<PAGE> 1
MARCH 31, 1997
(UNAUDITED)
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) of
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) of
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-20222
PRINCETON DENTAL MANAGEMENT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 36-3484607
------------------------------ ----------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7421 West 100th Place, Bridgeview, Illinois 60455-2442
(Address of principal executive offices)
(Zip Code)
(708) 974-4000
(Registrant's telephone number, including area code)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR 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
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 10,122,323 SHARES OF THE
COMPANY'S COMMON STOCK ($.0001 PAR VALUE) PER SHARE OUTSTANDING AS OF
MARCH 31, 1997.
<PAGE> 2
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
FORM 10-QSB
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE (S)
CONDENSED CONSOLIDATED BALANCE SHEETS 3-4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-11
PART II - OTHER INFORMATION 11-13
<PAGE> 3
PRINCETON DENTAL MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
March 31, 1997 December 31, 1996
-------------- -----------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash Equivalents $ 337,085 $ 185,235
Accounts Receivable, net of allowances
for doubtful accounts of $265,000 and
$297,000 respectively 1,182,277 1,170,640
Current portion of loan receivable - affiliate 9,991 9,991
Inventories 121,673 105,193
Other Current Assets 90,472 95,847
---------- -----------
Total Current Assets 1,741,498 1,566,906
Property and equipment, net 966,487 1,159,524
Goodwill, net of accumulated amortization of
$1,829,516 and $1,948,760, respectively 6,119,819 7,002,192
Loan Receivable - affiliate 9,066 10,820
Other Assets, net 690,864 543,512
---------- -----------
Total Other Assets 7,786,236 8,716,048
Total Assets $9,527,734 $10,282,954
========== ===========
</TABLE>
<PAGE> 4
PRINCETON DENTAL MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
(Unaudited)
LIABILITIES AND SHAREHOLDER'S EQUITY
<S> <C> <C>
Current Liabilities:
Notes Payable $ 179,000 $ 179,000
Notes Payable to shareholders 122,948 122,948
Current portion of capital lease obligations 18,036 25,883
Current portion of long-term debt 715,806 715,806
Convertible secured debt 2,115,924 2,115,924
Accounts Payable 1,409,633 1,442,487
Accrued salaries and wages 742,077 743,958
Other accrued expenses 641,449 583,142
------------ ------------
Total Current Liabilities 5,944,873 5,929,148
Long-term debt, excluding current portion 2,739,387 3,267,106
Capital lease obligations, excluding current portion 26,750 38,145
------------ ------------
Total Liabilities 8,711,010 9,234,399
------------ ------------
Shareholder's Equity:
Series A 11.75% Cumulative Convertible
Preferred Stock par value $1.00 per share;
authorized shares - 1,000,000; issued and
outstanding - 2,848 at December 31, 1996 2,848 2,848
Series B Preferred Stock, par value $1.00
per share; authorized shares - 100; issued
and outstanding - 100 at December 31, 1996 100 100
Common stock, par value $0.0001 per share;
authorized shares - 25,000,000; issued and
outstanding - 10,122,323 at March 31, 1997
and December 31, 1996 1,012 1,012
Less: 309,217 shares Common Stock held
in treasury, at cost (331,771) (331,771)
Additional Paid-In Capital 15,107,556 15,107,556
Accumulated Deficit (13,963,021) (13,731,190)
------------ ------------
Net Shareholders' Equity 816,724 1,048,555
------------ ------------
Total Liabilities and Stockholder's Equity $ 9,527,734 $ 10,282,954
============ ============
</TABLE>
<PAGE> 5
PRINCETON DENTAL MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
Revenue: -------------- --------------
<S> <C> <C>
Practice Revenue $ 2,932,787 $ 3,742,614
Laboratory Revenue 1,060,698 974,482
------------ ------------
Total Revenue $ 3,993,485 $ 4,717,096
------------ ------------
Expenses:
Practice compensation and Benefits 2,168,518 2,423,044
Other Practice Expense 552,134 961,258
Cost of Laboratory Revenue & Expenses 825,772 886,287
General Corporate Expenses 243,138 380,110
Depreciation and Amortization 225,282 231,001
------------ ------------
Total Operating Expenses 4,014,844 4,881,700
------------ ------------
Operating Loss (21,359) (164,604)
Loss from sale of practices (32,572) -
Interest Expense (190,028) (151,512)
Other Income 12,128 13,571
------------ ------------
Net Loss $ (231,831) $ (302,545)
============ ============
Net Loss Per Share $ (0.02) $ (0.04)
============ ============
Weighted Average
Number of Shares Outstanding 10,122,323 8,119,870
============ ============
</TABLE>
<PAGE> 6
PRINCETON DENTAL MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Operating Activities:
Net Loss $ (231,831) $ (302,545)
