<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
             FORM 10-Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED           JUNE 30, 1999
                              --------------------------------------------------

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________________ TO ______________________

COMMISSION FILE NUMBER:     000-25549
                        --------------------------------------------------------

                                INTERDENT, INC.
--------------------------------------------------------------------------------
           (Exact name of registrant as specified in its charter)

              DELAWARE                                 95-4710504
   --------------------------------       ------------------------------------
   (State or other jurisdiction of        (I.R.S. Employer Identification No.)
    incorporation or organization)

           222 NO. SEPULVEDA BLVD., SUITE 740, EL SEGUNDO, CA 90245-4340
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                  (310) 765-2400
--------------------------------------------------------------------------------
               (Registrant's telephone number, including area code)

                                    NO CHANGE
--------------------------------------------------------------------------------
               (Former name, former address and former fiscal year,
                          if changed since last report)


Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes     No  X
                 ---     ---

As of August 1, 1999, 20,933,445 shares of the issuer's common stock were
outstanding.

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                                 INTERDENT, INC.
                                                AND SUBSIDIARIES
                                      Condensed Consolidated Balance Sheets
                                 (Unaudited, in thousands, except share amounts)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                             JUNE 30,     DECEMBER 31,
                                         ASSETS                                                1999          1998
                                                                                           ------------   ------------
<S>                                                                                        <C>            <C>
Current assets:
    Cash and cash equivalents                                                              $    2,728     $    8,244
    Accounts receivable, net                                                                   13,286         10,616
    Management fee receivables                                                                  5,533          4,536
    Current portion of notes and advances receivable from professional associations, net        1,182          1,157
    Supplies inventory                                                                          3,213          2,887
    Prepaid and other current assets                                                            3,650          3,164
                                                                                           ------------   -----------
           Total current assets                                                                29,592         30,604
                                                                                           ------------   -----------
Property and equipment, net                                                                    25,277         21,379
Intangible assets, net                                                                        123,726        105,111
Notes and advances receivable from professional associations, net of current portion            8,429          4,062
Other assets                                                                                    3,423          3,978
                                                                                           ------------   -----------
           Total assets                                                                    $  190,447     $  165,134
                                                                                           ============   ===========
              LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                                       $    3,275     $    4,223
    Accrued payroll and payroll related costs                                                   8,704          4,862
    Other current liabilities                                                                  12,691         10,809
    Current portion of long-term debt and capital lease obligations                             3,672          4,001
                                                                                           ------------   -----------
           Total current liabilities                                                           28,342         23,895
                                                                                           ------------   -----------
Long-term liabilities:
    Obligations under capital leases, net of current portion                                      850          1,243
    Long-term debt, net of current portion                                                     55,014         35,854
    Convertible senior subordinated debt                                                       30,000         30,000
    Deferred income taxes                                                                       2,947          2,914
    Other long-term liabilities                                                                   145            136
                                                                                           ------------   -----------
           Total long-term liabilities                                                         88,956         70,147
                                                                                           ------------   -----------
           Total liabilities                                                                  117,298         94,042
                                                                                           ------------   -----------
Redeemable common stock, no par value, 180,712 shares issued and outstanding                    2,109          2,102
                                                                                           ------------   -----------
Shareholders' equity:
    Preferred stock, 30,000,000 shares authorized:
       Preferred stock - Series A, no par value, 100 shares authorized and
      outstanding                                                                                   1              1
       Convertible Preferred stock - Series B, no par value, 70,000 shares authorized,
         zero shares issued and outstanding                                                         -              -
       Preferred stock - Series C, no par value, 100 shares authorized, zero shares
      issued and outstanding                                                                        -              -
       Convertible Preferred stock - Series D, no par value, 2,000,000 shares
      authorized, 1,628,663 shares issued and outstanding                                      12,089         12,089
    Common stock, no par value, 50,000,000 shares authorized, 20,752,252 and 20,584,416
      shares issued and outstanding in 1999 and 1998, respectively                                 21             21
     Additional paid-in capital                                                                61,760         61,129
    Shareholder notes receivable                                                                 (606)          (596)
    Accumulated deficit                                                                        (2,225)        (3,654)
                                                                                           ------------   -----------
           Total shareholders' equity                                                          71,040         68,990
                                                                                           ------------   -----------
           Total liabilities, redeemable common stock and shareholders' equity             $  190,447     $  165,134
                                                                                           ============   ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                                        2
<PAGE>
                                               INTERDENT, INC.
                                              AND SUBSIDIARIES

                               Condensed Consolidated Statements of Operations

                             (Unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                    THREE MONTHS ENDED         SIX MONTHS ENDED
                                                                         JUNE 30,                  JUNE 30,
                                                                    1999         1998         1999         1998
                                                                 ----------   ----------   ----------   ----------
<S>                                                              <C>          <C>          <C>          <C>
Dental practice net patient service revenue                      $   44,019   $   20,644   $   84,416   $   38,503
Net management fees                                                  10,785        7,442       21,501       12,738
Licensing and other fees                                                259          173          524          294
                                                                 -----------   ----------   ----------   ----------
           Net revenues                                              55,063       28,259      106,441       51,535
Cost and expenses:
    Clinical salaries and benefits                                   21,188       10,501       40,839       19,325
    Practice nonclinical salaries and benefits                        7,481        4,269       14,473        7,774
    Dental supplies and lab expenses                                  6,870        3,643       13,285        6,691
    Practice occupancy expenses                                       3,189        1,932        6,312        3,540
    Practice selling, general and administrative expenses             5,633        2,844       11,415        5,450
    Corporate selling, general and administrative expenses            2,999        1,989        5,795        3,786
    Corporate restructure and merger costs                            1,348           -         5,029           -
    Depreciation and amortization                                     2,232        1,101        4,349        1,928
                                                                 -----------   ----------   ----------   ----------
           Operating income                                           4,123        1,980        4,944        3,041
                                                                 -----------   ----------   ----------   ----------
Nonoperating income (expense):
    Interest expense, net                                            (1,409)        (458)      (2,760)        (653)
    Other income (expense), net                                         (30)          11           (8)          (7)
                                                                  -----------   ----------   ----------   ----------
           Nonoperating expense, net                                 (1,439)        (447)      (2,768)        (660)
                                                                  -----------   ----------   ----------   ----------
           Income before income taxes                                 2,684        1,533        2,176        2,381
Provision for income taxes                                              549          593          740          915
                                                                  -----------   ----------   ----------   ----------
           Net income                                                 2,135          940        1,436        1,466

Accretion of redeemable common stock                                     (3)          (5)          (7)         (12)
                                                                  -----------   ----------   ----------   ----------
           Net income attributable to common stock                $   2,132     $    935   $    1,429   $    1,454
                                                                  ===========   ==========   ==========   ==========
Income per share attributable to common stock - basic             $    0.10     $   0.05   $     0.07   $     0.07
                                                                  ===========   ==========   ==========   ==========
Income per share attributable to common stock - diluted           $    0.09     $   0.04   $     0.06   $     0.07
                                                                  ===========   ==========   ==========   ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                                  3
<PAGE>

