SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 10-QSB  |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2005 or |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  Commission File Number 001-15975  REMEDENT, INC. (Exact name of small business issuer as specified in its charter)   NEVADA

86-0837251(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

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)  Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesxNo o  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o Nox  Number of shares of issuer's common stock outstanding as of January 31, 2006: 12,764,112  Transitional Small Business Disclosure Format (check one). Yes o Nox  Documents incorporated by reference: None.       REMEDENT, INC.

TABLE OF CONTENTS

FORM 10-QSB REPORT

December 31, 2005





PART I - FINANCIAL INFORMATION
PageItem 1. Interim Consolidated Financial StatementsCondensed Consolidated Balance Sheet as of December 31, 2005 (Unaudited)

and March 31, 2005
1Condensed Consolidated Statements of Income (Loss) for the Three and Nine

Months Ended December 31, 2005 and December 31, 2004 (Unaudited)
2Condensed Consolidated Statements of Shareholders Equity (Deficit) for theNine months Ended December 31, 2005 (Unaudited)
3Condensed Consolidated Statements of Comprehensive Income (Loss) for

the Three and Nine months Ended December 31, 2005 and December 31, 2004 (Unaudited)
4Condensed Consolidated Statements of Cash Flows for the Nine

Months Ended December 31, 2005 and December 31, 2004 (Unaudited)
5Notes to Interim Condensed Consolidated Financial Statements for the Nine

Months Ended December 31, 2005 and 2004 (Unaudited)
7Item 2. Management's Discussion and Analysis or Plan of Operation
22Item 3. Controls and Procedures
29PART II - OTHER INFORMATION
30Item 1. Legal Proceedings
30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
30Item 3. Defaults upon Senior Securities
30Item 4. Submission of Matters to Vote of Security Holders
30Item 5. Other Information
30Item 6. Exhibits
30Signatures
31




PART I - FINANCIAL INFORMATION

Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)



REMEDENT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

December 31, 2005

March 31, 2005(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents

$ 1,294,062

$ 40,442Cash, restricted

60,000

-Accounts receivable, net of allowance for doubtful accounts of $70,108 at December 31, 2005 and $80,194 at March 31, 2005

1,865,031

1,488,296Due from related party

-

156,099Inventories, net

1,275,124

558,335Prepaid expense

289,158

192,306Other current assets

-

129,650Total current assets

4,783,375

2,565,128PROPERTY AND EQUIPMENT, NET

337,118

85,737OTHER ASSETSPatents, net

232,164

61,750TOTAL ASSETS

$ 5,352,657

$ 2,712,615LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIES:Current portion, long term debt

$ 12,641

$ -Line of Credit

594,200

-Notes payable

31,282

294,322Accounts payable

1,400,521

889,668Accrued liabilities

380,179

367,854Due to related parties

58,958

58,958Deferred revenue

-

18,864Income taxes payable

53,478

178,269Total current liabilities

2,531,259

1,807,935LONG TERM DEBT

63,354

-MINORITY INTEREST IN REMEDENT N.V.

-

1,178,590STOCKHOLDERS DEFICIT: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, 12,764,112 shares issued and outstanding at December 31, 2005 and 2,176,225 shares issued and outstanding at March 31, 2005 )

12,764

2,176Additional paid-in capital

11,511,102

5,427,289Accumulated deficit

(8,729,899)

(5,764,249)Common stock subscribed, not issued

200

-Accumulated other comprehensive income (loss)(foreign currency translation adjustment)

(36,123)

60,874Total stockholders deficit

2,758,044

(273,910)TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
$ 5,352,657

$ 2,712,615

See notes to the financial statements



1
REMEDENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE THREE AND NINE MONTHS DECEMBER 31, 2005 AND 2004

(UNAUDITED)



For the three months ended

For the nine months endedDecember 31,

December 31,2005

2004

2005

2004Net sales
$ 1,870,037

$2,010,666

$ 4,682,471

$ 5,104,020Cost of sales
1,010,660

812,043

2,229,858

2,115,624Gross profit
859,377

1,198,623

2,452,613

2,988,396Operating ExpensesResearch and development
918,749

59,708

1,029,798

139,909Sales and marketing
349,122

88,490

582,948

227,063General and administrative
1,260,232

797,453

3,019,710

1,833,277Non cash restructuring expense
-

-

764,151

-Depreciation and amortization
33,267

10,456

71,116

25,411TOTAL OPERATING EXPENSES
2,561,370

956,107

5,467,723

2,225,660INCOME (LOSS) FROM OPERATIONS
(1,701,993)

242,516

(3,015,110)

762,736OTHER INCOME (EXPENSES)
-Interest expense
(4,424)

(22,710)

(11,333)

(54,840)Non cash interest expense
-

-

(100,000)

-Other income
3,997

-

43,996

-TOTAL OTHER INCOME (EXPENSES)
(427)

(22,710)

(67,337)

(54,840)LOSS BEFORE INCOME TAXES
(1,702,420)

219,806

(3,082,447)

707,896Income tax expense (benefit)
-

(245,188)

116,797

(245,188)MINORITY INTEREST IN REMEDENT N.V.
-

(54,861)

-

(455,790)NET INCOME (LOSS)
$ (1,702,420)

$ (80,243)

$ (2,965,650)

$ 6,918LOSS PER SHAREBasic
$ (0.13)

$ (0.04)

$ (0.27)

$ 0.00Fully diluted
$ (0.13)

$ (0.04)

$ (0.27)

$ 0.00WEIGHTED AVERAGE SHARES OUTSTANDINGBasic
12,826,128

2,053,716

11,122,754

2,005,332Fully diluted
12,826,128

2,142,466

11,122,754

2,094,082

See notes to the financial statements



2
REMEDENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (DEFICIT)

FOR THE NINE MONTHS ENDED DECEMBER 31, 2005

(UNAUDITED)



Shares
Amount
Additional Paid in Capital
Accumulated Deficit
Common Stock Subscribed
Treasury Stock
Other
TotalBalance, March 31, 2005
2,176,225
$ 2,176
$ 5,427,289
$ (5,764,249)
-
$ -
$ 60,874
$ (273,910)Common stock issued for 78% equity interest in Remedent NV
7,715,703
7,716
1,170,876
-
-
-
-
1,178,592Common Stock issued to MDB Capital for conversion of $100,000 note payable including $10,000 accrued interest and $100,000 non cash interest as a result of stock valuation
197,839
198
209,802
-
-
-
-
210,000Common Stock issued to MDB Capital for consulting fees
247,298
247
395,430
-
-
-
-
395,677Warrants issued to MDB Capital for consulting fees


368,474

-
-

368,474Common stock issued by private placement
2,520,661
2,521
3,198,137

-
-

3,200,658Common stock to be issued for development services


519,800

200


520,000Stock options issued for development services


361,500

-


361,500Treasury stock received as repayment of related party loan
-
-
-
-
-
(140,300)
-
(140,300)Treasury stock retired and cancelled
(93,533)
(94)
(140,206)

-
140,300

-Common stock fractional shares cancelled in reverse split
(81)
-
-
-
-
-
-
-Cumulative translation adjustment
-
-
-
-
-
-
(96,997)
(96,997)Net loss
-
-
-
(2,965,650)
-
-
-
(2,965,650)Balance, December 31, 2005
12,764,112
$ 12,764
$11,511,102
$ (8,729,899)
$ 200
$ 0
$ (36,123)
$ 2,758,044

See notes to the financial statements



3
REMEDENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2005 AND 2004

(UNAUDITED)





For the three months ended

For the nine months endedDecember 31,

December 31,2005

2004

2005

2004Net Income (Loss)
$ (1,702,420)

$ (80,243)

$ (2,965,650)

$ 6,918OTHER COMPREHENSIVEINCOME (LOSS):Foreign currency translation adjustment
936

87,967

(96,997)

96,216Comprehensive income (loss)
$(1,701,484)

$ 7,724

$ (3,062,647)

$ 103,134



See notes to the financial statements







4
REMEDENT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2005 AND 2004

(UNAUDITED)

For the nine months endedDecember 31, 2005

December 31, 2004CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
$ (2,965,650)

$ 6,918Adjustments to reconcile net income (loss)to net cash used by operating activitiesDepreciation and amortization
70,317

25,411Inventory reserve
(30,534)

32,039Allowance for doubtful accounts
(2,675)

3,486Common Stock issued to MDB Capital for noncash interest on conversion of $100,000 note payable
100,000

-Common Stock issued to MDB Capital for consulting fees
395,677

-Warrants issued to MDB Capital for consulting fees
368,474

-Common stock to be issued for development services
520,000

-Stock options issued for development services
361,500

-Minority Interest
-

455,790Changes in operating assets and liabilities:
-Accounts receivable
(512,038)

447,165Due from related party
6,751

-Inventories
(753,973)

8,308Prepaid expenses
(112,854)

(52,309)Other current assets
122,135

-Accounts payable
597,302

(120,103)Accrued liabilities
48,424

96,976Deferred revenue
(17,771)

-Income taxes payable
(112,975)

-Net cash provided (used) by operating activities
(1,917,889)

903,681CASH FLOWS FROM INVESTING ACTIVITIESIncrease in restrited cash
(60,000)

-Investments
-

(66,536)Purchase of patent rights
(178,260)

(29,216)Purchases of equipment
(352,713)

(65,000)Notes receivable-related party
-

(148,441)Net cash used by investing activities
(590,973)

(309,193)CASH FLOWS FROM FINANCING ACTIVITIESNet proceeds from private placement
3,200,658

-Proceeds from capital lease note payable
86,696

-Principal payments on capital lease note payable
(8,594)

-Proceeds from notes and debentures
-

201,750Note payments-unrelated parties
(153,590)

(166,262)Proceeds from (repayments of) line of credit
610,675

(792,343)Net cash provided (used) by financing activities
3,735,845

(756,855)NET INCREASE (DECREASE) IN CASH
1,226,983

(162,367)Effect of exchange rate changeson cash and cash equivalents
26,637

96,216CASH AND CASH EQUIVALENTS, BEGINNING
40,442

172,382CASH AND CASH EQUIVALENTS, ENDING
$ 1,294,062

$ 106,231

See notes to the financial statements and supplemental disclosures on following page.



