<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              ---------------------

                                    FORM 10-K

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

FOR THE YEAR ENDED DECEMBER 31, 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: 0-22835

                           MONARCH DENTAL CORPORATION
             (Exact name of registrant as specified in its charter)

          DELAWARE                                          51-0363560
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

                           MONARCH DENTAL CORPORATION
                       4201 SPRING VALLEY ROAD, SUITE 320
                                DALLAS, TX 75244
                    (Address of principal executive offices)

                                 (972) 702-7446
              (Registrant's telephone number, including area code)

          Securities registered pursuant to Section 12 (b) of the Act:

                                      None

          Securities registered pursuant to Section 12 (g) of the Act:

                          Common Stock, $.01 par value
                          ----------------------------
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [X]       No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]



<PAGE>   2
The aggregate market value of the shares of the Registrant's Common Stock held
by non-affiliates of the Registrant on March 20, 2000 was approximately
$22,453,990 based upon the closing price per share of the Registrant's Common
Stock as reported on the Nasdaq SmallCap Market on March 20, 2000. Shares of
Common Stock held by each officer and director and by each person who owns 5% or
more of the outstanding Common Stock have been excluded in that such persons may
be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes. As of March 20, 2000,
there were 12,839,881 outstanding shares of the Registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference into the Parts
of this Report on Form 10-K indicated below:

     (1)  The Annual Report to Stockholders for fiscal year ended December 31,
          1999 (Part II).

     (2)  The Company's definitive proxy statement dated April 13, 2000 for the
          Annual Meeting of Stockholders to be held on May 9, 2000 (Part III).


           STATEMENTS MADE OR INCORPORATED INTO THIS ANNUAL REPORT INCLUDE A
NUMBER OF FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934.
FORWARD LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS CONTAINING
THE WORDS "ANTICIPATES," "BELIEVES," "EXPECTS," "INTENDS," "FUTURE" AND WORDS OF
SIMILAR IMPORT WHICH EXPRESS MANAGEMENT'S BELIEF, EXPECTATIONS OR INTENT
REGARDING THE COMPANY'S FUTURE PERFORMANCE. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, AMONG OTHERS, RISKS ASSOCIATED
WITH THE COMPANY'S ACQUISITION STRATEGY AND EXPANSION WITHIN EXISTING MARKETS,
MANAGEMENT OF GROWTH AND COMPETITION AND PURSUIT OF STRATEGIC ALTERNATIVES.
THESE AND OTHER FACTORS ARE DESCRIBED IN ITEM 7 OF PART II OF THIS FORM 10-K
UNDER THE CAPTION "CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS."



                                       2
<PAGE>   3

                           MONARCH DENTAL CORPORATION

                                    INDEX TO
                           ANNUAL REPORT ON FORM 10-K

<TABLE>
<CAPTION>
                                                                                                         Page No.
<S>          <C>             <C>                                                                         <C>
Part I.

             Item 1.         Business                                                                        4
             Item 2.         Properties                                                                     13
             Item 3.         Legal Proceedings                                                              14
             Item 4.         Submission of Matters to a Vote of Security Holders                            14

Part II.

             Item 5.         Market for Registrant's Common Equity and Related
                             Stockholder Matters                                                            15
             Item 6.         Selected Financial Data                                                         *
             Item 7.         Management's Discussion and Analysis of Financial Condition
                             and Results of Operations                                                       *
             Item 8.         Financial Statements and Supplementary Data                                     *
             Item 9.         Changes in and Disagreements with Accountants on
                             Accounting and Financial Disclosure                                            16

Part III.

             Item 10.        Directors and Executive Officers of the Registrant                             **
             Item 11.        Executive Compensation                                                         **
             Item 12.        Security Ownership of Certain Beneficial Owners and Management                 **
             Item 13.        Certain Relationships and Related Transactions                                 **

Part IV.

             Item 14.        Exhibits, Financial Statement Schedules, and Reports Filed on Form 8-K         18

Signatures                                                                                                  20
</TABLE>



*    Incorporated by reference to the Company's Annual Report to Stockholders
     for fiscal year ended December 31, 1999.

**   Incorporated by reference to the Company's definitive proxy statement dated
     April 13, 2000 for the Annual Meeting of Stockholders to be held on May 9,
     2000.



                                       3
<PAGE>   4

                                     PART I

ITEM 1.  BUSINESS

           The information contained in this report is provided as of December
31, 1999, unless otherwise indicated.

           The Company manages dental group practices in selected markets,
located in Texas, Wisconsin, Pennsylvania, Virginia, Ohio, Arkansas, Utah,
Colorado, Georgia, New Jersey, Florida, Indiana, Arizona and New Mexico at
December 31, 1999. Dentists practicing at the Company's dental offices (the
"Dental Offices") provide general dentistry services such as examinations,
cleanings, fillings, bonding, placing crowns and fitting and placing fixed or
removable prostheses. At many of the Company's Dental Offices, dentists also
provide specialty dental services such as orthodontics, oral surgery,
endodontics, periodontics and pediatric dentistry. The Company seeks to build
geographically dense networks of dental providers by expanding within its
existing markets and entering new markets through acquisition. At December 31,
1999, the Company owned and managed 190 Dental Offices, of which 28 were
internally developed and 173 were acquired (eleven of these offices were
subsequently closed) by the Company. At December 31, 1999, 444 full-time
dentists practiced at the Company's Dental Offices. The Company was incorporated
under the laws of Delaware on December 28, 1994.

DENTAL SERVICES

           Dentists practicing at the Dental Offices provide general dentistry
services such as examinations, cleanings, fillings, bonding, placing crowns and
fitting and placing fixed or removable prostheses. At many of the Company's
Dental Offices, dentists also provide specialty dental services such as
orthodontics, oral surgery, endodontics, periodontics and pediatric dentistry.
Specialty dental services are typically offered by teams which rotate through
several Dental Offices in a particular market. This enables the dental
professional corporations managed by the Company (the "P.C.s") or the Company,
as applicable, to capture revenue from services that would otherwise be referred
to independent specialists.

           Except with respect to Dental Offices located in states in which the
ownership of dental practices by non-dentists is permitted, dental services
provided at the Dental Offices are provided by or under the supervision of
licensed dentists employed by or under independent contracts with the P.C.s. In
states in which the Company operates and in which the ownership of dental
practices by non-dentists is permitted (currently Wisconsin), dental services
provided at the Dental Offices are provided by or under the supervision of
licensed dentists employed by or under independent contracts with the Company.
The Company owns or leases all of the operating assets of each of the Dental
Offices, including inventory, equipment, leases and leasehold improvements. The
Company typically equips its Dental Offices with state-of-the-art clinical and
diagnostic equipment such as fiber optic handpieces, intraoral video cameras and
panoramic and cephalometric X-ray equipment.



                                       4
<PAGE>   5

           The following table shows the principal areas in which the Company
owns and manages Dental Offices, the number of Dental Offices and dentists in
each area at December 31, 1999, the year that each practice was established and
the effective date of each practice's affiliation with the Company:

<TABLE>
<CAPTION>
                                                        NUMBER OF        NUMBER OF            DATE         EFFECTIVE DATE
DENTAL GROUP PRACTICE / MARKET                       DENTAL OFFICES    DENTISTS (1)          FOUNDED       OF ACQUISITION
------------------------------                       --------------    ------------          -------       --------------
<S>                                                        <C>              <C>               <C>          <C>
Monarch, Dallas-Fort Worth                                 30               84                1983         N/A
MacGregor Dental Centers, Houston                          16               51                1962         February 1996
Midwest Dental Care, Wisconsin                             26               46                1975         September 1996
Convenient Dental Care, Arkansas                            1                5                1982         November 1996
Arkansas Dental Health, Arkansas                            2                5                1984         January 1997
United Dental Care, Arkansas                                8               12                1990         April 1997
Dental Centers of Indiana, Indiana                         14               17                1980         August 1997
J.B. Hays, Arkansas                                         1                3                1994         October 1997
Three Peaks Dental Health, Colorado                         6               10                1990         November 1997
Press Family Dental, San Antonio                            7               20                1971         November 1997
Dental America, Midland - Odessa                            3                6                1994         December 1997
Dental Care One, Ohio                                       8               12                1979         March 1998
Managed Dental Care Centers, New Mexico                     4                6                1995         June 1998
Valley Forge Dental Associates, Various                    54              141                1995         September 1998
Talbert Dental, Arizona and Utah                           10               26                1973         September 1998
</TABLE>

(1)   Includes full-time general dentists and specialists employed by or under
      contract with the Company (in the case of Midwest) or the applicable P.C.
      (in the case of each dental group practice other than Midwest).

