Birner Dental Management Services (BDMS) 10-Q 13 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	BIRNER DENTAL MANAGEMENT SERVICES INC
Entity Central Index Key	948,072
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,860,261
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash	$ 525,598	$ 258,801
Accounts receivable, net of allowance for doubtful accounts of approximately $390,000 and $390,000, respectively	3,482,873	3,043,655
Note receivable	34,195	34,195
Deferred tax asset	287,875	275,907
Income tax receivable	0	73,878
Prepaid expenses and other assets	799,862	575,770
Total current assets	5,130,403	4,262,206
PROPERTY AND EQUIPMENT, net	9,182,513	9,808,014
OTHER NONCURRENT ASSETS:
Intangible assets, net	7,354,507	7,565,648
Deferred charges and other assets	155,741	155,741
Note receivable	47,755	55,002
Total assets	21,870,919	21,846,611
CURRENT LIABILITIES:
Accounts payable	2,246,412	2,920,998
Accrued expenses	980,154	1,547,915
Accrued payroll and related expenses	2,703,232	2,330,398
Income taxes payable	150,709	0
Current maturities of long-term debt	2,000,000	1,500,000
Total current liabilities	8,080,507	8,299,311
LONG-TERM LIABILITIES:
Deferred tax liability, net	2,050,984	2,242,800
Long-term debt	9,117,598	8,707,578
Other long-term obligations	1,037,025	949,554
Total liabilities	20,286,114	20,199,243
SHAREHOLDERS' EQUITY:
Preferred Stock, no par value, 10,000,000 shares authorized; none outstanding	0	0
Common Stock, no par value, 20,000,000 shares authorized; 1,861,106 and 1,860,261 shares issued and outstanding, respectively	1,484,029	1,446,182
Retained earnings	100,776	201,186
Total shareholders' equity	1,584,805	1,647,368
Total liabilities and shareholders' equity	$ 21,870,919	$ 21,846,611

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Allowance for doubtful accounts	$ 390,000	$ 390,000
SHAREHOLDERS' EQUITY:
Preferred Stock, par value (in dollars per share)	$ 0	$ 0
Preferred Stock, authorized (in shares)	10,000,000	10,000,000
Preferred Stock, outstanding (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 0	$ 0
Common Stock, authorized (in shares)	20,000,000	20,000,000
Common Stock, issued (in shares)	1,860,261	1,861,106
Common Stock, outstanding (in shares)	1,860,261	1,861,106

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
REVENUE:
Dental practice revenue		$ 15,366,543	$ 15,388,974
Capitation revenue		1,064,690	1,198,550
Total Revenue		16,431,233	16,587,524
DIRECT EXPENSES:
Clinical salaries and benefits		9,870,950	9,944,817
Dental supplies		725,273	745,484
Laboratory fees		871,615	810,377
Occupancy		1,566,805	1,474,673
Advertising and marketing		158,870	160,887
Depreciation and amortization		1,020,091	1,109,871
General and administrative		1,403,210	1,257,765
Total Direct Expenses		15,616,814	15,503,874
Contribution from dental offices		814,419	1,083,650
CORPORATE EXPENSES:
General and administrative	[1]	876,906	1,075,005
Depreciation and amortization		62,799	55,335
OPERATING LOSS		(125,286)	(46,690)
Interest expense, net		39,322	28,516
LOSS BEFORE INCOME TAXES		(164,608)	(75,206)
Income tax benefit		(64,198)	(29,330)
NET LOSS		$ (100,410)	$ (45,876)
Net loss per share of Common Stock - Basic (in dollars per share)		$ (0.05)	$ (0.02)
Net loss per share of Common Stock - Diluted (in dollars per share)		(0.05)	(0.02)
Cash dividends per share of Common Stock (in dollars per share)		$ 0	$ 0.22
Weighted average number of shares of Common Stock and dilutive securities:
Basic (in shares)		1,860,482	1,859,689
Diluted (in shares)		1,860,482	1,859,689
[1]	Corporate expenses - general and administrative includes $80,773 and $46,707 of stock-based compensation expense pursuant to ASC Topic 718 for the quarters ended March 31, 2015 and 2016, respectively.