5
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:



During September 2004, the Company issued 12,500 shares of stock to an unrelated third party for the settlement of consulting fees for a total of $2,500.



During the quarter ended December 31, 2004, the Company executed agreements effective as of December 31, 2004 which converted convertible debentures totaling $127,580 in principal plus $62,187 in interest into 184,767 shares of common stock.



On June 3, 2005, the Company issued 7,715,703 shares of its common stock in exchange for 78% of the stock of Remedent N.V., a commonly controlled subsidiary and the $1,178,590 minority interest associated with this 78% interest as of the closing of the transaction was recorded by the Company as additional paid in capital.



On June 3, 2005 a $100,000 note payable issued by the Company on March 23, 2004 the Christopher T. Marlett Living Trust (Marlett Note) converted to 197,839 shares of common stock pursuant to its terms which required automatic conversion contingent upon successful completion of the Companys corporate restructuring. The Company recognized the value of the beneficial conversion feature of the Marlett Note equal to the difference between the effective conversion price, $0.57 per share, and the fair market value of the Companys common stock as of the date of the Marlett Note was issued ($1.60 per share as of March 23, 2004) as additional interest expense as of the date of the conversion, not to exceed the amount of the proceeds received from the Marlett Note. Accordingly, the Company recorded $100,000 in additional non-cash interest expense as of June 3, 2005.



On June 3, 2005, the Company issued to MDB Capital Group, LLC (MDB) for consulting fees related to the Companys corporate restructuring 247,298 shares of the Companys common stock and 247,298 five year common stock purchase warrants that will be exercisable beginning sixty (60) days after June 3, 2005 with an exercise price of $1.20 per share. The market value of the Companys common stock on June 3, 2005 was $1.60 per share, resulting in a value attributable to the stock issued to MDB of $395,677. The value of the warrants, determined in accordance with the Black-Scholes pricing model is$1.49 per warrant, for a total for the warrants of $368,474. Accordingly the Company recognized a non-cash restructuring expense as of June 3, 2005 of $764,151.



Effective July 13, 2005, the Companys Board of Directors approved the repayment of a 115,000 advance to Dental Marketing Development N.V. ("DMD"), a company owned and operated by Guy De Vreese which later merged with Lident N.V., another company controlled by Mr. De Vreese, in exchange for 93,533 shares of the Companys common stock held by Lident valued at $1.50 per share based upon a principal amount of 115,000 and a conversion rate of $1.22 to the Euro. The 93,533 shares of common stock received have been cancelled and are available for reissue as of December 31, 2005.





6
REMEDENT, INC. AND SUBSIDIARIES

NOTES TO INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005

(UNAUDITED)



1.
BACKGROUND AND BUSINESS ACTIVITIES

The Company was originally incorporated under the laws of Arizona in September 1996 under the name Remedent USA, Inc. In October 1998, the Company was acquired by Resort World Enterprises, Inc., a Nevada corporation ("RWE") in a share exchange and RWE immediately changed its name to Remedent USA, Inc. The share exchange was a "reverse acquisition" and accounted for as if the Company acquired RWE and then recapitalized its capital structure. On July 1, 2001, the Company formed three wholly-owned subsidiaries, Remedent Professional Holdings, Inc., Remedent Professional, Inc. and Remedent N.V. (a Belgium corporation). Remedent Professional, Inc. and Remedent Professional Holdings, Inc. are both wholly-owned subsidiaries and have been inactive since inception. In June 2005, the Company formed Remedent Asia Pte Ltd, a wholly-owned subsidiary formed under the laws of Singapore. In October, 2005, the Company
established a sales office in the U.S. in Los Angeles, California in order to introduce its products to the U.S. market.



During the quarter ended March 31, 2002, through the Companys Belgium based subsidiary, Remedent N.V., the Company initiated its entrance into the high technology dental equipment market. Since that time, the majority of the Companys operations have been conducted through its subsidiary, Remedent N.V. For the last three fiscal years, substantially all of the Companys revenue has been generated by Remedent N.V., which has become a leading provider of cosmetic dentistry products, including a full line of professional dental and retail "over-the-counter" tooth whitening products in Europe. Because the controlling stockholders of Remedent N.V. consisted of the Companys executive officers or companies owned by these executive officers, the Company has always had effective "control" over Remedent N.V., as defined by APB 51"Consolidated Financial Statements," even though it owned only
twenty two percent (22%) of this subsidiary.



On June 3, 2005, the Company consummated the acquisition of the remaining 78% of Remedent N.V., and issued 7,715,703 shares of the Companys common stock in exchange for the 78% of the common stock of Remedent N.V. not owned by the Company. As a result of this acquisition, Remedent N.V. is now our wholly-owned subsidiary.



In addition, on June 3, 2005, the Company amended its Articles of Incorporation pursuant to the filing of the Amended and Restated Articles of Incorporation with the Nevada Secretary of State. The Amended and Restated Articles of Incorporation (i) changed the name of the Company from "Remedent USA, Inc." to "Remedent, Inc." (ii) increased the number of authorized shares to 60,000,000 shares consisting of 50,000,000 shares of common stock and 10,000,000 shares of Preferred Stock, and (iii) effected a one-for-twenty reverse stock split (collectively, the "Amendments"). The consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the effects of the reverse split and authorization of 10,000,000 shares of Preferred Stock.



2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization



The accompanying consolidated financial statements include the accounts of Remedent, Inc. (formerly Remedent USA, Inc.), a Nevada corporation, and its three subsidiaries, Remedent N.V. (Belgian corporation) located in Deurle, Belgium, Remedent Professional, Inc. (incorporated in California) and a



7
subsidiary of Remedent Professional Holdings, Inc. and Remedent Asia Pte Ltd, a wholly-owned subsidiary formed under the laws of Singapore (collectively, the "Company"). Remedent, Inc. is a holding company with headquarters in Deurle, Belgium and, as of October 2005, offices in Los Angeles, California. Remedent Professional, Inc. and Remedent Professional Holdings, Inc. have been dormant since inception. Remedent Asia Pte. Ltd., commenced operations as of July 2005. All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.



Interim Financial Information



The interim consolidated financial statements of Remedent, Inc. and Subsidiaries (the Company) are condensed and do not include some of the information necessary to obtain a complete understanding of the financial data. Management believes that all adjustments necessary for a fair presentation of results have been included in the unaudited consolidated financial statements for the interim periods presented. Operating results for the three and nine months ended December 31, 2005, are not necessarily indicative of the results that may be expected for the year ended March 31, 2006. Accordingly, your attention is directed to footnote disclosures found in the March 31, 2005 Annual Report on Form 10KSB/A for the year ended March 31, 2005, and particularly to Note 1, which includes a summary of significant accounting policies.



Basis for Presentation



The Companys financial statements have been prepared on an accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America. These principles contemplate the realization of assets and liquidation of liabilities in the normal course of business. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.



Principles of Consolidation



All inter-company balances and transactions have been eliminated in consolidation. Corporate administrative costs are not allocated to subsidiaries.



Revenue Recognition



Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period that related sales are recorded. The Company recognizes revenue in accordance with Staff Accounting Bulletin 104.



Impairment of Long-Lived Assets



Long-lived assets consist primarily of property and equipment. The recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in the business environment. If impairment exists, the carrying amount of the long-lived assets is reduced to its estimated fair value, less any costs associated with the final settlement. As of December 31, 2005, management believes there was no impairment of the Companys long-lived assets.





8
Cash-Restricted



The Company has deposited $60,000 in cash in an escrow with Wells Fargo Bank as security for the Companys credit card merchant processing associated with anticipated direct sales activities in the U.S.



