# Park Dental Partners, Inc.: Form 10-Q for the period ended Mar 31, 2026

- Company: [Park Dental Partners, Inc.](/companies/park.md) (CIK 2069604)
- Form: 10-Q
- Filed: 2026-05-14
- Accepted by EDGAR: May 14, 2026, 16:25 ET
- Period: 2026-03-31
- Accession: 0001104659-26-061216
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/2069604/000110465926061216/park-20260331x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/2069604/000110465926061216/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $62.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $56.3m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2026-01-01 to 2026-03-31 | $6.4m | us-gaap:GrossProfit |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | −$1.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | −$1.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | −$390.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.09 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.09 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-01-01 to 2026-03-31 | 4,383,073 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | $5.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2026-01-01 to 2026-03-31 | $2.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-03-31 | $24.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-03-31 | $37.7m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $179.9m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $35.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-03-31 | $154.4m | us-gaap:Liabilities |
| Long-term debt | at 2026-03-31 | $9.6m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2026-03-31 | $1.9m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2026-03-31 | $25.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 38,465 characters.

### FORWARD-LOOKING STATEMENTS

The following discussion and analysis of the Company’s condensed consolidated financial condition and results of operations should be read along with the condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words, although not all forward-looking statements contain these words. These statements are only predictions. The information, except for historical information, contained in this discussion and analysis or set forth elsewhere in this Quarterly Report includes forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements because of, among other things, potential risks and uncertainties, such as:

- Regulatory and compliance risk, including state dental corporate practice of dentistry and fee-splitting restrictions, HIPAA and other privacy/cybersecurity obligations, and evolving healthcare and labor regulations;
- Reimbursement risk, including risks related to payer mix, reimbursement rates, audit/recoupment activity, enrollment and collections timing, and dependence on significant third-party payors;
- Our ability to identify, acquire, integrate and effectively support affiliated practices and to execute de novo expansion, and the risk of undiscovered liabilities in acquisitions;
- Dependence on affiliated dental practices and their clinical performance; our ability to attract, hire and retain dentists, specialists and hygienists; and risks related to ownership transitions of affiliated entities;
- Competition for patients and clinicians in our markets and the impact on patient volumes and staffing;
- Macroeconomic conditions, inflation and interest rates, and our geographic concentration, particularly in the Minnesota area.

You should review Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended December 31, 2025 for a discussion of a number of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis or set forth elsewhere in this Quarterly Report. The Company assumes no obligation to publicly release the results of any revisions or updates to these forward-looking statements to reflect future events or unanticipated occurrences.

### Overview

As a dental resource organization (“DRO”), Park Dental Partners, Inc. provides comprehensive business support services including clinical team members, administrative personnel, facilities and equipment to our affiliated general and multi-specialty dental practices in Minnesota, Wisconsin and Arizona. Our network of affiliated dental practices employs 221 dentists, and consists of 994 hygienists, dental assistants, and patient care coordinators that support affiliated dentists in operating their dental practices across 86 practice locations. Our network of affiliated dental practices has been operating for over fifty years, beginning with the establishment of the general dentistry group in 1972. The mission of our affiliated dental practices since inception has been to ensure patients enjoy the benefits of a lifetime of good oral health. This mission continues to be the driving force behind our organization today.

### Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses in the reporting period. Our actual results may differ from these estimates.

The critical accounting policies affected most significantly by estimates, assumptions and judgments used in the preparation of the Company’s condensed consolidated financial statements are described in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report. On an ongoing basis, the Company evaluates the critical accounting policies used to prepare its condensed consolidated financial statements, including, but not limited to, those related to business acquisitions. There have been no material changes in these critical accounting policies and estimates during the three months ended March 31, 2026.

### Results of Operations

### Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table sets forth, for the periods indicated, our condensed consolidated statements of operations and certain other information. Amounts may not add to the totals due to rounding.