Cash Provided by (Used In) Operating Activities:
Depreciation and Amortization 225,282 231,001
Loss on sale of Dental Practices 32,572 -
Changes in Operating Assets and Liabilities:
Accounts Receivable 249,116 (257,947)
Inventories (16,480) 2,076
Other Current Assets 5,375 (34,222)
Accounts Payable (83,806) 204,517
Accrued Expenses 56,426 373,220
----------- ------------
Net Cash Provided by Operating Activities 236,654 216,100
----------- ------------
Cash Provided by (Used In) Investing Activities:
Other Assets 17,648 -
Proceeds from notes receivable 1,754 -
Purchase of property and equipment - Net (32,245) (47,899)
Proceeds from sales of Dental Practices 475,000 -
----------- ------------
Net Cash Provided by (Used In) Investing Activities 462,157 (47,899)
----------- ------------
Cash Provided by (Used In) Financing Activities:
Principal payments on capital lease obligations (19,242) (12,388)
Principal payments on notes payable - 1,958
Principal payments on long term debt and
notes payable to shareholders (527,719) (83,099)
----------- ------------
Net Cash Used in Financing Activities (546,961) (93,529)
----------- ------------
Increase in Cash and Cash Equivalents 151,850 74,672
Cash and Cash Equivalents at beginning of period 185,235 124,872
----------- ------------
Cash and Cash Equivalents at end of period $ 337,085 $ 199,544
=========== ============
</TABLE>
<PAGE> 7
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
Note 1 - SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by Princeton Dental Management Corporation
(the Company) for quarterly financial reporting purposes are the same as those
disclosed in the Company's annual financial statements. In the opinion of
management, the accompanying condensed consolidated financial statements
reflect all adjustments (which consist only of normal recurring adjustments
other than the transaction disclosed in Note 3) necessary for a fair
presentation of the information presented.
The quarterly condensed consolidated financial statements herein have been
prepared by the Company without audit. Certain information and footnote
disclosures included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted.
Although the Company's management believes the disclosures are adequate to make
the information not misleading, it is suggested that these quarterly condensed
financial statements be read in conjunction with the audited annual financial
statements and footnotes thereto.
Note 2 - RECLASSIFICATIONS
The accompanying condensed consolidated financial statements contain certain
reclassifications of previously reported information. The reclassifications
have been made to more appropriately reflect the operating results of the
Company.
Note 3 - FINANCING AGREEMENT
1. On April 22, 1996, the Company entered into a financing arrangement pursuant
to which the Company issued Convertible Debt (the Convertible Debt) to
Amsterdam Equities Limited in the amount of $2,483,620 and 3,599.77 shares of
Series A 11.75% Cumulative Convertible Preferred Stock (the Preferred Stock) to
Amsterdam Equities Limited (195 shares), Frank Leonard Laport (1,904.77
shares), and Beverly Trust Company, as custodian for the Frank Leonard Laport
Rollover Individual Retirement Account No. 75-49990 (1,500 shares)
(collectively, the Investor Group). The Convertible Debt and Preferred Stock
replaced indebtedness of the Company at April 22, 1996, in the amount of
$1,976,700 incurred under that certain letter agreement dated December 7, 1994
( the Letter Agreement) and that certain Secured Revolving Demand Note dated
January 27, 1995 (the Secured Note). Under the terms of the Convertible Debt
and Preferred Stock Agreements (also referred to herein collectively as the
Financing Arrangement) the Investor Group may lend additional funds, in
increments to be determined solely by the Investor Group. The funds may be used
by the Company subject to the approval of the Investor Group, to fund certain
acquisitions. The Convertible Debt and Preferred Stock will bear interest and
have a coupon rate, respectively of 11.75%, plus the payment of any withholding
taxes which may be due and owing with respect to any person which is a foreign
entity. Payments on the Convertible Debt/Preferred Stock are interest only due
in quarterly installments which were to begin in September 1996. The
Convertible Debt/Preferred Stock has a maturity of seven years from the date of
closing, subject to acceleration in the event of a default. Subsequent to
September 30, 1996 the Company was unable to pay the interest only requirements
of the Convertible Debt and Preferred Stock Agreements, therefore, effective
October 1, 1996 until the accrued interest is paid, interest will accrue at the
default rate of 21.75%. The accrued interest on the Convertible Debt/Preferred
Stock totaled approximately $376,598 at March 31, 1997.