           The attributes of the Dental Offices vary from market to market. In
urban and suburban areas a Dental Office may have, for example, 15 or more
single-chair operatories, a multi-chair specialty bay, several full-time general
dentists, several dental hygienists and dental assistants, a business manager
and a receptionist. In more rural markets, a Dental Office may have, for
example, only three or four single chair operatories, and be staffed by one
general dentist, one hygienist or dental assistant and a receptionist. One
general dentist, designated as the Dental Director, oversees professional
matters at each Dental Office.

ADVERTISING AND MARKETING

           The Company seeks to increase patient volume at the Dental Offices
through television, radio and print advertising and other marketing techniques.
The Company has developed these techniques over the past 15 years in its
Dallas-Fort Worth operations and adapts them for use in its other markets as
appropriate. The Company's advertising emphasizes regional brand name
recognition of its affiliated Dental Offices, quality of care, comprehensive
specialty services, affordable payment plans for more complex procedures and
patient satisfaction. The Company operates as "Monarch(TM) Dental" or under
established regional brand names, such as "ProDent(SM)" in Philadelphia and
"Midwest Dental(SM)" in Wisconsin, depending on the nature and requirements of
the relevant market. The Company believes the brand name recognition by
consumers and managed dental care payors generated by its advertising programs
has contributed to its growth.

           The Company complements its advertising and marketing programs in
Dallas-Fort Worth  with a regional call center for the Dental Offices located in
this market. The Company's advertising and marketing support activities also
include the offering of convenient office hours, selecting favorable locations
for its Dental Offices, offering same-day emergency care and introducing or
expanding additional, higher-margin specialty services at the Dental Offices.
The Company has been able to leverage its existing advertising program to
generate revenue as it expands within its markets.



                                       5
<PAGE>   6

PAYOR MIX

           Third-party payment arrangements from which the Company derives
revenue directly or through the P.C.s include indemnity insurance, preferred
provider plans and capitated managed dental care plans. Under indemnity
insurance plans, the patient or the patient's employer pays insurance premiums
and the insurance company reimburses the dentist for all or a portion of the
dentist's usual and customary fee, with the patient paying the portion not
covered by insurance. Under preferred provider plans, dentists agree to provide
dental services to plan members on a discounted fee-for-service basis. Capitated
managed dental care plans typically pay dental group practices that agree to
provide services to plan members a fixed monthly amount for each plan member
covered for a specified schedule of services regardless of the quantity or cost
of services to the participating dental group practice obligated to provide
them. This arrangement shifts the risk of utilization to the dental group
practice that provides the dental services. Because the Company assumes
responsibility under the Management Agreements for all aspects of the operation
of the dental practices (other than the practice of dentistry) and thus bears
all costs of the P.C.s associated with the provision of dental services at the
Dental Offices (other than compensation and benefits of dentists and
hygienists), the risk of over-utilization of dental services at the Dental
Offices under capitated managed dental care plans is effectively shifted to the
Company. In addition, members of capitated managed dental care plans pay the
P.C.s or the Company, as applicable, additional amounts as co-payments for more
complex procedures. The relative size of capitation payments and co-payments
varies in accordance with the level of benefits provided and plan design.

           The Company seeks to optimize the revenue mix at the Dental Offices
between revenue from fee-for-service business and revenue from capitated managed
dental care plans. The Company focuses on fee-for-service business, which
includes fees paid by indemnity insurers, fees from preferred provider plans and
direct patient billings. The Company seeks to increase fee-for-service business
by expanding its operations within existing markets, entering new markets and
advertising.

           The Company seeks to supplement fee-for-service business with revenue
derived from contracts with capitated managed dental care plans. Capitated
managed dental care relationships with the Company and the P.C.s increase
dentist productivity and facility utilization. These relationships also provide
increased co-payment revenue, referrals of additional fee-for-service patients
and opportunities for dentists practicing at the Dental Offices to educate
patients about the benefits of elective dental procedures that may not be
covered by the patients' capitated managed dental care plans.

           The following table sets forth information regarding the sources of
revenue of the Company for the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                              ---------------------------------------------------------------------------------------------
                                        1999                               1998                            1997
                              --------------------------        --------------------------        -------------------------
                                                PERCENT                           PERCENT                          PERCENT
REVENUE SOURCE                REVENUE           OF TOTAL        REVENUE           OF TOTAL        REVENUE          OF TOTAL
--------------                --------          --------        --------          --------        --------         --------
                                                                  (DOLLARS IN THOUSANDS)
<S>            <C>            <C>                   <C>         <C>                   <C>         <C>                  <C>
Fee-for-Service(1)            $118,981              58.3%       $ 77,453              59.8%       $ 42,506             62.0%
Managed Dental Care:
   Capitation                   63,954              31.3%         34,764              26.8%         15,728             22.9%
   Co-payment                   21,135              10.4%         17,384              13.4%         10,385             15.1%
                              --------          --------        --------          --------        --------         --------
          Total               $204,070             100.0%       $129,601             100.0%       $ 68,619            100.0%
                              ========          ========        ========          ========        ========         ========
</TABLE>

(1)   Constitutes Revenue derived from indemnity dental plans, preferred
      provider plans and direct payments by patients not covered by any third
      party payor.



                                       6
<PAGE>   7

OPERATIONS

           The Company seeks to achieve operational efficiencies based on the
best practices identified in its affiliated dental groups. The Company adapts
and implements these practices throughout its provider networks, when
appropriate, to (i) reduce purchasing and administrative expenses, (ii) improve
operational efficiencies in such areas as scheduling, billing and personnel
management and (iii) introduce and standardize patient record keeping, treatment
protocols and technique utilization. The Company establishes and maintains
geographically dense networks of dentists in each of its markets. The Company
believes that these provider networks offer preferred provider and capitated
managed dental care plans the ability to enter the markets served by the
networks more quickly and comprehensively and to service their plan members more
efficiently than contracting through solo or smaller group practices. The
Company believes these networks provide it with advantages in establishing and
maintaining relationships with capitated managed dental care plans and other
third-party payors, including greater leverage than that of solo or smaller
group practices when negotiating provider agreements.

           Recruiting

           Establishing geographically dense networks of providers by effective
recruiting of qualified dentists is an important element of the Company's
business strategy. In the Company's experience, many dentists in the early
stages of their careers have incurred substantial student loans. As a result
they face significant financial constraints to starting their own practices or
buying into existing practices, especially in view of the capital-intensive
nature of modern dentistry. The Company believes that practice in its network of
Dental Offices offers both recently graduated dentists and more experienced
dentists without their own practices advantages over a solo or smaller group
practice, including relief from the burden of administrative and management
responsibilities and the resulting ability to focus almost exclusively on
practicing dentistry. Advantages to dentists may also include, depending upon
the market involved, compensation which rewards productivity, employee benefits
such as health insurance, paid vacation, continuing education, payment of
professional membership fees and malpractice insurance, and, for affiliated
specialists, the prospect of a steadier stream of referrals than a specialist
practicing independently. In markets in which it is difficult to recruit and
retain dentists, such as certain rural areas, the Company may seek to establish
partnerships in which these dentists retain a portion of the equity interest in
the practice.

