UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(MARK ONE)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE
TRANSITION FROM _________ TO __________
COMMISSION FILE NUMBER 0-30608
DENTAL RESOURCES, INC.
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(Name of Small Business Issuer as Specified in its charter)
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MINNESOTA 41-1279182
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(State of incorporation) (IRS Employer Identification No.)
530 RIVER STREET SOUTH, DELANO, MN, 55328
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(Address of principal executive offices and Zip Code)
(Registrant's telephone number) (612) 972-3801
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CHECK WHETHER THE ISSUER: (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR
SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND
(2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES (X) NO ( )
THERE WERE 1,901,697 SHARES OF COMMON STOCK OUTSTANDING AT AUGUST 31, 2000.
<PAGE>
DENTAL RESOURCES, INC.
INDEX
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE NO.
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Balance Sheets as of August 31, 2000 and May 31, 2000. P. 1
Statements of Operations for the three months ended
August 31, 2000 and August 31, 1999 P. 3
Statements of Cash Flows for the three months ended
August 31, 2000 and August 31, 1999. P. 4
Statements of Stockholders' Equity for the period ended
August 31, 2000 P. 5
Notes to Financial Statements P. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS P. 8
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS P. 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K P. 12
SIGNATURES P. 12
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DENTAL RESOURCES, INC.
BALANCE SHEET
AS OF AUGUST 31, 2000 AND MAY 31, 2000
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<TABLE>
<CAPTION>
AUGUST 31, MAY 31,
2000 2000
(UNAUDITED) (AUDITED)
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 4,711 $ 29,028
Accounts receivable - trade, less allowance for
doubtful accounts of $3,000 886,407 739,587
Accounts receivable - other 762 902
Inventories 663,937 596,442
Prepaid expenses 38,347 31,324
Deposits 2,500 1,500
Deferred income taxes 15,771 15,771
------------ ------------
TOTAL CURRENT ASSETS 1,612,435 1,414,554
------------ ------------
PROPERTY AND EQUIPMENT
Property and equipment 1,422,578 1,388,144
Less: accumulated depreciation (761,487) (731,800)
------------ ------------
PROPERTY AND EQUIPMENT - NET 661,091 656,344
------------ ------------
OTHER ASSETS
Patents and trademarks, less accumulated
amortization of $2,666 in August and $2,541 in May 2,334 2,458
------------ ------------
TOTAL OTHER ASSETS 2,334 2,458
------------ ------------
TOTAL ASSETS $ 2,275,860 $ 2,073,356
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
1
<PAGE>
DENTAL RESOURCES, INC.
BALANCE SHEET
AS OF AUGUST 31, 2000 AND MAY 31, 2000
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<TABLE>
<CAPTION>
AUGUST 31, MAY 31,
2000 2000
(UNAUDITED) (AUDITED)
------------ ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit note payable $ 250,919 $ 256,989
Current portion of long-term debt 38,400 38,400
Accounts payable 535,782 340,154
Accrued expenses 40,251 54,804
Income taxes payable 825 5,550
------------ ------------
TOTAL CURRENT LIABILITIES 866,177 695,897
------------ ------------
LONG-TERM LIABILITIES
Long-term debt, less current portion shown above 77,622 80,572
Deferred income taxes 38,041 38,041
------------ ------------
TOTAL LONG-TERM LIABILITIES 115,663 118,613
------------ ------------
COMMITMENTS:
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 20,000,000 shares
authorized; 1,901,697 and 1,905,844 shares issued and
outstanding, respectively 19,017 19,058
Additional paid-in capital 1,595,291 1,593,369
Accumulated deficit (320,288) (353,581)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,294,020 1,258,846
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,275,860 $ 2,073,356
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
2
<PAGE>
DENTAL RESOURCES, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 31, 2000 AND 1999
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<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
SALES $ 1,370,595 $ 1,259,018
COST OF SALES 1,007,564 926,828
----------- -----------
GROSS PROFIT 363,031 332,190
EXPENSES
Marketing 171,954 159,665
General and administrative 142,193 105,419
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TOTAL EXPENSES 314,147 265,084
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INCOME FROM OPERATIONS 48,884 67,106
OTHER INCOME (EXPENSE)
Finance charge income 1,675 4,005
Other expense (1,636) (471)
Interest expense (7,855) (5,895)
----------- -----------
TOTAL OTHER INCOME (EXPENSE) (7,816) (2,361)
----------- -----------
INCOME BEFORE INCOME TAXES 41,068 64,745
PROVISION FOR INCOME TAXES 7,775 13,286
----------- -----------
NET INCOME $ 33,293 $ 51,459
