PRINCETON DENTAL MANAGEMENT CORP, DEF 14A, 1998-11-25

PRINCETON DENTAL MANAGEMENT CORP
DEF 14A, 1998-11-25
HEALTH SERVICES

Previous: AMERICAN BIOGENETIC SCIENCES INC, SC 13D, 1998-11-25

Next: INSURED MUNICIPALS INCOME TRUST 84TH INSURED MULTI SERIES, 497J, 1998-11-25

<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PRINCETON DENTAL MANAGEMENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
PRINCETON DENTAL MANAGEMENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials.

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

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

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

(2) Form, schedule or registration statement no.:

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

(3) Filing party:

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

(4) Date filed:

- --------------------------------------------------------------------------------
<PAGE> 2
PRINCETON DENTAL MANAGEMENT CORPORATION
7421 W. 100TH PLACE, BRIDGEVIEW, ILLINOIS 60455

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 1998

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

To Shareholders of Princeton Dental Management Corporation:

Notice is hereby given that the annual meeting of shareholders of
Princeton Dental Management Corporation (the "Company") will be held at
Princeton Dental Management Corporation, 7421 West 100th Place, Bridgeview,
Illinois, on Friday, December 18, 1998 at 3:00 p.m. Central Time for the
following purposes:

1. To elect four directors of the Company to hold office
until the next annual meeting of shareholders or until
their successors have been duly elected;

2. To ratify the appointment by the Board of Directors of
Kirkland, Russ, Murphy and Tapp as the independent auditors
of the Company for fiscal year 1998; and

3. To transact such other matters as may properly come before
the annual meeting or any adjournment thereof.

The close of business as of November 18, 1998, has been fixed as the
record date for the meeting. All shareholders of record at that date are
entitled to vote at the meeting. A list of shareholders of record as of the
record date will be available for examination by shareholders prior to the
annual meeting at the offices of the Company, currently located at 7421 W. 100th
Place, Bridgeview, Illinois, 60455.

By the order of the Board of Directors,

/s/
-----------------------------------
Acting Secretary

ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU
EXPECT TO ATTEND, PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ENVELOPE PROVIDED TO ASSURE THE PRESENCE OF A QUORUM. YOU MAY REVOKE YOUR PROXY
AND VOTE IN PERSON AT THE MEETING, IF YOU DESIRE. IF YOUR SHARES ARE HELD IN
STREET NAME BY A BROKERAGE FIRM, YOUR BROKER WILL SUPPLY YOU WITH A PROXY TO BE
RETURNED TO THE BROKERAGE FIRM. IT IS IMPORTANT THAT YOU RETURN THE FORM TO THE
BROKERAGE FIRM AS QUICKLY AS POSSIBLE SO THAT THE BROKERAGE FIRM MAY VOTE YOUR
SHARES. YOU MAY NOT VOTES YOUR SHARES IN PERSON AT THE MEETING UNLESS YOU OBTAIN
A POWER OF ATTORNEY OR LEGAL PROXY FROM YOUR BROKER AUTHORIZING YOU TO VOTE THE
SHARES, AND YOU PRESENT THIS POWER OF ATTORNEY OR PROXY AT THE MEETING.

PLEASE NOTE THAT ATTENDANCE AT THE MEETING WILL BE LIMITED TO SHAREHOLDERS OF
THE COMPANY AS OF THE RECORD DATE (OR THEIR DULY AUTHORIZED REPRESENTATIVES). IF
YOUR SHARES ARE HELD BY A BANK OR BROKER, PLEASE BRING TO THE MEETING YOUR BANK
OR BROKERAGE STATEMENT EVIDENCING YOUR BENEFICIAL OWNERSHIP OF THE COMPANY
STOCK.

<PAGE> 3

PRINCETON DENTAL MANAGEMENT CORPORATION
7421 W. 100TH PLACE, BRIDGEVIEW, ILLINOIS 60455

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

PROXY STATEMENT

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

ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 18, 1998

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

SOLICITATION AND VOTING

The enclosed proxy, to be used at the annual meeting of shareholders to
be held on December 18, 1998, is solicited by, and on behalf of, the Board of
Directors of Princeton Dental Management Corporation (the "Company"). If a proxy
is properly executed and returned in the form enclosed, shares represented
thereby will be voted in favor of the proposals to be acted upon, except to the
extent other directions are given in the proxy. Any other matters which may
properly come before the annual meeting will be considered and voted upon at the
discretion of the proxy holder.

