##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2007
 or
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
 Commission File Number 001-15975
 REMEDENT,
INC.
  NEVADA
    
    86-0837251(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)XAVIER DE COCKLAAN 42, 9831 DEURLE, BELGIUM
    
    N/A(Address of principal executive offices)
    
    (Zip code)
 011 32 9 321 70 80
 (Issuers telephone number)
 þ o
 o þ
  o o þ
 Number of shares of issuers common stock outstanding as of February 12, 2008: 18,606,245
 o þ




---



##### 



REMEDENT, INC.
TABLE OF CONTENTS
FORM 10-QSB REPORT
December 31, 2007
 PagePART I  FINANCIAL INFORMATION
    
    
    3Item 1. Interim Consolidated Financial Statements
    
    
    3Condensed Consolidated Balance Sheet as of December 31, 2007 (Unaudited) and March 31, 2007
    
    
    3Condensed Consolidated Statements of Operations for the Three and Nine months ended
December 31, 2007 and December 31, 2006 (Unaudited)
    
    
    4Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine
months Ended December 31, 2007 and December 31, 2006 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine months Ended December 31,
2007 and December 31, 2006 (Unaudited)
    
    
    6Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
    
    
    8Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    17Item 3. Controls and Procedures
    
    
    21PART II  OTHER INFORMATION
    
    
    22Item 1. Legal Proceedings
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults upon Senior Securities
    
    
    22Item 4. Submission of Matters to Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    23Signatures
    
    
    24EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  2




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Interim Condensed Consolidated Financial Statements
 REMEDENT, INC. AND SUBSIDIARIES
 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2007
 (unaudited)
 REMEDENT, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31, 2007
    
    
    March 31, 2007(unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,016,538
    
    
    $
    126,966Accounts receivable, net of allowance for doubtful accounts of $73,940 at December
31, 2007 and $79,996 at March 31, 2007
    
    
    1,583,946
    
    
    
    1,724,121Inventories, net
    
    
    1,128,898
    
    
    
    1,132,941Prepaid expense
    
    
    1,023,930
    
    
    
    668,421Total current assets
    
    
    5,753,312
    
    
    
    3,652,449PROPERTY AND EQUIPMENT, NET
    
    
    727,522
    
    
    
    589,623OTHER ASSETSLong-term investments and advances
    
    
    675,000
    
    
    
    Patents, net
    
    
    123,974
    
    
    
    135,894TOTAL ASSETS
    
    $
    7,279,808
    
    
    $
    4,377,966LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion, long term debt
    
    $
    14,443
    
    
    $
    43,499Line of Credit
    
    
    813,344
    
    
    
    1,530,276Notes payable
    
    
    
    
    
    
    11,282Accounts payable
    
    
    1,644,577
    
    
    
    1,441,502Accrued liabilities
    
    
    377,182
    
    
    
    412,435Due to related parties
    
    
    50,536
    
    
    
    50,536Taxes payable
    
    
    81,859
    
    
    
    Total current liabilities
    
    
    2,981,941
    
    
    
    3,489,530LONG TERM DEBT
    
    
    149,715
    
    
    
    152,343STOCKHOLDERS EQUITY:Preferred Stock $0.001 par value (10,000,000 shares authorized, none issued and
outstanding)
    
    
    
    
    
    
    Common stock, $0.001 par value; (50,000,000 shares authorized, 18,606,245 shares
issued and outstanding at December 31, 2007 and 12,996,245 shares issued and
outstanding at March 31, 2007)
    
    
    18,606
    
    
    
    12,996Additional paid-in capital
    
    
    17,792,553
    
    
    
    11,904,000Accumulated deficit
    
    
    (13,640,049
    )
    
    
    (11,147,600
    )Accumulated other comprehensive income (loss) (foreign currency translation adjustment)
    
    
    (22,958
    )
    
    
    (33,303
    )Total stockholders equity
    
    
    4,148,152
    
    
    
    736,093TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    7,279,808
    
    
    $
    4,377,966COMMITMENTS (Note 18)
  3




---



##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  For the three months ended
    
    For the nine months endedDecember 31,
    
    December 31,2007
    
    2006
    
    2007
    
    2006Net sales
    
    $
    2,132,950
    
    
    $
    1,159,408
    
    
    $
    4,453,899
    
    
    $
    4,870,161Cost of sales
    
    
    1,271,430
    
    
    
    672,050
    
    
    
    2,623,506
    
    
    
    2,627,724Gross profit
    
    
    861,520
    
    
    
    487,358
    
    
    
    1,830,393
    
    
    
    2,242,437Operating ExpensesResearch and development
    
    
    172,108
    
    
    
    63,394
    
    
    
    247,665
    
    
    
    303,894Sales and marketing
    
    
    611,144
    
    
    
    119,756
    
    
    
    996,937
    
    
    
    743,170General and administrative
    
    
    1,087,313
    
    
    
    872,042
    
    
    
    2,891,165
    
    
    