*(in thousands)*

| ​ ​ ​ Condensed Consolidated Statements of Operations: | ​ ​ ​ ​ ​ ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2026 ​ ​ | ​ ​ ​ ​ ​ | ​ ​ 2025 ​ ​ |
| --- | --- | --- | --- | --- |
| REVENUE |  | $62,695 | ​ | $59,037 |
| COST OF SERVICES |  | ​ ​ | ​ | ​ ​ |
| Salaries and benefits |  | ​ 41,895 | ​ | ​ 35,637 |
| Dental supplies and Laboratory fees |  | ​ 4,338 | ​ | ​ 4,239 |
| Office occupancy |  | ​ 4,285 | ​ | ​ 4,004 |
| Other practice expenses |  | ​ 3,834 | ​ | ​ 3,405 |
| Depreciation |  | ​ 1,963 | ​ | ​ 1,896 |
| TOTAL COST OF SERVICES |  | ​ 56,315 | ​ | ​ 49,181 |
| GROSS MARGIN |  | ​ 6,380 | ​ | ​ 9,856 |
| General and administrative expenses |  | ​ 7,840 | ​ | ​ 6,928 |
| Depreciation and amortization |  | ​ 420 | ​ | ​ 378 |
| OPERATING INCOME |  | ​ (1,880) | ​ | ​ 2,550 |
| INTEREST EXPENSE - NET |  | ​ (121) | ​ | ​ (337) |
| INCOME (LOSS) BEFORE TAX | ​ | ​ (2,001) | ​ | ​ 2,213 |
| PROVISION/(BENEFIT) FOR INCOME TAX | ​ | ​ (1,611) | ​ | ​ 646 |
| NET INCOME (LOSS) | ​ | $(390) | ​ | $1,566 |

### Revenues

Total revenues for the three months ended March 31, 2026, increased $3.7 million, or 6.2%, to $62.7 million from $59.0 million for the three months ended March 31, 2025. General Dentistry revenue increased $2.8 million, and multi specialty dentistry revenue was higher by $0.9 million, reflecting increased patient visits and clinical hours, the impact of acquisitions, and reimbursement growth through higher payor contractual rates. Revenue from acquisitions contributed approximately $0.8 million for the quarter over the prior year’s comparable quarter. Same Practice Revenue Growth, as defined as dental practice locations that have been operating for at least 13 full months prior to the end of a given period and which have not been closed, or sold during such periods, increased approximately 4.1%, or $2.4 million from the prior comparable period.

### Cost of Services

*Salaries and Benefits*. Salaries and benefits consist principally of affiliated dentist compensation, clinical team member compensation and related benefit costs. Salaries and benefits for the three months ended March 31, 2026 was $41.9 million, an increase of $6.3 million, or 17.6%, from $35.6 million for the three months ended March 31, 2025. The increase is primarily attributable to the recognition of $3.7 million in share based compensation expense in the three months ended March 31, 2026, while no share based compensation expense was recorded in the three months ended March 31, 2025. The remaining $2.6 million increase relates to an increase of $1.5 million in salaries, driven by increased headcount, including from acquired practices, annual salary increases, $0.4 million increase in benefit costs, $0.3 million in higher incentive compensation, and $0.3 million of contractor support.

*Dental supplies and Laboratory Fees.* Dental supplies and laboratory fees consists of variable costs associated with our affiliated dental practices providing dental services. Dental supplies and laboratory fees expense for the three months ended March 31, 2026 was $4.3 million, an increase of $0.1 million, or 2.3% from $4.2 million for the three months ended March 31, 2025.

*Office occupancy expenses.* Office occupancy expenses include lease costs and other physical practice location expenses. Office occupancy expense for the three months ended March 31, 2026 was $4.3 million, an increase of $0.3 million, or 7.0%, from $4.0 million for the three months ended March 31, 2025, attributable to increased capacity expansion and slightly higher leasing costs.

*Other practice expenses.* Other practice expenses include MinnesotaCare provider taxes, software and subscription costs, repairs and maintenance costs, recruiting, travel and entertainment, insurance and other operating costs. Other practice expense for the three months ended March 31, 2026 was $3.8 million, an increase of $0.4 million, or 12.6%, from $3.4 million for the three months ended March 31, 2025 as a result of higher software and subscription costs, and volume-based MinnesotaCare provider taxes.