                                                INTERDENT, INC.
                                               AND SUBSIDIARIES

                                 Condensed Consolidated Statements of Cash Flows

                                            (Unaudited, in thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                                              SIX MONTHS ENDED JUNE 30,
                                                                                                 1999           1998
                                                                                             -----------    -----------
<S>                                                                                          <C>            <C>
Cash flows from operating activities:
    Net income                                                                               $    1,436     $    1,466
    Adjustments to reconcile net income to net cash provided by (used in) operating
      activities:
      Depreciation and amortization                                                               4,349          1,928
      Loss on investment in joint venture                                                             -              4
      Non-employee stock options granted and stock issued for fees and compensation                  28             32
      Interest accrued on shareholder notes receivables                                             (10)            (9)
      Amortization of deferred financing costs                                                      134              3
      Deferred income taxes                                                                          33            (20)
    Changes in assets and liabilities, net of the effect of acquisitions:
        Accounts receivable, net                                                                 (1,129)         1,114
        Management fee receivables from professional associations                                  (484)        (2,472)
        Supplies inventory                                                                            3              -
        Prepaid expenses and other current assets                                                  (207)          (973)
        Other assets                                                                                (38)          (245)
        Accounts payable                                                                         (1,217)        (1,157)
        Accrued payroll and payroll related costs                                                 2,836            442
        Accrued merger and restructure                                                              (82)        (1,003)
        Other liabilities                                                                          (885)          (748)
                                                                                             ------------   ------------
                Net cash provided by (used in)  operating activities                              4,767         (1,638)
                                                                                             ------------   ------------
Cash flows from investing activities:
    Purchase of property and equipment                                                           (3,804)        (3,537)
    Net payments received (advances) on notes receivable from professional associations            (509)          (396)
    Advances to professional associations                                                        (3,948)          (878)
    Cash paid for acquisitions, including direct costs, net of cash acquired                    (17,981)       (23,380)
                                                                                             ------------   ------------
                Net cash used in investing activities                                           (26,242)       (28,191)
                                                                                             ------------   ------------
Cash flows from financing activities:
    Net proceeds from credit facilities                                                          18,745         11,000
    Proceeds from issuance of long term debt                                                          -         31,216
    Payments on long-term debt and obligations under capital leases                              (2,627)       (21,616)
    Payments of deferred financing costs                                                           (217)           (13)
    Proceeds from issuance of common and preferred stock                                             56         13,825
    Exercise of stock options                                                                         2             23
                                                                                             ------------   ------------
                Net cash provided by financing activities                                        15,959         34,435
                                                                                             ------------   ------------
                Increase (decrease) in cash and cash equivalents                                 (5,516)         4,606

Cash and cash equivalents, beginning of period                                                    8,244         20,670
                                                                                             ------------   ------------
Cash and cash equivalents, end of period                                                     $    2,728     $   25,276
                                                                                             ============   ============
Cash paid for interest                                                                       $    3,128     $    1,099
                                                                                             ============   ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                                     4
<PAGE>

                                 INTERDENT, INC.
                                AND SUBSIDIARIES

                             June 30, 1999 and 1998

                Notes to Condensed Consolidated Financial Statements

            (Unaudited, in thousands, except per share and share amounts)


(1)  ORGANIZATION

InterDent, Inc. ("InterDent" or the "Company"), incorporated on October 13,
1998, is a Delaware corporation headquartered in El Segundo, California.
InterDent is one of the largest providers of dental practice management services
to multi-specialty dental professional corporations and associations ("PAs") in
the United States. Including affiliations completed through August 5, 1999,
InterDent provides management services to professional dental associations at
204 dental offices with 603 dentists, including 139 specialists, and 1,744
operatories in selected markets in California, Florida, Georgia, Hawaii, Idaho,
Indiana, Michigan, Nevada, Oregon, Pennsylvania, and Washington.

As part of a delivery network of multi-specialty dental care, the Company
provides management services to affiliated PAs under long-term management
service agreements. Under the terms of the management service agreements, the
Company bills and collects patient receivables and provides all administrative
support services to the PAs. The dentists employed through the Company's network
of PAs provide comprehensive general dentistry services and offer specialty
dental services, which include endodontics, oral pathology, oral surgery,
orthodontics, pedodontics, periodontics, and prosthodontics. The Company's
practice management services facilitate the delivery of convenient, high
quality, comprehensive and affordable dental care to patients in a comfortable
environment. The Company seeks to build geographically dense dental practice
networks in selected markets through a combination of affiliations with dental
practices existing in the area and selectively developing new offices.

(2)  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

On March 12, 1999, Gentle Dental Service Corporation ("GDSC") and Dental Care
Alliance, Inc. ("DCA") completed mergers in which each entity became a
wholly-owned subsidiary of InterDent, Inc., a newly formed corporation. The
combination is being accounted for using the pooling-of-interests method of
accounting and reflects the combined financial position and operating results of
GDSC and DCA for all periods presented. The consolidated financial statements
include the accounts of InterDent, Inc. and its subsidiaries and certain PAs, as
discussed below. All significant intercompany transactions and accounts have
been eliminated.

The Emerging Issues Task Force ("EITF") of the Financial Accounting Standards
Board has evaluated certain matters relating to the physician practice
management industry (EITF issue number 97-2) and reached a consensus on the
accounting for transactions between physician practice management companies and
physician practices and the financial reporting of such entities. For financial
reporting purposes, EITF 97-2 mandates the consolidation of physician practice
activities with the practice management company when certain conditions have
been met, even though the practice management company does not have an equity
investment in the physician practice. The accompanying financial statements are
prepared in conformity with the consensus reached in EITF 97-2.

Corporate practice of medicine laws in the states in which InterDent currently
operates generally prohibit it from owning dental practices. In response to
these laws, the Company has executed management services agreements ("MSAs")
with various PAs. Under those circumstances where the MSAs meet the criteria for
consolidation as outlined in EITF 97-2, all the accounts of those PAs are
included in the accompanying consolidated financial statements. Accordingly, the
consolidated statements of operations include the net patient revenues and
related expenses of those PAs. As of June 30, 1999 there are 112 clinical
locations included within the condensed consolidated statements of operations,
including the net patient revenues and related expenses of the PAs.

In instances where the MSAs have not met the criteria for consolidation, the
Company does not consolidate the accounts of the PAs. Accordingly, the
consolidated statements of operations exclude the net patient revenues and
expenses of these PAs, and include only the Company's net management fee revenue
generated from those MSAs and the Company's corresponding expenses associated
with fulfilling its obligations under those MSAs. There are 79 clinical
locations accounted for in this manner within the condensed consolidated
statements of operations as of June 30, 1999.


                                       5
<PAGE>

INTERIM REPORTING

The accompanying unaudited interim consolidated financial statements of
InterDent have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). Certain information and note
disclosures normally included in annual consolidated financial statements have
been condensed or omitted as permitted under those rules and regulations. We
believe all adjustments, consisting only of normal, recurring adjustments
considered necessary for a fair presentation, have been included and that the
disclosures made are adequate to insure that the information presented is not
misleading. To obtain a more detailed understanding of our results, it is
suggested that these financial statements be read in conjunction with the
consolidated financial statements and related notes for the year ended December
31, 1998 included in Form 8-K/A filed on May 28, 1999. The results of operations
for the three and six months ended June 30, 1999 are not necessarily indicative
of the results of operations for the entire year.

NET REVENUES

Revenues consist primarily of PA net patient service revenue and Company net
management fees. Net patient revenue represents the consolidated revenue of the
PAs reported at the estimated net realizable amounts from patients, third party
payors and others for services rendered, net of contractual adjustments. Net
management fees represent amounts charged under MSAs to the unconsolidated PAs
on an agreed-upon percentage of the PAs net patient service revenue, net of
provisions for contractual adjustments and doubtful accounts.

RECEIVABLE FROM PAS

Management fee receivable represents amounts owed to the Company from
unconsolidated PAs related to revenue recorded in accordance with their MSAs and
is recorded based upon the net realizable value of patient accounts receivables
of the PAs. The Company reviews the collectibility of the patient account
receivables of the PAs and adjusts its management fee receivable accordingly.

