UNITED STATES 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 SEPTEMBER 30, 2006 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.  EmployerIdentification 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 November 14, 2006: 12,996,245  Transitional Small Business Disclosure Format (check one).  Yes o Nox  Documents incorporated by reference: None.     REMEDENT, INC. TABLE OF CONTENTS FORM 10-QSB REPORT September 30, 2006   PART I - FINANCIAL INFORMATION
        PageItem 1.  Interim Consolidated Financial StatementsCondensed Consolidated Balance Sheet as of September 30, 2006 (Unaudited)
and March 31, 2006
        1Condensed Consolidated Statements of Operations for the Three
Months and Six Months Ended September 30, 2006 and September 30, 2005 (Unaudited)
        2Condensed Consolidated Statements of Comprehensive Income (Loss) for
the Three Months and Six Months Ended September 30, 2006 and
September 30, 2005 (Unaudited)
        3Condensed Consolidated Statements of Cash Flows for the Six
Months Ended September 30, 2006 and September 30, 2005 (Unaudited)
        4Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
        6Item 2.  Management's Discussion and Analysis or Plan of Operation
        17Item 3.  Controls and Procedures
        24PART II - OTHER INFORMATIONItem 1.  Legal Proceedings
        24Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
        25Item 3.  Defaults upon Senior Securities
        25Item 4.  Submission of Matters to Vote of Security Holders
        25Item 5.  Other Information
        25Item 6.  Exhibits
        25Signatures
        26
       PART I - FINANCIAL INFORMATION Item 1.  Interim Condensed Consolidated Financial Statements  REMEDENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS   September 30,2006
        March 31, 2006(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
        $151,761
        $        332,145Cash, restricted
        81,047
        70,762Accounts receivable, net of allowance for doubtful accounts of $71,304 at September 30, 2006 and $74,133 at March 31, 2006
        2,623,992
        2,370,846Inventories, net
        1,385,598
        1,470,553Prepaid expense
        356,191
        335,111Total current assets
        4,598,589
        4,579,417PROPERTY AND EQUIPMENT, NET
        387,106
        317,361OTHER ASSETSPatents, net
        151,030
        166,166TOTAL ASSETS
        $  5,136,725
        $  5,062,944LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion, long term debt
        $ 12,641
        $       12,641Line of Credit
        1,648,010
        605,200Notes payable
        11,282
        31,282Accounts payable
        1,529,022
        1,632,449Accrued liabilities
        539,665
        601,042Due to related parties
        50,536
        58,958Income taxes payable
        -
        103,001Total current liabilities
        3,791,156
        3,044,573LONG TERM DEBT
        53,013
        60,998STOCKHOLDERS EQUITY:Preferred Stock $0.001 par value (10,000,000 shares authorized, none issued and outstanding)
        -
        -Common stock, $0.001 par value; (50,000,000 shares authorized, 12,996,245 shares issued and outstanding at September 30, 2006 and 12,764,112 shares issued and outstanding at March 31, 2006 )
        12,996
        12,764Additional paid-in capital
        11,871,556
        11,624,234Accumulated deficit
        (10,589,137)
        (9,651,551)Common stock subscribed, not issued
        -
        200(foreign currency translation adjustment)
        (2,859)
        (28,274)Total stockholders equity
        1,292,556
        1,957,373TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
        $   5,136,725
        $   5,062,944
   See notes to the financial statements  1
    REMEDENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  For the three months ended
        
        For the six months endedSeptember 30,
        
        September 30,2006
        2005
        
        2006
        2005Net sales
        $ 2,415,114
        $   1,434,126
        
        $ 3,710,753
        $ 2,812,434Cost of sales
        1,210,012
        588,513
        
        1,955,674
        1,219,198Gross profit
        1,205,102
        845,613
        
        1,755,079
        1,593,236Operating ExpensesResearch and development
        115,218
        59,235
        
        240,500
        111,049Sales and marketing
        236,839
        124,940
        
        623,414
        233,826General and administrative
        833,762
        977,382
        
        1,671,112
        1,759,478Non cash restructuring expense
        -
        -
        
        -
        764,151Depreciation and amortization
        46,432
        24,706
        
        87,694
        37,849TOTAL OPERATING EXPENSES
        1,232,251
        1,186,263
        
        2,622,720
        2,906,353INCOME (LOSS) FROM OPERATIONS
        (27,149)
        (340,650)
        
