PARK Park Dental Partners, Inc. - 10-K

ITEM 1A. RISK FACTORS

SUMMARY

Our business is subject to a number of risks. You should carefully consider all information set forth in this annual report and, in particular, should evaluate specific factors set forth herein in evaluating our business or our shares of Common Stock. Among these important risks are the following:

Risks Related to Our Business.

● Our business model is impacted by general economic conditions, particularly in Minnesota where most of our affiliated dental practices are located.

● We depend on our contractual arrangements with our affiliated dental practices and our success depends largely on our ability to provide effective business support services to our affiliated dental practices that result in increased revenues.

● Our business is dependent on long-term arrangements with our affiliated dental practices for which we are the primary beneficiary. Termination and/or breach of an administrative resource agreement could result in a material adverse effect on our financial results, change the variable interest structure analysis and result in an inability to consolidate revenues or affiliated dental practices. It could also potentially result in regulatory issues.

● Our profitability is also dependent upon the performance of our affiliated dental practices and dentists in areas we do not control, such as the delivery of patient care.

● If our affiliated dental practices are unable to attract and retain qualified dentists, specialists and dental hygienists, their ability to attract and maintain patients and generate revenue could be negatively affected.

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● Our growth strategy depends on our ability to increase the number of locations in which our affiliated dental groups practice. Expansion involves many challenges, including selecting the appropriate site, attracting patients to the new locations, and attracting, training and retaining dental professionals to the new locations.

● A portion of our growth and future financial performance depends on our ability to integrate acquired dental practices and the success of those acquisitions.

● Our affiliated dental practices compete for patients in a highly competitive environment that may make it difficult to increase patient volumes and revenues.

● We are reliant upon affiliated dentists and other personnel to practice within the scope of their profession and in accordance with professional standards and could be harmed by misconduct by our affiliated dentists and other personnel.

● Our success is dependent on the dentists who provide patient care in the affiliated dental practices with whom we enter into administrative resources agreements, and we may have difficulty locating qualified dentists to replace affiliated dental practice owners.

● Rising inflation and interest rates may result in an increased cost of dental services which could have a material adverse effect on our results of operations as many of our patients pay for dental services on an out of pocket basis.

● A loss of the services of our key management team members could have a material adverse effect on our business.

Risks Related to Information Technology, Cybersecurity and Intellectual Property.

● Our business model depends on proprietary and third-party management information systems that we use to track financial and operating performance of affiliated dental practices, and any failure to successfully design and maintain these systems or implement new systems could materially harm our operations.

● We are increasingly dependent on technology in our operations and, if our technology fails, our business could be adversely affected.

● A cybersecurity incident, including a privacy breach, could negatively impact our business and our relationships with patients, personnel and suppliers and may lead to significant liabilities, including through litigation or regulatory action.

● We may not be able to adequately protect our and our affiliated dental practices’ intellectual property, which could harm the value of our brand and adversely affect our business.

● We or one of our affiliated dental practices could be found to have infringed on the intellectual property rights of others and may be subject to infringement claims.

Risks Related to Government Regulation, Reimbursement/Third Party Payors and Litigation.

● We and our affiliated dental practices are subject to complex laws, rules and regulations, compliance with which may be costly and burdensome.

● We, along with our affiliated dental practices and their dentists, may be subject to malpractice and other similar claims and may be unable to obtain or maintain adequate insurance against these claims.

● Our revenue and that of our affiliated dental practices may be adversely affected by the actions on insurance providers and federal and state agencies, including downward reimbursement pressure from these entities.

● We are self-insured for certain employee group medical costs and an increase in our medical claims and related expenses may have a material negative impact on us.

● Our affiliated dental practices rely on arrangements with, and payments from, third-party payors. The inability to collect payments from such payors and patients in the amounts anticipated (and in a timely manner) could impact the ability of our affiliated dental practices to pay our management fees and in turn could adversely impact our profitability.

● Our business may be interrupted or negatively affected by litigation or regulatory action.

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Risks Related to Our Financial Condition and Indebtedness.

● Covenants in our debt agreements may adversely affect our operations.

● We may have substantial future capital requirements, and our ability to obtain additional funding is uncertain.

● We cannot guarantee future financial performance based on our historical performance.

Risks Related to Our Common Stock.

● We expect that the price of our Common Stock will fluctuate significantly.

● Future sales of our Common Stock, or the perception that such sales may occur, could depress our Common Stock price.

● Our issuance of additional shares of Common Stock in connection with financings, acquisitions, investments, equity incentive plans, or otherwise will dilute all shareholders.

● Our Common Stock does not control voting rights for all Board of Directors positions. Our affiliated dentists control the right to appoint three directors to the Board of Directors.

General Risk Factors.

● The obligations associated with being a public company will require significant resources and management attention, which may divert from our business operations.

● If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our Common Stock, the price of our Common Stock could decline.

● Our amended and restated bylaws contain, and our restated certificate of incorporation and Minnesota law each contain provisions that could discourage another company from acquiring us and may prevent attempts by our shareholders to replace or remove our current management.

Risks Related to Our Business

Our business model is impacted by general economic conditions, particularly in Minnesota where most of our affiliated dental practices are located.

Dental care patients tend to be price-sensitive because many pay for a significant portion of their dental expenses on an out-of-pocket basis. According to the Centers for Medicare and Medicaid Services, or CMS, consumer out-of-pocket expenditures accounted for 38.3% of payments for dental services in 2024, Consequently, dental care patients tend to base their selection of a dental practice on the affordability and quality of the dental service. Notwithstanding the fact that many dental expenditures arise out of necessity, the growth of our total revenue can be severely impacted by changes in consumer spending.

Most of our affiliated dental practices are located in Minnesota and the locations in that state generated 99.0% and 98.9% of our revenue for the years ended December 31, 2025 and 2024, respectively. Adverse changes or conditions affecting our markets in Minnesota, such as healthcare reforms, changes in laws and regulations, reduced Medicaid reimbursements and government investigations, may have a particularly significant impact on the business of our affiliated dentists and our business, financial condition and results of operations. Our current concentration in these markets, as well as our strategy of focused expansion in areas in and around our existing markets, increases the risk to us that adverse economic or regulatory developments in one or more of these markets may have a material and adverse impact on our operations.

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We depend on contractual arrangements with our affiliated dental practices and our success depends largely on our ability to provide effective business support services to our affiliated dental practices and dentists that result in increased revenues.

State laws can prohibit entities owned by persons other than licensed dentists, including us, from practicing dentistry or from exercising control over the provision of professional dental services. Certain state laws also limit the ability of a person other than a licensed dentist or other regulated health professional to control or operate certain equipment used in a dental practice. We operate each of our practices in conjunction with an affiliated dental practice and we are party to long-term administrative resource agreements with each affiliated dental practice and the affiliated dentist who owns the shares of each affiliated dental practice, pursuant to which our affiliated dental practices are operated.

Given the nature of these arrangements, we depend on the affiliated dental practices and their respective affiliated dentists to comply with the terms of these contractual arrangements. To the extent either an affiliated dental practice or its affiliated dentist breaches any of the contractual provisions applicable to them or otherwise elects to terminate any of these contractual arrangements, our financial performance may be negatively impacted.

We receive fees for the support services provided to the dental practices under the administrative resources agreements. We own most of the non-dental operating assets of the practices but we do not employ or contract with dentists or control the provision of dental care in the affiliated dental practices, which exercise sole decision-making authority with respect to all clinical matters. Our revenue is dependent on the revenue generated by the affiliated dental practices. Therefore, effective and continued performance of dentists providing services for the practices is essential to our long-term success. Under each administrative resource agreement, we pay substantially all the operating and non-operating expenses associated with the provision of dental services except for the salaries and benefits of the dentists. Any material loss of revenue by the practices would have a material adverse effect on our business, financial condition and operating results, and any termination of an administrative resource agreement (which is permitted in the event of a material default or bankruptcy by either party) could have such an effect. In the event of a breach of a management agreement by an affiliated dental practice, there can be no assurance that the legal remedies available to us would be adequate to compensate us for our damages resulting from such breach. Furthermore, state regulatory authorities may review the administrative resource agreements for legal and regulatory compliance. If an administrative resources agreement with an affiliated dental practice was deemed by a regulatory or judicial authority to be in violation of any law or regulation, our relationship with the applicable affiliated dental practice may terminate, the shares in the practice may need to be transferred, the administrative resources agreement may require material amendments with uncertain consequences or we might be required to restructure our business model.

Our business is dependent on long-term arrangements with our affiliated dental practices and termination of an administrative resource agreement would result in a material adverse effect on our financial results and potentially other negative consequences.

Our business is reliant on administrative resource agreements with our affiliated dental practices, which we do not own. Our ability to consolidate the financial results of the affiliated practices is predicated on the existence of these agreements and that we are the primary beneficiary of these variable interest entities. Given the nature of these arrangements, we depend on the affiliated dental practices and their respective affiliated dentists to comply with the terms of these contractual arrangements and not breach any of the contractual provisions applicable to them. As a result of our exclusive, long-term administrative resource agreements with our affiliated dental practices, we have a variable interest and are the primary beneficiary in those variable interest entities. Accordingly, our consolidated financial results include the consolidated results of the affiliated dental practices in which we do not hold an equity interest. Termination or breach of an administrative resource arrangement could result in a loss of our ability to consolidate revenues and financial results of the affiliated practices which would negatively impact our consolidated financial position. Termination or breach of an administrative resource agreement could also result in regulatory issues as a regulatory body or state agency may deny our practices the ability to continue to operate based on rules that preclude a non-dentist from owning, operating or managing a dental practice. Such an action by a regulator or state agency could prevent our ability to generate revenues.

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Our success depends largely on our ability to provide effective business support services to our affiliated dental practices that result in increased revenues.

Our ability to continue to grow and improve profitability depends, to a significant extent, on our ability to provide quality and cost-effective business support services that enable our affiliated dental practices to increase their revenues. The affiliated dental practices rely on us to perform the non-clinical functions of their practice in order for their dentists, specialists and hygienists to spend more time with their patients. As a result, the success of our affiliated dental practices, and in turn our success, is dependent on our ability to provide effective support services that result in increased revenues, such as:

acquiring or affiliating with established dental practices in new markets;

determining where and when to build out and equip de novo practices or expand existing practices;

implementing cost-effective services such as marketing, facility management, supply chain management, operations support, and other administrative functions;

maintaining patient communication services that provide consistent, high quality patient service;

investing and providing integrated technology and information systems that support clinical operations

providing dental practice team members;

making available patient financing and alternative methods of payment;

supporting regulatory compliance for practicing dentists and team members; and

providing training and other continuing education resources to affiliated dentists and specialists.

If we do not provide support services that enable the affiliated dental practices to increase patient volumes, we will not be able to increase patient revenues and recognize operational efficiencies and cost savings across affiliated dental practices.

Our profitability is also dependent upon the performance of our affiliated dental practices and dentists in areas we do not control, such as the delivery of patient care.

Our profitability is dependent on the performance of our affiliated dental practices and dentists. In accordance with generally accepted accounting principles in the United States, we present our financial statements consolidated with our affiliated dental practices’ net assets and results of operations. Accordingly, our results of operations include the performance of our affiliated dental practices. However, we do not employ dentists and specialists and do not control the clinical decisions of any affiliated dental practice. Because the success of any dental practice will, to some extent, depend upon the efforts of the dentists and their professional skills and reputation, the success of our affiliated dental practices depends, in part, on factors outside of our control. While we seek to affiliate with dedicated, well-qualified dentists, we do not control their delivery of patient care. Our lack of control over all clinical aspects of the delivery of dental services by affiliated dental practices groups makes it more difficult for us to improve our performance. As a result, we do not control a key determinant of our success.

