renewable one year
terms. These agreements provide for general support through access to help
desks, error corrections to software, software upgrades within a product line
and remote diagnostics. Customer support and services are provided through a
wide area voice and data network which incorporates automated call distribution
to route customer calls from any location to the appropriate support person,
regardless of physical location. Additionally, InfoCure has acquired a company-
wide customer support software system. This system, which is currently utilized
to support approximately 44% of InfoCure's customers, operates within a
client/server environment and provides client-tracking information to assist
InfoCure support representatives. InfoCure's remaining customers are scheduled
to be supported on this system by June 1999. Hardware support is generally
provided directly by the manufacturer or its authorized reseller.

InfoCure has invested significant resources in the systems, facilities and
personnel required to provide outstanding service to its customers. As of
February 24, 1999, the customer support and services group consisted of 392
employees, representing approximately 47% of InfoCure's total employee base.

Acquisition Integration

InfoCure has developed a significant infrastructure to support the
acquisition and integration of targeted businesses. This infrastructure
consists of management and technical personnel, sophisticated communications
technology and advanced financial and accounting software. An acquisition team,
which includes key members of InfoCure's management and technical staff,
identifies acquisition targets, performs due diligence investigations and
negotiates the terms of each acquisition. An integration team, which includes
key operational

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<PAGE>

personnel, works with each acquired company to identify and complete the
various post-acquisition tasks of integration, including incorporation of
desired product features into InfoCure's products and consolidation of
administrative and financial functions.

InfoCure supports the integration of acquired businesses through company-wide
communications and software systems. Dedicated T-1 telecommunications lines
connect each of InfoCure's remote facilities enabling an integrated computer
network and phone system. Each acquired business is rapidly migrated to this
communications system in order to facilitate seamless integration with
InfoCure's operations. InfoCure's accounting software is capable of
standardizing the accounting and financial reporting of newly acquired
companies rapidly, minimizing the time and expense associated with financial
integration. InfoCure believes its infrastructure effectively positions it to
continue to acquire new companies and facilitates the integration of the
operations of each acquired company.

Product Development

InfoCure's research and development organization, comprised of 186 full time
employees as of February 24, 1999, is organized into product development,
conversion and quality assurance groups. InfoCure's research and development
efforts principally involve the incorporation of the best technologies from
each acquired product into InfoCure's core practice management systems.
InfoCure's research and development staff facilitates the integration of
acquired products by conducting a technical review of acquired companies'
software products to determine the best available functions and features within
such products. Based upon this evaluation, InfoCure generally pursues one of
the following alternatives for each acquired product:

. incorporate the features of the product into one or more of InfoCure's
core products; or

. continue to market and support the product without revision.

From time to time, InfoCure will choose to retire obsolete software products
and actively migrate users to its core products. InfoCure continually refines
its core products and rapidly deploys new features and advanced technologies
into such products. Moreover, InfoCure's product development staff develops
additional advanced practice management functionality for its core products and
add-on software modules designed to be compatible with these core products.
InfoCure is also seeking to expand its EDI services to include additional
capabilities such as electronic eligibility verification, referral
authorization, precertification and claims status.

Sales and Marketing

InfoCure markets its products through a direct sales force, comprised of 99
marketing and sales personnel in 20 locations as of February 24, 1999. InfoCure
organizes its sales force by specialty practice area and computer platform. The
sales force is trained to understand the specialty-specific needs of its
customers.

Within its existing customer base, InfoCure promotes and sells system
upgrades, maintenance services, add-on software modules and information
services. In addition, InfoCure targets new customers principally through
seminars, trade shows, telemarketing, direct mail campaigns and advertisements
in various publications. To address the complex needs of larger potential
customers, InfoCure recently formed an executive sales group. In addition,
senior personnel and members of management assist in sales and marketing
initiatives to larger and more technically-advanced potential customers.
Through third-party sources, InfoCure offers its customers who purchase systems
non-recourse financing with a rapid approval process.

Intellectual Property

InfoCure regards its software as proprietary and protects its software
primarily through reliance on copyright law and trade secret protection.
InfoCure generally enters into written license agreements with customers which
contain customary license and support terms. In limited circumstances, InfoCure
distributes its less expensive products under a "shrink-wrap" license. In most
instances InfoCure provides its software

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<PAGE>

products in object code form, although source code licenses have been granted
in a limited number of unique situations. See "Risk Factors--Our Success
Depends On Our Ability to Protect the Confidentiality of Our Software."

Competition

InfoCure's principal competitors include both national and regional practice
management systems vendors. Currently, the practice management systems industry
in the United States is characterized by a large number of relatively small,
regionally-focused companies, comprising a highly fragmented industry with only
a few national vendors. Smaller, regionally-focused companies typically market
their products to a single practice specialty. Until recently, larger, national
vendors have targeted primarily large healthcare providers. InfoCure believes
that the larger, national vendors may broaden their markets to include both
small and large healthcare providers. In addition, InfoCure competes with
national and regional providers of computerized billing, insurance processing
and record management services to healthcare practices. As the market for
InfoCure's products and services expands, additional competitors are likely to
enter this market. InfoCure believes that the primary competitive factors in
its markets are:

. product features and functionality;

. customer service, support and satisfaction;

. price;

. ongoing product enhancements; and

. the reputation and stability of the vendor.

Some national competitors have greater financial, development, technical,
marketing and sales resources than InfoCure. If competition in the practice
management systems industry intensifies, InfoCure may be required to lower the
prices of its products and services. See "Risk Factors--Competition Could
Reduce Revenues from Our Products and Services."

Government Regulation

The confidentiality of patient records and the circumstances under which such
information may be used or released are subject to substantial regulation by
state and federal laws and regulations. Regulations governing electronic health
data transmissions are evolving rapidly and are often unclear and difficult to
apply. The Health Insurance Portability and Accountability Act of 1996
("HIPAA"), signed into legislation on August 22, 1996, requires the Secretary
of Health and Human Services (the "Secretary") to adopt national standards for
certain types of electronic healthcare information transactions and the data
elements used in such transactions, and to adopt standards to ensure the
integrity and confidentiality of such information. In August 1998, the
Secretary issued proposed standards specifying electronic transactional code
sets, data security and electronic signature standards and certain provider and
employer identifiers (standards governing identifiers for health plans have not
yet been proposed). Final standards are expected following a public comment
period for each proposal and are expected to become mandatory within 24 to 36
months thereafter. InfoCure believes that the proposed standards would not
materially affect InfoCure's business if adopted as proposed. There can be no
assurance, however, that such standards will be adopted as proposed or that the
standards yet to be proposed, particularly those related to data security, will
not have a material adverse effect on InfoCure's business, financial condition
and results of operations.

As required by the HIPAA legislation, the Secretary submitted recommendations
to Congress for legislation to protect privacy and confidentiality of personal
health information in September 1997. If Congress does not enact legislation by
August 1999, HIPAA requires the Secretary to promulgate regulations concerning
such protections. Legislation governing the dissemination of medical record
information is frequently proposed and debated at both the federal and state
levels. Such legislation, if enacted, could require patient consent before even
coded or anonymous patient information may be shared with third parties and
could also require that holders or users of such information implement
specified security measures. Any material restriction on the ability of
healthcare providers to obtain or disseminate patient information could
adversely affect InfoCure's business, financial condition and results of
operations.

39
<PAGE>

The FDA has jurisdiction under the 1976 Medical Device Amendments to the
Federal Food, Drug, and Cosmetic Act (the "FDC Act") to regulate computer
products and software as medical devices if they are intended for use in the
diagnosis, cure, mitigation, treatment or prevention of disease in humans. We
have not determined to what extent InfoCure's practice management software
products would be deemed to be a medical device subject to FDA regulation. The
FDA has issued a draft policy statement under which manufacturers of medical
image storage devices and related software are required to submit to the FDA
premarket notification applications and otherwise comply with the requirements
of the FDC Act applicable to medical devices. Recently, the FDA has initiated
agency rulemaking which may exempt certain close-up medical image management
devices from premarket notification procedures, but there can be no assurance
that such an exemption actually will be adopted and, if so, that the rulemaking
will apply to InfoCure's products. Non-compliance with applicable requirements
can result in, among other things, fines, injunctions, civil penalties, total
or partial suspension of production, refusal by the government to approve
products, revocation of approvals or clearances previously granted and criminal
prosecution. There can be no assurance that any final FDA policy governing
computer products, once issued, or future laws or regulations concerning the
manufacture or marketing of medical devices or healthcare information systems
will not increase the cost and time to market of new or existing products. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors--We May Be Subject to Changing Government
Regulations."

Human Resources

As of February 24, 1999, InfoCure employed 832 persons, including 99 in
marketing and sales, 392 in customer support and services, 186 in product
development and 155 in administration, finance and management. None of
InfoCure's employees is subject to a collective bargaining arrangement.
InfoCure considers its relations with its employees to be good.

40
<PAGE>

MANAGEMENT

Directors and Executive Officers

The directors and executive officers of InfoCure and their ages as of the
date of this prospectus are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Frederick L. Fine................. 40 Chief Executive Officer, President and
Director(1)
James K. Price.................... 40 Executive Vice President, Secretary and
Director(1)
Richard E. Perlman................ 52 Chairman, Treasurer and Director(1)
Lance B. Cornell.................. 33 Senior Vice President--Finance; Chief
Financial Officer
Michael E. Warren................. 44 Vice President--Human Resources and
Director
R. Ernest Chastain................ 49 Vice President--Sales and Marketing
Donald M. Rogers.................. 40 Chief Information Officer
Kurt I. Lawrence.................. 47 Vice President--Research and Development
Gary W. Plumer.................... 41 Vice President--Finance, Assistant
Secretary and Assistant Treasurer
James D. Elliott.................. 38 Director(2)(3)
Raymond H. Welsh.................. 67 Director(2)(3)
</TABLE>
- --------
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3)Member of the Compensation Committee

Frederick L. Fine is a founder of InfoCure and currently serves as its
President and Chief Executive Officer. He has served as a director of InfoCure
since its inception. Mr. Fine served as president of AMC from 1995 to 1997 and
as president of ICS from 1994 to 1997. From 1993 to 1995, Mr. Fine served as
executive vice president of AMC, and from 1985 to 1994 served as executive vice
president of ICS, which he co-founded in 1985. From 1991 to 1993, Mr. Fine
served as vice president of Newport Capital, Inc. ("Newport"), predecessor to
AMC. Mr. Fine has served as a director of InfoCure as well as AMC, ICS and
Newport throughout the terms of his employment by each company. From 1983 to
1985, Mr. Fine was with Informatics General Corporation, a supplier of
accounting software, and from 1981 to 1983 was with Moore Business Systems, a
division of Moore Corporation Ltd., a provider of practice management systems.
Mr. Fine holds a B.S. in Economics from the University of Georgia.

James K. Price is a founder of InfoCure and currently serves as its Executive
Vice President and Secretary. He has served as a director of InfoCure since its
inception. Mr. Price served as executive vice president of AMC from 1996 until
1997 and was vice president from 1993 to 1995. Mr. Price co-founded ICS and has
served as its executive vice president since 1994, as vice president from 1987
to 1994 and as president from 1985 to 1987. In addition, from 1991 to 1993, Mr.
Price was a vice president of Newport. Mr. Price has served as a director of
InfoCure as well as AMC, ICS and Newport throughout the terms of his employment
by each company. From 1983 to 1985, Mr. Price was healthcare sales manager of
Executive Business Systems, a practice management systems supplier, and from
1981 to 1983 was with Moore Business Systems. Mr. Price holds a B.A. in
Marketing from the University of Georgia.

Richard E. Perlman has served as InfoCure's Chairman and Treasurer since
December 1997 and as a director since March 1997. From December 1997 until
October 1998, Mr. Perlman served as InfoCure's Chief Financial Officer. Mr.
Perlman is the founder of Compass Partners, L.L.C. ("Compass"), a merchant
banking and financial advisory firm specializing in corporate restructuring and
middle market companies, and has served as its president since its inception in
May 1995. From 1991 to 1995, Mr. Perlman was executive vice president of
Matthew Stuart & Co., Inc., an investment banking firm. Mr. Perlman received a
B.S. in Economics from the Wharton School of the University of Pennsylvania and
a Masters in Business Administration from the Columbia University Graduate
School of Business.

41
<PAGE>

Lance B. Cornell has served as InfoCure's Senior Vice President of Finance
and Chief Financial Officer since October 1998. Prior to joining InfoCure, Mr.
Cornell served as vice president--controller and in other financial management
roles at HBO & Company, a healthcare information systems company, from March
1992 through June 1998. Mr. Cornell holds a B.S. in Finance from the University
of Colorado and is a Certified Public Accountant.

Michael E. Warren has served as Vice President of InfoCure since December
1997, most recently as Vice President--Human Resources since August 1998. Prior
to that time he served as InfoCure's Chief Financial Officer from December 1996
until December 1997. He has served as a director of InfoCure since March 1997.
Mr. Warren served as vice president of operations and as chief financial
officer of AMC from 1994 to 1996. From 1992 to 1994, Mr. Warren was director of
provider systems at Millennium Healthcare, a supplier of electronic healthcare
services. From 1986 to 1992, Mr. Warren was director of the Southeast Computer
Risk Management Practice of Arthur Andersen, LLP. From 1983 to 1986, Mr. Warren
worked as Manager of Systems Auditing for NationsBank, and from 1980 to 1983
was an accountant with Coopers & Lybrand, LLP. Mr. Warren holds a Masters in
Business Information Systems from Georgia State University and a B.A. in
Accounting from the University of Georgia. Mr. Warren is a member of the AICPA
and a member of the Georgia Society of CPAs.

R. Ernest Chastain has served as Vice President--Sales and Marketing of
InfoCure since December 1997. Prior to joining InfoCure in December 1997, Mr.
Chastain served as vice president--sales and marketing of AMC from November
1996. From 1994 until 1996 he served as vice president of sales of Quality
Systems, Inc., a healthcare practice management company; and from 1993 to 1994,
Mr. Chastain served as vice president of sales for ELCOMP, Inc., a healthcare
practice management company. From 1983 to 1986, Mr. Chastain served as regional
vice president for Contel Business Systems, Inc., a supplier of practice
management systems, which was acquired in 1986 by Versyss, Inc., another
practice management system supplier. From 1986 to 1992, Mr. Chastain served as
vice president of sales management for Versyss, Inc. Mr. Chastain holds a B.A.
in Marketing from the University of Georgia.

Donald M. Rogers has served as InfoCure's Chief Information Officer since
July 1998. Mr. Rogers served as a Vice President of InfoCure from April 1998
until July 1998 and as President of InfoCure's medical systems division from
April 1997 until April 1998. He was the founder of DR Software and served as
its president since its formation in 1983. From 1983 to 1984, Mr. Rogers was an
account manager at HBO & Company, a healthcare information systems company, and
from 1980 to 1983 was a systems analyst at NCR Corporation, a computer hardware
manufacturer. Mr. Rogers holds a B.S. in Management from the State University
of New York at Buffalo.

Kurt I. Lawrence has served as InfoCure's Vice President--Research and
Development since August 1998. Mr. Lawrence has led InfoCure's research and
development efforts since joining InfoCure in March 1998. He founded MSI in
June 1989 and served as its president and chief executive officer until MSI was
acquired by InfoCure. Mr. Lawrence was founder, president and chief executive
officer of Lawrence Data Systems, Inc. from 1983 until 1989 and from 1976 until
1982 he served as the director of the University of Rochester Medical Center's
computing department.

Gary W. Plumer has served as Vice President--Finance, Assistant Secretary and
Assistant Treasurer of InfoCure since December 1997. He served as Controller
for the Company from November 1996 until December 1997. Prior to joining the
Company, Mr. Plumer served as divisional controller for Turner Broadcasting
System, Inc., a worldwide broadcasting company, from April 1988 until November
1996. Mr. Plumer is a Certified Public Accountant and holds a B.B.A. in Finance
from the University of Georgia.

James D. Elliott has served as a director of InfoCure since March 1997. Mr.
Elliott is the president of Cablepro, Inc., a computer/telephone cable systems
integration company and has served in that position since 1991. He was
president of GE Network Services from August 1996 until August 1997. Mr.
Elliott co-founded Universal Data Consultants, Inc., a systems integrator, in
1983 and served as its president from 1983 until it

42
<PAGE>

was purchased by GE Capital Services Company in July 1996. Mr. Elliott has also
served as a director of Abdata Systems, Inc. since February 1998. Mr. Elliott
holds a B.S. in Economics from the University of Georgia.

Raymond H. Welsh has served as a director of InfoCure since March 1998. He
has served as senior vice president of PaineWebber Incorporated since January
1995. From August 1955 to January 1995, Mr. Welsh served as an investment
broker, director, senior vice president and partner of Kidder Peabody & Co.
Incorporated. Mr. Welsh is a trustee of the University of Pennsylvania, a
trustee and member of the executive committee of the University of Pennsylvania
Health System, and chairman of the Health System Capital Campaign, "Creating
the Future of Medicine." Mr. Welsh received a B.S. in Economics from the
Wharton School of the University of Pennsylvania.

There are no family relationships between any of the directors or executive
officers of InfoCure.

Terms of Directors

The Board of Directors consists of seven directors each serving a one-year
term. Currently, there are six directors serving on the Board of Directors and
one vacancy. InfoCure's Bylaws permit the Board of Directors to fill vacancies.
In addition, InfoCure's Bylaws divide the Board of Directors into three classes
and each class serves for a staggered three-year term or until successors of
such class have been elected and qualified. Messrs. Perlman and Warren are
Class I directors and serve until the annual meeting of shareholders held in
1999. Messrs. Price and Welsh are Class II directors and serve until the annual
meeting of shareholders held in 2000. Messrs. Fine, Elliott and any director
appointed to fill the existing vacancy are Class III directors and will serve
until the annual meeting of shareholders held in 2001. At each annual meeting
of shareholders, a class of directors is elected for a three-year term to
succeed the directors of the same class whose terms are then expiring. To the
extent there is an increase in the number of directors, the Board of Directors
will distribute the additional directorships among the three classes so that,
as nearly as possible, each class will consist of an equal number of directors.

Non-employee Directors Stock Option Plan

InfoCure's Board of Directors has adopted the InfoCure Corporation Directors
Stock Option Plan (the "Directors Plan") which provides for the grant of non-
qualified stock options to directors who are not officers or employees of
InfoCure or its subsidiaries ("Non-employee Directors"). The Directors Plan,
and options granted thereunder, were approved by InfoCure's stockholders in
June 1998. Effective January 1998, each Non-employee Director who is first
appointed or elected to the Board of Directors will be granted an option to
purchase 10,000 shares of InfoCure's common stock. On each anniversary
thereafter, Non-employee Directors will be eligible for annual grants of
options to purchase 2,500 shares of common stock. The Directors Plan also
allows the Compensation Committee of the Board of Directors to make
extraordinary grants of options to Non-employee Directors. All options granted
under the Directors Plan vest at a rate of 50% upon completion of each year of
service by the Non-employee Director on the Board of Directors. Generally, no
option is transferable by the optionee other than by will or the laws of
descent and distribution, and each option is exercisable only by the optionee
during his or her lifetime. The exercise price of all options will be the fair
market value of the shares of common stock on the date of grant, and the term
of each option may not exceed ten years. Unless terminated sooner by the Board
of Directors, the Directors Plan will continue in effect for a period of ten
years or until all options outstanding thereunder have expired or been
exercised. There are 100,000 shares of common stock reserved for issuance under
the Directors Plan. As of December 31, 1998, options to acquire 25,000 shares
of common stock have been granted pursuant to the Directors Plan at a weighted
average exercise price of $7.22 per share.

Effective October 23, 1998, the Board of Directors granted a non-qualified
stock option to acquire 2,500 shares of common stock to each of Mr. Elliott and
Mr. Welsh at an exercise price of $13.50 per share, subject to vesting of 50%
upon the optionee's completion of each year of service on the Board of
Directors. These options were not granted pursuant to the Directors Plan.

43
<PAGE>

Employee Benefit Plans

In October 1996, AMC adopted and issued stock options under AMC's 1996 Stock
Option Plan (the "AMC Plan"). In addition, in December 1996, InfoCure's Board
of Directors and stockholders adopted the InfoCure Corporation 1996 Stock
Option Plan ("InfoCure's Plan"). In June 1998, InfoCure's stockholders approved
an amendment to InfoCure's Plan to allow 1,125,000 shares of common stock to be
issued thereunder. Effective October 23, 1998, the Board of Directors approved
an amendment to InfoCure's Plan, subject to stockholder approval, to reserve
3,000,000 shares of common stock to be issued thereunder.

InfoCure's Plan and the AMC Plan (collectively, the "Stock Option Plans")
each provide for the granting to officers, key employees and employee directors
of incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, (the "Code") and for the granting of non-
statutory stock options to employees and consultants. The Stock Option Plans
are administered by the Board of Directors, or a committee thereof, which
determines the term of the option granted, the exercise price, when and to whom
options are granted, shares subject to the option, the vesting schedule and the
form of consideration payable at the exercise of the option.