    2,543,154Depreciation and amortization
    
    
    80,157
    
    
    
    59,896
    
    
    
    215,941
    
    
    
    147,590TOTAL OPERATING EXPENSES
    
    
    1,950,722
    
    
    
    1,115,088
    
    
    
    4,351,708
    
    
    
    3,737,808INCOME (LOSS) FROM OPERATIONS
    
    
    (1,089,202
    )
    
    
    (627,730
    )
    
    
    (2,521,315
    )
    
    
    (1,495,371
    )OTHER INCOME (EXPENSES)Interest expense
    
    
    (16,588
    )
    
    
    (24,849
    )
    
    
    (71,802
    )
    
    
    (122,318
    )Interest income
    
    
    9,040
    
    
    
    
    
    
    
    100,665
    
    
    
    Other income
    
    
    
    
    
    
    5,016
    
    
    
    
    
    
    
    32,538TOTAL OTHER INCOME (EXPENSES)
    
    
    (7,548
    )
    
    
    (19,833
    )
    
    
    28,863
    
    
    
    (89,780
    )NET LOSS
    
    $
    (1,096,750
    )
    
    $
    (647,563
    )
    
    $
    (2,492,452
    )
    
    $
    (1,585,151
    )LOSS PER SHAREBasic and fully diluted
    
    $
    (0.06
    )
    
    $
    (0.05
    )
    
    $
    (0.14
    )
    
    $
    (0.12
    )WEIGHTED AVERAGE SHARES OUTSTANDINGBasic and fully diluted
    
    
    18,602,115
    
    
    
    12,996,245
    
    
    
    17,557,700
    
    
    
    12,963,794
  4




---



##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 For the three months ended
    
    
    For the nine months endedDecember 31,
    
    
    December 31,(Unaudited)
    
    
    (Unaudited)2007
    
    
    2006
    
    
    2007
    
    
    2006Net Income (Loss)
    
    $
    (1,096,750
    )
    
    $
    (647,563
    )
    
    $
    (2,492,452
    )
    
    $
    (1,585,151
    )OTHER COMPREHENSIVE INCOME (LOSS):Foreign currency translation adjustment
    
    
    58,949
    
    
    
    31,096
    
    
    
    10,345
    
    
    
    56,511Comprehensive income (loss)
    
    $
    (1,037,801
    )
    
    $
    (616,467
    )
    
    $
    (2,482,107
    )
    
    $
    (1,528,640
    )
  5




---



##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the nine months endedDecember 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (2,492,452
    )
    
    $
    (1,585,151
    )Adjustments to reconcile net loss to net cash used by operating activitiesDepreciation and amortization
    
    
    215,941
    
    
    
    147,590Allowance for doubtful accounts
    
    
    (13,417
    )
    
    
    (2,597
    )Stock issued upon conversion of convertible debentures
    
    
    
    
    
    
    25,706Value of stock options to employees and consultants
    
    
    101,271
    
    
    
    221,959Changes in operating assets and liabilities:Accounts receivable
    
    
    137,273
    
    
    
    990,234Inventories
    
    
    4,043
    
    
    
    373,479Prepaid expenses
    
    
    (352,607
    )
    
    
    (357,197
    )Accounts payable
    
    
    203,075
    
    
    
    (366,123
    )Accrued liabilities
    
    
    (35,253
    )
    
    
    (177,609
    )Income taxes payable
    
    
    81,859
    
    
    
    (107,783
    )Net cash used by operating activities
    
    
    (2,150,267
    )
    
    
    (837,492
    )CASH FLOWS FROM INVESTING ACTIVITIESDecrease (increase) in restricted cash
    
    
    
    
    
    
    70,762Long-term investments
    
    
    (675,000
    )
    
    
    Purchases of patents
    
    
    (11,998
    )
    
    
    Purchases of equipment
    
    
    (165,195
    )
    
    
    (356,336
    )Net cash used by investing activities
    
    
    (852,193
    )
    
    
    (285,574
    )CASH FLOWS FROM FINANCING ACTIVITIESNet proceeds from issuance of stock
    
    
    5,792,893
    
    
    
    Principal payments on (proceeds from) capital lease note payable
    
    
    (31,684
    )
    
    
    121,203Note payments  related parties
    
    
    
    
    
    
    (8,422
    )Proceeds from (repayments of) line of credit
    
    
    (716,932
    )
    
    
    1,024,679Net cash provided by financing activities
    
    
    5,044,277
    
    
    
    1,137,460NET INCREASE IN CASH
    
    
    2,041,817
    
    
    
    14,394Effect of exchange rate changes on cash and cash equivalents
    
    
    (152,245
    )
    
    
    (61,325
    )CASH AND CASH EQUIVALENTS, BEGINNING
    
    
    126,966
    
    
    
    332,145CASH AND CASH EQUIVALENTS, ENDING
    
    $
    2,016,538
    
    
    $
    285,214Supplemental Information:Interest paid
    
    $
    14,418
    
    
    $
    76,377Income taxes paid
    
    $
    
    
    