Any proxy delivered pursuant to this solicitation may be revoked, at
the option of the person executing the proxy, at any time before it is exercised
by delivering a signed revocation to the Company, by submitting a later-dated
proxy, or by attending the meeting in person and casting a ballot. If proxies
are signed and returned without voting instructions, the shares represented by
the proxies will be voted as recommended by the Board of Directors.

Expenses incurred in connection with the solicitation of proxies will
be paid by the Company. Upon request the Company will reimburse brokers,
dealers, and banks or their nominees, for reasonable expenses incurred in
forwarding copies of the proxy material and annual report to the beneficial
owners of share which such persons hold of records. Solicitation of proxies will
be made principally by mail. Proxies may also be solicited in person, or by
telephone or telegraph, by officers and regular employees of the Company.

This proxy material along with the Company's most recent Form 10-KSB is
being mailed to shareholders on or about November 18, 1998.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The record date for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting has been fixed by the Company's Board of
Directors as of November 18, 1998, and each shareholder of record as of the
close of business on that date shall be entitled to cast one vote for each share
of Common Stock registered in his or her name. At November 10, 1998, there were
3,196,448 shares of common stock (net of treasury shares).

Each share of Common Stock entitles its holder to one vote on the matters to be
considered by shareholders at the annual meeting.

<PAGE> 4

The following tables set forth the number of shares of the Common Stock
beneficially owned as of November 10, 1998, by directors, officers and persons
known by the Company to own more than five percent of the Company's outstanding
Common Stock. For purposes of this Proxy Statement, beneficial ownership of
securities is defined in accordance with the rules of the Securities and
Exchange Commission and generally includes the power to vote or dispose of
securities, irrespective of any economic interest therein.

CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>

NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
---------------- ----------------------- --------

<S> <C> <C>
Amsterdam Equities Limited 189,002(1) (2) 5.91%
Norfolk House, Frederick Street
Nassau, N.P., Bahamas

Frank Leonard Laport 1,101,233(1) (3) 34.45%
7421 W. 100th Place
Bridgeview, IL 60455
Director, Chairman, CEO

</TABLE>

(1) With respect to Mr. Laport, includes shares currently held by Mr.
Laport's IRA. With respect to both Mr. Laport and Amsterdam Equities
Limited, does not include shares issuable upon full conversion of Series
A Stock and Convertible Debt currently held by Amsterdam Equities Limited
and Mr. Laport. See "Certain Relationships and Related Transactions".

(2) Conversion of the Convertible Debt and Series A Stock presently held
by Amsterdam Equities Limited, which totals approximately $2.8 Million as
of this date, would result in the additional issuance to Amsterdam
Equities Limited of approximately 1,635,673 shares of Company Common
Stock. On a fully diluted basis and assuming full conversion, this would
result in Amsterdam Equities Limited owning shares of Company Common
Stock which, when added to its existing stock holdings, would be equal to
approximately 36% of the Company. As of this date, the conversion of this
debt into equity at the existing conversion formula would result in a
conversion price per share significantly in excess of current market
levels for the Company's Common Stock. Amsterdam Equities Limited has not
indicated to the Company whether it intends to convert its debt to
equity. See "Certain Relationships and Related Transactions".

(3) Conversion of the Series A Stock presently held by Mr. Laport, which
totals approximately $360,000 as of this date, would result in the
additional issuance to Mr. Laport of approximately 129,028 shares of
Company Common Stock. On a fully diluted basis, and assuming full
conversion by Amsterdam Equities Limited, this would result in Mr. Laport
owning shares of Common Stock which, when added to his existing stock
holdings, would be equal to approximately 24% of the Company (on a fully
diluted basis and assuming conversion in full by Amsterdam Equities
Limited and Mr. Laport). Mr. Laport is contractually prohibited from
converting his Series A Stock unless Amsterdam Equities Limited also
decides to convert its Convertible Debt. See "Certain Relationships and
Related Transactions".