=========== ===========
BASIC NET INCOME PER COMMON SHARE $ 0.02 $ 0.03
DILUTED NET INCOME PER COMMON SHARE $ 0.02 $ 0.03
AVERAGE BASIC SHARES OUTSTANDING 1,902,462 1,902,511
AVERAGE DILUTED SHARES OUTSTANDING 2,135,194 1,912,328
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE>
DENTAL RESOURCES, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31, 2000 AND 1999
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<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 33,293 $ 51,459
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 32,374 24,791
Amortization 125 125
Compensation Expense on Warrants Issued 3,690
Changes in assets and liabilities:
(increase) decrease in receivables (146,680) (92,303)
(increase) decrease in inventories (67,495) (97,813)
(increase) decrease in prepaid deposits (7,023) (28,999)
(increase) decrease in deposits (1,000) 31,100
increase (decrease) in income taxes payable (4,725) 12,744
increase (decrease) in acounts payable 195,627 211,886
increase (decrease) in accrued liabilities (14,553) (17,255)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 23,633 95,735
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (37,121) (118,750)
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NET CASH (USED IN) INVESTING ACTIVITIES (37,121) (118,750)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (2,950)
Net payments on note-payable-bank (6,070) (4,000)
Retirements of Common Stock (2,209)
Proceeds from issuance of common stock 400
------------ ------------
NET CASH (USED IN) FINANCING ACTIVITIES (10,829) (4,000)
------------ ------------
NET INCREASE (DECREASE) IN CASH (24,317) (27,015)
CASH - BEGINNING OF PERIOD 29,028 46,623
------------ ------------
CASH - END OF PERIOD $ 4,711 $ 19,608
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during period for:
Interest $ 7,855 $ 5,895
============ ============
Income taxes $ 12,500 $ 542
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
4
<PAGE>
DENTAL RESOURCES, INC.
STATEMENT OF STOCKHOLDER EQUITY
AS OF AUGUST 31, 2000
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<TABLE>
<CAPTION>
COMMON STOCK
----------------------------
NUMBER ADDITIONAL
OF PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE ON MAY 31, 1999 1,902,511 $ 19,025 $ 1,587,950 $ (479,211) $ 1,127,764
Common stock issued 3,333 33 499 532
Compensation expense on Warrants Issued 4,920 4,920
Net Income 125,630 125,630
------------ ------------ ------------ ------------ ------------
BALANCE ON MAY 31, 2000 1,905,844 19,058 1,593,369 (353,581) 1,258,846
Common stock issued 1,853 19 381 400
Common stock retired (6,000) (60) (2,149) (2,209)
Compensation expense on Warrants Issued 3,690 3,690
Net income 33,293 33,293
------------ ------------ ------------ ------------ ------------
BALANCE ON AUGUST 31, 2000 1,901,697 $ 19,017 $ 1,595,291 $ (320,288) $ 1,294,020
============ ============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements
5
<PAGE>
DENTAL RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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1. INTERIM FINANCIAL STATEMENTS
The information furnished in this report is unaudited but reflects all
adjustments (which include only normal recurring adjustments), which are
necessary, in the opinion of management, for the fair presentation of the
results of the interim period. Actual results for the three months ending August
31, 2000 and 1999 are not necessarily indicative of the results to be expected
for the full fiscal year. These statements should be read in conjunction with
the Company's most recent Annual Report on form 10-KSB.
2. NET EARNINGS PER COMMON SHARE
Basic net income per share is based on the weighted average number of common
shares outstanding during each year. Diluted net income per common share
includes the dilutive effect of potential common shares outstanding. The Company
calculates the dilutive effect of outstanding stock options and warrants using
the treasury stock method. A reconciliation of earnings per share for the months
ended August 31, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
2000 1999
BASIC DILUTED BASIC DILUTED
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net earnings $ 33,293 $ 33,293 $ 51,459 $ 51,459
---------------------------- ----------------------------
Average shares outstanding 1,902,462 1,902,462 1,902,511 1,902,511
Effect of dilutive securities:
Options and Warrants 0 232,732 0 9,817
---------------------------- ----------------------------
Equivalent shares 1,902,462 2,135,194 1,902,511 1,912,328
---------------------------- ----------------------------
Earnings per share $ 0.02 $ 0.02 $ 0.03 $ 0.03
============================ ============================
</TABLE>
3. RESEARCH AND DEVELOPMENT EXPENSES
Research and development costs are expensed in the period in which the expenses
are incurred. Research and development costs for the three month period ended
August 31, 2000 were $2,014 as compared to $400 for the three month period ended
August 31, 1999.