    $
    
  6




---



##### Table of Contents



SUPPLEMENTAL NON-CASH INVESTING
AND FINANCING ACTIVITIES:
  7




---



##### Table of Contents



NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
(unaudited)
 1. BACKGROUND AND ORGANIZATION
  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
           8




---



##### Table of Contents



Accounting for Registration Payment Arrangements
 Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statements No. 109
     Fair Value Measurements
 9




---



##### Table of Contents



3. PRIVATE PLACEMENT
       4. CONCENTRATION OF RISK
    10




---



##### Table of Contents



Revenues  For the nine month period ended December 31, 2007 the Company had five customers that
accounted for 34.20% of total revenues. For the nine months ended December 31, 2006 the Company
had one customer that accounted for 41,8 % of total revenues.5.
    
    ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTSA summary of accounts receivable and allowance for doubtful accounts as of December 31, 2007 and
March 31, 2007 is as follows:
 December 31, 2007
    
    March 31, 2007Accounts receivable, gross
    
    $
    1,657,886
    
    
    $
    1,804,117Less: allowance for doubtful accounts
    
    
    (73,940
    )
    
    
    (79,996
    )Accounts receivable, net
    
    $
    1,583,946
    
    
    $
    1,724,121
 6.
    
    INVENTORIESInventories are stated at the lower of cost (weighted average) or market. Inventory costs include
material, labor and manufacturing overhead. Individual components of inventory are listed below
as follows:
 December 31, 2007
    
    March 31, 2007Raw materials
    
    $
    34,660
    
    
    $
    30,579Components
    
    
    902,181
    
    
    
    786,728Finished goods
    
    
    206,779
    
    
    
    329,0001,143,620
    
    
    
    1,146,307Less: reserve for obsolescence
    
    
    (14,722
    )
    
    
    (13,366
    )Net inventory
    
    $
    1,128,898
    
    
    $
    1,132,941
 7.
    
    PREPAID EXPENSESPrepaid expenses are summarized as follows:
 December 31, 2007
    
    
    March 31, 2007Prepaid materials and components
    
    $
    518,193
    
    
    $
    394,598Prepaid Belgium income taxes
    
    
    73,605
    
    
    
    66,830Prepaid consulting
    
    
    98,540
    
    
    
    66,830VAT payments in excess of VAT receipts
    
    
    196,388
    
    
    
    47,260Royalties
    
    
    36,803
    
    
    
    33,415Prepaid trade show expenses
    
    
    45,526
    
    
    
    6,523Prepaid rent
    
    
    10,066
    
    
    
    7,054Other
    
    
    44,809
    
    
    
    45,911$
    1,023,930
    
    
    $
    668,421
 8.
    
    PROPERTY AND EQUIPMENTProperty and equipment are summarized as follows:
 December 31, 2007
    
    March 31, 2007Furniture and Fixtures
    
    $
    180,603
    
    
    $
    137,560Machinery and Equipment
    
    
    768,971
    
    
    
    559,422Tooling
    
    
    254,450
    
    
    
    188,4501,204,024
    
    
    
    885,432Accumulated depreciation
    
    
    (476,502
    )
    
    
    (295,809
    )Property & equipment, net
    
    $
    727,522
    
    
    $
    589,623
  11




---



##### Table of Contents



9.
    
    LONG TERM INVESTMENTS AND ADVANCESInnovative Medical & Dental Solutions, LLC (IMDS, LLC)Effective July 15, 2007 the Company entered into a Limited Liability Company Merger and Equity
Reallocation Agreement (the Participation Agreement) through its subsidiary, Remedent N.V.
Pursuant to the terms of the Participation Agreement, the Company has acquired a 10% equity
interest in IMDS, LLC in consideration for $300,000 which was converted against IMDS receivables.The agreement stipulates certain exclusive world wide rights to certain tooth whitening
technology, and the right to purchase at standard cost certain whitening lights and accessories
and to sell such lights in markets not served by the LLC. The terms of the Participation
Agreement also provide that Remedent N.V. has the first right to purchase additional equity.
Parties to the Participation Agreement include two officers of IMDS, LLC, and an individual who
is both an officer and director of Remedent Inc., and certain unrelated parties.IMDS, LLC is registered with the Secretary of the State of Florida as a limited liability company
and with the Secretary of the State of California as a foreign corporation authorized to operate
in California. IMDS, LLC is merging with White Science World Wide, LLC, a limited liability
company organized under the laws of the State of Georgia. The merged companies will operate as a
single entity as IMDS, LLC, a Florida limited liability company.Soca Networks Singapore (Soca)Pursuant to the terms of a letter of intent dated December 17, 2007, the Company has agreed to
purchase 20% of Soca for a total purchase price of $750,000. Half of the purchase price has been
advanced $375,000 to Soca as a down payment, pending completion of the agreement terms. The
balance of $375,000 is to be paid through the issuance of 220,588 shares of the Companys common
stock. The final agreement is currently being negotiated and management expects to close the
agreement prior to year end.10.
    