<PAGE> 5

OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>

NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- ---------------- ----------------------- --------
<S> <C> <C>
Frank Leonard Laport 1,101,233(1) (3) 34.45%
7421 W. 100th Place
Bridgeview, IL 60455
Director, Chairman, CEO

Gary A. Lockwood 0 0.0%
12752 Stark Road
Livonia, MI 48150
Director, President, COO

George B. Collins 0(2) (3) 0.0%
One North LaSalle
Chicago, IL 60602
Director

Dr. Zigmund C. Porter
0 0.0%
3200 N Lake Shore #1605
Chicago, IL 60657
Director

All officers and directors 1,101,233(1)(2) 34.45%
as a group

</TABLE>

(1) With respect to Mr. Laport, includes shares currently held by Mr.
Laport's IRA. Does not include shares issuable upon full conversion of
Series A Stock and Convertible Debt currently held by Amsterdam Equities
Limited and Mr. Laport. See "Certain Relationships and Related
Transactions".

(2) Not included in this number is 189,002 shares of record held by
Amsterdam Equities Limited, which can under certain circumstances, be
voted by George B. Collins as Amsterdam Equities Limited's
Attorney-in-Fact. This share figure also does not include any shares
which could be obtained by Amsterdam Equities Limited upon conversion of
its Series A Stock and Convertible Debt. See "Certain Relationships and
Related Transactions".

(3) Conversion of the Convertible Debt and Series A Stock presently held
by Amsterdam Equities Limited, which totals approximately $2.8 Million as
of this date, would result in the additional issuance to Amsterdam
Equities Limited of approximately 1,635,673 shares of Company Common
Stock. On a fully diluted basis and assuming full conversion, this would
result in Amsterdam Equities Limited owning shares of Company Common
Stock which, when added to its existing stock holdings, would be equal to
approximately 36% of the Company. As of this date, the conversion of this
debt into equity at the existing conversion formula would result in a
conversion price per share significantly in excess of current market
levels for the Company's Common Stock. Amsterdam Equities Limited has not
indicated to the Company whether it intends to convert its debt to
equity. See "Certain Relationships and Related Transactions".

Conversion of the Series A Stock presently held by Mr. Laport, which
totals approximately $360,000 as of this date, would result in the
additional issuance to Mr. Laport of approximately 129,028 shares of
Company Common Stock. On a fully diluted basis, and assuming full
conversion by Amsterdam Equities Limited, this would result in Mr. Laport
owning shares of Common Stock which, when added to his existing stock
holdings, would be equal to approximately 24% of the Company (on a fully
diluted basis and assuming conversion in full by Amsterdam Equities
Limited and Mr. Laport). Mr. Laport is contractually prohibited from
converting his Series A Stock unless Amsterdam Equities Limited also
decides to convert its Convertible Debt. See "Certain Relationships and
Related Transactions".

All of the above information was obtained from records available to the
Company as of the date of this mailing and to the best knowledge of the Company
and the nominees for election as directors, on the record date, no other person
owned beneficially more than 5% of the outstanding Common Stock of the Company.
<PAGE> 6

EXECUTIVE COMPENSATION

The following table sets forth the compensation earned from the Company for the
last three fiscal years with respect to the Company's Chief Executive officer
and to those executive officers whose compensation exceeded $100,000 in any of
the last three fiscal years.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other Annual Restricted Options
Name and Principal Position Year Salary Compensation Stock SARS
- --------------------------- ---- ------ ------------ ----- ----
Awards (#)
------ ---
<S> <C> <C> <C> <C> <C>
1997 0 0 0 0
Kurt E. Anderson
Former President 1996 0 0 0 0
(President 1/95 to 10/95) 1995 53,717 0 0 0

Charles R. Mitchell 1997 0 0 0 0
Former President 1996 44,000(1) 0 50,000(1) 0
(President 10/95 to 8/96) 1995 0(1) 0 0(1) 0

Gary A. Lockwood 1997 119,000(2) 0 0 100,000
President and 1996 119,000(2) 0 0 100,000
Chief Operating Officer 1995 97,000(2) 3,731(2) 0 0
(President 8/96 to Present)