Incentive stock options granted under the Stock Option Plans are not
transferable by the optionee other than by will or the laws of descent and
distribution, and each incentive stock option is exercisable only by the
optionee during his or her lifetime. The exercise price of all incentive stock
options granted under the Stock Option Plans must be at least equal to the fair
market value of InfoCure's common stock on the date of grant. With respect to
any participant who owns stock possessing more than 10% of the voting power of
all classes of the outstanding stock of the issuer, the exercise price of any
incentive stock option granted must equal at least 110% of the fair market
value on the grant date and the maximum term of such option must not exceed
five years. The term of all options granted under the Stock Option Plans may
not exceed ten years. All options expire one year after termination of an
optionee's employment or engagement, unless such termination was for death or
disability in which case such options expire two years after termination.
Unless terminated sooner by the Board of Directors, stock options may be
granted within ten years of the adoption of the Stock Option Plan.

Generally, stock options granted under the Stock Option Plans to executive
officers expire ten years from the date of grant and vest 25% per year on the
anniversary of the date of grant, thus becoming fully exercisable on the fourth
anniversary. Certain options granted under InfoCure's Plan become fully vested
in the event that the common stock reaches a target average closing price for a
specified number of consecutive trading days. Certain options granted to
Messrs. Fine, Perlman and Price in September 1997 have longer vesting
schedules. If the executive officer's employment is terminated for any reason,
except upon a change of control, prior to the vesting of the option, that
portion of the option which has not vested shall be terminated. Upon certain
events resulting in a change of control of InfoCure, all options become fully
vested.

As of December 31, 1998, options to purchase 128,642 shares of common stock
were outstanding under the AMC Plan at an equivalent weighted average exercise
price of $4.19 per share and options to purchase 2,209,036 shares of common
stock were outstanding under InfoCure's Plan at weighted average exercise price
of $9.58 per share. No additional stock options will be granted under the AMC
Plan.

Employee Stock Purchase Plan

In June 1998, InfoCure's stockholders approved the InfoCure Corporation
Employee Stock Purchase Plan (the "Stock Purchase Plan") which is intended to
qualify under Section 423 of the Code. InfoCure implemented the Stock Purchase
Plan during the first quarter of 1998. The Stock Purchase Plan allows employees
to purchase common stock through payroll deductions for 85% of the fair market
value of the common stock. Participation in the Stock Purchase Plan is
voluntary. Employees may become participants in the Stock Purchase Plan by
authorizing payroll deductions of one to fifteen percent of their base pay or a
set dollar amount for each payroll period. At the end of each three-month
purchase period, each participant in the Stock Purchase Plan will receive an
amount of InfoCure's common stock equal to the sum of that participant's
payroll deductions during the calendar quarter multiplied by 85% of the lower
of the fair market value of

44
<PAGE>

InfoCure's common stock at the beginning of the calendar quarter, or the fair
market value of InfoCure's common stock at the end of the quarter. Common stock
which is purchased pursuant to the Stock Purchase Plan is subject to a one-year
holding period, and thus employees who purchase common stock under the Stock
Purchase Plan will not receive stock certificates for their shares until the
one-year holding period has terminated. This holding period lapses upon certain
events resulting in a change of control. No employee may participate in the
Stock Purchase Plan to the extent that such employee owns or would own 5% or
more of the voting power of all classes of InfoCure's stock. There are
currently 100,000 shares of common stock reserved for issuance under the Stock
Purchase Plan. In addition, InfoCure is permitted under the Stock Purchase Plan
to purchase shares of common stock on the open market for the purpose of
reselling the shares to participants in the Stock Purchase Plan. As of December
31, 1998, all of the shares sold to participants in the Stock Purchase Plan
were purchased on the open market and no shares have been originally issued by
InfoCure. Effective October 23, 1998, the Board of Directors approved an
amendment to the Stock Purchase Plan, subject to stockholder approval within
one year, increasing the number of shares of common stock reserved for issuance
thereunder to 150,000, and deleting payment by personal check as an alternate
method of payment for common stock purchased under the Stock Purchase Plan.

Length-of-Service Stock Option Plan

In June 1998, InfoCure's stockholders approved InfoCure's Length-of-Service
Nonqualified Stock Option Plan which provides for the grant of nonqualified
stock options to employees (the "Length-of-Service Plan"). Employees are
eligible for the grant of options under the Length-of-Service Plan based on the
number of years of service which they have completed with InfoCure or a
business which has been acquired by InfoCure. Upon completion of each of their
first five years of service, employees are eligible to receive an option to
purchase 50 shares of InfoCure's common stock. Upon completion of their sixth
year of service, employees are eligible to receive an option to purchase 350
shares of common stock. Upon completion of each year of service after the sixth
year of service, employees are eligible to receive an option to purchase 100
shares of common stock. Options granted under the Length-of-Service Plan will
be granted at an exercise price equal to the fair market value of the
underlying common stock on the date of grant and, generally, will fully vest on
the fourth anniversary thereof. The term of options granted under the Length-
of-Service Plan may not exceed ten years. Employees lose all non-vested options
upon leaving the employment of InfoCure. Employees who leave InfoCure may
exercise their options, to the extent vested, within 30 days after leaving the
employment of InfoCure, except in the case of a termination for cause, in which
case the employees lose all vested options upon termination. Options are
exercisable only by optionees during their lifetime and, except by will or the
laws of descent or distribution, are non-transferrable. Upon certain events
resulting in a change of control, all outstanding options under the Length-of-
Service Plan fully vest and become immediately exercisable. The Length-of-
Service Plan will continue in effect for a period of ten years or until all
options outstanding thereunder have expired or been exercised. Effective
October 23, 1998, the Board of Directors approved an amendment to the Length-
of-Service Plan which, subject to stockholder approval, increases the number of
shares of common stock reserved for issuance under the Length-of-Service Plan
to 500,000 from 150,000. As of December 31, 1998, options to acquire 216,650
shares have been granted at a weighted average exercise price of $9.39 per
share.

Employment Agreements

In July 1998, InfoCure entered into four-year employment agreements with
Frederick L. Fine and James K. Price. Each agreement provides for an initial
annual base salary of $125,000 and a severance payment equal to three times the
then current annual base salary rate upon the termination of employment by
InfoCure without cause or a voluntary termination in the event of a change of
control of InfoCure. In addition, each agreement provides for incentive
compensation pursuant to a program established by the Board of Directors, a
cash bonus payment in the event that InfoCure meets certain earnings thresholds
and a restricted stock grant payable in ten years or earlier if InfoCure's
common stock attains certain market price thresholds. See "--Restricted Stock
Awards." A market price threshold was achieved in January 1999 resulting in an
acceleration of vesting in the amount of 50% of the stock covered by this
restricted stock award. See "Risk Factors--We May Have Charges Associated With
Acquisitions and Other Events." Both executives are entitled to participate in
InfoCure's employee benefit programs.

45
<PAGE>

Richard E. Perlman entered into a four-year employment agreement with
InfoCure in January 1998 which provides for an annual base salary of $120,000
and a severance payment equal to three times the then current annual base
salary rate upon termination of employment by InfoCure without cause or a
voluntary termination in the event of a change of control of InfoCure. Under
the agreement, Mr. Perlman is eligible to receive incentive compensation
pursuant to a program established by the Board of Directors, a cash bonus
payment in the event InfoCure meets certain earnings thresholds and a
restricted stock grant payable in ten years or earlier if InfoCure's common
stock attains certain market price thresholds. See "--Restricted Stock Awards."
A market price threshold was achieved in January 1999 resulting in an
acceleration of vesting in the amount of 50% of the stock covered by this
restricted stock award. See "Risk Factors--We May Have Charges Associated With
Acquisitions and Other Events." In addition, Mr. Perlman may participate in
InfoCure's employee benefit program.

As of July 10, 1997, InfoCure entered into a two-year employment agreement
with Donald M. Rogers which provides for an annual base salary of $110,000. In
February 1998, InfoCure entered into a two-year employment agreement with Kurt
I. Lawrence which provides for an annual base salary of $110,000. Each of the
foregoing employment agreements has a covenant that the executive may not
compete with InfoCure for a period of one year following termination of
employment. InfoCure has not adopted a formal bonus plan. However, all
executive officers of InfoCure are eligible for a bonus, awardable at the sole
discretion of the Board of Directors, which is dependent upon each executive
officer's individual performance and the performance of InfoCure.

Restricted Stock Awards

In June 1998, the Board of Directors approved restricted stock awards for
35,000 shares to Mr. Fine, 30,000 shares to Mr. Price and 30,000 shares to Mr.
Perlman. The total value of these restricted stock awards was approximately
$1.1 million on the date of grant. The restricted stock awards vest ratably
over a ten-year term but vesting can be accelerated upon the occurrence of
certain events. One-half of the shares subject to the restricted stock awards
vested in the first quarter of 1999 when the average closing price of
InfoCure's common stock was $25.00 or more for 20 consecutive trading days.
InfoCure will incur an estimated compensation charge of $500,000 in the first
quarter of 1999 related to the restricted stock awards to reflect this
accelerated vesting. The remaining shares will vest immediately at the time the
average closing price of InfoCure's common stock is $40.00 or more for 20
consecutive trading days. It is possible that InfoCure will incur an additional
charge of up to $580,000 if this second accelerated vesting occurs. InfoCure
does not expect to grant additional restricted stock awards in the future and
therefore does not expect to incur compensation charges relating to restricted
stock awards in the future.

Limitation of Liability and Indemnification of Officers and Directors

Pursuant to InfoCure's Certificate of Incorporation and Bylaws, officers and
directors shall be indemnified by InfoCure to the fullest extent allowed under
Delaware law for claims brought against them in their capacities as officers or
directors. Indemnification is not allowed if the officer or director does not
act in good faith and in a manner reasonably believed to be in the best
interests of InfoCure, or if the officer or director had no reasonable cause to
believe his conduct was lawful. Accordingly, indemnification may occur for
liabilities arising under the Securities Act. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted for directors,
officers and controlling persons of InfoCure pursuant to the foregoing
provisions or otherwise, InfoCure has been advised that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Securities Act and therefore, may be unenforceable.

46
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of InfoCure capital stock as of the date of this prospectus, and as
adjusted to reflect the sale by InfoCure of the common stock being offered
hereby, by: (i) each director; (ii) each shareholder known by InfoCure to be
beneficial owners of more than 5% of the outstanding shares of common stock;
(iii) the selling stockholders; and (iv) all executive officers and directors
of InfoCure as a group.

<TABLE>
<CAPTION>
Common
Common Stock Stock to Common Stock
Beneficially Owned be Sold Beneficially Owned
Prior to the in the After the
Offering(1) Offering Offering(1)
-------------------- -------- --------------------
Name and Address of
Beneficial Owner Shares Percentage Shares Shares Percentage
- ------------------- --------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
Directors, Officers and 5%
Stockholders:
Frederick L. Fine(2)...... 527,718 5.9% -- 527,718 4.1%
James K. Price(3)......... 525,300 5.9 -- 525,300 4.1
Richard E. Perlman(4)..... 352,055 3.9 -- 352,055 2.7
Michael E. Warren(5)...... 84,192 * -- 84,192 *
James D. Elliott(6)....... 28,886 * -- 28,886 *
Raymond H. Welsh(6)....... 23,000 * -- 23,000 *
All directors and
executive officers as a
group (11 persons)(7).... 1,802,328 19.4 10,177 1,792,151 13.8
Crescent International
Limited(8)............... 549,983 6.1 250,000 299,983 2.3
William Herbert Hunt Trust
Estate(9)................ 548,932 6.0 -- 548,932 4.2
James D. Davis............ 465,036 5.2 65,036 400,000 3.1
Reid W. Simmons........... 465,036 5.2 65,036 400,000 3.1
Selling Stockholders(10):
Bailey, Joe M............. 6,220 * 1,866 4,354 *
Ball, George L............ 6,220 * 1,866 4,354 *
Ball, Susan Huffard....... 6,220 * 1,866 4,354 *
Barbour, Carol C.......... 3,109 * 933 2,176 *
Brewster, John C. and Mar-
ianna.................... 3,109 * 933 2,176 *
Chadwick, Michael S....... 3,109 * 933 2,176 *
Cockspur, Inc............. 6,220 * 1,866 4,354 *
Cohn Holstead, Anne Lind-
say...................... 6,220 * 1,866 4,354 *
Cohn, Bobby Smith......... 6,220 * 1,866 4,354 *
Cohn, Elizabeth Kirby..... 6,220 * 1,866 4,354 *
Cohn, Morton A............ 43,543 * 13,063 30,480 *
Colville, G. Christopher.. 3,109 * 933 2,176 *
Cummings, Alan G.......... 6,220 * 1,866 4,354 *
Custer, Thomas W.......... 6,220 * 1,866 4,354 *
Davis, Charles L.......... 1,555 * 466 1,089 *
DeArman, William M........ 6,220 * 1,866 4,354 *
DelHomme, Louis........... 6,220 * 1,866 4,354 *
Dillard, Max M............ 6,220 * 1,866 4,354 *
Drury, John E............. 12,441 * 3,732 8,709 *
Duddlesten, Wayne B....... 12,441 * 3,732 8,709 *
Elkins Jr., J.A. and Mar-
garet W.................. 6,220 * 1,866 4,354 *
Ellis, Leigh and Mimi G... 3,109 * 933 2,176 *
Ener Corporation.......... 1,555 * 466 1,089 *
Fitch, Don................ 6,220 * 1,866 4,354 *
</TABLE>

47
<PAGE>

<TABLE>
<CAPTION>
Common
Common Stock Stock to Common Stock
Beneficially be Sold Beneficially
Owned Prior to in the Owned After the
the Offering(1) Offering Offering(1)
----------------- -------- -----------------
Name and Address of Beneficial
Owner Shares Percentage Shares Shares Percentage
- ------------------------------ ------ ---------- -------- ------ ----------
<S> <C> <C> <C> <C> <C>
Flom, Joseph.................... 6,220 * 1,866 4,354 *
Fordham, Scott.................. 3,109 * 933 2,176 *
Frost Family I, Ltd............. 6,220 * 1,866 4,354 *
Gunther, Don J. and Rosemary
T.............................. 3,109 * 933 2,176 *
Hagans, Fred.................... 6,220 * 1,866 4,354 *
Hamblen III, Tolar.............. 3,109 * 933 2,176 *
Harter, Steve................... 6,220 * 1,866 4,354 *
Hebert, L. Carl and Edith C..... 6,220 * 1,866 4,354 *
Herbold, William K. and Norma
Rae............................ 3,109 * 933 2,176 *
Higdon Compton Insurance........ 3,109 * 933 2,176 *
Hopson, Courtney Lyle Cohn...... 6,220 * 1,866 4,354 *
Hutson, Miles A................. 3,109 * 933 2,176 *
J-All Partnership............... 18,661 * 5,598 13,063 *
James Ventures, L.P............. 74,646 * 22,394 52,252 *
Johnson, Walter................. 3,109 * 933 2,176 *
Jones, Austin and Margaret...... 6,220 * 1,866 4,354 *
Jones, Samuel A................. 3,109 * 933 2,176 *
Keenan, Ltd..................... 6,220 * 1,866 4,354 *
Keller, Susan K................. 3,109 * 933 2,176 *
Kinder, Nancy G................. 6,220 * 1,866 4,354 *
Kinder, Richard D............... 6,220 * 1,866 4,354 *
Kinney, Robert Larry............ 6,220 * 1,866 4,354 *
Lary, Robert W.................. 6,220 * 1,866 4,354 *
Lawlor, Michael P. and Helen
C.............................. 6,220 * 1,866 4,354 *
Lay, Kenneth L. and Linda P..... 12,441 * 3,732 8,709 *
Lindsey Spicer #1 Trust......... 6,220 * 1,866 4,354 *
Lindstedt, Roger P.............. 24,882 * 7,465 17,417 *
Malanga, John H. and Jodi F..... 1,555 * 400 1,155 *
McAninch, Ed.................... 6,220 * 1,866 4,354 *
McClanahan, Randy J. and Jenni-
fer G.......................... 6,220 * 1,866 4,354 *
McConnell, Michael H............ 1,555 * 466 1,089 *
McMaken, Bruce.................. 1,555 * 466 1,089 *
Mitchell, Michael............... 3,109 * 933 2,176 *
MJ & DJ Management Company,
Ltd............................ 6,220 * 6,220 -- --
Moorehead Jr., Donald F......... 18,661 * 5,598 13,063 *
Moorehead, George............... 3,109 * 933 2,176 *
Moorehead, Shelley B............ 18,661 * 5,598 13,063 *
Morris, Ben T.(11).............. 6,220 * 1,866 4,354 *
Mundy, John I.(11).............. 3,109 * 933 2,176 *
O'Neill, Katherine Halliday..... 3,109 * 933 2,176 *
O'Quinn, John M................. 24,882 * 7,465 17,417 *
Platinum Business Investment
Company, Ltd................... 31,102 * 9,331 21,771 *
Poarch, Donald L................ 3,109 * 933 2,176 *
Quigley, Leroy E................ 3,109 * 933 2,176 *
Rauch, Leonard.................. 6,220 * 1,866 4,354 *
Reamer, R.E. Individual Retire-
ment Account................... 3,109 * 933 2,176 *
Rimmer, Roy T., Jr.............. 6,220 * 1,866 4,354 *
</TABLE>

48
<PAGE>

<TABLE>
<CAPTION>
Common
Common Stock Stock to Common Stock
Beneficially Owned be Sold Beneficially Owned
Prior to the in the After the
Offering(1) Offering Offering(1)
------------------ -------- ------------------
Name and Address of Beneficial
Owner Shares Percentage Shares Shares Percentage
- ------------------------------ ------- ---------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Rogers, Franelle.............. 3,109 * 933 2,176 *
Rome, Mark A.................. 1,555 * 466 1,089 *
Ross, Rex C. and Adrian T..... 6,220 * 1,866 4,354 *
Ryan, Nolan................... 6,220 * 1,866 4,354 *
Sanders, Brad D............... 3,109 * 933 2,176 *
Sanders, Bret D............... 3,109 * 933 2,176 *
Sanders, Christine M.......... 3,109 * 933 2,176 *
Sanders, Don A.(11)........... 46,653 * 13,996 32,657 *
Sanders, Katherine U.......... 31,102 * 9,331 21,771 *
Sanders, Laura K.............. 3,109 * 933 2,176 *
Scott, Stephen D.............. 31,102 * 9,331 21,771 *
Slovin, Bruce................. 12,441 * 3,732 8,709 *
Spicer, Sherri................ 6,220 * 1,866 4,354 *
Tanglewood Family Limited
Part......................... 3,109 * 933 2,176 *
Tate, Paul and Lara M......... 3,109 * 933 2,176 *
Tompkins, Jack I.............. 6,220 * 1,866 4,354 *
Towery, David................. 3,109 * 933 2,176 *
Weir, Don and Julie Ellen..... 3,109 * 933 2,176 *
Weir, Eric G.................. 3,109 * 933 2,176 *
Weir, Lisa Dawn............... 3,109 * 933 2,176 *
Wolf Canyon, Ltd. ............ 6,220 * 1,866 4,354 *
Humphrey, Todd J.............. 22,000 * 2,000 20,000 *
Micro-Software Designs, Inc.
............................. 270,000 3.0 135,000 135,000 1.0
Lawrence, Karen A.(12)........ 99,456 1.1 10,177 89,279 *
Schraut, Sherry J............. 10,652 * 10,652 -- --
Vagle, Erik E................. 1,540 * 600 940 *
Vagle, Melvin C............... 48,607 * 10,000 38,607 *
Vagle, Ronald M............... 179,690 2.0 50,000 129,690 1.0
Vagle, Wade................... 628 * 628 -- --
Winkelman, Joe................ 911 * 411 500 *
George, M. Wayne.............. 23,365 * 23,365 -- --
Caputo, Donald E.............. 1,411 * 600 811 *
Gorman, Ruth.................. 1,424 * 1,424 -- --
Johnson, Dick................. 7,998 * 998 7,000 *
Loukatos, Marsha.............. 6,060 * 6,060 -- --
Teese, Charles F.............. 4,186 * 2,093 2,093 *
Quiat, Barry.................. 18,227 * 6,000 12,227 *
The Richard P. Koffler and
Cheryl Bartlett Koffler Trust
UTD August 24, 1995.......... 23,562 * 12,500 11,062 *
Williams, Robert.............. 9,114 * 4,557 4,557 *
Barnes Family Holdings, LLC... 52,436 * 26,218 26,218 *
delaRosa Family Holdings,
LLC.......................... 30,796 * 15,398 15,398 *
Baker, Steve.................. 13,728 * 4,000 9,728 *
Bolton, Harold D.............. 18,304 * 9,152 9,152 *
Case, Stephen Anthony......... 13,728 * 5,000 8,728 *
Garrison, Richard Allan....... 3,775 * 775 3,000 *
Gwaltney, Thomas M., Jr....... 23,795 * 23,795 -- --
</TABLE>