If our affiliated dental practices are unable to attract and retain qualified dentists, specialists, hygienists, and dental assistants, their ability to attract and maintain patients and generate revenue could be negatively affected.

The recruitment and retention of qualified dentists, specialists, such as orthodontists, oral surgeons, endodontists, periodontists, and pediatric dentists, hygienists, and dental assistants is a critical factor in the success of our affiliated dental practices. In addition, our affiliated dental practices must be able to recruit and retain new dentists, specialists,

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hygienists, and dental assistants for acquired and de novo practices. Our affiliated dental practices may experience decreased productivity in connection with any significant turnover.

Our affiliated dental practices have entered into employment agreements or independent contractor agreements with substantially all of their respective dentists and specialists, which agreements typically restrict the dentist’s or specialist’s solicitation of patients, staff and employees of the affiliated dental practice and may contain legacy non- competition provisions that prohibit the dentist or specialist from competing with the affiliated dental practices within a specified geographic area following such dentist’s or specialist’s termination. These non-competition covenants and other arrangements, however, may not be enforceable or may be significantly limited by the courts of the states in which we operate.

If our affiliated dental practices are unable to consistently attract, hire and retain qualified dentists, the ability of those affiliated dental groups to attract and maintain patients and generate revenue could be negatively affected.

Labor shortages affecting dental hygienists, dental assistants, and other clinical support staff may constrain our capacity, increase operating costs, and adversely affect patient care and satisfaction.

The dental industry is experiencing workforce shortages that have been exacerbated by pandemic-related disruptions and demographic trends. According to the American Dental Association (ADA), there are over 7,000 designated dental professional shortage areas in the United States. Recent surveys indicate that approximately 62% of dentists identify staffing as their most significant business challenge, and many dental practices have been forced to reduce patient capacity due to an inability to recruit and retain qualified hygienists and dental assistants.

Our affiliated dental practices employ 990 hygienists, dental assistants, and patient care coordinators across 86 locations. Competition for qualified dental professionals and staff has intensified, and we have experienced increased labor costs as market compensation rates have risen. Industry data indicates that front office compensation has increased approximately 16% in recent periods. Additionally, surveys of dental hygienists indicate that a significant percentage are considering leaving the profession, which could further constrain the available labor pool.

If our affiliated dental practices are unable to attract and retain sufficient qualified clinical staff, they may be forced to limit patient appointment availability, extend wait times for services, or reduce operating hours. Such capacity constraints could negatively impact patient satisfaction and retention, limit revenue growth, and damage our competitive position. Continued upward pressure on compensation and benefits to attract and retain staff will increase our operating costs and could adversely affect our profitability. There can be no assurance that labor market conditions will improve or that we will be successful in addressing these workforce challenges.

We may be unable to successfully execute our growth strategy and, as a result, our business may be harmed.

Our success depends in part on our ability to build on our position through a balanced program of internal growth initiatives and selective acquisitions of established dental practices. If we cannot implement or effectively execute these initiatives and acquisitions, our business, financial condition, results of operations, cash flows and prospects will be adversely affected. Even if we effectively implement our growth strategy, we may not achieve the economies of scale that we have experienced in the past or that we anticipate having in the future. Our internal growth rate may decline and could become negative. Any reductions in the rate of our internal growth may cause our revenues and margins to decrease. Our historical growth rates and margins are not necessarily indicative of future results.

Our growth strategy depends on our ability to increase the number of dental locations in which our affiliated dentists practice. Expansion involves many challenges, including selecting or acquiring the appropriate site, attracting patients to the new locations, and attracting, training and retaining dental professionals to the new practices.

Our growth strategy, and a significant percentage of our projected future growth, depends on our ability to increase our revenue by increasing the number of dentists practicing in our affiliated dental groups practice. Acquiring new practices and opening de novo practices involves many challenges, including selecting or acquiring the appropriate site,

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attracting patients to the new locations, and attracting, training and retaining dental professionals to the new practices. In addition, we could experience delays or encounter unexpected problems in acquiring or opening de novo practices. Any one of these events could result in us not realizing the growth we anticipate, which could result in a decline in our profitability.

In addition, expanding existing practices and opening of de novo practices requires substantial time and resources from us. We have used, and expect to continue to use, a significant portion of our capital resources to expand. We expect future expansion will be funded from internally generated cash flows, amounts available under our revolving and term loan facilities and the proceeds of future equity or debt offerings or refinancings. Our ability to expand existing practices may be impaired if we are unable to obtain funding from these capital sources when needed and on terms acceptable to us. Our expansion strategy also requires substantial management time which may result in disruption to our existing business operations. Our inability to successfully address these challenges may adversely affect the profitability of our business operations as we pursue our growth strategy.

Our affiliated dental practices compete for patients in a highly competitive environment that may make it more difficult to increase patient volumes and revenues.

The business of providing dental services is highly competitive in each of the markets in which our affiliated dental practices operate. The primary basis of such competition are quality of care and reputation, marketing and advertising strategy and implementation, convenience, traffic flow and visibility of practice locations, relationships with third-party payors, price of services and hours of operation. Our affiliated dental practices compete with all other dentists in their local market. Many of those dentists have established practices and reputations in their markets. In addition, a number of other dental support organizations are currently operating in our markets and in other parts of the country that may enter our existing markets in the future. Some of these competitors and potential competitors may have financial resources, affiliation models, reputations or management expertise that provide them competitive advantages against us, which may make it difficult to compete against them.

We depend on our ability to attract and retain dental and other health care professionals.

We depend on our ability to attract and retain qualified and skilled dentists and other personnel, including dental hygienists, dental assistants, and administrative staff. To that end, we routinely expend resources to promote our employer brand on university campuses, at industry events, on social media, and through other traditional job platforms. However, the market for talent is becoming increasingly competitive. Our affiliated dental practices’ ability to identify, hire, develop, motivate and retain qualified personnel will directly affect our ability to maintain and grow our business, and such efforts will require significant time, expense and attention. Turnover of dentists and other personnel could negatively impact patients and result in a loss of business or less frequent visits to the affiliated dental practices in our affiliate network. If our affiliated dental practices are unable to attract and retain dentists and other personnel at the same rate and on the same terms as we have historically, our reputation, business, financial condition and growth strategy may be materially adversely affected.

We are reliant upon affiliated dentists and other personnel to practice within the scope of their profession and in accordance with professional standards and could be harmed by misconduct by our affiliated dentists and other personnel.

While our affiliated dentists have significant continuing education obligations and while we and our affiliated dental practices also provide additional training on a variety of services to our affiliated dentists and personnel as appropriate, we cannot be assured that this training is sufficient to address all potential issues that our affiliated dentists or other personnel may encounter while providing services to patients. In addition, our affiliated dentists and other personnel contractually agree to only provide services within the scope of their applicable profession and in accordance with professional standards and that they only hold themselves out as having the qualifications and designations applicable to them; however, it may be the case that an affiliated dentist or member of personnel breaches these obligations and we cannot be assured that all affiliated dentists or personnel will comply with the restrictions and limitations applicable to their scope of practice or our policies and procedures. In addition, while our affiliated dentists are trained members of their applicable governing body of dentists, these individuals must use their independent discretion to practice dentistry,

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and we do not have the ability to control actions or omissions of the affiliated dentists and any failure by an individual to practice his or her profession in accordance with applicable laws and the policies, guidance and requirements of the dental regulatory bodies could cause harm to patients and expose us to reputational damage or litigation and have a material adverse effect on our reputation, business, financial condition, results of operations, cash flows and prospects.

Our success is dependent on the dentists who operate the affiliated dental practices with whom we enter into administrative resources agreements, and we may have difficulty locating qualified dentists to replace affiliated dental practice owners.

Affiliated dental practices are operated as separate legal entities organized under state laws as affiliated dental practices or professional limited liability companies. Each entity operates an affiliated dental practice that employs or contracts with dentists and specialists in one or more locations. Each of the affiliated dental practices is wholly owned by one or more licensed dentists, the entity owner, and we do not own any capital stock of any entity. We enter into service agreements with an entity to provide on an exclusive basis all non-clinical services of the dental practice. The entity owner is critical to the success of affiliated dental practices because he or she has control of all clinical aspects of the practice of dentistry and the provision of dental services.

Under our arrangements with the owners of affiliated practice entities, the entity owners are prohibited from selling, transferring, pledging or assigning the stock of the entity to a third party without our consent. In addition, we can require the entity owner to sell his or her interest in the entity to any person designated by us that is permitted to hold an ownership interest in the entity. However, upon the departure of an entity owner, we may not be able to locate one or more suitably qualified licensed dentists to hold the ownership interest in the entity and maintain the success of the departing entity owner. Also, a court may decide not to enforce these transfer restrictions in a given situation. Dr. Christopher Steele and Dr. Alan Law, who are both members of our Board of Directors, and have been associated with the Park Dental organization since 1991 and 1996, respectively, are owners and control affiliated dental practices that provide dental services at the dental locations that comprise 100% of our total revenue. Adequate succession planning for the departure of entity owners is important to maintain our successful operations.

Rising inflation and interest rates may result in an increased cost of dental services which could have a material adverse effect on our results of operations as many of our patients pay for dental services on an out of pocket basis.

An inflationary environment and rising interest rates can increase our operating costs including the cost of labor and other operating costs, which could result in increased cost of our dental services. Since many of our dental care patients pay for a significant portion of their dental expenses on an out-of-pocket basis, many patients tend to be price-sensitive, and our business and industry can be impacted by economic conditions. Adverse changes in economic conditions could, in turn, have a material adverse effect on our business and operating results.

A loss of the services of our key management team members could have a material adverse effect on our business.

Our continued success depends upon the retention of our senior officers, in particular Peter G. Swenson and Christopher J. Bernander, who have been instrumental in our success and upon our ability to attract and retain other highly qualified individuals. The loss of some of our senior officers, or an inability to attract or retain other key individuals, could materially adversely affect us. Continued growth and success in our business depends, to a large degree, on our ability to retain and attract such officers and employees.

Risks Related to Information Technology, Cybersecurity and Intellectual Property

Our business model depends on proprietary and third-party management information systems that we use to track financial and operating performance of affiliated dental practices, and any failure to successfully design and maintain these systems or implement new systems could materially harm our operations.

We depend on integrated management information systems, some of which are provided by third parties, and standardized procedures for operational and financial information, as well as for patient records, patient financing and

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our billing operations. We may experience unanticipated delays, complications, data breaches or expenses in implementing, integrating, and operating our systems. Our technology and information systems regularly require modifications, improvements or replacements that may require both substantial expenditures as well as interruptions in operations. Our ability to implement these systems is subject to the availability of skilled information technology specialists to assist us in creating, implementing and supporting these systems. Our failure to successfully design, implement and maintain all of our systems could have a material adverse effect on our business, financial condition and results of operations.

Further, we rely on our systems to bill for services provided by affiliated dentists and specialists in accordance with the terms of third-party payor agreements. Our systems must be designed to accurately bill for services consistent with the requirements of third-party payors. Our failure to successfully operate our billing system could lead to potential violations of third-party payor agreements and healthcare laws and regulations.

We are increasingly dependent on technology in our operations and, if our technology fails, our business could be adversely affected.

Our business is dependent on information systems for operational processes and financial information. Our information systems could be vulnerable to damage or interruption from computer viruses, cyber-attacks, ransomware attacks, human error, natural disasters, telecommunications failures, intentional acts of vandalism and similar events. A significant or prolonged interruption to our information systems could have a material adverse effect on our business, financial condition and results of operations.

In addition, we use technology platforms to attract new patients into our network, communicate with all new and existing patients, enhance the frequency of visits, improve retention, and provide patients with a place for all of their comprehensive oral care needs. While some of these technologies are relatively new, and while we are encouraged by their impact on our business to date, there can be no assurance that we will realize, in full or in part, the anticipated benefits of these platforms.