           The Company believes that hygienists, dental assistants and office
staff are critical to attracting and retaining patients. Accordingly, the
Company actively recruits such staff by offering salaries and benefits which it
believes are generally superior to those offered by many solo or smaller group
practices.

           Call Centers; Scheduling

           The Company maintains a regional call center in Dallas-Fort Worth.
The call center staff fields calls generated by advertising, schedules patient
visits, answers patient questions and initiates contact with patients for
follow-up of ongoing treatment programs.

           The Company utilizes a centralized management information system in
the Dallas-Fort Worth call center to schedule patient appointments. The Dental
Offices generally offer extended office hours and Saturday appointments. The
Company sends patients to the Dental Office that is most convenient for the
patient in terms of timing and location. The Company's centralized scheduling
systems provide the Company with better control over patient scheduling,
resulting in increased productivity, as well as the ability to analyze and
control the revenue mix at the Dental Offices by balancing fee-for-service and
capitated managed dental care patients. This also enables the staff at each
Dental Office to focus on patient care and customer service by eliminating a
significant number of incoming calls.

           Purchasing

           The integration of the Dental Offices enables the Company to take
advantage of economies of scale that are generally not available to solo or
smaller group practices. The Company is able to purchase dental supplies,
laboratory services, insurance, office furniture, equipment, information systems
and advertising at reduced costs. The Company



                                       7
<PAGE>   8

also can contract for employee benefits at a lower cost than solo or smaller
group practices typically can obtain for themselves and their employees.

           Management Information Systems

           The Company has licensed for use at its Dental Offices a management
information system for dental practice management. The majority of the Dental
Offices are currently utilizing this information system. The Company uses the
information system to track data related to each Dental Office's operations and
financial performance. The information system can provide each of the Dental
Offices with data such as patient and practitioner scheduling information,
insurance coverage information, clinical record-keeping and revenue and
collection data (including credit history). Within each market, the Company uses
the information system to manage billing and collections, including electronic
insurance claims processing. In addition, the Company uses the information
system to provide information for case management and outcome related research.

           Quality Assurance

           The Company requires the dentists and hygienists at each of its
Dental Offices to develop and implement clinical management procedures and
treatment protocols, as well as uniform business and administrative standards
under which dental services are provided. These procedures, protocols and
standards vary from region to region and are determined by the Dental Directors
in each region in consultation with and under the guidance of a committee of the
Regional Dental Directors. The protocols include treatment planning, diagnostic
screening, radiographic records, record keeping, specialty referrals and dental
hygiene protocols. State licensing authorities require dentists to undergo
annual training. The dentists and hygienists practicing at the Dental Offices
can obtain some of the required continuing education training through the
Company's internal training programs in each regional market, certain of which
have been accredited by the Academy of General Dentistry.

AFFILIATION STRUCTURE

           Relationship with P.C.s

           In states in which the ownership of dental practices by non-dentists
is prohibited, the Company derives all of its revenue from its Management
Agreements with the P.C.s. Under each of the Management Agreements, the Company
receives a management fee equal to the Company's costs plus the lower of (i) 30%
of the P.C.'s net revenues or (ii) the P.C.'s net pre-tax income. The Company's
costs include all direct and indirect costs, overhead and expenses relating to
the Company's provision of services to the P.C.s under the Management
Agreements, such that substantially all costs associated with the provision of
dental services at the Dental Offices are borne by the Company, other than the
compensation and benefits of the dentists and hygienists who are employed by or
are independent contractors of the P.C.s. Under the Management Agreements, the
Company provides the P.C.s with, among other things, the facilities,
administrative personnel and supplies, as well as numerous services, including
administrative, accounting, cash management, financial statements and reports,
budgeting including capital expenditures, recruiting, insurance, litigation
management, negotiation of managed dental care contracts (which are entered into
by the Company and the P.C.s (except in Wisconsin)), management information
systems, billing and collection services. Each Management Agreement is for a
term of 40 years, with automatic renewal thereafter. Further, each Management
Agreement generally may be terminated by the P.C. only for cause, which includes
an uncured breach of the agreement by the Company, or upon the P.C.'s bankruptcy
or voluntary dissolution and may be terminated by the Company as of any
anniversary date of the Management Agreement upon 90 days' prior written notice.
In addition to the Management Agreements, the Company has a contractual right to
designate or approve the licensed dentists who own each P.C.'s capital stock.
Because the Company establishes a "controlling financial interest" under the
Management Agreements, the Company consolidates the dental group practices. In
states in which non-dentists are permitted to own dental practices, such as
Wisconsin, there is no need for this structure and the dentists are employed
directly by or are independent contractors of the Company.



                                       8
<PAGE>   9

           Employment Agreements

           All dentists practicing at the Dental Offices have entered into
employment agreements, or independent contractor agreements through their
professional corporations, with the P.C.s or, in the case of dentists practicing
in dental offices located in states (currently Wisconsin) in which the ownership
of dental practices by the Company is permitted, the Company. Such agreements
typically contain a non-competition agreement for up to three years following
their termination within a specified geographic area, usually a specified number
of miles from the relevant Dental Office. The employment agreements with
dentists who have sold their practices to the Company generally are for a
specified initial term of up to five years. Under each agreement, the dentist
assigns billing and collection rights to the P.C., in the case of states in
which non-dentists are permitted to own dental practices, or to the P.C. in
other states, with the P.C. in turn assigning such rights to the Company under
the terms of the applicable Management Agreement. In return, the dentist
receives either a fixed salary or collections-based compensation, which may have
a minimum guarantee, and a package of benefits which varies from region to
region. The dentists' compensation and benefits are paid by the entity, either
the Company or the relevant P.C., with whom the dentist has entered into an
employment agreement.

CURRENT EVENTS

           The Company believes that cash generated from operations will be
sufficient to fund its core operations. However, the Company may not have
sufficient cash from operations to fund interest expense and certain
non-recurring and contingency payments aggregating approximately $3.5 million
during the second quarter of 2000. In addition, the Company does not expect to
generate sufficient cash from operations to repay its obligations under its
short-term note, due June 30, 2000 under the Credit Facility, which the Company
expects will approximate $10.0 million at that time. Failure to make the
required principal payment would constitute a default under the Credit Facility.
The Company is currently discussing with its lenders an extension of this
short-term note and the extension of additional credit to cover the potential
cash shortfall in the second quarter. However, the Company can provide no
assurance that its lenders will extend the maturity of this short-term note or
that additional credit will be available to meet the potential cash shortfall in
the second quarter. Assuming that the Company can obtain additional financing in
the second quarter to meet any cash shortfall, the Company believes that cash
from operations will be sufficient in the third and fourth quarters of 2000 to
meet its obligations.

           In order to meet its short-term and long-term liquidity needs, the
Company may issue additional equity and debt securities, subject to market and
other conditions. In addition, the Company is also in the process of contacting
potential acquirors in order to determine if a sale of the Company would be more
beneficial to the Company's stockholders than raising additional capital to meet
its liquidity needs. The Company expects that potential acquirors would commence
due diligence procedures in the second quarter 2000. There can be no assurance
that any such sale will be available on terms acceptable to the Company. In the
event a sale transaction is not consummated, the Company would pursue the
issuance of debt securities and has signed an engagement letter with an
investment bank to pursue the issuance of these securities. Although there can
be no assurance that this financing will be available on terms acceptable to the
Company, the Company believes that additional sources of liquidity are available
at rates that would increase the Company's interest obligations. The failure to
raise the funds necessary to finance its future cash requirements could
adversely affect the Company's operations in future periods.