*Cost of Services Depreciation Expense.* Cost of services depreciation expense encompasses depreciation associated with practice related assets such as dental equipment, leasehold improvements, furniture and fixtures and computer equipment. Practice depreciation expense for the three months ended March 31, 2026 was $2.0 million, an increase of $0.1 million, or 3.5%, from $1.9 million for the three months ended March 31, 2025.

### General and Administrative

General and administrative expenses consist of costs of our centralized billing offices and call-centers, marketing and advertising expenses, regional management expenses, executive and senior management, and centralized functions, such as accounting, finance, team member relations, information technology, operations, real estate and other similar functions. General and administrative expense for the three months ended March 31, 2026 was $7.8 million, an increase of $0.9 million, or 13.2%, from $6.9 million for the three months ended March 31, 2025. The increase in cost is primarily attributable to a $0.4 million increase in share based compensation expense, $0.4 million higher professional fees, $0.3 million higher marketing and travel, and $0.2 million increase in salaries and wages, offset in part by $0.5 million lower costs associated with preparing for our 2025 initial public offering.

### Depreciation and Amortization

Depreciation and amortization expenses are related to our non-practice related investments in long-lived assets such as computer equipment, furniture and fixtures, and amortization of intangible assets. Depreciation and amortization expense for the three months ended March 31, 2026 remained flat compared to the three months ended March 31, 2025. The recognized expense for both periods was $0.4 million.

### Interest Expense, net

Net interest expense for the three months ended March 31, 2026 was $0.1 million, a slight decrease from $0.3 million for the three months ended March 31, 2025. This decrease was driven by a decrease in total interest-bearing debt under our term loan and usage of line of credit over the year and an increase in interest income earned on money market funds.

### Provision for Income Taxes

Income tax benefit for the three months ended March 31, 2026 was $1.6 million compared to $0.6 million income tax expense for the three months ended March 31, 2025. The change was due to lower taxable income, impacted by decreased operating earnings and increased tax benefits primarily related to share based compensation.

### Key Financial Measures, Performance Indicators and Non-GAAP Financial Measures

In assessing the performance of our business, we consider a variety of financial measures and performance indicators that directly or indirectly impact our revenue and profitability. The key financial and Non-GAAP financial measures and performance indicators we use are set forth below, as of and for the three months ended March 31, 2026 and 2025:

*(in thousands, except per share amounts, percentages, patient visits, and doctor count)*

| ​ ​ Key Financial Measures | ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2026 ​ ​ | ​ ​ ​ ​ ​ | ​ ​ 2025 ​ ​ | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ Increase/ (Decrease) ​ ​ | ​ ​ ​ ​ ​ ​ | ​ ​ % Increase/ (Decrease) ​ | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | --- | ---: |
| Revenue | ​ | $62,695 | **​** | $59,037 | **​** | $3,658 | **​** | ​ | 6.2% |
| Gross Margin | ​ | $6,380 | **​** | $9,856 | **​** | $(3,476) | **​** | ​ | (35.3)% |
| Net Income (Loss) | ​ | $(390) | **​** | $1,566 | **​** | $(1,956) | **​** | ​ | (124.9)% |
| Diluted EPS | ​ | $(0.09) | ​ | $0.88 | ​ | $(0.97) | **​** | ​ | (110.1)% |
| Patient Visits | ​ | 178,527 | ​ | 175,940 | ​ | 2,587 | ​ | ​ | 1.5% |
| Same Practice Revenue Growth | ​ | ​ 4.1% | ​ | ​ 1.2% | ​ | ​ 290 | bps | ​ | 241.7% |
| Patient Retention Rate | ​ | ​ 90.1% | ​ | ​ 89.2% | ​ | ​ 90 | bps | ​ | 1.0% |
| Doctor Count | ​ | ​ 221 | ​ | ​ 203 | ​ | ​ 18 | ​ | ​ | 8.9% |
| Non-GAAP Measures(1) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ |
| Adjusted EBITDA | ​ | $4,745 | ​ | $5,465 | ​ | $(720) | ​ | ​ | (13.2)% |
| Adjusted EBITDA Percentage | ​ | ​ 7.6% | ​ | ​ 9.3% | ​ | ​ (170) | bps | ​ | (18.4)% |
| Adjusted Gross Margin | ​ | $12,205 | ​ | $11,900 | ​ | $305 | ​ | ​ | 2.6% |
| Adjusted Gross Margin Percentage | ​ | ​ 19.5% | ​ | ​ 20.2% | ​ | ​ (70) | bps | ​ | (3.5)% |
| Adjusted Diluted EPS | ​ | $0.44 | ​ | $1.14 | ​ | $(0.70) | **​** | ​ | (61.4)% |
| General and Administrative Expense Percentage | ​ | ​ 12.5% | ​ | ​ 11.7% | ​ | ​ 80 | bps | ​ | 6.8% |