We rely on third-party licensed software, which may not always be available to us or properly supported and maintained and could adversely affect our business.

We and our affiliated dental practices utilize third-party licensed software. We and our affiliated dental practices anticipate that they will continue to rely on third-party licensed software in the future. Although we and our affiliated dental practices believe that there are commercially reasonable alternatives to the third-party software they currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of new third-party software may require significant work and require substantial investment of our and our affiliated dental practices’ time and resources and adversely affect our and our affiliated dental practices business prospects and ability to compete.

Additionally, any undetected errors or defects in third-party licensed software could prevent the deployment or impair the functionality of our and our affiliated dental practices’ software, delay new updates or enhancements to our and our affiliated dental practices’ platform, result in a failure of our affiliated dental practices’ platform, present security risks, subject us to liability and injure our reputation.

A cybersecurity incident, including a privacy breach, could negatively impact our business and our affiliated dental practices’ relationships with patients, personnel and suppliers and may lead to us incurring significant liabilities, including through litigation or regulatory action.

We and our affiliated dental practices routinely collect, use, disclose, access and store confidential health, financial and other personal information of patients in connection with the operation of our and our affiliated dental practices’ business. We also collect, use, disclose, and maintain personal information of affiliated dentists, other personnel, and contractors. We and our affiliated dental practices have installed privacy protection systems on our network in an attempt to prevent unauthorized access to information in our database. However, we have experienced a security breach in the past and our technology may fail to adequately secure the personal information that we and our affiliated dental practices maintain in their databases.

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Additionally, we use third-party service providers to help deliver services to patients. These service providers may have access to or store personal information (including sensitive information such as personal health information and credit card information) and/or other confidential information on our behalf. As a result, such third parties may obtain unauthorized access to the personal information of our patients. This information could be exposed through human error, malfeasance or otherwise.

The unauthorized release, unauthorized access or compromise of personal information in our or our affiliated dental practice’s custody or control could have a material adverse effect on our financial condition, results of operations, cash flows and prospects and could negatively affect our reputation and business.

We and our affiliated dental practices are also subject to federal and state laws regarding cybersecurity, privacy and the protection of data, including state health privacy legislation. We and our affiliated dental practices are subject to laws that require us to notify governmental authorities, regulatory authorities, individuals and/or other organizations of certain data security breaches, such as those involving certain types of personal information. Additionally, we and our affiliated dental practices are required to use reasonable measures to safeguard personal information.

The regulatory framework in the United States in respect of cybersecurity and the protection of data and privacy is constantly evolving and is likely to remain uncertain for the foreseeable future. Certain aspects of the interpretation and application of such laws and regulations are also ambiguous. A failure by us or an affiliated dental practice to comply with federal and state laws regarding privacy and protection of data, as applicable, could lead to significant fines and penalties imposed by regulators, legal claims by our patients and other persons, and highly adverse publicity. These proceedings or violations could force us or an affiliated dental practice to spend money in defense or settlement of such proceedings, result in the imposition of monetary liability, divert management’s time and attention, increase our or an affiliated dental practice’s cost of doing business, and adversely affect our or an affiliated dental practice’s reputation and the demand for our affiliated dental practices’ products and services. We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that our insurers will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business, financial condition, results of operations, cash flows and prospects.

On January 23, 2024, we became aware of unauthorized activity for a limited number of employee email accounts. Upon discovering this event, we promptly took steps to investigate the incident, assess the security of our systems, and notify potentially affected individuals. As part of our ongoing commitment to the privacy of personal information in our care, while we have safeguards in place to protect data in our care and have made enhancements, we continue to review and identify further enhancements of these protections as part of our ongoing commitment to data security. The litigation related to these events is inherently unpredictable, but we believe we have substantial defenses to the claims and we intend to vigorously defend ourselves against all claims.

Our operations depend on information technology systems that are vulnerable to cybersecurity threats, and any security breach could result in significant legal, financial, and reputational harm.

We rely extensively on information technology systems to manage patient health information, process billing and collections, coordinate scheduling, and operate our affiliated dental practices. These systems contain sensitive data, including protected health information subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and state health privacy laws, as well as personal financial information and employee data. Our network spans 86 practice locations and includes connections to third-party vendors, payors, and service providers, increasing the potential attack surface for cyber threats.

The healthcare industry has experienced a significant increase in cyberattacks, ransomware incidents, and data breaches in recent years. Threat actors have become increasingly sophisticated in their methods, and even organizations with substantial cybersecurity investments have experienced material breaches. The Change Healthcare breach in February 2024, which affected approximately 190 million individuals and resulted in costs exceeding $2 billion, illustrates the scale and severity of risks facing healthcare organizations. The Department of Health and Human Services

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Office for Civil Rights (OCR) continues to actively investigate and impose penalties for HIPAA violations, with enforcement actions resulting in settlements totaling approximately $12.8 million in 2024 alone.

A successful cyberattack or data breach affecting our systems or those of our third-party service providers could result in unauthorized access to, or theft, destruction, or alteration of patient health information and other confidential data. Such an incident could trigger mandatory breach notification obligations under HIPAA and state laws, expose us to government investigations and enforcement actions, result in regulatory penalties and fines, give rise to class action litigation and individual claims for damages, require significant expenditures for remediation and enhanced security measures, damage our reputation and relationships with patients and payors, and disrupt our ability to operate our affiliated dental practices. We maintain cybersecurity insurance, but such coverage may not be adequate to cover all costs arising from a significant breach. Any of these consequences could have a material adverse effect on our business, financial condition, and results of operations.

The increasing use of artificial intelligence and emerging technologies in dental care creates both competitive pressures and regulatory uncertainties that could affect our business.

Artificial intelligence and related technologies are being increasingly adopted across the dental industry for applications including diagnostic imaging analysis, treatment planning assistance, patient communication, and administrative automation. The U.S. Food and Drug Administration (FDA) has cleared a growing number of AI-enabled dental devices, and competitors are incorporating these technologies into their service offerings. Failure to effectively evaluate, adopt, and integrate appropriate AI and other emerging technologies could place us at a competitive disadvantage and impair our ability to attract patients and dental professionals.

At the same time, the use of AI in healthcare settings raises significant regulatory, liability, and operational questions that remain unresolved. The regulatory framework for AI-enabled medical devices continues to evolve, and there is uncertainty regarding applicable standards for clinical validation, ongoing performance monitoring, and liability allocation when AI tools contribute to treatment decisions. Dental professionals retain ultimate responsibility for clinical decisions, but the interaction between AI-assisted recommendations and professional judgment creates potential areas of liability exposure. Additionally, the use of AI tools may raise patient privacy concerns and require clear disclosures and consent processes.

If we adopt AI technologies that prove unreliable, produce errors, or raise safety concerns, we could face professional liability claims, regulatory scrutiny, reputational damage, and operational disruptions. Conversely, if we do not adopt AI technologies that become standard in the industry, we may lose competitive position. The pace of technological change makes it difficult to predict which investments will prove beneficial, and we may make technology investments that do not produce expected returns. Any of these factors could adversely affect our business, financial condition, and results of operations.

We may not be able to adequately protect our and our affiliated dental practices intellectual property, which could harm the value of our brand and adversely affect our business.

Our ability to implement our business plan successfully depends in part on our and our affiliated dental practices’ ability to further build brand recognition using our trademarks, service marks and other proprietary intellectual property, including our name and logos. While it is our policy to protect and defend vigorously our rights to our intellectual property, we cannot predict whether steps taken by us to protect our intellectual property rights will be adequate to prevent infringement or misappropriation of these rights. Any litigation to enforce our rights could be costly, divert attention of management, and may not be successful. Although we believe that we have sufficient rights to all of our and our affiliated dental practices’ trademarks, service marks and other intellectual property rights, we may face claims of infringement that could interfere with our ability to market and promote our brand. Any such litigation may be costly and divert resources from our business. Moreover, if we are unable to successfully defend against such claims, we may be prevented from using our and our affiliated dental practices’ trademarks, service marks or other intellectual property rights in the future and may be liable for damages, which in turn could adversely affect our business, financial condition or results of operations.

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We or one of our affiliated dental practices could be found to have infringed on the intellectual property rights of others and may be subject to infringement claims.

Although we and our affiliated dental practices believe that the third-party software utilized is licensed from the entity holding the intellectual property rights and that their products and services do not infringe on the rights of third parties, third parties may assert infringement claims against us or our affiliated dental practices in the future. As we and our affiliated dental practices continue to employ proprietary and third-party technology platforms and use new technology, the exposure to threats of infringement may increase.

Regardless of whether any potential infringement claims against us or our affiliated dental practices have any merit, such claims could:

adversely affect our and our affiliated dental practices relationships with patients;

be time-consuming and expensive to evaluate and defend, including in litigation or other proceedings;

result in negative publicity for us or our affiliated dental practices;

divert management’s attention and resources;

subject us to significant liabilities; and

require us or our affiliated dental practices to cease certain activities or to cease use of our technology platforms.

Any of the foregoing infringement claims and related litigation could have a material adverse effect on our business, operating results, ability to compete, and prospects.

Our inability or failure to protect our intellectual property could have a negative impact on our operating results.

We or our affiliated dental practices are the registered owner, or have filed for registration, of various marks in the United States that we currently use and consider to be material to the successful operation of our affiliated businesses, including PARK DENTAL PARTNERS™, PARK DENTAL ® , WITH YOU EVERY SMILE OF THE WAY™, our Park Dental logo “P” design, and our Parker mascot. In addition to our registered marks, our principal intellectual property rights include rights to our domain names, databases and information management systems. The steps we take to protect our proprietary rights may be inadequate. We may not be able to secure the right to use the filed for marks. Our competitors or others may adopt trademarks or service marks similar to our marks or try to prevent us from using our marks because laws protecting trademarks and similar proprietary rights are unclear. Therefore, we may be unable to prevent third parties from acquiring trademarks or service marks that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights. If we are unable to protect or preserve the value of our trademarks, or other proprietary rights for any reason, our brand and reputation could be impaired or diluted and we may see a decline in revenues.

Events or rumors relating to our brand names could significantly impact our business.

Recognition of our brand names, including Park Dental, The Dental Specialists, The Facial Pain Center, Apollo Dental, Greenview Family Dentistry, Weddell Dental, Ironwood Dental, Precision Oral & Facial Surgery, and Central Minnesota Endodontics and the association of those brands with quality, comprehensive dental care are an integral part of our business. The occurrence of any events or rumors that cause patients to no longer associate the brands with

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quality, comprehensive dental care may materially adversely affect the value of the brand names and demand for dental services at our affiliated dental practices.

Risks Related to Government Regulation, Reimbursement/Third Party Payors and Litigation

We and our affiliated dental practices are subject to complex laws, rules and regulations, compliance with which may be costly and burdensome.

The affiliated dental practices and we are subject to extensive federal, state and local laws, rules and regulations, including:

state regulations on the practice of dentistry;

the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and other federal and state laws governing the collection, dissemination, use, security and confidentiality of patient-identifiable health and financial information;

federal and state regulations, such as Medicare and Medicaid, and anti-kickback provisions and restrictions on referrals;

the federal Fair Debt Collection Practices Act and similar state laws that restrict the methods that we and third-party collection companies may use to contact and seek payment from patients regarding past due accounts;

the Occupational Safety and Health Administration Bloodborne Pathogens Standard, which requires affiliated dental groups to institute training programs and procedures designed to eliminate or minimize occupational exposure to Hepatitis B Virus (HBV), Human Immunodeficiency Virus (HIV) and other bloodborne pathogens;

the U.S. Environmental Protection Agency’s Dental Office Category effluent limitations guidelines and standards governing management of dental amalgam wastewater, including installation, operation, and maintenance of compliant amalgam separators, implementation of best management practices and recordkeeping and retention of documentation, as well as submission of required reports; and

state and federal labor laws including wage and hour laws.