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock based compensation expense	$ 46,707	$ 80,773

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2016 - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Total
BALANCES at Dec. 31, 2015	$ 1,446,182	$ 201,186	$ 1,647,368
BALANCES (in shares) at Dec. 31, 2015	1,861,106		1,861,106
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase and retirement of Common Stock	$ (8,860)	0	$ (8,860)
Purchase and retirement of Common Stock (in shares)	(845)
Stock-based compensation expense	$ 46,707	0	46,707
Net loss	0	(100,410)	(100,410)
BALANCES at Mar. 31, 2016	$ 1,484,029	$ 100,776	$ 1,584,805
BALANCES (in shares) at Mar. 31, 2016	1,860,261		1,860,261

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (100,410)	$ (45,876)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,082,890	1,165,206
Stock-based compensation expense	46,707	80,773
Provision for doubtful accounts	234,920	175,142
Benefit from deferred income taxes	(203,784)	(223,738)
Changes in assets and liabilities:
Accounts receivable	(674,138)	(696,963)
Prepaid expenses and other assets	(224,092)	(83,472)
Deferred charges and other assets	0	2,300
Accounts payable	(674,586)	(414,439)
Accrued expenses	(158,318)	(195,620)
Accrued payroll and related expenses	372,834	382,595
Income taxes payable (receivable)	224,587	189,258
Other long-term obligations	87,471	(2,172)
Net cash provided by operating activities	14,081	332,994
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures	(246,248)	(187,388)
Note receivable	7,247	6,826
Net cash used in investing activities	(239,001)	(180,562)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Advances - line of credit	6,761,108	7,070,628
Repayments - line of credit	(5,851,088)	(6,684,030)
Purchase and retirement of Common Stock	(8,860)	0
Common stock cash dividends	(409,443)	(409,131)
Net cash provided by (used in) financing activities	491,717	(22,533)
NET CHANGE IN CASH	266,797	129,899
CASH, beginning of period	258,801	310,229
CASH, end of period	525,598	440,128
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	50,759	35,925
Cash paid for income taxes	0	5,150
Cash received for income taxes	85,000	0
NON-CASH ITEMS:
Repayments - line of credit with Compass Bank	$ 10,617,598	$ 0