(1) Non-GAAP Measures are defined in the “*Non-GAAP Financial Measures Definitions”* section. For a reconciliation of Adjusted EBITDA to net income, Adjusted Gross Margin to Gross Margin, and Adjusted Diluted EPS to Diluted EPS, to the most directly comparable GAAP measures, see the “*Non-GAAP Financial Measures”* section.

### Revenue Related Financial Measures and Performance Indicators

*Patient Visits.* A patient visit is counted when service is provided to a patient at one of our affiliated dental general dentistry practices. Measuring the year-over-year change in patient visits helps us to evaluate how the affiliated dental practices are performing. It also helps with evaluating demand for services which influences decision-making relating to matters such as appropriate staffing levels and recruiting needs. In addition, it influences decision-making processes relating to our marketing, sales and advertising strategies and helps us with evaluating the effectiveness of those strategies. Further, with respect to continuing care patient count, it allows us to evaluate the ability of affiliated dentists to encourage patients to complete their diagnosed dental treatment plans.

Patient visits for the three months ended March 31, 2026 were 178,527, an increase of 1.5% from 175,940 for the three months ended March 31, 2025.

*Same Practice Revenue Growth.* Same practice revenues represent total revenues for same dental practice locations that have been operating for at least 13 full months prior to the end of a given period and which have not been closed, or sold during such period. Measuring the year-over-year change in same practice revenues allows us to evaluate how affiliated dental practices are performing. We believe various factors affect comparable practice revenues, including patient demand for dental services, economic trends, dentist and hygienist staffing levels, availability of dentists and hygienists, pricing, competition, visibility and accessibility of the dental practices, quality of the tenants surrounding the dental practices, clinical hours and the level of patient service provided inside and outside of the dental practices.

Same Practice Revenue growth for the three months ended March 31, 2026 was 4.1%, or 290 bps higher than the 1.2% Same Practice Revenue growth for the three months ended March 31, 2025.

*Patient Retention Rate.* Patient retention rate is calculated by counting patients that remain active at the beginning and end of a twelve-month period. Active patients are defined as general dentistry patients having been seen by our affiliated dental practices within the past 36 months, or last 18 months for patients under the age of 18. Patients who have not been seen by our affiliated dental practices within these time periods are removed from our active patient lists. This methodology is aligned with ADA clinical procedure codes, and is consistent with treatment protocols for new patients, before being considered an active patient again. Measuring the year-over-year and quarter-over-quarter change in patient retention allows us to evaluate the recurring nature of patient visits at the dental practices and affiliated dentists which influences decision-making around matters such as appropriate levels of staffing, recruiting, advertising and facility expansion opportunities.

Patient retention was stable with the retention rate for the three months ended March 31, 2026 at 90.1%, an increase of 90 bps from 89.2% for the three months ended March 31, 2025.

*Doctor Count.* Dentists operating in one of our affiliated dental practices are included in this calculation, which includes both full and part-time dentists. Measuring the year-over-year and quarter-over-quarter change in dentist count allows us to evaluate the production capacity of affiliated dental practices. It also influences decision-making relating to matters such as appropriate staffing levels and recruiting needs.

Doctor count as of March 31, 2026 was 221, eighteen higher than the March 31, 2025 doctor count of 203.

### Non-GAAP Financial Measures

This report contains “non-GAAP financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “Adjusted EBITDA Percentage,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Diluted EPS,” and “General and Administrative Expense Percentage,” collectively known as “the Non-GAAP Financial Measures”.