Many of the above laws, rules and regulations applicable to us and our affiliated dental practices are ambiguous, have not been definitively interpreted by courts or regulatory authorities and vary from jurisdiction to jurisdiction. Accordingly, we may not be able to predict how these laws and regulations will be interpreted or applied by courts and regulatory authorities, and some of our activities could be challenged. In addition, we must consistently monitor changes in the laws and regulatory schemes that govern our operations. For example, numerous legislative proposals to reform the U.S. health care system have been introduced in Congress and in various state legislatures recently and over the past several years. We cannot predict whether any of these proposals will be adopted and, if adopted, what impact this legislation would have on our business. Although we have tried to structure our business and contractual relationships in compliance with these laws, rules and regulations in all material respects, if any aspect of our operations was found to violate applicable laws, rules or regulations, we could be subject to significant fines or other penalties, required to cease operations in a particular jurisdiction, prevented from commencing operations in a particular state or otherwise be required to revise the structure of our business or legal arrangements. Our efforts to comply with these laws, rules and regulations may impose significant costs and burdens, and failure to comply with these laws, rules and regulations may result in fines or other charges being imposed on us.

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We, along with our affiliated dental practices and their dentists, may be subject to malpractice and other similar claims and may be unable to obtain or maintain adequate insurance against these claims.

The provision of dental services by dentists entails an inherent risk of potential malpractice and other similar claims. Although we do not have responsibility for compliance by affiliated dental practices and their dentists with regulatory and other requirements directly applicable to dentists and dental groups, claims, suits or complaints relating to services provided at the offices of our affiliated dental groups may be asserted against us. The assertion or outcome of these claims could result in higher administrative and legal expenses, including settlement costs or litigation damages. Our current standard insurance policy provides coverage limits of $2.0 million per occurrence and $3.0 million annual aggregate. For dental specialists and general dentists providing sedation services, the policy includes higher coverage limits of $5.0 million per occurrence and $7.0 million annual aggregate. Under this professional liability insurance policy, we arrange and are reimbursed for the cost of the professional liability insurance for our affiliated dental practices and most of their employed or contracted dentists. Our inability to obtain adequate insurance or an increase in the future cost of insurance to us and the dentists and specialists who provide dental services or an increase in the amount we must self-insure may have a material adverse effect on our business and financial results.

Our revenue and that of our affiliated dental practices may be adversely affected by the actions of insurance providers and federal and state agencies, including downward reimbursement pressure from these entities.

Approximately 92% of our total revenues for each of the years ended December 31, 2025 and 2024, were derived from patients with indemnity and preferred provider plans and government sponsored and funded plans and programs and subject to federal oversight by CMS. The health care services industry, including the dental services market, is experiencing a trend toward cost containment, as third-party payors seek to impose lower reimbursement rates and sometimes decide not to renew their agreements with dental providers. We believe that this trend will continue and will increasingly affect the compensation for dental services. Insurance providers are continually negotiating the fees reimbursed for dental care, with a goal of containing reimbursement and utilization rates. This may result in a reduction in per-patient and per-procedure revenue from historic levels.

States in which we operate and the federal government may also change the benefits they provide to dental patients. Approximately 22% and 16% of total revenues for the years ended December 31, 2025 and 2024, respectively, were derived from patients with government-sponsored plans including Medicare and Medicaid. Changes in Medicaid programs affecting provider eligibility, reimbursement rates or specific dental procedures eligible for reimbursement, or an affiliated dental practices’ failure to maintain its authorization as a provider under these programs, or to comply with applicable state and federal law or its contracts with the insurance providers who administer claims and make payments under these programs, could have a significant adverse impact on revenues generated by affiliated dental practices which may adversely impact our revenues.

We are self-insured for certain employee group medical costs and an increase in our medical claims and related expenses may have a material negative impact on us.

We are self-insured up to certain limits for a portion of the employee group medical benefits we provide. We maintain contractual arrangements intended to mitigate a portion of this exposure, including stop-loss coverage for claims above specified limits. Our reserves are established using historical trends and, where appropriate, using a third-party actuary to estimate costs to settle reported claims and claims incurred but not yet reported. Estimated costs are subject to a variety of assumptions and other factors including the severity, duration and frequency of claims, healthcare trends and projected inflation of related factors. Material increases in medical claims, changes to healthcare costs, a concentration of high-cost claims, delays or disputes in reimbursement under stop-loss coverage, and other factors could result in an unfavorable difference between actual medical benefit costs and our reserve estimates. As a result, our self-insurance costs could increase which may adversely affect our business, results of operations, financial condition and cash flows.

Our affiliated dental practices rely on arrangements with, and payments from, third-party payors. The inability to collect from such payors and patients in the amount anticipated (and in a timely manner) could impact the

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ability of our affiliated dental practices to pay our management fees and in turn could adversely impact our profitability.

Our affiliated dental practices derive significant revenue from third party payors. One third-party payor constituted 30% and 32% of our revenues for the years ended December 31, 2025 and 2024, respectively. There is no assurance that our affiliated dental practices will be able to maintain the arrangements we currently have with third party payors in the amounts or percentages currently in place or as projected. In addition, delays in payment or audits leading to refunds to payors or termination of such relationships may impact the ability of an affiliated dental practice to pay our management fees. Furthermore, many patients, including those covered by insurance, pay for all or a significant portion of the dental services they receive out-of-pocket. Our affiliated dental practices will bear the financial risk relating to uncollectible, reduced or delayed payments and adverse results could result if our affiliated dental practices are unable to pay our management fees timely and in full. During periods of economic downturn, our affiliated dental practices may experience an increase in the time it takes to collect payments.

In addition, reimbursements from governmental healthcare programs may be delayed if affiliated dentists and specialists have not been properly enrolled in governmental healthcare programs, such as Medicare and Medicaid. Each time a new dentist or specialist joins an affiliated dental practice, the affiliated dental practice must enroll the dentist under its applicable group number for Medicare or Medicaid programs and for certain insurance programs before the affiliated dental practice can receive reimbursement for services the dentist renders to patients covered by those programs. The estimated time to receive approval for the enrollment is sometimes difficult to predict and, in recent years, the Medicare program carriers often have not issued these approvals to affiliated dentists in a timely manner. These practices result in delayed reimbursement that may adversely affect the affiliated dental practice and our cash flow and total revenues.

Our revenue may be negatively impacted by the failure of affiliated dental practices to appropriately document services they provide.

We rely upon affiliated dental practices to appropriately and accurately complete necessary dental record documentation and assign appropriate reimbursement codes for their services. Reimbursement is conditioned on affiliated dental practices providing the correct procedure and diagnosis codes and properly documenting the services themselves, including the level of service provided and the necessity for the services. If affiliated dental practices provide incorrect or incomplete documentation or select inaccurate reimbursement codes, this could result in nonpayment for services rendered or lead to allegations of billing fraud. This could subsequently lead to civil and criminal penalties, including exclusion from government healthcare programs, such as Medicare and Medicaid. In addition, third party payors may disallow, in whole or in part, requests for reimbursement based on determinations that certain amounts are not covered, services provided were not necessary, or supporting documentation was not adequate. Retroactive adjustments may change amounts realized from third party payors and result in recoupments or refund demands, affecting revenue already received.

Our business may be interrupted or negatively affected by litigation or regulatory action.

We or an affiliated dentist or dental group may become involved in various legal proceedings, including commercial disputes, intellectual property issues, employment claims, personal injury claims and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management or our affiliated dentists’ attention and resources and cause us or a dental practice in our network to incur significant expenses. In addition, our insurance or indemnities or those of the practices in our network may not cover all claims that may be asserted against us or an affiliated dental practice, and any claims asserted against us or such dental practices, regardless of merit or eventual outcome, may harm our or such practices’ reputation. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on our business, financial condition, results of operations, cash flows or prospects.

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Changes to U.S. trade policy, tariff and import/export regulations could affect our operating results.

Tariffs, and the possibility of additional tariffs in the future, have created uncertainty in most all businesses. Changes to existing or future tariffs or other trade restrictions may negatively affect our price of dental supplies which could reduce our gross profits, or could increase the cost to maintain an appropriate level of investment in capital expenditures. Such outcomes could adversely affect the amount or timing, of our revenues or expenses, results of operations or cash flows, and continuing uncertainty could cause price fluctuations or supply shortages or cause our patients to advance or delay their dental needs. It is difficult to predict what further trade-related actions governments may take, which may include additional or increased tariffs and trade restrictions, and we may be unable to quickly and effectively react to such actions.

Risks Related to Our Financial Condition and Indebtedness

Our operating results are subject to seasonal variability.

We have historically experienced and expect to continue to experience quarterly fluctuations in revenue and net income. Absent the impact and timing of acquisitions, our total revenues have historically been lower in the third quarter of the year due to fluctuations in patient volumes, which are primarily impacted by the timing of holidays and the school year calendar. As a result of the fluctuations caused by these factors and due to the timing of any acquisition, our results of operations for any quarter are not necessarily indicative of results of operations for any future period or full year.

Covenants in our debt agreements may adversely affect our operations.

Our credit facilities contain customary financial and negative covenants that, among other things, limit our ability to incur and pay certain indebtedness; to create, incur, or assume certain liens and negative pledges; to sell, lease, convey, transfer or otherwise dispose of certain assets; to merge or consolidate with or into another; to liquidate or dissolve any of our subsidiaries; to make certain loans and investments; to make certain dividends and redemptions; to substantially change the nature of our business; and to enter into or amend certain agreements. We are also required to comply with limitations on our capital expenditures and comply with certain financial ratios, including a leverage ratio and fixed charge coverage ratio. Our ability to comply with these covenants or meet those financial ratios can be affected by events beyond our control, and we cannot assure you that we will meet them.

Upon the occurrence of an event of default under our credit facilities, lenders could elect to declare all amounts outstanding under our credit facilities to be immediately due and payable and terminate all commitments to extend further credit. Further, the lenders under our credit facilities could proceed against the collateral granted to them to secure that indebtedness, which represents substantially all of our assets. If any of the lenders under our credit facilities accelerate the repayment of borrowings, we may not have sufficient cash flow or assets to repay our credit facilities and other indebtedness or have the ability to borrow sufficient funds to refinance such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to us.

Certain of our current financing arrangements include significant prepayment obligations and our current financing arrangements require compliance with financial and other covenants. A failure to comply with such covenants could adversely affect our ability to operate.

The terms of our various credit agreements and other financing documents require us to comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios and adequate insurance coverage. In addition, our $2.2 million promissory notes payable include prepayment approval by both parties which likely will prevent prepayment and result in us having to pay interest on such obligations at rates exceeding 28% per annum until maturity in October 2037. These covenants and provisions may limit our flexibility in conducting our operations and breaches of loan covenants could result in defaults under the instruments governing the applicable indebtedness, even if we have satisfied and continue to satisfy our payment obligations. Regulatory and market changes may also result in higher borrowing costs and reduced access to credit.

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We may have substantial future capital requirements, and our ability to obtain additional funding is uncertain.

Our capital needs depend on many factors, including the rate of acquiring and expanding dental practices, technological advances that require new clinical equipment or technology, such as digital imaging, and the replacement and enhancement of management information systems and related technology needs and requirements.

Because our growth strategy depends on expansion, we will need additional capital resources to expand our business. While the cost of any acquisition or additional practices will vary based on size and region, we estimate that the average acquisition of new practices will cost approximately $1 – 2 million as we anticipate future acquisitions to be larger than our average historical acquisitions. Additional factors can unexpectedly increase the costs of acquiring and expanding practices. Also, we generally incur significant advertising and marketing expenditures to attract patients during the first year of new or expanded operations. The expenses involved in acquiring, developing and establishing new practices and in supporting them could consume a significant portion of our cash flow.