COMPETITION

           The dental services industry is highly fragmented, consisting
primarily of solo and smaller group practices. The dental practice management
segment of this industry, currently in its formative stage, is highly
competitive and is expected to become more competitive. In this regard, the
Company expects that the provision of multi-specialty dental services at
convenient locations will become increasingly more common. The Company is aware
of several dental practice management companies that are currently operating in
its existing markets. Companies with dental practice management businesses
similar to that of the Company, which currently operate in other parts of the
country, may begin targeting the Company's existing markets for expansion. Such
competitors may be better capitalized or otherwise enjoy competitive advantages
which may make it difficult for the Company to compete against them or to
acquire additional



                                       9
<PAGE>   10

Dental Offices on terms acceptable to the Company. If the Company seeks to
expand its operations into new markets, it is likely to face competition from
dental practice management companies which already have established a strong
business presence in such locations.

           The business of providing general dental, orthodontic and other
specialty dental services is highly competitive in the markets in which the
Company operates. The Company believes it competes with other providers of
dental and specialty services on the basis of factors such as brand name
recognition, convenience, cost and the quality and range of services provided.
Competition may include practitioners who have more established practices and
reputations. The Company's affiliated dental practices also compete in the
retention and recruitment of general dentists, specialists and clinical staff.
If the availability of dentists begins to decline in the Company's markets, it
may become more difficult to attract qualified dentists to staff the Dental
Offices sufficiently or to expand them. The Dental Offices may not be able to
compete effectively against other existing practices or against new single or
multi-specialty dental practices that enter its markets, or to compete against
such other practices in the recruitment of qualified dentists.

GOVERNMENT REGULATION

           The practice of dentistry is regulated at both the state and federal
levels. There can be no assurance that the regulatory environment in which the
Company or P.C.s operate will not change significantly in the future. The laws
and regulations of all states in which the Company operates impact the Company's
operations but do not currently materially restrict the Company's operations in
those states. In addition, state and federal laws regulate health maintenance
organizations and other managed care organizations for which dentists may be
providers. In general, regulation of health care-related companies is
increasing. In connection with its operations in existing markets and expansion
into new markets, the Company may become subject to additional laws, regulations
and interpretations or enforcement actions. The ability of the Company to
operate profitably will depend in part upon the ability of the Company and the
P.C.s to operate in compliance with applicable health care regulations.

           State Regulation

           The laws of many states, including all states in which the Company
currently operates, except Wisconsin, permit a dentist to conduct a dental
practice only as an individual, a member of a partnership or an employee of a
professional corporation, limited liability company or limited liability
partnership. These laws typically prohibit, either by specific provision or as a
matter of general policy, non-dental entities, such as the Company, from
practicing dentistry, from employing dentists and, in certain circumstances,
hygienists or dental assistants, or from otherwise exercising control over the
provision of dental services. Because under the Management Agreements the
Company bears all costs associated with the provision of dental services by the
P.C.s at the Dental Offices other than compensation and benefits of dentists and
hygienists and determines annual budgets for the P.C.s, the Company is
effectively able to manage the profitability of the Dental Offices. Under the
Management Agreements, however, the P.C.s control all clinical aspects of the
practice of dentistry and the provision of dental services at the Dental
Offices, including the exercise of independent professional judgment regarding
the diagnosis or treatment of any dental disease, disorder or physical
condition. Under the Management Agreements, persons to whom dental services are
provided at the Dental Offices are patients of the P.C.s and not of the Company
and the Company does not have or exercise any control or direction over the
manner or methods in which dental services are performed nor does the Company
interfere in any way with the exercise of professional judgment by the dentists
who are employees or independent contractors of the P.C.s.

           Many states in which the Company's Dental Offices presently are
located have fraud and abuse laws which are similar to the federal fraud and
abuse law described below, and which in many cases apply to referrals for items
or services reimbursable by any insurer, not just by Medicare and Medicaid. A
number of states, including all of the states in which Dental Offices are
currently located, also impose significant penalties for submitting false claims
for dental services. Many states, including all of the states in which the
Dental Offices are currently located, either prohibit or require disclosure of
self-referral arrangements and impose penalties for the violation of these laws.
Many states also prohibit dentists from splitting fees with non-dentists.



                                       10
<PAGE>   11

           Many states limit the ability of a person other than a licensed
dentist to own or control equipment or offices used in a dental practice. Some
of these states allow leasing of equipment and office space to a dental
practice, under a bona fide lease, if the equipment and office remain under the
control of the dentist. Some states (none in which the Company currently
operates) prohibit the advertising of dental services under a trade or corporate
name. Some states, including Arkansas, require all advertisements to be in the
name of the dentist. A number of states also regulate the content of
advertisements of dental services and the use of promotional gift items. In
addition, many states impose limits on the tasks that may be delegated by
dentists to hygienists and dental assistants. Some states (none in which the
Company currently operates) require entities designated as "clinics" to be
licensed, and may define clinics to include dental practices that are owned or
controlled in whole or in part by non-dentists. These laws and their
interpretations vary from state to state and are enforced by the courts and by
regulatory authorities with broad discretion.

           In addition, there are certain regulatory risks associated with the
Company's role in negotiating and administering managed care contracts. The
application of state insurance laws to third-party payor arrangements, other
than fee-for-service arrangements, is an unsettled area of law with little
guidance available. As the Company or the P.C.s contract with third-party
payors, on a capitation or other basis under which the Company or the relevant
P.C. assumes financial risk, the Company or the P.C.s may become subject to
state insurance laws. Specifically, in some states, regulators may determine
that the Company or the P.C.s are engaged in the business of insurance,
particularly if they contract on a financial-risk basis directly with
self-insured employers or other entities that are not licensed to engage in the
business of insurance. To the extent that the Company or the P.C.s are
determined to be engaged in the business of insurance, the Company may be
required to change the method of payment from third-party payors and the
Company's revenue may be materially and adversely affected.

           Federal Regulation

           Many of the federal laws regulating the provision of dental care
apply only to dental services which are reimbursed under the Medicare or
Medicaid programs. Because very little dental care is currently provided by
Medicare and Medicaid, the Company derives very little revenue from these
programs. Therefore, the current impact of these laws is negligible. However,
there can be no assurance that the reach of these laws will not be expanded in
the future to cover services reimbursable by any payor. If these laws were to be
expanded in such a manner, they could have a material adverse effect upon the
Company.

           The federal fraud and abuse statute prohibits, subject to certain
safe harbors, the payment, offer, solicitation or receipt of any form of
remuneration in return for, or in order to induce, (i) the referral of a person
for service, (ii) the furnishing or arranging for the furnishing of items or
services or (iii) the purchase, lease or order or the arrangement or
recommendation of a purchase, lease or order of any item or service which is, in
each case, reimbursable under Medicare or Medicaid. The statute reflects the
federal government's policy of increased scrutiny of joint ventures and other
transactions among health care providers in an effort to reduce potential fraud
and abuse related to Medicare and Medicaid costs. Because dental services are
covered under various government programs, including Medicare and Medicaid, this
federal law applies to dentists and the provision of dental services.

           Significant prohibitions against dentist self-referrals for services
covered by Medicare and Medicaid programs were enacted, subject to certain
exceptions, by Congress in the Omnibus Budget Reconciliation Act of 1993. These
prohibitions, commonly known as Stark II, amended prior physician and dentist
self-referral legislation known as Stark I (which applied only to clinical
laboratory referrals) by dramatically enlarging the list of services and
investment interests to which the self-referral prohibitions apply. Effective
January 1, 1995, Stark II prohibits a physician or dentist, or a member of his
or her immediate family, from making referrals for certain "designated health
services" to entities in which the physician or dentist has an ownership or
investment interest, or with which the physician or dentist has a compensation
arrangement. "Designated health services" include, among other things, clinical
laboratory services, radiology and other diagnostic services, radiation therapy
services, durable medical equipment, prosthetics, outpatient prescription drugs,
home health services and inpatient and outpatient hospital services. Stark II
prohibitions include referrals within the physician's or dentist's own group
practice (unless such practice satisfies the "group practice" exception) and
referrals in connection with the physician's or dentist's employment
arrangements with the P.C. (unless the arrangement satisfies the employment
exception). Stark II also prohibits billing the Medicare or Medicaid programs



                                       11
<PAGE>   12

for services rendered following prohibited referrals. Noncompliance with, or
violation of, Stark II can result in exclusion from the Medicare and Medicaid
programs and civil and criminal penalties. The Company believes that its
operations as presently conducted do not pose a material risk under Stark II,
primarily because the Company does not provide "designated health services."
Even if the Company were deemed to provide "designated health services," the
Company believes its activities would be protected under the employment and
group practice exceptions to Stark II. Nevertheless, there can be no assurance
that Stark II will not be interpreted or hereafter amended in a manner that has
a material adverse effect on the Company's operations as presently conducted.