4. MARKET SEGMENT INFORMATION
The Company has one reportable segment which is the manufacturing and marketing
of five associated groups of dental related products. The Company's five product
groups are: Proform thermo-forming equipment and supplies, Hygienist chemicals
and consumables, Packaging products, Procure ultraviolet light-cured ovens and
composites, and Pro-flex denture materials. These products are sold worldwide.
The Company does not currently own any assets outside the United States. Gross
revenues by product group are as follows:
6
<PAGE>
REVENUES BY PRODUCT GROUP
FOR THE THREE MONTHS ENDED AUGUST 31, 2000 AND 1999
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDING AUGUST 31, 2000 ENDING AUGUST 31, 1999
TOTAL DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PROFORM $ 629,060 $ 408,889 $ 220,171 $ 609,651 $ 396,273 $ 213,378
HYGIENIST 252,725 176,907 75,818 225,176 157,623 67,553
PACKAGING 436,230 327,172 109,058 352,925 264,694 88,231
PROCURE 19,752 13,826 5,926 17,625 12,338 5,287
PROFLEX 32,828 29,546 3,282 53,641 48,277 5,364
----------------------------------------------------------------------------------
TOTALS 1,370,595 956,340 414,255 1,259,018 879,205 379,813
==================================================================================
</TABLE>
5. STOCK OPTIONS AND WARRANTS
In 1998, the Company approved a stock option plan which allows issuance of stock
options to officers and key employees. The exercise price for each option is to
be no less than 100% of the fair market value of the common stock on the day the
option is granted. Options under this plan have a term of five years. In fiscal
year 2000, options to purchase 190,100 shares of common stock were issued to
officers and employees under this plan. A total of 550,000 shares of common
stock have been reserved for this plan of which 359,900 shares remained
available to be issued as of August 31, 2000.
In fiscal year 2000, the Company also granted stock warrants to officers,
directors, and consultants of the Company. The Warrants granted to officers and
directors which total 162,500 shares worth of common stock allow the holder to
purchase the Company's common stock at $0.20 per share. The Warrants granted to
the consultants of the Company which total 100,000 shares worth of common stock
were granted as consideration for assisting the Company in identifying and
evaluating strategic business opportunities and helping to negotiate and
structure any potential transactions over the next two years. The warrants
issued to the consultants also allow the holder to purchase the Company's common
stock at $0.20 per share. All warrants have a term of five years.
No options or warrants were granted during the quarter ended August 31, 2000.
The Company follows the disclosure provisions of SFAS No. 123 "Accounting for
Stock-Based Compensation," but applies APB Opinion No.25, "Accounting for Stock
Issued to Employees" for measurement and recognition of stock-based transactions
with its employees. There was no compensation expense recorded for options and
warrants issued to officers and employees. Compensation expense for stock
warrants issued to non-employee consultants is being expensed equally over the
two-year life of the consulting agreement based on a calculation of the fair
value of the warrants issued using the Black-Scholes option pricing model. The
Company recognized $3,690 of compensation expense for the quarter ended August
31, 2000 and no compensation expense for the quarter ended August 31, 1999. The
compensation expense recorded in the quarter ended August 31, 2000 is included
in General and Administrative expense on the Company's statement of operations.
7
<PAGE>
The fair value of the options and warrants granted in fiscal year 2000 was
estimated using the Black-Scholes option pricing model, using the following
assumptions:
Risk-Free Interest Rate 6.32%
Expected Life 5 years
Expected Volatility 80.6%
Dividend Yield 0.0%
The following summarizes transactions for stock options and warrants for the
year ended May 31, 2000 and the quarter ended August 31, 2000:
<TABLE>
<CAPTION>
Stock Options Warrants
------------------------- -------------------------
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Outstanding at May 31, 1999 14,998 $ 0.21 -- $ --
Issued 190,100 0.44 262,500 0.20
Exercised (3,333) 0.16 -- --
--------- ---------
Outstanding at May 31, 2000 201,765 0.43 262,500 0.20
Exercised (1,853) 0.22 -- --
Expired (1,600) 0.25 -- --
--------- ---------
Outstanding at August 31, 2000 198,312 $ 0.43 262,500 $ 0.20
========= =========
</TABLE>
All stock options and warrants are fully vested and currently exercisable as of
August 31, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion contains forward looking statements, which we have made pursuant
to the safe-harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward looking statements reflect our current views with respect to such
future events. Actual results may vary materially and adversely from those
anticipated, believed, estimated or otherwise indicated. Factors that could
cause actual results to differ adversely include, without limitation, unexpected
laboratory results in clinical studies, inability to secure targeted product
endorsers, and timing differences between the scheduled and actual launch date
of new products. Without limiting the foregoing, the words "believes,"
"anticipates, "Plans," "expects," and similar expressions are intended to
identify forward-looking statements. In addition, forward looking statements
include, but are not limited to, statements regarding future financing needs,
future revenues, future profitability and factors affecting future liquidity. A
number of important factors could cause the Company's actual results to differ
materially from those indicated in the forward-looking statements in this
discussion. We do not undertake to update any forward-looking statement that may
be made from time to time by us or on our behalf.