<PAGE> 8
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
In addition to the amounts owed under the Letter Agreement and the Secured
Note, the terms of the Convertible Debt and Preferred Stock Agreements called
for the conversion of 291,667 shares of the Company's Regulation D stock held
by the Investor Group into $350,000 of Convertible Debt and Preferred Stock.
The shares of common stock redeemed are being held in treasury at March 31,
1997.
An additional provision of the Convertible Debt and Preferred Stock Agreements
included the payment of $300,000 as a closing fee and required the Company to
reimburse the legal fees and out-of-pocket costs and expenses of the Investor
Group in connection with the negotiation and the closing of the transaction
which totaled $216,897. The closing fees and reimbursement of the costs and
expenses were payable in the form of Convertible Debt and Preferred Stock. In
total, the Company incurred costs of $544,716 in connection with the
refinancing which has been capitalized and will be amortized over a period of
seven years.
The terms of the Convertible Debt and Preferred Stock Agreements provided the
Investor Group with certain rights pertaining to the registration of any common
stock to which the Investor Group may convert from Convertible Debt or
Preferred Stock, certain anti-dilution rights, and a right of first refusal on
any future offering of Company securities.
Under the terms of the transaction, the Company also issued a warrant to
purchase 100 shares of Series B Preferred Stock. The Series B Preferred Stock
entitled Amsterdam Equities Limited, after the occurrence of an event of
default, to elect a Class B director who would have super-majority voting
powers on the Company's Board of Directors.
The Convertible Debt and Preferred Stock may be converted into the common stock
of the Company, at the sole option of the Investor Group, at various conversion
rates as set forth in the conversion formula contained in the Convertible Debt
and Preferred Stock Agreements. Conversion pursuant to such conversion formula
would result in a conversion price per share of the Company's common stock
significantly below present market levels. If the Investor Group were to
convert all outstanding Convertible Debt and Preferred Stock at the present
time, the conversion would result in the issuance to the Investor Group of a
majority interest representing in excess of Fifty Percent (50.0%) of the issued
and outstanding shares of the Company's common stock (assuming full conversion
and anti-dilution).
In addition, pursuant to the terms of the Financing Arrangement, the Company
issued to the holders of the Convertible Debt and the Preferred Stock a warrant
to purchase an aggregate of 4,125,000 shares of common stock at an exercise
price of $.10 per share. The Investor Group could exercise the warrant only
upon the occurrence of an event of default under the terms of the Financing
Arrangement or upon the failure by the Company to achieve certain minimum
financial goals of net income of at least one dollar in the fiscal year ending
December 31, 1996, and net income at least equal to 60% of the dollar amount of
Convertible Debt of the Company outstanding at the end of 1997 for the fiscal
year ending December 31, 1997, increased by 10% each year thereafter,
compounded, plus 60% of the additional Convertible debt outstanding at the end
of such year over the immediately preceding year. The Company is in ongoing
default under the Financing Arrangement and the stated financial goals have not
been met, and, accordingly, these default warrants are capable of being
exercised by the Investor Group upon payment of the exercise price of $412,500
in the aggregate. The cumulative effect of the issuance of shares pursuant to
the default warrant to the Investor Group could result in ownership by the
Investor Group of up to 75% of the Company's total issued and outstanding
common stock. To date, the Investor Group has taken no steps to exercise these
default warrants.