           Proposed federal regulations also govern physician incentive plans
associated with certain managed care organizations that offer risk-based
Medicare or Medicaid contracts. These regulations define physician incentive
plans to include any compensation arrangement (such as capitation arrangements,
bonuses and withholds) that may directly or indirectly have the effect of
reducing or limiting services furnished to patients covered by the Medicare or
Medicaid programs. Direct monetary compensation which is paid by a managed care
plan, dental group or intermediary to a dentist for services rendered to
individuals covered by the Medicare or Medicaid programs is subject to these
regulations, if the compensation arrangement places the dentist at substantial
financial risk. When applicable, the regulations generally require disclosure to
the federal government or, upon request, to a Medicare beneficiary or Medicaid
recipient regarding such financial incentives, and require the dentist to obtain
stop-loss insurance to limit the dentist's exposure to such financial risk. The
regulations specifically prohibit physician incentive plans which involve
payments made to directly induce the limitation or reduction of medically
necessary covered services. A recently enacted federal law specifically exempts
managed care arrangements from the application of the federal anti-kickback
statute (the principal federal health care fraud and abuse law), but there is a
risk this exemption may be repealed. It is unclear how the Company will be
affected in the future by the interplay of these laws and regulations.

           The Company may be subject to Medicare rules governing billing
agents. These rules prohibit a billing agent from receiving a fee based on a
percentage of Medicare collections and may require Medicare payments for the
services of dentists to be made directly to the dentist providing the services
or to a lock box account opened in the name of the applicable P.C.

           Federal regulations also allow state licensing boards to revoke or
restrict a dentist's license in the event such dentist defaults in the payment
of a government-guaranteed student loan, and further allow the Medicare program
to offset such overdue loan payments against Medicare income due to the
defaulting dentist's employer. The Company cannot assure compliance by dentists
with the payment terms of their student loans, if any.

           Revenues of the P.C.s or the Company from all insurers, including
governmental insurers, are subject to significant regulation. Some payors limit
the extent to which dentists may assign their revenues from services rendered to
beneficiaries. Under these "reassignment" rules, the Company may not be able to
require dentists to assign their third-party payor revenues unless certain
conditions are met such as acceptance by dentists of assignment of the payor
receivables from patients, reassignment to the Company of the sole right to
collect the receivables, and written documentation of the assignment. In
addition, governmental payment programs such as Medicare and Medicaid limit
reimbursement for services provided by dental assistants and other ancillary
personnel to those services which were provided "incident to" a dentist's
services. Under these "incident to" rules, the Company may not be able to
receive reimbursement for services provided by certain members of the Company's
Dental Office staff unless certain conditions are met such as requirements that
services must be of a type commonly furnished in a dentist's office and must be
rendered under the dentist's direct supervision and that clinical Dental Office
staff must be employed by the dentist or the P.C. The Company does not currently
derive a significant portion of its Revenue under such programs.

           The operations of the Dental Offices are also subject to compliance
with regulations promulgated by the Occupational Safety and Health
Administration ("OSHA"), relating to such matters as heat sterilization of
dental instruments and the usage of barrier techniques such as masks, goggles
and gloves. The Company incurs expenses on an ongoing basis relating to OSHA
monitoring and compliance.

           Although the Company believes its operations as currently conducted
are in material compliance with existing applicable laws, there can be no
assurance that the Company's contractual arrangements will not be successfully



                                       12
<PAGE>   13

challenged as violating applicable fraud and abuse, self-referral, false claims,
fee-splitting, insurance, facility licensure or certificate-of-need laws or that
the enforceability of such arrangements will not be limited as a result of such
laws. In addition, there can be no assurance that the business structure under
which the Company operates, or the advertising strategy the Company employs,
will not be deemed to constitute the unlicensed practice of dentistry or the
operation of an unlicensed clinic or health care facility. The Company has not
sought judicial or regulatory interpretations with respect to the manner in
which it conducts its business. There can be no assurance that a review of the
business of the Company and the P.C.s by courts or regulatory authorities will
not result in a determination that could materially and adversely affect their
operations or that the regulatory environment will not change so as to restrict
the Company's existing or future operations. In the event that any legislative
measures, regulatory provisions or rulings or judicial decisions restrict or
prohibit the Company from carrying on its business or from expanding its
operations to certain jurisdictions, structural and organizational modifications
of the Company's organization and arrangements may be required, which could have
a material adverse effect on the Company, or the Company may be required to
cease operations.

INSURANCE

           The Company maintains professional malpractice and general liability
insurance for itself and maintains professional liability insurance covering
dentists, hygienists and dental assistants at the Dental Offices. The Company
generally is a named insured under such policies and is named as an additional
insured on each individual dentist's policy. The Company maintains $1.0 million
per occurrence and $2.0 million in the aggregate for general liability coverage
with $9.0 million umbrella coverage. The Company maintains malpractice coverage
of up to $10.0 million per occurrence and $10.0 million in the aggregate.
Certain types of risks and liabilities are not covered by insurance, however,
and there can be no assurance that coverage will continue to be available upon
terms satisfactory to the Company or that the coverage will be adequate to cover
losses. Malpractice insurance, moreover, can be expensive and varies from state
to state. Successful malpractice claims asserted against the dentists, the P.C.s
or the Company may have a material adverse effect on the Company's business,
financial condition and operating results. While the Company believes its
insurance policies are adequate in amount and coverage for its current
operations, there can be no assurance that the coverage maintained by the
Company will be sufficient to cover all future claims or will continue to be
available in adequate amounts or at a reasonable cost.

EMPLOYEES

           As of December 31, 1999, the Company had approximately 2,127
employees, including 46 dentists and 55 hygienists located at Midwest but
excluding the 458 dentists and 370 hygienists employed by or contracting with
the P.C.s. The Company is not party to any collective bargaining agreement with
a labor union and considers its relations with its employees to be satisfactory.

ITEM 2.  PROPERTIES

           The Company's corporate headquarters are located at 4201 Spring
Valley Road, Dallas, Texas, in approximately 17,000 square feet occupied under a
lease which expires on January 31, 2001.

           The Company also leases real estate at the location of each Dental
Office. Typically, each acquired Dental Office is located at the site used by
the respective selling dentist prior to the Company's acquisition. For the year
ended December 31, 1999, the Company had lease costs of approximately $8.6
million.



                                       13
<PAGE>   14

ITEM 3.  LEGAL PROCEEDINGS

           On or about April 26, 1999, the Company was served with a putative
class action complaint against the Company and certain of its officers and
directors, captioned Robert O. Neibert, et al. v. Monarch Dental Corp., Warren
F. Melamed, Gary W. Cage and Roger B. Kafker, Civil No. 3-99-CV-0762-X. The
class action complaint, which was filed in the United States District Court for
the Northern District of Texas (the "District Court"), alleges that the Company
and certain of its officers and directors violated the federal securities laws
by making material misrepresentations and omissions in certain public
disclosures during the period between February 24, 1998 and December 22, 1998.
The public disclosures relate to, among other things, acquired dental practices,
the Company's internal growth and growth prospects, and the Company's past and
future financial performance. Following the announcement of the filing of this
class action lawsuit, the Company was served with two similar putative class
actions in the District Court, which encompass the same class period and cover
almost identical allegations. On May 24, 1999, the District Court consolidated
these three class action complaints into a single action. The Company was
subsequently served on September 10, 1999 with a consolidated amended class
action complaint which contained substantially the same allegations as were
encompassed in the prior separate class action complaints. The Company and all
of the defendants named in the amended class action complaint filed motions to
dismiss all of the claims set forth in this complaint in October 1999.