Frank Leonard Laport, Esq. 1997 0(3) 0(3) 0(3) 0(3)
CEO & Chairman of the Board 1996 0 0 0 0
(8/96 to Present) 1995 0 0 0 0
</TABLE>

(1) Dr. Mitchell was awarded 50,000 shares of Common Stock in connection
with the execution of his employment contract dated January 1996. Dr.
Mitchell received no direct compensation in the form of salary or
consulting fees directly during 1995. However, Stratum Management Inc., a
company Dr. Mitchell was affiliated with prior to his appointment as
President, had been paid $35,833 per month in the form of consulting fees
during 1995 and $41,000 per month during 1996. In addition, Stratum
received warrants to purchase 600,000 shares (subsequently reduced to
388,000 shares) of Company common stock at an exercise price of $1.00.
Dr. Mitchell's wife and siblings remained shareholders and employees of
Stratum during Dr. Mitchell's tenure with the Company.

(2) Compensation received was primarily for the management of Dental
Labs. G. Lockwood did not receive compensation in an executive officer
capacity during 1995. Compensation does not include (i) amounts received
by Stark Enterprises, of which Mr. Lockwood is a partial owner, pursuant
to the lease for the Company's lab facility in Livonia, MI, or (ii)
amounts received by The Island Group, of which Mr. Lockwood is a partial
owner pursuant to that certain Acquisition Promissory Note. See "Certain
Relationships and Related Transactions".

(3) Mr. Laport currently serves without direct compensation, although a
compensation committee has been formed to develop a compensation package
for Mr. Laport. Compensation does not include amounts received by Mr.
Laport pursuant to the Leases between the Company and Mr. Laport for the
Company offices at 7421 W 100th Place, Bridgeview, IL. In addition, Mr.
Laport is a member of the Investor Group along with Amsterdam Equities
Limited. See "Certain Relationships and Related Transactions".

<PAGE> 7

OPTIONS AND WARRANTS GRANTS

As of November 10, 1998 options to purchase an aggregate of 140,000
shares of Common Stock at approximate exercise prices ranging from $ 4.00 to $
8.00 had been granted and were outstanding under the Company's 1993 Incentive
and Non-Statutory Stock Option Plan. The dates such options were granted range
from June 3, 1993 to June 6, 1996.

As of December 31, 1997, no options had been exercised or have a year
end value.

In April, 1996, and in connection with debt incurred by the Company in
1994, the Company issued certain default warrants to an investor group
consisting of Amsterdam Equities Limited, Mr. Laport and Mr. Laport's IRA. See
"Certain Relationships and Related Transactions". In July, 1997, in connection
with a waiver of in excess of $700,000 of accrued interest and dividends on the
part of the Investor Group, the terms of the default warrants were modified to
reduce the required exercise price. The terms of the default warrants were such
that, upon exercise, the holder of the default warrants would receive Company
Common Stock in an amount equal to fifty percent of the Company. Effective as of
November, 1998 (i) Amsterdam Equities Limited transferred its interest in the
default warrants to Mr. Laport, and (ii) Mr. Laport proceeded to exercise the
default warrants, resulting in the issuance to Mr. Laport of 1,065,483 shares of
Company Common Stock for an aggregate exercise prices of $41,250.

EMPLOYMENT AGREEMENTS

1. Mr. Laport currently serves without compensation and without an
employment agreement. However, Mr. Laport is a member of the Investor
Group. See "Certain Relationships and Related Transactions".

2. Mr. Lockwood currently is a party to an employment agreement, dated
December 31, 1993, and amended as of June 1, 1996, with the Company and
Mason Dental Midwest, Inc., a wholly owned subsidiary of the Company.
The agreement provides for Mr. Lockwood to receive an annual salary of
approximately $107,000 for operating the Company's Mason lab operation
and $12,000 for serving as the Company's President. Mr. Lockwood was
also granted options to purchase up to 100,000 shares of Company Common
Stock at an exercise price based upon the Company's average trading
price in the period from June to August, 1996.
<PAGE> 8

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As described below and in the Company's public filings, the Company has
entered into a number of transactions with officers and directors and other
related person in the past. With certain limited exceptions specified below,
these related transactions were generally entered into by the Company prior to
the time that the officers, directors and/or related parties actually became
officers and directors of the Company. Any such transactions were entered into
in compliance with the Company's governing documents.