<PAGE> 9
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
2. In August 1996, the Company entered into a Letter Agreement by and among the
Company; Dr. Charles R. Mitchell, a former President of the Company; Stratum
Management, Inc., a former consultant to the Company; John H. Hagan, a former
director of the Company; Dr. Seymour Kessler, a former director of the
Company; and Amsterdam Equities Limited, Frank Leonard Laport, and Beverly
Trust Company, as Custodian of the Frank Leonard Laport Rollover Individual
Retirement Account No. 75-49990, each members of the Investor Group. Under the
Letter Agreement, which became effective on August 9, 1996, the Series B
Preferred Stock previously referred to in the Convertible Debt Agreement
executed by the Company on April 22, 1996 was amended to be immediately
effective and Class B Preferred Stock was immediately issued to Amsterdam.
The Class B Preferred Stock entitled Amsterdam to elect a Director to the Board
of Directors of the Company who would have super majority voting powers. In
effect, the Class B director appointed by Amsterdam shall have the number of
votes on the Board of Directors as the current Board currently holds, plus one
vote. The amendment and activation of the Class B Preferred Stock occurred
upon the satisfaction of the following two conditions: (i) delivery to the
Company of a notice, pursuant to which the Investor Group would convert an
aggregate amount of U.S. $700,000 of currently outstanding Convertible
Debt/Preferred Stock into the Company's Common Stock in accordance with the
contractual terms of the Convertible Debt and Preferred Stock Agreements
executed on April 22, 1996 and (ii) upon the advance to the Company of an
additional $200,000.00 pursuant to the Convertible Debt and the Preferred Stock
Agreements executed April 22, 1996. As of August 9, 1996, the Investor Group
had satisfied these two conditions and the Class B Preferred Stock was issued
to Amsterdam. Frank Leonard Laport, Chairman and CEO of the Company, was
elected as the Series B Director effective as of August 9, 1996. The Series B
Director has not voted on any matters to date or taken any action whatsoever to
date.
In connection with the activation of the Class B Preferred Stock, the provision
of additional funding and conversion of debt, Stratum, Hagan and Kessler agreed
to forfeit, on a pro rata basis, an aggregate amount of 300,000
options/warrants to purchase the Company's Common Stock of the Company.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached
condensed consolidated financial statements and notes thereto, and with the
Company's audited financial statements and notes thereto for the year ended
December 31, 1996.
Results of Operations
Revenue for the three month period ended March 31, 1997 was $3,993,485 compared
with $4,717,096 for the three month period ended March 31, 1996, a decrease of
$723,611. The change in revenue is due primarily to the sale of two dental
practices.
Operating expenses decreased $866,856 to $4,014,844 for the three month period
ended March 31, 1997 from $4,881,700. This decrease is due in large part to
the sales of the Fairfield and Delray dental practices.
Interest expense increased $38,516 to $190,028 for the three month period ended
March 31, 1997 versus $151,512 incurred in the comparable three month period
last year. The increase is primarily the result of interest accruing on the
Convertible Debt and Preferred Stock Agreements at the default rate.
<PAGE> 10
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
The net loss for the three month period ended March 31,1997 of $231,831 is
primarily the result of the loss from the sale of the two dental practices,
interest expense, and depreciation and amortization. The net loss decreased by
$70,714, showing an improvement from the three month period ended March 31,
1996. Losses from operations are attributable to an increase in the overall
cost of providing dental services and expanding the patient base to include
more specialty services as well as the production cost within the laboratory
division.
Financial Condition
Changes in the Company's financial condition at March 31, 1997 as compared with
December 31, 1996 resulted primarily from the sale of two dental practices
during the three month period ended March 31, 1997. The Company's current
revenue base is insufficient to cover the costs of providing the dental
services, overhead costs, and debt service requirements. During the three
months ended March 31, 1997, the Company funded its losses from operations
primarily through funds received from the sale of Fairfield Dental Center of
approximately $475,000. The sale of the Dental Team of Delray Beach was
exclusively forgiveness of debt. The Company recognized no cash from the sale
of the Delray Beach practice.