49
<PAGE>

<TABLE>
<CAPTION>
Common
Common Stock Stock to Common Stock
Beneficially be Sold Beneficially
Owned Prior to in the Owned After the
the Offering(1) Offering Offering(1)
----------------- --------- -----------------
Name and Address of Beneficial
Owner Shares Percentage Shares Shares Percentage
- ------------------------------ ------ ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C>
Haddad, Michael J............. 3,775 * 1,800 1,975 *
Hofstetter, Joseph M., Jr..... 45,760 * 15,000 30,760 *
Hornick, Keith................ 3,775 * 1,887 1,888 *
Horton, Cyrus William......... 11,400 * 4,440 7,000 *
Kerney, Thomas L., Jr......... 34,320 * 14,000 20,320 *
Sentell, Jane Elizabeth....... 1,144 * 144 1,000 *
Sentell, Craig Martin......... 19,448 * 8,448 11,000 *
Sexton, Jacob Paul............ 5,720 * 1,720 4,000 *
Stuff, James Robert........... 11,440 * 5,720 5,720 *
Whitt, Susan F................ 3,775 * 775 3,000 *
---------
Total........................ 1,039,398
=========
</TABLE>
- --------
* Less than one percent.
(1) Information with respect to "beneficial ownership" shown in the table
above is based on information supplied by the respective beneficial owner
or by other stockholders as well as filings made with the Commission or
furnished to InfoCure. Beneficial ownership is determined in accordance
with the rules of the Commission and generally includes voting or
investment power with respect to securities. For purposes of calculating
the percentage beneficially owned after the offering, the shares of common
stock deemed outstanding (a) include: (i) 8,888,936 shares outstanding as
of February 24, 1999; (ii) 1,000,070 shares issuable upon the conversion
of the 850,060 shares of Series A Preferred concurrently with the
effectiveness of the offering; (iii) 100,644 shares issuable upon
conversion of the Convertible Obligations concurrently with the
effectiveness of the offering; and (iv) shares issuable by InfoCure
pursuant to warrants and options held by the respective person or group
which may be exercised within 60 days following the date of this
prospectus ("Presently Exercisable Options") and (b) exclude 47,500 shares
that are issuable upon attainment of vesting goals applicable to
restricted stock awards. See "Capitalization" and "Management--Restricted
Stock Awards." No shares of preferred stock will be outstanding after the
offering. Presently Exercisable Options are deemed to be outstanding and
to be beneficially owned by the person or group holding such options for
the purpose of computing the percentage ownership of such person or group
but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person or group. Shares of common stock
beneficially owned by certain selling stockholders after this offering are
registered pursuant the Resale Registration Statement and will be
immediately eligible to be sold in the public market either immediately or
upon expiration of 30 or 90 day lock-up agreements executed by such
selling stockholders. See "Shares Eligible For Future Sale." Unless
otherwise specified, the mailing address of each beneficial owner is
c/o InfoCure Corporation, 1765 The Exchange, Suite 450, Atlanta, Georgia
30339.
(2) Includes 3,579 shares held by Mr. Fine for the benefit of his children and
1,193 shares held by a charitable trust over which he has sole voting and
investment control. Also includes 17,500 shares held in a deferred
compensation trust on behalf of Mr. Fine and 48,424 shares issuable upon
the exercise of Presently Exercisable Options.
(3) Includes 3,225 shares held by Mr. Price's brother as to which Mr. Price
maintains voting control. Also includes 15,000 shares held in a deferred
compensation trust on behalf of Mr. Price and 48,424 shares issuable upon
the exercise of Presently Exercisable Options.
(4) Includes (i) 195,691 shares held by Compass, of which Mr. Perlman holds a
majority interest; (ii) 110,000 shares issuable to Compass upon exercise
of an outstanding warrant at an exercise price of $5.50 per share; (iii)
15,000 shares held in a deferred compensation trust on behalf of Mr.
Perlman; and (iv) 47,364 shares issuable upon the exercise of Presently
Exercisable Options.
(5) Includes 34,330 shares issuable upon the exercise of Presently Exercisable
Options.
(6) Includes 5,000 shares issuable upon the exercise of Presently Exercisable
Options.

50
<PAGE>

(7) Includes (i) 10,177 shares held by Karen A. Lawrence, the spouse of Kurt
I. Lawrence, which are being sold in this offering and (ii) an aggregate
of 277,137 additional shares issuable upon the exercise of Presently
Exercisable Options.
(8) According to a Schedule 13D, as amended, filed by Crescent International
Limited ("Crescent") dated December 21, 1998, Crescent has sole voting
and dispositive power as to the shares of common stock. The common stock
total includes 15,790 shares of common stock issuable upon conversion of
13,422 shares of Series A Preferred at a conversion price of $8.50 per
share and 100,000 shares issuable upon exercise of a warrant at an
exercise price of $23.00 per share. Crescent's mailing address is
c/o Greenlight (Switzerland) SA, 84, Av Louis-Casai, P.O. Box 42, 1216,
Geneva, Cointrin, Switzer land.
(9) According to a Schedule 13D filed by The William Herbert Hunt Trust Estate
(the "Hunt Trust") dated February 19, 1998, the Hunt Trust has sole voting
and dispositive power as to the shares of common stock. The common stock
total includes 315,811 shares of common stock issuable upon conversion of
268,440 shares of Series A Preferred at a conversion price of $8.50 per
share. The mailing address of the Hunt Trust is 3900 Thanksgiving Tower,
1601 Elm Street, Dallas, Texas 75201.
(10) The number of shares beneficially owned by the selling stockholders after
the offering reflects shares owned before any sale of shares that are
being registered pursuant to the Resale Registration Statement.
(11) Shares beneficially owned by these persons exclude 100,000 shares issuable
upon the exercise of a warrant beneficially owned by Sanders Morris Mundy,
Inc., over which they share the voting and dispositive powers.
(12) Includes 79,279 shares beneficially owned and 10,000 shares subject to
Presently Exercisable Options held by Ms. Lawrence's spouse.

51
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offering, there will be 12,942,150 shares of common
stock outstanding. Of these shares, shares (including the 4,039,398 shares
sold in this offering) will be freely tradable upon completion of this
offering, subject to the lock-up agreements and Rule 144 restrictions discussed
below. Of the remaining shares of common stock outstanding, 3,954,078 are
subject to the Resale Registration Statement and also will be freely tradable
upon completion of this offering, subject to lock-up agreements and Rule 144
restrictions discussed below. The remaining shares of common stock
outstanding are "restricted securities" under Rule 144.

InfoCure's shares will become eligible for sale in the public market as
follows:

......... These shares are restricted securities and may be sold
pursuant to Rule 144. Of these shares, will be eligible
to be sold immediately upon completion of this offering
and the remainder will become eligible for sale at various
dates thereafter.
</TABLE>

The lock-up agreements provide that the holders of the shares may not sell or
otherwise dispose of their shares for a period of 30 or 90 days after the date
of this prospectus without the prior written consent of The Robinson-Humphrey
Company, LLC. In addition, InfoCure has agreed not to sell any additional
shares of common stock for 90 days after the date of this prospectus without
the prior written consent of The Robinson-Humphrey Company, LLC. The Robinson-
Humphrey Company, LLC may release InfoCure or the stockholders from these
restrictions, in whole or in part, at any time in its sole discretion.

In general, under Rule 144 as currently in effect, beginning 90 days after
the effective date of the registration statement of which this prospectus is a
part, a stockholder, including an affiliate, who has beneficially owned his or
her restricted securities for at least one year from the later of the date such
securities were acquired from InfoCure, or (if applicable) the date they were
acquired from an affiliate, is entitled to sell, within any three month period,
a number of shares that does not exceed the greater of 1% of the then
outstanding shares of common stock (approximately 130,000 shares after the
offering) or the average weekly trading volume in the common stock during the
four calendar weeks proceeding the date on which notice of such sale was filed
under Rule 144, provided certain requirements concerning availability of public
information, manner of sale and notice of sale are satisfied. In addition,
under Rule 144(k), if a period of at least two years has elapsed between the
later of the date restricted securities were acquired from InfoCure, or (if
applicable) the date they were acquired from an affiliate of InfoCure, a
stockholder who is not an affiliate of InfoCure at the time of sale and has not
been an affiliate for at least three months prior to the sale is entitled to
sell the shares immediately without compliance with the foregoing requirements
under Rule 144.

InfoCure has filed registration statements on Form S-8 under the Securities
Act to register shares of common stock issuable under the AMC Plan,
InfoCure's Plan, the Length-of-Service Plan, the Employee Stock Purchase Plan,
the Directors Plan and certain outstanding non-plan stock options. Shares
issued upon the

52
<PAGE>

exercise of stock options or other rights thereunder after the effective date
of the Form S-8 registration statements will be eligible for resale in the
public market without restriction, subject to Rule 144 limitations applicable
to affiliates of InfoCure and to the lock-up agreements noted above, if
applicable. InfoCure intends to file a registration statement on Form S-8
covering the remaining shares of common stock subject to its stock option plans
and certain non-plan options. This registration statement will be filed after
InfoCure receives stockholder approval of such options.

No prediction can be made as to the effect, if any, that market sales of
shares of common stock, or the availability of shares for sale, will have on
the market price of the common stock prevailing from time to time.
Nevertheless, sales of a large number of shares of common stock in the public
market could adversely affect the market price of the common stock and could
impair InfoCure's future ability to raise capital through an offering of its
equity securities. See "Risk Factors--Future Sales of Shares Could Affect Our
Stock Price."

UNDERWRITING

Subject to the terms and conditions stated in the underwriting agreement
among InfoCure, the selling stockholders named herein and the underwriters
named below, for whom The Robinson-Humphrey Company, LLC, SG Cowen Securities
Corporation and Sanders Morris Mundy Inc. are acting as representatives,
InfoCure and the selling stockholders have agreed to sell, and the underwriters
have severally agreed to purchase, the number of shares set forth opposite the
name of such underwriter.

<TABLE>
<CAPTION>
Number
of
Name Shares
---- ------
<S> <C>
The Robinson-Humphrey Company, LLC....................................
SG Cowen Securities Corporation.......................................
Sanders Morris Mundy Inc..............................................
-----
Total.............................................................
=====
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The underwriters are obligated to purchase all the shares (other than those
covered by the over-allotment option described below) if they purchase any of
the shares.

The underwriters propose to offer the shares directly to the public at the
public offering price set forth on the cover page of this prospectus and to
certain dealers at such price less a concession not in excess of $ per
share. The underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share in sales to certain other dealers. After the
offering, the public offering price and other selling terms may be changed.

InfoCure has granted to the underwriters a 30-day option to purchase up to an
additional 600,000 shares of common stock at the public offering price less the
underwriting discount. The underwriters may exercise such option solely for the
purpose of covering over-allotments, if any, in connection with this offering.
If the underwriters exercise their over-allotment option, each underwriter will
be obligated, subject to certain conditions, to purchase a number of additional
shares of common stock approximately proportionate to such underwriter's
initial purchase commitment.

InfoCure, its executive officers and directors and the selling stockholders
have agreed that, for a period of 90 days from the date of this prospectus,
they will not, without the prior written consent of The Robinson-Humphrey
Company, LLC, offer, sell, contract to sell, or otherwise dispose of, any
shares of common stock of InfoCure or any securities convertible into, or
exercisable or exchangeable for, common stock of InfoCure. The Robinson-
Humphrey Company, LLC, in its sole discretion, may release any of the
securities subject to these lock-up agreements at any time without notice.

53
<PAGE>

The common stock is listed on the Nasdaq Stock Market under the symbol
"INCX."

The following table shows the underwriting discounts and commissions to be
paid to the underwriters by InfoCure and the selling stockholders in connection
with this offering. These amounts are shown assuming both no exercise and full
exercise of the underwriter's option to purchase additional shares of common
stock.

<TABLE>
<CAPTION>
Paid by Selling
Paid by InfoCure Stockholders
----------------- -----------------
No Full No Full
Exercise Exercise Exercise Exercise
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Per share................................
Total....................................
</TABLE>

InfoCure expects to incur expenses of approximately $ in connection
with this offering.

In connection with the offering, The Robinson-Humphrey Company, LLC, on
behalf of the underwriters, may over-allot, or engage in syndicate covering
transactions, stabilizing transactions and penalty bids. Over-allotment
involves syndicate sales of common stock in excess of the number of shares to
be purchased by the underwriters in the offering, which creates a syndicate
short position. Syndicate covering transactions involve purchases of common
stock in the open market after the distribution has been completed in order to
cover syndicate short positions. Stabilizing transactions consist of certain
bids or purchases of common stock made for the purpose of preventing or
retarding a decline in the market price of the common stock while the offering
is in progress. Penalty bids permit the underwriters to reclaim a selling
concession from a syndicate member when The Robinson-Humphrey Company, LLC, in
covering syndicate short positions or making stabilizing purchases, repurchases
shares originally sold by that syndicate member. These activities may cause the
price of the common stock to be higher than the price that otherwise would
exist in the open market in the absence of such transactions. These
transactions may be effected on the Nasdaq Stock Market or in the over-the-
counter market, or otherwise and, if commenced, may be discontinued at any
time.

InfoCure and the selling stockholders have agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the underwriters may be required
to make in respect of any of those liabilities.

SG Cowen Securities Corporation acted as financial adviser to InfoCure in
connection with the HSD Acquisition completed on October 23, 1998, and received
a customary fee for its services in connection therewith. Sanders Morris Mundy
Inc. acted as placement agent in connection with the private placement of the
Series A Preferred completed in February 1998, and received as part of its
compensation a warrant to acquire 100,000 shares of common stock, at an
exercise price of $9.00 per share, in exchange for such services.

LEGAL MATTERS

The validity of the issuance of the shares of the common stock offered hereby
will be passed upon for InfoCure and the selling stockholders by Morris,
Manning & Martin, L.L.P., Atlanta, Georgia. Employees of Morris, Manning &
Martin, L.L.P. own an aggregate 57,760 shares of InfoCure's common stock.
Certain legal matters in connection with the offering will be passed upon for
the underwriters by King & Spalding, Atlanta, Georgia.

EXPERTS

The Consolidated Financial Statements of InfoCure as of December 31, 1997 and
1998 and for the year ended January 31, 1997, the eleven months ended December
31, 1997 and the year ended December 31, 1998, incorporated herein by reference
and included herein and the Financial Statements of DR Software, Inc., Millard-
Wayne, Inc., Rovak, Inc. and KComp Management Systems, Inc. incorporated herein
by reference have been audited by BDO Seidman, LLP, independent auditors, as
set forth in their reports thereon appearing elsewhere herein and incorporated
herein by reference, and are included in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.

54
<PAGE>

The Financial Statements of The Healthcare Systems Division of The Reynolds
and Reynolds Company as of September 30, 1998 and September 30, 1997, and for
the years ended September 30, 1998, 1997 and 1996, appearing in this prospectus
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report appearing herein, and are included in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

This prospectus is part of a registration statement on Form S-3 that we filed
with the Commission. This prospectus does not contain all the information in
that registration statement. For further information with respect to InfoCure
and the securities offered by this prospectus, you should review the
registration statement. You can obtain the registration statement from the
Commission and the Nasdaq Stock Market at the public reference facilities we
refer to below.

The Commission allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the Commission. The
information incorporated by reference is deemed to be part of this prospectus,
except for any information superseded by information contained directly in this
prospectus. This prospectus incorporates by reference the documents set forth
below that InfoCure has previously filed with the Commission. These documents
contain important information about InfoCure and its financial condition.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein, or in any other subsequently filed document that is also incorporated
or deemed to be incorporated by reference herein, modifies or supersedes the
earlier statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.

The following documents are incorporated by reference into this prospectus:

<TABLE>
<CAPTION>
Filing Period
------ ------
<S> <C>
Registration Statement on Form SB-2 (with respect
to the description of the common stock and the
audited financial statements contained therein)
................................................. Effective July 10, 1997
Definitive Proxy Statement (with respect to the
description of the Series A Preferred contained
therein)......................................... Filed on April 30, 1998
Annual Report on Form 10-KSB...................... Year Ended December 31, 1998
Current Report on Form 8-K (relating to the RADMAN
Acquisition)..................................... Dated January 6, 1999
Current Report on Form 8-K (relating to the
OMSystems Merger)................................ Dated February 9, 1999
</TABLE>

All documents filed by InfoCure pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the date of this
prospectus will be deemed to be incorporated by reference into this prospectus
and to be a part hereof from the date of filing of such documents.

On request, InfoCure will provide at no cost to each person, including any
beneficial owner, who receives a copy of this prospectus, a copy of any or all
of the documents incorporated in this prospectus by reference. InfoCure will
not provide exhibits to any of such documents, however, unless such exhibits
are specifically incorporated by reference into this prospectus. Written or
telephonic requests for such copies should be addressed to InfoCure's principal
executive offices, attention: Lance B. Cornell, Senior Vice President--Finance
and Chief Financial Officer, 1765 The Exchange, Suite 450, Atlanta, Georgia
30339, telephone number (770) 221-9990.

55
<PAGE>

WHERE YOU CAN FIND MORE INFORMATION

InfoCure files reports, proxy statements and other information with the
Commission. InfoCure has filed with the Commission a registration statement on
Form S-3 under the Securities Act to register the offering of the shares of
common stock offered hereby. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in
the registration statement. Prospective investors may read and copy the
registration statement and its exhibits and schedules without charge at the
Public Reference Room maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Prospective investors may obtain information on the
operation of the Public Reference Room by calling the Commission at 1-800-SEC-
0330. In addition, InfoCure is required to file electronic versions of these
documents with the Commission through the Commissions' Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. The Commission maintains a
World Wide Web site at http://www.sec.gov that contains reports, proxy
statements and other information regarding registrants that file electronically
with the Commission.

56
<PAGE>

INFOCURE CORPORATION

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
InfoCure Corporation Unaudited Pro Forma Combined Financial Statements
Basis of Presentation................................................... F-2
Pro Forma Combined Balance Sheet........................................ F-3
Pro Forma Combined Statement of Operations.............................. F-4
Notes to Pro Forma Combined Financial Statements........................ F-5
InfoCure Corporation
Report of Independent Certified Public Accountants...................... F-9
Consolidated Balance Sheets............................................. F-10
Consolidated Statements of Operations................................... F-11
Consolidated Statements of Changes in Stockholders' Equity.............. F-12
Consolidated Statements of Cash Flows................................... F-13
Notes to Consolidated Financial Statements.............................. F-14
The Healthcare Systems Division of The Reynolds and Reynolds Company
Independent Auditors' Report............................................ F-32
Balance Sheets.......................................................... F-33
Statements of Operations and Deficit in Divisional Net Assets........... F-34
Statements of Cash Flows................................................ F-35
Notes to Financial Statements........................................... F-36
</TABLE>

F-1
<PAGE>

INFOCURE CORPORATION
PRO FORMA COMBINED FINANCIAL STATEMENTS
(Unaudited)

BASIS OF PRESENTATION

The unaudited pro forma combined financial statements present the balance
sheet and income statement data from the consolidated financial statements of
InfoCure Corporation ("InfoCure" or the "Company") and give effect to the
acquisition by InfoCure (completed in October 1998) of substantially all the
net assets of the Healthcare Systems Division ("HSD") of The Reynolds and
Reynolds Company (the "HSD Acquisition"), the merger in February 1999 with
OMSystems, Inc. ("OMSystems"), the offering, and certain other transactions.

The unaudited pro forma combined statements of operations have been prepared
for the year ended December 31, 1998. These statements give effect to the HSD
Acquisition and the OMSystems merger as if such transactions had occurred on
January 1, 1998. The unaudited pro forma combined balance sheet gives effect to
the OMSystems merger, the offering, and certain other transactions as if such
events had occurred on December 31, 1998. Additionally, the effects of the
offering and other related transactions are also presented on an "as adjusted
basis" as if they had occurred January 1, 1998.

The unaudited pro forma combined financial statements are based on the
historical financial statements of InfoCure and HSD included elsewhere in this
Prospectus, and the estimates and assumptions set forth below and in the notes
to the unaudited pro forma combined financial statements. The unaudited pro
forma combined financial statements also reflect the merger with OMSystems
completed in February 1999. This business combination is to be accounted for as
a pooling of interests and, although not significant for inclusion of separate
financial statements, is presented to provide additional informative
disclosure.

The unaudited pro forma combined statements of operations for the year ended
December 31, 1998 include InfoCure's results of operations for the year ended
December 31, 1998 (which include the results of operations of HSD from October
23, 1998) with appropriate adjustments to reflect the HSD Acquisition for the
period January 1 to October 23, 1998 and the effects of the OMSystems pooling.