We present the Non-GAAP Financial Measures as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe these non-GAAP measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes the Non-GAAP Financial Measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses the Non-GAAP Financial Measures to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

The Non-GAAP Financial Measures are not recognized terms under GAAP and should not be considered as alternatives to net income (loss) or gross margin as measures of financial performance or cash provided by operating activities as measures of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be measures of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. All measurements are provided with a reconciliation from a GAAP measurement.

### Non-GAAP Financial Measures Definitions

“Adjusted EBITDA” is defined as net income (loss) adjusted to exclude interest expense (income), net, provision for (benefit from) income taxes, depreciation and amortization, share based compensation, discretionary shareholder bonuses, non-qualified deferred compensation expenses, and restructuring costs.

“Adjusted EBITDA Percentage” is defined as Adjusted EBITDA as a percentage of consolidated revenue.

“Adjusted Gross Margin” is defined as Gross Margin excluding depreciation expense, share based compensation, discretionary shareholder bonuses, non-qualified deferred compensation expenses, and restructuring costs.

“Adjusted Gross Margin Percentage” is defined as Adjusted Gross Margin as a percentage of consolidated revenue.

“Adjusted Diluted EPS” is defined as Diluted EPS adjusted to exclude share based compensation, restructuring costs, non-qualified deferred compensation expenses, and the income tax effect of those adjustments at our estimated long-term annual effective tax rate.

“General and Administrative Expense Percentage” is defined as General and Administrative expenses as a percentage of consolidated revenue.

### Non-GAAP Financial Measures for the three months ended March 31, 2026 and 2025

The following table contains a reconciliation of our net income (loss) attributable to Park Dental Partners, Inc. determined in accordance with GAAP to Adjusted EBITDA:

*(in thousands)*

| ​ ​ Net Income (Loss) to Adjusted EBITDA | ​ ​ ​ ​ ​ ​ | ​ ​ For the Three Months Ended March 31, 2026 | ​ ​ ​ ​ | ​ ​ 2025 |
| --- | --- | ---: | --- | ---: |
| Net income (loss) attributable to Park Dental Partners, Inc. |  | $(390) | ​ | $1,566 |
| Addback/(Deduct): | ​ | ​ ​ | ​ | ​ ​ |
| Provision/(Benefit) for income taxes | ​ | (1,611) | ​ | 646 |
| Interest expense, net | ​ | 121 | ​ | 337 |
| Depreciation and amortization | ​ | 2,383 | ​ | 2,274 |
| EBITDA | ​ | $503 | ​ | $4,823 |
| Adjustments: | ​ | ​ | ​ | ​ |
| Share based compensation | ​ | ​ 4,024 | ​ | ​ - |
| Restructuring costs(1) | ​ | ​ 58 | ​ | ​ 557 |
| Deferred compensation | ​ | ​ 160 | ​ | ​ 85 |
| Adjusted EBITDA | ​ | $4,745 | ​ | $5,465 |
| Adjusted EBITDA Percentage | ​ | 7.6% | ​ | 9.3% |

(1) Restructuring costs primarily consist of expenses incurred in connection with the Company’s initial public offering completed on December 4, 2025 and gains and losses from the disposal of equipment.

*Adjusted EBITDA.* Adjusted EBITDA for the three months ended March 31, 2026 was $4.7 million, a decrease of $0.7 million from the $5.5 million Adjusted EBITDA for the three months ended March 31, 2025, primarily due to the $1.0 million increase in general and administrative expenses after adjustment, offset in part by the $0.3 million increased Adjusted Gross margin. The increase in general and administrative expenses after adjustments is due to a $0.4 million increase in professional fees, and a $0.2 million increase in salaries and wages after adjustments, and $0.3 million higher marketing and travel. Measuring the year-over-year change in Adjusted EBITDA allows us to evaluate the overall operating performance of affiliated dental practices on a consistent basis. It also influences our decision-making process on allocation of resources and helps us evaluate the effectiveness of our strategies.

*Adjusted EBITDA Percentage.* Adjusted EBITDA Percentage for the three months ended March 31, 2026 was 7.6%, a 170 basis point decrease from 9.3% for the three months ended March 31, 2025, attributable primarily due to an increase in general and administrative expenses after adjustments.