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2016
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS [Abstract]
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	(1) UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated financial statements included herein are unaudited and have been prepared by Birner Dental Management Services, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company’s accounting policies and other financial information is included in the audited consolidated financial statements as filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2016 and the results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the quarter ended March 31, 2016 are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	(2) SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation/Basis of Consolidation The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting. These financial statements present the financial position and results of operations of the Company and the dental offices (“Offices”), which are under the control of the Company. The Offices are organized as professional corporations (“P.C.s”) and the Company provides business services to the Offices under long-term management agreements (the “Management Agreements”). All intercompany accounts and transactions have been eliminated in the consolidation. The Company treats Offices as consolidated subsidiaries where it has a long-term and unilateral controlling financial interest over the assets and operations of the Offices. The Company maintains control of substantially all of its Offices via the Management Agreements. The Company is a business service organization and does not engage in the practice of dentistry or the provision of dental hygiene services. These services are provided by licensed professionals. Certain key features of these arrangements either enable the Company at any time and in its sole discretion to cause a change in the shareholder of the P.C. (i.e., ''nominee shareholder'') or allow the Company to vote the shares of stock held by the owner of the P.C. and to elect a majority of the board of directors of the P.C. The accompanying condensed consolidated statements of operations reflect revenue, which is the amount billed to patients less contractual adjustments. Direct expenses consist of all the expenses incurred in operating the Offices and paid by the Company. Under the Management Agreements, the Company assumes responsibility for the management of most aspects of the Offices' business (the Company does not engage in the practice of dentistry or the provision of dental hygiene services), including personnel recruitment and training; comprehensive administrative, business and marketing support and advice; and facilities, equipment, and support personnel as required to operate the practices. The Company prepares its consolidated financial statements in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, which provides for consolidation of variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The Company has concluded that the P.C.s meet the definition of VIEs as defined by this standard and that the Company is the primary beneficiary of these VIEs. This conclusion was reached because the Company has the power to direct significant activities of the VIEs and the Company is obligated to absorb losses of and/or provide rights to receive benefits from the VIEs. Revenue Revenue is generally recognized when services are provided and is reported at estimated net realizable amounts due from insurance companies, preferred provider and health maintenance organizations (i.e., third-party payors) and patients for services rendered, net of contractual and other adjustments. Dental services are billed and collected by the Company in the name of the Offices. Revenue under certain third-party payor agreements is subject to audit and retroactive adjustments. To the Company’s knowledge, there are no material claims, disputes or other unsettled matters that exist concerning third-party reimbursements as of March 31, 2016. Most of the Company’s patients are insured under third-party payor agreements. The Company’s billing system generates contractual adjustments for each patient encounter based on fee schedules for the patient’s insurance plan. The services provided are attached to the patient’s fee schedule based on the insurance the patient has at the time the service is provided. Therefore, the revenue that is recorded by the billing system is based on insurance contractual amounts. Additionally, each patient at the time of service signs a form agreeing that the patient is ultimately responsible for the contracted fee if the insurance company does not pay the fee for any reason. Note Receivable A note receivable was created as part of a dental Office acquisition, of which approximately $82,000 in principal amount was outstanding at March 31, 2016. The note has equal monthly principal and interest amortization payments and a maturity date of October 31, 2018. The note bears interest at 6%, which is accrued monthly. If the note is uncollectible, an allowance for doubtful accounts will be created. There was no allowance for doubtful accounts for the note as of March 31, 2016 or December 31, 2015. . Intangible Assets The Company's dental practice acquisitions involve the purchase of tangible and intangible assets and the assumption of certain liabilities of the acquired dental Offices. As part of the purchase price allocation, the Company allocates the purchase price to the The Management Agreements cannot be terminated by a P.C. without cause, consisting primarily of bankruptcy or material default by the Company. If facts and circumstances indicate that the carrying value of long-lived and intangible assets may be impaired, the Company will perform an evaluation of recoverability. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value is required. There were no impairment write-downs associated with the Company’s long-lived and intangible assets during the quarters ended March 31, 2016 and 2015. Stock-Based Compensation Expense The Company recognizes compensation expense on a straight line basis over the requisite service period of the award. Total stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the quarters ended March 31, 2016 and 2015 was approximately $47,000 and $81,000, respectively, related to stock options. Total stock-based compensation expense was recorded as a component of corporate general and administrative expense. The Black-Scholes option-pricing model was used to estimate the option fair values. The option-pricing model requires a number of assumptions, of which the most significant are expected stock price volatility, the expected pre-vesting forfeiture rate, expected dividend rate and the expected option term (the amount of time from the grant date until the options are exercised or expire). Expected volatility was calculated based upon actual historical stock price movements over the most recent periods ended March 31, 2016 equal to the expected option term. Expected pre-vesting forfeitures were estimated based on historical pre-vesting forfeitures over the most recent periods ended March 31, 2016 for the expected option term. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). In August 2014, FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842). In March 2016, FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting.

LOSS PER SHARE

LOSS PER SHARE	3 Months Ended
	Mar. 31, 2016
LOSS PER SHARE [Abstract]
LOSS PER SHARE	(3) LOSS PER SHARE The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC Topic 260. Quarters Ended March 31, 2015 2016 Net Loss Shares Per Share Amount Net Loss Shares Per Share Amount Basic EPS $ (45,876 ) 1,859,689 $ (0.02 ) $ (100,410 ) 1,860,482 $ (0.05 ) Effect of Dilutive Stock Options - - - - - - Diluted EPS $ (45,876 ) 1,859,689 $ (0.02 ) $ (100,410 ) 1,860,482 $ (0.05 ) For the quarters ended March 31, 2016 and 2015, options to purchase 544,666 and 478,935 shares, respectively, of the Company’s common stock (“Common Stock”) were not included in the computation of diluted EPS because their effect was anti-dilutive.