    LICENSED PATENTSTeeth Whitening PatentsIn October 2004, the Company acquired from the inventor the exclusive, perpetual license to two
issued United States patents which are applicable to several teeth whitening products currently
being marketed by the Company. Pursuant to the terms of the license agreement, the Company was
granted an exclusive, worldwide, perpetual license to manufacture, market, distribute and sell
the products contemplated by the patents subject to the payment of $65,000 as reimbursement to
the patent holder for legal and other costs associated with obtaining the patents, which was paid
in October 2004, and royalties for each unit sold subject to an annual minimum royalty of
$100,000 per year. The Company is amortizing the initial cost of $65,000 for these patents over a
ten year period and accordingly has recorded $21,125 of accumulated amortization for this patent
as of December 31, 2007. The Company accrues this royalty when it becomes payable to the
inventory therefore no provision has been made for this obligation as of December 31, 2007.Universal Applicator PatentIn September 2004, the Company entered into an agreement with Lident N.V. (Lident), a company
controlled by Mr. De Vreese, the Companys Chairman, to obtain an option, exercisable through
December 31, 2005, to license an international patent (excluding the US) and worldwide
manufacturing and distribution rights for a potential new product which Lident had been assigned
certain rights by the inventors of the products, who are unrelated parties, prior to Mr. De
Vreese association with the Company. The patent is an Italian patent which relates to a single
use universal applicator for dental pastes, salves, creams, powders, liquids and other substances
where manual application could be relevant. The Company has filed to have the patent approved
throughout Europe. The agreement required the Company to advance to the inventors through Lident
a fully refundable deposit of 100,000 subject to the Companys due diligence regarding the
enforceability of the patent and marketability of the product, which, if viable, would be
assigned to the Company for additional consideration to the inventors of 100,000 and an
ongoing royalty from sales of products related to the patent equal to 3% of net sales and, if not
viable, the deposit would be repaid in full by Lident. The consideration the Company had agreed
to pay Lident upon the exercise of the option is the same as the consideration Lident is
obligated to pay the original inventors. Consequently, Lident would not have profited from the
exercise of
 12




---



##### Table of Contents



the option. Furthermore, at a meeting of the Companys Board of Directors on July 13, 2005, the
Board accepted Lidents offer to facilitate an assignment of Lidents intellectual property
rights to the technology to the Company in exchange for the reimbursement of Lidents actual
costs incurred relating to the intellectual property. Consequently, when the Company exercises
the option, all future payments, other than the reimbursement of costs would be paid directly to
the original inventors and not to Lident.On December 12, 2005, the Company exercised the option and the Company and the patent holder
agreed to revise the assignment agreement whereby the Company agreed to pay 50,000 additional
compensation in the form of prepaid royalties instead of the 100,000 previously agreed,
25,000 of which had been paid by the Company in September 2005 and the remaining 25,000
to be paid upon the Companys first shipment of a product covered by the patent. The patent is
being amortized over five (5) years and accordingly, the Company has recorded $50,297 of
accumulated amortization for this patent as of December 31, 2007. At the end of December 31,
2007, the product has not yet been commercialized. Management believes no impairment is
applicable.
 11.
    
    LINE OF CREDITOn October 8, 2004, our wholly owned subsidiary, Remedent N.V., obtained a mixed-use line of
credit facility with Fortis Bank, a Belgian bank, for 1,070,000 (the Facility). The
Facility was secured by a first lien on the assets of Remedent N.V. The purpose of the Facility
is to provide working capital to grow our business and to finance certain accounts receivable as
necessary. Since opening the Facility in 2004, Remedent N.V. and Fortis Bank have subsequently
amended the Facility several times to increase or decrease the line of credit. On May 3, 2005 the
Facility was amended to decrease the line of credit to 1,050,000. On March 13, 2006 the
Facility was amended to increase the mixed-use line of credit to 2,300,000, consisting of a
1,800,000 credit line based on the eligible accounts receivable and a 500,000 general
line of credit. The latest amendment to the Facility, dated September 1, 2006, amended and
decreased the mixed-use line of credit to 2,050,000. Each line of credit carries its own
interest rates and fees as provided in the Facility. Remedent N.V. is currently only utilizing
two lines of credit, advances based on account receivables and the straight loan. As of December
31, 2007 and March 31, 2007, Remedent N.V. had, in the aggregate, $813,344 and $1,530,276
advances outstanding, respectively, under this mixed-use line of credit facility.12.
    