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 could choose to lend additional funds, in increments to be determined
solely by the Investor Group. The Convertible Debt and Preferred Stock were
initially to bear interest and have a coupon rate, respectively of 11.75%, plus
the payment of any withholding taxes which might be due and owing with respect
to any person which is a foreign entity. Payments on the Convertible
Debt/Preferred Stock were interest only due in quarterly installments which were
to begin in September 1996. The Convertible Debt/Preferred Stock originally had
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 interest began to accrue
at the default rate of 21.75%.

Pursuant to that certain Modification Agreement ("Modification
Agreement") entered into between the Investor Group and the Company and dated as
of July 1, 1997, the Investor Group agreed, conditioned upon continued listing
by the Company on the Nasdaq SmallCap Market and similar concessions by another
significant Company creditor, to waive all accumulated and ongoing interest
and/or dividends on the Convertible Debt/Preferred Stock for the period from
January 1, 1997 through December 31, 1997. That waiver ended on January 1, 1998,
and interest and dividends have again been accruing.

The waiver of interest and dividends during 1997 on the part of the
Investor Group resulted in a total savings to the Company in excess of $700,000.

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 58,333 shares of the Company's Regulation D Common
Stock held by the Investor Group into $350,000 of Convertible Debt and Preferred
Stock.
<PAGE> 9

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 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 or until the
Convertible Debt/Preferred Stock is called.

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 to elect a Class B director who would have
super-majority voting powers on the Company's Board of Directors. Effective as
of August , 1996, Mr. Laport was elected as the Class B Director. The Class B
Director has taken no action to date.

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. If the Investor Group were to
convert all outstanding Convertible Debt and Preferred Stock at the present
time, and exercise the default warrants (see below), the conversion would result
(when combined with existing holdings) in the Investor Group owing approximately
60% of the issued and outstanding shares of Company's common stock (after
conversion and 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
series of default warrants to purchase an aggregate number of shares of common
stock equivalent to fifty percent (50.0%) of the issued and outstanding Common
Stock of the Company at an exercise price of $0.10 per share (subsequently
reduced to $0.01 per share under the terms of the Modification Agreement). This
modification effectively reduced the aggregate exercise price of approximately
$412,500 for the default warrants to an aggregate exercise price of
approximately $41,250 (not accounting for any adjustments due to the
anti-dilution provision of the Warrants and due to changes in the total issued
and outstanding shares of the Company's common stock). Initially, the Investor
Group could exercise the warrants 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 various net income tests
in subsequent years. The Company has been in ongoing default under the Financing
Arrangement and the stated financial goals have not been met, and, accordingly,
these default warrants have been capable of being exercised by the Investor
Group upon payment of a minimal exercise price since January 1, 1997. At present
the cumulative effect of the issuance of shares pursuant to the default warrants
to the Investor Group and the conversion of outstanding Convertible
Debt/Preferred Stock would result in ownership by the Investor Group of
approximately 60% of the Company's total issued and outstanding common stock
after such conversion and exercise.
<PAGE> 10

Effective as of November 4, 1998, the Company was advised that (i)
Amsterdam Equities Limited had transferred any and all interest which they had
in the default warrants to Frank Leonard Laport, and (ii) that Mr. Laport had
proceeded to exercise such default warrants. Exercise of all of the default
warrants for the stated exercise price resulted in Mr. Laport receiving
approximately 1,065,483 additional shares of Company Common Stock.

2. George B. Collins, a director of the Company, holds a Power of Attorney
from Amsterdam Equities Limited and generally serves as the representative of
Amsterdam Equities Limited on the Board of the Company.

3. Mr. Laport, an officer and director of the Company, owns the property
and the phone system located at 7421 West 100th Place, Bridgeview, IL and leases
a portion of such space and phone system to the Company. The Leases between the
Company and Mr. Laport are on a month-to-month basis and provide for aggregate
monthly payments from the Company to Mr. Laport of approximately $ 2,000. In
addition, the Company is responsible for a pro-rata portion of the expenses
associated with the property, including real estate taxes, utilities, etc. This
lease was entered into subsequent to Mr. Laport becoming an officer and
director.