The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions that management deems appropriate. The
unaudited pro forma combined financial data presented herein do not purport to
represent the results that InfoCure would have obtained had the transactions
which are the subject of pro forma adjustments occurred at the beginning of the
applicable periods presented, as assumed, or to project the future results of
InfoCure. The unaudited pro forma combined financial statements should be read
in conjunction with the other financial statements and notes thereto included
elsewhere in this prospectus. Also, see the "Risk Factors" included elsewhere
in this prospectus.

F-2
<PAGE>

INFOCURE CORPORATION

PRO FORMA COMBINED BALANCE SHEET

December 31, 1998
(In thousands)
(Unaudited)

<TABLE>
<CAPTION>
InfoCure
Historical Offering Pro Forma
Consolidated OMSystems Subtotal Adjustments Ref Pro Forma Adjustments Ref As Adjusted
------------ --------- -------- ----------- --- --------- ----------- --- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current:
Cash and cash
equivalents $ 8,552 $ 517 $ 9,069 $ -- $ 9,069 $ 83,564 (B) $ 14,427
(78,206) (D)
Accounts receivable,
net................... 22,648 1,631 24,279 -- 24,279 -- 24,279
Inventory.............. 2,043 1,006 3,049 -- 3,049 -- 3,049
Deferred tax asset..... 675 -- 675 -- 675 -- 675
Prepaid expense and
other................. 1,233 148 1,381 -- 1,381 -- 1,381
-------- ------- -------- ------- -------- -------- --------
Total current assets.. 35,151 3,302 38,453 -- 38,453 5,358 43,811
Property and equipment,
net of depreciation.... 8,103 1,035 9,138 -- 9,138 -- 9,138
Goodwill, net of
accumulated
amortization........... 72,203 -- 72,203 -- 72,203 -- 72,203
Other intangibles, net
of accumulated
amortization........... 7,308 -- 7,308 -- 7,308 (4,507) (D) 2,801
Deferred tax asset...... 5,019 -- 5,019 -- 5,019 -- 5,019
-------- ------- -------- ------- -------- -------- --------
Total assets.......... $127,784 $ 4,337 $132,121 $ -- $132,121 $ 851 $132,972
======== ======= ======== ======= ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable........... $ 2,000 $ -- $ 2,000 $ -- $ 2,000 $ -- $ 2,000
Accounts payable....... 3,723 75 3,798 -- 3,798 -- 3,798
Accrued restructuring
costs................. 283 -- 283 -- 283 (105) (C) 178
Accrued expense........ 5,951 456 6,407 -- 6,407 (45) (C) 6,362
Income taxes payable... 645 -- 645 -- 645 -- 645
Deferred revenue....... 9,185 1,594 10,779 -- 10,779 -- 10,779
Current portion of
long-term debt........ 12,884 114 12,998 -- 12,998 (12,108) (D) 890
-------- ------- -------- ------- -------- -------- --------
Total current
liabilities.......... 34,671 2,239 36,910 -- 36,910 (12,258) 24,652
Long-term debt, less
current portion........ 68,358 1,195 69,553 -- 69,553 (604) (C) 3,451
(65,498) (D)
-------- ------- -------- ------- -------- -------- --------
Total liabilities..... 103,029 3,434 106,463 -- 106,463 (78,360) 28,103
-------- ------- -------- ------- -------- -------- --------
Convertible, redeemable
preferred stock........ 8,500 -- 8,500 -- 8,500 (8,500) (C) --
-------- ------- -------- ------- -------- -------- --------
Stockholders' equity:
Common stock, $.001
par................... 8 1 9 -- 9 3 (B) 13
1 (C)
Common stock issuable.. 1,975 -- 1,975 (1,975) (A) -- --
Additional paid-in
capital............... 31,358 6,390 37,748 1,975 (A) 39,723 83,561 (B)
9,253 (C) 132,537
Accumulated deficit.... (15,781) (5,488) (21,269) -- (21,269) (5,107) (D) (26,376)
Deferred compensation.. (1,083) -- (1,083) -- (1,083) (1,083)
Treasury stock......... (222) -- (222) -- (222) -- (222)
-------- ------- -------- ------- -------- -------- --------
Total stockholders'
equity................. 16,255 903 17,158 -- 17,158 87,711 104,869
-------- ------- -------- ------- -------- -------- --------
Total liabilities and
stockholder's equity... $127,784 $ 4,337 $132,121 $ -- $132,121 $ 851 $132,972
======== ======= ======== ======= ======== ======== ========
</TABLE>

See notes to pro forma combined financial statements.

F-3
<PAGE>

INFOCURE CORPORATION

PRO FORMA STATEMENT OF OPERATIONS

Year Ended December 31, 1998
(In thousands, except for per share data)
(Unaudited)

<TABLE>
<CAPTION>
Pro Forma InfoCure,
InfoCure Effects Subtotal HSD and
Historical of HSD InfoCure OMSystems Acquisition Offering
Consolidated Acquisition(1) and HSD OMSystems(2) Combined Adjustments Ref Pro Forma Adjustments Ref
------------ -------------- -------- ------------ --------- ----------- --- --------- ----------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Systems and
software....... $34,492 $ 18,440 $ 52,932 $10,440 $ 63,372 $ -- $ 63,372 $ --
Maintenance,
support and
services....... 29,231 19,775 49,006 4,512 53,518 -- 53,518 --
------- -------- -------- ------- -------- -------- -------- -------
Total revenue.... 63,723 38,215 101,938 14,952 116,890 -- 116,890 --
Operating
expense:
Hardware and
other items
purchased for
resale......... 12,567 6,511 19,078 3,902 22,980 -- 22,980 --
Selling, general
and
administrative.. 34,685 39,382 74,067 7,746 81,813 (15,361) (E) 66,452 --
Depreciation and
amortization... 4,328 5,045 9,373 136 9,509 (2,388) (F) 7,121 --
Purchased
research and
development.... 9,000 -- 9,000 -- 9,000 -- 9,000 --
Compensatory
stock awards... 57 -- 57 6,390 6,447 -- 6,447 --
Restructuring
and special
charges........ 1,874 750 2,624 -- 2,624 -- 2,624 --
------- -------- -------- ------- -------- -------- -------- -------
Total operating
expense......... 62,511 51,688 114,199 18,174 132,373 (17,749) 114,624 --
Operating income
(loss).......... 1,212 (13,473) (12,261) (3,222) (15,483) 17,749 2,266 --
Other expense
(income):
Interest, net... 3,488 (33) 3,455 137 3,592 4,861 (G) 8,453 (8,075) (I)
Other, net...... (81) (1) (82) (63) (145) -- (145) --
------- -------- -------- ------- -------- -------- -------- -------
Income (loss)
before income
taxes........... (2,195) (13,439) (15,634) (3,296) (18,930) 12,888 (6,042) 8,075
Provision
(benefit) for
income taxes.... (334) (5,107) (5,441) -- (5,441) 3,645 (H) (1,796) 3,068 (J)
------- -------- -------- ------- -------- -------- -------- -------
Net income
(loss).......... (1,861) (8,332) (10,193) (3,296) (13,489) 9,243 (4,246) 5,007
Accretive
dividend........ 800 -- 800 -- 800 -- 800 --
------- -------- -------- ------- -------- -------- -------- -------
Net income (loss)
available to
common
stockholders.... $(2,661) $ (8,332) $(10,993) $(3,296) $(14,289) $ 9,243 $ (5,046) $ 5,007
======= ======== ======== ======= ======== ======== ======== =======
Net (loss) per
share:
Basic and
diluted........ $ (0.58)
========
Shares used in
computing net
(loss)
per share (K):
Basic and
diluted........ 8,726
========
<CAPTION>
Pro Forma
As Adjusted
-----------
<S> <C>
Revenue:
Systems and
software....... $ 63,372
Maintenance,
support and
services....... 53,518
-----------
Total revenue.... 116,890
Operating
expense:
Hardware and
other items
purchased for
resale......... 22,980
Selling, general
and
administrative.. 66,452
Depreciation and
amortization... 7,121
Purchased
research and
development.... 9,000
Compensatory
stock awards... 6,447
Restructuring
and special
charges........ 2,624
-----------
Total operating
expense......... 114,624
Operating income
(loss).......... 2,266
Other expense
(income):
Interest, net... 378
Other, net...... (145)
-----------
Income (loss)
before income
taxes........... 2,033
Provision
(benefit) for
income taxes.... 1,272
-----------
Net income
(loss).......... 761
Accretive
dividend........ 800
-----------
Net income (loss)
available to
common
stockholders.... $ (39)
===========
Net (loss) per
share:
Basic and
diluted........ $ (0.00)
===========
Shares used in
computing net
(loss)
per share (K):
Basic and
diluted........ 12,611
===========
</TABLE>
- -------
(1) Includes pro forma effect of HSD acquisition from January 1 to October 23,
1998. The audited historical financial statements of this acquisition are
included elsewhere in this prospectus.

(2) Represents the year ended December 31, 1998. OMSystems was not deemed
significant at the date of acquisition and therefore inclusion of audited
statements is unnecessary.

F-4
<PAGE>

INFOCURE CORPORATION

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS

(Unaudited)

1. General

InfoCure Corporation ("InfoCure" and, together with its subsidiaries, the
"Company") was founded in 1996 to become a leading national provider of
practice management software and services to targeted healthcare specialty
practices. On July 10, 1997, InfoCure completed the initial public offering
("IPO") of its common stock (the "Common Stock") and simultaneously acquired
in separate transactions six businesses (collectively the "Founding
Companies"). Contemporaneously with the acquisition of the Founding Companies
and the IPO, InfoCure merged with American Medcare Corporation ("AMC"). AMC is
considered the predecessor to InfoCure and the accounting acquiror of the
Founding Companies. Subsequent to the IPO and through September 30, 1998, the
Company acquired seven practice management companies, all of which were
accounted for as purchases. In October 1998, the Company completed the
acquisition of substantially all of the net assets of the Healthcare Systems
Division ("HSD") of The Reynolds and Reynolds Company (the "HSD Acquisition")
in a transaction accounted for as a purchase. In December 1998, the Company
completed a merger with Radiology Management Systems, Inc. ("RADMAN") in a
transaction accounted for as a pooling of interests. Accordingly, the
Company's historical financial statements have been restated for the effects
of this pooling. In February 1999, the Company completed a merger with
OMSystems, Inc. ("OMSystems") in a transaction accounted for as a pooling of
interests.

2. Unaudited Pro Forma Combined Balance Sheet Adjustments

Private placement

(A) Records the January issuance of 80,000 shares of Common Stock under the
terms of a private placement to an institutional investor (the "Institutional
Placement"). Net proceeds of $1,975,000 had been received by the Company in
December and recorded as common stock issuable.

Offering adjustments

(B) Records the proceeds from the issuance of 3,000,000 shares of Common
Stock, net of estimated offering costs. Offering costs consist primarily of
discounts and commissions, legal fees, accounting fees and printing expenses.

(C) Records (i) the conversion of 850,060 shares of Series A Convertible,
Redeemable Preferred Stock into 1,000,070 shares of Common Stock at the
applicable conversion price, (ii) the conversion of a $603,566 note payable
and applicable accrued interest into 85,487 shares of Common Stock at the
applicable conversion price and (iii) the issuance of 13,768 shares of Common
Stock in satisfaction of earnout commitments related to previous acquisitions.
These transactions are provided for by the terms of the original applicable
agreements.

(D) Records estimated repayment of indebtedness in connection with the HSD
and other acquisitions under the Line of Credit.

F-5
<PAGE>

INFOCURE CORPORATION

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS--(Continued)

3. Unaudited Pro Forma Combined Statements of Operation Adjustments

Acquisition adjustments

(E) Records pro forma adjustments to compensation and certain other operating
expenses pursuant to applicable provisions of the HSD acquisition agreement. In
accordance with specific terms of the agreement certain operating units and
certain specifically identified personnel and costs related thereto which were
not part of the acquisition have been eliminated. These adjustments are
summarized as follows:

<TABLE>
<CAPTION>
Year Ended
December 31,
Description of adjustment 1998
------------------------- --------------
(in thousands)
<S> <C>
Reduction in compensation and related expenses................. $ 2,678
Net reductions in costs and expenses of operating
activities/centers not acquired............................... 953
Elimination of HSD's corporate services overhead and related
allocations not acquired...................................... 13,584
Increase in the Company's overhead expenses to integrate the
HSD acquisition............................................... (1,854)
-------
$15,361
=======
</TABLE>

The pro forma adjustment to compensation and related expenses is derived from
position reductions at the four HSD operating centers. These reductions, which
are specifically provided for in the acquisition and related agreements,
aggregate 55 positions or approximately 20% of the total headcount prior to the
acquisition. The position eliminations are duplicative in nature and
attributable to administrative activities and redundancies in sales, support
and research and development.

The pro forma adjustment to eliminate net results of operating
activities/centers not acquired is based on the exclusion, pursuant to specific
terms of the acquisition agreement, of HSD's clinical product development
center and its forms management operation. These activities generated minimal
contribution, are not important to integration of the other operating centers
and do not fit within the Company's overall strategy.

The elimination of the corporate services overhead and related allocations
reflects the rational adjustment to eliminate the excessive infrastructure
costs. The expenditure of $15.0 million in overhead for an enterprise with
revenue of $50.0 million clearly indicates that HSD's parent had made a
significant investment in infrastructure intended to support a significantly
larger organization. These reductions, which are specifically provided for in
the acquisition and related agreements, aggregate 106 positions that are either
duplicative in nature or unnecessary to support operations at current levels.
In addition certain corporate overhead services allocated by The Reynolds and
Reynolds Company were not continued by InfoCure under the terms of the
acquisition and related agreements.

It is management's opinion that the reductions will not materially adversely
affect the Company's ability to continue service levels, sales efforts and
other functions required to maintain sales levels comparable with those
historically achieved and, assuming no unforeseen change in economic or other
factors, that these levels could be maintained through the period required to
achieve integration of the HSD Acquisition. Further, as indicated in the table
summarizing pro forma adjustments, management has provided for an addition to
the Company's overhead, including increases in appropriate corporate support
and administrative personnel to facilitate integration of the HSD Acquisition.

Assuming constant sales levels, management believes that no additional change
in personnel is required, called for or anticipated. Any increase in personnel
requirements would be related to increased activity from growth or the
introduction of new products and services. The specifically negotiated
reductions in the workforce give recognition to the economies of scale and
synergies to be attained as a result of integration of the HSD Acquisition.

F-6
<PAGE>

INFOCURE CORPORATION

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS--(Continued)

(F) Records adjustment to depreciation and amortization expense as follows:

<TABLE>
<CAPTION>
Year Ended
December 31,
(Decrease) due to: 1998
- ------------------ --------------
(in thousands)
<S> <C>
Eliminate amortization for other intangibles not acquired....... $(1,880)
Adjustment to depreciation and amortization for increase in
basis and application of uniform lives of three to seven
years.......................................................... (508)
-------
$(2,388)
=======
</TABLE>

Goodwill acquired totalled approximately $36.0 million and represents the
excess of purchase price over identifiable tangible and intangible assets of
HSD as reflected in the independent appraisal. Goodwill is to be amortized over
its estimated useful life of 15 years consistent with the Company's established
policy and, with respect to the HSD Acquisition, is supported by the findings
in the appraisal.

(G) Records adjustment of interest expense related to debt incurred to effect
the purchase of the HSD Acquisition.

(H) Adjusts the provision for income taxes based on other pro forma
adjustments.

Offering adjustments

(I) Records adjustment to interest expense based on (i) debt repaid from the
proceeds of the Offering and (ii) conversion of debt concurrent with the
Offering.

(J) Adjusts the provision for income taxes based on offering adjustments.

4. Debt Extinguishment Costs

As described in Adjustment D, the Company will repay certain indebtedness
with a portion of the proceeds of the Offering. In connection therewith, the
Company anticipates that by the end of the first quarter 1999, it will incur
debt extinguishment costs of as much as $5.1 million including write-off of
deferred loan costs, the estimated value of warrants granted to FINOVA and
prepayment fees.

F-7
<PAGE>

INFOCURE CORPORATION

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS--(Continued)

5. Pro forma earnings per share

(K) The weighted average number of shares used to calculate earnings per
share (EPS) for pro forma and pro forma--as adjusted purposes included the
following:

<TABLE>
<CAPTION>
Year Ended
December 31, 1998
--------------------
Pro Forma
As
Pro Forma Adjusted
--------- ----------
<S> <C> <C>
Shares issued in conjunction with the Company's IPO...... 1,400,000 1,400,000
Shares issued to acquire the Founding Companies.......... 3,895,887 3,895,887
Shares issued in connection with Recent Acquisitions,
including RADMAN and OMSystems.......................... 2,091,662 2,091,662
Shares issued in satisfaction of earnout commitments..... 398,123 398,123
Shares issued in payment of debt and other obligations,
net..................................................... 236,273 236,273
Shares issued in connection with private placements...... 351,322 351,322
Shares issued in connection with exercise of options and
warrants................................................ 257,437 257,437
Shares issued for restricted stock awards................ 95,000 95,000
Shares assumed issued from the Offering to repay debt and
other obligations....................................... -- 2,786,085
Shares assumed issued to convert 850,060 shares of
preferred stock......................................... -- 1,000,070
Shares issuable or assumed issued in satisfaction of
earnout commitments..................................... -- 13,768
Shares assumed issued to convert note payable and accrued
interest................................................ -- 85,487
--------- ----------
Estimated shares outstanding--basic and diluted.......... 8,725,704 12,611,114
========= ==========
</TABLE>

The impact of the assumed exercise of the Company's stock options and
warrants would be anti-dilutive for the year ended December 31, 1998 and have
not been presented.

F-8
<PAGE>

Report of Independent Certified Public Accountants

Board of Directors and Shareholders of
InfoCure Corporation
Atlanta, Georgia

We have audited the accompanying consolidated balance sheets of InfoCure
Corporation and its subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the year ended December 31, 1998, the eleven months ended
December 31, 1997 and the year ended January 31, 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of InfoCure Corporation and its subsidiaries at December 31, 1998 and 1997, and
the consolidated results of their operations and their cash flows for the year
ended December 31, 1998, the eleven months ended December 31, 1997 and the year
ended January 31, 1997 in conformity with generally accepted accounting
principles.