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS	3 Months Ended
	Mar. 31, 2016
STOCK-BASED COMPENSATION PLANS [Abstract]
STOCK-BASED COMPENSATION PLANS	(4) STOCK-BASED COMPENSATION PLANS The Company’s 2005 Equity Incentive Plan, as amended (“2005 Plan”), terminated on March 17, 2015. The 2005 Plan provided for the grant of incentive stock options, restricted stock, restricted stock units and stock grants to eligible employees (including officers and employee-directors) and non-statutory stock options to eligible employees, directors and consultants. As of March 31, 2016, there were 312,672 vested options and 131,994 unvested options granted under the 2005 Plan that remained outstanding in accordance with their terms and there were no shares available for issuance under the 2005 Plan due to its termination. The Company’s shareholders approved the 2015 Equity Incentive Plan (“2015 Plan”) on June 9, 2015. The 2015 Plan replaces the 2005 Plan. The maximum number of shares of Common Stock that may be delivered to participants and their beneficiaries under the 2015 Plan is 200,000. The 2015 Plan provides for the grant of incentive stock options, stock appreciation right awards, restricted stock awards, stock unit awards and other stock-based awards to eligible recipients. The objectives of the 2015 Plan are to attract and retain the best possible candidates for positions of responsibility and provide for additional performance incentives by providing eligible employees with the opportunity to acquire equity in the Company. The 2015 Plan is administered by a committee of two or more outside directors from the Company’s Board of Directors (the “Committee”). The Committee determines the eligible individuals to whom awards under the 2015 Plan may be granted, as well as the time or times at which awards will be granted, the number of shares subject to awards to be granted to any eligible individual, the term of the award, vesting terms and conditions and any other terms and conditions of the grant in addition to those contained in the 2015 Plan. Each grant under the 2015 Plan will be confirmed by and subject to the terms of an award agreement. A summary of option activity as of March 31, 2016, and changes during the quarter then ended, is presented below: Number of Options Weighted- Average Exercise Price Range of Exercise Prices Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (thousands) Outstanding at January 1, 2016 455,666 $ 16.82 $ 12.55 - $19.75 4.2 $ - Granted 95,000 $ 10.11 $ 10.04 - $11.11 Cancelled (6,000 ) $ 12.74 $ 12.74 - $12.74 Outstanding at March 31, 2016 544,666 $ 15.70 $ 10.04 - $19.75 4.4 $ - Exercisable at March 31, 2016 312,672 $ 17.78 $ 12.55 - $19.75 3.2 $ - No options were granted during the quarter ended March 31, 2015. The weighted average grant date fair values of options granted was $1.74 per share during the quarter ended March 31, 2016. As of March 31, 2016, there was approximately $281,000 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted average period of 2.55 years.

DIVIDENDS

DIVIDENDS	3 Months Ended
	Mar. 31, 2016
DIVIDENDS [Abstract]
DIVIDENDS	(5) DIVIDENDS The Company has declared and paid the following quarterly cash dividends. Date Dividend Paid Quarterly Dividend Paid per Share January 2014; April 2014; July 2014; October 2014 $ 0.22 January 2015; April 2015; July 2015; October 2015 January 2016 The payment of dividends in the future is subject to the discretion of the Company’s Board of Directors, and various factors may prevent the Company from paying dividends or require the Company to reduce the dividends. Such factors include the Company’s financial position, capital requirements and liquidity, the existence of a stock repurchase program, credit agreement restrictions, state corporate law restrictions, results of operations and such other factors that the Company’s Board of Directors may consider relevant. On March 29, 2016, the Company entered into a new Loan and Security Agreement with Guaranty Bank and Trust Company (the “Credit Facility”). Through the remainder of 2016, dividends are prohibited under the Credit Facility. Beginning in 2017, dividends are permitted so long as the pro forma fixed charge coverage ratio is greater than 1.20 to 1.00 after giving effect to the dividend.

LINE OF CREDIT

LINE OF CREDIT	3 Months Ended
	Mar. 31, 2016
LINE OF CREDIT [Abstract]
LINE OF CREDIT	(6) LINE OF CREDIT On March 29, 2016, the Company entered into the Credit Facility. The Credit Facility consists of a $2.0 million revolving line of credit and a $10.0 million reducing revolving loan. The revolving line of credit matures on March 31, 2018. The reducing revolving loan matures on March 31, 2021 and requires mandatory reductions of $500,000 per calendar quarter beginning July 1, 2016. The reducing revolving loan allows the Company to drawdown, repay and re-draw loans advanced to it within the available balance. Interest varies between LIBOR plus 2.90% and LIBOR plus 2.25% depending on the Company’s funded debt-to-EBITDA ratio. As of March 31, 2016, the revolving line of credit rate was 3.33% and the reducing revolving loan rate was 3.33%. There is no commitment fee or origination fee on the Credit Facility. At March 31, 2016, the Company had approximately $1.1 million of borrowings outstanding under the revolving line of credit and approximately $863,000 available for borrowing under the Credit Facility. The Company had $10.0 million of borrowings outstanding under the reducing revolving loan. The Credit Facility is collateralized by substantially all of the assets of the Company and requires the Company to comply with certain affirmative and negative covenants, including maintaining (i) a funded debt-to-EBITDA ratio of no more than 2.50 to 1.00 for the period ending June 30, 2016, declining to 2.00 to 1.00 for the twelve months ending September 30, 2017 and 1.90 to 1.00 thereafter, (ii) net worth of at least $1.0 million (increased by 25% of any net income after taxes of the Company in 2016 and thereafter), and (iii) a fixed charge coverage ratio of not less than 1.35 to 1.00. At March 31, 2016, the Company was in compliance with the Credit Facility covenants. Through the remainder of 2016, dividends are prohibited under the Credit Facility. Beginning in 2017, dividends are permitted so long as the pro forma fixed charge coverage ratio is greater than 1.20 to 1.00 after giving effect to the dividend. On March 30, 2016, the Company terminated its credit facility with Compass Bank. The Company repaid the outstanding $10.6 million principal amount plus accrued interest under the Credit Agreement with Compass Bank with borrowings under the new Credit Facility.