           After the motions to dismiss were filed but before the District Court
decided on them, the parties reached agreement on the terms of a potential
settlement of the action. Accordingly, the parties entered into a Memorandum of
Understanding dated January 31, 2000, which sets forth the principal bases of a
settlement of the action, subject to approval by the District Court. The
Memorandum of Understanding and the proposed settlement will be contingent upon
(i) the parties' execution of an appropriate Stipulation of Settlement
("Stipulation"); (ii) conditional certification of the Class for purposes of the
Settlement; (iii) Court approval of the Settlement; and (iv) dismissal of the
Action with prejudice.

           In the Stipulation, the parties will request that the District Court
certify, for purposes of settlement, a class of all persons (exclusive of
Defendants and their affiliates) who purchased or otherwise acquired shares of
the Company during the period between February 24, 1998 and December 22, 1998,
and their successors in interest and transferees, immediate and remote (the
"Class"); that the District Court approve the settlement, including the release
of all claims by Class members against the Defendants; and that the Court enter
final judgment dismissing with prejudice all claims of the plaintiffs and the
Class against the Defendants. As part of the settlement, the Company will pay
$3.5 million into a settlement fund which will, among other things, be used to
pay authorized members of the Class. The entire settlement amount will be funded
by Monarch's directors & officers liability insurance carrier. No cash
contribution is required of Monarch or any of the other defendants. The parties
are currently negotiating the Stipulation and related settlement documentation.

           The Company also settled a dispute with the sellers of an affiliated
dental practice regarding the original purchase price and future obligations to
the sellers based on earnings of the practice.

           In accordance with generally accepted accounting principles, the
difference between the obligations terminated and the total consideration was
reflected in the Company's fourth quarter 1999 financial statements as a special
income item of $2.9 million, net of related legal expenses, or approximately
$0.23 per share.

           In addition to the matters discussed above, the Company is engaged in
various legal proceedings incidental to its business activities. Management does
not believe the resolution of such matters will have a material adverse effect
on the Company's financial position, results of operations or liquidity.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           No matters were submitted to a vote of security holders during the
fourth quarter of fiscal year 1999.



                                       14
<PAGE>   15

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

           The Common Stock of the Company is traded on the Nasdaq SmallCap
Market under the symbol "MDDS". Prior to September 14, 1999 the Common Stock of
the Company was traded on the Nasdaq National Market. The following table sets
forth the high and low sale prices for the Common Stock during the periods
indicated.

<TABLE>
<CAPTION>
                                 PERIOD                                  HIGH ($)    LOW ($)
           ----------------------------------------------                --------    -------
<S>                                                                      <C>         <C>
           1998
                First Quarter............................                17.750      11.000
                Second Quarter...........................                19.750      12.000
                Third Quarter............................                16.875       9.375
                Fourth Quarter...........................                14.375       3.625
           1999
                First Quarter............................                4.813        2.875
                Second Quarter...........................                4.313        2.375
                Third Quarter............................                4.000        2.188
                Fourth Quarter...........................                2.531        1.500
</TABLE>

           As of March 20, 2000, the closing price of the Common Stock was
$2.7188.

HOLDERS

           The number of record holders of the Company's Common Stock as of
March 20, 2000 was 448. The Company believes the number of beneficial owners of
the Company's Common Stock at that date was substantially greater.

DIVIDENDS

           The Company has not declared or paid any cash dividends on its Common
Stock since it became a C corporation in February 1996. The Company currently
intends to retain its earnings for future growth and, therefore, does not
anticipate paying cash dividends in the foreseeable future. Payment of future
dividends, if any, will be at the discretion of the Company's Board of Directors
after taking into account various factors, including the Company's financial
condition, operating results and current and anticipated cash needs. In
addition, under the terms of the Company's senior credit facility, the payment
of cash dividends is currently prohibited without the consent of the lender.

CHANGES IN SECURITIES AND USE OF PROCEEDS

           In November 1999, pursuant to a Stock Purchase Agreement, the Company
issued 16,897 shares of Common Stock to various affiliated dentists as
consideration for achieving specified financial performance goals in reliance
upon the exemption from registration under Regulation D promulgated under the
Securities Act.

           In December 1999, pursuant to a Stock Purchase Agreement, the Company
issued 1,753 shares of Common



                                       15
<PAGE>   16

Stock to various affiliated dentists as consideration for achieving specified
financial performance goals in reliance upon the exemption from registration
under Regulation D promulgated under the Securities Act.

           In December 1999, pursuant to stock option agreements, the Company
granted options to purchase 217,000 shares of Common Stock at an exercise price
of $1.6875 per share to certain of its employees in reliance upon the exemption
from registration under Regulation D promulgated under the Securities Act.

ITEM 6.  SELECTED FINANCIAL DATA

           The information set forth in "Selected Consolidated Financial
Information" on pages 9 and 10 of the Annual Report to Stockholders for the
fiscal year ended December 31, 1999 is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

           The information set forth in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 11 through 20 of the
Annual Report to Stockholders for the fiscal year ended December 31, 1999 is
incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

           The consolidated financial statements of the Company set forth on
pages 21 through 32 of the Annual Report to Stockholders for the fiscal year
ended December 31, 1999 are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

           None.



                                       16
<PAGE>   17

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

           The information appearing under the captions "Information Regarding
Directors" and "Executive Officers" in the registrant's definitive proxy
statement dated April 13, 2000 relating to the Annual Meeting of Stockholders to
be held on May 9, 2000 is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

           The information appearing under the caption "Executive Compensation"
in the registrant's definitive proxy statement dated April 13, 2000 relating to
the Annual Meeting of Stockholders to be held on May 9, 2000 is incorporated
herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The information appearing under the caption "Principal and Management
Stockholders" in the registrant's definitive proxy statement dated April 13,
2000 relating to the Annual Meeting of Stockholders to be held on May 9, 2000 is
incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

           The information appearing under the caption "Certain Transactions" in
the registrant's definitive proxy statement dated April 13, 2000 relating to the
Annual Meeting of Stockholders to be held on May 9, 2000 is incorporated herein
by reference.



                                       17
<PAGE>   18

                                     PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS FILED ON FORM 8-K

     (a)  Documents Filed as Part of this Annual Report on Form 10-K:

          1.   Financial Statements: The following Consolidated Financial
               Statements of Monarch Dental Corporation and Report of
               Independent Public Accountants, are incorporated by reference to
               pages 21 through 32 of the Registrant's 1999 Annual Report to
               Stockholders:

                    Report of Independent Public Accountants

                    Consolidated Balance Sheets at December 31, 1999 and 1998

                    Consolidated Statements of Income for the Years Ended
                    December 31, 1999, 1998 and 1997

                    Consolidated Statements of Stockholders' Equity for the
                    Years Ended December 31, 1999, 1998 and 1997

                    Consolidated Statements of Cash Flows for the Years Ended
                    December 31, 1999, 1998 and 1997

                    Notes to Consolidated Financial Statements

          2.   Financial Statement Schedules: The following financial statement
               schedule for Monarch Dental Corporation is filed as part of this
               Annual Report and should be read in conjunction with the
               Consolidated Financial Statements of Monarch Dental Corporation:

                    Schedule II - Valuation and Qualifying Accounts

               Schedules not listed above have been omitted because they are not
               applicable or are not required or the information required to be
               set forth therein is included in the Consolidated Financial
               Statements or Notes thereto.

          3.   Exhibits:

               The Exhibits listed on the accompanying Exhibit Index immediately
               following the financial statement schedules are filed as part of,
               or incorporated by reference into, this Annual Report.

     (b)  Reports on Form 8-K.

               Not applicable.