    LONG TERM DEBTOn September 15, 2005, the Company entered into two five year capital lease agreements for
manufacturing equipment totaling 70,296 (US $85,231). On October 24, 2006, the Company
entered into another five year capital lease agreement for additional manufacturing equipment
totaling 123,367 (US $157,503). The leases require monthly payments of principal and interest
at 7.43% of 1,258 (US$1,852 at December 31, 2007) for the first two leases and 9.72% of
2,256 (US$3,321 at December 31, 2007) and provide for buyouts at the conclusion of the five
year term of 2,820 (US$4,151) or 4.0% of original value for the first two contracts and
4,933 (US $7,262) or 4.0 % of the original value for the second contract. The book value as
of December 31, 2007 and March 31, 2007 of the equipment subject to the foregoing leases are
$161,811 and $198,225, respectively.13.
    
    DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONSBalances due to related parties consist of the following:
 December 31, 2007
    
    
    March 31, 2007Demand loan from a former officer and major stockholder
    
    $
    50,536
    
    
    $
    50,536$
    50,536
    
    
    $
    50,536
 Borrowings from employees and entities controlled by officers of the Company are, unsecured,
non-interest bearing, and due on demand.Transactions with related parties consisted of the following:Compensation:During the nine month periods ended December 31, 2007 and 2006 respectively, the Company incurred
$483,304 and $441,707 respectively, as compensation for all directors and officers.
 13




---



##### Table of Contents



Effective August 8, 2007, the Company appointed a Senior Vice President and Head of U.S.
Marketing. Terms of the appointment provide for an initial base salary of $150,000 per year and
options to purchase 100,000 shares of common stock under the Companys 2004 Incentive and
Nonstatutory Stock Option Plan (granted  Refer to Note 16).Sales Transactions:One of the Companys directors owns a 5% interest in a client company, IMDS Inc. (refer to Note
9), to which goods were sold during the years ended March 31, 2007 and 2006 totaling $476,122 and
$38,494 respectively, sales during the three month period ended December 31, 2007 totaled $
47,256. Accounts receivable with this customer totaled $63,272 and $ 105,851 as at December 31,
2007 and 2006 respectively.All related party transactions involving provision of services or tangible assets were recorded
at the exchange amount, which is the value established and agreed to by the related parties
reflecting arms length consideration payable for similar services or transfers.Other related party transactions are disclosed in Supplemental Non-Cash Investing and Financing
Activities, clause (e), and Note 17. (Refer to Note 9.)14.
    
    ACCRUED LIABILITIESAccrued liabilities are summarized as follows:
 December 31, 2007
    
    March 31, 2007Accrued customer prepayments
    
    $
    12,401
    
    
    $
    Accrued payroll and employee benefit taxes
    
    
    167,234
    
    
    
    260,676Commissions
    
    
    4,291
    
    
    
    2,834Accrued audit and tax preparation fees
    
    
    19,000
    
    
    
    27,282Reserve for warranty costs
    
    
    22,082
    
    
    
    20,049Accrued interest
    
    
    1,289
    
    
    
    6,180Accrued consulting fees
    
    
    11,701
    
    
    
    2,528Other accrued expenses
    
    
    139,183
    
    
    
    92,886$
    377,182
    
    
    $
    412,435
 15.
    
    CAPITAL STOCKDuring the three months ended December 31, 2007 the Company received $15,900 on the exercise of
10,000 common stock purchase warrants.16.
    
    EQUITY COMPENSATION PLANSThe Board of Directors and stockholders approved the Nonstatutory Stock Option Plan (the 2001
Plan) and adopted it on May 29, 2001. The Company has reserved 250,000 shares of its common
stock for issuance to the directors, employees and consultants under the Plan. The Plan is
administered by the Board of Directors. Vesting terms of the options range from immediately to
five years.Pursuant to an Information Statement on Schedule 14C mailed on May 9, 2005 to all stockholders of
record as of the close of business on February 1, 2005 and became effective September 3, 2005,
the Company authorized the implementation of a 2004 Incentive and Nonstatutory Stock Option Plan
(2004 Plan) reserving 800,000 shares of common stock for issuance to employees, directors and
consultants of the Company or any subsidiaries. This plan became effective as of September 3,
2005 after the Company had completed a one for twenty reverse split.On October 1, 2006, the Company granted to a marketing consultant 25,000 options to purchase the
Companys common stock at a price of $1.80 per share. These options vested immediately upon grant
and are exercisable for a period of five years. The Company valued the foregoing options using
the Black Scholes option pricing model using the following assumptions: no dividend yield;
expected volatility rate of 91.58%; risk free interest rate of 5% and an average life of 5 years
resulting in a value of $1.298 per option granted.
 14