Advances consist primarily of receivables due in connection with working capital
advances made to certain unconsolidated PAs. Such advances bear interest at
8.5%, adjusted for any changes in the Company's borrowing rate, and are due upon
demand. Note receivables relate to the financing of medical and non-medical
capital additions made by certain unconsolidated PAs. The notes, which are
personally guaranteed by the PA owners, bear interest at rates ranging between
8.5% and 18.5%. The collectibility of receivables from PAs is reviewed based
upon cash flow of the PAs and, where appropriate, the fair market value of
collateral assets. Advance and note amounts to be collected within the next year
are classified as current assets in the accompanying condensed consolidated
balance sheets and are recorded net of provision for allowance.

INTANGIBLE ASSETS

Intangible assets result primarily from the excess of cost over the fair value
of net tangible assets purchased. Such intangibles relate primarily to
non-competition covenants, management services agreements, and goodwill
associated with dental practice acquisition asset and stock purchase
transactions. Intangibles relating to management service agreements consist of
the costs of purchasing the rights to provide management support services to PAs
over the initial non-cancelable terms of the related agreements. Under these
agreements, the PAs have agreed to provide dental services on an exclusive basis
only through facilities provided by the Company which is the exclusive
administrator of all non-dental aspects of the acquired PAs, providing
facilities, equipment, support staffing, management and other ancillary
services. The agreements, which are generally for 25 to 40 year terms, are
non-cancelable except for performance defaults, as defined. Intangible assets
are amortized on the straight-line method, ranging from 5 years for other
intangible assets to 25 years for MSAs and goodwill.

USE OF ESTIMATES

In preparing the financial statements conforming to Generally Accepted
Accounting Principals ("GAAP"), we have made estimates and assumptions that
affect the following:

     -  Reported amounts of assets and liabilities at the date of the financial
        statements;
     -  Disclosure of contingent assets and liabilities at the date of the
        financial statements; and
     -  Reported amounts of revenues and expenses during the period.

Actual results could differ from those estimates.


                                       6
<PAGE>

NET INCOME PER SHARE

The Company has adopted Statement of Financial Accounting Standards No. 128,
Earnings Per Share ("SFAS 128"). In accordance with SFAS 128, the Company
presents "basic" earnings per share, which is net income divided by the average
weighted common shares outstanding during the period, and "diluted" earnings per
share, which considers the impact of common share equivalents. Dilutive
potential common shares represent shares issuable using the treasury stock
method. Dilutive potential common shares comprised of convertible subordinated
debt have been excluded from the computation of diluted income per share for the
three and six months ended June 30, 1999 and 1998, as their effect is
anti-dilutive. Such excluded issuable shares were 3,257,328. The following table
summarizes the computation of income per share:

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                  JUNE 30,                         JUNE 30,
                                                            1999            1998             1999            1998
                                                       -------------   -------------    -------------   -------------
<S>                                                    <C>             <C>              <C>             <C>
Net income attributable to common stock                $      2,132    $        935     $      1,429    $      1,454
                                                       =============   =============    =============   =============
Basic Shares Reconciliation:
  Weighted average common shares outstanding             20,924,400      19,499,396       20,912,843      19,453,799
  Contingently issuable common shares                          -            140,714             -            131,120
  Contingently repurchasable common shares                 (566,422)            -           (565,504)           -
                                                       -------------   -------------    -------------   -------------
       Basic shares                                      20,357,978      19,640,110       20,347,339      19,584,919
                                                       =============   =============    =============   =============
 Income per share attributable to common stock -
  basic                                                $       0.10    $       0.05     $       0.07    $       0.07
                                                       =============   =============    =============   =============
Diluted Shares Reconciliation:
  Basic shares                                           20,357,978      19,640,110       20,347,339      19,584,919
  Effects of dilutive potential common shares:
    Convertible preferred stock                           1,628,665         810,753        1,628,665         407,616
    Warrants                                                 90,591         263,624          136,684         240,249
    Stock options                                           227,770         491,090          195,760         397,705
    Put rights                                               90,121          44,015           95,775          48,117
     Contingent shares, non-issuable                        110,165            -              98,380            -
                                                       -------------   -------------    -------------   -------------
       Diluted shares                                    22,505,290      21,249,592       22,502,603      20,678,606
                                                       =============   =============    =============   =============
 Income per share attributable to common stock -
  diluted                                              $       0.09    $       0.04     $       0.06    $       0.07
                                                       =============   =============    =============   =============
</TABLE>

(3)      NET REVENUE

Revenues consist primarily of PA net patient service revenue and Company net
management fees. Net patient revenue represents the consolidated revenue of the
PAs reported at the estimated net realizable amounts from patients, third party
payors and others for services rendered, net of contractual adjustments. Net
management fees represent amounts charged under MSAs to the unconsolidated PAs
on an agreed-upon percentage of the PAs net patient service revenue, net of
provisions for contractual adjustments and doubtful accounts.

The following represents amounts included in the determination of dental
practice net patient service revenue and net management fees (in thousands):

<TABLE>
<CAPTION>
                                                        FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS ENDED
                                                                  JUNE 30,                         JUNE 30,
                                                            1999            1998             1999            1998
                                                       -------------   -------------    -------------   -------------
<S>                                                    <C>             <C>              <C>             <C>

Dental practice net patient service revenue-all PAs    $     59,929    $     31,468     $    116,001    $     57,078
LESS:
Dental practice net patient service revenue-
unconsolidated PAs                                          (15,910)        (10,824)         (31,585)        (18,575)
                                                       -------------   -------------    -------------   -------------
Reported practice net patient service revenue          $     44,019    $     20,644     $     84,416    $     38,503
                                                       -------------   -------------    -------------   -------------
Dental practice net patient service revenue-
unconsolidated PAs                                     $     15,910    $     10,824     $     31,585    $     18,575


                                                       7
<PAGE>

LESS:
Amounts retained by dentists                                 (5,125)         (3,383)         (10,084)         (5,837)
                                                       -------------   -------------    -------------   -------------
Net management fees                                    $     10,785    $      7,441     $     21,501    $     12,738
                                                       =============   =============    =============   =============
</TABLE>


(4)   BUSINESS COMBINATIONS AND DENTAL PRACTICE ACQUISITIONS

BUSINESS COMBINATIONS

On March 12, 1999 GDSC and DCA completed mergers in which each entity became a
wholly-owned subsidiary of InterDent, Inc. In the mergers, each share of GDSC's
9,178,602 total shares of outstanding common stock, including earn-out shares
that were earned but not yet issued, automatically converted into one share of
common stock of InterDent. Each 10 shares of GDSC's 100 outstanding shares of
Preferred Stock - Series C automatically converted into one share of common
stock of InterDent. Also, each share of GDSC's 100 outstanding shares of
Preferred Stock - Series A and 1,628,663 outstanding shares of Convertible
Preferred Stock - Series D converted into one share of preferred stock of
InterDent with the same rights, preferences, and privileges as to InterDent as
the share of preferred stock had with respect to GDSC. Each share of DCA's
7,031,187 total shares of outstanding common stock was exchanged for 1.67 shares
of InterDent stock. Upon consummation of the mergers, GDSC and DCA stockholders
represent a 43.5% and 56.5%, respective ownership of InterDent, excluding common
share equivalents. Including the impact of potential dilutive common shares
outstanding, upon consummation of the mergers, GDSC and DCA stockholder
ownership was approximately 53.5% and 46.5%, respectively.