INTRODUCTION
Dental Resources, Inc. (the "Company" or "Dental Resources") was incorporated as
a "C" corporation in Minnesota in 1976. It has not been the subject of any
bankruptcy, receivership or similar proceedings; it has not experienced
8
<PAGE>
any material reclassification, merger or consolidation; nor has it purchased or
sold a significant amount of assets that were not in the ordinary course of its
business. The Company is principally engaged in the manufacturing and
distribution of a number of specialized dental products and packaging materials
for use by the dental and medical industries. The Company has a fiscal year of
May 31.
RESULTS OF OPERATIONS
Results of Operations For the Three Months Ended August 31, 2000 and 1999.
For the quarter ended August 31, 2000, the Company recorded revenues of
$1,371,000, an increase of approximately 9% compared to $1,259,000 for the same
period in 1999. This change is attributable to increased sales in most of the
Company's product lines, although the majority of the increases were within the
Company's two largest groups, Pro-form and Packaging. The Pro-flex line was the
only group not experiencing growth as the Company has temporarily suspended
promotion of the line until problems with staining and cracking of the products
within the line can be researched. Gross profits rose to $363,000 for the
quarter ended August 31, 2000 from $332,000 in 1999. The increase in gross
profits was due to the increase in revenues. Gross profit as a percent of sales
held relatively constant at 26.5% in the quarter ending August 31, 2000 compared
to 26.4% in 1999.
Marketing expenses for the quarter ending August 31, 2000 increased to $172,000
from $160,000 in 1999, an increase of 7%. Additional personnel in customer
service along with increased advertising expenses were the primary factors
causing the increase in marketing expenses. General and administrative expenses
increased to $142,000 for the quarter ended August 31, 2000 from $105,000 in
1999, an increase of 35%. Legal and accounting expenses relating to public
securities filings were the primary reason for the increase in general and
administrative expenses. An additional factor contributing to the increase in
general and administrative expenses was related to maintenance expenses on the
Company's computer system as the Company prepares to exchange data
electronically between facilities and with it's primary customers and vendors.
Interest expense increased to $7,900 for the quarter ended August 31, 2000 from
$5,900 in 1999. The increase in interest is a combination of increased borrowing
of term notes coupled with overall increases in interest rates. Income taxes
decreased to $7,800 for the quarter ended August 31, 2000 from $13,200 in 1999.
The decrease was due to a decrease in net profits from operations. Net Income
for the quarter ended August 31, 2000 fell to $33,000 from $51,000 in 1999.
On August 31, 2000 the Company's total assets were $2,276,000, compared to
$2,073,000 at May 31, 2000. The increase was due primarily to increases in
accounts receivable, inventories, and investments in property and equipment used
for production. Total liabilities increased from $815,000 at May 31, 2000 to
$982,000 at August 31, 2000. The increase was primarily in accounts payable as
inventories were adjusted to keep pace with increased sales.
Liquidity and Capital Resources.
During the three month period ending August 31, 2000, operations of the Company
produced a positive cash flow from operations of $24,000. The prior year
produced positive cash flows from operations of $96,000 in comparison. The
decrease in operating cash flows is primarily caused by a combination of reduced
profits and investments in inventories and receivables needed to keep pace with
expanding sales volumes.
The Company has typically relied on cash flows from operations to finance its
working capital needs. The Company has a working capital loan with Oakley
National Bank of Buffalo, Minnesota in the amount of $350,000 secured by the
Company's inventories and accounts receivable to fund temporary or seasonal
variations in cash flows. As of August 31, 2000, the Company had used $251,000
of the credit line leaving a balance of $99,000 available. The Company has
traditionally borrowed capital from time to time on term basis to finance
necessary purchases of specific capital equipment. As of August 31, 2000, the
balance due on all outstanding term loans used for capital equipment purchases
was $116,000. Management is confident that these combined sources of capital
will be sufficient to finance the current operations of the Company. The
Company's future capital requirements will depend on many factors, including
growth of the Company's customer base, economic conditions and other factors
including the results of future operations.