The following table contains a reconciliation of our Gross Margin determined in accordance with GAAP to Adjusted Gross Margin

*(in thousands)*

| ​ ​ Gross Margin to Adjusted Gross Margin | ​ ​ ​ ​ ​ ​ | ​ ​ For the Three Months Ended March 31, 2026 | ​ ​ ​ ​ | ​ ​ 2025 |
| --- | --- | ---: | --- | ---: |
| Gross Margin |  | $6,380 | ​ | $9,856 |
| Addback: | ​ | ​ ​ | ​ | ​ ​ |
| Share based compensation | ​ | 3,665 | ​ | - |
| Restructuring costs | ​ | 37 | ​ | 63 |
| Deferred compensation | ​ | 160 | ​ | 85 |
| Depreciation | ​ | 1,963 | ​ | 1,896 |
| Adjusted Gross Margin | ​ | $12,205 | ​ | $11,900 |
| Adjusted Gross Margin Percentage | ​ | 19.5% | ​ | 20.2% |

*Adjusted Gross Margin.* Adjusted Gross Margin for the three months ended March 31, 2026 was $12.2 million, an increase of $0.3 million, or 2.6%, from $11.9 million for the three months ended March 31, 2025, attributable to increased revenue of $3.7 million, partially offset by a $2.5 million increase in salaries and wages after adjustments. Measuring the year-over-year change in Adjusted Gross Margin allows us to evaluate the profitability of affiliated dental practices and their performance. It also influences our decision-making process related to cost management strategies and helps us evaluate the effectiveness of those strategies.

*Adjusted Gross Margin Percentage.* Adjusted Gross Margin Percentage for the three months ended March 31, 2026 was 19.5%, a 70 basis point decrease from 20.2% for the three months ended March 31, 2025, primarily reflecting an increase in revenue.

The following table contains a reconciliation of our Diluted EPS determined in accordance with GAAP to Adjusted Diluted EPS:

*(in thousands, except share and per share amounts)*

| ​ ​ Diluted EPS to Adjusted Diluted EPS | ​ ​ ​ ​ | ​ ​ For the Three Months Ended March 31, 2026 | ​ ​ ​ ​ | ​ ​ 2025 |
| --- | --- | --- | --- | --- |
| EARNINGS (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS: | ​ | $(390) | ​ | $1,566 |
| Adjustments: | ​ | ​ ​ | ​ | ​ ​ |
| Share based compensation | ​ | ​ 4,024 | ​ | ​ - |
| Restructuring costs | ​ | ​ 58 | ​ | ​ 557 |
| Deferred compensation | ​ | ​ 160 | ​ | ​ 85 |
| Income tax effect of the Adjustments(1) | ​ | ​ (1,188) | ​ | ​ (180) |
| ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | ​ | $2,664 | ​ | $2,028 |
| ​ | ​ | ​ | ​ | ​ |
| **Adjusted Weighted Average Diluted Shares - Reconciliation** | ​ | ​ | ​ | ​ |
| WEIGHTED-AVERAGE SHARES USED IN COMPUTING GAAP NET (LOSS) EARNINGS PER SHARE, DILUTED | ​ | ​ 4,383,073 | ​ | ​ 1,783,352 |
| ADJUSTED WEIGHTED AVERAGE DILUTED SHARES USED IN COMPUTING ADJUSTED EARNINGS PER SHARE, DILUTED(2) | ​ | ​ 6,059,839 | ​ | ​ 1,783,352 |
| ​ | ​ | ​ ​ | ​ | ​ ​ |
| ADJUSTED DILUTED EARNINGS PER SHARE: | ​ | $0.44 | ​ | $1.14 |

(1) Income tax effect is based on an estimated long-term annual effective tax rate of 28% tax rate for the three months ended March 31, 2026 and 2025. The Company's estimated long-term annual effective tax rate excludes certain non-cash items such as share based compensation arrangements, and is used in order to provide consistency across periods.

(2) Includes an additional 1,584,666 of weighted average dilutive shares and 92,100 of weighted average dilutive warrants for the three months ended March 31, 2026, that are excluded from a GAAP perspective due to the Company's net loss in that reporting period.