---



##### Table of Contents



On September 14, 2006, pursuant to an S-8 filed with the SEC, the Company registered 1,150,000
common shares, pursuant to compensation arrangements.On August 17, 2007, pursuant to the terms of the Companys 2004 Plan, the Company granted to an
employee 100,000 options to purchase the Companys common stock at a price of $1.50 per share.
These options will vest over the next 3 years and are exercisable for a period of 5 years. The
Company valued the foregoing options using the Black Scholes option pricing model using the
following assumptions: no dividend yield; expected volatility rate of 115%; risk free interest
rate of 4.75% and an average life of 5 years resulting in a value of $1.24 per option granted.
The value of these options will be recognized on a straight-line basis over the next three years
and accordingly a value of $17,381 has been recorded in the period ended December 31, 2007.On September 21, 2007 the Company granted to employees and directors a total of 570,000 options
to purchase the Companys common stock at a price of $1.75 per share. These options will vest
over the next 3 years and are exercisable for a period of 10 years. The Company valued the
foregoing options using the Black Scholes option pricing model using the following assumptions:
no dividend yield; expected volatility rate of 115%; risk free interest rate of 4.75% and an
average life of 7 years resulting in a value of $1.47 per option granted. The value of these
options will be recognized on a straight-line basis over the next three years and accordingly a
value of $83,889 has been recorded in the period ended December 31, 2007.A summary of the option activity for the nine months ended December 31, 2007 pursuant to the
terms of the plans is as follows:
 2001 Plan
    
    
    2004 Plan
    
    
    OtherWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedOutstanding
    
    
    Average
    
    
    Outstanding
    
    
    Average
    
    
    Outstanding
    
    
    AverageOptions
    
    
    Exercise Price
    
    
    Options
    
    
    Exercise Price
    
    
    Options
    
    

Exercise PriceOptions outstanding , March 31, 2007
    
    
    222,500
    
    
    $
    1.29
    
    
    
    210,666
    
    
    $
    3.19
    
    
    
    
    
    
    
    Granted
    
    
    
    
    
    
    
    
    
    
    520,000
    
    
    
    1.71
    
    
    
    150,000
    
    
    $
    1.75Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancelled or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options outstanding, December 31,
2007
    
    
    222,500
    
    
    $
    1.29
    
    
    
    730,666
    
    
    $
    2.29
    
    
    
    150,000
    
    
    $
    1.75Options exercisable December 31,
2007
    
    
    222,500
    
    
    $
    1.29
    
    
    
    210,666
    
    
    $
    4.46
    
    
    
    
    
    
    
    Exercise price range
    
    $
    1.00 to $4.00
    
    
    
    
    
    
    $
    1.50 to $4.00
    
    
    
    
    
    
    $
    1.75Weighted average remaining life
    
    4.3 years
    
    
    
    
    
    5.62 years
    
    
    
    
    
    8.97 yearsShares available for future issuance
    
    
    27,500
    
    
    
    
    
    
    
    69,334
    
    
    
    
    
    
    
    N/A
 A summary of the Companys equity compensation plans approved and not approved by shareholders is
as follows:
 Number of
    
    
    
    
    
    
    Number of securitiessecurities to be
    
    
    
    
    
    
    remaining available forissued upon
    
    
    
    
    
    
    future issuance underexercise of
    
    
    Weighted-average
    
    
    equity compensationof outstanding
    
    
    exercise price of
    
    
    plans (excludingoptions, warrants
    
    
    outstanding options
    
    
    securities reflectedPlan Category
    
    and right
    
    
    warrants and rights
    
    
    in column (a))Equity Compensation Plans approved by security holders
    
    
    1,103,166
    
    
    $
    2.01
    
    
    
    96,834Equity Compensation Plans not approved by security holders
    
    
    297,298
    
    
    $
    1.50
    
    
    NA1,400,464
    
    
    $
    1.91
    
    
    
    96,834
 Prior to January 1, 2006, the Company accounted for employee stock-based compensation under the
recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25,
Accounting for Stock Issued to Employees, and related Interpretations, as permitted by SFAS No.
123, Accounting for Stock-Based Compensation. Under the recognition principles of APB No. 25,
compensation expense related to restricted stock and performance units was recognized in the
financial statements. However, APB No. 25 generally did not require the recognition of
compensation expense for stock options because the exercise price of these instruments was
generally equal to the fair value of the underlying common stock on the date of grant, and the
related number of shares granted were fixed at that point in time.
 15




---



##### Table of Contents



Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No.
123(R), Share-Based Payment. In addition to recognizing compensation expense related to
restricted stock and performance units, SFAS No. 123(R) also requires recognition of compensation
expense related to the estimated fair value of stock options. The Company adopted SFAS No. 123(R)
using the modified-prospective-transition method. Under that transition method, compensation
expense recognized subsequent to adoption includes: (a) compensation cost for all share-based
payments granted prior to, but not yet vested as of January 1, 2006, based on the values
estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost
for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair
values estimated in accordance with the provisions of SFAS No. 123(R). Consistent with the
modified-prospective-transition method, the Companys results of operations for prior periods
have not been adjusted to reflect the adoption of FAS 123(R). For the nine months) ended December
31, 2007 the Company recognized $101,270 (2006  $221,959) in compensation expense in the
consolidated statement of operations.17.
    