The mergers have been accounted for using the pooling-of-interests method of
accounting. Accordingly, the historical financial statements for the periods
prior to the completion of the combination have been restated as though the
companies had been combined. The restated financial statements have been
adjusted to conform the lives in computing depreciation of equipment. The
individual results of operations of GDSC and DCA for 1999 through February 28,
1999, representing the latest available financial statements of the individual
corporations prior to the mergers, are as follows:

<TABLE>
<CAPTION>
                                                         GDSC           DCA
                                                     ------------   -----------
      <S>                                            <C>
      PA net patient service revenue                 $   26,048     $       -
      Management, consulting, and licensing fees            532         6,441
      Net income                                          1,129           595
</TABLE>

As a result of the mergers the Company recorded direct merger expenses of $3,333
during the six months ended June 30, 1999, consisting of investment banker fees,
advisors fees, investor relations expense, legal fees, accounting fees, printing
expense, and other costs. Also, the Company recorded a restructuring charge of
$1,696 relating to the Company's restructuring plan, including charges for
employee related costs, redirection of certain duplicative operations and
programs, and other costs. Total restructure costs paid during the six months
ended June 30, 1999 were $1,471. Included in accounts payable and other current
liabilities at June 30, 1999 is $3,060 in accrued merger and restructure costs,
of which $1,412 relates to accrued restructure costs. At December 31, 1998 these
liabilities were $3,142.

DENTAL PRACTICE AFFILIATIONS

During the six months ended June 30, 1999, the Company acquired substantially
all of the assets of 27 dental office locations, including cash, accounts
receivable, supplies and fixed assets. The aggregate dental practice acquisition
purchase price recorded during the six months ended June 30, 1999, representing
the fair value of the assets acquired in the above affiliations and earn-out
consideration accrued or paid for transactions completed in current and prior
periods was $25,108. Approximately $20,959 of the purchase price has been
allocated to intangible assets. The total purchase consideration included
$15,399 in cash, $5,106 in liabilities incurred and assumed, and $4,603
aggregate value of payments accrued and shares reserved under earn-out
agreements.

In connection with the completion of certain affiliation transactions, the
Company has agreed to pay to the selling parties possible future consideration
in the form of cash and InterDent common stock. The amount of future
consideration payable by the Company under earn-outs is generally computed based
upon financial performance of the affiliated dental practices during certain
specified periods. The Company accrues earn-out payments with respect to
practice acquisitions when such amounts are probable and reasonably estimable.
During the six months ended June 30, 1999 the Company paid $2,582 in additional
earn-out consideration.

As of June 30, 1999, the Company has accrued $5,179 for future earn-out
payments, of which $764 is included in additional paid-in capital for
anticipated stock to be issued while the remaining accrual for anticipated cash
payments is included


                                       8
<PAGE>

in other current liabilities. For those acquisitions with earn-out provisions,
the Company estimates the total maximum earn-out that could be paid, including
amounts already accrued, is between $20,000 and $30,000 from June 1999 to
December 2002, of which the majority is expected to be paid in cash. In future
years, such additional earn-out consideration could result in additional
amortization of $800 to $1,200 annually.

The above asset purchases in 1999 have been accounted for using the purchase
method of accounting. The excess of the total purchase price over the fair value
of the net tangible and identifiable intangible assets acquired representing the
estimated future value of the management services agreements are being amortized
over the lesser of the term of the related management service agreements or 25
years using the straight-line method. The results of operations for these
practices have been included in the consolidated financial statements of the
Company since the dates of their affiliation.

(5)  DEBT

Through June 15, 1999, the Company had two credit facilities providing for a
maximum borrowing of $60,000. Effective June 15, 1999, the Company amended and
restated one of the existing agreements, increasing the revolving credit
commitment from $45,000 to $70,000, with the syndication of banks led by Chase
Manhattan Bank. Proceeds from the amended credit agreement were used to pay-down
the outstanding $15,000 credit facility which has been terminated. The amended
and restated credit agreement has a revolving feature that expires on September
30, 2001, at which time it will convert into a four year term loan to be repaid
in 16 equal quarterly installments. All amounts due under the credit facility
are included in the long-term portion of debt. The financial institution in
which the $15,000 credit facility was terminated has elected to participate in
the syndication of the $70,000 facility amendment. Subsequent to June 30, 1999,
the Company extended its credit facility to $90,000, see note 8.

The credit facility requires the Company to pay unused commitment fees and
contains several covenants including restrictions on the ability of the Company
to incur indebtedness, prohibitions on dividends without prior approval, and
requirements relating to maintenance of a specified net worth and compliance
with specified financial ratios. In addition, the credit facility requires the
Company to notify the lenders prior to making any acquisitions and to obtain the
consent of the lenders prior to making acquisitions over a specified purchase
price. The obligations of the Company under the credit facility and the
subsidiaries under the guarantees are secured by a security interest in the
equipment, fixtures, inventories, receivables, subsidiary stock, certain debt
instruments, accounts and general intangibles of each of such entities.

The Company has issued $30,000 of subordinated convertible notes ("Notes"). The
Notes have an eight-year term and bear interest at 7.0%. See note 6 for
discussion on the conversion of the Notes.

(6)  SHAREHOLDERS' EQUITY

The Company has completed a $45,000 private placement, consisting of $30,000 of
subordinated convertible notes and $15,000 of preferred stock. The subordinated
notes have eight-year terms and are convertible into shares of the common stock
at $9.21 for each share of common stock issuable upon conversion of outstanding
principal and accrued but unpaid interest on such subordinated notes. If certain
events of default occur, the subordinated notes then outstanding will
automatically convert into shares of Series B preferred stock at a rate of one
share of Series B preferred stock for each thousand dollars in outstanding
principal and accrued but unpaid interest on the subordinated notes, subject to
adjustment for stock splits, reverse splits, stock dividends, reorganizations
and the like. The subordinated notes and all outstanding shares of preferred
stock, if any, shall be automatically converted into common stock (or, in the
case of Series A preferred stock and Series C preferred stock, redeemed at
nominal cost) if the rolling 21-day average closing market price of the common
stock on 20 out of any 30 consecutive trading days is more than $15.73 on or
prior to May 18, 1999, more than $16.85 on or prior to May 18, 2000, or more
than $17.98 at any time thereafter.

The Company is authorized to issue 30,000,000 shares of preferred stock.
Presently authorized series of preferred stock include the following series:

-  Series A - 100 shares authorized, issued and outstanding

-  Series B - 70,000 shares authorized, zero issued or outstanding

-  Series C - 100 shares authorized, zero shares issued or outstanding

-  Series D - 2,000,000 shares authorized, 1,628,663 shares issued and
   outstanding.

The shares of Series B preferred stock are convertible into shares of common
stock at the rate of 108.58 shares of common stock for each share of Series B
preferred stock (assuming there are no declared but unpaid dividends on the
Series B preferred stock), and the shares of Series D preferred stock are
convertible into shares of common stock on a share for share basis (assuming
there are no declared but unpaid dividends on the Series D preferred stock), in
each case subject to


                                       9
<PAGE>

adjustment for stock splits, reverse splits, stock dividends, reorganizations
and the like. The Series A preferred stock and Series C preferred stock are not
convertible.

(7)   CONTINGENCIES

The Company has been named as a defendant in a malpractice case filed in
superior court in Clark County, Washington against one of the PAs and an
orthodontist employed thereby. Following an orthodontic examination, the
plaintiff was referred by the orthodontist to an ear, nose and throat specialist
who then removed plaintiffs tonsils. Several days after the operation, plaintiff
suffered complications resulting in permanent physical damage. The plaintiff has
alleged damages of in excess of $10,000 due to the alleged negligence on the
part of the orthodontist and has alleged that the orthodontist acted as an
employee of the Company. The Company denies these allegations and believes that
the case is without merit and is defending the case vigorously. The Company does
not believe the outcome of this case will have a material impact on the
Company's financial position or results of operations.


(8)   SUBSEQUENT EVENTS

Subsequent to June 30, 1999, the Company completed the acquisition of 5 PAs,
representing thirteen clinical office locations. The purchase price for these
affiliations totaled $13,405. The total purchase price included cash paid of
$9,108 and liabilities issued or assumed of $4,297, plus contingent payments to
be made based on future performance. These affiliations were accounted for using
the purchase method of accounting. Funds for the acquisitions were provided
under borrowings on the credit facility.