During the first quarter of 1997, the Company arranged payment terms with
several of it's suppliers. Certain larger suppliers have ceased extending
credit and are filling orders on a C.O.D. basis or a very limited credit terms
basis. One of the Company's largest suppliers has temporarily discontinued
shipping supplies and providing services until a mutually agreed upon plan is
put into place to reduce the outstanding balances. Negotiations are proceeding
forward with these suppliers, however, the company can give no assurances as to
whether or not a mutually agreed upon plan can be established with each of
them.
Given the Company's recurring losses from operations, the significant working
capital deficits, the uncertainty in obtaining additional funding to provide
working capital in the short term, and the current situation with the Company's
vendors, doubt has been raised as to the entity's ability to continue as a
going concern.
The Company is currently in the process of developing revenue enhancement
programs in both the dental practice segment as well as the laboratory segment.
In addition, the Company is also working to improve the operating results of
the various operations by reducing the costs of patient services including the
reduction in payroll. The Company has begun steps to reduce general and
administrative expenses. However, the Company can make no assurances in regards
to the results of these programs.
In addition, the Company is in the process of negotiating the sale of one of
its dental practices in Pennsylvania and is formulating a plan to sell other
dental practices. These sales would provide significant working capital. The
Company can make no assurances as to whether or not these sales will be
consummated.
During the first and second quarters of 1996, the Company did not deposit
certain state payroll tax liabilities totaling approximately $53,000. The
Company has filed the state payroll tax returns for the first and second
quarters of 1996. Management is currently negotiating with the State to pay
the payroll obligations in monthly installments and to abate penalties
associated with the late payment. These negotiations are under review by state
authorities.
<PAGE> 11
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
In addition, during 1994 the Company did not make certain federal payroll tax
deposits on a timely basis and is in the process of negotiating with the IRS to
abate penalties associated with these late filings. The payroll deposits and
all outstanding payroll tax returns have been filed as of January, 1997.
The Company has made tax liability and penalty interest payments in the amount
of $43,000. Management has provided a reserve of approximately $60,000 for the
state tax liability and penalties and $70,000 to cover the IRS penalties should
the IRS ruling be unfavorable. Management believes these reserves are
sufficient to cover these obligations.
Liquidity and Capital Resources
As of March 31, 1997, the Company had a working capital deficit of $4,203,375
and a financial accumulated deficit of $13,963,021. Goodwill and other
intangibles comprise approximately 64% of total assets, leaving tangible assets
of approximately $3,407,915 and negative tangible net worth of approximately
$5,303,095.
During the three month period ended March 31, 1997, the Company's cash and cash
equivalents increased $151,850. Cash provided by operations was $236,654,
resulting primarily from the Company's decrease in accounts receivable, which
can be attributed to the sale of the dental practices, accounts payable, and
accrued expenses. These operations were partially offset by depreciation and
amortization of $225,282.
Investing activities provided $462,157 of cash, primarily related to the sale
of the two dental practices. Cash of $546,961 was used in financing
activities, primarily as a result of the extingushment of debt principal
payments of $527,719, and principal payments on capital lease obligations and
notes payable in the amount of $19,242.
As disclosed in Note 3, the Company's primary source of outside financing is
from the Investor Group. Given the Company's working capital deficit and
negative tangible net worth, the Company is heavily reliant on the Investor
Group's financing to continue the Company's expansion plans and to a larger
extent, provide working capital to fund the operations. The Company can make
no assurances the Company will be able to meet the requirements to obtain the
additional financing in the increments required. In fact, given the
performance of the Company for the three months ended March 31, 1997, these
requirements have not be met and additional funding would only be obtained if
the Investor Group waived or restructured certain portions of the Convertible
Debt Agreement.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
a) On October 16, 1996, the Company was sued for $160,000 by Romajo
Partners Limited Partnership, a Partnership controlled by Dr. Seymour
Kessler, a former director of the Company. The Company intends to
vigorously contest the suit.
b) The Company is involved in a number of other legal proceedings
related to malpractice, worker's compensation, general employment
and contract disputes all in various stages of proceedings, most of
which will be covered by insurance.