DISCLOSURES ABOUT FAIR VALUE OF

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Mar. 31, 2016
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS	(7) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS ASC Topic 825, ''Disclosures About Fair Value of Financial Instruments,'' requires disclosure about the fair value of financial instruments. Carrying amounts for all financial instruments included in current assets and current liabilities approximate estimated fair values due to the short maturity of those instruments. The fair values of the Company's long-term debt are based on similar rates currently available to the Company. The Company believes the book value approximates fair value for the notes receivable. The Company follows ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. The statement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; or Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. ASC Topic 820 requires financial assets and liabilities to be classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between the fair value hierarchy levels during the quarters ended March 31, 2016 and 2015. The following table represents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2015 and March 31, 2016 by level within the fair value hierarchy: December 31, 2015 March 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Contingent Liabilities Balance $ - - $ 321,000 $ - - $ 321,000 Contingent Liabilities As part of an Office acquisition completed in 2009, the Company recorded contingent liabilities to recognize an estimated amount to be paid as part of the acquisition agreement. These contingent liabilities are recorded at estimated fair values as of the date of acquisition, are payable beginning after four years from the acquisition date and are calculated at a multiple of the then trailing twelve-months operating cash flows. The Company remeasures the contingent liability to fair value each reporting date until the contingency is resolved. Any changes to the fair value are recognized into the income statement when determined. As of March 31, 2016, approximately $321,000 of contingent liabilities were recorded on the consolidated balance sheets in other long-term obligations.