Atlanta, Georgia
February 19, 1999

F-9
<PAGE>

InfoCure Corporation

Consolidated Balance Sheets

<TABLE>
<CAPTION>
December 31, December 31,
1997 1998
------------ ------------
<S> <C> <C>
ASSETS (Note 8):
Current
Cash and cash equivalents....................... $ 1,625,757 $ 8,552,217
Accounts receivable--trade, net of allowance of
$51,000 and $633,000........................... 4,885,460 22,244,180
Other receivables............................... 233,082 403,756
Inventory....................................... 587,336 2,043,268
Deferred tax assets (Note 12)................... 1,160,000 675,000
Prepaid expense and other current assets........ 784,396 1,233,059
------------ ------------
Total current assets.......................... 9,276,031 35,151,480
Property and equipment, net of accumulated
depreciation (Note 5)............................ 1,529,317 8,102,495
Goodwill, net of accumulated amortization of
$404,888 and $3,467,000 (Notes 3 and 4).......... 17,013,526 72,202,999
Other intangible assets (Note 6).................. 1,322,768 7,308,382
Deferred tax assets (Note 12)..................... 1,983,000 5,019,000
------------ ------------
$ 31,124,642 $127,784,356
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities
Note payable (Note 8)........................... $ -- $ 2,000,000
Accounts payable................................ 1,889,922 3,723,248
Accrued expense (Note 7)........................ 1,214,186 5,950,996
Accrued restructuring costs (Note 4)............ 3,172,066 282,916
Income taxes payable............................ -- 644,956
Deferred revenue and customer deposits.......... 5,281,832 9,184,940
Current portion of long-term debt (Note 8)...... 2,061,393 12,883,684
------------ ------------
Total current liabilities..................... 13,619,399 34,670,740
Long-term debt, less current portion (Note 8)..... 7,288,745 68,357,932
Other liabilities (Note 9)........................ 6,585,526 --
------------ ------------
Total liabilities............................. 27,493,670 103,028,672
------------ ------------
Commitments (Note 10)
Convertible, redeemable preferred stock (Note
11).............................................. -- 8,500,600
------------ ------------
Stockholders' equity (Note 11)
Common stock.................................... 6,258 7,622
Common stock issuable........................... -- 1,975,000
Additional paid-in capital...................... 16,860,489 31,358,016
Accumulated deficit............................. (13,119,871) (15,780,949)
Deferred compensation........................... -- (1,083,000)
Treasury stock, at cost......................... (115,904) (221,605)
------------ ------------
Total stockholders' equity.................... 3,630,972 16,255,084
------------ ------------
$ 31,124,642 $127,784,356
============ ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-10
<PAGE>

InfoCure Corporation

Consolidated Statements of Operations

<TABLE>
<CAPTION>
Year Ended Eleven Months Year Ended
January Ended December
31, December 31, 31,
1997 1997 1998
---------- ------------- -----------
<S> <C> <C> <C>
Revenue:
Systems and software.................. $3,857,142 $ 9,733,619 $34,491,904
Maintenance, support and services..... 2,494,151 8,540,814 29,231,668
---------- ------------ -----------
Total revenue........................... 6,351,293 18,274,433 63,723,572
---------- ------------ -----------
Operating expense:
Hardware and other items purchased for
resale............................... 1,192,338 4,327,396 12,566,865
Selling, general and administrative... 5,427,284 11,653,369 34,741,989
Depreciation and amortization......... 236,528 1,091,848 4,328,423
Purchased research and development
(Note 3)............................. -- -- 9,000,000
Asset impairment and restructuring
costs (Note 4)....................... -- 11,136,027 1,874,032
---------- ------------ -----------
Total operating expense................. 6,856,150 28,208,640 62,511,309
---------- ------------ -----------
Operating (loss) income................. (504,857) (9,934,207) 1,212,263
Other expense (income):
Interest, net......................... 82,900 344,146 3,488,225
Other, net............................ (5,805) (223,123) (80,884)
---------- ------------ -----------
Loss before income taxes................ (581,952) (10,055,230) (2,195,078)
Income tax benefit (Note 12)............ (868,000) (1,324,142) (334,000)
---------- ------------ -----------
Net income (loss)....................... 286,048 (8,731,088) (1,861,078)
Accretive dividend (Note 11)............ -- -- 800,000
---------- ------------ -----------
Net income (loss) available to common
stockholders........................... $ 286,048 $ (8,731,088) $(2,661,078)
========== ============ ===========
Net loss per share--basic and diluted
(Note 2)............................... $ (1.79) $ (0.39)
============ ===========
</TABLE>

See accompanying notes to consolidated financial statements

F-11
<PAGE>

InfoCure Corporation

Consolidated Statements of Changes in Stockholders' Equity

<TABLE>
<CAPTION>
Shares
--------------------- Common Accrued Stock Additional
Common Treasury Common Treasury Stock Stock Purchase Deferred Paid-in
Stock Stock Stock Stock Issuable Repurchase Warrant Compensation Capital
----------- -------- -------- --------- ---------- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, at
February 1, 1996.. 49,914,496 (228,489) $ 49,914 $(100,000) $ -- $ -- $ 500,000 $ -- $ 1,627,612
Issuance of
common stock..... 13,387,440 -- 13,388 -- -- -- -- -- 1,424,580
Cancellation of
warrant.......... -- -- -- -- -- -- (500,000) -- 450,000
Issuance of
warrant.......... -- -- -- -- -- -- 80,000 -- --
Issuance of stock
options.......... -- -- -- -- -- -- -- -- 30,000
Capital
contribution..... -- -- -- -- -- -- -- -- 110,000
Pending
repurchase of
common stock..... -- -- -- -- -- (65,000) -- -- --
Net income........ -- -- -- -- -- -- -- -- --
----------- -------- -------- --------- ---------- -------- --------- ----------- -----------
Balance, at January
31, 1997.......... 63,301,936 (228,489) 63,302 (100,000) -- (65,000) 80,000 -- 3,642,192
Issuance of
common stock..... 800,000 -- 800 -- -- -- -- -- 279,200
Stock
repurchase....... (114,933) -- (115) -- -- 65,000 -- -- (64,885)
Conversion of
common stock
upon formation
of Company
(Note 1)......... (60,501,333) 228,489 (60,501) 100,000 -- -- -- -- (41,670)
Issuance of
common stock,
net of related
expense for:
Initial public
offering....... 1,400,000 -- 1,400 -- -- -- -- -- 5,727,064
Acquisition of
Founding
Companies...... 907,585 -- 908 -- -- -- -- -- 4,990,811
Payment of debt
and other
obligations.... 276,716 -- 277 -- -- -- -- -- 1,521,662
Exercise of
warrants....... 111,296 -- 111 -- -- -- (80,000) -- 201,159
Recent
Acquisitions... 76,748 -- 76 -- -- -- -- -- 577,315
Issuance of stock
options and
warrants......... -- -- -- -- -- -- -- -- 27,641
Purchase of
treasury stock... -- (21,073) -- (115,904) -- -- -- -- --
Net loss.......... -- -- -- -- -- -- -- -- --
----------- -------- -------- --------- ---------- -------- --------- ----------- -----------
Balance, at
December 31,
1997.............. 6,258,015 (21,073) 6,258 (115,904) -- -- -- -- 16,860,489
Issuance of
common stock,
net of related
expense for:
Recent
Acquisitions... 373,547 -- 374 -- -- -- -- -- 4,158,903
Private
Placements..... 351,322 -- 351 -- -- -- -- -- 4,777,149
Exercise of
stock options
and warrants... 146,141 -- 146 -- -- -- -- -- 314,024
Earnout
commitments.... 398,123 -- 398 -- -- -- -- -- 2,329,178
Restricted stock
award.......... 95,000 -- 95 -- -- -- -- (1,140,000) 1,139,905
Common stock
issuable in
private
placement ....... -- -- -- -- 1,975,000 -- -- -- --
Issuance of stock
options and
warrants......... -- -- -- -- -- -- -- -- 1,778,368
Accretive
dividend......... -- -- -- -- -- -- -- -- --
Purchase of
treasury stock... -- (19,370) -- (105,701) -- -- -- -- --
Amortization of
deferred
compensation..... -- -- -- -- -- -- -- 57,000 --
Net loss.......... -- -- -- -- -- -- -- -- --
----------- -------- -------- --------- ---------- -------- --------- ----------- -----------
Balance, at
December 31,
1998.............. 7,622,148 (40,443) $ 7,622 $(221,605) $1,975,000 $ -- $ -- $(1,083,000) $31,358,016
=========== ======== ======== ========= ========== ======== ========= =========== ===========
<CAPTION>
Deficit
-------------
<S> <C>
Balance, at
February 1, 1996.. $ (4,674,831)
Issuance of
common stock..... --
Cancellation of
warrant.......... --
Issuance of
warrant.......... --
Issuance of stock
options.......... --
Capital
contribution..... --
Pending
repurchase of
common stock..... --
Net income........ 286,048
-------------
Balance, at January
31, 1997.......... (4,388,783)
Issuance of
common stock..... --
Stock
repurchase....... --
Conversion of
common stock
upon formation
of Company
(Note 1)......... --
Issuance of
common stock,
net of related
expense for:
Initial public
offering....... --
Acquisition of
Founding
Companies...... --
Payment of debt
and other
obligations.... --
Exercise of
warrants....... --
Recent
Acquisitions... --
Issuance of stock
options and
warrants......... --
Purchase of
treasury stock... --
Net loss.......... (8,731,088)
-------------
Balance, at
December 31,
1997.............. (13,119,871)
Issuance of
common stock,
net of related
expense for:
Recent
Acquisitions... --
Private
Placements..... --
Exercise of
stock options
and warrants... --
Earnout
commitments.... --
Restricted stock
award.......... --
Common stock
issuable in
private
placement ....... --
Issuance of stock
options and
warrants......... --
Accretive
dividend......... (800,000)
Purchase of
treasury stock... --
Amortization of
deferred
compensation..... --
Net loss.......... (1,861,078)
-------------
Balance, at
December 31,
1998.............. $(15,780,949)
=============
</TABLE>

See accompanying notes to consolidated financial statements

F-12
<PAGE>

InfoCure Corporation

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January 31, December 31, December 31,
1997 1997 1998
----------- ------------- ------------
<S> <C> <C> <C>
Cash provided by (used in) operating
activities:
Net income (loss).................. $ 286,048 $(8,731,088) $ (1,861,078)
Adjustments to reconcile net income
(loss) to cash provided by (used
in) operating activities:
Purchase of in-process research
and development.................. -- -- 9,000,000
Asset impairment and restructuring
costs............................ -- 11,136,027 1,874,032
Depreciation and amortization..... 236,528 1,091,848 4,328,423
Allowance for doubtful accounts... (55,086) 16,000 582,000
Net gain on sale of property and
equipment........................ -- -- (9,160)
Stock-based compensation.......... 30,000 27,500 86,155
Option cancellation expense....... 110,000 -- --
Deferred income taxes............. (868,816) (1,369,991) (1,633,000)
Changes in current assets and
liabilities--net of effects of
acquisitions:
Accounts receivable............. (37,192) (1,077,338) (7,469,327)
Inventory, prepaid expense and
other current assets........... 130,301 (493,087) (131,035)
Accounts payable and accrued
expense........................ (442,901) (2,107,821) 2,380,458
Deferred revenue................ (511,122) 817,046 (1,039,001)
----------- ----------- ------------
Net cash provided by (used in)
operating activities........... (1,122,240) (690,904) 6,108,467
----------- ----------- ------------
Cash used in investing activities:
Net cash paid for acquisition of
Founding Companies................ (150,000) (3,745,113) --
Net cash paid for acquisition of
Recent Acquisitions............... -- (4,795,408) (60,161,254)
Property and equipment
expenditures...................... (48,966) (297,472) (2,557,791)
Net proceeds from disposal of
property and equipment............ -- -- 327,679
Cash paid for other intangible
assets............................ (237,377) (76,093) (3,505,628)
Proceeds from collection of notes
and other receivables............. -- 375,201 --
----------- ----------- ------------
Net cash used in investing
activities.......................... (436,343) (8,538,885) (65,896,994)
----------- ----------- ------------
Cash provided by financing
activities:
Proceeds from issuance of common
stock............................. 1,320,402 6,008,464 6,752,500
Proceeds from exercise of options
and warrants...................... -- 121,270 314,170
Net borrowings under acquisition
credit facility................... -- 7,188,095 55,200,788
Proceeds from issuance of long-term
debt.............................. 296,066 -- --
Payment of loan costs.............. -- (299,879) (2,519,308)
Proceeds from issuance of
convertible preferred stock....... -- -- 7,819,952
Repayment of notes payable to
stockholders...................... -- -- (143,848)
Principal payments on long-term
debt.............................. (155,282) (2,262,115) (603,566)
Proceeds from note payable to
stockholder....................... 108,545 -- --
Repurchase of common stock
warrant........................... (50,000) -- --
Purchase of treasury stock......... -- (115,904) (105,701)
----------- ----------- ------------
Net cash provided by financing
activities.......................... 1,519,731 10,639,931 66,714,987
----------- ----------- ------------
Net change in cash and cash
equivalents......................... (38,852) 1,410,142 6,926,460
Cash and cash equivalents, beginning
of period........................... 254,467 215,615 1,625,757
----------- ----------- ------------
Cash and cash equivalents, end of
period.............................. $ 215,615 $ 1,625,757 $ 8,552,217
=========== =========== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-13
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements

1. Organization and Basis of Presentation

InfoCure Corporation ("InfoCure") was founded in November 1996 to develop,
market and service practice management systems for use by health care providers
throughout the United States. On July 10, 1997, InfoCure closed an initial
public offering of its common stock, par value $.001 per share, (the "Common
Stock") (the "July Offering") and simultaneously acquired the following six
operating companies: (i) International Computer Solutions, Inc. ("ICS"), (ii)
Health Care Division, Inc. ("HCD"), (iii) Millard-Wayne, Inc. ("Millard-
Wayne"), (iv) KComp Management Systems, Inc. ("KComp"), (v) DR Software, Inc.
("DR Software") and (vi) Rovak, Inc. ("Rovak") (collectively the "Founding
Companies"). American Medcare Corporation ("AMC"), a holding company and parent
of ICS, HCD, and Millard-Wayne, originally incorporated on January 11, 1983,
was merged with and into InfoCure at the time the Offering became effective and
is considered a predecessor company to InfoCure and the accounting acquirer of
all the companies. All outstanding shares of AMC were converted into
approximately 3.0 million shares of InfoCure Common Stock concurrently with the
consummation of the Offering. The aggregate consideration paid for the Founding
Businesses was approximately $3.7 million in cash and 907,000 shares of Common
Stock for an aggregate value of $8.7 million including fees and other
acquisition related costs.

Subsequent to the consummation of the Offering and the acquisition of the
Founding Companies, InfoCure acquired substantially all the assets or all the
outstanding equity securities of the following companies: (i) Professional On-
Line Computer, Inc. ("POLCI"); (ii) Commercial Computers, Inc. ("CCI"); (iii)
SoftEasy Software, Inc. ("SoftEasy"); (iv) Pace Financial Corporation ("PACE");
and (v) the orthodontic business unit of HALIS Services, Inc. ("OPMS"). POLCI,
CCI and SoftEasy were acquired with effect from October 1, 1997; PACE was
acquired with effect from November 1, 1997 and OPMS was acquired with effect
from December 1, 1997. Aggregate consideration for these acquisitions completed
in the eleven months ended December 31, 1997 was approximately 77,000 shares of
Common Stock and $11.7 million cash and debt, for an aggregate value of $12.4
million.

Additionally, in the year ended December 31, 1998, InfoCure acquired
substantially all the assets, subject to the assumption of certain liabilities,
of Micro-Software Designs, Inc. ("MDI") and Healthcare Systems Division ("HSD")
of The Reynolds and Reynolds Company and acquired the outstanding equity
securities of Medical Software Integrators, Inc. ("MSI"). These acquisitions
were effective from January 1, 1998 with respect to MDI and MSI and October 23,
1998 for HSD. Aggregate consideration for these acquisitions completed in 1998
was approximately 373,000 shares of Common Stock and $73.0 million cash and
debt for an aggregate value of $77.1 million. These acquisitions, together with
the acquisitions described in the preceding paragraph, are collectively
referred to as the "Recent Acquisitions."

In December 1998, InfoCure completed a merger with Radiology Management
Systems, Inc. ("RADMAN"). The Company exchanged approximately 497,000 shares of
InfoCure in the transaction. This acquisition was accounted for as a pooling of
interests. Accordingly, the accompanying consolidated financial statements
include the financial position, results of operations and cash flows of RADMAN
for all periods.

With the exception of the RADMAN transaction, the acquisitions of the
Founding Companies as well as the Recent Acquisitions, have been accounted for
using the purchase method of accounting.

InfoCure, the Founding Companies, the Recent Acquisitions and RADMAN are
referred to collectively as the Company. The Company changed its fiscal
reporting period to December 31 effective February 1, 1997.

The accompanying financial statements have been presented on a consolidated
basis for the eleven months ended December 31, 1997, and the year ended
December 31, 1998, including InfoCure, and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated. The
accompanying consolidated financial statements include AMC (InfoCure's
predecessor) and its subsidiaries, RADMAN, ICS

F-14
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

and HCD for the period from February 1, 1997; the Founding Companies for the
period from July 11, 1997, and the Recent Acquisitions from their respective
dates of acquisition.

For the year ended January 31, 1997, the accompanying financial statements
present the consolidated financial position, results of operation and cash
flows of AMC and its wholly owned subsidiaries, RADMAN, ICS and, with effect
from December 3, 1996, HCD, which was acquired as of that date.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period.
Actual results could differ from those estimates.

Revenue Recognition

Revenue from software sales is recognized upon shipment in instances where
the Company has evidence of a contract, the fee charged is fixed and
determinable and collection is probable. Hardware resales are recognized upon
product shipment. Revenue from support and maintenance contracts, which are
typically one year in length, is recognized ratably over the life of the
contract. Revenue from other services is recognized as the services are
provided.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturity dates of
three months or less from the date of purchase to be cash equivalents.

Concentrations of Credit Risk

The Company's credit concentrations are limited due to the wide variety of
customers in the health care industry and the geographic areas into which the
Company's systems and services are sold. The Company performs periodic credit
evaluations of its customers and generally does not require collateral. Bad
debt expense was approximately $142,000, $159,000 and $862,000 for the year
ended January 31, 1997, the eleven months ended December 31, 1997 and the year
ended December 31, 1998, respectively. Corresponding write-offs of
uncollectible accounts receivable were approximately $197,000, $143,000 and
$280,000 for the year ended January 31, 1997, the eleven months ended December
31, 1997 and the year ended December 31, 1998, respectively.

At certain times during the year, the Company maintains cash and cash
equivalents in bank accounts in amounts above the federally insured limits.

Fair Value of Financial Instruments

The fair value of financial instruments is the amount at which the instrument
could be exchanged in a current transaction between willing parties. Management
estimates that the carrying amounts of the Company's financial instruments
included in the accompanying consolidated balance sheets are not materially
different from their fair values.

Inventories

Inventory consists primarily of peripheral computer equipment and related
supplies. Inventory is accounted for on the first-in, first-out basis and
reported at the lower of cost or market.

F-15
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed over the
estimated useful lives of the related assets using both straight line and
accelerated methods for financial reporting and primarily accelerated methods
for income tax purposes. Substantial betterments to property and equipment are
capitalized and repairs and maintenance are expensed as incurred.

Capitalized Software Costs

Software development costs are expensed as incurred prior to establishing the
technological feasibility of a product. For the period between the
establishment of technological feasibility and the time a product is available
for general release, such costs are capitalized. Capitalized software costs are
amortized using the straight-line method over the estimated lives of the
related products (generally 48 months).

Goodwill and Other Intangible Assets

Intangible assets consist primarily of goodwill, which represents the excess
of cost over the fair value of assets acquired in business combinations
accounted for under the purchase method. All goodwill is amortized on a
straight-line basis over an estimated useful life of 15 years. Other intangible
assets consist primarily of deferred loan costs which are being amortized over
the life of the respective loans at rates which approximate the interest
method.

Asset Impairment

Statement of Financial Accounting Standards ("SFAS") No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of, effective for years beginning after December 15, 1995, requires that long-
lived assets and certain intangibles to be held and used by the Company be
reviewed for impairment. The Company periodically assesses whether there has
been a permanent impairment of its long-lived assets, in accordance with SFAS
No. 121. A write-down of assets due to impairment was required for the eleven
months ended December 31, 1997, in the amount of approximately $7.8 million
(Note 4).

Income Taxes

The Company accounts for income taxes under an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. In estimating future tax
consequences, the Company generally considers all expected future events other
than possible enactments of changes in the tax laws or rates.

Restructuring Costs

The Company records the costs of consolidating existing Company facilities
into acquired operations, including the external costs and liabilities to close
redundant Company facilities and severance and relocation costs related to the
Company's employees in accordance with Emerging Issues Task Force ("EITF")
Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in
Restructuring).

Earnings Per Share

The Company has adopted the provisions of SFAS No. 128, Earnings Per Share,
which is effective for fiscal years ending after December 15, 1997. Basic
earnings per share for the eleven months ended

F-16
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

December 31, 1997 is calculated based upon the weighted average number of
common shares outstanding during the period. Diluted earnings per share include
the dilutive effect of Common Stock equivalents. Earnings per share (EPS) for
the year ended January 31, 1997, has not been presented as it is not considered
meaningful due to the acquisitions of the Founding Companies and the Company's
initial public offering in conjunction with the formation of the Company during
the period ended December 31, 1997.

Weighted average number of shares outstanding used in computing basic EPS for
the eleven months ended December 31, 1997, were 4,880,455. Weighted average
number of shares outstanding used in computing basic EPS for the year ended
December 31, 1998, were 6,780,437. The impact of the assumed exercise of the
Company's stock options and warrants and convertible preferred stock would have
been antidilutive for the eleven months ended December 31, 1997, and the year
ended December 31, 1998, and, therefore, diluted EPS data have not been
presented. The impact of the assumed exercise of these instruments may have a
dilutive effect in the future.

Reclassification

Certain prior year amounts have been reclassified to conform with the current
year presentation.

New Accounting Pronouncements

SFAS No. 130, Reporting Comprehensive Income, became effective in 1998. This
statement establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purposes financial
statements. This Statement requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. The Company addressed the requirements of SFAS No.
130 and there was no impact on the financial statements as a result.

SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, became effective in 1998. It establishes standards for reporting
information about operating segments in annual financial statements and interim
financial reports issued to shareholders. Generally, certain financial
information is required to be reported on the basis that is used internally for
evaluating performance of and allocation of resources to operating segments.
The Company has determined that this standard did not impact its current
practice of reporting operating information.

Statement of Position ("SOP") 97-2, Software Revenue Recognition, issued by
the American Institute of Certified Public Accountants, became effective in
1998. This Statement provides guidance on applying generally accepted
accounting principles in recognizing revenue on software transactions and
establishes certain criteria for revenue recognition. The revenue recognition
criteria stated in the pronouncement had no material impact on the Company's
financial statements.

SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
is effective for all fiscal quarters of fiscal years beginning after June 15,
1999. SFAS No. 133 requires companies to recognize all derivatives contracts as
either assets or liabilities in the balance sheet and to measure them at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedge, the objective of which is to match the timing of gain or
loss recognition on the hedging derivative with the recognition of (i) the
changes in

F-17
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

the fair value of the hedged asset or liability that are attributable to the
hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
For a derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. Historically, the Company has not
entered into derivatives contracts either to hedge existing risks or for
speculative purposes. Accordingly, the Company does not expect adoption of the
new standard on January 1, 2000, to affect its financial statements.

3. Business Combinations

In December 1996, AMC, the predecessor to the Company, through its wholly-
owned subsidiary HCD, acquired certain assets and assumed certain liabilities
of a division of InfoSystems of North Carolina, Inc. ("ISI"). Aggregate
consideration was $1.7 million comprised of $150,000 cash and a $1.55 million
note payable to ISI.

As described in Note 1, the Company, in conjunction with the July Offering,
acquired the six Founding Companies. The Recent Acquisitions, also described in
Note 1, included POLCI, CCI and SoftEasy, acquired with effect from October 1,
1997; PACE, acquired with effect from November 1, 1997; and OPMS, acquired with
effect from December 1, 1997. Additionally, the Recent Acquisitions described
in Note 1 also included the fiscal 1998 acquisitions of MSI and MDI, acquired
with effect from January 1, 1998, and HSD, acquired October 23, 1998.

Also as described in Note 1, the Company merged with RADMAN in December 1998.
This acquisition was accounted for as a pooling of interests. Accordingly, the
accompanying consolidated financial statements include the financial position,
results of operations and cash flows of RADMAN for all periods.

All of the companies acquired have long-term marketing rights to and/or
ownership of licensed software in various segments of the healthcare industry.
Except for the RADMAN acquisition, all of the acquisitions of the Company and
its predecessor have been accounted for under the purchase method of accounting
and the acquired companies' results of operations from the respective
acquisition dates are included in the accompanying consolidated financial
statements.

The separate results of operations of InfoCure and RADMAN for the periods
presented follow. The amounts for the year ended January 31, 1997 are for AMC
(InfoCure's predecessor).

<TABLE>
<CAPTION>
Year Ended Eleven Months Year Ended
January Ended December
31, December 31, 31,
1997 1997 1998
---------- ------------- -----------
<S> <C> <C> <C>
Revenue
InfoCure............................. $2,494,563 $15,755,072 $59,235,474
RADMAN............................... 3,856,730 2,519,361 4,488,098
---------- ----------- -----------
$6,351,293 $18,274,433 $63,723,572
========== =========== ===========
Net income (loss)
InfoCure............................. $ 254,094 $(8,569,498) $(2,881,712)
RADMAN............................... 31,954 (161,590) 1,020,634
---------- ----------- -----------
$ 286,048 $(8,731,088) $(1,861,078)
========== =========== ===========
</TABLE>

The following unaudited pro forma information presents the consolidated
results of operations of the Company as if the acquisitions had occurred as of
the beginning of the immediately preceding period. The

F-18
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

pro forma information is not necessarily indicative of what would have occurred
had the acquisitions been made as of such periods, nor is it indicative of
future results of operations. The pro forma amounts give effect to appropriate
adjustments for the fair value of the assets acquired, reductions in personnel
costs and other operating expenses not assumed as part of the acquisitions,
amortization of intangibles, interest expense and income taxes.

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January 31, December 31, December 31,
Pro Forma Amounts 1997 1997 1998
----------------- ----------- ------------- ------------
(In Thousands Except Share Data)
<S> <C> <C> <C>
Revenue............................. $48,589 $ 89,056 $101,938
Net income (loss) available to
common stockholders ............... 1,499 (18,174) (3,002)
Loss per share--basic and diluted... (2.52) (0.34)
</TABLE>

The pro forma amounts for net income and earnings per share for the eleven
months ended December 31, 1997 include the impact of asset impairment and
restructuring charges as described in Note 4. Pro forma earnings per share for
the year ended January 31, 1997 are not considered meaningful and have not been
presented.

The following tables summarize the fair values of the assets acquired,
liabilities assumed and consideration given in connection with the foregoing
acquisitions accounted for as purchases:

<TABLE>
<CAPTION>
Year Ended Eleven Months Year Ended
January Ended December
31, December 31, 31,
1997 1997 1998
---------- ------------- -----------
<S> <C> <C> <C>
Accounts receivable.................. $ 154,358 $ 3,218,513 $10,642,067
Inventory............................ -- -- 1,426,186
Prepaid expenses..................... -- -- 347,374
Property and equipment............... 60,000 1,216,574 4,831,662
Goodwill............................. 1,926,717 21,644,540 56,148,495
Capitalized software................. -- 1,717,956 420,082
Other assets......................... 8,902 1,321,316 707,381
Deferred revenue..................... (432,324) (2,690,051) (4,942,109)
Accounts payable..................... (14,305) (933,630) (692,577)
Notes payable........................ -- (1,650,173) --
Other liabilities.................... (3,348) (2,744,090) (742,118)
---------- ----------- -----------
Net assets acquired.................. 1,700,000 21,100,955 68,146,443
Purchased research and development... -- -- 9,000,000
---------- ----------- -----------
Total acquisition.................... $1,700,000 $21,100,955 $77,146,443
========== =========== ===========
</TABLE>

These acquisitions were funded as follows:

<TABLE>
<CAPTION>
Year Ended Eleven Months Year Ended
January Ended December
31, December 31, 31,
1997 1997 1998
---------- ------------- -----------
<S> <C> <C> <C>
Common stock........................... $ -- $ 5,569,110 $ 4,159,277
Note payable and other payables........ 1,550,000 6,991,324 12,825,912
Cash................................... 150,000 8,540,521 60,161,254
---------- ----------- -----------
Total consideration.................... $1,700,000 $21,100,955 $77,146,443
========== =========== ===========
</TABLE>

F-19

<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

In addition to the foregoing consideration, certain of the purchase
acquisition agreements provided for additional purchase consideration based on
attaining certain revenue or operating income goals. The additional
consideration will be accounted for as additional purchase price or
compensation expense if and when earned. Maximum contingent consideration
payable with respect to the Founding Companies originally aggregated
$4.7 million. As more fully described in Note 4, the Company's restructuring
plans affected certain of the acquired companies such that portions of the
contingent consideration related thereto was deemed earned and payable as of
December 31, 1997. Accordingly, approximately $2.5 million of such
consideration was included as part of the Company's restructuring costs for the
eleven months ended December 31, 1997, in settlement of estimated contingent
consideration obligations related to the affected companies. In the year ended
December 31, 1998, the Company finalized negotiations with respect to
contingent consideration for one affected company. As a result the Company
agreed to an additional $750,000 of purchase consideration which is included in
its restructuring costs for the year ended December 31, 1998.

Maximum contingent consideration payable with respect to the Recent
Acquisitions completed in 1998 aggregates $12.4 million. In 1998 contingent
consideration of approximately $1.1 million was earned and has been recorded as
additional purchase price pursuant to the terms of the original purchase
agreement, as amended. Total remaining contingent consideration outstanding at
December 31, 1998 is approximately $10.9 million.

Purchased Research and Development

Through its acquisition of HSD, the Company acquired three in-process
physician practice management system research and development projects. As of
the acquisition date, technological feasability had not been established and
there were no alternative future uses for the projects. The Company assigned an
aggregate value of $9 million to the projects, based on the results of an
independent appraisal. The appraisal considered the projects' stage of
completion at the acquisition date and the time frame and estimated costs to
complete the projects.

4. Impairment of Assets and Restructuring Costs

Effective December 1, 1997, the Company determined to restructure through a
plan to consolidate existing facilities and acquired operations. This
restructuring plan enabled the Company to more effectively leverage its present
and planned acquisitions, streamline its offering of products and services and
respond more effectively to changing market conditions. In connection
therewith, management also reevaluated the Company's investment in goodwill and
capitalized software in light of current market conditions and the
restructuring plan. Management determined that, based on current market
conditions and an analysis of projected undiscounted future cash flows
calculated in accordance with the provisions of SFAS No. 121, the carrying
amount of certain long-lived assets, principally of Rovak and DR Software, may
not be recoverable. The resultant impairment of long-lived assets, due
principally to the impact of the Company's new acquisitions (Note 3),
necessitated a write-down of approximately $7.8 million as follows: (i) $3.5
million and $2.8 million of goodwill representing the excess of cost over net
assets of the acquisition of Rovak and DR Software, respectively, acquired in
July 1997 and (ii) $1.5 million of capitalized software related to products
whose future utility is diminished based on market conditions. The estimated
fair values of these long-lived assets were determined by calculating the
present value of estimated expected future cash flows using a discount rate
commensurate with the risks involved.

In connection with effecting the consolidation and restructuring, the Company
has also recorded costs and accrued liabilities to close redundant facilities,
cancel leases and other executory contracts and recognize

F-20
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

contingent consideration earned or deemed as payable under terms of certain
acquisition agreements for acquired companies affected by the consolidation and
restructuring.

The restructuring plan, which was completed in the second quarter of 1998,
also included termination of certain redundant staff positions. Details of this
element of the restructuring plan were finalized and communicated in the first
quarter of 1998. Accordingly, compensation costs, including severance and other
termination benefits, and other future costs related to the restructuring
aggregating $1.1 million, were recognized in the first quarter of 1998 in
accordance with EITF No. 94-3.

Asset impairment and restructuring costs for the eleven months ended December
31, 1997 and the year ended December 31, 1998, are as follows:

<TABLE>
<CAPTION>
Eleven Months
Ended Year Ended
December 31, December 31,
Cost related to 1997 1998
--------------- ------------- ------------
<S> <C> <C>
Write-off of goodwill............................ $ 6,360,063 $ --
Write-off of capitalized software development
costs........................................... 1,460,943 --
Facility closure and consolidation............... 460,808 --
Compensation costs for severance and other
termination benefits............................ -- 1,124,032
"Earn-out" compensation for contingent
consideration earned or deemed payable to former
stockholders of entities affected by the
consolidation and restructuring................. 2,558,169 750,000
Other asset write-downs and costs................ 296,044 --
----------- ----------
Total asset impairment and restructuring costs... $11,136,027 $1,874,032
=========== ==========
</TABLE>

As of December 31, 1998, approximately 50 employee terminations were related
to restructuring actions. Accrued restructuring at December 31, 1998 totaled
approximately $283,000, which is considered adequate to cover the facilities
related costs which remain as a result of the 1997 restructuring plan.

5. Property and Equipment

Major classes of property and equipment consisted of the following:

<TABLE>
<CAPTION>
Estimated
Useful Lives December 31, December 31,
(Years) 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Office and computer equipment....... 3-5 $2,017,013 $ 6,765,489
Furniture and fixtures.............. 5-7 492,414 1,684,816
Equipment under capital lease
obligations........................ 3-5 161,732 1,233,876
Leasehold improvements.............. 3-5 76,029 333,320
---------- -----------
2,747,188 10,017,501
Less accumulated depreciation....... 1,217,871 1,915,006
---------- -----------
$1,529,317 $ 8,102,495
========== ===========
</TABLE>

Depreciation expense was approximately $78,000, $231,000 and $651,000 for the
year ended January 31, 1997, the eleven months ended December 31, 1997 and the
year ended December 31, 1998, respectively. In connection with the
restructuring plan described in Note 4, the Company disposed of property and
equipment, primarily office and computer equipment, with a net book value of
approximately $155,000.

F-21

<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

6. Other Intangible Assets

Other intangible assets consisted of:

<TABLE>
<CAPTION>
December 31, December 31,
1997 1998
------------ ------------
<S> <C> <C>
Unamortized loan costs............................. $ 299,879 $4,655,739
Capitalized software development costs............. 859,877 2,602,027
Capitalized costs of future acquisitions........... 611,880 401,746
Other.............................................. 196,992 417,425
---------- ----------
1,968,629 8,076,937
Less accumulated amortization...................... 645,861 768,555
---------- ----------
$1,322,768 $7,308,382
========== ==========
</TABLE>

As described in Note 4, approximately $1.5 million of capitalized software
was written-off during the eleven month period ended December 31, 1997.
Amortization of capitalized software charged to operations was approximately
$101,000, $331,000 and $112,000 for the year ended January 31, 1997, the eleven
months ended December 31, 1997, and the year ended December 31, 1998,
respectively.

7. Accrued Expense

Accrued expense consisted of the following:

<TABLE>
<CAPTION>
December 31, December 31,
1997 1998
------------ ------------
<S> <C> <C>
Interest........................................... $ 85,174 $1,677,195
Compensation....................................... 645,549 1,420,875
Additional purchase price consideration............ -- 1,100,000
Taxes, other than income........................... 55,979 484,249
Professional fees.................................. 169,000 146,849
Other.............................................. 258,484 1,121,828
---------- ----------
$1,214,186 $5,950,996
========== ==========
</TABLE>

8. Notes Payable and Long-Term Debt

The Company has a $2 million short-term note payable given in connection with
an acquisition. The note bears interest at 12% per annum. The first installment
of $1 million was due in January 1999 and the second installment is due and
payable in February 1999.

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
December
December 31, 31,
1997 1998
------------ -----------
<S> <C> <C>
Notes payable, FINOVA Capital Corporation
("FINOVA") (1).................................... $7,188,095 $68,350,807
Subordinated notes payable, remainder of purchase
price for acquisitions (2)........................ 1,207,132 10,603,566
Subordinated notes payable to stockholders;
interest varies between 7% and 10%; maturing at
various dates through 2001........................ 618,328 180,058
Other.............................................. 336,583 2,107,185
---------- -----------
9,350,138 81,241,616
Less current portion............................... 2,061,393 12,883,684
---------- -----------
$7,288,745 $68,357,932
========== ===========
</TABLE>

F-22
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

(1) At December 31, 1997, the Company had a $10 million credit facility with
FINOVA for the purpose of funding its acquisition program. The credit
facility is collateralized by substantially all of the Company's assets and
the accounts receivable, cash flows and assets of future acquisition
companies. This facility has a five-year term and accrues interest at an
annual rate of prime plus 1.25% to 2%, depending on the Company achieving
certain debt service ratios. This facility also included a contingent
obligation payment, due in 2001 or upon full prepayment, based on the
Company achieving certain operating cash flows in excess of a base
operating cash flow, as defined. At December 31, 1997, the interest rate
was 10.5% per annum and the contingent obligation payment was
indeterminable.

In February 1998, an amendment to the credit facility and a new loan
increased the available credit under this facility to $30 million and, in
October 1998, another amendment and new loan increased the available credit
under this facility to $70 million. In connection with the amendments and
increases, the interest rates were prime plus 0.5% to 1% (8.75% at December
31, 1998) on the $20 million loan and fixed at 9.5% on the $40 million and
$10 million loans. Principal is due on all the loans in quarterly
installments, beginning at $2,777,000, increasing ratably to $6,777,000,
before the final installment of $13,777,000 in October 2002. In addition,
with the October 1998 amendment and increase, the Company agreed to pay
fees and costs of approximately $2.5 million and issued warrants to the
lender to acquire up to 245,000 shares of Common Stock. The estimated value
of these warrants is $1.5 million, which is included in other intangible
assets and is being amortized as interest expense over the remaining term
of the loan. A portion of these fees and costs were in substitution of the
contingent obligation payment described above.

(2) The notes payable for the remainder of purchase price for acquisitions
consist of two notes at December 31, 1998. One note, for $10 million, is
due in equal installments of principal over five years. The initial
interest rate is eight percent per annum and increases each year to a
maximum of 14 percent per annum. The note is convertible, at the Company's
option during the first year of the term, into shares of Common Stock at a
rate based on the price per share of an underwritten public offering or the
market value of the Common Stock. The remaining $603,566 note bears
interest at six percent per annum and is due October 1, 2000. This note is
convertible into shares of Common Stock upon the closing of a public
offering of the Common Stock (Note 14). The conversion price is $7.59 or
$8.25 per share if the conversion occurs in 1999 or 2000, respectively.

As of December 31, 1998, future maturities of these obligations are as
follows:

<TABLE>
<CAPTION>
Year Amount
---- -----------
<S> <C>
1999......................................................... $12,883,684
2000......................................................... 14,217,296
2001......................................................... 13,592,420
2002......................................................... 38,473,429
2003......................................................... 2,074,787
-----------
Total...................................................... $81,241,616
===========
</TABLE>

9. Other Liabilities

At December 31, 1997, other liabilities consisted primarily of approximately
$6.3 million representing the balance payable in connection with the
acquisition of PACE effective November 1, 1997. This amount was paid in the
first quarter of 1998 from proceeds of long-term debt.

10. Commitments

Operating Leases

The Company leases its office facilities and certain equipment under
operating leases having terms ranging from one to seven years.

F-23
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

Approximate future minimum rentals, by year and in the aggregate, under
noncancellable operating leases with remaining terms of more than one year are
as follows:

<TABLE>
<CAPTION>
Year Amount
---- ----------
<S> <C>
1999.......................................................... $2,838,000
2000.......................................................... 2,393,000
2001.......................................................... 2,002,000
2002.......................................................... 1,847,000
2003.......................................................... 560,000
Thereafter.................................................... 203,000
----------
Total....................................................... $9,843,000
==========
</TABLE>

Rent expense was approximately $140,000, $468,000 and $1,338,000 for the year
ended January 31, 1997, the eleven months ended December 31, 1997, and the year
ended December 31, 1998, respectively.

Employee Benefit Plan

In January 1998, the Company implemented a qualified 401(k) savings plan
("the Plan") covering all employees meeting certain age and years of service
eligibility requirements. Eligible employees may contribute up to 15% of their
annual salary to the Plan, subject to certain limitations. The Company may make
matching contributions and may also provide profit-sharing contributions at its
sole discretion. Employees become fully vested in any employer contributions
after five years of service.

During the eleven months ended December 31, 1997, the companies comprising
the Founding Companies and the Recent Acquisitions had separate benefit plans
for employee retirement. As of January 31, 1998, all previous plans were rolled
into the newly adopted plan. Contributions to employee benefit plans for the
year
ended January 31, 1997, the eleven months ended December 31, 1997, and the year
ended December 31, 1998, were approximately $0, $34,000, and $435,000,
respectively. The contribution for the year ended December 31, 1998 will be in
Common Stock.

11. Stockholders' Equity

Common Stock

In connection with the formation of the Company and concurrent with
completion of its initial public offering, all of the approximately 52 million
outstanding shares of AMC common stock were converted into approximately 3.0
million shares of Common Stock. The Company had 15,000,000 shares of $.001 par
value Common Stock and 2,000,000 shares of $.001 par value Preferred Stock
authorized at December 31, 1998. Shares of Common Stock issued and outstanding
were 6,236,942 and 7,581,705, respectively, at December 31, 1997 and December
31, 1998.

Institutional Investor

Under the terms of a private placement agreement with an institutional
investor (the "Investor"), the Company can exercise options ("Put Options")
with the Investor. Generally, upon exercise of a Put Option, the Investor must
tender the amount designated by the Company (the "Investment Amount"). The
number of shares to be issued upon exercise of a Put Option is based on a
nominal discount of the stock's average closing price, as defined.

The Investor has committed to invest up to $10 million. The Company has
exercised $7 million in three installments from September 28 through December
31, 1998. The most recent installment, for $2 million, was initiated in
December 1998, closed in January 1999, and is reflected as common stock
issuable in the accompanying financial statements. A total of 351,322 shares
were issued in the first two installments and 80,000 shares were issued in the
third installment.

F-24
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

The Company also granted the Investor warrants to acquire 100,000 shares of
common stock (see below).

Convertible Redeemable Preferred Stock

In February 1998, the Company completed the sale of 850,060 shares of its
Convertible Redeemable Preferred Stock in a private placement for approximately
$8.5 million which netted the Company $7.8 million after commissions and
offering expenses. These proceeds were used primarily for funding future
acquisitions and related expenses.

The Preferred Stock is not currently entitled to any set level of dividends;
however, in the event the Company should pay any dividend or make any other
distribution in respect of its Common Stock, a dividend in a like amount must
be paid in respect to the Preferred Stock based on the number of shares of
Common Stock into which the Preferred Stock could then be converted.

Shares of the Redeemable Preferred Stock are immediately convertible into
shares of Common Stock. Until February 6, 1999, the shares can be converted
into that number of Common Stock shares determined by dividing the initial
price of $10.00 per share by a conversion price of $8.50. On February 6, 1999,
the conversion price will be reset for the lesser of $8.50 per share or the
trailing 30-day average closing price of the Common Stock, subject to a minimum
of $6.75 per share. All unconverted shares of Preferred Stock will be redeemed
by the Company for $10 per share plus accumulated and unpaid dividends in
February 2003.

The holders of Preferred Stock are entitled to vote together as a single
class with the holders of Common Stock on all matters submitted to a vote of
stockholders, except to the extent a separate class vote is required. The
holders of Preferred Stock have one vote for each share of Common Stock that
could then be acquired on conversion of their Preferred Stock.

