SECURITIES AND EXCHANGE COMMISSION Washington, D.C. FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: March 5, 2001 MEDICAL DYNAMICS, INC. ---------------------------------------------------- (Exact name of Registrant as specified in its charter) Commission file number: 0-8632 Colorado 84-0631765 ------------------------------ ------------ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 400 Inverness Drive South Englewood, Colorado 80112 -------------------------------------- -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 486-5818 99 Inverness Drive East, Englewood, CO 80112 -------------------------------------------- former name or former address, if applicable Item 5. Other Events. Medical Dynamics, Inc. (OTCBB - MEDY), a nationwide provider of dental practice management software and integrated technology solutions, today announced it has executed an extension to the amended and restated merger agreement with InfoCure Corporation (Nasdaq-VWKS) by which InfoCure had agreed to acquire all outstanding Medical Dynamics common stock in exchange for InfoCure common and preferred stock (now a combination of InfoCure common stock and common and preferred stock of PracticeWorks, Inc. as described below). The merger agreement between InfoCure and Medical Dynamics originally entered into on December 21, 1999 and subsequently amended on April 10 and June 21, 2000, and then amended and restated on October 11, 2000. The amended and restated merger agreement was further amended on October 30, 2000 and December 19, 2000. As extended, the merger is expected to occur before May 31, 2001. InfoCure spun off its interest in its PracticeWorks subsidiary (AMEX - PRW) to the InfoCure shareholders as of 11:59 pm on March 5, 2001. An aggregate of approximately 8.7 million shares of PracticeWorks common stock, representing 100% of the issued and outstanding PracticeWorks common stock, were issued to the InfoCure shareholders in the distribution. Each InfoCure stockholder received 1/4 of a share of PracticeWorks common stock for each share of InfoCure's common stock held on February 21, 2001. As a result of the completion of the PracticeWorks spin-off, PracticeWorks has become obligated under the merger agreement to acquire Medical Dynamics. As a result, if the shareholders approve the transaction Medical Dynamics will merge with a wholly-owned subsidiary of PracticeWorks and, upon completion of the merger, will become a wholly-owned subsidiary of PracticeWorks. Upon completion of the merger, one current share of Medical Dynamics common stock will convert to o 0.017183 shares of PracticeWorks common stock o .06873 shares of InfoCure common stock and o .07558 shares of a series of PracticeWorks 6% preferred stock which will have a liquidation preference of $5.44 per share. The shares of PracticeWorks preferred stock will be represented by depository receipts equal to 1/10th share of preferred stock or greater. The shares of PracticeWorks preferred stock to be issued in the spin-off will be convertible into 1.5% of PracticeWorks common stock outstanding on a fully-diluted basis immediately after that spin-off occurs. Persons holding 100 or fewer shares of Medical Dynamics common stock will receive cash at the rate of $.75 per share. Persons holding options and warrants to acquire Medical Dynamics common stock prior to the merger will be entitled to receive options to acquire PracticeWorks common stock. The merger is subject to approval by Medical Dynamics shareholders at a meeting which Medical Dynamics expects to hold on or before May 31, 2001, pursuant to a proxy statement. The proxy statement will be included as part of a Form S-4 registration statement to be filed by PracticeWorks. InfoCure has loaned to Medical Dynamics a total of $1,650,000. This loan is due on December 31, 2001 if the merger does not occur. InfoCure has assigned this loan and all loan documents to PracticeWorks. Medical Dynamics has used the proceeds of this loan for working capital. Dr. and Mrs. Adair (principal shareholders and directors of Medical Dynamics) and Daniel Richmond and Chae Kim (directors of Medical Dynamics and Computer Age Dentist) agreed to continue to subordinate their remaining debt (totaling approximately $350,000) and their security interest in Medical Dynamics's assets and the assets of Computer Age Dentist to the repayment of the amounts due to PracticeWorks. InfoCure is a leading national provider of information management technology and services targeted to healthcare practices that operate in a variety of specialties, including anesthesiology, dermatology, emergency medicine, pathology, podiatry, radiology and enterprise-wide medical entities. The company's wide-range of technological solutions automate the administrative, financial and clinical information management functions for doctors and other healthcare providers. InfoCure provides its customers with ongoing software services, training and electronic data interchange (EDI) services. Visit InfoCure at www.infocure.com . PracticeWorks, Inc. is an information management technology provider for dentists, orthodontists and oral and maxillofacial surgeons. PracticeWorks' product offerings include practice management applications, business-to- business e-commerce services, electronic data interchange (EDI) services, and ongoing maintenance, support and training related to all products. Visit PracticeWorks at www.practiceworks.com . Certain statements contained in this report may be forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks including, but not limited to, future economic conditions, competitive products and pricing, new product development, the delivery of products under existing contracts and other factors. Item 7. Financial Statements and Exhibits (a) Not applicable. (b) Not applicable. (c) Exhibits 1. Extension Agreement dated March 5, 2001 2. Collateral Assignment of Loan Documents and Security Agreement SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MEDICAL DYNAMICS, INC. March 12, 2001 By: /s/ Van A. Horsley -------------------------------- Van A. Horsley, President