We may not have adequate resources to finance the growth in our business and we may not be able to obtain additional capital through subsequent equity or debt financings on terms acceptable to us or at all. If we do not have adequate resources and cannot obtain additional capital, we will not be able to implement our expansion strategy successfully, our growth could be limited and our results of operations could decline.

We may not realize the expected value of our goodwill and intangible assets.

As of December 31, 2025 and December 31, 2024, approximately 15.9% and 18.6% of our total assets, respectively, were represented by goodwill and intangible assets, net of amortization. Trademarks subject to amortization are capitalized and amortized over 15 years on a straight-line basis. Patient lists acquired as part of dental practice acquisitions are capitalized and amortized over 15 years on a straight-line basis.

Goodwill is recognized for the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of businesses acquired. Goodwill is not amortized but is assessed for impairment annually. When testing goodwill for impairment, we may first assess qualitative factors to determine if it is more likely than not the carrying value of an asset exceeds its estimated fair value. During a qualitative analysis, we consider the impact of changes, if any, to the following factors: macroeconomic, industry and market factors; cost factors; changes in overall financial performance; and any other relevant events and uncertainties impacting the fair value. If our qualitative assessment indicates a goodwill impairment is more likely than not, we perform additional quantitative analyses. We may also elect to bypass the qualitative testing and proceed directly to the quantitative testing. We completed our annual impairment test for goodwill as of October 1, 2025 and 2024, and determined the fair value of goodwill was substantially in excess of the carrying value, thus no impairment adjustment was deemed necessary for 2025 or 2024.

If impairment were determined to be appropriate in any of our asset categories, we would make the appropriate adjustment to the asset to reduce the asset’s carrying value to fair value. In the event of any sale or liquidation of us or a portion of our assets, the value of our intangible assets may not be realized. Any future determination requiring the write-off of goodwill or recognizing an impairment charge could have an adverse effect on our financial condition and results of operations.

We cannot guarantee future financial performance based on our historical performance.

We rely on our management to successfully manage our operations and any expansion and development opportunities. However, future results of operations are also dependent on various other factors outside of our control. There is no guarantee that our historical performance is indicative of our future financial performance.

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Risks Related to our Common Stock

We expect that the price of our Common Stock will fluctuate significantly.

Volatility in the market price of our Common Stock may prevent you from being able to sell your Common Stock at or above the price you paid for your Common Stock. The market price for our Common Stock could fluctuate significantly for various reasons, including:

our operating and financial performance and prospects, including seasonal fluctuations in our financial performance;

conditions that impact demand for the services of our affiliated dentists;

the public’s reaction to our press releases, other public announcements and filings with the Securities and Exchange Commission;

changes in earnings estimates or recommendations by securities analysts who track our Common Stock;

market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

strategic actions by us or our competitors, such as acquisitions or restructurings;

changes in federal and state government regulation;

changes in accounting standards, policies, guidance, interpretations or principles;

arrival or departure of key personnel;

sales of Common Stock by us, affiliated dentist shareholders or members of our management team or affiliates; and

changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our Common Stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

Future sales of our Common Stock, or the perception that such sales may occur, could depress our Common Stock price.

Upon completion of our initial public offering on December 4, 2025, our affiliated dentist shareholders, directors and executive officers hold a substantial number of shares of our Common Stock that they will be able to sell in the public market in the near future. Sales, or the perception that such sales may occur, in particular by our affiliated dentist shareholders, directors and executive officers of a substantial number of shares could significantly reduce the market price of our Common Stock.

We, our directors and executive officers, and all of our shareholders have agreed with the offering underwriters that, without the prior written consent of Northland Securities, Inc. (“Northland Securities”), we and they will not, subject to certain exceptions, during the period ending 180 days after the date of the initial public offering completed on December 4, 2025, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,

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grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of directly or indirectly, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock. In addition, during January 2026, 11 affiliated dentist shareholders representing 176,852 shares vesting upon initial public offering, agreed to extend the existing lock-up period for a further 185 days in return for a short term loan to meet a portion of the associated tax obligations upon vesting. The representative of the underwriters, in its sole discretion and at any time without notice, may release all or any portion of the shares of our Common Stock subject to the lock-up agreements related to our initial public offering.

All of our shares of Common Stock will be freely tradable after the expiration of the lock-up agreements, excluding any shares acquired by persons who may be deemed to be our affiliates. Approximately 698,056 shares of our Common Stock held by our affiliates will continue to be subject to the volume and other restrictions of Rule 144 under the Securities Act. The representative of the underwriters, in its sole discretion and at any time without notice, may release all or any portion of the shares of our Common Stock subject to the lock-up agreements.

In addition, on December 5, 2025, we filed a registration statement registering 929,640 shares of Common Stock under the Securities Act reserved for issuance in respect of incentive awards and restricted stock awards to our officers and certain of our employees and shares issuable under our Employee Stock Purchase Plan. If any of these holders cause a large number of securities to be sold in the public market, the sales could reduce the trading price of our Common Stock. These sales also could impede our ability to raise future capital.

Our issuance of additional shares of Common Stock in connection with financings, acquisitions, investments, equity incentive plans, or otherwise will dilute all shareholders.

We expect to issue additional shares of Common Stock and other equity-linked securities in the future, which will dilute existing shareholders and could cause the market price of our Common Stock to decline. In connection with our initial public offering, we issued a warrant to the representative of the underwriters to purchase shares of our Common Stock, and shares issuable upon exercise of that warrant will dilute existing shareholders if and when issued. In addition, we have registered shares for issuance under our equity compensation plans, and we expect to continue to grant equity awards to employees, directors and consultants. The issuance of shares upon the settlement, vesting or exercise of equity awards (including any net share settlements) will dilute existing shareholders and could adversely affect the market price of our Common Stock.

We may also raise capital through additional equity financings in the future. Any additional capital raised through the sale of equity securities will dilute existing shareholders’ percentage ownership, and we may issue securities with rights, preferences and privileges senior to those of holders of our Common Stock. Capital raised through debt financings would require us to make periodic principal and interest payments and may impose restrictive covenants that could limit our operational flexibility. Furthermore, additional financings may not be available when needed, on terms favorable to us, or at all. If we are unable to obtain additional funding could prevent us from making expenditures that, we may be required to delay, reduce or eliminate expenditures and initiatives that we believe are important to implementing our growth strategy and growing or maintaining our operations.

Our Directors serve staggered, three years terms and the holders of our Common Stock do not control the election of all Board of Director positions. Our affiliated dentists control the right to appoint three directors to the Board of Directors.

Our Board of Directors is structured into three classes, each with a three-year term. Common Stock shareholders have the right to vote for a majority, but not all of the members of the Board of Directors. Dentists of our affiliated dental practices meeting certain criteria principles focused on years of practice with the group elect a five (5) person Board of Governors of DDS Advisor LLC, a South Dakota limited liability company.

This Board then appoints one director in each class of our Board of Directors, giving DDS Advisor LLC the right to appoint three (3) directors to our Board of Directors. This structure may deter a future tender offer and may have the

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effect of assisting our management to retain its position and place it in a better position to resist changes that shareholders may desire.

General Risk Factors

We are subject to risks associated with engaging in acquisitions.

While individual acquisitions have historically not been material relative to the size of our overall operations, we expect to engage in future acquisitions to achieve our growth strategy. Our ability to execute our growth strategy depends in part on our ability to identify and acquire desirable acquisition candidates at a price and on terms acceptable to us (including terms which foster motivation for continued success in the acquired dental practices) and on our ability to successfully integrate acquired operations into our group. If we identify suitable acquisition candidates, we may be unable to successfully negotiate their acquisition at a price or on terms and conditions acceptable to us. In addition, we are not always able to control the timing of our acquisitions. An inability to complete acquisitions within the time frames that we expect may cause our results of operations to be less favorable than expected. Even if we are able to make acquisitions on advantageous terms and are able to integrate them successfully into our group, some acquisitions may not fulfill our anticipated financial or strategic objectives in a given market due to factors that we cannot control, such as market conditions, market position, competition, patient base contraction, third-party legal challenges or governmental actions.

A component of our growth strategy involves achieving economies of scale and operating efficiencies by growing through acquisition. We may not achieve these goals unless we effectively integrate the operations of acquired dental practices within our existing group. Our future financial performance is impacted by our ability to efficiently and effectively integrate the operations of acquired dental practices into our existing network and achieve identified cost savings and other synergies. In addition, we may change our strategy with respect to a market or acquired dental practices and decide to sell such operations at a loss, or keep those operations and recognize an impairment of goodwill and/or intangible assets.

Failure to retain existing patients of the acquired dental practices, expand operational and financial systems and controls or to retain and integrate appropriate personnel could also adversely affect our results of operations. Further, if capital expenditure requirements are greater than anticipated, or if we are unable to manage our growth profitably, our business, financial condition, cash flows and prospects may be negatively impacted.

We may also have opportunities in the future to acquire other dental support services organizations. Such acquisitions may result in difficulties in assimilating acquired dental support services organizations and may result in the diversion of our capital and our management’s attention from other business issues and opportunities. We may not be able to successfully integrate other dental support services organizations that we acquire, including their personnel, systems and general operating procedures. If we fail to successfully integrate such acquisitions, we could experience increased costs associated with operating inefficiencies, which could have an adverse effect on our profitability.

We may be subject to potential liabilities from past and future acquisitions.

Acquired dental practices may be subject to operational, tax and other liabilities and risks that were not identified at the time they were acquired. In pursuing acquisitions, we will conduct due diligence on the business or assets being acquired and seek detailed representations and warranties with respect to the business or assets being acquired and as a standard practice to seek to obtain indemnification from sellers of the acquired dental practices. Despite such efforts, there can be no assurance that the scope of such indemnification would adequately cover any liabilities as a result of acquisitions, or that we will not become subject to undisclosed liabilities as a result of acquisitions. Any failure to discover potential liabilities may be due to various factors, such as a failure to accurately assess all of the pre-existing liabilities of the operations acquired or sellers failing to comply with laws. If this occurs, we may be responsible for such liabilities or prior violations of laws, which could have a material adverse effect on our business, financial condition, results of operations and cash flows and in some instances, could negatively impact the public perception of our brand. Further, we are also subject to the risk of fraud on the part of sellers which could, among other things, result in an overstatement of key metrics of the acquired dental practices or in the failure to disclose instances of non-compliance

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with applicable laws, dental benefits policies or contracts related to the acquired dental practices which could expose us to governmental investigation, penalties or fines, the risk of termination or renegotiation of such contracts and have a negative impact on the public perception of our brand.

The obligations associated with being a public company will require significant resources and management attention, which may divert from our business operations.

We are subject to the reporting requirements of the Securities Exchange Act of 1934 (“the Exchange Act”), and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. As a result, we incurred significant legal, accounting and other expenses that we did not previously incur. We anticipate that we may need to upgrade our systems, implement additional financial and management controls, reporting systems and procedures, implement an internal audit function, and hire additional accounting and internal audit staff. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a stand-alone public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. In addition, we cannot predict or estimate the amount of additional costs we may incur in order to comply with these requirements. We anticipate that these costs will materially increase our general and administrative expenses.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of the fiscal year that coincides with the filing of our second annual report on Form 10-K. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. We will also be required to disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

As a company with less than US $1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. Therefore, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act, in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies. As a result, if we elect not to comply with such reporting and other requirements, in particular the auditor attestation requirements, our investors may not have access to certain information they may deem important.

The date we would cease to be an emerging growth company would be the earliest of (i) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; (ii) the date we qualify as a “large accelerated filer;” and (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the last day of the fiscal year following the fifth anniversary of our first sale of common equity securities under an effective Securities Act registration statement.

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Regulatory compliance may divert our attention from the day-to-day management of our business.

Regulatory oversight and reporting these obligations require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business.