                                       18
<PAGE>   19

     (c)  Exhibits

          The Company hereby files as part of this Annual Report on Form 10-K
          the Exhibits listed in the attached Exhibit Index pages of this Annual
          Report.

     (d)  Financial Statement Schedules

          The Company hereby files as part of this Annual Report on Form 10-K
          the financial statement schedule listed in item 14 (a) 2 as set forth
          above.



                                       19
<PAGE>   20

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                               MONARCH DENTAL CORPORATION

Date:  March 30, 2000                          By: /s/ GARY W. CAGE
                                                  ------------------------------
                                                  Gary W. Cage
                                                  Chief Executive Officer

Date:  March 30, 2000                          By: /s/ LISA K. PETERSON
                                                  ------------------------------
                                                  Lisa K. Peterson
                                                  Chief Financial Officer


                                POWER OF ATTORNEY

           KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Warren F. Melamed and Gary W. Cage, joint
and severally, his or her attorneys-in-fact, each with the power of
substitution, for such person in any and all capacities, to sign any amendments
to this Report on Form 10-K, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or substitute or substitutes, may do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated below.

<TABLE>
<CAPTION>
Signature                                                Title                                    Date
---------                                                -----                                    ----
<S>                                                      <C>                                      <C>
 /s/  WARREN F. MELAMED, D.D.S.                          Chairman of the Board                    March 30, 2000
--------------------------------------                   and Director
Warren F. Melamed, D.D.S.

 /s/  GARY W. CAGE                                       Chief Executive Officer,                 March 30, 2000
--------------------------------------                   President
Gary W. Cage                                             and Director

 /s/  LISA K. PETERSON                                   Chief Financial Officer                  March 30, 2000
--------------------------------------                   (principal financial officer
Lisa K. Peterson                                         and principal accounting officer)

 /s/  GLENN E. HEMMERLE                                  Director                                 March 30, 2000
--------------------------------------
Glenn E. Hemmerle

/s/  JOHN E. MAUPIN, JR., D.D.S.                         Director                                 March 30, 2000
--------------------------------------
John E. Maupin, Jr., D.D.S

/s/  W. BARGER TYGART                                    Director                                 March 30, 2000
--------------------------------------
W. Barger Tygart
</TABLE>



                                       20
<PAGE>   21

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Stockholders of
Monarch Dental Corporation:


We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of Monarch Dental Corporation and subsidiaries
included in this Form 10-K and have issued our report thereon dated February 23,
2000. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statement schedules is presented for the purposes of complying with
the Securities and Exchange Commission's rules and is not part of the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.




                                       ARTHUR ANDERSEN LLP


Dallas, Texas,
  February 23, 2000



<PAGE>   22

                                   SCHEDULE II

                   MONARCH DENTAL CORPORATION AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       ADDITIONS      ADDITIONS
                                                        BALANCE AT     CHARGED TO       FROM                             BALANCE
                                                        BEGINNING      COSTS AND      ACQUIRED                           AT END
  CLASSIFICATION                                        OF PERIOD      EXPENSES       COMPANIES     DEDUCTIONS          OF PERIOD
  --------------                                        ----------     ----------     ---------     ----------          ---------
<S>                                                      <C>            <C>            <C>           <C>                 <C>
December 31, 1999:
      Allowance for Uncollectibles                       $ 9,419        $17,019        $  630        $(14,390)(a)        $12,678
      Accumulated Amortization of Intangible
            Assets                                         4,622          5,316            --              --              9,938
                                                         -------        -------        ------        --------            -------
                    Total Reserves and Allowances        $14,041        $22,335        $  630        $(14,390)           $22,616
                                                         =======        =======        ======        ========            =======

December 31, 1998:
      Allowance for Uncollectibles                       $ 3,155        $ 5,972        $6,038        $ (5,746)(a)        $ 9,419
      Accumulated Amortization of Intangible
            Assets                                         1,677          6,262            --          (3,317)             4,622
                                                         -------        -------        ------        --------            -------
                    Total Reserves and Allowances        $ 4,832        $12,234        $6,038        $ (9,063)           $14,041
                                                         =======        =======        ======        ========            =======

December 31, 1997:
      Allowance for Uncollectibles                       $ 1,797        $ 1,686        $1,572        $ (1,900)(a)        $ 3,155
      Accumulated Amortization of Intangible
            Assets                                           573          1,127            --             (23)             1,677
                                                         -------        -------        ------        --------            -------
                    Total Reserves and Allowances        $ 2,370        $ 2,813        $1,572        $ (1,923)           $ 4,832
                                                         =======        =======        ======        ========            =======
</TABLE>

This schedule should be read in conjunction with the Company's audited
consolidated financial statements and related notes thereto.

(a)  Write-off of uncollectible receivables net of recoveries of bad debt
     write-offs.



                                       21
<PAGE>   23
                                  EXHIBIT INDEX


   EXHIBIT
   NUMBER                            EXHIBIT
   ------                            -------

    +2.1       Stock Redemption Agreement dated as of February 5, 1996 by and
               between the Registrant and Warren F. Melamed, D.D.S. (excluding
               schedules, which the Registrant agrees to furnish supplementally
               to the Commission upon request) (1)

     2.2       Stock Purchase Agreement dated as of February 5, 1996 by and
               among the Registrant and the investors named therein (excluding
               schedules, which the Registrant agrees to furnish supplementally
               to the Commission upon request) (1)

     2.3       Asset Contribution Agreement dated as of January 31, 1996 by and
               among the Registrant, Shears Vanguard Ltd., Shears Vanguard Inc.,
               MDC Dental, Inc., Shears Vanguard SMI Inc., Shears Vanguard
               General, Inc. and Charles G. Shears, D.D.S. (excluding schedules,
               which the Registrant agrees to furnish supplementally to the
               Commission upon request) (1)

     2.4       Stock Purchase Agreement dated as of August 29, 1996 by and
               between the Registrant and David L. Hehli, D.D.S. (excluding
               exhibit, which the Registrant agrees to furnish supplementally to
               the Commission upon request) (1)

     2.5       Agreement and Plan of Merger dated as of June 19, 1997 by and
               among the Registrant, Dental Centers of Indiana (Monarch), Inc.,
               Dental Centers of Indiana, Inc., James W. Willis, Mark R. Johnson
               and Thurman H. Brown, II (excluding exhibits, which the
               Registrant agrees to furnish supplementally to the Commission
               upon request) (3)

     2.6       First Amendment to Agreement and Plan of Merger dated as of July
               25, 1997 by and among Monarch Dental Corporation, Dental Centers
               of Indiana (Monarch), Inc., Dental Centers of Indiana, Inc. and
               James W. Willis, Mark R. Johnson, and Thurman H. Brown, II (4)

     2.7       Asset Purchase Agreement dated as of November 12, 1997 by and
               among Monarch Dental (Press) Associates, L.P., Victor Press,
               B.D.S., P.C., VP Investments, Inc., Victor Press, Roger Obregon,
               Edgardo A. Gonzalez, Jeffrey J. Jacobs, Campbell R. Janse, Nick
               M. Higgins, Frank B. Lewis and Bruce M. Kral (excluding exhibits,
               which the Registrant agrees to furnish supplementally to the
               Commission upon request) (5)

     2.8       Agreement and Plan of Merger, dated as of September 1, 1998, by
               and among Monarch Dental Corporation, Valley Forge Dental
               Associates, Inc., DFV Acquisition Corp. and certain stockholders
               of Valley Forge Dental Associates, Inc. (excluding exhibits,
               which the Registrant agrees to furnish supplementally to the
               Commission upon request) (6)

     2.9       Asset Purchase Agreement, dated as of September 1, 1998, by and
               among Monarch Dental Associates (Utah), Inc., Robert Anderson,
               D.D.S., Inc., James Brodahl, D.D.S., Inc., Larry Kaban, D.D.S.,
               Inc., John Whitley, D.D.S., Inc., Talbert Dental Group, P.C.,
               Talbert Dental Group, Inc. and Talbert Medical Management
               Corporation (excluding exhibits, which the Registrant agrees to
               furnish supplementally to the Commission upon request) (7)