MEDICAL DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2000 ASSETS ------ CURRENT ASSETS: Cash and equivalents $ 330,800 Trade receivables, less allowance for doubtful accounts of $19,600 43,300 Inventories 2,500 Prepaid expenses and other 700 ------------ Total current assets 377,300 ------------ SOFTWARE DEVELOPMENT AND SUPPORT: Software development costs, net of accumulated amortization of $1,321,800 1,948,200 Technical support contracts, net of accumulated amortization of $890,700 593,800 ------------ Total software development and support 2,542,000 ------------ PROPERTY AND EQUIPMENT: Demonstration equipment 143,000 Machinery and equipment 606,100 Furniture and fixtures 235,600 Leasehold improvements 54,500 ------------ 1,039,200 Less accumulated depreciation and amortization (753,900) ------------ Property and equipment, net 285,300 ------------ OTHER ASSETS: Goodwill, net of accumulated amortization of $225,500 1,050,600 Deposits and other 42,500 ------------ Total other assets 1,093,100 ------------ TOTAL ASSETS $ 4,297,700 ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Current maturities of notes payable $ 2,002,200 Accounts payable and accrued expenses 665,900 Unearned revenue 269,800 ------------ Total current liabilities 2,937,900 ------------ NOTES PAYABLE, net of current portion 135,900 STOCKHOLDERS' EQUITY: Preferred stock, $.001 par value; authorized 5,000,000 shares; none issued -- Common stock, $.001 par value; authorized 30,000,000 shares, issued and outstanding 13,229,206 shares 13,200 Additional paid-in capital 28,353,200 Accumulated deficit (27,142,500) ------------ Total stockholders' equity 1,223,900 ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,297,700 ============ See accompanying notes to these consolidated financial statements. F-3

MEDICAL DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, ---------------------------- 2000 1999 ------------ ------------ NET SALES: Dental products: Software, training, and installation $ 796,300 $ 3,809,700 Equipment 222,200 4,495,900 Support services 2,669,500 2,522,400 Medical products 11,300 130,700 ------------ ------------ 3,699,300 10,958,700 ------------ ------------ COST OF SALES: Dental products: Software, training, and installation 616,200 1,133,000 Equipment 365,400 4,015,300 Support services 679,100 924,700 Medical products 54,500 34,600 ------------ ------------ 1,715,200 6,107,600 ------------ ------------ GROSS PROFIT 1,984,100 4,851,100 ------------ ------------ OPERATING EXPENSES: Selling and marketing 608,000 3,679,800 General and administrative 2,945,500 4,983,300 Stock-based compensation 24,400 49,600 Research and development -- 2,900 Impairment of goodwill -- 655,200 ------------ ------------ Total operating expenses 3,577,900 9,370,800 ------------ ------------ OPERATING LOSS (1,593,800) (4,519,700) OTHER INCOME (EXPENSE): Other income 3,800 44,900 Interest income 14,300 13,500 Interest expense (375,700) (650,000) Loss on Command settlement -- (286,800) ------------ ------------ (357,600) (878,400) ------------ ------------ NET LOSS $ (1,951,400) $ (5,398,100) ============ ============ BASIC AND DILUTED LOSS PER COMMON SHARE $ (.15) $ (.52) ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 13,087,200 10,312,700 ============ ============ See accompanying notes to these consolidated financial statements. F-4

MEDICAL DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999 COMMON STOCK Additional ------------------------ Paid-in Shares Amount Capital --------- ------------ ----------- BALANCE, October 1, 1998 10,034,500 $ 10,000 $ 25,246,900 Conversion of debentures to common stock: Principal, net of discount 1,144,900 1,200 1,142,200 Accrued interest 101,300 100 125,900 Fair value of warrants issued for debt discount and issuance costs -- -- 299,400 Proceeds from exercise of options 98,000 100 141,400 Proceeds from sale of common stock, net of offering costs of $32,900 523,800 500 766,600 Additional shares issued pursuant to terms of agreement 311,800 300 (300) Attribution of compensation under stock options and warrants: Employee -- -- 32,100 Non-employee -- -- 17,500 Net loss -- -- -- ------------ ------------ ------------ BALANCE, September 30, 1999 12,214,300 12,200 27,771,700 Conversion of debentures to common stock: Principal, net of discount 729,340 720 372,980 Proceeds from exercise of options 207,700 200 184,200 Additional shares issued pursuant to terms of agreement 77,866 80 (80) Attribution of compensation under stock options and warrants: Non-employee -- -- 24,400 Net loss -- -- -- ------------ ------------ ------------ BALANCE, September 30, 2000 13,229,206 $ 13,200 $ 28,353,200 ============ ============ ============ Table continues on following page. See accompanying notes to these consolidated financial statements. F-5