The Company completed an expansion of its expansion credit facility to $90,000
with a syndication of banks led by Chase Manhattan Bank. The expansion is an
amendment to the agreement outstanding at June 30, 1999 and is subject to the
same constraints and covenants as the $70,000 revolving credit facility
discussed in note 5.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

InterDent, Inc ("InterDent" or the "Company") is one of the largest providers of
dental practice management services to multi-specialty dental professional
corporations and associations ("PAs") in the United States. Including the
affiliations completed through August 5, 1999, InterDent provides management and
licensing services to dental practices at 204 dental offices with 603 dentists,
including 139 specialists, and 1,744 operatories in selected markets in
California, Florida, Georgia, Hawaii, Idaho, Indiana, Michigan, Nevada, Oregon,
Pennsylvania, and Washington.

The Company's practice management services facilitate the delivery of
convenient, high quality, comprehensive and affordable dental care to patients
in a comfortable environment. The dentists affiliated through the Company's
network of PAs provide comprehensive general dentistry services and offer
specialty dental services, which include endodontics, oral pathology, oral
surgery, orthodontics, pedodontics, periodontics, and prosthodontics. The
Company's strategic objective is to maintain and expand its leadership position
in the dental practice management industry. To achieve this objective, the
Company seeks to enter selected geographic markets and develop locally
prominent, multi-specialty dental delivery networks. The key elements of the
Company's strategy are as follows:

-  Provide convenient, comprehensive dental care
-  Focus on quality of patient care
-  Establish a comprehensive dental care network
-  Achieve operational efficiencies and enhance revenue
-  Integrate and leverage management information systems
-  Expand patient volume through proactive marketing
-  Capitalize on managed care expertise

As part of a delivery network of multi-specialty dental care, the Company
provides management and licensing services to affiliated PAs under long-term
management service agreements (collectively referred to as "MSAs"). Under the
terms of the MSAs, the Company bills and collects patient receivables and
provides all administrative and management support services to the PAs. These
administrative and management support services include: financial, accounting,
training, efficiency and productivity enhancement, recruiting, team building,
marketing, advertising, purchasing, and related support personnel. Licensing
services include marketing, advertising, and purchasing.


                                      10
<PAGE>

As compensation for services provided under the MSAs, the Company receives
management fees from the PAs. Depending upon the individual MSA provisions, the
management fee is calculated based upon one of two methods. Under one method the
management fee is equal to reimbursement of expenses incurred in the performance
of its obligations under the MSAs, plus an additional fee equal to a percentage
of the net revenues of the PAs. Under the other method, the management fee is a
set percentage of the net revenues of the PAs, as defined.

The MSAs have initial terms ranging from 25-40 years with automatic extensions
thereafter, unless either party gives notice before the end of the term. The
MSAs are not subject to early termination by the PAs unless the Company is the
subject of bankruptcy proceedings or the Company materially breaches the MSAs
and does not cure the breach following notice. Certain MSAs have additional
termination events, including the refusal to comply with the decisions of the
joint operating committee, failure to pay the management fee, and a material
change in applicable federal or state law.

RESULTS OF OPERATIONS

The Emerging Issues Task Force ("EITF") of the Financial Accounting Standards
Board evaluated certain matters relating to the physician practice management
industry (EITF issue number 97-2) and reached a consensus on the accounting for
transactions between physician practice management companies and physician
practices and the financial reporting of such entities. For financial reporting
purposes, EITF 97-2 mandates the consolidation of physician practice activities
with the practice management company when certain conditions have been met, even
though the practice management company does not have an equity investment in the
physician practice. The accompanying financial statements are prepared in
conformity with the consensus reached in EITF 97-2.

Under those circumstances where the MSAs meet the criteria for consolidation as
outlined in EITF 97-2, all the accounts of those PAs are included in the
accompanying condensed consolidated financial statements. Accordingly, the
condensed consolidated statements of operations include the net patient revenues
and related expenses of those PAs. In instances where the MSAs have not met the
criteria for consolidation, the Company does not consolidate the accounts of the
PAs. Accordingly, the condensed consolidated statements of operations exclude
the net patient revenues and expenses of these PAs. Rather, the condensed
statements of operations include only the Company's net management fee revenue
generated from those MSAs and the Company's expenses incurred in the performance
of its obligations under those MSAs. The following discussion highlights changes
in historical revenues and expense levels for the three and six months ended
June 30, 1999 and 1998 as reported in the accompanying condensed consolidated
financial statements.

1999 STATEMENT OF OPERATIONS COMPARED TO 1998

DENTAL PRACTICE NET PATIENT REVENUE. Dental practice net patient revenue
represents the clinical patient revenues at 112 current clinical locations
through June 30, 1999 where the consolidation requirements of EITF 97-2 have
been met. Dental practice net patient revenue increased to $44.0 million for the
second quarter of 1999 compared to $20.6 million for the second quarter of 1998,
representing a 113% increase of $23.4 million. Revenues also increased to $84.4
million for the first six months of 1999 compared to the first six months of
1998 of $38.5 million, representing a 119% increase of $45.9 million.

The Company is pursuing an aggressive expansion strategy through additional PA
affiliations. As a result, the majority of this revenue growth is due to 18
affiliations completed during 1998 and the first six months of 1999,
representing 70 current clinical locations. These affiliations have management
services agreements that meet the Emerging Issues Task Force's consolidation
requirements.

The Company was also effectively able to increase total dental practice net
patient service revenue at existing facilities. The Company worked with
affiliated PAs to recruit new dentists to meet increased demand, negotiated
additional contracts with managed care organizations and third party-payors,
leveraged additional specialty dental services, and increased the number of
patients successfully completing their treatment programs with the use of
internally developed propriety software. For those locations affiliated as of
March 31, 1998 where the MSAs meet the criteria for consolidation, same-store
dental practice net patient revenue for the second quarter 1999 increased by
over 10% when compared to revenues for the second quarter of 1998. For those
locations affiliated as of January 1, 1998 where the MSAs meet the criteria
for consolidation, same-store dental practice net patient revenue for the
first six months of 1999 also increased by over 10% when compared to revenues
for the first six months of 1998.

NET MANAGEMENT FEES. Net management fees consist of revenues earned by the
Company in the performance of its obligations under MSAs at 79 current
unconsolidated PA clinical locations. Net management fees increased to $10.8
million for the second quarter of 1999 compared to $7.4 million for the second
quarter of 1998, representing a 44.9% increase of $3.4 million. Revenues also
increased to $21.5 million for the first six months of 1999 compared to the
first six months of 1998 of $12.7 million, representing a 68.8% increase of $8.8
million. The Company is pursuing an aggressive expansion strategy


                                      11
<PAGE>

through additional PA affiliations. As a result, the majority of this growth is
related to the affiliation of 48 clinical locations during 1998 and 1999.

LICENSING AND OTHER FEES. The Company earns certain fees from unconsolidated PAs
for various licensing and consulting services. The increase is entirely
attributed to the addition of 46 unconsolidated clinical locations during 1998
and 1999.

PRACTICE FACILITY OPERATING EXPENSES. Practice facility operating expenses
("operating expenses") represents the direct costs associated with operating and
managing the practice facility locations, including regional support
departments. These costs are comprised of the following expenses:

-  CLINICAL SALARIES AND BENEFITS AND PROVIDER COSTS include all patient
   service provider staff compensation and related payroll costs at the
   consolidated dental practices, including dentists, hygienists and dental
   assistants, and dental assistants for the unconsolidated PAs.

-  PRACTICE NONCLINICAL SALARIES AND BENEFITS COSTS include all staff
   compensation and related payroll costs at all dental facilities other than
   dentists, hygienists, and dental assistants.