     3.1       Restated Certificate of Incorporation (8)

     3.2       Second Amended and Restated By-Laws (8)


<PAGE>   24


   EXHIBIT
   NUMBER                            EXHIBIT
   ------                            -------

      4.1      Specimen certificate for Shares of Common Stock, $.01 par value,
               of the Registrant (2)

    +10.1      Monarch Dental Corporation 1996 Stock Option and Incentive Plan,
               as amended (2)

    +10.2      Monarch Dental Corporation 1997 Employee Stock Purchase Plan (1)

     10.1      Monarch Dental Corporation 1996 Equity Acquisition Option Plan
               (2)

     10.2      Amended and Restated Stockholders' Agreement dated as of August
               29, 1996 by and among the Registrant, the TA Investors (as
               defined), the MacGregor Investors (as defined), the Monarch
               Investors (as defined) and the Hehli Investors (as defined) (2)

    +10.6      Amended and Restated Non-Competition Agreement dated as of July
               1, 1997 by and between the Registrant and Warren F. Melamed,
               D.D.S. (3)

     10.7      Management Agreement by and between Modern Dental Professionals,
               P.C. and Monarch Dental Associates, L.P. (2)

     10.8      Management Agreement by and between Modern Dental Professionals,
               P.C. and MacGregor Dental Associates, L.P. (2)

     10.9      Management Agreement by and between Modern Dental Professionals -
               Girlinghouse, P.A. and Convenient Dental Care, Inc. (2)

     10.10     Management Agreement by and between Modern Dental Professionals -
               Beavers, P.A. and Arkansas Dental Health Associates, Inc. (2)

     10.11     Management Agreement by and between Modern Dental Professionals /
               UDC - Girlinghouse, P.A. and United Dental Care, Inc. (2)

     10.12     Management Agreement by and between William T. Harris and
               Associates, a Professional Dental Corporation and United Dental
               Care, Inc. (2)

     10.13     Management Agreement by and between United Dental Care Tom
               Harris, D.D.S. & Associates and United Dental Care, Inc. (2)

     10.14     Management Agreement by and between Modern Dental Professionals -
               Indiana, P.C. and Dental Centers of Indiana (Monarch), Inc. (8)

     10.15     Management Agreement by and between Modern Dental Professionals -
               Colorado, P.C. and Three Peaks Dental Management, Inc. (8)


<PAGE>   25
   EXHIBIT
   NUMBER                            EXHIBIT
   ------                            -------

     10.16     Primary Care Dentist Agreement effective April 1, 1997 by and
               between Prudential Dental Maintenance Organization, Inc. and
               Modern Dental Professionals, P.C. and Monarch Dental Associates,
               L.P. (excluding certain portions which have been omitted as
               indicated based upon a request for confidential treatment, but
               which have been separately filed with the Commission) (2)

     10.17     Dental Service Agreement dated January 1, 1995 by and between
               Compcare Health Services Insurance Corporation and Advance Dental
               Management, Inc. (excluding certain portions which have been
               omitted as indicated based upon a request for confidential
               treatment, but which have been separately filed with the
               Commission) (2)

     10.18     Form of Director Indemnification Agreement (1)

     10.19     Sublease Agreement dated as of March 7, 1996 by and between Old
               American Country Mutual Fire Insurance Company and Oral Health
               Concepts Inc. (1)

     10.20     Office Lease Agreement dated as of September 6, 1996 by and
               between Government Employees Insurance Company and Monarch Dental
               Associates, L.P. (1)

    +10.21     Employment Agreement dated as of July 1, 1997 by and among the
               Registrant, Monarch Dental Associates, L.P. and Mr. Gary W. Cage
               (3)

    +10.22     Non-Competition Agreement dated as of July 1, 1997 by and between
               the Registrant and Mr. Gary W. Cage (3)

    +10.23     Employment Agreement dated as of September 11, 1998 by and
               between the Registrant and Joseph J. Frank (6)

     10.24     Monarch Dental Corporation 1999 Stock Option and Grant Plan (9)

    +10.25     Agreement dated as of March 26, 1999 by and among the Registrant,
               Warren F. Melamed, D.D.S. and Modern Dental Professionals, P.C.
               (9)

    +10.26     Employment Agreement dated as of August 9, 1999 by and between
               the Registrant and Lisa Corbett Peterson (10)

    *10.27     Second Amended and Restated Loan Agreement dated as of June 30,
               1999 among Monarch Dental Corporation and Bank of America, N.A
               and Other Entities Designated Herein

    *10.28     The First Amendment to Second Amended and Restated Loan Agreement
               dated December 30, 1999 by and among Monarch Dental Corporation,
               Bank of America, N.A. and Other Entities Designated Herein

    *10.29     The Second Amendment to Second Amended and Restated Loan
               Agreement dated March 9, 2000 by and among Monarch Dental
               Corporation, Bank of America, N.A. and Other Entities Designated
               Herein

    *10.30     Warrant Agreement dated January 4, 2000 among Monarch Dental
               Corporation, Bank of America, N.A., Fleet National Bank, and
               COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,"Rabobank
               Nederland", New York Branch


<PAGE>   26

     EXHIBIT
     NUMBER                            EXHIBIT
     ------                            -------

     *11.1     Statement re: Computation of per share earnings data

     *13.1     Annual Report to Stockholders for the fiscal year ended December
               31, 1999 (such report, except for those portions thereof which
               are expressly incorporated by reference in this filing, is
               furnished for the information of the Commission and is not deemed
               "filed" as part hereof)

     *21.1     Subsidiaries of the Registrant

     *23.1     Consent of Arthur Andersen LLP

     *24.1     Powers of Attorney (included on signature page hereto)

     *27.1     Financial Data Schedule



     *    Filed herewith

      +   Management contract or compensatory plan or arrangement

     (1)  Filed as an exhibit to the Registrant's Pre-Effective Amendment No. 1
          to its Registration Statement on Form S-1 (File No. 333-24409) filed
          with the Securities and Exchange Commission on May 20, 1997 and
          incorporated herein by reference thereto.

     (2)  Filed as an exhibit to the Registrant's Pre-Effective Amendment No. 2
          to its Registration Statement on Form S-1 (File No. 333-24409) filed
          with the Securities and Exchange Commission on June 23, 1997 and
          incorporated herein by reference thereto.

     (3)  Filed as an exhibit to the Registrant's Pre-Effective Amendment No. 3
          to its Registration Statement on Form S-1 (File No. 333-24409) filed
          with the Securities and Exchange Commission on July 17, 1997 and
          incorporated herein by reference thereto.

     (4)  Filed as an exhibit to the Registrant's Current Report on Form 8-K
          filed with the Securities and Exchange Commission on August 15, 1997
          and incorporated herein by reference thereto.

     (5)  Filed as an exhibit to the Registrant's Current Report on Form 8-K
          filed with the Securities and Exchange Commission on November 19, 1997
          and incorporated herein by reference thereto.

     (6)  Filed as an exhibit to the Registrant's Current Report on Form 8-K
          filed with the Securities and Exchange Commission on September 25,
          1998 and incorporated herein by reference thereto.

     (7)  Filed as an exhibit to the Registrant's Current Report on Form 8-K
          filed with the Securities and Exchange Commission on October 2, 1998
          and incorporated herein by reference thereto.

     (8)  Filed as an exhibit to the Registrant's Current Report on Form 10-K
          filed with the Securities and Exchange Commission on March 31, 1998
          and incorporated herein by reference thereto.

     (9)  Filed as an exhibit to the Registrant's Current Report on Form 10-K
          filed with the Securities and Exchange Commission on March 31, 1999
          and incorporated herein by reference thereto.

     (10) Filed as an exhibit to the Registrant's Current Report on Form 10-Q
          filed with the Securities and Exchange Commission on November 15, 1999
          and incorporated herein by reference thereto.