        (867,641)
        (1,313,117)OTHER INCOME (EXPENSES)Interest expense
        (73,454)
        (4117)
        
        (97,469)
        (106,909)Other income
        2,746
        1,288
        
        27,523
        40,000TOTAL OTHER INCOME (EXPENSES)
        (70,708)
        (2,829)
        
        (69,946)
        (66,909)LOSS BEFORE INCOME TAXES
        (97,857)
        (343,479)
        
        (937,587)
        (1,380,026)Income tax expense (benefit)
        -
        (92,637)
        
        -
        (116,796)NET INCOME (LOSS)
        $   (97,857)
        $   (250,842)
        
        $ (937,587)
        $(1,263,230)LOSS PER SHAREBasic and fully diluted
        $     (0.01)
        $    (0.02)
        
        $ (0.07)
        $ (0.12)WEIGHTED AVERAGE SHARES OUTSTANDINGBasic and fully diluted
        12,996,245
        10,266,413
        
        12,947,479
        10,266,413
  See notes to the financial statements  2
    REMEDENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)  For the three months endedSeptember 30,
        
        For the six months endedSeptember 30,2006
        
        2005
        
        2006
        
        2005Net Income (Loss)
        $    (97,857)
        
        $  (250,842)
        
        $  (937,587)
        
        $ (1,263,230)OTHER COMPREHENSIVEINCOME (LOSS):Foreign currency translation adjustment
        14,413
        
        10,538
        
        25,415
        
        (97,933)Comprehensive income (loss)
        $    (83,444)
        
        $  (240,304)
        
        $  (912,712)
        