-  DENTAL SUPPLIES AND LAB COSTS include all direct supply costs in the
   performance of patient treatment programs.

-  PRACTICE OCCUPANCY EXPENSES include facility leases, property taxes,
   utilities, janitorial services, and repairs and maintenance.

-  PRACTICE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES include general
   office, advertising, professional services (excluding dentistry), office
   supplies, bank processing fees, local taxes, insurance, bad debt expense,
   and other miscellaneous costs at the dental facilities and regional
   centers.

Operating expenses have increased significantly during the second quarter and
first six months of 1999 when compared to the same periods in 1998. Second
quarter operating expenses increased to $44.4 million for the second quarter of
1999 compared to $23.2 million for the second quarter of 1998, representing a
91.3% increase of $21.2 million. These expenses also increased to $86.3 million
for the first six months of 1999 compared to the first six months of 1998 of
$42.8 million, an increase of 102% or $43.5 million. The majority of the
increase in operating expenses is due to the 37 affiliations (representing 118
current clinical locations) completed during 1998 and first six months of 1999,
as a result of the Company's aggressive expansion strategy. Of the total
clinical locations affiliated in 1998 through June 30, 1999, 18 of the 37
affiliations have management services agreements that meet the Emerging Issues
Task Force's consolidation requirements.

During the second quarter and first six months of 1999, most categories of
operating expenses varied slightly as a percentage of net revenues when compared
to the second quarter and first six months of 1998 and were anticipated due to
the effect of practice affiliations. During 1999 the Company has shown
significant improvements in the reduction of total operating expenses. As a
percentage of net revenues, operating expenses for the second quarter of 1999
were 80.6% compared to 82.1% for the second quarter of 1998 and 81.1% for the
first six months of 1999 compared to 83.1% for the first six months of 1998. The
overall reduction in operating expenses is a result of the successful
implementation of the Company's operating model at existing facilities and the
proven strong operational and financial track records of current affiliated
practices. As a result, the overall practice facility operating margin for the
second quarter of 1999 was 19.4% compared to 17.9% for the second quarter of
1998 and 18.9% for the first six months of 1999 compared to 16.9% for the first
six months of 1998.

CORPORATE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Corporate selling,
general and administrative expenses ("Corporate G&A expense") include: corporate
salaries, general office costs, investor relations expense, legal and audit,
general and director & officer insurance, corporate office supplies, and other
miscellaneous costs at the corporate facilities. Corporate G&A expense was $3.0
million for the second quarter of 1999 compared to $2.0 million for the second
quarter of 1998, an increase of 50.7%. These expenses also increased to $5.8
million for the first six months of 1999 compared to $3.8 million for the first
six months of 1998, an increase of 53.0%.

The rise in total costs is the result of the Company increasing corporate
staffing levels in the marketing, human resource, finance, and operations
departments to accommodate the additional affiliations completed. Additionally,
resources have been added to respond to the increasing affiliated dental
practice needs for information systems implementation, clinical management and
mentoring programs, and to appropriately develop the support infrastructure of
the Company. At the same time, management seeks to maximize the effectiveness of
corporate infrastructure costs. As a result, Corporate G&A expense as a
percentage of net revenues has steadily declined. Corporate G&A expense for the
second quarter of 1999 was 5.4% of net


                                      12
<PAGE>

revenues as compared to 7.0% for the second quarter of 1998. G&A expense for
the first six months of, 1999 was 5.4% of net revenues as compared to 7.3% for
the first six months of 1998.

CORPORATE RESTRUCTURE AND MERGER COSTS. The Company recorded merger and
restructure related expenses associated with the combination of Gentle Dental
Service Corporation and Dental Care Alliance, Inc., each of which became a
wholly-owned subsidiary of the Company in March 1999. The combination has been
accounted for as a pooling-of-interests. As a result of the combination, the
Company recorded expense of $1.3 million during the second quarter of 1999 and
$5.0 million of expense for the first six months of 1999. Approximately $3.3
million of the total expense relates to merger costs consisting of investment
banker fees, advisors fees, investor relations expense, legal fees, accounting
fees, printing costs, and other costs. The remaining $1.7 million relates to the
Company's restructuring plan, including charges for employee related costs and
the redirection of certain duplicative operations and systems costs.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for the
second quarter of 1999 and first six months of 1999 increased in excess of 100%
over the respective periods in 1998. This increase is primarily due to the
additional property and equipment depreciation and amortization of intangible
costs assigned to management services agreements and goodwill associated with
affiliations completed in 1998 and 1999. It is anticipated that future
acquisitions will result in additional depreciation and amortization throughout
the year.

INTEREST EXPENSE. Interest expense was $1.4 million for the second quarter of
1999 compared to $.5 million for the second quarter of 1998. These expenses also
increased to $2.8 million for the first six months of 1999 compared to $653
thousand for the first six months of 1998. This increase in interest expense was
due to additional debt incurred under the Company's credit facility and private
placement to complete the rapid expansion of additional dental practice
affiliations throughout 1998 and 1999 (See note 4 of Notes to the Condensed
Consolidated Financial Statements). It is anticipated that future acquisitions
will require additional borrowings under the existing credit facility.
Accordingly, management anticipates that interest expense will increase
throughout the year.

PROVISION FOR INCOME TAXES. The current expected tax rate is lower than the
statutory rate as certain merger related expenses are not deductible for income
tax purposes, which are offset by the carry forward of net operating losses from
Company subsidiaries and affiliates. The Company expects to fully utilize the
net operating loss carryforwards in 1999. For the six months ended June 30, 1999
the Company has recorded an expected annual effective tax rate of approximately
34% as compared to the effective rate of 38% recorded during the same period in
1998.


LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1999, cash and cash equivalents were $2.7 million, representing a
$5.5 million decrease in cash and cash equivalents available at December 31,
1998. This decline is due to the amendment to the credit facility, which allowed
us to consolidate cash balances between subsidiaries and pay down the credit
facility balances. Working capital at June 30, 1999 of $1.3 million represents a
decrease from working capital of $6.7 million at December 31, 1998. This
decrease in working capital is primarily attributable to acquisition earn-out
and merger & restructure payables and accruals of approximately $3.1 million
(excluding amounts paid during 1999), payment of earn-out consideration, and
utilization of cash to pay down borrowings under the company's credit facility.

Net cash provided by operations (which includes merger and restructure expenses)
amounted to $4.7 million for the six months ended June 30, 1999 compared to a
use of cash of $1.6 million for the six months ended June 30, 1998. The increase
of net cash provided by operations during the six months ended June 30, 1999 is
attributed to improvements in the Company's results of operations and increases
in accrued payroll and payroll related costs. Excluding merger and restructure
costs, operating income for the six months ended June 30, 1999 and 1998 was
$10.0 million and $3.0 million, respectively. As a result, excluding merger and
restructure costs, net cash provided by operations amounted to $6.9 million for
the six months ended June 30, 1999 compared to cash used of $.6 million for the
six months ended June 30, 1998.

Net cash used in investing activities was $26.2 million for the six months ended
June 30, 1999. Included in the investing activities is cash paid for PA
affiliations of $18.0 million and $3.8 million paid for property and equipment.
These uses of cash were primarily funded through borrowing under the Company's
existing credit facility. As a result, cash provided from the credit facility
amounted to $18.7 million for the six months ended June 30, 1999.

During the six months ended June 30, 1999, the Company acquired substantially
all of the assets of 27 office locations, including cash, accounts receivable,
supplies and fixed assets. The affiliations have been accounted for using the
purchase method of accounting. The aggregate dental practice acquisition
purchase price recorded during the six months ended June 30, 1999, representing
the fair value of the assets acquired, including intangible assets was $25.1
million. Approximately


                                      13
<PAGE>

$21.0 million of the purchase price has been allocated to intangible assets.
The total purchase consideration included $15.4 million in cash, $5.1 million
in liabilities incurred and assumed, and $4.6 million in accrued earn-out from
transactions completed in current and prior periods.