SIGNIFICANT ACCOUNTING POLICI15

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2016
SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation/Basis of Consolidation	Basis of Presentation/Basis of Consolidation The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting. These financial statements present the financial position and results of operations of the Company and the dental offices (“Offices”), which are under the control of the Company. The Offices are organized as professional corporations (“P.C.s”) and the Company provides business services to the Offices under long-term management agreements (the “Management Agreements”). All intercompany accounts and transactions have been eliminated in the consolidation. The Company treats Offices as consolidated subsidiaries where it has a long-term and unilateral controlling financial interest over the assets and operations of the Offices. The Company maintains control of substantially all of its Offices via the Management Agreements. The Company is a business service organization and does not engage in the practice of dentistry or the provision of dental hygiene services. These services are provided by licensed professionals. Certain key features of these arrangements either enable the Company at any time and in its sole discretion to cause a change in the shareholder of the P.C. (i.e., ''nominee shareholder'') or allow the Company to vote the shares of stock held by the owner of the P.C. and to elect a majority of the board of directors of the P.C. The accompanying condensed consolidated statements of operations reflect revenue, which is the amount billed to patients less contractual adjustments. Direct expenses consist of all the expenses incurred in operating the Offices and paid by the Company. Under the Management Agreements, the Company assumes responsibility for the management of most aspects of the Offices' business (the Company does not engage in the practice of dentistry or the provision of dental hygiene services), including personnel recruitment and training; comprehensive administrative, business and marketing support and advice; and facilities, equipment, and support personnel as required to operate the practices. The Company prepares its consolidated financial statements in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, which provides for consolidation of variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The Company has concluded that the P.C.s meet the definition of VIEs as defined by this standard and that the Company is the primary beneficiary of these VIEs. This conclusion was reached because the Company has the power to direct significant activities of the VIEs and the Company is obligated to absorb losses of and/or provide rights to receive benefits from the VIEs.
Revenue	Revenue Revenue is generally recognized when services are provided and is reported at estimated net realizable amounts due from insurance companies, preferred provider and health maintenance organizations (i.e., third-party payors) and patients for services rendered, net of contractual and other adjustments. Dental services are billed and collected by the Company in the name of the Offices. Revenue under certain third-party payor agreements is subject to audit and retroactive adjustments. To the Company’s knowledge, there are no material claims, disputes or other unsettled matters that exist concerning third-party reimbursements as of March 31, 2016. Most of the Company’s patients are insured under third-party payor agreements. The Company’s billing system generates contractual adjustments for each patient encounter based on fee schedules for the patient’s insurance plan. The services provided are attached to the patient’s fee schedule based on the insurance the patient has at the time the service is provided. Therefore, the revenue that is recorded by the billing system is based on insurance contractual amounts. Additionally, each patient at the time of service signs a form agreeing that the patient is ultimately responsible for the contracted fee if the insurance company does not pay the fee for any reason.
Note Receivable	Note Receivable A note receivable was created as part of a dental Office acquisition, of which approximately $82,000 in principal amount was outstanding at March 31, 2016. The note has equal monthly principal and interest amortization payments and a maturity date of October 31, 2018. The note bears interest at 6%, which is accrued monthly. If the note is uncollectible, an allowance for doubtful accounts will be created. There was no allowance for doubtful accounts for the note as of March 31, 2016 or December 31, 2015.
Intangible Assets	Intangible Assets The Company's dental practice acquisitions involve the purchase of tangible and intangible assets and the assumption of certain liabilities of the acquired dental Offices. As part of the purchase price allocation, the Company allocates the purchase price to the The Management Agreements cannot be terminated by a P.C. without cause, consisting primarily of bankruptcy or material default by the Company. If facts and circumstances indicate that the carrying value of long-lived and intangible assets may be impaired, the Company will perform an evaluation of recoverability. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value is required. There were no impairment write-downs associated with the Company’s long-lived and intangible assets during the quarters ended March 31, 2016 and 2015.
Stock-Based Compensation Expense	Stock-Based Compensation Expense The Company recognizes compensation expense on a straight line basis over the requisite service period of the award. Total stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the quarters ended March 31, 2016 and 2015 was approximately $47,000 and $81,000, respectively, related to stock options. Total stock-based compensation expense was recorded as a component of corporate general and administrative expense. The Black-Scholes option-pricing model was used to estimate the option fair values. The option-pricing model requires a number of assumptions, of which the most significant are expected stock price volatility, the expected pre-vesting forfeiture rate, expected dividend rate and the expected option term (the amount of time from the grant date until the options are exercised or expire). Expected volatility was calculated based upon actual historical stock price movements over the most recent periods ended March 31, 2016 equal to the expected option term. Expected pre-vesting forfeitures were estimated based on historical pre-vesting forfeitures over the most recent periods ended March 31, 2016 for the expected option term.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). In August 2014, FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842). In March 2016, FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting.

LOSS PER SHARE (Tables)

LOSS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2016
LOSS PER SHARE [Abstract]
Earnings/(loss) per share calculation	The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC Topic 260. Quarters Ended March 31, 2015 2016 Net Loss Shares Per Share Amount Net Loss Shares Per Share Amount Basic EPS $ (45,876 ) 1,859,689 $ (0.02 ) $ (100,410 ) 1,860,482 $ (0.05 ) Effect of Dilutive Stock Options - - - - - - Diluted EPS $ (45,876 ) 1,859,689 $ (0.02 ) $ (100,410 ) 1,860,482 $ (0.05 )

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS (Tables)	3 Months Ended
	Mar. 31, 2016
STOCK-BASED COMPENSATION PLANS [Abstract]
Summary of option activity	A summary of option activity as of March 31, 2016, and changes during the quarter then ended, is presented below: Number of Options Weighted- Average Exercise Price Range of Exercise Prices Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (thousands) Outstanding at January 1, 2016 455,666 $ 16.82 $ 12.55 - $19.75 4.2 $ - Granted 95,000 $ 10.11 $ 10.04 - $11.11 Cancelled (6,000 ) $ 12.74 $ 12.74 - $12.74 Outstanding at March 31, 2016 544,666 $ 15.70 $ 10.04 - $19.75 4.4 $ - Exercisable at March 31, 2016 312,672 $ 17.78 $ 12.55 - $19.75 3.2 $ -

DIVIDENDS (Tables)