If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our Common Stock, the price of our Common Stock could decline.

The trading market for our Common Stock will rely in part on the research and reports that equity research analysts publish about us and our business. We do not control these analysts. The price of our stock could decline if one or more equity analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.

Our amended and restated bylaws, our restated certificate of incorporation, and Minnesota law each contain provisions that could discourage another company from acquiring us and may prevent attempts by our shareholders to replace or remove our current management.

Provisions of our amended and restated bylaws, our restated articles of incorporation and Minnesota law may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. In addition, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove directors appointed by our affiliated dentists. These provisions include:

authorizing the issuance of “blank check” preferred stock without any need for action by shareholders;

eliminating the ability of shareholders to call special meetings of shareholders;

requiring a supermajority vote for a change in control transaction;

staggered board of directors with three board seats appointed by a dentist controlled entity;

prohibiting shareholder action by written consent; and

establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings.

We are also subject to provisions of the Minnesota Business Corporation Act that, in general, prohibit any business combination with a beneficial owner of 10% or more of our Common Stock for four years unless the holder’s acquisition of our stock was approved in advance by our board of directors. In addition, Minnesota law also invalidates the voting rights of shares of Common Stock if specific procedures are not complied with as a shareholder accumulates increasing amounts of share ownership percentage. Together, our governing documents and these article statutory provisions could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our Common Stock.

The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Common Stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your Common Stock in an acquisition.

Certain limitations on director and officer liability and indemnification in our articles of incorporation and indemnification agreements may discourage shareholders from bringing a lawsuit against our directors and officers for breaches of their fiduciary duties, may reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit the Company and other shareholders,

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and may adversely impact shareholders’ investments to the extent that the Company pays the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

In accordance with the provisions in our articles of incorporation, we will indemnify an officer, director, or former officer or director, to the full extent permitted by law. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, or otherwise, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of us in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

While we believe that including the limitation and indemnification provisions in our post-offering agreements and articles of incorporation is customary and necessary to attract and retain qualified persons such as directors, officers and key employees, those provisions may discourage shareholders from bringing a lawsuit against our directors and officers for breaches of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other shareholders. Further, a shareholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

Our business could be adversely affected by natural disasters, public health crises, political crises, economic downturns or other unexpected events.

A significant natural disaster, such as an earthquake, fire, hurricane, tornado, flood or significant power outage, could disrupt our operations, mobile networks, the internet or the operations of our third-party technology providers. In addition, any unforeseen public health crises, such as that experienced with COVID-19, or political crises, such as terrorist attacks, war and other political instability, or other catastrophic events, whether domestic or abroad, could adversely affect our operations or the economies of the markets where we operate. The COVID-19 pandemic adversely affected the dental industry between 2020 and 2021, and we cannot assure you that similar outbreaks, from new variants of COVID-19, or new viruses, will not occur in the future. Any such occurrences could cause severe disruption to our daily operations. Any natural disaster, act of terrorism or other disruption to us or our business partners’ abilities could result in decreased demand for our product and service offerings or a delay in the provision of our offerings, which could adversely affect our business, financial condition and results of operations. All of the aforementioned risks may be further increased if recovery plans prove to be inadequate. Disruptions or downturns in global or national or local economic conditions may cause demand for dental services to decline. An economic downturn resulting in a prolonged recessionary period would have a material adverse effect on our business, financial condition, and operating results.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear elsewhere in this Annual Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. For more information about such statements, please see “Special Note About Forward Looking Statements,” above. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in “Risk Factors.” In accordance with factors for consolidation under generally accepted accounting principles in the United States, we consolidate the net assets and results of operations of the affiliated dental practices operating under long-term business service agreements with us. As a result, references to our revenues, our expenses and similar items relating to our results of operations and net assets includes the revenues, expenses and similar items of our affiliated dental practices and all transactions between the affiliated dental practices and us, such as the management fees we charge, are eliminated in consolidation.

Overview

As a dental resource organization (“DRO”) operating through Park Dental Partners, Inc. we provide administrative 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 214 dentists, and consists of 990 hygienists, dental assistants, and patient care coordinators that support affiliated dentists in operating our dental practices across 86 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, and which continues through today, has been to ensure patients enjoy the benefits of a lifetime of good oral health.

Business Model

We provide support services on an exclusive basis to dental groups operating in the United States. We operate under long term Administrative Resources Agreements with affiliated dental practices pursuant to which we provide business support services, non-clinical personnel, facilities and equipment. In exchange for providing these services, we receive a

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management fee plus reimbursement of certain costs incurred by us in connection with fulfilling our responsibilities under these services agreements.

Our Administrative Resources Agreements are long-term agreements between the affiliated dental practice and the DRO, and a single designated doctor who is the sole holder of the equity of the respective affiliated dental practice. The agreements outline the terms under which we provide administrative, business, and operational support services to the affiliated dental practices. Effective October 1, 2023, each agreement establishes the DRO as the exclusive provider of non-clinical services — such as billing, collections, staffing, marketing, compliance, and facilities management — allowing the affiliated dental practice to focus solely on delivering professional dental services. The agreements ensure compliance with state laws prohibiting the unlicensed practice of dentistry, clearly delineating that all clinical decisions remain under the affiliated dental practice’s control and the practices’ dentists. Each agreement includes detailed provisions on financial arrangements, including a management fee based on a percentage of net collections, confidentiality, indemnification, and termination rights. The agreements are effective for 30 years with automatic five-year renewals, unless another termination date is mutually agreed upon. The agreements also include restrictive covenants and HIPAA compliance obligations.

Under each long-term Administrative Resources Agreement, the affiliated dental practice agrees to pay the DRO a monthly management fee equal to approximately 15% – 18% of the affiliated dental group’s net collections. Net collections are defined as the actual cash receipts collected by the affiliated dental practice, minus any patient or payor refunds, adjustments, and payments made to third-party collection agencies. As a result of our exclusive, long-term Administrative Resource Agreements with our affiliated dental practices, we have a variable interest and are the primary beneficiary in those affiliated dental practices. Accordingly, our consolidated financial results include the consolidated results of the affiliated dental practices in which we do not hold an equity interest. See further description under Note 16, Variable Interest Entities, of the Consolidated Financial Statements presented elsewhere in this Annual Report.

The agreements also stipulate that the management fee will automatically increase by 5% annually unless both parties agree in writing to a different arrangement. Additionally, each affiliated dental practice is responsible for fully reimbursing the DRO, without any markup, for all costs, expenses, and liabilities incurred in connection with the services rendered under the agreements or related to the operation and maintenance of the affiliated dental practice’s business.

Stock transfer restrictions exist between the DRO, the affiliated dental practice and the single designated doctor who is the sole holder of the nominal equity of the respective affiliated dental practice. The restrictions ensure continuity and compliance with legal and operational standards. Transfers are only permitted under specific conditions, such as the designated doctor’s death, disability, or disqualification, and must be made to a designated transferee approved by the DRO. The restrictions outline procedures for such transfers, including automatic resignation from company roles and payment terms. The agreement also includes provisions for arbitration, enforcement, and confidentiality, as governed by Minnesota law.

Park Dental Partners, Inc has a controlling financial interest in the affiliated dental practices operating under the administrative resources agreements which provide the DRO the right to receive a significant majority of profits generated by the affiliated dental practices. Accordingly, the assets and liabilities and results of operations of the affiliated dental practices are included in our consolidated financial statements and all transactions between the affiliated dental practices and us, such as the management fees we charge, have been eliminated.

Our network of affiliated dental practices provides both general and specialty dental services, including oral surgery, periodontics, pediatric dentistry, prosthodontics, endodontics, and orthodontics, under long-term agreements with initial terms of 30 years, with automatic 5-year renewals. We have established a significant footprint and brand awareness in our current markets. Our revenues, derived primarily from our affiliated dental practices’ provision of dental services, were $244.5 million and $229.8 million for the years ended December 31, 2025 and 2024, respectively. As a result of our exclusive, long-term agreements with our affiliated dental practices, our consolidated financial results include the consolidated results of the affiliated dental practices, in which we do not hold an equity interest.

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Our material revenues are comprised of dental services, which includes the consolidated revenues of our affiliated dental practices. Dental services are provided to patients, who typically pay for services out-of-pocket, through private insurance plans, or through government insurance plans. Approximately 92% of total revenues for each of the years ended December 31, 2025 and 2024, were derived from patients with private insurance or government sponsored plans. Our revenues have increased over the past several years, driven primarily by acquisitions, growth in new and existing patients, increased dentist and hygienist productivity, the expansion of specialty services, increased volume of hygiene services and the hiring of additional dentists and hygienists.

We intend to grow our revenues primarily through expansion of our existing affiliated practices by hiring additional dentists and hygienists, expansion of specialty services, increased productivity and patient appointment volume. We also intend to leverage our strong brand names to expand through acquisition and de novo practices in our existing and new markets. We supported the acquisition of three and two dental practices in the years ended December 31, 2025 and 2024, respectively. We opened one and zero de novo practices in the years ended December 31, 2025 and 2024, respectively.

Absent the impact and timing of acquisitions, our total revenues have historically been lower in the third quarter of the year due to fluctuations in patient volumes, which are primarily impacted by the timing of holidays and the school year calendar.

Our cost of services consists of clinical team member costs and benefits, dental supplies and laboratory fees, office occupancy, depreciation associated with practice assets, share based compensation, and other practice expenses. In addition, advertising costs with activities at the practice level are charged to cost of services. Our cost of services expenses are directly associated with operating the dental facilities. Clinical team member expenses and benefits consist principally of affiliated dentist compensation, clinical team member compensation and associated benefit costs. Dental supplies and laboratory fees consists of variable costs associated with our affiliated dental practices providing dental services. Office occupancy expenses include lease costs and other practice physical location 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. Depreciation expenses are related to our investments in long-lived assets such as dental equipment, and practice location leasehold improvements.

General and administrative expenses consist of management expenses, the costs of our centralized billing offices and call-centers, marketing and advertising expenses, executive and senior management, share based compensation, and centralized functions, such as accounting, finance, team member relations, information technology, operations, real estate and other similar functions.

Depreciation and amortization expenses are related to our non-practice related investments in resource support center long-lived assets such as computer equipment, furniture and fixtures, and amortization of intangible assets.

Our costs have increased over the last several years as we have grown our business. However, when excluding the impact of share based compensation and restructuring costs related to our IPO, our general and administrative costs as a percentage of total revenues have remained consistent. We strive to improve our cost structure and gain operating cost efficiency by (i) streamlining our business processes to optimize their effectiveness and minimize their cost, and (ii) leveraging our purchasing volumes to obtain favorable pricing from vendors for products and services. We believe our business model has allowed affiliated dentists and hygienists to increase productivity as a result of their ability to expand service offerings and treat an increased volume of patients. We expect to gain additional leverage over our operating cost structure in the future by leveraging our centralized infrastructure to support our expected growth and expansion.

In 2024, we refinanced a revolving line of credit into long-term debt, increasing the amount of our outstanding long-term debt by approximately $10.2 million but decreasing the applicable interest rate. With normal course long term debt required payments throughout 2024 and 2025, and lower borrowings on the revolving line of credit resulting from lower dividend payments, we have experienced lower interest expense. We expect interest expense will continue at a similar rate over the next twelve months unless we make significant acquisitions or otherwise utilize our revolving loan facility.

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Our primary sources of liquidity are cash provided by operations and available borrowings under our credit facilities. The management fees we receive from affiliated dental practices and their reimbursements of certain costs we incur on their behalf are our primary source of cash from operations. To the extent the affiliated dental groups do not generate sufficient revenues to pay a significant portion of our management fee, after paying for their expenses and reimbursing us for our costs, we may not have sufficient cash to meet our debt obligations. In December 2025, we also generated $20 million in gross proceeds ($18.4 million net proceeds) from the sale of shares of our Common Stock through our initial public offering.

