SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

 Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

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* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

* Includes 598,800 and 1,200 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 598,800 and 1,200 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 399,200 and 800 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 492,600 and 1,000 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 93,400 and 200 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 1,091,400 and 2,200 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 1,091,400 and 2,200 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

* Includes 1,091,400 and 2,200 shares of Common Stock issuable upon the conversion of Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock, respectively, which are both convertible into Series B Convertible Preferred Stock at any time at the option of the holder, which Series B Convertible Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Does not include interest and dividends.

**Assumes the conversion of (i) the Convertible Senior Subordinated Loan Notes and Series A Convertible Preferred Stock into Series B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock into Common Stock. Does not include interest and dividends.

This Amendment No. 2 to Statement of Beneficial Ownership on Schedule 13D (this “Amendment No. 2”) amends the Statement of Beneficial Ownership on Schedule 13D filed by the Reporting Persons on January 3, 2018 (as amended, the “Schedule 13D” or this “Statement”), with respect to the Common Stock, no par value per share (the “Common Stock”), of Birner Dental Management Services, Inc., a Colorado corporation (the “Company”). Capitalized terms used but not defined in this Amendment No. 2 shall have the meanings set forth in the Schedule 13D. Except as amended and supplemented by this Amendment No. 2, the Schedule 13D remains unchanged.

Item 3. Source and Amount of Funds or Other Consideration.

On September 1, 2018, Palm Active Dental, LLC (“PAD”) transferred and contributed to Palm Global Small Cap Master Fund, LP. (the “Fund”) $1,497,000 in principal amount of the Convertible Senior Subordinated Secured Loan Notes of the Company (the “Notes”) and three shares of Series A Convertible Preferred Stock of the Company (the “Series A Preferred Stock”), in exchange for limited partnership interests in the Fund with a value equal to $1,500,000.

Item 5. Interest in Securities of the Issuer.

(a) The Reporting Persons beneficially own in the aggregate 1,093,600 shares of Common Stock, including (i) 598,800, 399,200 and 93,400 shares of Common Stock issuable upon the conversion of the Notes held by Palm Global, PAD and PAD II, respectively, and (ii) 1,200, 800 and 200 shares of Common Stock issuable upon the conversion of the Series A Preferred Stock held by Palm Global, PAD and PAD II, respectively. The Notes and Series A Preferred Stock are both convertible into Series B Preferred Stock at any time at the option of the holder, which Series B Preferred Stock is then convertible into Common Stock at any time at the option of the holder. Assuming (i) the conversion of the Notes and Series A Preferred Stock into Series B Preferred Stock and (ii) the Series B Preferred Stock into Common Stock, the Reporting Persons beneficially own approximately 36.8% of the Company’s outstanding shares of Common Stock (not including restricted stock held by Messrs. Horowitz and Tirpak received as director compensation).

Each of Palm Global, PAD and PAD II directly holds the number and percentage of shares of Common Stock disclosed as beneficially owned by it in the applicable table set forth on the cover page to this Statement. Each of Mr. Horowitz and Mr. Tirpak directly holds 2,000 shares of restricted stock received by them as director compensation; restricted stock vests in two equal installments on June 20, 2019 and June 20, 2020. None of the other Reporting Persons directly holds any of the securities or shares of Common Stock disclosed in this Statement.

In addition, the Palm Investors are entitled to the aggregate amount of PIK interest and dividends for the Notes and Series A Preferred Stock equal to $147,669 through July 31, 2018 that would be convertible into additional shares of Common Stock.

Each percentage ownership of shares of Common Stock set forth in this Statement is based on 1,881,761 shares of Common Stock reported by the Company as outstanding as of August 3, 2018 in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 filed with the Securities and Exchange Commission on August 14, 2018 plus 1,093,600 shares of Common Stock issuable upon the conversion of (i) the Notes and the Series A Preferred Stock into Series B Preferred Stock and (ii) the Series B Preferred Stock into shares of Common Stock.