DIVIDENDS (Tables)	3 Months Ended
	Mar. 31, 2016
DIVIDENDS [Abstract]
Dividends payable	The Company has declared and paid the following quarterly cash dividends. Date Dividend Paid Quarterly Dividend Paid per Share January 2014; April 2014; July 2014; October 2014 $ 0.22 January 2015; April 2015; July 2015; October 2015 January 2016

DISCLOSURES ABOUT FAIR VALUE 19

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Mar. 31, 2016
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
Fair value, assets and liabilities measured on recurring basis	The following table represents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2015 and March 31, 2016 by level within the fair value hierarchy: December 31, 2015 March 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Contingent Liabilities Balance $ - - $ 321,000 $ - - $ 321,000

SIGNIFICANT ACCOUNTING POLICI20

SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Note Receivable [Abstract]
Outstanding principal amount of note receivables	$ 82,000
Maturity date	Oct. 31, 2018
Interest rate on notes receivable	6.00%
Allowance for doubtful accounts	$ 0		$ 0
Intangible Assets [Abstract]
Life of the management agreement	40 years
Amortization period for contract	25 years
Amortization expense	$ 211,000	$ 211,000
Impairment of Long-Lived and Intangible Assets [Abstract]
Impairment of long-lived and intangible assets	0	0
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 47,000	$ 81,000

LOSS PER SHARE (Details)

LOSS PER SHARE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income/(loss), diluted [Abstract]
Net loss, basic EPS	$ (100,410)	$ (45,876)
Effect of dilutive stock options	0	0
Net loss, diluted EPS	$ (100,410)	$ (45,876)
Weighted average number of shares outstanding reconciliation [Abstract]
Weighted average number of shares, basic EPS (in shares)	1,860,482	1,859,689
Effect of dilutive stock options, shares (in shares)	0	0
Weighted average number of shares outstanding, diluted EPS (in shares)	1,860,482	1,859,689
Earnings per share, basic and diluted [Abstract]
Earnings per share, basic EPS (in dollars per share)	$ (0.05)	$ (0.02)
Effect of dilutive stock option (in dollars per share)	0	0
Per share amount - diluted EPS (in dollars per share)	$ (0.05)	$ (0.02)
Antidilutive securities (in shares)	544,666	478,935

STOCK-BASED COMPENSATION PLAN22

STOCK-BASED COMPENSATION PLANS (Details) - Stock Options [Member]	3 Months Ended		12 Months Ended
	Mar. 31, 2016USD ($)Administrator$ / sharesshares	Mar. 31, 2015shares	Dec. 31, 2015USD ($)$ / sharesshares
Options outstanding [Rollforward]
Outstanding, beginning balance (in shares) | shares	455,666
Granted (in shares) | shares	95,000	0
Cancelled (in shares) | shares	(6,000)
Outstanding, ending balance (in shares) | shares	544,666		455,666
Exercisable (in shares) | shares	312,672
Options weighted average exercise price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 16.82
Granted (in dollars per share)	10.11
Cancelled (in dollars per share)	12.74
Outstanding, ending balance (in dollars per share)	15.70		$ 16.82
Exercisable (in dollars per share)	$ 17.78
Options, additional disclosures [Abstract]
Outstanding, weighted average remaining contractual term	4 years 4 months 24 days		4 years 2 months 12 days
Outstanding, aggregate intrinsic value | $	$ 0		$ 0
Exercisable, weighted average remaining contractual term	3 years 2 months 12 days
Exercisable, aggregate intrinsic value | $	$ 0
Total unrecognized compensation expense | $	$ 281,000
Weighted average period for recognition	2 years 6 months 18 days
Minimum [Member]
Range of Exercise Prices [Abstract]
Outstanding, beginning of period (in dollars per share)	$ 12.55
Granted (in dollars per share)	10.04
Cancelled (in dollars per share)	12.74
Outstanding, end of period (in dollars per share)	10.04		$ 12.55
Exercisable (in dollars per share)	12.55
Maximum [Member]
Range of Exercise Prices [Abstract]
Outstanding, beginning of period (in dollars per share)	19.75
Granted (in dollars per share)	11.11
Cancelled (in dollars per share)	12.74
Outstanding, end of period (in dollars per share)	19.75		$ 19.75
Exercisable (in dollars per share)	$ 19.75
2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance (in shares) | shares	0
Vested options (in shares) | shares	312,672
Unvested options (in shares) | shares	131,994
2015 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance (in shares) | shares	100,000
Minimum number of plan administrators | Administrator	2
Unvested options (in shares) | shares	100,000
Maximum number of shares of Common Stock that can be delivered under the plan (in shares) | shares	200,000
Options, additional disclosures [Abstract]
Weighted average grant date fair value of options (in dollars per share)	$ 1.74