    COMMON STOCK WARRANTS AND OTHER OPTIONSOn February 10, 2006, the Company issued to an individual the right to purchase 150,000 shares of
the Companys common stock at an exercise price of $2.60 per share for a term of five (5) years
pursuant to the terms and conditions of a Stock Option Agreement as consideration for past
services performed and the release of any and all claims under this individuals prior agreements
with the Company. The 150,000 options have been valued in accordance with the Black-Scholes
pricing model utilizing an historic volatility factor of 1.55, a risk free interest rate of 4.5%
and an expected life for the options of five years, resulting in a value of $2.41 per option
granted for a total for the warrants of $361,500. The value of this option grant was recorded as
of December 31, 2005 as a research and development expense.In November 2006, the Company entered into a Settlement Agreement and Release (Settlement
Agreement) with this individual pursuant to which the prior agreement was terminated. In
connection with the Settlement Agreement, the Company agreed to pay this individual $65,000 in
settlement of all accounts which was recorded as an expense as of the date of the Settlement
Agreement and he in turn agreed to the cancellation of his options to purchase 150,000 shares of
the Companys common stock in exchange for certain product rights that the Company had elected
not to pursue.As of December 31, 2007, the Company has 7,260,026 warrants to purchase the Companys common
stock outstanding that were not granted under shareholder approved equity compensation plans at
prices ranging between $1.20 and $3.00 per share with expiration dates between August 2007 and
September 2012 as follows:
 WeightedOutstanding
    
    
    Average ExerciseWarrants
    
    
    PriceWarrants and options outstanding , March 31, 2007
    
    
    3,105,651
    
    
    $
    1.72Granted
    
    
    4,200,000
    
    
    
    1.55Exercised
    
    
    (10,000
    )
    
    
    1.59Cancelled or expired
    
    
    (35,725
    )
    
    
    Warrants exercisable December 31, 2007
    
    
    7,260,026
    
    
    $
    1.67Exercise price range
    
    $
    1.20 to $10.00Weighted average remaining life
    
    4.95 Years
 18.
    
    SEGMENT INFORMATIONThe Companys only operating segment consists of dental products and oral hygiene products sold
by Remedent Inc., Remedent N.V., Sylphar N.V., and Remedent Asia. Since the Company only has one
segment, no further segment information is presented.
 December 31, 2007
    
    December 31, 2006U.S. sales
    
    $
    316,208
    
    
    $
    173,733Foreign sales
    
    
    4,137,691
    
    
    
    4,696,428$
    4,453,899
    
    
    $
    4,870,161
 16




---



##### Table of Contents



19.
    
    COMMITMENTS AND CONTINGENCIESReal Estate LeaseThe Company leases its 26,915 square feet office and warehouse facility in Deurle, Belgium from
an unrelated party pursuant to a nine year lease commencing December 20, 2001 at a base rent of
$6,838 per month ($9,696 per month at December 31, 2007). In addition, the Company is responsible
for the payment of annual real estate taxes for the property which totaled 3,245 ($4,382) for
calendar year 2006. The minimum aggregate rent to be paid over the remaining lease term based
upon the conversion rate for the  at December 31, 2007 is $283,142. Rent expense for the
foregoing lease for the nine months ended December 31, 2007 and December 31, 2006 was $80,991 and
$59,040 respectively.Minimum monthly lease payments for real estate, and all other leased equipment for the next four
years are as follows based upon the conversion rate for the (Euro) at December 31, 2007.
 March 31, 2008
    
    $
    231,425March 31, 2009
    
    $
    212,805March 31, 2010
    
    $
    68,954March 31, 2011
    
    $
    37,790
 
 Item 2. Managements Discussion and Analysis of Financial Condition or Plan of Operations
 The discussion contained herein is for the nine months ended December 31, 2007 and 2006. The
following discussion should be read in conjunction with the Companys condensed consolidated
financial statements and the notes to the condensed consolidated financial statements included
elsewhere in this Quarterly Report on Form 10-QSB for the quarterly period ended December 31, 2007.
In addition to historical information, this section contains forward-looking statements,
including statements regarding the growth of product lines, optimism regarding the business,
expanding sales and other statements. Words such as expects, anticipates, intends, believes, sees,
estimates and variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future performance and involve
certain risks and uncertainties that are difficult to predict. Actual results could vary materially
from the description contained herein due to many factors including continued market acceptance of
our products. In addition, actual results could vary materially based on changes or slower growth
in the oral care and cosmetic dentistry products market; the potential inability to realize
expected benefits and synergies; domestic and international business and economic conditions;
changes in the dental industry; unexpected difficulties in penetrating the oral care and cosmetic
dentistry products market; changes in customer demand or ordering patterns; changes in the
competitive environment including pricing pressures or technological changes; technological
advances; shortages of manufacturing capacity; future production variables impacting excess
inventory and other risk factors. Factors that could cause or contribute to any differences are
discussed in Risk Factors and elsewhere in the Companys annual report on Form 10-KSB filed on
July 13, 2007 with the Securities and Exchange Commission. Except as required by applicable law or
regulation, the Company undertakes no obligation to revise or update any forward-looking statements
contained in this Quarterly Report on Form 10-QSB for the quarterly period ended December 31, 2007.
The information contained in this Quarterly Report on Form 10-QSB for the quarterly period ended
December 31, 2007 is not a complete description of the Companys business or the risks associated
with an investment in the Companys common stock. Each reader should carefully review and consider
the various disclosures made by the Company in this Quarterly Report on Form 10-QSB for the
quarterly period ended December 31, 2007 and in the Companys other filings with the Securities and
Exchange Commission.
 Overview
    17




