Regarding Denver-based Birner Dental Management Services Inc. (OTC bulletin board: BDMS), and activist shareholders :
Recall C.R.S 12-35-129 (v):

"Sharing any professional fees with anyone except those with whom the dentist or dental hygienist is lawfully associated in the practice of dentistry or dental hygiene; except that a licensed dentist or dental
hygienist may pay an independent advertising or marketing agent compensation for advertising or marketing services rendered by the agent for the benefit of the licensed dentist or dental hygienist,including compensation that is based on the results or performance of the services on a per patient basis"



We point to statements found in the form 10-Q SEC filing from May,13, 2016

"Under the typical Management Agreement, the P.C. pays the Company a management fee equal to the Adjusted Gross Center Revenue of the P.C. less compensation paid to the dentists, dental hygienists and dental assistants employed at the Office of the P.C. Adjusted Gross Center Revenue is comprised of all fees and charges booked each month by or on behalf of the P.C. as a result of dental services provided to patients at the Office, less any adjustments for uncollectible accounts, professional courtesies and other activities that do not generate a collectible fee. "

"The Management Agreement represents the Company's right to manage the Offices during the 40-year term of the Management Agreement. The assigned value of the Management Agreement is amortized using the straight-line method over a period of 25 years.  Amortization remained constant at approximately $211,000 for the quarters ended March 31, 2016 and 2015."

We note that Advertising and Marketing is an itemized direct expense, totaling a mere $158,780 for the quarter ending March 31.

Finally we note that the Company has paid a dividend of $0.22 per share for many recent quarters.   One can verify that the stock is held by many institutions, for example, Renaissance Technologies Corp, which are not licensed to practice dentistry.


Reading the above, we conclude that "typically" the Company collects all fees and keeps all profits.  Certainly, this cannot fall into the "independent advertising or marketing agent" exception provided in C.R.S 12-35-129 (v).  Even without the description of Adjusted Gross Center Revenue, simple arithmetic shows that the total revenue exceeds the advertising and marketing expenses by a large multiple. We feel that the 40 year contracts, recorded as "intangible assets," constitute an illegal arrangement to collect dental fees from patients.  Trading such assets on the open market raises serious public interest concerns.