DIVIDENDS (Details)

DIVIDENDS (Details)	Mar. 29, 2016	Dec. 31, 2015$ / shares	Sep. 30, 2015$ / shares	Jun. 30, 2015$ / shares	Mar. 31, 2015$ / shares	Dec. 31, 2014$ / shares	Sep. 30, 2014$ / shares	Jun. 30, 2014$ / shares	Mar. 31, 2014$ / shares	Dec. 31, 2013$ / shares
Dividends Payable [Line Items]
Quarterly Dividend Paid per Share (in dollars per share)		$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22	$ 0.22
Date Dividend Paid		Jan. 31, 2016	Oct. 31, 2015	Jul. 31, 2015	Apr. 30, 2015	Jan. 31, 2015	Oct. 31, 2014	Jul. 31, 2014	Apr. 30, 2014	Jan. 31, 2014
Minimum [Member]
Dividends Payable [Line Items]
Pro forma fixed charge coverage ratio	1.20

LINE OF CREDIT (Details)

LINE OF CREDIT (Details) - USD ($)	Mar. 30, 2016	Mar. 29, 2016	Mar. 31, 2016	Mar. 31, 2015
Long-term Debt [Line Items]
Repayments of lines of credit			$ 5,851,088	$ 6,684,030
Minimum [Member]
Long-term Debt [Line Items]
Pro forma fixed charge coverage ratio		1.20
Line of Credit [Member]
Long-term Debt [Line Items]
Debt instrument net worth minimum		$ 1,000,000
Percentage of net worth increased from net income		25.00%
Repayments of lines of credit	$ 10,600,000
Line of Credit [Member] | Maximum [Member]
Long-term Debt [Line Items]
Debt To EBITDA ratio for the twelve months ending June 30, 2016		2.50
Debt To EBITDA ratio for the twelve months ending September 30, 2017		2
Debt To EBITDA ratio after September 30, 2017		1.90
Line of Credit [Member] | Minimum [Member]
Long-term Debt [Line Items]
Fixed charge coverage ratio, Period one		1.35
Pro forma fixed charge coverage ratio		1.20
Domestic Line Of Credit Due March 2018 [Member]
Long-term Debt [Line Items]
Maximum borrowing capacity		$ 2,000,000
Amount outstanding			1,100,000
Amount available for borrowing			$ 863,000
Line of credit interest rate			3.33%
Maturity date			Mar. 31, 2018
Domestic Line Of Credit Due March 2021 [Member]
Long-term Debt [Line Items]
Amount outstanding		10,000,000
Quarterly payment of loan payable		$ 500,000
Line of credit interest rate			3.33%
Maturity date			Mar. 31, 2021
LIBOR Borrowing Rate [Member] | Domestic Line Of Credit Due March 2018 [Member] | Maximum [Member]
Long-term Debt [Line Items]
Basis spread on variable rate		2.90%
LIBOR Borrowing Rate [Member] | Domestic Line Of Credit Due March 2018 [Member] | Minimum [Member]
Long-term Debt [Line Items]
Basis spread on variable rate		2.25%
LIBOR Borrowing Rate [Member] | Domestic Line Of Credit Due March 2021 [Member] | Maximum [Member]
Long-term Debt [Line Items]
Basis spread on variable rate		2.90%
LIBOR Borrowing Rate [Member] | Domestic Line Of Credit Due March 2021 [Member] | Minimum [Member]
Long-term Debt [Line Items]
Basis spread on variable rate		2.25%

DISCLOSURES ABOUT FAIR VALUE 25

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Contingent Liabilities [Abstract]
Number of years until the contingent liability becomes payable	4 years
Number of trailing months of operating cash flow used to determine contingent liability	12 months
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Liabilities, Fair Value Disclosure [Abstract]
Contingent Liabilities Balance	$ 0	$ 0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Liabilities, Fair Value Disclosure [Abstract]
Contingent Liabilities Balance	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Liabilities, Fair Value Disclosure [Abstract]
Contingent Liabilities Balance	$ 321,000	$ 321,000