Implant Centers of America (ICOA) was conceived as a natural extension of the Mini Dental Implant Centers of America concept, where dentists and their offices have made restorative implant dentistry central to their practice. ICOA will be formed by a select group of founding members, including dentists and others with extensive experience in the dental space. The primary goal of this founding group is to design a platform that maximizes the value of dentistry for all stakeholders, including the member dentists, patients, and their supporters.

As a founding member of ICOA, you will be tasked with determining many of the ownership and compensation structures of the Implant Centers of America DSO. ICOA currently envisions a model where founding dentists contribute 100% of their practice to Implant Centers of America while still maintaining operational control over their individual offices. The founding members will also play a key role in designing mechanisms for structuring ownership interests, including opportunities for new members and staff to participate in equity incentive plans. It is imperative that any ownership structures are designed to comply with the rules and regulations of all applicable federal, state, or other oversight bodies.

Yes, as a dentist within the Implant Centers of America DSO, you will maintain operational control of your practice. Our model is designed to empower dentists by allowing them to continue running their practices according to their professional judgment and standards, while removing the administrative burdens associated with accounting, paying bills, among others.

While you retain this control, we offer a comprehensive suite of operational and financial improvement options that you can choose to implement. These options are designed to enhance your practice’s efficiency, profitability, and patient care quality. With the support of ICOA, you can access resources and expertise in areas such as marketing, administrative support, financial management, and technological advancements.

Many of these improvement options and their implementation structures will be determined by the founding members of ICOA. This collaborative approach ensures that the strategies and tools provided are aligned with the needs and preferences of our member dentists.

In summary, joining ICOA allows you to maintain the autonomy of your practice while benefiting from additional support and resources tailored to help you succeed.

The due diligence expenses for joining Implant Centers of America include an engagement fee and a monthly consulting fee. These fees are used to cover the expenses related to due diligence, including Quality of Earnings analysis, legal fees, and other typical expenses related to evaluating a dental office’s operations and financial health. The monthly consulting fee will cease after the formation of the DSO.

Though we are striving to keep our due diligence fees below other comparable opportunities by negotiating engagements with advisors who can cap fees given the scope of certain deliverables, we are pleased to announce that we envision fully refunding these fees to practices that ultimately join the DSO. The refunds will be issued from the proceeds of our first funding event, which we anticipate will be through a loan taken soon after the formation of the DSO. This approach aims to support and incentivize practices to become part of our network without bearing the long-term costs of due diligence expenses.

The value of a dental practice being contributed to ICOA is determined through an objective valuation process focused on EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and a uniform EBITDA valuation multiple. This approach provides a clear picture of the practice’s profitability and financial health, while applying a founder’s EBITDA multiple in recognition of your participation in the formation stage of Implant Centers of America.

The process typically involves thorough due diligence, where various aspects of the practice are scrutinized, including financial statements, patient records, operational efficiencies, and market position. The validation of the financials is performed through a process known as Quality of Earnings, which yields an adjusted EBITDA considering any customary adjustments. The valuation multiple applied to EBITDA reflects industry standards, growth potential, and risk factors specific to the practice.

By combining these financial metrics with a detailed analysis of the practice’s operational and market dynamics, a fair and accurate valuation is established, ensuring that the contributing practice is appropriately valued within the DSO structure.

When we talk about the quality of earnings, we’re looking at how reliable and sustainable a dental practice’s earnings are. It’s not just about how much money the practice makes, but also about where that money comes from and whether it’s likely to continue in the future.

Key factors include:

• Consistency: Earnings should come from regular, ongoing operations, such as routine dental procedures and patient visits, rather than one-time events or unusual circumstances.
• Sustainability: The practice should have a stable patient base and a steady stream of new patients, indicating that the earnings can be maintained over the long term.
• Accuracy: Financial records should be clear and accurate, reflecting true revenue and expenses without any adjustments or unusual items that could mislead the evaluation.
• Efficiency: Operational efficiencies, such as cost management and effective use of resources, contribute to higher quality earnings by ensuring the practice runs smoothly and profitably.

High-quality earnings mean that the practice’s financial health is solid, making it a more attractive and valuable addition to Implant Centers of America. This helps ensure that the valuation based on EBITDA and other financial metrics is fair and reflective of the practice’s true worth.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s an important operational metric used to approximate the true operational performance of a dental practice. By focusing on EBITDA, we strip away non-cash expenses, non-recurring items, and other incomes and expenses that wouldn’t occur after the formation of ICOA.

Here’s why EBITDA is important:

• Operational Focus: EBITDA provides a clear picture of the practice’s core operating performance by excluding items like interest, taxes, depreciation, and amortization. These exclusions help to highlight the practice’s profitability from its main dental services.
• Consistency: Non-recurring items, such as one-time legal fees or extraordinary gains, can distort the true financial performance of a practice. EBITDA removes these items to present a more consistent and reliable measure of ongoing performance.
• Comparability: By excluding non-operational factors, EBITDA allows for better comparisons between different practices. It helps in assessing how efficiently a practice is being run relative to others, regardless of differing financial structures or capital expenditures.
• Post-DSO Formation: After joining the DSO, certain costs and revenues may change or be eliminated. EBITDA helps to estimate the practice’s financial health in this new context, making it a useful metric for evaluating its value and potential within the DSO.

In summary, EBITDA is a key metric that helps to assess the operational efficiency and profitability of a dental practice by focusing on core earnings and eliminating factors that do not reflect ongoing operations. This makes it a valuable tool for understanding the practice’s true financial performance and potential.