4. Mr. Lockwood, an officer and director of the Company, is a part owner
of Stark Enterprises, which owns the property located at 12752 Stark Road in
Livonia, MI. The Company leases such property from Stark Enterprises. Pursuant
to such lease, which expires in 2002, the Company pays monthly payments of
approximately $ 13,000 to Stark Enterprises. In addition, Mr. Lockwood also has
a partial ownership interest in The Island Group. In connection with the
Company's initial acquisition of its Mason Dental lab facility, the Company
issued a promissory note to The Island Group, which such Note requires monthly
payments of $21,000 and runs through 2005.

COMPENSATION OF OUTSIDE DIRECTORS

The Company pays a fee of $1,000 per meeting date to each director who
is not employed by the company. Each director is entitled to reimbursement for
all reasonable expenses incurred by such director in connection with his duties
as a director. For the fiscal year ended December 31, 1997 the directors waived
any fees and expenses and the fees and expenses paid to directors amounted to
$0.00.

ELECTION OF DIRECTORS

Four directors are to be elected by the shareholders of the company to
hold office until the annual meeting of shareholders for fiscal year 1998 or
until their respective successors have been elected. It is intended that proxies
granted by shareholders in the form enclosed be voted, unless otherwise
directed, in favor of electing the following persons as directors: Frank Leonard
Laport, George B. Collins, Gary A. Lockwood and Dr. Zigmund C. Porter. Election
of the directors requires the favorable vote by the holders of a majority of the
outstanding shares of common stock present in person or represented by proxy and
entitled to vote thereon at the meeting. In the event any nominee named herein
for election as a director at the annual meeting is not available or willing to
serve when the election occurs, proxies in the accompanying form may be voted
for a substitute nominated by the Board. Messrs. Laport, Collins and Lockwood
<PAGE> 11

have served as directors of the Company since August 9, 1996 and Dr. Porter has
served as a director of the Company since August 15, 1997.

INFORMATION REGARDING DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTORS

The following table and commentary sets forth information about each of
the nominees.

<TABLE>
<CAPTION>
First Became Beneficially Owned Beneficially Owned

Employment Age a Director Number of Shares Percent of Shares
- ---------- --- ---------- ---------------- -----------------

<S> <C> <C> <C> <C>
Frank Leonard Laport 57 8/9/96 1,101,233(1)(3) 34.45%

George B. Collins 66 8/9/96 0(2)(3) 0.0%

Gary A. Lockwood 51 8/9/96 0 0.0%
Dr. Zigmund C. Porter 60 8/15/97 0 0.0%
</TABLE>

(1) With respect to Mr. Laport, includes shares currently held by Mr.
Laport's IRA. Does not include shares issuable upon conversion of Series
A Stock and Convertible Debt currently held by Amsterdam Equities Limited
and Mr. Laport. Conversion of this Series A Stock and Convertible Debt
could result in Amsterdam Equities and Mr. Laport holding, in the
aggregate, approximately 60% of the Class. See "Certain Relationships and
Related Transactions".

(2) Does not consider 189,002 Amsterdam Equities Limited shares for which
Mr. Collins holds a power of attorney.

FRANK LEONARD LAPORT. Mr. Laport, born Chicago, Illinois, March 8, 1941,
admitted to the Bar: 1966, Illinois; 1969, Florida; 1974, Indiana; 1966, U.S.
Tax Court; 1967, U.S. District Court, Northern District of Illinois; 1969, U.S.
District, Southern District of Florida; 1974, U.S. District, Southern District
of Indiana; U.S. Supreme Court. Licensed as Illinois Real Estate Broker on July
1, 1964. Earned the Certified Commercial Investment Member (C.C.I.M.)
designation of the Realtors National Marketing Institute, an affiliate of the
National Association of Realtors in 1983. Education: Elmhurst College (B.S., in
B.A., 1963); DePaul University, Law School (J.D. 1966). Director, Chairman, and
CEO of the Company since August, 1996.