9
<PAGE>
The Company intends to continue developing its existing product lines and
expanding it's manufacturing capacity. It is estimated that the Company may
borrow up to $150,000 from traditional banking resources during the next twelve
months to finance the acquisition of capital equipment necessary to support such
expansion. In particular, the Company intends to continue the development of its
extrusion and thermo-forming lines. The Company has not made any commitments for
any capital expenditures at this time. At this time there are no plans to sell
any significant capital equipment. The Company is evaluating the possibility of
further expanding its plastic extrusion and die cutting operations. By expanding
operations, the Company expects that the number of full time employees it
employs will increase by approximately ten percent over the next two years.
There are no known trends, events, or uncertainties known to management at this
time that have had or are reasonably expected to have a material impact on the
net sales or revenues or income from continuing operations. Historically, the
first quarter of operations has always been the strongest for the Company due to
increased sales of its Pro-form mouthguard line to athletes returning to school
in the fall. The quarter ended August 31, 2000 showed sales that would correlate
with this seasonal trend. As the Company continues to expand the other product
lines that it markets, the effect of this seasonal business is expected to
continue to decline as a material aspect of its operations.
FUTURE EXPECTATIONS
Management of the Company expects sales of its current product lines to show a
slight growth over the prior year. Increases in the Proform line are expected to
come mainly from sales of materials rather than machines. Management believes
that the domestic market for vacuum machines has become saturated and sales to
foreign markets will only allow the Company to maintain current market share for
this particular product. Sales of the Hygienist and Packaging lines are expected
to remain steady as long as the overall health and strength of the economy stays
strong. The Company is currently working on new products within the packaging
line, which management expects to offer some excellent opportunities for growth
in this line. Sales in the Procure line are expected to remain relatively
constant for the next three quarters. Management continues to expect a slight
drop off in the Proflex lines until the Company completes testing of the
modified product and begins to promote the product again.
The Company continues to enjoy good relations with its distributors, both
domestically and internationally. The Company continues to introduce innovative
new products, streamline its production facilities, and implement advanced
technologies to strengthen its position with current channels of distribution to
assure continued growth in the healthcare industry.
Management expects that recent and upcoming investments in capital equipment
used in manufacturing will allow gross margins to be increased on existing
product lines leading to higher net profits. Management also expects these same
investments to help increase capacity in areas where the Company had previously
approached maximum capacity levels limiting expansion of those particular lines.
Management expects selling and administrative expenses as a percent of sales
revenue to decrease slightly, as sales revenues continue to increase in the
coming periods leading to increased profitability.
10
<PAGE>
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company has entered into the following transactions with respect to options
and warrants to purchases its common stock during the interim period ending
August 31, 2000. The options indicated below as granted under the Company's
stock option plan were granted to persons who were directors or employees of the
Company in private transactions that were exempt under Section 4(2) of the
Securities Act and SEC Rule 701. The Company advised each option holder of the
restricted nature under the Securities Act of the common stock purchasable on
exercise of the options. The options were issued under the Company's written
stock option plan, the aggregate exercise price of those options did not exceed
$1,000,000 during any consecutive 12 month period, and the persons to whom
options were granted were given copies of the option plan and of the options
granted to them.
In July of 2000 Options for 1600 shares of common stock exercisable at
$.25 issued to outside directors expired without being exercised. The
expiration date of the options was July 5, 2000.
In July of 2000 an Option for 800 shares of common stock was exercised
by an outside director at $.25 per share. The expiration date of the option was
July 5, 2000. The Company relied on Section 4(2) of the Securities Act of 1933
and SEC Rule 701 for the issuance of these securities.
In July of 2000 an Option for 1,053 shares of common stock was
exercised by an outside director at $.19 per share. The expiration date of the
option was December 6, 2000. The Company relied on Section 4(2) of the
Securities Act of 1933 and SEC Rule 701 for the issuance of these securities.
11
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company did not file nor was it required to file any reports on Form 8-K
during its fiscal quarter ended August 31, 2000.
LIST OF EXHIBITS
The following exhibits are filed with this Form 10-QSB:
Assigned Number Description
Exhibit 3.1.1 Restated Articles of Incorporation*
Exhibit 3.1.2 Restated Bylaws*
Exhibit 11 Statement Regarding Computation of Earnings Per Share**
Exhibit 27 Financial Data Schedule**
--------------------
* - Previously filed with Form 10-SB filed March 7, 2000.
** - Filed herewith.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DENTAL RESOURCES, INC.
By: /s/ Bryan A. Nichols
------------------------------------------
Bryan A. Nichols
Vice President and Chief Financial Officer
Date: October 13, 2000
12