Due to his positions with Palm Management (US) LLC and affiliated entities, Mr. Palmer may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global, PAD and PAD II. Palm Management (US) LLC, as the investment manager of Palm Global, may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global. Due to their positions with Palm Global and Palm Management (US) LLC, Messrs. Horowitz and Tirpak may be deemed to be beneficial owners of the shares of Common Stock disclosed as directly owned by Palm Global. Palm Active Partners Management, LLC, as the investment manager of PAD and PAD II, may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by PAD and PAD II. Due to their positions with Palm Active Partners Management, LLC, Messrs. Horowitz, Palmer and Tirpak may be deemed to be beneficial owners of the shares of Common Stock disclosed as directly owned by PAD and PAD II. Palm Management (US) LLC, Palm Active Partners Management, LLC, Messrs. Horowitz, Palmer and Tirpak disclaim beneficial ownership of these shares except to the extent of their respective pecuniary interest therein.

(c) On September 1, 2018, PAD transferred and contributed to the Fund $1,497,000 in principal amount of the Notes and three shares of the Series A Preferred Stock, in exchange for limited partnership interests in the Fund with a value equal to $1,500,000.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

 
The information set forth in Item 3 above is incorporated herein by reference.

Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into an agreement with respect to the joint filing of this Amendment No. 2, which agreement is set forth on the signature page to this Statement.

Item 7. Material to Be Filed as Exhibits.

SIGNATURE

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct.

In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of this Statement on Schedule 13D with respect to the Common Stock of the Company.

Exhibit 99.1

TRANSFER AND JOINDER AGREEMENT

This TRANSFER AND JOINDER AGREEMENT (this “Agreement”) is entered into on this September 1, 2018, by and between Palm Active Dental, LLC, a Delaware limited liability company (“Transferor”), and Palm Global Small Cap Master Fund, LP, a Cayman Islands limited partnership (“Transferee”).  Transferor and Transferee are sometimes referred to herein as a “Party” and together as the “Parties”.

The Parties are party to a Securities Purchase Agreement, dated December 28, 2017 (the “Securities Purchase Agreement”), with Birner Dental Management Services, Inc., a Colorado corporation (the “Company”), pursuant to which Transferor acquired from the Company a Convertible Senior Subordinated Secured Loan Note in the principal amount of $3,493,000 (the “Subject Note”) and seven (7) shares of Series A Convertible Preferred Stock (the “Subject Shares”) and Transferee acquired from the Company a Convertible Senior Subordinated Secured Loan Note in the principal amount of $1,497,000 and three (3) shares of Series A Convertible Preferred Stock.

In connection with the Securities Purchase Agreement, the Parties also entered into a Security Agreement, dated December 28, 2017 (the “Security Agreement”), with the Company, a Subordination Agreement, dated December 28, 2017 (the “Subordination Agreement”), with the Company and Guaranty Bank and Trust Company, a Colorado bank (the “Bank”), and a Registration Rights Agreement, dated December 28, 2017 (the “Registration Right Agreement”), with the Company.

Transferor hereby transfers and contributes to Transferee $1,497,000 in principal amount of the Subject Note (the “Acquired Note”) and three (3) of the Subject Shares (the “Acquired Shares”), in exchange for limited partnership interests in Transferee with a value equal to $1,500,000 as of the date hereof (the “LP Interests”). The Transferor shall be entitled to the payment of accrued but unpaid interest on the Acquired Note and accrued but unpaid dividends on the Acquired Shares up to and through the date hereof. Interest on the Acquired Note and dividends on the Acquired Shares accruing from and after the date hereof shall be payable to the Transferee.  Transferee shall issue the LP Interests to Transferor on or promptly after the date hereof.

Transferor agrees to promptly surrender to the Company for transfer the Subject Note and a certificate for the Subject Shares and cause the Company to issue to the Transferee a new Convertible Senior Subordinated Secured Loan Note in the amount of the Acquired Note and a certificate for three (3) shares of Series A Convertible Preferred Stock representing the Acquired Shares, with the balance of the Subject Note and Subject Shares being reissued by the Company to the Transferor.