*Adjusted Diluted EPS.* Adjusted Diluted EPS for the three months ended March 31, 2026 was $0.44, a $0.70 decrease from $1.14 for the three months ended March 31, 2025, primarily due to an increase in the weighted average dilutive securities used in computing adjusted diluted earnings per share due to the Company’s IPO in December 2025.

*General and Administrative Expense Percentage.* General and Administrative Expense Percentage for the three months ended March 31, 2026 was 12.5%, a 80 basis point increase from 11.7% for the three months ended March 31, 2025. This increase is attributable to higher share based compensation costs related to becoming a publicly-traded company in the fourth quarter of 2025, $0.4 million increase in professional fees, and a $0.2 million increase in salaries and wages, and $0.3 million higher marketing and travel, net of $0.5 million lower costs associated with our 2025 initial public offering.

### Liquidity and Capital Resources

We finance our operations and growth through a combination of cash provided by operating activities and borrowings under our revolving loan facility. Cash and cash equivalents was $24.4 million at March 31, 2026, and $25.2 million at December 31, 2025. At March 31, 2026 and December 31, 2025, we had total outstanding borrowings under our debt arrangements of approximately $11.5 million and $12.0 million, respectively. Unused availability under our line of credit was approximately $15 million at March 31, 2026.

We believe that our existing cash and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months. Over the longer term, our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our dental services expenditures, the continuing market acceptance of our offerings, and any investments or acquisitions we may choose to pursue in the future. In the event that we need to borrow funds or issue additional equity, we cannot be assured that any such additional financing will be available on terms acceptable to us, if at all. In addition, any future borrowings may result in additional restrictions on our business and any issuance of additional equity would result in dilution to investors. If we are unable to raise additional capital when desired and on terms acceptable to us, our business, results of operations, and financial condition could be materially and adversely affected

### Cash flows from operating activities

Cash flows provided by operating activities were $5.0 million for the three months ended March 31, 2026, compared to $5.9 million for the three months ended March 31, 2025. The $0.9 million decrease in cash flows provided by operating activities was due primarily to a decrease in changes in operating assets and liabilities of $2.7 million, offset in part by a $0.8 million increase in net income (loss) after adjustments for non-cash items.

### Cashflows used in investing activities

Our investing activities are primarily related to capital expenditures for practice growth and expansion, replacing obsolescent assets, and adding capital improvements in existing facilities and technology related projects. Cash flows used in investing activities were $4.8 million and $3.1 million for the three months ended March 31, 2026 and 2025, respectively. Cash used in investing activities increased due to $1.6 million higher consideration paid for business acquisitions and an increase of $0.6 million due to notes issued in the first quarter of 2026, offset in part by a $0.4 million decrease in premiums paid on life insurance.

### Cashflows used in financing activities

Cash flows used in financing activities primarily reflect our borrowings and repayments under our current and prior credit facilities which were refinanced in March 2024, and amended subsequently in February 2026. Cash flows used in financing activities for the three months ended March 31, 2026 were $1.1 million compared to $2.0 million for the three months ended March 31, 2025. The $0.9 million change in finance cash usage reflected decreased checks issued in excess of cash of $0.7 million and a decrease of $0.2 million for share repurchases.

### Outstanding indebtedness

Amounts outstanding under our bank term loan were $9.3 million and $9.8 million at March 31, 2026, and December 31, 2025, respectively. During the three months ended March 31, 2026 we made scheduled principal payments of $0.5 million. At both March 31, 2026, and December 31, 2025, we had no outstanding balance under the line of credit.

On March 27, 2024, we entered into a new credit agreement which amended the existing agreement and provided for a new $13.0 million term loan and amended the line of credit to $15.0 million from the prior $23 million. The term loan matures in March 2029 and carries an interest rate equal to the one-month SOFR rate plus 2.10%. The amended agreement also provides for an accordion right to increase the term loan by an additional $10 million. The amended line of credit extended the maturity from March 2024 to March 2027 and carries an interest rate equal to the one-month SOFR rate plus 2.00%.

On February 13, 2026, the Company entered into an amendment to its credit agreement. The amendment extends availability under the line of credit to March 27, 2029, updates certain financial covenants and definitions, and provides consent for the formation of a new subsidiary.