        $ (1,361,163)
   See notes to the financial statements  3
    REMEDENT INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  For the six months ended September 30,2006
        2005CASH FLOWS FROM OPERATING ACTIVITIESNet loss
        $  (937,587)
        $  (1,263,230)Adjustments to reconcile net lossto net cash used by operating activitiesDepreciation and amortization
        87,694
        37,021Allowance for doubtful accounts
        (6,172)
        (4,096)Common Stock issued to MDB Capital for noncash interest on conversion of $100,000 note payable
        -
        100,000Common Stock issued to MDB Capital for consulting fees
        -
        395,677Warrants issued to MDB Capital for consulting fees
        -
        368,474Stock issued upon conversion of convertible debentures
        25,706
        -Value of issued stock options to employees
        189,515
        -Changes in operating assets and  liabilities:Accounts receivable
        (131,043)
        353,765Due from related party
        -
        11,449Inventories
        150,516
        (262,290)Prepaid expenses
        (7,399)
        (119,456)Accounts payable
        (171,178)
        (113,354)Accrued liabilities
        (69,527)
        (8,400)Deferred revenue
        -
        121Income taxes payable
        (105,048)
        (116,584)Net cash used by operating activities
        (974,522)
        (620,903)CASH FLOWS FROM INVESTING ACTIVITIESIncrease in restricted cash
        (10,285)
        -Purchases of equipment
        (111,322)
        (279,579)Net cash used by investing activities
        (121,607)
        (279,579)CASH FLOWS FROM FINANCING ACTIVITIESNet proceeds from private placement
        -
        3,202,923Proceeds from capital lease note payable
        (3,185)
        88,897Principal payments on capital lease note payable
        (7,985)
        (4,164)Note payments-related parties
        (8,422)
        -Note payments-unrelated parties
        -
        (158,497)Proceeds from line of credit
        987,560
        -Net cash provided (used) by financing activities
        967,968
        3,129,159NET INCREASE (DECREASE)  IN CASH AND CASH
EQUIVALENTS
        (128,161)
        2,228,677Effect of exchange rate changeson cash and cash equivalents
        (52,224)
        7,157CASH AND CASH EQUIVALENTS, BEGINNING
        332,145
        40,442CASH AND CASH EQUIVALENTS, ENDING
        $     151,761
        $   2,276,276Supplemental Information:Interest paid
        $        48,572
        $                4,921Income taxes paid
        $                          -
        $                 -
  See notes to the financial statements and supplemental disclosures on following page.  4
    SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:  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 $1,178,592 minority interest associated with this 78% interest as of the closing of the transaction was recorded by the Company as additional paid in capital ($1,170,586) and common stock ($7,716).  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.  On June 15, 2005, the Company entered into two five year capital lease agreements for manufacturing equipment totaling $85,231 of which $73,351 was outstanding at June 30, 2006. The leases require monthly payments of principal and interest at 4.20% of 1,258 ($1,599 at June 30, 2006) and provide for buyouts at the conclusion of the five year term of 2,820 ($3,585) or 4.0% of original value.  The book value as of June 30, 2006 of the equipment subject to the foregoing leases is $68,902.  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 June 30, 2006.  On July 31, 2006, the Company issued 32,133 shares of its common stock in exchange for $20,000 in convertible debentures and accrued interest of $12,133. The difference between the conversion price of $1.00 per share and the market value of the common stock exchanged valued at $1.80 per share totaled $25,706 and was charged to interest expense.  5
    REMEDENT, INC. AND SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  1.
        BACKGROUND AND BUSINESS ACTIVITIES
  The Company is a manufacturer and distributor of cosmetic dentistry products, including a full line of professional dental and retail Over-The-Counter tooth whitening products which are distributed in Europe, and recently in Asia and the United States. The Company manufactures many of its products in its facility in Deurle, Belgium as well as outsourced manufacturing in China. The Company distributes its products using both its own internal sales force and through the use of third party distributors.  The accompanying consolidated financial statements include the accounts of Remedent, Inc. (formerly Remedent USA, Inc.), a Nevada corporation, and its subsidiaries, Remedent N.V. (Belgian corporation) located in Deurle, Belgium, Remedent Professional, Inc. (incorporated in California) and a 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.  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 subsidiaries, Remedent N.V. (Belgian corporation) located in Deurle, Belgium, Remedent Professional, Inc. (incorporated in California) and a 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 six months ended September 30, 2006, are not necessarily indicative of the results that may be expected for the year ended March 31, 2007.  Accordingly, your attention is directed to footnote disclosures found in the Annual Report on Form 10-KSB for the year ended March 31, 2006, and particularly to Note 1, which includes a summary of significant accounting policies.  6
     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.  Revenue Recognition  The Company recognizes revenue from product sales when persuasive evidence of a sale exists:  that is, a product is shipped under an agreement with a customer; risk of loss and title has passed to the customer; the fee is fixed or determinable; and collection of the resulting receivable is reasonably assured. Sales allowances are estimated based upon historical experience of sales returns.  Impairment of Long-Lived Assets  Long-lived assets consist primarily of patents and 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 September 30, 2006, management believes there was no impairment of the Companys long-lived assets.  Cash-Restricted  The Company has deposited $81,047 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.  7
    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 Years
 Manufacturing Equipment
        4 Years
 Furniture 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 September 30, 2006 a provision for potential future warranty costs of $19,016.  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 functional currency for Remedent Asia Pte is the Singapore 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  8
    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.  Impact of New Accounting Standards  In March 2006, the Financial Accounting Standard Board (FASB) issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140. This Statement requires recognition of servicing a financial asset by entering into a servicing contract in certain situations. This pronouncement will be effective on the fiscal year beginning after September 15, 2006. Currently, the Company does not have any servicing asset or liability, and therefore the adoption of SFAS No. 156 is not expected to have a material impact on the Companys financial position or results of operations.  In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R) (SFAS 158). SFAS 158 requires employers to (a) recognize in its statement of financial position the funded status of a benefit plan measured as the difference between the fair value of plan assets and the benefit obligation, (b) recognize net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS No. 87, Employers Accounting for Pensions or SFAS No. 106, Employers Accounting for Postretirement Benefits Other Than Pensions, (c) measure defined benefit plan assets and obligations as of the date of the employers
statement of financial position and (d) disclose additional information in the notes to the financial statements about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition assets or obligations. The requirements of SFAS 158 are to be applied prospectively upon adoption. The Company believes the adoption of this pronouncement will not have a material impact on its consolidated financial statements.  In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently in the process of assessing the impact the adoption of SFAS 157 will have on its financial statements.  In September 2006, the SEC issued SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB108). SAB 108 requires that public companies utilize a dual-approach to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. Management believes the adoption of this pronouncement will not have a material impact on the Companys consolidated financial statements.  3.
        CONCENTRATION OF RISK
  Financial Instruments - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable.  9
    Concentration of credit risk-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 September 30, 2006, one customer accounted for 67.6% of the Companys trade accounts receivable.  At September 30, 2005, two customers accounted for 31% and 12%, respectively, of the Companys trade accounts receivable.  The Company performs ongoing credit evaluations of its customers and normally does not require collateral to support accounts receivable. Revenues - For the six months ended September 30, 2006 the Company had two customers that accounted for 49% and 10%, respectively of total revenues.  For the six months ended September 30, 2005, two customers accounted for 12% and 11% of revenues.  Purchases The Company has diversified its sources for product components and finished goods and, as a result, the loss of a supplier would not have a material impact on the Companys operations.  The Company currently relies on one factory to manufacture certain components of its MetaTray and iWhite products which represented 24.9% of the Companys purchases for the six months ended September 30, 2006.  4.
        ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
  A summary of accounts receivable and allowance for doubtful accounts as of September 30, 2006 and March 31, 2006 is as follows:  September 30, 2006
        
