Birner Dental Management Services, Inc. Provides Information To Shareholders In Connection With 2016 Annual Meeting

DENVER, June 6, 2016

On May 19, 2016, a group of activist shareholders led by Mark Birner (the Mark Birner Group) filed a Schedule 13D with the Securities and Exchange Commission. Among other things, the Schedule 13D disclosed what had been private communications between the Company and its Board of Directors and the Mark Birner Group and between the Company and certain other parties that have expressed an interest in the Company. The Company's shareholders are advised that today the Company became aware that the Mark Birner Group intends to nominate two insurgent directors selected by and associated with the Mark Birner Group to the Company's Board of Directors at the Company's Annual Meeting of Shareholders.

Fred Birner, CEO and Chairman of the Board of the Company, said, "We are disappointed that the Mark Birner Group would attempt to take these last minute actions at our Annual Meeting. Since at least August 2015, we have attempted to engage in discussions with the Mark Birner Group. They have refused reasonable and customary requests to enter into a confidentiality agreement that would enable us to have these discussions that would provide them with useful information about the Company and its prospects. These refusals continued last week, and they were unwilling to sign a confidentiality agreement until this afternoon.  Instead, the Mark Birner Group elected to take public what had been private communications between the Company and its Board and themselves and between the Company and certain other parties that have expressed an interest in the Company. This is very unfortunate and, we believe, harmful to the Company and its shareholders. As a result, we believe we have no choice but to make disclosures and address issues that we believe would have better served the Company's shareholders had they been conducted privately."

The Company announced today that, as part of the Board of Directors' ongoing evaluation of the Company's long-term strategic options, it has engaged a reputable middle market investment banking firm with significant experience in the Company's industry as its financial advisor. 

Fred Birner said, "Our Board of Directors has been very responsive to multiple communications and demands made by the Mark Birner Group over the past year, including the most recent demands by that group in its letter of May 9, 2016. The Board's decision to engage a financial advisor, which decision preceded the Mark Birner Group's May 9, 2016 letter by over a month, is just one such example. In addition, the Board has been closely monitoring the Company's financial performance, assessing the Company's strategic options and carefully considering expressions of interest in the Company." 

The Company also announced that it has negotiated increases in its two major capitation agreements with its two principal insurance carriers as well as a significant increase in the number of patients in its network. These agreements are expected to generate additional incremental revenue for the Company.

Fred Birner stated, "These matters involving the Mark Birner Group have been highly distracting to the management and employees of our Company and may be adversely affecting our business and results of operations. Among other things, we have been required to incur significant business time and legal and other expenses to address the communications and demands from the Mark Birner Group. As one of the Company's largest shareholders, I am aligned with every other shareholder in seeking to maximize the value of the Company. Since 2004, the Company has paid out almost $38 million to its shareholders in dividends and share repurchases. The Mark Birner Group's proposal to replace two of the Company's experienced independent directors who are highly familiar with the Company, its business and its prospects with two new directors of their choosing at this critical stage in the life of the Company would be a disservice to the Company's shareholders. We met with the Mark Birner Group today to provide them with valuable information about our Board's plans, including information disclosed in this press release, and to impress upon them that this 11th hour, "midnight raid" approach to governance of the Company may have serious adverse consequences for the Company and its shareholders.  We believe it is appropriate that the shareholders know our views on these matters in connection with the Company's Annual Meeting."