Accounts Receivable and Allowance for Doubtful Accounts



The Company sells professional dental equipment and consumer dental products to various companies, primarily to distributors located in Western Europe. The terms of sales vary by customer, however, generally are 2% 10 days, net 30 days. Accounts receivable is reported at net realizable value and net of allowance for doubtful accounts. The Company uses the allowance method to account for uncollectible accounts receivable. The Companys estimate is based on historical collection experience and a review of the current status of trade accounts receivable.

Prepaid Expense



Included in the Companys prepaid expenses are prepayments to suppliers for inventory purchases and to the Belgium customs department, to obtain an exemption of direct VAT payments for imported goods out of the European Union (EU). This prepayment serves as a guarantee to obtain the facility to pay VAT at the moment of sale and not at the moment of importing goods at the border.

Property and Equipment



Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.

The Company depreciates its property and equipment for financial reporting purposes using the straight-line method based upon the following useful lives of the assets:

Tooling
3 YearsManufacturing Equipment
4 YearsFurniture and fixtures
4 Years

Research and Development Costs



The Company expenses research and development costs as incurred.



Warranties



The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its basic warranty programs. The specific warranty terms and conditions vary depending upon the product sold but generally include technical support, repair parts, labor for periods up to 18 months. Factors that affect the Companys warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy the Companys warranty obligation. Based upon the foregoing, we have recorded as of December 31, 2005 a provision for potential future warranty costs of $17,826.





9
Impact of New Accounting Standards



In July 2004, the Emerging Issues Task Force (EITF) reached a consensus on Issue No. 04-8, Accounting Issues Related to Certain Features of Contingently Convertible Debt and the Effect on Diluted Earnings per Share (EITF No. 04-8). The Task Force reached a consensus that contingently convertible debt instruments should be included in the computation of diluted earnings per share under the if-converted method regardless of whether the market price trigger (or other contingent feature) has been met. The EITF 04-8 consensus must be applied by retroactive restatement based on the term in effect on the last day of the fiscal period in which the consensus becomes effective. This consensus became effective for all financial statements issued after December 15, 2004. Accordingly, the Company retroactively restated all earnings per share measures for all periods to reflect
the consensus as it relates to a $100,000 note payable contingently convertible into two percent (2%) of the Companys outstanding common stock upon successful completion of a restructuring (see Note 3) and $147,580 in principal plus interest in convertible debentures issued by the Company from April 2000 through February 2001 of which $127,580 converted (plus accrued interest of $57,187) as of December 31, 2004.



In November 2004, the FASB issued SFAS 151 Inventory Costs, an amendment of ARB No. 43, Chapter 4. This Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This Statement requires that those items be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company will adopt this statement for the fiscal year beginning April 1, 2006.



In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share Based Payment (SFAS 123R), a revision to SFAS No. 123, Accounting for Stock-Based Compensation. SFAS 123R supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows. SFAS 123R requires that the Company measure the cost of employee services received in exchange for equity awards based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards. The Company is required to adopt SFAS 123R effective as of the beginning of the first interim or annual reporting period that begins after December 15, 2005 or January 1, 2006. Under this method, the Company will begin
recognizing compensation cost for equity-based compensation for all new or modified grants after the date of adoption. In addition, the Company will recognize the unvested portion of the grant date fair value of awards issued prior to adoption based on the fair values previously calculated for disclosure purposes over the remaining vesting period of the outstanding options and warrants. The Company is currently evaluating the potential effect that the adoption of SFAS 123R will have on the Companys financial statement presentation and disclosures. Until such time, the Company has determined that it will continue to account for stock-based employee compensation in accordance with APB No. 25.



In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment to APB Opinion No. 29 (SFAS 153). SFAS 153 amends Accounting Principles Board Opinion No. 29, Accounting for Nonmonetary Transactions, to require that exchanges of nonmonetary assets be measured and accounted for at fair value, rather than at carryover basis, of the assets exchanged. Nonmonetary exchanges that lack commercial substance are exempt from this requirement. SFAS 153 is effective for nonmonetary exchanges entered into in fiscal periods beginning after June 15, 2005. Company is currently evaluating the potential effect that the adoption of SFAS No. 153 will have on the Companys financial statement presentation and disclosures.





10
In June 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB No. 20 and FAS No. 3. SFAS No. 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS No. 154 also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The correction of an error in previously issued financial statements is not an accounting change. However, the reporting of an error correction involves adjustments to previously issued financial statements
similar to those generally applicable to reporting an accounting change retrospectively. Therefore, the reporting of a correction of an error by restating previously issued financial statements is also addressed by SFAS No. 154. SFAS No. 154 is required to be adopted in fiscal years beginning after December 15, 2005. The Company does not believe adoption of SFAS No. 154 will have a material impact on its financial position, results of operations or cash flows.



Computation of Earnings per Share



Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share attributable to common stockholders assuming dilution is computed by dividing net income by the weighted average number of shares of common stock outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Potential common shares related to stock options and stock warrants are excluded from the computation when their effect is antidilutive.



Conversion of Foreign Currencies



The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The functional currency for the Companys European subsidiary, Remedent N.V. is the Euro. The functional currency for Remedent Professional, Inc. is the U.S. dollar. The Company translates foreign currency statements to the reporting currency in accordance with FASB 52. The assets and liabilities of companies whose functional currency is other than the U.S. dollar are included in the consolidation by translating the assets and liabilities at the exchange rates applicable at the end of the reporting period. The statements of income of such companies are translated at the average exchange rates during the applicable period. Translation gains or losses are accumulated as a separate component of stockholders deficit. The Company reports the reporting currency equivalent of foreign currency cash
flows using an appropriately weighted average exchange rate for the period and reports the effect of exchange rate changes on cash balances held in foreign currencies as a separate part of the reconciliation of the change in cash and cash equivalents during the period.



3.
CORPORATE RESTRUCTURING

Action by Unanimous Written Consent

In February 2005 and December 2004, in an action taken by written consent of the holders of a majority of the issued and outstanding shares of the Companys common stock, and without a meeting pursuant to Section 78.320 of the Nevada Revised Statute (the Written Consent), the Company: (i) increased the number of authorized shares to 60,000,000 shares, consisting of 50,000,000 shares of common stock and 10,000,000 shares of preferred stock, (ii) implemented a one-for-twenty reverse stock split with consideration for fractional shares to be issued in the form of scrip, and (iii) changed the name of the Company from "Remedent USA, Inc." to "Remedent, Inc." The Written Consent also authorized acquisition of the remaining 78% of the Companys subsidiary, Remedent N.V., that the Company did not



11
own from Messrs. Guy De Vreese and Robin List, the Chairman and Chief Executive Officer respectively, through the issuance of shares of the Companys common stock equal to 78% of the Companys issued and outstanding shares following the completion of the transaction. Lastly, the Written Consent authorized the implementation of a 2004 Incentive and Nonstatutory Stock Option Plan, following the implementation of the reverse stock split (so as not to be affected by the reverse stock split), reserving 800,000 shares of common stock for issuance to employees, directors and consultants of the Company or any subsidiaries. These actions were disclosed in 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 June 3, 2005.

On June 3, 2005, the Company amended its Articles of Incorporation pursuant to the filing of the Amended and Restated Articles of Incorporation with the Nevada Secretary of State. The Amended and Restated Articles of Incorporation (i) changed the name of the Company from "Remedent USA, Inc." to "Remedent, Inc." (ii) increased the number of authorized shares to 60,000,000 shares consisting of 50,000,000 shares of common stock and 10,000,000 shares of Preferred Stock, and (iii) effected a 1 for 20 reverse stock split (collectively, the "Amendments").

Acquisition of Minority Interest

Also on June 3, 2005 the Company entered into an agreement (Exchange Agreement) with Remedent N.V. the Companys Belgium based consolidated subsidiary, Lausha N.V., a Belgian company that is controlled by Guy De Vreese who is Chairman of the Company ("Lausha"); and Robin List, a director and the Chief Executive Officer of the Company ("Mr. List"). Mr. List and Lausha are collectively referred to as the "Exchanging Stockholders." Prior to the exchange contemplated by the Exchange Agreement, the Company owned 2,200 shares of Remedent N.V. representing a twenty two percent (22%) ownership interest in Remedent N.V. and the Exchanging Stockholders collectively owned 7,800 shares of Remedent N.V. representing a seventy-eight percent (78%) ownership interest of Remedent N.V. Under the terms of the Exchange Agreement, the Company agreed to issue 7,715,703 of its restricted common stock
(representing a 78% ownership interest in the Company) giving effect to a one for twenty reverse stock split (the "Reverse Stock Split"), in exchange for all of the issued and outstanding shares of Remedent N.V. owned by the Exchanging Stockholders (the "Acquisition"). The number of shares to be issued, as a percentage of the Company's outstanding shares, in consideration for the Acquisition of the seventy eight percent (78%) of the shares of Remedent N.V. was based on an evaluation by MDB Capital Group, LLC (MDB), a NASD registered broker dealer retained by the Company to render advice with regard to the Company's restructuring. MDB concluded that the Company's twenty two percent (22%) interest in Remedent N.V. was the Company's only asset and therefore, as consideration for their seventy eight percent (78%) interest in Remedent N.V., the Exchanging Stockholders should receive an equal percentage ownership interest in the Company, therefore preserving the existing proportional indirect
ownership interests in Remedent N.V. of both the Exchanging Stockholders and the existing Company stockholders.