The agreement requires, among other things, that we comply with a minimum fixed charge coverage ratio and a total cash flow leverage ratio. In addition, the agreement contains standard negative covenants that, among other things, limit our ability to undertake individual business combinations in excess of specified limits; incur and pay certain indebtedness; create, incur, or assume certain liens and negative pledges; sell, lease, convey, transfer or otherwise dispose of certain assets; liquidate or dissolve any of our subsidiaries; make certain loans and investments; make certain dividends and redemptions; substantially change the nature of our business; and effect certain changes in ownership or control beyond specified thresholds.

We were in compliance with all covenants specified in the credit agreement at March 31, 2026 and December 31, 2025 including the fixed charge coverage and cash flow leverage ratios. We believe, based on our current financial forecasts and trends, that we will remain compliant with all covenants for the foreseeable future.

Our obligations under the credit facilities are secured by a first priority lien on substantially all of our tangible and intangible assets and the tangible and intangible business assets of the affiliated dental practices.

In addition to the aforementioned credit facilities, we have secured notes payable of $2.2 million due to related parties and certain current and former shareholders. The principal is due at maturity and interest is due quarterly through October 1, 2037. Interest is equal to the greater of 14% of the principal balance or an amount based on a formula using average dentist compensation or a formula based on total revenue. The effective interest rate for 2026 is 24.5% compared to 25.7% in 2025. The notes are secured by all of our business assets and the affiliated dental practices and are subordinated to the bank term loan and the line of credit. The notes have significant prepayment obligations.

Our primary sources of liquidity are cash provided by operations and available borrowings under our revolving loan facility. The management fees we receive from affiliated dental practices and their reimbursement to us of certain costs we incur on their behalf are our primary source of cash from operations.

*Deferred Compensation —* Our deferred compensation obligation, including current and non-current obligations was $69.8 million and $70.6 million at March 31, 2026 and December 31, 2025, respectively, and primarily consisted of active non-qualified deferred compensation plans and other inactive deferred compensation plans.

*Non-qualified Deferred Compensation Plans —* We and our affiliated dental practices utilize non-qualified deferred compensation plans that provide participants the opportunity to defer compensation on a pretax basis. Benefit payments to participants are available upon termination of employment, disability, death, unforeseeable emergencies, a change-in-control event, as defined, or qualified planned in-service distributions. The agreement provides eligible participants the option to receive payment in a lump sum distribution or up to five annual installments. Participants are immediately 100% vested in their voluntary deferred compensation contributions. Participants are fully vested in employer credits after five years of service. Participant accounts are credited with deferred compensation contributions and earnings thereon, as defined. At March 31, 2026 and December 31, 2025, the total deferred compensation liability related to the non-qualified deferred compensation plans was $22.7 million and $23.0 million, respectively.

*Deferred Compensation Plans – Inactive —* Our affiliated dental practices have profession and executive deferred compensation plans, and have executed employment agreements with certain dentists, executives and professional employees. These agreements provided for the creation of deferred compensation balances for eligible employees in the event of separation from service. These plans were frozen prior to January 1, 2024. At March 31, 2026 and December 31, 2025, the total of these other inactive deferred compensation plans were $47.0 million and $47.6 million, respectively. This deferred compensation value is fixed and non-interest bearing. The deferred compensation balances are generally to be paid over a period of five years from the date of the participants separation from the groups, subject to certain limitation. One plan, comprising the significant majority of the balance has an annual maximum cap on payments at 2% of the respective Company’s annual adjusted gross revenue, as defined in the agreements.

### Recently adopted accounting pronouncements

The Company has not adopted any new accounting standards in the three months ended March 31, 2026.

### Recently issued accounting pronouncements

Refer to Note 1 to the Company’s condensed consolidated financial statements for a discussion of recently issued but not yet adopted accounting pronouncements.

## Market risk

As filed, 151 characters.

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

## Controls and procedures

As filed, 3,717 characters.

### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

There were no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer), does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

## Risk factors

As filed, 381 characters.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described in “Item 1A. Risk Factors” in our Annual Report, which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors described in our Annual Report.

Filed May 14, 2026.
Source: SEC EDGAR, the filing index for accession 0001104659-26-061216. Last ingested by Listed: Nov 10, 2026, 01:57 ET. No prices; not investment advice.