        March 31, 2006Accounts receivable, gross
        $   2,695,296
        
        $   2,444,979Less: allowance for doubtful accounts
        (71,304)
        
        (74,133)Accounts receivable, net
        $   2,623,992
        
        $   2,370,846
  5.
        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:  September 30, 2006
        
        March 31, 2006Raw materials
        $     32,159
        
        $           30,538Components
        1,024,189
        
        1,102,231Finished goods
        341,927
        
        349,8881,398,275
        
        1,482,657Less: reserve for obsolescence
        (12,677)
        
        (12,104)Net inventory
        $   1,385,598
        
        $      1,470,553
  6.
        PROPERTY AND EQUIPMENT
  Property and equipment are summarized as follows:   10
     September 30, 2006
        
        March 31, 2006Furniture & Fixtures
        $                134,688
        
        $          94,368Machinery & Equipment
        255,564
        
        167,764Tooling
        188,450
        
        175,950578,702
        
        438,082Less: Accumulated Depreciation
        (191,596)
        
        (120,721)Property & equipment, net
        $                387,106
        
        $        317,361
  7.
        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 license to manufacture, market, distribute and sell the products contemplated by the patents subject to the payment of $65,000 as reimbursement to the patent holder for legal and other costs associated with obtaining the patents, which was paid in October 2004, and royalties for each unit sold subject to an annual minimum royalty of $100,000 per year. The Company is amortizing the initial cost of $65,000 for these patents over a ten year period and the Company has recorded $13,000 of accumulated amortization for this patent as of September 30, 2006. The Company
accrues this royalty when it becomes payable to the inventor therefore no provision has been made for this obligation as of September 30, 2006.  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 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 September 30, 2006) 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 on July 13, 2005, the Board accepted Lidents offer to facilitate an assignment of Lidents intellectual property rights to the technology to the Company in exchange for the reimbursement of Lidents actual costs incurred
relating to the intellectual property. Consequently, when the Company exercises the option, all future payments, other than the reimbursement of costs would be paid directly to the original inventors and not to Lident.  On December 12, 2005, the Company exercised the option and the Company and the patent holder agreed to revise the assignment agreement whereby the Company agreed to pay 50,000 additional compensation in the form of prepaid royalties instead of the 100,000 previously agreed, 25,000 of which had been paid by the Company in September 2005 and the remaining 25,000 to be paid upon  11
    the Companys first shipment of a product covered by the patent. The patent is being amortized over five (5) years and the Company has recorded $19,810 of accumulated amortization for this patent as of September 30, 2006.  8.
        LINE OF CREDIT
  On October 8, 2004, the Company obtained a new secured line of credit facility with a new Belgian bank for  1,050,000 (US $1,331,085 at September 30, 2006) Line of Credit Facility (the "Facility") with a Belgian bank , consisting of a 800,000 (US $1,014,160) credit line based on the  eligible accounts receivable and a 250,000 (US $316,925) general line of credit. The Facility is secured by a first lien on all assets of the Company. 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 ($633,850) and decrease the credit line based on the eligible accounts receivable to 550,000 ($697,235). As of September 1, 2006, the Company and the bank agreed
to increase the credit line based on the eligible accounts receivable to 1,550,000 ($1,964,935).   Pursuant to a letter of credit, the Company agreed to pledge its business as collateral for this line of credit.  Interest on each advance under this line is charged at the banks published rate, which was 7.9% at September 30, 2006.  All other terms and conditions remained unchanged.  There was 500,000 ($633,850) outstanding under the general line if credit and 800,000 ($1,014,160) outstanding based on the eligible accounts receivable, for a total outstanding balance of 1,300,000 ($1,648,410) for this line of credit as of September 30, 2006 and 500,000 ($605,200) advances under the general line of credit outstanding as of March 31, 2006.  9.
        DUE TO RELATED PARTIES
  September 30, 2006
        