In connection with the completion of certain affiliation transactions, the
Company has agreed to pay to the selling parties' possible future consideration
in the form of cash and InterDent common stock. The amount of future
consideration payable by the Company under earn-outs is generally computed based
upon financial performance of the affiliated dental practices during certain
specified periods. The Company accrues for earn-out payments with respect to
practice acquisitions when such amounts are probable and reasonably estimable.
During the six months ended June 30, 1999, the Company paid $2.6 million in
additional earn-out consideration.

As of June 30, 1999, the Company has accrued $5.2 million for future earn-out
payments, of which $.8 million is included in additional paid-in capital for
anticipated stock to be issued while the remaining accrual for anticipated cash
payments is included in other current liabilities. For those acquisitions with
earn-out provisions, the Company estimates the total maximum earn-out that could
be paid, including amounts already accrued, is between $20 and $30 million from
January 1999 to December 2002, of which the majority is expected to be paid in
cash. In future years, such additional earn-out consideration could result in
additional amortization of $.8 million to $1.2 million annually.

The Company previously has made loans to various unconsolidated PAs in
connection with the PAs acquisition of assets of dental practices and has made
working capital advances to certain unconsolidated PAs for their operations. The
loans, which are evidenced by interest bearing notes that are payable upon
demand, are being paid in accordance with their terms. The PA owners personally
guarantee both the loans and advances.

The Company currently has a credit facility providing a maximum credit line of
$90 million. The credit facility has a revolving feature expiring on September
30, 2001, at which time it will convert into a four year term loan to be repaid
in 16 equal quarterly installments. Principal amounts owed under the credit
facility bear interest, at the Company's option at varying margins over LIBOR
(2.25%-3.0%) or the prime rate (0.5%-1.25%), at the Company's option, based on
the level of InterDent's leverage ratio. The credit facility requires the
Company to pay an unused commitment fee (depending on amounts of unused
available credit). This fee is based on the average daily amount by which the
bank commitment under the credit facility exceeds the aggregate amount of all
loans then outstanding.

The credit facility contains several covenants including restrictions on the
ability of the Company to incur indebtedness; repurchase, or make dividends with
respect to, its capital stock; and requirements relating to maintenance of a
specified net worth and compliance with specified financial ratios. In addition,
the credit facility requires the Company to notify certain lenders prior to
making any acquisitions and to obtain the consent of the lenders prior to making
acquisitions with purchase prices exceeding a certain amount of cash and
purchase price. The obligations of the Company under the credit facility and its
subsidiaries under the guarantees are secured by a security interest in certain
equipment, fixtures, inventories, receivables, subsidiary stock, certain debt
instruments, accounts and general intangibles of each of such entities.

The Company has $30 million of subordinated notes and $15 million of preferred
stock. The subordinated convertible notes have eight-year terms and are
convertible into shares of common stock at $9.21 for each share of common stock
issuable upon conversion of outstanding principal and accrued but unpaid
interest on such subordinated notes. If certain events of default occur, the
subordinated notes then outstanding will automatically convert into shares of
Series B preferred stock at a rate of one share of Series B preferred stock for
each thousand dollars in outstanding principal and accrued but unpaid interest
on the subordinated notes, subject to adjustment for stock splits, reverse
splits, stock dividends, reorganizations and the like. The subordinated notes
and all outstanding shares of preferred stock shall be automatically converted
into common stock (or, in the case of Series A preferred stock and Series C
preferred stock, redeemed at nominal cost) if the rolling 21-day average closing
market price of the common stock on 20 out of any 30 consecutive trading days is
more than $15.73 on or prior to May 18, 1999, more than $16.85 on or prior to
May 18, 2000, or more than $17.98 at any time thereafter.

The Company is authorized to issue 30,000,000 shares of preferred stock.
Presently authorized series of preferred stock include the following series:

-  Series A - 100 shares authorized, issued and outstanding
-  Series B - 70,000 shares authorized, zero issued or outstanding
-  Series C - 100 shares authorized, zero shares issued or outstanding
-  Series D - 2,000,000 shares authorized, 1,628,663 shares are issued and
   outstanding

The shares of Series B preferred stock are convertible into shares of common
stock at the rate of 108.58 shares of common stock for each share of Series B
preferred stock (assuming there are no declared but unpaid dividends on the
Series B


                                      14
<PAGE>

preferred stock), and the shares of Series D preferred stock are convertible
into shares of common stock on a share for share basis (assuming there are no
declared but unpaid dividends on the Series D preferred stock), in each case
subject to adjustment for stock splits, reverse splits, stock dividends,
reorganizations and the like. The Series A preferred stock and Series C
preferred stock are not convertible.

We believe that proceeds from our existing credit facility and cash flow from
operations will be sufficient to fund our operations for the next fiscal year.
We also believe that such funds will be sufficient to complete a number of other
future dental practice affiliations and any possible future consideration to be
paid. However, to execute our long term business strategy, the Company will
require substantial additional funding through additional long-term or
short-term borrowing arrangements or through the public or private issuance of
additional debt or equity securities to affiliate new practices and to expand
and maintain existing affiliated practices. There can be no assurance that any
such financing will be available or will be available on terms acceptable to
InterDent.

A total of 254,901 and 339,246 outstanding shares of InterDent common stock
issued at a price of $0.45 and $0.225 per share, respectively are subject to
repurchase as a result of a subsidiary's failure to achieve certain specified
performance targets through December 31,1998. It is anticipated that these
shares will be repurchased in the future.

YEAR 2000 COMPLIANCE

Many existing computer programs use only two digits to identify a year in a data
field. These programs were designed and developed without considering the impact
of the upcoming change in the century. If not corrected, many computer
applications could fail or create erroneous results by or at the Year 2000 or
earlier. The Year 2000 issue affects us in that the dental practice management
business is dependent on computer applications, such as management information
systems and financial and accounting systems.

In order to address the Year 2000 issues facing InterDent, our management
initiated a program to prepare our computer systems and applications for the
Year 2000. As the primary focus of our Year 2000 plans, we have converted
affiliated PAs to target systems identified and believed to be Year 2000
compliant. We have divided our Year 2000 plan into five phases, and chart our
progress in each of the phases, expressed as an approximate percentage of
completion of that phase:

<TABLE>
<CAPTION>
                                                                 APPROXIMATE
         PHASE                                               PERCENTAGE COMPLETED
         <S>                                                 <C>
         Awareness .........................................        100%
         Assessment ........................................        100%
         Renovation ........................................         80%
         Validation ........................................         80%
         Implementation ....................................         75%
</TABLE>

The Company expects to complete all phases of our Year 2000 plan by November
1999.

We expect to incur internal staff costs as well as consulting and other expenses
related to infrastructure enhancements necessary to prepare for the Year 2000.
Validation and conversion of primary system applications and hardware is
expected to cost approximately $1 million and will be incurred by the end of
fiscal year 1999.

As part of our Year 2000 plan, we are undertaking infrastructure and facilities
enhancements and performing tests necessary to ensure that the Company is
adequately prepared for the Year 2000. We are also communicating with vendors
and third-party payors to ensure that they are taking appropriate steps to
address their Year 2000 issues. We are also preparing contingency plans to
minimize potential harm to the Company in the event that any or all of the third
parties with which we conduct business with is unable to attain Year 2000
compliance. The contingency plans being prepared are system and application
specific and are intended to ensure that in the event that certain systems
and/or applications fail by or at the Year 2000, that we will be able to engage
in our core business functions in spite of such failure. The most likely worst
case Year 2000 scenario would be that we experience significant delays in
billing and collecting professional fees due to our affiliated PAs. This delay
would directly impact our cash flow and could have a material adverse effect on
our business, financial condition or results of operations.