The Company consummated the Acquisition of Remedent N.V. as contemplated by the Exchange Agreement on June 3, 2005. In connection with the Acquisition, the Company issued 7,715,703 shares of its restricted common stock to the Exchanging Stockholders in exchange for all of the issued and outstanding shares of Remedent N.V. owned by the Exchanging Stockholders. As a result of the Acquisition, Remedent N.V. is a wholly owned subsidiary of the Company. Since the Exchanging Stockholders of Remedent N.V. are officers, directors and shareholders of the Company, the Company has determined that it has "control" of Remedent N.V., as defined by APB 51 "Consolidated Financial Statements". Accordingly, the Acquisition was recorded at predecessor basis and all assets and liabilities have been presented at historical amounts.





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Conversion of Note Payable

Upon successful completion of the foregoing transactions, on June 3, 2005 a $100,000 note payable issued by the Company on March 23, 2004 to Christopher Marlett (Marlett Note) converted to 197,839 shares of common stock pursuant to its terms which required automatic conversion contingent upon successful completion of any corporate restructuring in an amount equal to two percent (2.0%) of the outstanding shares of the Company at the completion of such restructuring. As of June 3, 2005, accrued interest on the Marlett Note was $11,173, resulting in an effective conversion price of $0.57 per share. In accordance with Emerging Issues Task Force (EITF) consensus on Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, the Company recognized the value of the beneficial conversion feature
equal to the difference between the effective conversion price, $0.57 per share, and the fair market value of the Companys common stock as of the date of the Marlett Note was issued ($1.60 per share as of March 23, 2004) as additional interest expense as of the date of the conversion, not to exceed the amount of the proceeds received from the Marlett Note. Accordingly, the Company recorded $100,000 in additional non-cash interest expense as of June 3, 2005.

Non-cash Fees for Financial Advisory Services

Also upon completion of the foregoing transactions, MDB, for financial advisory services rendered to the Company in connection with the Companys corporate restructuring, was entitled to receive shares of the Companys common stock equal to 2.5% the issued and outstanding shares as of June 3, 2005 restructuring and five year common stock purchase warrants equal to another 2.5% of the Companys outstanding shares as of June 3, 2005 that will be exercisable beginning sixty (60) days after June 3, 2005 with an exercise price of $1.20 per share. Accordingly, as of June 3, 2005, the Company is obligated to issue to MDB or its designee, 247,298 shares of the Companys common stock and 247,298 five year common stock purchase warrants. The market value of the Companys common stock on June 3, 2005 was $1.60 per share, resulting in a value attributable to the stock issued to MDB of
$395,677. The value of the warrants, determined in accordance with the Black-Scholes pricing model utilizing an historic volatility factor of 1.52, a risk free interest rate of 6.0% and an expected life for the warrants of five years, is $1.49 per warrant, for a total for the warrants of $368,474. Accordingly the Company recognized a non-cash restructuring expense as of June 3, 2005 of $764,151.

4.
CONCENTRATION OF RISK

Financial Instruments - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable.

Concentrations of credit risk with respect to trade receivables are normally limited due to the number of customers comprising the Companys customer base and their dispersion across different geographic areas. At December 31, 2005, two customers accounted for 43% and 11%, respectively, of the Companys trade accounts receivable. For the nine months ended December 31, 2005, these same two customers accounted for 18% and 10% of revenues, respectively. The Company performs ongoing credit evaluations of its customers and normally does not require collateral to support accounts receivable.

Purchases  The Company does not specifically rely upon any suppliers for key components for its professional dentist products. The loss of any one supplier in the professional dentist product line would not have a material impact on the Companys operations. The Company currently relies on one factory for the manufacture certain components of its new MetaTray and iWhite products, which represented 25.7% and 20.9% of the Companys purchases for the three and nine months ended December 31, 2005, respectively.The Company believes alternative manufacturers could be obtained should it become necessary.





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5.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

A summary of accounts receivable and allowance for doubtful accounts as of December 31, 2005 and March 31, 2005 is as follows:



December 31, 2005

March 31,

2005Accounts receivable, gross
$ 1,935,936

$ 1,568,490Less: allowance for doubtful accounts
(70,905)

(80,194)Accounts receivable, net
$ 1,865,031

$ 1,488,296

6.
DUE FROM RELATED PARTY

On February 12, 2002, Remedent N.V. entered into a loan agreement for  125,000 with Lident N.V., a company owned and operated by Guy De Vreese, the Companys Chairman. The agreement was entered into in connection with a line of credit established by Remedent N.V. with a Belgian bank. Due to the insufficient assets maintained by Remedent N.V. as of inception date of the line of credit, the bank imposed two requirements for the extension of credit; (1) Mr. De Vreese personally guarantee the line of credit, and (2) Remedent N.V. use the line of credit repay in full the 125,000 outstanding balance on BBL's existing line of credit to Dental Marketing Development N.V. ("DMD"), a company owned and operated by Guy De Vreese. Accordingly, Mr. De Vreese personally guaranteed the 250,000 BBL line of credit, including pledging as collateral specific investments owned by Mr. De Vreese valued
at approximately $250,000, and Remedent N.V. drew 125,000 from this line of credit to advance to DMD and booked this amount as an interest-free loan to DMD. DMD would have to repay this loan (i) if the line of credit had been cancelled by BBL due to insufficient security, (ii) if Remedent found other facilities to secure payment of Mr. De Vreese's funds and no longer needed the line of credit, or (iii) Remedent N.V. was still using the line of credit but has found other facilities to secure payment of Mr. De Vreese's funds. Remedent N.V. did not take any procedural steps to insure fairness in the terms of this transaction to the Company or to Remedent N.V. DMD later merged with Lident N.V. Effective July 13, 2005, the Companys Board of Directors approved the repayment of the advance to DMD in exchange for 93,533 shares of our common stock at $1.50 per share, based upon a remaining principal amount of 115,000 at June 30, 2005 and a conversion rate of $1.22 to the Euro as of July 13,
2005, a total value of $140,300. As of December 31, 2005, the 93,533 shares of common stock received have been cancelled and are available for reissue.



Also included as of March 31, 2005 in due from related parties was a cash investment of 5,400 in Pure White International made in May, 2003 in exchange for a 30% interest in this company. This investment was repurchased by Pure White International for 5,400 in July, 2005. Pure White International BV is the Companys former distributor for the CleverWhite tooth whitening kits for the Dutch market prior to the Company licensing these distribution rights to Omega Pharma.



7.
INVENTORIES

Inventories 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:





14
December 31, 2005

March 31,

2005Raw materials
$ 37,362

$ 14,486Components
1,051,718

496,800Finished goods
191,986

85,9441,281,066

597,230Less: reserve for obsolescence
(5,942)

(38,895)Net inventory
$ 1,275,124

$ 558,335

8.
PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:



December 31, 2005

March 31,

2005Furniture & Fixtures
$ 87,632

$ 39,517Machinery & Equipment
165,345

75,558Tooling
175,950

-Less: Accumulated Depreciation
(91,809)

(29,338)Property & equipment, net
$ 337,118

$ 85,737

9.
LICENSED PATENTS

In 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 licenseto 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.



In 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
($129,650 as of March 31, 2005) 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 ($118,840 as of December 31, 2005) 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 the option. Furthermore, at a meeting of the Company's Board of Directors



15
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 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 has been recorded as of December 31, 2005 at  150,000 ($178,260) and is being amortized over five (5) years.



10.
LINE OF CREDIT

On October 8, 2004, the Company obtained a new line of credit facility with a new Belgian bank for  1,050,000 (US $1,247,820 at December 31, 2005) Line of Credit Facility (the "Facility") with a Belgian bank , consisting of a 800,000 (US $950,720) credit line based on the eligible accounts receivable and a 250,000 (US $297,100) general line of credit. Advances are approved by the bank based upon dated bills of exchange issued and signed by the customer for shipped goods. These advances are discounted at a rate of 2.125%. As of May 3, 2005, the Company and the bank agreed to increase the general line of credit to500,000 ($594,200) and decrease the credit line based on the eligible accounts receivable to550,000 ($653,620). Interest on each advance under this line is charged at the banks
published rate, which was 4.47% at December 31, 2005. All other terms and conditions remained unchanged. There was 500,000 ($594,200) in advances outstanding for this line of credit as of December 31, 2005 and no advances outstanding as of March 31, 2005.



11.
DUE TO RELATED PARTIES

December 31, 2005

March 31,

2005Interest free borrowings from employeesin the form of working capital loans
$ 58,958

$ 58,958

Borrowings from employees and entities controlled by officers of the Company are due upon demand and bear no interest.