Upon any dissolution, liquidation or winding-up of the Company, before any
payments are made to any holders of Common Stock or any other class or series
the Company's capital stock then outstanding, the holders of Preferred Stock
are entitled to receive an amount equal to $10.00 per share of Preferred Stock
or, in the event the holders of Common Stock would be entitled to a greater
payment, the holders of Preferred Stock are entitled to participate equally
with the holders of Common Stock, on an as-converted basis, in such liquidating
distribution.

The Preferred Stock is not entitled to cumulative voting and has no
preemptive rights. There is no sinking fund in respect of the Preferred Stock.

In connection with the immediate conversion feature the Company recognized
$800,000 as an accretive dividend attributable to the Preferred Stock issuance
including commissions and the estimated value of warrants granted to the
placement agent (see below).

Stock Compensation Plans

The Company has stock option plans that provide for the granting of incentive
and non-qualified options to purchase the Company's Common Stock to selected
officers, other key employees, directors, and consultants. These plans include
the InfoCure Corporation 1996 Stock Option Plan, the InfoCure Corporation
Length-of-Service Nonqualified Stock Option Plan, and the InfoCure Corporation
Directors Stock Option Plan. The Company also assumed the stock options of AMC,
its predecessor, which were outstanding at July 10, 1997. Such options were
converted at the same rate used in connection with the conversion of AMC's
common stock.

Under the InfoCure Corporation 1996 Stock Option Plan 3,000,000 shares of
Common Stock of the Company have been reserved for option grants to directors,
officers, other key employees, and consultants. Employees of the Company may be
granted Incentive Stock Options (ISOs) within the dollar limitations under

F-25
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

Section 422(d) of the Internal Revenue Code. The exercise price of all ISOs
shall not be less than the fair market value of the Common Stock as of the
option grant date (110% of such value for 10% shareholders). Options granted to
directors and consultants must be nonqualified stock options. Options vest
ratably over the four year period beginning on the grant date.

Under the InfoCure Corporation Length-of-Service Nonqualified Stock Option
Plan, 500,000 shares of Common Stock of the Company have been reserved for
issuance to employees of the Company. Employees are granted nonqualified stock
options based on years of service with the Company and are fully vested four
years from the grant date. The exercise price of options issued pursuant to
this plan shall be no less than the fair market value of the Common Stock as of
the grant date.

Under the InfoCure Corporation Directors Stock Option Plan, 100,000 shares of
Common Stock of the Company have been reserved for issuance as nonqualified
stock options to Directors of the Company who are not employees of the Company.
Upon appointment to the Board of Directors, a director receives an option grant
of 10,000 shares and may receive an additional option grant of 2,500 shares on
each anniversary date. One-half of the options granted pursuant to this plan
vests after one year of service following the grant date and the other one-half
vests after two years of service following the grant date.

In 1998, the Company implemented the InfoCure Employee Stock Purchase Plan.
This plan allows employees of the Company to purchase Common Stock through
payroll deductions for 85% of fair market value. As of December 31, 1998, there
are 150,000 shares of Common Stock reserved for issuance under this plan.

In October 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123, Accounting for Stock-Based Compensation, effective for InfoCure
beginning February 1, 1996. SFAS No. 123 defines a "fair value method" of
accounting for employee stock options. It also allows accounting for such
options under the "intrinsic value method" in accordance with Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
Employees and related interpretations. If a company elects to use the intrinsic
value method, then pro forma disclosures of earnings and earnings per share are
required as if the fair value method of accounting was applied. The effects of
applying SFAS No. 123 in the pro forma disclosures are not necessarily
indicative of future amounts because the pro forma disclosures do not take into
account the amortization of the fair value of awards prior to 1995.
Additionally, InfoCure is expected to grant additional awards in future years.

The Company has elected to account for its stock options under the intrinsic
value method as outlined in APB No. 25. The fair value method requires use of
option valuation models, such as the Black-Scholes option valuation model, to
value employee stock options, upon which a compensation expense is based. The
Black-Scholes option valuation model was not developed for use in valuing
employee stock options. Instead, this model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because InfoCure's stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, it is management's
opinion that the existing models do not necessarily provide a reliable measure
of the fair value of its employee stock options. Under the intrinsic value
method, compensation expense is only recognized if the exercise price of the
employee stock option is less than the market price of the underlying stock on
the date of grant.

In accordance with SFAS No. 123, the fair value for the Company's employee
stock options was estimated at the date of grant using the Black-Scholes option
pricing model with the following weighted

F-26
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

average assumptions for the year ended January 31, 1997, the eleven months
ended December 31, 1997 and the year ended December 31, 1998.

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January 31, December 31, December 31,
1997 1997 1998
----------- ------------- ------------
<S> <C> <C> <C>
Risk-free interest rate............. 7.5% 5.7-6.2% 6%
Dividend yield...................... 0.0% 0.0% 0.0%
Volatility factor................... 0.0% 19.7% 58%
Weighted average expected life (in
years)............................. 5-10 5 4

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information, excluding earnings per share for year ended January 31,
1997 which are not considered meaningful, follows:

<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January 31, December 31, December 31,
1997 1997 1998
----------- ------------- ------------
(In Thousands Except Share Data)
<S> <C> <C> <C>
Net income (loss) available to
common stockholders
As reported....................... $286 $ (8,731) $(2,661)
Pro forma......................... 46 (8,835) (3,803)

Basic and diluted loss per share
As reported....................... $ (1.79) $ (0.39)
Pro forma......................... (1.81) (0.56)
</TABLE>

A summary of stock option activity, and related information for the year
ended January 31, 1997, the eleven months ended December 31, 1997, and the year
ended December 31, 1998 follows:

<TABLE>
<CAPTION>
Weighted-
Average
exercise
Options price
--------- ---------
<S> <C> <C>
Outstanding at February 1, 1996......................... 238,640 $12.78
Granted............................................... 138,710 4.05
Exercised............................................. (29,830) 0.02
Forfeited or canceled................................. (178,980) 16.76
---------
Outstanding at January 31, 1997......................... 168,540 3.63
Granted............................................... 985,471 4.23
Exercised............................................. -- --
Forfeited or canceled................................. (2,983) 1.67
---------
Outstanding at December 31, 1997........................ 1,151,028 4.15
Granted............................................... 1,697,475 12.64
Exercised............................................. (50,887) 1.22
Forfeited or canceled................................. (251,829) 8.26
---------
Outstanding at December 31, 1998........................ 2,545,787 9.74
Options exercisable at January 31, 1997................. 36,542 1.74
Options exercisable at December 31, 1997................ 68,236 2.91
Options exercisable at December 31, 1998................ 361,232 4.22
</TABLE>

F-27
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

The weighted average fair value of options granted for the year ended January
31, 1997, the eleven months ended December 31, 1997, and the year ended
December 31, 1998, were $0.11, $1.34 and $6.81, respectively.

The following table summarizes information about the Company's outstanding
stock options at December 31, 1998.

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------- ------------------------
Weighted-
Number Average Weighted- Number Weighted-
Range of Outstanding at Remaining Average Exercisable at Average
Exercise December 31, Contractual Exercise December 31, Exercise
Prices 1998 Life (Years) Price 1998 Price
-------- -------------- ------------ --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
$ 1.68- 4.13 708,696 2.6 $ 4.01 266,211 $3.81
4.19- 9.81 454,742 2.7 7.55 95,021 5.31
10.00-13.50 1,320,549 3.8 13.29 -- --
13.63-26.44 61,800 3.6 15.77 -- --
------------ --------- --- ------ ------- -----
$ 1.68-26.44 2,545,787 3.2 $ 9.74 361,232 $4.22
============ ========= === ====== ======= =====
</TABLE>

Restricted Stock Award

In 1998, the Board approved a restricted stock award aggregating 95,000
shares as part of an incentive compensation package to three executives. The
fair value of this award at the grant date, approximately $1.1 million, is
deferred compensation amortizable over its ten year vesting period; however,
the vesting can be accelerated upon the occurrence of certain events. Under the
terms of the agreement, 50% of shares not vested will automatically vest upon
the Company's stock having an average closing price of $25 per share over a
20-day period. The remainder of shares not vested will automatically vest upon
the Company's stock having an average closing price of $40 per share over a 20-
day period. Based on these criteria, approximately $500,000 vested in the first
quarter of 1999 and it is possible that the remaining portion will also vest
during the first quarter 1999.

Warrants

In 1997, the Company issued to an investment advisory firm a warrant to
acquire 110,000 shares of Common Stock at $5.50 per share. This warrant was in
lieu of approximately $330,000 payable to the investment advisory firm
principally for services in connection with the Company's acquisition program.
An executive/director is associated with this investment advisory firm.

In connection with the acquisition of PACE, the Company issued to the former
owners of PACE warrants to acquire 186,000 shares of Common Stock at an
exercise price of $9.13 per share. These warrants have a ten-year term.

In connection with the Redeemable Preferred Stock private placement in
February 1998, the Company granted to the placement agent a ten-year warrant to
acquire 100,000 shares of Common Stock at an exercise price of $9.00 per share.
The $219,000 estimated value of this warrant was recorded as part of the
accretive dividend attributed to the preferred stockholders.

In connection with a private placement arrangement with the Investor, the
Company granted a warrant to acquire 100,000 shares of Common Stock at $23.00
per share. This warrant has a five-year term and is immediately exercisable.

F-28

<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

In connection with the October 1998 loan which increased the Company's credit
facility, the lender was granted the right to acquire up to 245,000 shares of
Common Stock at $12 per share. At December 31, 1998, an immediately exercisable
warrant for 225,000 shares had been issued with a ten-year term. The $1.5
million estimated value of this warrant has been recorded as deferred loan
costs.

None of the foregoing warrants have been exercised.

12. Income Taxes

The components of income tax expense (benefit) are as follows:

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January December 31, December 31,
31, 1997 1997 1998
---------- ------------- ------------
<S> <C> <C> <C>
Current:
Federal........................... $ 696 $ 38,849 $ 1,064,000
State............................. 120 7,000 235,000
--------- ----------- -----------
Total current....................... 816 45,849 1,299,000
--------- ----------- -----------
Deferred:
Federal........................... (168,146) (1,406,741) (1,104,000)
State............................. (29,670) (248,250) (244,000)
--------- ----------- -----------
Total deferred...................... (197,816) (1,654,991) (1,348,000)
--------- ----------- -----------
Change in deferred tax asset
valuation allowance................ (671,000) 285,000 (285,000)
--------- ----------- -----------
Net income tax benefit.............. $(868,000) $(1,324,142) $ (334,000)
========= =========== ===========
</TABLE>

Deferred taxes result from temporary differences between the bases of assets
and liabilities for financial reporting purposes and such amounts as measured
by tax laws and regulations. The sources of the temporary differences and their
effect on deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
December 31, December 31,
1997 1998
------------ ------------
<S> <C> <C>
Current:
Deferred tax assets
Allowance for doubtful accounts............... $ 20,000 $ 247,000
Deferred revenue and customer deposits........ 617,000 235,000
Accrued restructuring costs................... 309,000 72,000
Credit carryforwards.......................... 60,000 --
Accrued expense............................... 154,000 76,000
Other......................................... -- 45,000
---------- ----------
1,160,000 675,000
---------- ----------
Noncurrent:
Deferred tax assets
Basis difference of goodwill, capitalized
software costs, property and equipment and
other assets................................. 1,620,000 4,760,000
Net operating loss carryforwards.............. 648,000 259,000
---------- ----------
2,268,000 5,019,000
---------- ----------
Subtotal.......................................... 3,428,000 5,694,000
Valuation allowance............................... (285,000) --
---------- ----------
$3,143,000 $5,694,000
========== ==========
</TABLE>

F-29
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

The Company's effective income tax rate varied from the U.S. federal
statutory rate as follows:

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January December 31, December 31,
31, 1997 1997 1998
---------- ------------- ------------
<S> <C> <C> <C>
Expected tax benefit................ $(198,000) $(3,419,000) $(746,000)
Increase (decrease) in income taxes
resulting from:
State income benefit.............. (35,000) (603,000) (154,000)
Nondeductible goodwill............ (14,000) 2,306,000 724,000
Other, net........................ 50,000 106,858 127,000
Change in deferred tax asset
valuation allowance.............. (671,000) 285,000 (285,000)
--------- ----------- ---------
Net income tax benefit.............. $(868,000) $(1,324,142) $(334,000)
========= =========== =========
</TABLE>

As of December 31, 1998, the Company and its subsidiaries have net operating
loss carryforwards for federal income tax purposes of approximately $761,000
which expire at various dates to 2013.

13. Supplemental Cash Flow Information

Cash payments for interest amounted to approximately $99,000, $309,000 and
$1,906,000 for the year ended January 31, 1997, the eleven months ended
December 31, 1997, and the year ended December 31, 1998, respectively. The
Company made cash payments for income taxes of approximately $0, $5,000 and
$1,200,000 for the year ended January 31, 1997, the eleven months ended
December 31, 1997 and the year ended December 31, 1998, respectively.

During the year ended January 31, 1997, the Company acquired certain assets
and assumed certain liabilities of HCD for consideration of a note in the
amount of $1,550,000 and cash of $150,000. During the eleven months ended
December 31, 1997, the Company issued Common Stock with an aggregate fair value
of approximately $5.6 million and incurred notes payable and other liabilities
of approximately $7.0 million in connection with acquisition of the Founding
Companies and the Recent Acquisitions. During the year ended December 31, 1998,
the Company issued Common Stock with an aggregate fair value of approximately
$4.2 million and incurred notes payable and other liabilities of approximately
$12,800,000 in connection with acquisitions completed during the period.

During the year ended January 31, 1997, and year ended December 31, 1998, the
Company issued stock warrants with an aggregate value of approximately $190,000
and $1.7 million, respectively, for services rendered to the Company.

14. Subsequent Events

In January 1999, the Company filed a registration statement to offer to the
public 3 million shares of its Common Stock. The Company intends to use the
proceeds to repay amounts outstanding on the FINOVA credit facility and notes
payable to The Reynolds and Reynolds Company from the purchase of HSD. The
balance of the proceeds will be used for working capital and other general
corporate purposes. In connection with planned extinguishment of outstanding
debt, the Company will incur debt extinguishment costs of as much as $5.1
million, representing write-off of deferred loan costs, including costs paid
after December 31, 1998.

In two separate transactions in February 1999, the Company merged with
OMSystems, Inc. ("OMS") and Macon Systems Management, LLC ("MSM") in business
combinations to be accounted for as pooling of interests. The Company exchanged
approximately 1,144,000 shares of Common Stock in the OMS transaction

F-30
<PAGE>

InfoCure Corporation

Notes to Consolidated Financial Statements--(Continued)

and 83,000 shares of Common Stock in the MSM transaction. OMS and MSM provide
practice management software for orthodontists and dermatologists,
respectively.

Pro forma unaudited results of operations assuming the OMS merger occurred on
February 1, 1996 are as follows:

<TABLE>
<CAPTION>
Eleven Months
Year Ended Ended Year Ended
January 31, December 31, December 31,
1997 1997 1998
----------- ------------- ------------
(In Thousands Except Share Data)
<S> <C> <C> <C>
Net revenue............................ $16,037 $29,617 $78,676
Net income (loss) available to common
stockholders.......................... 1,628 (7,124) (5,957)
Net loss per share--basic and diluted.. (1.18) (0.75)
</TABLE>

Earnings per share for the year ended January 31, 1997, has not been
presented as it is not considered meaningful due to the acquisitions of the
Founding Companies and the Company's initial public offering in conjunction
with the formation of the Company during the period ended December 31, 1998.

The pro forma information presented does not include the results of
operations of MSM as this merger was not considered significant.

F-31

<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors
The Reynolds and Reynolds Company:

We have audited the accompanying balance sheets of the Healthcare Systems
Division ("HSD") of The Reynolds and Reynolds Company ("R&R") as of September
30, 1998 and 1997, and the related statements of operations and deficit in
divisional net assets, and cash flows for each of the three years in the period
ended September 30, 1998. These financial statements are the responsibility of
R&R and HSD's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of HSD at September 30, 1998 and 1997, and the
results of its operations and its cash flows for each of the three years in the
period ended September 30, 1998 in conformity with generally accepted
accounting principles.

Deloitte & Touche LLP
Dayton, Ohio
January 15, 1999

F-32
<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

BALANCE SHEETS
SEPTEMBER 30, 1998 AND 1997 (In thousands)

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................ $ 4 $ 74
Accounts receivable (less allowance for doubtful accounts
of $958--1998 and $974--1997)........................... 11,946 11,423
Inventories--finished goods.............................. 1,607 1,836
Prepaid expenses and other assets........................ 566 649
-------- --------
Total current assets................................... 14,123 13,982
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Leasehold improvements................................... 700 572
Computer and other equipment............................. 5,977 4,871
Furniture and other...................................... 1,881 1,645
Construction in progress................................. 1 90
-------- --------
Total property, plant and equipment.................... 8,559 7,178
Less accumulated depreciation............................ 4,987 3,671
-------- --------
Net property, plant and equipment...................... 3,572 3,507
-------- --------
INTANGIBLE ASSETS:
Goodwill, net............................................ 8,824 9,852
Software licensed to customers, net...................... 5,071 5,997
Other, net............................................... 1,447 3,374
-------- --------
Total intangible assets................................ 15,342 19,223
-------- --------
OTHER ASSETS............................................... 921 2,133
-------- --------
TOTAL ASSETS............................................... $ 33,958 $ 38,845
======== ========
CURRENT LIABILITIES:
Accounts payable:
Trade................................................... $ 2,122 $ 2,340
Other................................................... 1,024 1,727
Accrued liabilities:
Compensation and related items.......................... 2,466 3,033
Other................................................... 1,335 1,543
Deferred revenues........................................ 210 867
-------- --------
Total current liabilities.............................. 7,157 9,510
-------- --------
Other liabilities:
Postretirement medical.................................. 402 222
Pensions................................................ 1,655 1,143
Other................................................... 41 797
-------- --------
Total other liabilities................................ 2,098 2,162
-------- --------
ADVANCES FROM PARENT, NET.................................. 35,789 47,907
-------- --------
DEFICIT IN DIVISIONAL NET ASSETS........................... (11,086) (20,734)
-------- --------
TOTAL LIABILITIES AND DEFICIT IN DIVISIONAL NET ASSETS..... $ 33,958 $ 38,845
======== ========
</TABLE>

See notes to financial statements.

F-33
<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

STATEMENTS OF OPERATIONS AND DEFICIT IN DIVISIONAL NET ASSETS
YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996
(In thousands)

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
NET SALES AND REVENUES:
Products......................................... $ 23,194 $ 22,651 $24,259
Services......................................... 24,874 17,796 16,412
-------- -------- -------
Total net sales and revenues................. 48,068 40,447 40,671
-------- -------- -------
COSTS AND EXPENSES
Cost of sales:
Products....................................... 18,541 18,935 16,701
Services....................................... 14,639 8,917 7,986
-------- -------- -------
Total cost of sales.......................... 33,180 27,852 24,687
-------- -------- -------
Selling, general and administrative expenses..... 32,650 42,815 24,339
Restructuring charge............................. -- 1,427 --
-------- -------- -------
Total costs and expenses..................... 65,830 72,094 49,026
-------- -------- -------
OPERATING LOSS..................................... (17,762) (31,647) (8,355)
-------- -------- -------
OTHER CHARGES (INCOME):
Interest expense................................. 1 3 1
Interest income.................................. (51) (49) (16)
Other............................................ (23) (20) 7
-------- -------- -------
Total other income........................... (73) (66) (8)
-------- -------- -------
LOSS BEFORE INCOME TAX BENEFIT..................... (17,689) (31,581) (8,347)
INCOME TAX BENEFIT................................. (6,603) (10,847) (2,900)
-------- -------- -------
NET LOSS........................................... (11,086) (20,734) (5,447)
DEFICIT IN DIVISIONAL NET ASSETS:
Beginning of period.............................. (20,734) (5,447) (2,458)
Advance from parent.............................. 20,734 5,447 2,458
-------- -------- -------
End of period.................................... $(11,086) $(20,734) $(5,447)
======== ======== =======
</TABLE>

See notes to financial statements.