GEORGE B. COLLINS. Mr. Collins, born Kansas City, Missouri, April 23, 1931;
admitted to bar, 1953, Arkansas; 1955 Illinois; 1970, U.S. Tax Court; 1972, U.S.
Supreme Court; 1982, U.S. District Court, Northern District of Illinois, Trial
Bar; U.S. Court of Appeals, Second, Seventh and Ninth Circuits. Education:
Arkansas A. & M. College (B.S. 1952); University of Arkansas (LL.B., 1954).
Omicron Delta Kappa. Associate Editor, Arkansas Law Review, 1951-1952. Author:
"Usury," 8 Arkansas Law Review, September 1954. Teaching Associate, Northwestern
University School of Law, 1954-1955. co-author: "Defending White Collar Crimes,"
Practicing Law Institute 1976; "White Collar Crimes; Defense Strategies",
Practicing Law Institute, 1977; "White Collar Crimes:, Practicing Law Institute,
1978; "White Collar
<PAGE> 12

Crimes." Practicing Law Institute, 1980. Member: Chicago (Member, 1955-1978,
Vice Chairman, 1967 and Chairman, 1968, Committee on Legal Education, Member,
Committee on Professional Fees, 1966; Vice Chairman, 1973; 1974-1975; Chairman,
1975, Committees on: Environmental Law, 1973; Circuit Court Operations, 1976.
Member 1976-1986, Vice Chairman, 1979-1980; 2981 and chairman 1980-1981, Lawyers
Referral Plan Committee), Illinois State, Arkansas and American Bar
Associations. Director of the Company since August, 1996.

GARY A. LOCKWOOD. Mr. Lockwood, born January 1, 1947, was named Chief Operating
Officer of Princeton Dental Management Corporation in June, 1996, and as
President and Director in August, 1996. In this capacity, he is responsible for
all PDMC operating units in Michigan. Previously he served as Chief Executive
Officer of the corporation's dental laboratory in Michigan. Mr. Lockwood brings
to his post more than 20 years of dental management experience as owner of
Michigan-based Mason Dental, Inc. one of the nation's largest manufacturers of
dental prosthetics. Prior to the company's acquisition by PDMC, he served as
President and Director of Diversified Dental Services, a wholly owned subsidiary
of Mason Dental. Mr. Lockwood has held executive positions and directorships
with realty, financial management and banking organizations. A Michigan native,
he is a graduate of Northern Michigan University with a degree in business
administration. President and Director of the Company since August, 1996.

DR. ZIGMUND C. PORTER. Dr. Porter, born Chicago, Illinois, April 20, 1938. Dr.
Porter received his B.S. from the University of Illinois in 1960 and his D.D.S.
from the University of Illinois in 1962. Dr. Porter also received a Certificate
of Periodontics and Oral Medicine from Tufts University School of Dental
Medicine, Boston, in 1962-64. Dr. Porter has been a licensed periodontist for
over 25 years and has held numerous teaching and hospital positions, including
serving as Professor of Periodontics, University of Illinois, and Director of
Post Graduate Periodontics from 1964-85, and holding positions at Hinsdale
Hospital, MacNeal Hospital, Illinois Masonic Hospital and the University of
Illinois. Dr. Porter has given numerous lectures and has received a number of
citations and awards for his work in the dental field. Director of the Company
since August 15, 1997.
<PAGE> 13

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's Directors and Executive Officers, and persons who own more than 10% of
the Company's Common Stock, to file with the Securities and Exchange Commission
(the "SEC"), initial reports of ownership and reports of changes in ownership of
Common Stock. In addition these individuals are also required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely upon a review of forms, reports and
certificates provided to the Company by such persons, during the two (2) fiscal
years ended December 31, 1997, all Section 16(a) filing requirements applicable
to its executive officers, directors and greater than 10% beneficial owners were
complied with the exception that the Company has been advised that a Form 3 may
have been filed late by Mr. Lockwood. The Company has made no investigation in
this regard.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

The Board of Directors of the Company held seven meetings with all
members in attendance during fiscal year 1997.

The Board does not have a nominating committee for recommending to
shareholders candidates for positions on the Board of Directors.

The Audit Committee, which consists of Mr. Collins and Dr. Porter is
authorized to recommend to the Board independent certified public accounting
firms for selection as auditors of the Company; make recommendations to the
Board on auditing matters; and examine and make recommendations to the Board
concerning the scope of audits.