12.
ACCRUED LIABILITIES

Accrued liabilities are summarized as follows:

December 31, 2005

March 31,

2005Accrued interest
$ 9,833

$ 20,470Accrued audit and tax preparation fees
19,000

37,500Accrued consulting fees
32,062

1,700Accrued employee benefit taxes
181,691

190,973Reserve for warranty costs
17,826

19,448Customer prepayments
1,547

-Other accrued expenses
118,220

97,764$ 380,179

$ 367,854





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13.
NOTES PAYABLE

Notes payable are summarized as follows:

December 31, 2005
March 31,

2005Convertible Debentures:Maturity Dates: September 1, 2001 thru February 8, 2002Interest rate: 10% per annumOptional conversion rate: 30% of the averagetrading price (average of bid and ask) for the30 days immediately prior to the maturity date.Debentures are unsecured.Unpaid principal balance
$ 20,000
$ 20,000Union Bank Debt:Maturity Dates: April 26, 2005Interest rate: 7.5% per annumSecurity All of the assets of the companyUnpaid principal balance
11,282
11,282Loan Payable -Fortis BankMaturity: October 9, 2005,Interest Rate: 4.09%, UnsecuredPayable in twelve equal monthly installments of 12,783Unpaid principal balance
-
163,040Convertible Promissory Note:Maturity Date: September 30, 2004, Interest rate: 10% per annumConversion rate: Balance of note converted intothe number of shares necessary to provide the note holderwith two percent of the Company's outstanding shares ofcommon stock, calculated on a fully diluted basis.Promissory note is secured by a first security interest inassets of the Company pursuant to the terms of the SecurityAgreement. This note converted to 197,839 shares of common stock on June 3, 2005 (See Note 3)
-
100,000Notes Payable
$ 31,282
$ 294,322



For the loans shown which are past their maturity dates, the company is presently in negotiation to amend the repayment terms and believes such renegotiation will be successful. No defaults have been declared by the note or debenture holders.



14.
LONG TERM DEBT

On June 15, 2005, the Company entered into two five year capital lease agreements for manufacturing equipment totaling 70, 245 ($84,589). The leases require monthly payments of principal and interest at 4.20% of 1,258 ($1,505) and provide for buyouts at the conclusion of the five year term of 2,820 ($3,374) or 4.0% of original value. Principal payable within 12 months of December 31, 2005 totals $12,378.





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15.
PRIVATE PLACEMENT

On July 20, 2005 the Company completed a private placement of 2,520,661 Units for an aggregate offering price of $3,780,985 (the "Offering"). Each Unit consists of one share of restricted Common Stock (the Shares) and one Common Stock Purchase Warrant (the Warrants) at a price of $1.50 per Unit. The Warrants are exercisable for a period of five years and entitle the holder to purchase one share of restricted Common Stock (the Warrant Shares) for $1.75 per Warrant Share. The Company also has the right to redeem the Warrants for $0.01 per Warrant Share covered by the Warrants if the Shares trade on the OTC Electronic Bulletin Board or similar market above $3.50 per share for 30 consecutive trading days based upon the closing bid price for the Shares for each trading day (the Redemption Right), provided, however, that the Warrant Shares have been registered
with the Securities and Exchange Commission (the Commission). Once the Redemption Right vests, the Company has the right, but not the obligation, to redeem the Warrants for $0.01 per Warrant Share covered by the Warrants upon 30 days written notice to the holders of the Warrants.



Under the terms of the subscription agreement/purchase agreement and the registration rights agreement, the Company was required to prepare and file with the Commission a registration statement covering the resale of the Shares and the Warrant Shares. The Company has filed such registration statement and such registration statement was declared effective by the Securities and Exchange Commission during October 2005.



The Company engaged MDB Capital Group, LLC, as its exclusive agent to offer the Units (the "Placement Agent"). The Placement Agent earned a fee equal to ten percent (10%) of the gross proceeds derived from the sale of the Units, which totaled $378,099,together with a five year warrant to purchase up to 252,067 of the Units sold in the Offering at an exercise price of $1.50 per Unit. In addition, the Company incurred a total of $199,962 in professional fees and costs associated with this offering which were offset against the proceeds attributable to additional paid in capital.



The Units were offered and sold by the Company to accredited investors in reliance on Section 506 of Regulation D of the Securities Act of 1933, as amended.



16.
STOCK OPTIONS

In 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 June 3, 2005, the Company authorized the implementation of a 2004 Incentive and Nonstatutory Stock Option 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 June 3, 2005 after the Company had completed a one for twenty reverse split.



On October 12, 2005, the Company entered into an Employment Agreement with an individual to render full-time employment to the Company as for an initial term of three (3) years whose duties include managing worldwide sales for the Company. The agreement automatically renews for an additional one (1) year period at the end of each then existing term, unless one party gives to the other written notice to terminate. The agreement provides for an annual salary of $275,000 and quarterly bonuses in the amount of $25,000, subject to certain conditions. The agreement also granted 400,000 options under the Company's 2004 Incentive and Nonstatutory Stock Option Plan (the "Stock Plan"). The options were priced at $4.00. The options vest one third each on the last day of the first, second and third years of employment. These options have a term of eight (8) years from the date of grant and are subject to other
standard terms and conditions under the Stock Plan and contain standard anti-dilution language and a provision for cashless exercise. The market value of the foregoing option grant based upon the



18
Black-Scholes option pricing model utilizing a market price on the date of grant of $3.50 per share, an annualized volatility of 155%, a risk free interest rate of 4.5% and an expected life of eight years is $3.41 per option granted, for a total value of approximately $1,364,490.



In addition to the foregoing, during the quarter ending December 31, 2005, the Company granted an aggregate of 90,000 three year options to purchase the Companys common stock to three new employees in its US offices at an exercise price of $3.41. The options vest over a three year period. The value of the foregoing option grants based upon the Black-Scholes option pricing model utilizing a market price on the date of grant of $3.41 per share, an annualized volatility of 155%, a risk free interest rate of 4.5% and an expected life of three years is $2.84 per option granted, for a total value of approximately $255,600.



On December 23, 2005, the Company granted to its Chief Financial Officer 75,000 ten year options to purchase the Companys common stock at an exercise price of $2.46, the market value of the Companys stock on the date of grant. The options were fully vested upon issue. The value of the foregoing option grants based upon the Black-Scholes option pricing model utilizing a market price on the date of grant of $2.46 per share, an annualized volatility of 155%, a risk free interest rate of 4.5% and an expected life of eight years is $2.40 per option granted, for a total value of approximately $180,000.



On February 10, 2006, the Company issued to an individual options to purchase 150,000 shares of the Company's common stock pursuant to the terms and conditions of a Stock Option Agreement to be agreed to by the parties as consideration for past services performed by this individual and the release of any and all claims under this individuals prior agreements with the Company (See SUBSEQUENT EVENTS  Note 20). 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 has been recorded as of December 31, 2005 as a research and development expense.



17.
STOCK BASED COMPENSATION

The Company accounts for stock-based employee compensation in accordance with the provisions of Accounting Principles Board (APB) Opinion No. 25 and FASB Interpretation No. 44 (FIN 44), Accounting for Certain Transactions Involving Stock Compensation, and complies with the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation. Under APB No. 25, compensation expense is recorded based on the difference, if any, between the fair value of the Companys stock and the exercise price on the measurement date. The Company accounts for stock options and warrants issued to non-employees in accordance with SFAS No. 123, which requires entities to recognize as expense over the service period the fair value of all stock-based awards on the date of grant and EITF 96-18, Accounting for Equity Investments that are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, which addresses the measurement date and recognition approach for such transactions.



Pro forma information regarding net income (loss) per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of such statement rather than disclosure only. The fair value for these options was estimated at the date of grant using the Black-Scholes option-pricing model.



For purpose of pro forma disclosures, the estimated fair value of the options is amortized to operations over the vesting period of the options or the expected period of benefit. The Companys unaudited pro forma information is as follows:





19
December 31, 2005
December 31,

2004Net income (loss):As reported
$ (2,965,650)
$ 87,161Pro forma
$ (3,145,650)
$ 77,161Earnings per share:Basic and dilutedAs reported
$ (0.27)
$ 0.04Pro forma
$ (0.28)
$ 0.04

18.
SEGMENT INFORMATION

The Companys only operating segment consists of dental products and oral hygiene products sold by Remedent N.V. The other subsidiaries of the Company have been dormant since inception. Since the Company only has one segment, no further segment information is presented.



Customers Outside of the United States



Sales to customers outside of the United States were 92% and 99% of total sales for the six month periods ended December 31, 2005 and 2004, respectively. The sales were made mostly to customers in countries that are members of the European Union (EU).



December 31, 2005

December 31, 2004U.S. sales
$ 368,686

$ 17,647Foreign sales
4,313,785

3,075,707$ 4,682,471

$ 3,093,354

19.
COMMITMENTS AND CONTINGENCIES

Real Estate Lease



The 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 6,560 per month ($7,795 per month at December 31, 2005). In addition, the Company is responsible for the payment of annual real estate taxes for the property which totaled 3,245 ($3,856) for calendar year 2004. The minimum aggregate rent to be paid over the remaining lease term based upon the conversion rate for the (Euro) at December 31, 2005 is $486,514.