F-34

<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996
(In thousands)

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net loss......................................... $(11,086) $(20,734) $(5,447)
Adjustments to reconcile net loss to net cash
used in operating activities:
Purchased in-process research and development
costs.......................................... 11,000
Depreciation and amortization................... 7,095 5,587 3,387
Loss on sales of assets......................... 138 4
Changes in operating assets and liabilities, net
of assets acquired:
Accounts receivable............................. (523) 686 (2,998)
Inventories..................................... 229 (526) 247
Prepaid expenses, intangible and other assets... 1,340 379 (258)
Accounts payable................................ (921) 194 1,485
Accrued and other liabilities................... (1,917) (1,083) 675
-------- -------- -------
Net cash used in operating activities.......... (5,783) (4,359) (2,905)
-------- -------- -------
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Business combinations, net of cash acquired...... (494) (17,524)
Capital expenditures............................. (1,425) (1,244) (2,478)
Net proceeds from sales of assets................ 34 19 622
Capitalization of software licensed to
customers....................................... (1,018) (1,065) (888)
-------- -------- -------
Net cash used in investing activities.......... (2,903) (19,814) (2,744)
-------- -------- -------
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Advances from parent, net........................ 8,616 26,015 5,349
Principal payment on debt........................ (1,769) (10)
-------- -------- -------
Net cash provided by financing activities...... 8,616 24,246 5,339
-------- -------- -------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS....... (70) 73 (310)
CASH AND EQUIVALENTS--Beginning of year........... 74 1 311
-------- -------- -------
CASH AND EQUIVALENTS--End of year................. $ 4 $ 74 $ 1
======== ======== =======
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTION -
Advance from parent.............................. $ 20,734 $ 5,447 $ 2,458
======== ======== =======
</TABLE>

See notes to financial statements.

F-35

<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996
(In thousands)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business--The financial statements include the accounts of the
Healthcare Systems Division ("HSD" or the "Division") of The Reynolds and
Reynolds Company ("R&R"). HSD sells computer systems including both hardware
and software to a wide range of entities that operate in the healthcare
industry. HSD also receives service revenue from hardware and software
maintenance as well as training and installation services.

Because HSD is operated as a segment of R&R, these financial statements may
not necessarily be representative of results that would have been attained if
HSD had operated as a separate entity.

Use of Estimates--The financial statements are prepared in conformity with
generally accepted accounting principles and include amounts based on
management's best estimates and judgments. The use of estimates and judgments
may affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.

Cash and Cash Equivalents--For purposes of reporting cash flows, cash and
cash equivalents includes cash on hand, cash deposits and investments with
maturities of three months or less at the time of purchase. The carrying amount
of these short-term investments approximates fair value.

Concentrations of Credit Risk--The Company is a leading provider of
information management systems to entities in the healthcare industry. A
significant portion of accounts receivable are due from such entities.

Inventories--Inventories, which consist primarily of computer equipment, are
stated at the lower of cost or market. Cost is determined by specific
identification. Market is based on net realizable value.

Property, Plant and Equipment--Property, plant and equipment are stated at
cost. Depreciation and amortization are provided over the estimated useful
service lives of the assets or asset groups, principally on the straight-line
method for financial reporting purposes. Estimated asset lives are:

<TABLE>
<CAPTION>
Years
------
<S> <C>
Lease improvements.................................................... 3 - 5
Computer and other equipment.......................................... 3 - 5
Furniture and other................................................... 3 - 15
</TABLE>

Intangible Assets--The excess of cost over the fair value of net assets of
companies acquired is recorded as goodwill and is amortized on a straight-line
basis over primarily seven years. Amortization expense was $2,261, $1,878 and
$1,803 for the years ended September 30, 1998, 1997 and 1996, respectively. At
September 30, 1998 and 1997, accumulated amortization was $7,328 and $5,067,
respectively.

The Company capitalizes certain costs of developing its software products.
Upon completion of a software product, amortization is determined based on the
larger of the amounts computed using (a) the ratio that current gross revenues
for each product bears to the total of current and anticipated future gross
revenues for that product or (b) the straight-line method over the remaining
estimated economic life of the product, primarily five years. Amortization
expense for software licensed to customers was $1,943, $1,103 and $116 for the
years ended September 30, 1998, 1997 and 1996, respectively. Amortization
expense, which is included in cost of goods sold, for the year ended September
30, 1998 includes a $750 write-off of capitalized software, which

F-36
<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

was determined to be impaired based on management's analysis of undiscounted
future cash flows. In addition, amortization expense for the year ended
September 30, 1997 included $648 from special charges (see Note B). At
September 30, 1998 and 1997 accumulated amortization was $13,742 and $11,799,
respectively.

Other intangible assets are amortized over periods ranging from two to
fifteen years. Amortization expense was $1,564, $1,473 and $534 for the years
ended September 30, 1998, 1997 and 1996, respectively. At September 30, 1998
and 1997 accumulated amortization was $6,846 and $5,282, respectively.

The carrying values of goodwill and other intangible assets are reviewed if
the facts and circumstances indicate potential impairment of their carrying
value. Any impairment in the carrying value of such intangibles is recorded
when identified in accordance with APB Opinion No. 17, "Intangible Assets" and
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."

Revenue Recognition--Revenues consist of both product sales and service
revenues. Products sales, including computer hardware and software licenses,
are recorded upon shipment to customers. Service revenues, which include
computer hardware maintenance, software support and training are recorded
ratably over the contract period or as services are performed.

Lease Obligations--The Division, along with other divisions at R&R, leases
premises and equipment under various capital and operating lease agreements.
However, the Division has not entered into significant leasing arrangements
separate from other R&R divisions; therefore, future minimum rental commitments
are not significant. Rental expenses allocated to the Division were $2,383,
$2,001 and $1,397 for the years ended September 30, 1998, 1997 and 1996,
respectively.

Research and Development Costs--The Company expenses research and development
costs as incurred. These costs were $4,092, $14,676 and $3,240 for the years
ended September 30, 1998, 1997 and 1996, respectively. These costs are included
in selling, general and administrative expenses in the accompanying statements
of operations. Included in the year ended September 30, 1997 are $11,000 of
purchased in-process research and development costs. In-process research and
development acquired in business combinations represented software development
costs for which technological feasibility was not established and for which
there was no alternative future use.

Income Taxes--The results of operations of HSD are included in a consolidated
federal income tax return with R&R. Federal income tax benefits allocable to
the operations of HSD are calculated as if it had filed separate income tax
returns, state income taxes are allocated based on R&R's overall effective
state tax rate. Income tax benefits are charged against advances from parent,
net. No deferred tax assets or liabilities are allocated by R&R to the
Division.

Reclassifications--Certain amounts in the 1997 financial statements have been
reclassified to conform to the 1998 presentation.

B. RESTRUCTURING AND SPECIAL CHARGES

During the year ended September 30, 1997, the Division recorded a pretax
charge of $13,075 consisting of a $1,427 restructuring charge and $11,648 of
other special charges. After income tax benefits, the charges

F-37
<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

increased net loss by $9,530. The income tax rate on the combined charges
represented a 27.1% effective tax rate because not all of the charges were tax
deductible. Major components of the charges are listed on the following table:

<TABLE>
<CAPTION>
Restructuring Special Total
Charge Charges Charges
------------- ------- -------
<S> <C> <C> <C>
Employee termination benefits.................... $1,427 $ $ 1,427
In-process research and development.............. 11,000 11,000
Discontinued products............................ 648 648
------ ------- -------
Totals......................................... $1,427 $11,648 $13,075
====== ======= =======
</TABLE>

Restructuring Charge--Employee termination benefits consisted of involuntary
severance benefits and voluntary retirement benefits for 23 employees. Through
September 30, 1998, all involuntary termination benefits had been paid. See
Note E to the financial statements for a discussion of voluntary retirement
benefits.

Special Charges--In-process research and development expenses resulted from
two recent computer services business combinations and represented software
development costs for which technological feasibility was not established and
for which there were no alternative future use. The balance of special charges
represented primarily the write-off of discontinued software licensed to
customers. Special charges increased cost of sales $648 and selling, general
and administrative expenses $11,000.

C. BUSINESS COMBINATIONS

In fiscal year 1997, the Division purchased two healthcare computer services
businesses for $17,524, paid from R&R's available cash. One of the businesses,
acquired June 30, 1997, provided information systems to physician practices
with primary emphasis on practice management systems for hospital-based
physicians. The other business, acquired February 28, 1997, has capabilities in
electronic medical records and clinical management. These businesses had annual
sales of about $10,000. Based on management's analysis of cash flows and an
appraisal, $11,000 of the purchase price was allocated to in-process research
and development, representing software development costs for which
technological feasibility was not established and for which there was no
alternative future use. Through September 30, 1998, no amounts have been
capitalized for software development relating to these projects.

Recorded liabilities of acquired companies included the costs to exit
duplicate facilities. Key elements of the costs accrued for exiting duplicate
facilities were involuntary termination benefits of $398 and lease costs of
$219. Involuntary termination benefits represent severance payments and
outplacement services for 54 employees. Through September 30, 1998, all
severance benefits were paid and the Division bought out its remaining lease
obligation. Costs paid approximated those reserved.

All business combinations were accounted for as purchases and the accounts of
the acquired businesses were included in the Division's financial statements
since the dates of acquisition. In connection with the business combinations,
the Division recorded goodwill of $2,889 in 1997. This goodwill is being
amortized on a straight-line basis over seven years.

Pro Forma Information (Unaudited)--On a pro forma basis, assuming that the
1997 business combinations were made as of October 1, 1995, the revenues of HSD
would have increased by $9,700 and $13,500 for the years ended September 30,
1997 and 1996, respectively. Net loss would have decreased by $7,700 for the
year-ended September 30, 1997 and increased by $2,300 for the year-ended
September 30, 1996. The in-process research and development charge was excluded
from both 1997 and 1996. These pro forma results of operations include pre-
acquisition results of the businesses acquired and may not be indicative of the
results of operations that actually would have been obtained if the business
combination had been in effect or that may be obtained in the future.

F-38
<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

D.INCOME TAX BENEFIT

<TABLE>
<CAPTION>
1998 1997 1996
------ ------- ------
<S> <C> <C> <C>
Provision for Income Tax Benefit
Federal................................................ $5,288 $ 8,618 $2,301
State and local........................................ 1,315 2,229 599
------ ------- ------
Income tax benefit....................................... $6,603 $10,847 $2,900
====== ======= ======
</TABLE>

<TABLE>
<CAPTION>
1998 1997 1996
--------------- ---------------- ---------------
Amount Percent Amount Percent Amount Percent
------ ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Reconciliation of Income Tax
Rates
Statutory federal income
taxes...................... $6,191 35.0 % $11,053 35.0 % $2,921 35.0 %
State and local taxes less
federal income tax effect.. 855 4.8 1,449 4.6 390 4.7
Goodwill amortization and
write-off.................. (371) (2.1) (323) (1.0) (313) (3.7)
In-process research and
development................ (1,401) (4.4)
Other....................... (72) (0.4) 69 0.1 (98) (1.3)
------ ---- ------- ---- ------ ----
Income tax benefit............ $6,603 37.3 % $10,847 34.3 % $2,900 34.7 %
====== ==== ======= ==== ====== ====
</TABLE>

E.POSTRETIREMENT BENEFITS

Pension benefits for the majority of the Division's employees are provided
through plans that are maintained by R&R. Pension benefits are based primarily
on years of service and compensation. R&R's funding policy is to make annual
contributions to the pension plan sufficient to meet or exceed the minimum
statutory requirements.

The Division also participates in the R&R sponsored defined benefit medical
plan for employees who retired before October 1, 1993. Future retirees may
purchase postretirement medical insurance from R&R. Discounts from the market
price of postretirement medical insurance will be provided to certain retirees
based on age and length of remaining service as of October 1, 1993. R&R also
sponsors a defined benefit life insurance plan in which substantially all of
the Division's employees participate. Medical and life insurance benefits are
funded on a pay as you go basis.

The Division was allocated $1,128, $1,691, and $656, respectively of pension
expense and $59, $171, and $25, respectively, of postretirement medical and
life insurance benefits expense for the years ended September 30, 1998, 1997
and 1996. During the year ended September 30, 1997, the Division expensed $769
of special termination benefits in connection with a voluntary retirement
program.

F. RELATED PARTY TRANSACTIONS

All of HSD's financing requirements are provided by R&R. These financial
statements do not include any long-term debt or interest expense because the
Division has not guaranteed the debt nor pledged any of its assets against the
debt. Such amounts are included in advances from parent, and will be increased
or decreased based on cash flows of the Division. R&R has allocated to the
Division costs related to employee benefits, data processing and other
corporate overhead of $2,077, $1,475 and $1,115 for the years ended September
30, 1998, 1997 and 1996, respectively, which are included in selling, general
and administrative expenses. Management believes that the amounts allocated are
reasonable; however, the amounts that would have been or will be incurred on a
separate company basis could differ from the estimated amounts due to economies
of scale realized by R&R and differences in management techniques and
organization.

F-39
<PAGE>

THE HEALTHCARE SYSTEMS DIVISION OF THE REYNOLDS AND REYNOLDS COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

G. ACCOUNTING STANDARDS

In October 1997, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 97-2, "Software Revenue Recognition," which
supersedes SOP 91-1, "Software Revenue Recognition." SOP 97-2 provides guidance
on applying generally accepted accounting principles in recognizing revenue on
software transactions. The new SOP will be effective for transactions entered
into in fiscal years beginning after December 15, 1997. Management believes the
adoption of this pronouncement will reduce revenues in the period of adoption.
The effect on net sales and revenue has not yet been determined. The adoption
will not effect the Division's future cash flows.

H. SUBSEQUENT EVENT

On October 23, 1998, R&R sold substantially all the assets of the Division,
net of certain liabilities to be assumed, to InfoCure Corporation for
approximately $50.0 million.

* * * * * *

F-40
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

You may rely only on the information contained in this prospectus. We have not
authorized anyone to provide information different from that contained in this
prospectus. Neither the delivery of this prospectus nor the sale of common
stock means that information contained in this prospectus is correct after the
date of this prospectus. This prospectus is not an offer to sell or
solicitation of an offer to buy these shares of common stock in any
circumstances under which the offer or solicitation is unlawful.

--------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 7
The Company.............................................................. 15
Use of Proceeds.......................................................... 17
Price Range of Common Stock.............................................. 18
Dividend Policy.......................................................... 18
Capitalization........................................................... 19
Dilution................................................................. 20
Selected Historical Consolidated Financial Data.......................... 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 23
Business................................................................. 31
Management............................................................... 41
Principal and Selling Stockholders....................................... 47
Shares Eligible for Future Sale.......................................... 49
Underwriting............................................................. 51
Legal Matters............................................................ 52
Experts.................................................................. 52
Incorporation of Certain Documents by Reference.......................... 53
Where You Can Find More Information...................................... 54
Index to Financial Statements............................................ F-1
</TABLE>

--------------

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

4,000,000 Shares

[InfoCure Logo]

Common Stock

-------------
PROSPECTUS
-------------

The Robinson-Humphrey
Company

SG Cowen

Sanders Morris Mundy

--------------

, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

Item 14. Other Expenses of Issuance and Distribution

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................. $ 41,721
National Association of Securities Dealers, Inc. fee................ $ 15,508
Nasdaq Stock Market listing fee..................................... $ 17,500
Accountants' fees and expenses...................................... *
Legal fees and expenses............................................. *
Transfer Agent's fees and expenses.................................. *
Printing and engraving expenses..................................... *
Miscellaneous....................................................... *
Total Expenses...................................................... $1,000,000
</TABLE>
- --------
*To be completed by amendment.

All fees other than the Commission registration fee, the NASD fee and the
Nasdaq Stock Market listing fee are estimated. None of the expenses of the
issuance and distribution of the common stock being offered will be borne by
the selling stockholders.

Item 15. Indemnification of Directors and Officers

InfoCure's Bylaws effectively provide that InfoCure shall, to the full extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 145"), indemnify all persons
whom it may indemnify pursuant thereto. In addition, InfoCure's Certificate of
Incorporation eliminates personal liability of its directors to the full extent
permitted by Section 102(b)(7) of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 102(b)(7)").

Section 145 permits a corporation to indemnify its directors and officers
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlements actually and reasonably incurred by them in connection with any
action, suit, or proceeding brought by a third party if such directors or
officers acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, indemnification may be made only for expenses
actually and reasonably incurred by directors and officers in connection with
the defense or settlement of an action or suit and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interest of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent
that the court in which the action or suit was brought shall determine upon
application that the defendant officers or directors are reasonably entitled to
indemnity for such expenses despite such adjudication of liability.

Section 102(b)(7) provides that a corporation may eliminate or limit the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for willful or
negligent conduct in paying dividends or repurchasing stock out of other than
lawfully available funds or (iv) for any transaction from which the director
derived an improper benefit. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the date
when such provision becomes effective.

Section 8 of the Underwriting Agreement (filed as Exhibit 1.1 to this
registration statement) provides that the underwriters severally and not
jointly will indemnify and hold harmless InfoCure, the selling stockholders and
each director, officer and controlling person of InfoCure from and against any
liability caused by any statement or omission in the registration statement, in
the prospectus, in any preliminary prospectus or in any amendment or supplement
thereto, in each case to the extent that the statement or omission was made in
reliance upon and in conformity with written information furnished to InfoCure
by the underwriters expressly for use therein.

II-1
<PAGE>

Item 16. Exhibits

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Amended Certificate of Incorporation of InfoCure (incorporated by
reference to Exhibit of the same number filed with InfoCure's
Registration Statement on Form SB-2) (Registration No. 333-18923).
3.2+ Amended and Restated Bylaws of InfoCure.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended Certificate of
Incorporation and Bylaws of InfoCure defining rights of the holders of
common stock of InfoCure.
4.2 Specimen Certificate for shares of common stock (incorporated by
reference to Exhibit of the same number filed with InfoCure's
Registration Statement on Form SB-2) (Registration No. 333-18923).
5.1* Opinion of Morris, Manning & Martin, L.L.P., Counsel to InfoCure, as
to legality of the shares being registered.
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Deloitte & Touche, LLP
23.4* Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit 5.1)
24.1 Powers of Attorney (included on signature page)
27.1 Financial Data Schedule
</TABLE>
- --------
*To be filed by amendment
+Previously filed

Item 17. Undertakings

(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Commission, such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

(i) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained

II-2
<PAGE>

in the form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.

(ii) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia on the 26th day of February, 1999.

INFOCURE CORPORATION

/s/ Frederick L. Fine
By: _________________________________
Frederick L. Fine
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Frederick L. Fine President, Chief Executive February 26, 1999
______________________________________ Officer and Director
Frederick L. Fine (Principal Executive
Officer)

* Executive Vice President, February 26, 1999
______________________________________ Secretary and Director
James K. Price

* Chairman, Treasurer and February 26, 1999
______________________________________ Director
Richard E. Perlman

* Senior Vice President-- February 26, 1999
______________________________________ Finance and Chief
Lance B. Cornell Financial Officer
(Principal Financial
Officer)

* Vice President and February 26, 1999
______________________________________ Director
Michael E. Warren

* Vice President--Finance, February 26, 1999
______________________________________ Assistant Secretary and
Gary W. Plumer Assistant Treasurer
(Principal Accounting
Officer)

* Director February 26, 1999
______________________________________
James D. Elliot

* Director February 26, 1999
______________________________________
</TABLE> Raymond H. Welsh

/s/ Frederick L. Fine
* By: __________________________
Frederick L. Fine
Attorney-in-Fact
II-4

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

InfoCure Corporation
Atlanta, Georgia

We hereby consent to the use of our report relating to the consolidated
financial statements of InfoCure Corporation as of December 31, 1997 and 1998 in
the prospectus constituting a part of this registration statement number 333-
71109 on Form S-3; the incorporation by reference in the prospectus constituting
a part of the registration statement number 333-48829 on Form S-8; and in the
prospectus constituting the registration statement number 333- on Form S-3.

We also consent to the reference to us under the caption "Experts" in the
prospectus.

BDO Seidman, LLP

Atlanta, Georgia
February 26, 1999

<PAGE>

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 1 to Registration Statement No.
333-71109 of InfoCure Corporation of our report dated January 15, 1999,
(relating to The Healthcare Systems Division of The Reynolds and Reynolds
Company) appearing in the Prospectus, which is a part of this Registration
Statement and to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP

Dayton, Ohio
February 22, 1999

<PAGE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 8,552,217
<SECURITIES> 0
<RECEIVABLES> 22,244,188
<ALLOWANCES> 633,000
<INVENTORY> 2,043,268
<CURRENT-ASSETS> 35,151,480
<PP&E> 8,102,495
<DEPRECIATION> (3,467,000)
<TOTAL-ASSETS> 127,784,356
<CURRENT-LIABILITIES> 34,670,740
<BONDS> 0
0
8,500,600
<COMMON> 7,622
<OTHER-SE> 16,247,462
<TOTAL-LIABILITY-AND-EQUITY> 127,784,356
<SALES> 34,491,904
<TOTAL-REVENUES> 63,723,572
<CGS> 12,566,865
<TOTAL-COSTS> 12,566,865
<OTHER-EXPENSES> 49,944,444
<LOSS-PROVISION> 582,000
<INTEREST-EXPENSE> 3,488,225
<INCOME-PRETAX> (2,195,078)
<INCOME-TAX> (334,000)
<INCOME-CONTINUING> (1,861,078)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,661,078)
<EPS-PRIMARY> (0.39)
<EPS-DILUTED> (0.39)

</TABLE>