Apple Orthodontix, Inc.
Ticker:AOI One West Loop South, Suite 100
Exchange:New York Stock Exchange Houston, TX 77027
Industry:Service (SIC Code 8021) (713) 964-6882

Offering Information
Type of Shares:Class A Common Shares Filing Date:3/5/97
U.S. Shares:2,350,000 Offer Date:5/22/97
Non-U.S. Shares:0 Filing Range:$7.00 - $8.00
Primary Shares:2,350,000 Offer Price:$7.00
Secondary Shares:0 Gross Spread:$0.49
Offering Amount: $17,625,000 Selling:$0.29
Expenses: - Reallowance:$0.10
Shares Out After:8,333,333

Primary Underwriting Group
ManagerTierPhone
Bear, Stearns & Co. Inc.Lead Manager (212) 272-4850

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Jackson & Walker
Auditor: Arthur Andersen

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
12/31/96 12/31/96
Revenue:$18.14Assets:$16.80
Net Income:$1.02Curr Assets:
EPS:$0.14Liabilities:$2.91
Prior EPS:-$0.47Curr Liabilities:
Cash Flow/Oper:Equity:$13.88
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company was founded in July 1996 to provide practice management services to orthodontic practices in the United States and Canada. The company's objective is to provide a full complement of practice management services designed to drive internal growth by enhancing the ability of Affiliated Practices to: (i) deliver quality, affordable orthodontic treatment primarily on a fee-for-service basis; (ii) stimulate demand in their local markets by increasing consumer awareness of the benefits, availability and affordability of orthodontic treatment; and (iii) improve the productivity and profitability of their practices. The company will also seek to grow through acquisitions. The company will earn revenue by providing management and other services to Affiliated Practices, including staffing, education and training, billing and collections, cash management, purchasing, inventory management, payroll processing, employee benefits administration, advertising production and other marketing support, patient scheduling, financial reporting and analysis, productivity reporting and analysis, recruiting and support for acquisitions, new site development and other capital requirements.

Use of Proceeds
The proceeds from the proposed offering will be used to fund the cash portion of the purchase price for the assets of the Founding Affiliated Practices, to repay indebtedness and for general corporate purposes which are expected to include future acquisitions, the development of satellite offices and future capital expenditures..

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