        March 31, 2006Demand loan from a former officer anda major stockholder
        $    50,536
        
        $            58,958
  Borrowings from employees and entities controlled by officers of the Company are due upon demand and bear no interest.  10.
        ACCRUED LIABILITIES
  Accrued liabilities are summarized as follows:  September 30, 2006
        March 31, 2006Accrued employee benefit taxes
        $   254,288
        $       227,369Royalties
        50,000
        100,000Commissions
        4,025
        80,366Accrued audit and tax preparation fees
        31,449
        23,500Reserve for warranty costs
        19,016
        18,156Accrued interest
        5,564
        15,584Accrued consulting fees
        38,384
        9,021Customer deposits
        75,053
        9,111Other accrued expenses
        61,887
        117,935
 $       539,666
        $      601,042
   12
     11.
        NOTES PAYABLE
  September 30, 2006
        March 31, 2006Convertible Debentures:Maturity Dates: September 1, 2001 thru February 8, 2002Interest rate: 10% per annumDebentures are unsecuredConvertible at 30% of the average trading price (average of bid and ask) for  the 30 days immediately prior to the maturity date (1)Unpaid principal balance
        $                 -0-
        $            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
        $ 11,282Total notes payable
        $          11,282
        $         31,282
  (1) The remaining outstanding debentures of $20,000 plus $12,133 in accrued interest were converted to 32,133 shares of common stock as of July 2006.  The Company valued the common stock at the market price of $1.80 per share on the date of conversion and charged interest expense for $25,706 for the difference between the amount of the debt converted and the market value of the common stock issued upon conversion.  12.
        LONG TERM DEBT
  On June 15, 2005, the Company entered into two five year capital lease agreements for manufacturing equipment totaling 70,245 ($85,231) of which 54,521 ($65,654) was outstanding at September 30, 2006. The leases require monthly payments of principal and interest at 4.20% of 1,258 ($1,595 at September 30, 2006) and provide for buyouts at the conclusion of the five year term of 2,820 ($3,575) or 4.0% of original value. Principal payable within 12 months of September 30, 2006 totals $12,641.  The book value as of March 31, 2006 and September 30, 2006 of the equipment subject to the foregoing leases are $73,411 and $64,999, respectively.  13.
        STOCK OPTIONS
  The Board of Directors and stockholders approved the Nonstatutory Stock Option Plan (the 2001 Plan) and adopted it on May 29, 2001. The Company has reserved 250,000 shares of its common stock for issuance to the directors, employees and consultants under the Plan. The Plan is administered by the Board of Directors. Vesting terms of the options range from immediate to five years.  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 (2004 Plan) reserving 800,000 shares of common stock for issuance to employees, directors and consultants of the Company or any subsidiaries. This plan became effective as of June 3, 2005 after the Company had completed a one for twenty reverse split.  13
     A summary of the option activity for the six months ended September 30, 2006 pursuant to the terms of the plans is as follows:  2001 Plan
        
        2004 PlanOutstanding Options
        Weighted Average Exercise Price
        
        Outstanding Options
        Weighted Average Exercise PriceOptions outstanding, March 31, 2006
        222,500
        $1.30
        
        475,000
        $  3.76Granted
        -
        -
        
        -
        -Exercised
        -
        -
        
        -
        -Cancelled or expired
        -
        -
        
        (289,334)
        -Options outstanding September 30, 2006
        222,500
        $         1.30
        
        185,666
        $      3.38Options exercisable September 30, 2006
        222,500
        $         1.30
        
        185,666
        $     3.38Exercise price range
        $1.00 to $4.00
        
        
        $2.46 to $4.00Weighted average remaining life (in years)
        5.5
        years
        