Rent expense for the foregoing lease for the nine months ended December 31, 2005 and 2004 was $96,973 and $67,937 respectively.



Equipment Lease



In November 2004, the Company leased new computer equipment from a Belgium based Lessor pursuant to a three year operating lease with monthly payments of 1,005 ($1,194). The aggregate rent to be paid over the lease term is $43,007.





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Minimum monthly lease payments for real estate and equipment for the next five fiscal years are as follows based upon the conversion rate for the (Euro) at December 31, 2005.



March 31, 2006
$ 107,882March 31, 2007
$ 107,882March 31, 2008
$ 106,688March 31, 2009
$ 93,550March 31, 2010
$ 93,550

20.
SUBSEQUENT EVENTS

On February 10, 2006, the Company entered into a consulting agreement effective as of January 1, 2006 with an unrelated individual who has previously provided product development services to the Company to provide future consulting and development services in order to assist the Company in the areas of research and design and product development relating to the dental and oral care markets. The agreement provides for a monthly fee of $25,000, payable on the 1st of each month. The initial term of this agreement ends on December 31, 2006, unless terminated earlier by either party. This agreement automatically renews for an additional one (1) year period at the end of each then existing term, unless one party gives to the other written notice to terminate. In conjunction with the terms of this agreement, the individual has agreed to a non-solicitation clause for a term of twelve (12) months following the
termination of this agreement.



As consideration for past services performed by this same individual and the release of any and all claims under this individuals prior agreements with the Company, the Company has agreed to; (i) issue two hundred thousand (200,000) shares of the Company's restricted common stock pursuant to the terms and conditions of a Stock Purchase Agreement to be agreed to, and; (ii) issue to this individual options to purchase 150,000 shares of the Company's common stock pursuant to the terms and conditions of a Stock Option Agreement to be agreed to. These Options shall be fully vested and have a term of not less than five (5) years with an exercise price equal to $2.60, the closing price of the Company's common stock as traded on the OTC Bulletin Board on February 10, 2006. The Company agreed that it will use its best efforts to register the Options and the restricted common stock of the Company issued
in connection with this agreement pursuant to a registration statement on Form S-8 under the Securities Act of 1933, as amended. The value of the 200,000 shares of common stock has been determined to be $2.60 per share, the closing price of the Company's common stock as traded on the OTC Bulletin Board on February 10, 2006, for a total value of $520,000. 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 total value of both the foregoing stock grant and option grant have been recorded as of December 31, 2005 as a research and development expense and has been credited to common stock subscribed ($200) and additional paid in capital ($881,300).





21
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations



The discussion contained herein is for the three and nine months ended December 31, 2005 and 2004. 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, 2005. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include words such as anticipates, expects, intends, plans, believes, may, will or similar expressions that are intended to identify forward-looking statements. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Such statements include, but are not limited to, statements regarding our intent, belief or current expectations regarding our strategies, plans and objectives, our product release schedules, our ability to design, develop, manufacture and market products, our intentions with respect to strategic acquisitions, the ability of our products to achieve or maintain commercial acceptance and our ability to obtain financing for our obligations. Such statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, the Companys actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Factors that could cause or contribute to the differences are discussed in Risk Factors and elsewhere in
the Companys registration statement on Form SB-2/A filed on October 26, 2005 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, 2005. The information contained in this Quarterly Report on Form 10-QSB for the quarterly period ended December 31, 2005 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, 2005 and in the Companys other filings with the Securities and Exchange Commission.



Overview



We were originally incorporated under the laws of Arizona in September 1996 under the name Remedent USA, Inc. In October 1998, we were then acquired by Resort World Enterprises, Inc., a Nevada corporation ("RWE") in a share exchange and RWE immediately changed its name to Remedent USA, Inc. The share exchange was a "reverse acquisition" and accounted for as if we acquired RWE and then recapitalized our capital structure. On July 1, 2001, we formed three wholly-owned subsidiaries, Remedent Professional Holdings, Inc., Remedent Professional, Inc. and Remedent N.V., and began developing high-technology dental equipment. Remedent Professional, Inc. and Remedent Professional Holdings, Inc. are both wholly-owned subsidiaries and have been inactive since inception. In June 2005, the Company formed Remedent Asia Pte Ltd, a wholly-owned subsidiary formed under the laws of Singapore.



During the quarter ended March 31, 2002, through our Belgium based subsidiary, Remedent N.V., we initiated our entrance into the high technology dental equipment market, with the introduction of the RemeCure high-speed dental curing light. Since that time, the majority of our operations have been conducted through our subsidiary, Remedent N.V. In just three years, we capitalized on our initial success with the RemeCure curing light and broadened our product line to include a full line of professional dental and retail "over-the-counter" tooth whitening products. We expanded our distribution to encompass over 35 countries throughout Europe, Asia and South America. In October, 2005, we established a sales office in the U.S. in Los Angeles, California in order to introduce our products to the U.S. market.





22
For the last three completed fiscal years, substantially all of our revenue has been generated by our Belgian subsidiary, Remedent N.V., which had experienced substantial growth in its revenues and recently has achieved positive operating income. Because the controlling stockholders of Remedent N.V. consist of our executive officers or companies owned by our executive officers, we have always had effective "control" over Remedent N.V., as defined by APB 51"Consolidated Financial Statements," even though we had owned only twenty two percent (22%) of this subsidiary.



On June 3, 2005, we consummated the acquisition of the remaining 78% of our subsidiary, Remedent N.V., and issued 7,715,703 shares of our restricted common stock in exchange for all of the issued and outstanding shares of Remedent N.V. owned or controlled by our executive officers. As a result of this acquisition, Remedent N.V. is now our wholly-owned subsidiary.



Also, on June 3, 2005, we amended our Articles of Incorporation pursuant to the filing of the Amended and Restated Articles of Incorporation with the Nevada Secretary of State. The Amended and Restated Articles of Incorporation (i) changed our name from "Remedent USA, Inc." to "Remedent, Inc." (ii) increased the number of authorized shares to 60,000,000 shares consisting of 50,000,000 shares of common stock and 10,000,000 shares of Preferred Stock, and (iii) effected a one-for-twenty reverse stock split.



Our Critical Accounting Policies



The discussion and analysis of the Companys financial condition and results of operations is based upon the Companys consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to bad debts, intangible assets, income taxes, and contingencies and litigation, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes that the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements: revenue recognition, inventory valuation, research and development costs, stock-based compensation, impairment of long-lived assets and conversion of foreign currencies. These accounting policies are discussed in ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION contained in the Companys Annual Report on Form 10-KSB for the fiscal year ended March 31, 2005, as well as in the notes to the March 31, 2005 consolidated financial statements. There have not been any significant changes to these accounting policies since they were previously reported at March 31, 2005.



Results of Operations



Results of Operations for the three and nine months ended December 31, 2005 compared with the three months ended December 31, 2004.



The following table presents our consolidated statements of income (loss), as a percentage of sales, for the periods indicated.





23
For the three months ended

For the nine months endedDecember 31,

December 31,2005
2004

2005
2004NET SALES
100.00 %
100.00 %

100.00 %
100.00 %COST OF SALES
54.04 %
40.39 %

47.62 %
41.45 %GROSS PROFIT
45.96 %
59.61 %

52.38 %
58.55 %OPERATING EXPENSESResearch and development
49.13 %
2.97 %

21.99 %
2.74 %Sales and marketing
18.67 %
4.40 %

12.45 %
4.45 %General and administrative
67.39 %
39.66 %

64.49 %
35.92 %Non cash restructuring expense
0.00 %
0.00 %

16.32 %
0.00 %Depreciation and amortization
1.78 %
0.52 %

1.52 %
0.50 %TOTAL OPERATING EXPENSES
136.97 %
47.55 %

116.77 %
43.61 %INCOME (LOSS) FROM OPERATIONS
(91.01)%
12.06 %

(64.39)%
14.94 %Other income (expense)
(0.02)%
(1.13)%

(1.44)%
(1.07)%INCOME (LOSS) BEFORE INCOMETAXES AND MINORITY INTEREST
(91.04)%
10.93 %

(65.83)%
13.87 %Minority interest
0.00 %
(2.73)%

0.00 %
(8.93)%Income tax benefit (expense)
0.00 %
(12.19)%

2.49 %
(4.80)%NET INCOME (LOSS)
(91.04)%
(3.99)%

(63.34)%
0.14 %

Net Sales



Net sales decreased for the three months ended December 31, 2005 by $140,629, or 7.0%, to $1,870,037 as compared to $2,010,666 for the three months ended December 31, 2004. For the nine months December 31, 2005, sales decreased by $421,549, or 8.3%, to $4,682,471 as compared to $5,104,020 for the nine months ended December 31, 2004. The decrease in net sales for the three and nine months ended December 31, 2005 is attributable to several reasons; a) manufacturing delays in launching of our new MetaTray, which began shipping in limited quantities in August 2005, causing professional dentist customers to defer orders of our existing products in anticipation of the new MetaTray products; b) deferral of reorders of our existing CleverWhite product in anticipation of the launch of our iWhite retail whitening product which was also delayed due to manufacturing, and; c) a 28% reduction in our selling price of
our Remecure product in order to maintain competitive position in the marketplace.