<PAGE> 12
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
Item 5. Other Information
On November 6, 1996, NASDAQ approved, subject to public comment,
certain modifications to the listing criteria on the NASDAQ System.
These proposed modifications were extensive, and included a proposal
that a company whose minimum bid price fell below $1.00 for a period
of time could, in certain circumstances, be delisted. These
proposed modifications are currently in the process of examination by
the Securities and Exchange Commission for final approval. The
Company's minimum bid price is currently below $1.00, and the Company
can make absolutely no assurances regarding the final outcome of these
proposed modifications to the listing criteria on the NASDAQ System or
the impact which such modifications could have on the Company's
continued listing on the NASDAQ System. The Company has been advised
that it is presently not in compliance with NASDAQ listing
requirements, and, absent changes in Company operations, may, under
certain circumstances, be delisted.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following documents are filed as an exhibit to this Report:
(10.51) Letter Agreement dated February 4, 1997 between Dr. Richard
Staller and the Registrant regarding the sale of the assets of the
Dental Team of Delray Beach. (Incorporated by reference to Exhibit
10.51 to the Registrant's Form 10-KSB for the fiscal year ended
December 31, 1996 filed with the Commission on March 31, 1997)
(10.52) Letter Agreement effective as of January 10, 1997 by and
among the Registrant and Drs. Barfield and Payne regarding the sale
of the assets of the Fairfield Dental Center practice.
(Incorporated by reference to Exhibit 10.51 to the Registrant's
Form 10-KSB for the fiscal year ended December 31, 1996 filed with
the Commission on March 31, 1997)
<PAGE> 13
PRINCETON DENTAL MANAGEMENT CORPORATION
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
b. Reports on Form 8-K
The Registrant filed the following Form 8-Ks during the period from
January 1, 1997 through March 31, 1997:
1) On January 16, 1997 the Registrant filed with the Securities and
Exchange Commission a current report on Form 8-K regarding the sale
of the assets of the Fairfield Dental Center practice to Drs.
Barfield and Payne. The Fairfield practice, with 1995 revenues of
approximately $2,000,000, represented approximately 11.9% of the
total revenue of the Company. The Fairfield practice was sold for a
purchase price of approximately $885,000, of which approximately
$410,000 represented forgiveness of debt.
2) On February 11, 1997, the Registrant filed with the Securities
and Exchange Commission a current report on Form 8-K regarding the
sale of the assets of the Dental Team of Delray Beach practice to
Dr. Richard Staller. The Delray Beach practice, with 1995 revenues
of approximately $859,135, represented approximately 5.1% of the
total revenue of the Company. The Delray Beach practice was sold
for a purchase price of approximately $200,000 in the form of
forgiveness of debt.
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this quarterly report of Form 10-QSB for the quarter
ended March 31, 1997, to be signed on its behalf, by the undersigned there unto
duly authorized.
DATED: Princeton Dental Management Corporation
By: /s/ Gary A. Lockwood
--------------------------------
Gary A. Lockwood
President and Chief Operating Officer
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this quarterly report of Form 10-QSB for the quarter
ended March 31, 1997, to be signed on its behalf, by the undersigned there unto
duly authorized.
DATED: Princeton Dental Management Corporation
By: /s/ Christopher D. Carlucci
------------------------------
Christopher D. Carlucci
Secretary and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 337,085
<SECURITIES> 0
<RECEIVABLES> 1,182,277
<ALLOWANCES> 265,000
<INVENTORY> 121,673
<CURRENT-ASSETS> 1,741,498
<PP&E> 2,007,681
<DEPRECIATION> 1,041,194
<TOTAL-ASSETS> 9,527,734
<CURRENT-LIABILITIES> 5,944,873
<BONDS> 2,766,137
2,949
0
<COMMON> 1,012
<OTHER-SE> 812,764
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</TABLE>