We believe that the established Year 2000 plan and other steps being taken are
adequate to ensure that we will not be materially affected by the Year 2000
problem. However, there can be no assurance that the Year 2000 plan and related
remedial and contingency plans will fully protect us from the risks associated
with the Year 2000 problem. The analysis of,


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<PAGE>

and preparation for, the Year 2000 and related problems necessarily relies on a
variety of assumptions about future events. There can be no assurance that
management has accurately predicted such future events or that the remedial and
contingency plans for the Company will adequately address such future events.
In the event that our business, vendor, or patients are disrupted as a result
of the Year 2000 problem such disruption could have a material adverse effect
on the Company.

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21B OF THE
SECURITIES EXCHANGE ACT OF 1934. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS. CERTAIN
FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, AMONG OTHERS, THE PACE OF
DEVELOPMENT AND ACQUISITION ACTIVITY, THE DEPENDENCE ON MANAGEMENT AGREEMENTS,
THE PAS AND AFFILIATED DENTISTS, THE REIMBURSEMENT RATES FOR DENTAL SERVICES,
AND OTHER RISKS DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION
FILINGS. OTHER RISK FACTORS ARE LISTED IN THE COMPANY'S REGISTRATION STATEMENT
NO. 333-66475 AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

No disclosure required.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company has been named as a defendant in a malpractice case filed in
superior court in Clark County, Washington against one of the PAs and an
orthodontist employed thereby. Following an orthodontic examination, the
plaintiff was referred by the orthodontist to an ear, nose and throat specialist
who then removed plaintiffs tonsils. Several days after the operation, plaintiff
suffered complications resulting in permanent physical damage. The plaintiff has
alleged damages of in excess of $10 million due to the alleged negligence on the
part of the orthodontist and has alleged that the orthodontist acted as an
employee of the Company. The Company denies these allegations and believes that
the case is without merit and is defending the case vigorously. The Company does
not believe the outcome of this case will have a material impact on the
Company's financial position or results of operations.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On March 12, 1999 Gentle Dental Service Corporation ("GDSC") and Dental Care
Alliance, Inc. ("DCA") completed mergers of the two corporations in which each
entity became a wholly-owned subsidiary of InterDent, Inc. In the mergers, each
share of GDSC's 9,178,602 total shares of outstanding common stock, including
earn-out shares that were earned but not yet issued, automatically converted
into one share of common stock of InterDent. Each 10 shares of GDSC's 100
outstanding shares of Preferred Stock - Series C automatically converted into
one share of common stock of InterDent. Also, each share of GDSC's 100
outstanding shares of Preferred Stock - Series A and 1,628,663 outstanding
shares of Convertible Preferred Stock - Series D converted into one share of
preferred stock of InterDent with the same rights, preferences, and privileges
as to InterDent as the share of preferred stock had with respect to GDSC. Each
share of DCA's 7,031,187 total shares of outstanding common stock was exchanged
for 1.67 shares of InterDent common stock. Additional information regarding the
rights, preferences, and privileges of the InterDent preferred stock issued in
the mergers are incorporated herein by reference to pages 102 through 106 of
InterDent's Amendment No. 4 to Registration Statement on Form S-4 Registration
No. 333-66475, filed on February 9, 1999. The preferred stock of InterDent was
issued in the mergers pursuant to an exemption from registration under 4(2) of
the Securities Act of 1933, as amended. InterDent common stock is traded on the
Nasdaq National Market under the trading symbol "DENT."

On March 31, 1999, the Company issued 44,000 shares of common stock on exercise
of an employee stock option. The purchase price was paid by delivery of 33,000
shares of common stock. The option was exercised prior to the filing of S-8
Registration Statements covering shares issuable under the Company's stock
option plans. The issuance of the shares was exempt from registration under
Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D
thereunder because the purchaser was an accredited investor within the meaning
of Rule 501.

On April 21, 1999, the Company issued 76,080 shares of common stock as
additional consideration for the acquisition of assets of a dental practice. The
issuance of the shares was exempt from registration under Section 4(2) of the
Securities Act of 1933 and Rule 506 of Regulation D thereunder because the
purchaser was an accredited investor within the meaning of Rule 501.


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<PAGE>

On June 28, 1999, the Company issued 3,708 shares of common stock as additional
consideration for the acquisition of assets of a dental practice. The issuance
of the shares was exempt from registration under Section 4(2) of the Securities
Act of 1933 and Rule 506 of Regulation D thereunder because the purchaser was an
accredited investor within the meaning of Rule 501.

The payment of dividends is within the discretion of InterDent's Board of
Directors; however, the Company intends to retain earnings from operations for
use in the operation and expansion of its business and does not expect to pay
cash dividends in the foreseeable future. Any future decision with respect to
dividends will depend on future earnings, operations, capital requirements and
availability, restrictions in future financing agreements and other business and
financial considerations. In addition, the Company's senior lender currently
prohibits the payment of cash dividends.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

3.1  Restated Certificate of Incorporation. Incorporated by reference to
Exhibit 3.1 of the Company's Registration Statement on Form S-4, Registration
No. 333-66475, filed on October 30, 1998.

3.2  Bylaws, as amended.  Incorporated by reference to Exhibit 3.3 of the
Company's Registration Statement on Form S-4, Registration No. 333-66475,
filed on October 30, 1998.

4.1  Restated Certificate of Incorporation (filed as Exhibit 3.1).

4.2  Bylaws, as amended (filed as Exhibit 3.2).

10.1  Amended and Restated Credit Agreement, dated as of June 15, 1999 (the
"Amended and Restated Credit Agreement"), by and among Gentle Dental Service
Corporation, Dental Care Alliance, Inc. and Gentle Dental Management, Inc., as
borrowers (the "Borrowers"), certain of the Company's subsidiaries, as
guarantors (the "Guarantors"), the financial institutions signatory thereto, as
lenders, Union Bank of California, N.A., as administrative agent (the
"Administrative Agent"), and The Chase Manhattan Bank, as syndication agent (the
"Syndication Agent").

10.2  Amendment Agreement No. 1 to the Amended and Restated Credit Agreement,
dated as of July 30, 1999, by and among the Borrowers, the Guarantors, the
financial institutions signatory thereto, as lenders, the Administrative Agent
and the Syndication Agent.

10.3  Amendment Agreement No. 2 to the Amended and Restated Credit Agreement,
dated as of August 9, 1999, by and among the Borrowers, the Guarantors, the
financial institutions signatory thereto, as lenders, the Administrative Agent
and the Syndication Agent.

10.4  Guaranty, dated as of March 12, 1999, by the Company in favor of the
Administrative Agent.

10.5  Confirmation of Guaranty, dated as of June 15, 1999, by the Company in
favor of the Administrative Agent.

27.1  Financial Data Schedule.

99.1  InterDent, Inc. 1999 Stock Incentive Plan.

99.2  InterDent, Inc. Employee Stock Purchase Plan of 1999.

99.3  InterDent, Inc. Dental Professional Stock Purchase Plan of 1999.

(b) Reports on Form 8-K.

On May 28, 1999, the Company filed an amendment to a Current Report on Form
8-K/A to provide consolidated financial statements in connection with the
completed mergers with Gentle Dental Service Corporation ("GDSC") and Dental
Care Alliance Inc. ("DCA") wherein GDSC and DCA each became a wholly-owned
subsidiary of the Company.


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                                  SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                                    INTERDENT, INC.
                                       -----------------------------------------
                                                     (Registrant)


Date:    August 13, 1999               By: /s/  Norman R. Huffaker
     ------------------------             -------------------------------------
                                              Norman R. Huffaker
                                              Chief Financial Officer


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