It should be noted that initial stocking of CleverWhite, the predecessor to iWhite, by the retail stores comprising Omega Pharma group, our largest customer in the nine months ended December 31, 2004, totaled approximately $2.0 million. For the nine months ended December 31, 2005, we now do business on a country by country basis with the member companies of the Omega Pharma group and have to date only shipped one country in the Omega Pharma Group (Spain) our new iWhite products. We anticipate shipping the remainder of the Omega Pharma Group and other major customers our iWhite products beginning in March 2006. To date, there are orders placed and unshipped for iWhite exceeding $1.0 million. In addition, in an 8K filed on December 28, 2005, we announced that we had entered into an Agreement with Pierre Fabre Medicament S.A., a French company, whereby commencing on January 1, 2006 Pierre Fabre will be
our sole and exclusive distributor of the I-White(R) and MetaTray(R) products ("Products") in France, Guadeloupe, Guiana, Martinique, Mayotte, New Caledonia, French Polynesia, La Reunion, St. Bartholomew, St. Martin, St. Pierre and Miquelon, Wallis and Futuna. The Agreement requires Pierre Fabre to order minimum quantities of these Products. In the event that Pierre Fabre fails to sell the minimum quantities of these Products within the first



24
eighteen (18) months of the Agreement, we will have a right to terminate the Agreement on a product by product basis upon one (1) month prior written notice.



The term of the Agreement is for an initial three (3) years, unless terminated by either party and will automatically be extended for successive two (2) year terms unless terminated by written notice at least six (6) months before its expiration. The Agreement also grants Pierre Fabre a first option right to expand the territory under the Agreement to include Cyprus, Morocco, Tunisia, Algeria and South Africa.



Cost of Sales

Cost of sales increased for the three months ended December 31, 2005 by $198,617, or 24.5%, to $1,010,660 as compared to $812,043 for the three months ended December 31, 2004. The increase in cost of sales occurred primarily as a result our expansion of our own in-house manufacturing of the whitening agent delivery system included in our MetaTray and iWhite products. Although these manufacturing costs, on a per unit basis, increased during the startup of this manufacturing process, which occurred during the three months ended December 31, 2005, we anticipate that we will achieve reductions in the cost of our products over that attainable through third party manufacturing sources in future periods as a result developing this in-house manufacturing capability.



For the nine months ended December 31, 2005, cost of sales increased $114,234, or 5.4%, to $2,229,858, as compared to $2,115,624 for the nine months ended December 31, 2004. This increase in primarily attributable to the expansion of our in house manufacturing capability during the three months ended December 31, 2005 as discussed above.



Gross Profit



Gross profit decreased by $339,246, or 28.3%, to $859,377 for the three month period ended December 31, 2005 as compared to $1,198,623 for the three month period ended December 31, 2004 resulting in a decrease in gross profit as a percentage of sales of 13.7%. The decrease in gross profit is the result of the decrease in sales and the increase in cost of sales discussed above as well the effect of the reduced margins on the Remecure products resulting from the 28% reduction in the average selling price of the Remecure products.



For the nine months ended December 31, 2005, gross profit decreased by $535,783, or 17.9%, to $2,452,613 as compared to $2,988,396 for the nine months ended December 31, 2004 resulting in a decrease in gross profit as a percentage of sales of 6.2%. The decrease for the nine month period is commensurate with the decrease in sales combined with the increase in manufacturing costs and reduction in Remecure selling prices that occurred during the three months ended December 31, 2005.



Operating Expenses:



Research and development expenses increased $859,041 to $918,749 for the three months ended December 31, 2005 as compared to $59,708 for the three months ended December 31, 2004. The principal reason for this increase was the result of an agreement reached with an individual who had been assisting in development of our MetaTray and iWhite products. As consideration for past services performed by this individual and the release of any and all claims under this individuals prior agreements with us, we agreed to (i) issue of two hundred thousand (200,000) shares of our restricted common stock pursuant to the terms and conditions of a Stock Purchase Agreement to be agreed to, and (ii) issue to this individual options to purchase 150,000 shares of our common stock pursuant to the terms and conditions of a Stock Option Agreement to be agreed to. These options shall be fully vested and have a term of
not less than five (5) years with an exercise price equal to $2.60, the closing price our common stock as traded on the OTC Bulletin Board on February 10, 2006. We also agreed that we will use our best efforts to register the options and the restricted common stock issued in connection with this agreement pursuant to a registration statement on Form S-8 under the Securities Act of 1933, as



25
amended. The value of the 200,000 shares of common stock has been determined to be $2.60 per share, the closing price of the Company's common stock as traded on the OTC Bulletin Board on February 10, 2006, for a total value of $520,000. 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 of $361,500. The total value of both the foregoing stock grant and option grant have been recorded as of December 31, 2005 as a research and development expense and has been credited to common stock subscribed ($200) and additional paid in capital ($881,300).



For the nine months ended December 31, 2005, research and development expenses increased $889,889, or 636.0%, to $1,029,798 as compared to $139,909 for the nine months ended December 31, 2004. The increase for the nine month period is as discussed above regarding the stock and option grant during the three months ended December 31, 2005. In addition, we continue to expend resources for research and development for potential new products to introduce during calendar year 2007.



Sales and marketing costs increased $260,632, or 294.5%, to $349,122 for the three months ended December 31, 2005 as compared to $88,490 for the three months ended December 31, 2004. The principal reason for this increase is the launch of our new sales office located in Los Angeles, California which resulted in additional sales and marketing costs of $160,055 for the three month period. We believe the costs related to the establishment of this office will enable us to introduce our products to the US markets while adding sales to support to our worldwide sales operations. Also contributing to the increase in sales and marketing costs was our increased presence at trade shows as part of the introduction of our new iWhite and MetaTray products.



For the nine months ended December 31, 2005, sales and marketing costs increased $355,885, or 156.7%, to $582,948 as compared to $227,063 for the nine months ended December 31, 2004. The increase for the nine month period is the result of the foregoing increases as described above related to the three months ended December 31, 2005 as well as the costs incurred earlier in the fiscal year for marketing and promotional materials developed and purchased to support the launch of the MetaTray products for the professional dentist market and iWhite for the retail OTC market.



General and administrative costs for the three months ended December 31, 2005 and 2004 were $1,260,232 and $797,453, respectively, representing an increase of $462,779 or 58.0%. The increase in general and administrative costs for the three months ended December 31, 2005 as compared to the prior year includes general and administrative costs related to our new office in Los Angeles, California totaling $105,071 and $33,308 in general administrative costs associated with our new office in Singapore. We have also significantly increased our personnel in all departments within our headquarters in Belgium from 10 employees as of December 31, 2004 to 28 employees as of December 31, 2005, resulting in an increase in salary and related costs for the three months ended December 31, 2005 of $141,000 as compared to the three months ended December 31, 2004



For the nine months ended December 31, 2005, general and administrative costs increased $1,186,433, or 64.7%, to $3,019,710 as compared to $1,833,277 for the nine months ended December 31, 2004 due to the above items as well additional investment in corporate governance and instituting improvements in financial reporting and internal control resulting in increased expenditures for legal and financial consulting expenditures for the nine months ended December 31, 2005 of $343,000 over the nine months ended December 31, 2004, $251,000 in additional personnel costs, inclusive of the $141,000 increase noted above, for product development, sales and manufacturing activities. Also contributing to the increase in general and administrative costs was an increase in travel costs related to our startup manufacturing activities, our increased sales force, our efforts to raise additional capital and the startup of our offices in the
U.S and in Singapore.





26
In conjunction with our corporate restructuring as of June 3, 2005, MDB Capital Group, LLC (MDB) received for financial advisory services rendered to us, shares of our common stock equal to 2.5% of our issued and outstanding shares as of June 3, 2005 and five year common stock purchase warrants equal to another 2.5% of our outstanding shares as of June 3, 2005 that will be exercisable beginning sixty (60) days after June 3, 2005 with an exercise price of $1.20 per share. Accordingly, as of June 3, 2005, we issued to MDB or its designee, 247,298 shares of the Companys common stock and 247,298 five year common stock purchase warrants. The market value of our common stock on June 3, 2005 was $1.60 per share, resulting in a value attributable to the stock issued to MDB of $395,677. The value of the warrants, determined in accordance with the Black-Scholes pricing model utilizing an historic volatility factor
of 1.52, a risk free interest rate of 6.0% and an expected life for the warrants of five years, is $1.49 per warrant, for a total of $368,474 for the warrants. Accordingly, we recognized a non-cash restructuring expense as of June 3, 2005 of $764,151.