MEDICAL DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999 (Continued) Accumulated Deficit Total ------------ ------------ BALANCE, October 1, 1998 $(19,793,000) $ 5,463,900 Conversion of debentures to common stock: Principal, net of discount -- 1,143,400 Accrued interest -- 126,000 Fair value of warrants issued for debt discount and issuance costs -- 299,400 Proceeds from exercise of options -- 141,500 Proceeds from sale of common stock, net of offering costs of $32,900 -- 767,100 Additional shares issued pursuant to terms of agreement -- -- Attribution of compensation under stock options and warrants: Employee -- 32,100 Non-employee -- 17,500 Net loss (5,398,100) (5,398,100) ------------ ------------ BALANCE, September 30, 1999 (25,191,100) 2,592,800 Conversion of debentures to common stock: Principal, net of discount -- 373,700 Proceeds from exercise of options -- 184,400 Additional shares issued pursuant to terms of agreement -- -- Attribution of compensation under stock options and warrants: Non-employee -- 24,400 Net loss (1,951,400) (1,951,400) ------------ ------------ BALANCE, September 30, 2000 $(27,142,500) $ 1,223,900 ============ ============ See accompanying notes to these consolidated financial statements. F-5(Con't)

MEDICAL DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, -------------------------- 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(1,951,400) $(5,398,100) Adjustments to reconcile net loss to net cash used in operating activities: Common stock options granted for compensation and other services 24,400 49,600 Depreciation expense 135,900 191,800 Amortization of intangible assets 887,900 937,000 Amortization of debt discount and issuance costs 123,000 446,500 Conversion of accrued interest on debentures to common stock -- 126,000 Bad debt expense -- 82,300 Impairment of goodwill -- 655,200 Loss on disposal of Command, less cash received -- 279,500 Provision for obsolete and slow-moving inventories -- 23,700 Other -- (23,200) Changes in operating assets and liabilities, net of effects of acquisitions: Decrease (increase) in: Trade receivables 211,100 454,000 Inventories 186,700 621,700 Prepaid expenses and other 22,700 13,100 Increase (decrease) in: Accounts payable and accrued expenses (453,700) 263,500 Unearned revenue (98,700) (1,600) ----------- ----------- Net cash used in operating activities (912,100) (1,279,000) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in restricted cash -- 50,000 Software development costs (68,200) (229,100) Purchase of property and equipment -- (85,800) ----------- ----------- Net cash used in investing activities (68,200) (264,900) ----------- ----------- See accompanying notes to these consolidated financial statements. F-6

MEDICAL DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED SEPTEMBER 30, -------------------------- 2000 1999 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on notes payable (353,300) (453,900) Payment of debt issue costs -- (90,900) Proceeds from issuance of common stock -- 767,100 Proceeds from exercise of common stock options 184,400 141,500 Proceeds from issuance of convertible debentures -- 400,000 Proceeds from shareholder loan -- 400,000 Proceeds from short-term borrowings 1,300,000 5,991,500 Repayment of short-term borrowings -- (5,984,500) ------------ ---------- Net cash provided by financing activities 1,131,100 1,170,800 ------------ ---------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 150,800 (373,100) CASH AND EQUIVALENTS, beginning of year 180,000 553,100 ------------ ---------- CASH AND EQUIVALENTS, end of year $ 330,800 $ 180,000 ============ ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION - Cash paid for interest $ 161,900 $ 100,500 ============ ========== SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Conversion of accounts payable to debt $ -- $ 118,600 ============ ========== Conversion of debentures to common stock, net of discount $ 373,700 $1,143,400 ============ ========== Conversion of accrued interest to notes payable $ -- $ 9,200 ============ ========== Fair value of warrants issued for debt discount $ -- $ 40,000 ============ ========== Debt issuance costs incurred for convertible debentures $ -- $ 259,400 ============ ========== See accompanying notes to these consolidated financial statements. F-7

1998 Plan 1998 Plan -------------------------- ------------------------- Weighted Weighted Average Average Number of Exercise Price Number of Exercise Price Shares Per Share Shares Per Share --------- --------- --------- --------- Outstanding, October 1, 1998 57,200 $ 1.74 -- $ -- Granted -- -- 234,800 .93 Exercised -- -- -- -- Cancled (5,000) 3.00 -- -- --------- -------- Outstanding, September 30, 1999 52,200 1.61 234,800 .93 Granted -- -- 40,000 1.81 Exercised -- -- (207,700) .89 Canceled -- -- (44,100) 1.64 --------- --------- Outstanding, September 30, 2000 52,200 $ 1.61 23,000 $ 1.47 ========= =========

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