In accordance with generally accepted accounting principles in the United States, or GAAP, we consolidate the operating results and net assets of affiliated dental practices with our financial statements. Assets of our affiliated dental practices are subject to the first priority lien securing our indebtedness under our credit facilities. The primary assets of affiliated dental practices are cash and receivables from patients and third-party payors and their primary liabilities are payables for their direct expenses, such as payables for salaries of dental professionals and payables due to us, which are eliminated through consolidation.

Results of Operations

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

Years Ended December 31,

(in thousands)

Consolidated Statements of Operations:

REVENUE

COST OF SERVICES

Salaries and benefits

Dental supplies and Laboratory fees

Office occupancy

Other practice expenses

Depreciation

TOTAL COST OF SERVICES

GROSS MARGIN

General and administrative expenses

Depreciation and amortization

OPERATING INCOME

INTEREST EXPENSE - NET

INCOME (LOSS) BEFORE TAX

PROVISION/(BENEFIT) FOR INCOME TAX

NET INCOME (LOSS)

Revenues

Total revenues for the year ended December 31, 2025, increased $14.7 million, or 6.4%, to $244.5 million from $229.8 million for the year ended December 31, 2024. General Dentistry revenue increased $8.2 million and multi-specialty dentistry revenue was higher by $6.5 million. 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 5.8%, or $13.2 million from the prior year, reflecting increased fee and reimbursement growth, increased patient visits driven by higher doctor count and increased clinical hours, and the effect of acquired practices. The increase in revenue from acquisitions in the last 12 months totaled approximately $1.5 million.

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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 year ended December 31, 2025, was $155.2 million, an increase of $14.5 million, or 10.3%, from $140.7 million for the year ended December 31, 2024. The cost increase is largely attributable to the recognition of approximately $6.7 million in share based compensation expense for the year ended December 31, 2025. For the year ended December 31, 2024, no stock compensation expense was recorded in cost of services. The remaining increase of $7.8 million primarily relates to higher salaries and benefits aligned with revenue growth, including increased headcount, higher incentive compensation, and increased contractor support.

Dental supplies and Laboratory Fees. Dental supplies and laboratory fees consist of variable costs associated with our affiliated dental practices providing dental services. Dental supplies and laboratory fees expense for the year ended December 31, 2025, was $17.2 million, an increase of $0.1 million, or 0.6%, from $17.1 million for the year ended December 31, 2024.

Office occupancy expenses. Office occupancy expenses include lease costs and other physical practice location expenses. Office occupancy expense for the year ended December 31, 2025 was $16.2 million, an increase of $0.7 million, or 4.3%, from $15.5 million for the year ended December 31, 2024, attributable to higher leasing costs, based on renewals, and expanded locations, and higher associated property taxes.

Other practice expenses. Other practice expenses include MinnesotaCare provider taxes, software and subscription costs, repairs and maintenance costs, recruiting, travel and entertainments, insurance and other operating costs. Other practice expense for the year ended December 31, 2025 was $14.4 million, an increase of $0.9 million, or 6.6%, from $13.5 million for the year ended December 31, 2024, higher as a result of a $0.7 million increase in software licensing and subscription costs, a $0.3 million increase in revenue related provider tax, offset in part by $0.2 million lower recruiting expenditures.

Cost of Services Depreciation expense. Cost of Services Depreciation expenses encompass depreciation associated with practice related assets such as dental equipment, and leasehold improvements, furniture and fixtures and computer equipment. Practice depreciation expense for the year ended December 31, 2025 was $7.9 million, an increase of $0.6 million, or 7.8%, from $7.3 million for the year ended December 31, 2024, attributable to increased capital investments in expanded production capacity, and capital investments within our existing dental practices.

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 year ended December 31, 2025 was $31.9 million, an increase of $6.4 million, or 25.3%, from $25.5 million for the year ended December 31, 2024. The increase in cost is primarily attributable to $3.5 million related higher salaries and benefits for administrative personnel, including the recognition of approximately $1.6 million increased share based compensation expense, and increases due to annual compensation increases, higher performance based incentive compensation, and higher headcount. In addition, the Company incurred approximately $2.7 million costs to support and position the organization through our transition to a public company.

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 year ended December 31, 2025 was $1.5 million, flat to the $1.5 million depreciation expense for the year ended December 31, 2024.

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Interest Expense, net

Interest expense, net, for the year ended December 31, 2025 decreased $0.2 million, or (19.3%), to $1.2 million for the year ended December 31, 2025, from $1.4 million for the year ended December 31, 2024. 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, offset in part by a change in market interest rates.

Provision (Benefit) for Income Taxes

Income tax benefit for the year ended December 31, 2025 was ($0.6) million compared to $2.9 million income tax expense for the year ended December 31, 2024. The 2025 tax benefit was derived from permanent benefits related to cash surrender value of life insurance policies and share based compensation, net of nondeductible transaction costs, and 162(m) executive officer compensation. The 2024 income tax provision included one-time items related to the initial recognition of deferred tax assets upon the conversion of certain legal entities from partnerships to C-Corporations as part of our reorganization, resulting in a tax benefit and an increase in deferred tax assets. These 2024 tax items did not occur in 2025 and are not expected to recur in future periods.

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 years ended December 31, 2025 and 2024:

Years Ended December 31,

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

Increase/ (Decrease)

% Increase/ (Decrease)

Key Financial Measures

Revenue

Gross Margin

Net Income (Loss)

Diluted EPS

Patient Visits

Same Practice Revenue Growth

Patient Retention Rate

Doctor Count

Non-GAAP Measures (1)

Adjusted EBITDA

Adjusted EBITDA Percentage

Adjusted Gross Margin

Adjusted Gross Margin Percentage

Adjusted Diluted EPS

General and Administrative Expense Percentage

(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.

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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 year ended December 31, 2025 were 719,295, an increase of 0.9% from 713,112 for the year ended December 31, 2024 even though one fewer business day existed during the year ended December 31, 2025, compared to the year ended December 31, 2024.

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 year ended December 31, 2025 was 5.8%, or 4.2% higher than the 1.6% Same Practice Revenue growth for the year ended December 31, 2024 driven by increased fee and reimbursement growth, higher doctor count, and increased clinical hours. Same dental practice locations included in Same Practice Revenue for the year ended December 31, 2025, and 2024, totaled 80 and 78, respectively.

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 year ended December 31, 2025 at 89.9%, an increase of 0.7% from 89.2% for the year ended December 31, 2024.

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 December 31, 2025 was 214, eight higher than the December 31, 2024 doctor count of 206.

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,”

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“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 year ended December 31, 2025 and 2024

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:

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For the Years Ended

Net Income (Loss) to Adjusted EBITDA

December 31,

(in thousands)

Net income (loss) attributable to Park Dental Partners, Inc.

Addback:

Provision/(Benefit) for income taxes

Interest expense, net

Depreciation and amortization

EBITDA

Adjustments:

Share based compensation

Restructuring costs

Deferred compensation

Adjusted EBITDA

Adjusted EBITDA Percentage

Adjusted EBITDA. Adjusted EBITDA for the year ended December 31, 2025 was $22.0 million, an increase of $2.6 million from the $19.4 million Adjusted EBITDA for the year ended December 31, 2024, primarily due to increased revenue and the resulting $5.2 million increased Adjusted Gross margin, partially offset by higher General and Administrative expenses related to increased annual compensation, higher performance based incentive compensation, and higher headcount. 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 year ended December 31, 2025 was 9.0%, a 60 basis point increase from 8.4% for the year ended December 31, 2024, attributable primarily due to an increase in the Adjusted Gross Margin Percentage.

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

For the Years Ended

Gross Margin to Adjusted Gross Margin

December 31,

(in thousands)

Gross Margin

Addback:

Share based compensation

Restructuring costs

Deferred compensation

Depreciation

Adjusted Gross Margin

Adjusted Gross Margin Percentage

Adjusted Gross Margin. Adjusted Gross Margin for the year ended December 31, 2025 was $49.3 million, an increase of $5.2 million, or 11.9%, from $44.0 million for the year ended December 31, 2024, attributable to increased revenue and from leverage on dental supplies and laboratory fees, and occupancy costs. 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.

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Adjusted Gross Margin Percentage. Adjusted Gross Margin Percentage for the year ended December 31, 2025 was 20.1%, a 90 basis point increase from 19.2% for the year ended December 31, 2024, primarily reflecting an increase in revenue, and from leverage on dental supplies and laboratory fees.

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

For the Years Ended

Diluted EPS to Adjusted Diluted EPS

December 31,

(in thousands, except share and per share amounts)

EARNINGS (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS:

Adjustments:

Share based compensation

Restructuring costs

Deferred compensation

Income tax effect of the Adjustments (1)

ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

Adjusted Weighted Average Diluted Shares - Reconciliation

WEIGHTED-AVERAGE SHARES USED IN COMPUTING GAAP NET LOSS PER SHARE, DILUTED

ADJUSTED WEIGHTED AVERAGE DILUTED SHARES USED IN COMPUTING ADJUSTED EARNINGS PER SHARE, DILUTED (2)

ADJUSTED DILUTED EARNINGS PER SHARE:

(1) Income tax effect is based on an estimated long-term annual effective tax rate of 28% tax rate for the period ended 2025 and 2024. 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 1,566,926 of weighted average dilutive securities for the year ended December 31, 2025, 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 year ended December 31, 2025 was $2.44, a $0.73 decrease from $3.17 for the year ended December 31, 2024, primarily due to an increase in the 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 year ended December 31, 2025 was 13.0%, a 190 basis point increase from 11.1% for the year ended December 31, 2024. This increase is attributable to higher share based compensation and restructuring costs related to becoming a publicly-traded company in 2025.

Liquidity and Capital Resources

We historically have financed our operations and growth through a combination of cash provided by operating activities and borrowings under our revolving loan facility, and most recently through an initial public offering (“IPO”). In December 2025 we completed our IPO, pursuant to which we issued and sold an aggregate of 1.54 million shares of our common stock. The aggregate net proceeds received by us from the IPO was $18.4 million, after deducting underwriting discounts and commissions, and other offering costs of $1.6 million. Cash and cash equivalents were $25.2 million and $2.7 million at December 31, 2025 and 2024 respectively. Unused availability under our line of credit was $15 million at December 31, 2025.

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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 assure you 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 $17.6 million for the year ended December 31, 2025, compared to $16.5 million for the year ended December 31, 2024. The $1.1 million increase in cash flows from operations was primarily as a result of $2.5 million higher net income after adjusting for non cash items such as depreciation, partially offset by changes in operating assets and liabilities that generated $1.4 million less cash from operations in the prior year.

Cash flows from investing activities

Our investing activities are primarily related to capital expenditures for practice growth and expansion, capital improvements in existing facilities and technology related projects. Cash flows used in investing activities were $10.6 million and $7.7 million for the years ending December 31, 2025 and 2024, respectively, higher by $3.0 million, due to $1.2 million increased investments in property and equipment, increased life insurance premiums and distributions of $1.0 million due primarily to higher distributions to participants, net of contributions in the non-qualified deferred compensation plan, and $0.8 million of increased consideration paid for business acquisitions due to the increased number of acquired practices.

Cash flows from financing activities

Cash flows from financing activities primarily reflect our borrowings and repayments under our current and prior credit facilities which were refinanced in March 2024. Cash flows from financing activities for the year ended December 31, 2025, were $15.5 million compared to cash used in financing activities of $6.7 million for the year ended December 31, 2024, a net change of $22.2 million. The change was due to $18.4 million net proceeds from the initial public offering completed in December 2025, $6.7 million lower dividend payments, and a $10.3 million net decline in the net borrowings and repayments under our line of credit. These impacts were partially offset by $13.0 million lower proceeds from our term loan.