APPOINTMENT OF INDEPENDENT AUDITORS

Kirkland, Russ, Murphy & Tapp was appointed as the company's
independent auditors for fiscal year 1994 and has continuously served in that
capacity. The Board of Directors of the Company, upon the recommendation of the
Audit Committee, recommend that Kirkland, Russ, Murphy & Tapp be retained as the
Company's auditors for fiscal year 1998. Kirkland, Russ, Murphy & Tapp has
advised the Audit Committee that neither the firm nor any of its partners or
staff, has any direct financial interest in the Company or any of its
subsidiaries.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.

OTHER MATTERS

The Board of Directors know of no other matters which are likely to be
brought before the annual meeting. If any matters are brought before the
meeting, however, Frank Leonard Laport, who is chairman of the Board of
Directors of the Company and the proxy agent named in the enclosed proxy, will
vote on such matters in accordance with his best judgment.
<PAGE> 14

SHAREHOLDER PROPOSALS

Any proposal which a stockholder intends to present at the annual
meeting of shareholders for fiscal year 1998 must be received by the company by
June 1, 1999, in order to be considered for inclusion in the proxy statement and
form of proxy relating to such meeting.

By Order of the Board of Directors

/s/
----------------------------------
Acting Secretary
<PAGE> 15

Affidavit of Mailing

State of New York )
)
County of New York )

__________________________being duly sworn, deposes and says:

I am Assistant Secretary of Continental Stock Transfer & Trust Company, 2
Broadway, New York, NY 10004, the Transfer Agent for Princeton Dental Management
Corporation and I have supervision over the records and operations of such
transfer agent.

On the ____ day of ____________, 19____, I caused to be mailed at the Post
Office regularly maintained by the United States Government at the Church Street
Station in the Borough of Manhattan, City and State of New York, to each owner
of record appearing as such on the books kept by Continental Stock Transfer &
Trust company in its office as such transfer agent of common the stock as of the
close of business on the ________ day of _________, 19___, the following
described paper (s) {of which specimen(s) (is) (are) attached hereto} a copy of
(each of) which was enclosed in an envelope, postage prepaid, addressed to each
such owner at the proper address appearing from such books or records:

"A" Form of Proxy
"B" Notice of Meeting & Proxy Statement
"C" Annual Report
"D" Business Reply Envelope

____________________________

SWORN TO BEFORE ME THIS
_______ day of ____________, 199 ___

____________________________________

<PAGE> 16

PRINCETON DENTAL MANAGEMENT CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Frank Leonard Laport, Chairman of the Board of
Directors of Princeton Dental Management Corporation (the "Company"), as Proxy
for the undersigned, to vote all shares of Common Stock the undersigned in
Princeton Dental Management Corporation with all the powers that the undersigned
would have if personally present, at the Annual Meeting of Shareholders of
Princeton Dental Management Corporation, to be held at the corporate offices of
Princeton Dental Management Corporation, 7421 W. 100th Place, Bridgeview,
Illinois, at 3:00 p.m., Central Time, December 18, 1998 and at any adjournment
thereof.

1. TO ELECT four Directors to hold office until the next Annual Meeting of
shareholders and until their successors have been duly elected and
qualified

[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
to vote for the nominees
listed below

(Except as marked to the contrary below)

INSTRUCTIONS: To withhold authority to vote for an individual
nominee, strike a line through the nominee's name in the list below.

Frank Leonard Laport, Esq. Gary A. Lockwood
George B. Collins, Esq. Dr. Zigmund C. Porter

2. TO RATIFY the appointment of Kirkland, Russ, Murphy & Tapp, independent
certified public accountants, as the Company's independent auditors for fiscal
year 1998.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. TO TRANSACT such other business as may properly come before the meeting or
any adjournment thereof.

This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this Proxy will be
voted for each of the Proposals set forth above.

Please sign exactly as name appears below.
When shares are held by joint tenants, both
should sign. When signing as attorney, as
executor, administrator or trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.

--------------------------------------------
Signature

--------------------------------------------
Signature, If Held Jointly

DATED: , 1998

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.