Net interest expense decreased by $18,286 to $4,424 from $22,710 during the three months ended December 31, 2005 over the comparable three months ended December 31, 2004. For the nine months ended December 31, 2005, interest expense increased $56,493 to $111,333 as compared to $54,840 for the nine months ended December 31, 2004. Included in interest expense for the nine months ended December 31, 2005 is $100,000 of non-cash interest equal to the value of the beneficial conversion feature on a $100,000 note payable that was converted to common stock on June 3, 2005 computed by taking the difference between the effective conversion price, $0.56 per share (based upon $100,000 in principal and $11,173 in accrued interest, divided by 197,839 shares, the amount of shares required to be issued) and the fair market value of our common stock as of the date of the note was issued ($1.60 per share as of March 23, 2004) times 197,839
shares issued in conversion of the note, not to exceed the original principal value of the convertible note. Not including the $100,000 non cash interest described in the preceding sentence, interest expense decreased for the nine months ended December 31, 2005 by $43,507 as a result of our improved cash position resulting in decreased utilization of our available bank credit lines, conversion into our common stock of convertible debentures totaling $127,580 in principal at December 31, 2004 and the liquidity provided by the private placement which was completed in July 2005.



Liquidity and Capital Resources



In order to continue the expansion of our product line and customer base, as well as allow us to establish operations in markets other than Europe, including establishment of a sales and distribution capability in the USA and Singapore, we required additional financing either in the form of additional debt or through the sale of additional equity securities. Although we anticipate requiring additional financing to continue this expansion, we believe we have sufficient cash resources for the next twelve months of operations.



On July 20, 2005 we completed a private placement of 2,520,661 Units for an aggregate offering price of $3,780,976 (the "Offering"). Each Unit consists of one share of restricted Common Stock (the Shares) and one Common Stock Purchase Warrant (the Warrants) at a price of $1.50 per Unit. The Warrants are exercisable for a period of five years and entitle the holder to purchase one share of restricted Common Stock (the Warrant Shares) for $1.75 per Warrant Share. We also have the right to redeem the Warrants for $0.01 per Warrant Share covered by the Warrants if the Shares trade on the OTC Electronic Bulletin Board or similar market above $3.50 per share for 30 consecutive trading days based upon the closing bid price for the Shares for each trading day (the Redemption Right), provided, however, that the Warrant Shares have been registered with the Securities and Exchange
Commission (the Commission). Once the Redemption Right vests, we have the right, but not the obligation, to redeem the Warrants for $0.01 per Warrant Share covered by the Warrants upon 30 days written notice to the holders of the Warrants.



Under the terms of the subscription agreement/purchase agreement and the registration rights agreement, we were required to prepare and file with the Commission a registration statement covering the resale of the Shares and the Warrant Shares. We filed such registration statement and such registration statement was declared effective by the Commission during October 2005.





27
We engaged MDB Capital Group, LLC, as our exclusive agent to offer the Units (the "Placement Agent"). The Placement Agent earned a fee equal to ten percent (10%) of the gross proceeds derived from the sale of the Units, which totaled $378,099, together with a five year warrant to purchase up to 252,067of the Units sold in the Offering at an exercise price of $1.50 per Unit. In addition, we incurred a total of $199,962 in professional fees and costs associated with this offering which were offset against the proceeds attributable to additional paid in capital.



The Units were offered and sold by us to accredited investors in reliance on Section 506 of Regulation D of the Securities Act of 1933, as amended.



Our balance sheet at December 31, 2005 reflects cash and cash equivalents of $1,294,062 as compared to $40,442 as of March 31, 2005, an increase of $1,253,620. Net cash provided (used by) operations decreased by $2,821,570 resulting in net cash being used by operations of $1,917,889 for the nine months ended December 31, 2005 as compared to net cash provided from operations of $903,681 for the nine months ended December 31, 2004. The decrease in net cash provided from operations for the nine months ended December 31, 2005 as compared to the nine months ended December 31, 2004 is primarily attributable to the net loss.



Net cash used in investing activities totaled $590,973 for the nine months ended December 31, 2005 as compared to net cash used in investing activities of $309,193 for the nine months ended December 31, 2004. The increase in net cash used in investing activities for the nine months ended December 31, 2005 is attributable to the purchase of manufacturing equipment related to our expansion of our in house manufacturing capability and office equipment as a result of our increased staffing in all three locations, Belgium, Los Angeles, Ca. and Singapore.



Net cash provided by financing activities totaled $3,735,845 for the nine months ended December 31, 2005 as compared to net cash used in investing activities of $756,855 for the nine months ended December 31, 2004. The increase in net cash provided from financing activities is primarily attributable to net proceeds from our private placement which totaled $3,200,658, net advances under our credit line for the nine months ended December 31, 2005 of $610,675 as compared to net repayments under our line of credit of $792,343 for the nine months ended December 31, 2004 as well as our additional net borrowings for capital leases for manufacturing equipment totaling $86,696.



During the nine months ended December 31, 2005, we recognized an increase in cash and cash equivalents of $26,637 from the effect of exchange rates between the Euro and the US Dollar.



Principal Commitments



We lease a 26,915 sq. ft. 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 6,560 per month ($7,795 per month at December 31, 2005). In addition, we are responsible for the payment of annual real estate taxes for the property which totaled 3,245 ($3,856) for calendar year 2004. The minimum aggregate rent to be paid over the remaining lease term based upon the conversion rate for the (Euro) at December 31, 2005 is $486,514.



Rent expense for the foregoing lease for the nine months ended December 31, 2005 and 2004 was $96,973 and $67,937 respectively.



Equipment Lease



In November 2004, we leased new computer equipment from a Belgium based Lessor pursuant to a three year operating lease with monthly payments of 1,005 ($1,194). The aggregate rent to be paid over the lease term is $43,007.





28
Minimum monthly lease payments for real estate and equipment for the next five fiscal years are as follows based upon the conversion rate for the (Euro) at December 31, 2005.



March 31, 2006
$ 107,882March 31, 2007
$ 107,882March 31, 2008
$ 106,688March 31, 2009
$ 93,550March 31, 2010
$ 93,550

Employment Agreement



On October 12, 2005, we entered into an Employment Agreement with Judd Darrin Hoffman to render full-time employment for an initial term of three (3) years. The Agreement automatically renews for an additional one (1) year period at the end of each then existing term, unless one party gives to the other written notice to terminate. Mr. Hoffman's duties are to manage and conduct our worldwide sales, including, but not limited to, the supervision, direction and control of the sales force and other employees. Mr. Hoffman's annual salary is $275,000 and he is entitled to quarterly bonuses in the amount of $25,000, subject to certain conditions. In conjunction with the terms of this Agreement, Mr. Hoffman has agreed to a non-competition clause while employed under this Agreement and a non-solicitation clause for a term of eighteen (18) months following his employment under this Agreement.



On February 10, 2006, we entered into a Consulting Agreement effective as of January 1, 2006 with an unrelated individual who has previously provided product development services to us to provide future consulting and development services in order to assist us in the areas of research and design and product development relating to the dental and oral care markets. This agreement provides for a monthly fee of $25,000, payable on the 1st of each month. The initial term of this agreement ends on December 31, 2006, unless terminated earlier by either party. This agreement automatically renews for an additional one (1) year period at the end of each then existing term, unless one party gives to the other written notice to terminate. In conjunction with the terms of this agreement, the individual has agreed to a non-solicitation clause for a term of twelve (12) months following the termination of this agreement.



Off-Balance Sheet Arrangements



At December 31 2005, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.



Item 3. Controls and Procedures.

(a)
Evaluation of Disclosure Controls and ProceduresDisclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted by the Company under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to the Companys management, including its principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.





29
The Company carried out an evaluation, under the supervision and with the participation of its management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures as of the end of the period covered by this report. Based upon and as of the date of that evaluation, the Companys principal executive officer and financial officers concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b)
Changes in Internal ControlsThere were no changes in the Companys internal controls or in other factors that could have significantly affected those controls subsequent to the date of the Companys most recent evaluation.

PART II - OTHER INFORMATION



Item 1. Legal Proceedings.



None.



Item 2. Unregistered Sale of Equity Securities.



None



Item 3. Defaults In Senior Securities.



None.



Item 4. Submission Of Matters To A Vote Of Security Holders.



None.



Item 5. Other Information.



None.



Item 6. Exhibits



The following documents are filed as part of this report:



Exhibit No.



10.21
Agreement between Remedent N.V. and Pierre Fabre Medicament S.A, dated December 21, 200531.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-OxleyAct of 2002

31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-OxleyAct of 2002

32.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



30
SIGNATURES



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



REMEDENT, INC.



Dated: February 21, 2006
/s/ Robin ListBy: Robin ListIts: Chief Executive Officer (PrincipalExecutive Officer) and Director



Dated: February 21, 2006
/s/ Philippe Van AckerBy: Philippe Van AckerIts: Chief Financial Officer (PrincipalFinancial Officer and PrincipalAccounting Officer)







31