Outstanding indebtedness

At December 31, 2025 and 2024, respectively, we had $9.8 million and $11.6 million outstanding under our respective term loans. At both December 31, 2025 and 2024, 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 allows 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%.

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

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dispose of certain assets; liquidate or dissolve any of our subsidiaries; make certain loans and investments; make certain dividends and redemptions; and substantially change the nature of our business.

Proceeds from the term loan were used to pay off the line of credit. We were in compliance with all covenants specified in the credit agreement at December 31, 2025 and 2024 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 certain current and former shareholders and related parties. The principal is due at maturity through October 1, 2037 and interest is due quarterly. 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 2025 and 2024 was 25.7% and 28.0%, respectively. The notes are secured by all of our business assets and the affiliated dental practices and are subordinated to the bank note payable and the line of credit. These secured notes have significant prepayment restrictions whereby lender approval is required for any prepayment to occur, except for notes representing approximately 25% of the outstanding value may be prepaid by the Company upon the death of the holder.

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. We do not, however, have direct recourse to the assets of affiliated dental practices, which consist primarily of cash and receivables from patients and third party payors. To the extent the affiliated dental practices do not generate sufficient revenues to pay a significant portion of our management fee, after paying for their expenses and reimbursing us for our costs, we may not have sufficient cash to meet our debt obligations.

Deferred Compensation — Our deferred compensation obligation, including current and non-current obligations was $70.6 million on December 31, 2025 and $69.1 million on December 31, 2024 and primarily consisted of active non-qualified deferred compensation plans and other inactive other 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 December 31, 2025 and 2024, the total deferred compensation liability related to the non-qualified deferred compensation plan was $23.0 million and $20.2 million, respectively.

Deferred Compensation Plans - Other — 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 December 31, 2025 and 2024, the total of these other deferred compensation plans were $47.6 million and $48.9 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 amount we will be required to pay in each year is capped at 2% of the respective Company’s annual adjusted gross revenue, as defined in the agreements.

Finance Leases — We entered into a finance lease agreement in 2020 to fund the acquisition of furniture and fixtures and equipment. The cost of furniture and fixtures and equipment is included in property and equipment on the

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consolidated balance sheet and was approximately $0.2 million on December 31, 2025 and December 31, 2024. Accumulated amortization on the furniture and fixtures and equipment at December 31, 2025 and 2024, was approximately $0.2 million and $0.1 million. respectively. Amortization of assets under finance leases is included in depreciation within cost of services, and depreciation and amortization expense. The lease is secured by the furniture and fixtures and equipment. The effective interest rate of this lease is 2.38%.

Critical Accounting Estimates

This discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. To prepare our financial statements in conformity with GAAP, we must make estimates 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. We have provided a summary of our significant accounting policies in our consolidated financial statements included elsewhere in this Annual Report. We describe below those accounting policies that require material subjective or complex judgments and that have the most significant impact on our financial condition and results of operations. Our management evaluates these estimates on an ongoing basis, based upon information currently available and on various assumptions management believes are reasonable as of the date on the front cover of this Annual Report.

Accounts Receivable and Revenue Recognition. Accounts receivable include amounts due from patients and third-party payors, including indemnity and preferred provider organizations, and government plans. Most accounts, other than for orthodontic treatments, are due as services are provided. We estimate and typically collect patient payments at the time of service based on the insurance plan fee schedule, deductible provisions and list of covered benefits for each plan. If the proper patient payment amount is not fully collected at the time of service, the patient will be directly billed for the difference. Fees for any services not collected same-day are setup as an account receivable and established on such date of service. Patient accounts receivable are uncollateralized patient obligations that are stated at the amount we expect to collect from outstanding balances. These obligations are primarily from patients, most of whom are insured under third-party payor agreements. Park Dental Partners, Inc. provides billing and collection services on behalf of the affiliated dental practices. We typically bill third-party payors on the patients’ behalf, or if a patient is uninsured, the patient is billed directly. Once claims are settled with the third-party payors, patients are billed for the remaining balance or reimbursed if overpayment was received. Payments on accounts receivable are applied to the specific claim identified on the remittance advice or statement. Park Dental Partners, Inc has the right to apply finance charges on patient past due accounts 90 days or older.

Dental services revenue is generally recognized as services are provided and reported at estimated net realizable amounts due from patients, third party payors and others for services rendered. Through our billing system, we record and report dental service revenue for each patient at rates that reflect the amount expected to be collected, based on unique fee schedules for each insurance plan which include pre-determined contractual rates with the insurance providers and co-payments and deductibles to be received from patients.

Our affiliated dental practices have agreements with third-party payors that typically provide for payments at amounts less than our established charges. Payment arrangements with major third-party payors consist of the following: (1) Medicaid: services are generally paid at prospectively determined rates per charge, per occasion of service, or per covered member and (2) Commercial insurance: payment agreements with certain insurance carriers provide for payment using prospectively agreed contractual rates per charge, discounts from established charges, and fee schedules.

We bill third party payors at our usual and customary rates and record an estimated allowance for price concessions and to align the net receivables presented to our best estimate of contractual rates to adjust for amounts that we expect will not be collected based on the contracts with the third party payors.

The process of estimating the ultimate amount of revenue to be collected is subjective and requires the application of judgment based on many factors, including contractual reimbursement rates, the determination of covered and uncovered benefits under the insurance plans and other relevant information. As a result of the inherent complexity of these calculations, our actual revenues, net income, and accounts receivable could vary from the amounts reported. For

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fiscal 2025, a one percent change in contractual allowances, with no offsetting changes to billings or procedure mix, would impact revenue by approximately 20 basis points.

Accounts receivable are presented net, and are reduced by contractual allowances and implicit price concessions that reflect our best estimate of the amounts that will not be collected. We calculate revenue and associated receivables utilizing contractual terms of third-party payer reimbursement agreements. In addition, we estimate uncollectible amounts, primarily for uninsured patients and amounts patients are personally responsible for, through a reduction in revenue and accounts receivable based on our assessment of historical collection experience, trends for each of its major payor sources of revenue, and the current status of the aging of individual accounts. Balances that are still outstanding after we have used reasonable collection efforts are written off. Write-offs have historically trended less than one (1%) percent of revenue. For fiscal 2025, a one percent change in write-offs would impact gross profit by less than $0.1 million.

Receivables are presented in the accompanying consolidated balance sheet, net of allowances for contractual adjustments, concessions, and reserve for uncollectible accounts. At December 31, 2025 net accounts receivable were $7.0 million, after contractual allowances, concessions, and reserves for uncollectible accounts of $4.9 million. At December 31, 2024 net accounts receivable were $7.4 million, after contractual allowances, concessions, and reserves for uncollectible accounts of $6.7 million. The contractual allowance and reserve for uncollectible accounts represents 41.0% and 47.7% of gross accounts receivable, at December 31, 2025 and 2024, respectively.

The overall decrease in the allowance at December 31, 2025 is primarily attributable to resolving issues that had been caused by our transition to a new dental practice management and billing system in 2024, which had reduced automation functionality for applying contractual allowances to clear the remaining billing, and for providing monthly statements and overdue collection notices. We estimate the allowance for these delayed-billing receivables by applying our historical collection rates for receivables with similar aging characteristics.

Goodwill is assessed for impairment annually as of October 1, and more frequently if events or changes in circumstances indicate that the asset might be impaired such as a when experiencing a sustained decline in the Company’s stock price, or prolonged negative industry or economic trends. The impairment test is performed at the reporting unit level, which has been determined to be the consolidated entity level. When testing goodwill for impairment, the Company may first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, the Company considers the impact of changes, if any, to the following factors: macroeconomic, industry and market factors; cost factors; changes in overall financial performance; and any other relevant events and uncertainties impacting a reporting unit. If the qualitative assessment indicates goodwill impairment is more likely than not, additional quantitative analysis is performed. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing.

We performed a qualitative assessment of our single reporting unit during 2025, which included the evaluation of macroeconomic conditions, industry and market factors, and entity-specific events including our financial performance. Based on our assessment, we concluded that it was more likely than not that the estimated fair value of our reporting unit was in excess of its carrying value, including goodwill, and concluded no impairment existed.

We performed a quantitative analysis of our single reporting unit during 2024, which included a test measuring the fair value of the reporting unit and comparing it to the carrying value, including goodwill. We estimate the fair value of our reporting unit using a discounted cash flow method which includes assumptions about a wide variety of internal and external factors. Assumptions used in the discounted cash flow method included financial projections of free cash flow, including revenue trends, terminal growth trends, and discount rates. Based on our analysis, we determined no impairment existed.

Equity-Based Compensation Plans. The 2023 Restricted Stock Plan, and 2023 Equity Incentive Plan allow us to grant equity-based awards to certain employees, consultants and directors. We granted our employees equity-based incentive awards in the form of restricted shares. Prior to our initial public offering, we measured equity-based compensation expense for equity-based awards based on the estimated fair value of those awards on the date of grant determined using market information, as discussed further below.

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Restricted stock awards granted prior to December 4, 2025 vested 25% upon the closing of our initial public offering of our Common Stock with the remaining grant vesting at the rate of 6.25% on each subsequent calendar quarter for the following 12 quarters. In the event of a change in control, the restricted shares vest immediately upon the date of the change of control. In addition, certain of these restricted stock awards contain provisions that allow for accelerated vesting in circumstances, such as proper notice of voluntary retirement, in accordance with the terms of the applicable award agreements. Share based compensation cost to employees and doctors employed by our affiliates is measured at the date of grant, based on the calculated fair value of the share based award, and will be recognized as expense over the requisite service period (generally the vesting period of the award). The 2023 Restricted Stock Plan was terminated with respect to future awards effective April 23, 2025. Restricted stock awards granted after December 4, 2025 vest annually over four years, with 25% vesting on each of the first four anniversaries of the grant date.

Prior to the completion of our IPO, the fair value of our equity-based awards was determined by our Board, with input from management and third-party valuations, as there was no public market for our Common Stock. In the absence of a public trading market of our Common Stock, our Board considered numerous objective and subjective factors to determine the best estimate of the fair value of our Common Stock at each incentive unit grant date, including:

Independent third-party valuation of our shares

the lack of marketability of our shares

In valuing our shares, the Board determined the value using the income, market and cost approach valuation methods.

The income approach estimates value based on the present worth of future economic benefits to be derived from ownership. Value indications were developed by discounting expected future net cash flows to their present worth at market-based rates of return. The market approach estimates value based on applying valuation multiples derived from an analysis of recent comparable sales or offerings and applying similar ratios to our financial results. The cost approach estimates value based on the summation of the fair market values of the organization’s net assets.

In the valuation of shares, the income, market and cost approach were considered and weighted, as applicable, based on their appropriateness considering relevant facts and circumstances.

We also considered an appropriate discount adjustment to recognize the lack of marketability and liquidity due to the fact that owners of private companies do not have access to trading markets similar to shareholders of public companies. The discount for marketability was determined using the quantitative marketability discount model.

Application of these approaches involves the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, discount for lack of marketability, market multiples, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our restricted shares.

For equity award valuations after the completion of our IPO, the fair value of each share of underlying common stock is based on the closing price of our common stock as reported on the date of grant on the Nasdaq stock exchange. We recognize the impact of forfeitures in equity-based compensation expense when they occur.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities with a single reportable segment to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure(s) of a segment’s profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment’s profit or loss to assess

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performance and decide how to allocate resources. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. We adopted the standard effective January 1, 2024.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on either a prospective or retrospective basis, with early adoption permitted. We adopted the standard effective January 1, 2025.

Other Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation, in the notes to the financial statements, of certain cost and expense captions presented on the face of the Company’s Statement of Operations, to provide enhanced transparency to investors. The update may be applied either prospectively or retrospectively. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact ASU 2024-03 will have on our disclosures.