        5.1Shares available for future issuance
        27,500
        
        
        614,334
  A summary of the Companys equity compensation plans approved and not approved by shareholders is as follows:  Plan Category
        Number ofsecurities to beissued uponexercise ofof outstandingoptions, warrantsand right
        Weighted-averageexercise price ofoutstanding optionswarrants and rights
        Number of securitiesremaining available forfuture issuance underequity compensationplans (excludingsecurities reflectedin column (a))Equity CompensationPlans approvedby security holders
        408,166
        $2.24
        641,834Equity CompensationPlans not approvedby security holders
        467,288
        $2.18
        NA875,454
        $2.21
        641,834
  14.
        STOCK BASED COMPENSATION
  Prior to January 1, 2006, the Company accounted for employee stock-based compensation under the recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and related Interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation. Under the recognition principles of APB No. 25, compensation expense related to restricted stock and performance units was recognized in the financial statements. However, APB No. 25 generally did not require the recognition of compensation expense for stock options because the exercise price of these instruments was generally equal to the fair value of the underlying common stock on the date of grant, and the related number of shares granted were fixed at that point in time.  Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment. In addition to recognizing compensation expense related to restricted stock and performance units, SFAS No. 123(R) also requires recognition of compensation  14
    expense related to the estimated fair value of stock options. The Company adopted SFAS No. 123(R) using the modified-prospective-transition method. Under that transition method, compensation expense recognized subsequent to adoption includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the values estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair values estimated in accordance with the provisions of SFAS No. 123(R). Consistent with the modified-prospective-transition method, the Companys results of operations for prior periods have not been adjusted to reflect the adoption of FAS 123(R). For the six months ended September 30, 2006, the Company recognized $189,515 in
compensation expense in the consolidated statement of operations.  For purposes of proforma disclosures prior to January 1, 2006, the estimated fair value of the options is amortized to expense over the options vesting periods. The Company had no options vest during the six months ended September 30, 2005 therefore there is no pro forma adjustment to the Companys net loss for that period.  15.
        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 98% and 89% of total sales for the six months periods ended September 30, 2006 and 2005, respectively.  The sales were made mostly to customers in countries that are members of the European Union (EU).  September 30, 2006
        