Transferee is already a party to the Securities Purchase Agreement, Security Agreement, Subordination Agreement, and Registration Rights Agreement.  Transferor hereby assigns to Transferee all of Transferor’s rights and benefits under the Securities Purchase Agreement, Security Agreement, Subordination Agreement, and Registration Rights Agreement as to the Acquired Note and the Acquired Shares. Transferee agrees to be bound by the Securities Purchase Agreement, Security Agreement, Subordination Agreement, and Registration Rights Agreement, as to the Acquired Note and the Acquired Shares, pursuant to the terms and conditions of such agreements. Transferee hereby agrees to be joined as a party to the Subordination Agreement, as to the Acquired Note and the Acquired Shares, as a “Subordinated Creditor” thereunder and hereby designates the “Subordinated Creditor Agent” as its agent under such agreement as and to the extent provided therein. The Transferee hereby agrees to be a party to the Subject Note, to the extent of the interest acquired therein by the Transferee.

The Parties agree to provide the notices that may be required by the Securities Purchase Agreement, Security Agreement, Subordination Agreement, and Registration Rights Agreement as a result of the transactions effectuated by this Agreement, including a notice to the Company pursuant to the Subject Note and a notice to the Bank pursuant to the Subordination Agreement.

The Parties agree that each of them will execute and deliver such further agreements, documents and instruments, in form and substance reasonably satisfactory to each of them, and take such other actions as may be reasonably necessary or appropriate, to carry out the purposes and intents of this Agreement and fully effectuate the transactions contemplated hereby.

The Parties have previously designated three (3) members of the board of directors of the Company pursuant to their rights under the Securities Purchase Agreement.  The Parties acknowledge that, due to their designation of members of the Company’s board of directors and their respective knowledge of the Company, the Parties are able to evaluate the financial position, results of operations and prospects of the Company and assess the merits of the transactions effectuated pursuant to this Agreement.

The Parties acknowledge, understand and agree that each of the Parties may possess material nonpublic information regarding the Company that may not be known to the other Party and that may impact the value of the Acquired Note and the Acquired Shares (the “Information”), but each of them have nevertheless determined that the transactions effectuated by this Agreement are appropriate and have determined to consummate such transactions.

Each Party agrees that neither the other Party nor any of the other Party’s affiliates, directors, principals, shareholders, partners, investors, officers, employees and/or agents shall have any liability to it or its affiliates, directors, principals, shareholders, partners, investors, officers, employees and/or agents, whatsoever, due to, based on or in connection with the other Party’s use or non-disclosure of any Information, and each Party hereby irrevocably waives any claim that it might have based on the failure of the other Party to disclose any such Information.

Each Party agrees, acknowledges, and understands that the other Party is relying on its agreements, acknowledgments and representations in this Agreement as a condition to proceeding with the transactions effectuated hereby and that, without such agreements, acknowledgments and representations, the other Party would not engage in such transactions.

Transferee represents that it is acquiring the Acquired Note and the Acquired Shares solely for Transferee’s own account and not with a view to, or for sale in connection with, any subsequent distribution. Transferee understands that the Acquired Note and the Acquired Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws and therefore cannot be resold unless registered under the Securities Act and applicable state securities laws, or unless an exemption from registration is available. Transferee acknowledges that because of the restrictions on the transferability of the Acquired Note and the Acquired Shares, Transferee may be required to bear the economic risk of Transferee’s investment in the Acquired Note and the Acquired Shares for an indefinite period of time.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same Agreement. Any original signature may be obtained through facsimile or other electronic transmission.

This Agreement is binding on the parties hereto and their respective heirs, personal representatives, successors and/or assigns, as applicable, and may not be canceled, revoked, transferred or assigned by any of them.

This Agreement will be governed by and construed in accordance with the laws of the State of New York, notwithstanding any conflict of law provision to the contrary.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date set forth above.

PALM ACTIVE DENTAL, LLC, by

PALM ACTIVE PARTNERS

MANAGEMENT LLC,

its investment manager

By: /s/ Joshua S. Horowitz

Name: Joshua S. Horowitz

Title: Director

PALM GLOBAL SMALL CAP

MASTER FUND, LP, by

PALM MANAGEMENT (US) LLC,

its investment manager

By: /s/ Bradley C. Palmer

Name: Bradley C. Palmer

Title: Sole Member