---



##### Table of Contents



® ®
    For the three months ended
    
    
    For the nine months endedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006NET SALES
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %COST OF SALES
    
    
    58.20
    %
    
    
    57.96
    %
    
    
    58.23
    %
    
    
    53.96
    %GROSS PROFIT
    
    
    41.80
    %
    
    
    42.04
    %
    
    
    41.77
    %
    
    
    46.04
    %OPERATING EXPENSESResearch and development
    
    
    8.07
    %
    
    
    5.47
    %
    
    
    5.56
    %
    
    
    6.24
    %Sales and marketing
    
    
    28.65
    %
    
    
    10.33
    %
    
    
    22.38
    %
    
    
    15.26
    %General and administrative
    
    
    50.98
    %
    
    
    75.21
    %
    
    
    64.91
    %
    
    
    52.22
    %Depreciation and amortization
    
    
    3.76
    %
    
    
    5.17
    %
    
    
    4.85
    %
    
    
    3.03
    %TOTAL OPERATING EXPENSES
    
    
    91.46
    %
    
    
    96.18
    %
    
    
    97.70
    %
    
    
    76.75
    %LOSS FROM OPERATIONS
    
    
    (49.66
    )%
    
    
    (54.14
    )%
    
    
    (55.93
    )%
    
    
    (30.71
    )%Other income (expense)
    
    
    (0.35
    )%
    
    
    (1.71
    )%
    
    
    0.65
    %
    
    
    0.67
    %LOSS BEFORE INCOME TAXES
    
    
    (50.01
    )%
    
    
    (55.85
    )%
    
    
    (55.28
    )%
    
    
    (30.04
    )%NET INCOME (LOSS)
    
    
    (50.01
    )%
    
    
    (55.85
    )%
    
    
    (55.28
    )%
    
    
    (30.04
    )%
 Net Sales
     18




---



##### Table of Contents



Cost of Sales
   Gross Profit
   Operating Expenses
 Research and Development.
   Sales and marketing costs
   General and administrative costs
  19




---



##### Table of Contents



Depreciation and amortization
   Net interest expense
   Liquidity and Capital Resources
  Cash and Cash equivalents
  Operations
  20




---



##### Table of Contents



Investing activities
  Financing activities
   Off-balance Sheet Arrangements
  Recently Issued Accounting Standards
  Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statements No. 109
 
 Item 3. Controls and Procedures
    21




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sale of Equity Securities
  
 Item 3. Defaults In Senior Securities.
  
 Item 4. Submission Of Matters To A Vote Of Security Holders.
  1
    
    The following four directors were elected to hold office for one-year terms or until
their successors are elected and qualified:
 Votes AgainstVotes For
    
    or Withheld
    
    Total VotedGuy De Vreese
    
    
    16,783,357
    
    
    
    2,657
    
    
    
    16,786,014Robin List
    
    
    16,783,357
    
    
    
    2,657
    
    
    
    16,786,014Stephen Ross
    
    
    16,784,325
    
    
    
    721
    
    
    
    16,785,046Fred Kolsteeg
    
    
    16,784,325
    
    
    
    721
    
    
    
    16,785,046
 2.
    
    To approve adoption of the 2007 Equity Incentive Plan:
 For
    
    
    15,719,684Against
    
    
    23,410Abstain
    
    
    1,500
 3.
    
    To ratify the Board of Directors appointment of PKF Bedrijfsrevisoren as the Companys
independent registered accounting firm for the 2008 fiscal year.
 For
    
    
    16,780,168Against
    
    
    2,002Abstain
    
    
    2,810
 
 Item 5. Other Information.
  22




---



##### Table of Contents



Item 6. Exhibits
  Exhibit No.
 31.1
    
    Certifications of the Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act31.2
    
    Certifications of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act32.1
    
    Certifications of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act32.2
    
    Certifications of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act
 23




---



##### Table of Contents



SIGNATURES
  REMEDENT, INC.Dated: February 13, 2008
    
    /s/ Robin ListBy: Robin ListIts: Chief Executive Officer (Principal Executive Officer) and DirectorDated: February 13, 2008
    
    /s/ Philippe Van AckerBy: Philippe Van AckerIts: Chief Financial Officer (Principal Financial Officer and Principal
Accounting Officer)
 24




---



##### Table of Contents



Exhibit No.
 31.1
    
    Certifications of the Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act31.2
    
    Certifications of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act32.1
    
    Certifications of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act32.2
    
    Certifications of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act
 25