        September 30, 2005U.S.  sales
        $       56,651
        
        $        315,406Foreign sales
        3,654,102
        
        2,497,028$  3,710,753
        
        $     2,812,434
  16.
        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 ($8,316 per month at September 30, 2006).  In addition, the Company is responsible for the payment of annual real estate taxes for the property which totaled  3,245 ($4,114 for calendar year 2005.  The minimum aggregate rent to be paid over the remaining lease term based upon the conversion rate for the (Euro) at September 30, 2006 is $430,538.  Rent expense for the foregoing lease for the six months ended September 30, 2006 and 2005 was $51,452 and $53,397 respectively.  From November 2, 2005 to July 2006, the Company leased an office space in Los Angeles, California on a month to month base. The monthly rent was $4,675.00.  15
    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 ($1,274).  The aggregate rent to be paid over the remaining lease term is $17,837.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 September 30, 2006.  March 31, 2007
        $    57,540March 31, 2008
        $   111,697March 31, 2009
        $  101,504March 31, 2010
        $  101,504March 31, 2011
        $    76,128
  17.
        OTHER EVENTS
  On July 19, 2006, the Company and Mr. Hoffman entered into an Employment Severance Agreement (the Agreement) pursuant to which an employment agreement between the Company and Mr. Hoffman dated October 12, 2005 (the Employment Agreement) was mutually terminated.  As of July 19, 2006, Mr. Hoffman is no longer the Companys Vice President of Worldwide Sales and Operations.  Under the Agreement, the Company agreed to make a one-time severance payment to Mr. Hoffman in an amount equal to Mr. Hoffmans base salary currently in effect as of July 19, 2006 through August 31, 2006.  In addition, the Company agreed to allow 110,666 of Mr. Hoffmans options to vest at August 31, 2006.  The balance of Mr. Hoffmans options lapsed upon his termination.  In conjunction with the terms of the Agreement, Mr. Hoffman has agreed to (a) a general release of liability
and (b) a non-solicitation clause for a term of eighteen (18) months commencing on August 31, 2006.  As a result of the foregoing the Company recognized severance costs of $31,731 and compensation related to the vesting of the options of $36,329 as of July 19, 2006.  16
    Item 2.  Management's Discussion and Analysis of Financial Condition or Plan of Operations  The discussion contained herein is for the three and six months ended September 30, 2005 and 2006.  The following discussion should be read in conjunction with the Companys condensed consolidated financial statements and the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2006.  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 annual report on Form 10-KSB filed on July 14, 2006 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 September 30, 2006.  The information contained in this Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2006 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 September 30, 2006 and in the Companys other filings with the Securities and Exchange Commission.  Overview  We are a manufacturer and distributor of cosmetic dentistry products, including a full line of professional dental and retail Over-The-Counter tooth whitening products which are distributed in Europe, and recently in Asia and the United States.  We manufacture many of our products in its facility in Deurle, Belgium as well as outsourced manufacturing in China.  In August 2005, we introduced MetaTray®, our next generation of products targeted for the professional dentist market.  In addition, earlier this year a variation of our MetaTray® product named iWhite® was introduced to our global retail distribution network.  We distribute our products using both its own internal sales force and through the use of third party distributors.  As a result of this approach, in just four years we have established dealers in 35 countries encompassing, Europe, Asia, Latin America, the Pacific Rim and the Middle East.  In addition, pursuant to distribution agreements we have granted certain distributors exclusive rights to distribute our products in the following territories: Cyprus, Morocco, Tunisia, Algeria, South Africa, Italy, Vatican City, Republic of San Marino, China, Korea, Vietnam,  Mongolia, and Thailand.  17
    Background and Corporate History  We were originally incorporated under the laws of Arizona in September 1996 under the name Remedent USA, Inc.  In October 1998, we were 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 was accounted for as if we acquired RWE.  On June 3, 2005, we changed our name to Remedent, Inc.  We have four wholly-owned subsidiaries, Remedent Professional Holdings, Inc., Remedent Professional, Inc., Remedent Asia Pte. Ltd and Remedent N.V.  Remedent Professional, Inc. and Remedent Professional Holdings, Inc. are both wholly-owned subsidiaries which 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.  For the fiscal years ending March 31, 2003 through 2006, substantially all of our revenue has been generated by our Belgian subsidiary, Remedent N.V.  From 2002 to 2005, we held a minority interest in Remedent N.V.  Although we owned only 22% of Remedent N.V. until 2005, 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.  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. became our wholly-owned subsidiary.  In February and December 2004, in an action taken by written consent of the holders of a majority of the issued and outstanding shares of our common stock, our stockholders authorized the acquisition of the remaining 78% of our subsidiary, Remedent N.V., which we did not own, in exchange for 7,715,703 post-split shares of our common stock in a transaction involving Messrs. Guy De Vreese and Robin List, our Chairman and Chief Executive Officer respectively.  On June 3, 2005, we consummated the acquisition of Remedent N.V. and issued 7,715,703 post- split shares of its restricted common stock to the Lausha N.V., a company controlled by Guy De Vreese, and to Robin List in exchange for all of the issued and outstanding shares of Remedent N.V. owned by Lausha N.V. and Robin List.  As a result of this acquisition, Remedent N.V. became our wholly owned subsidiary.  On June 3, 2005, we amended our Articles of Incorporation to; (i) change our name from Remedent USA, Inc. to Remedent, Inc. (ii) increase 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) effect 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  18
    estimates under different assumptions or conditions.  The Company believes that certain 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, 2006, as well as in the notes to the March 31, 2006 consolidated financial statements.  There have not been any significant changes to these accounting policies since they were previously reported at March 31, 2006.  Results of Operations  Results of Operations for the three and six months ended September 30, 2006 compared with the three and six months ended September 30, 2005.  The following table presents our consolidated statements of loss, as a percentage of sales, for the periods indicated.  For the three months ended
        
        For the six months endedSeptember 30,
        
        September 30,2006
        2005
        
        2006
        2005NET SALES
        100.00 %
        100.00 %
        
        100.00 %
        100.00 %COST OF SALES
        50.10 %
        41.04 %
        
        52.70 %
        43.35 %GROSS PROFIT
        49.90 %
        58.96 %
        
        47.30 %
        56.65 %OPERATING EXPENSESResearch and development
        4.77 %
        4.13 %
        
        6.48 %
        3.95 %Sales and marketing
        9.81 %
        8.71 %
        
        16.80 %
        8.31 %General and administrative
        34.52 %
        68.15 %
        
        45.03 %
        62.56 %Non cash restructuring expense
        0.00 %
        0.00 %
        
        0.00 %
        27.17 %Depreciation and amortization
        1.92 %
        1.72 %
        
        2.36 %
        1.35 %TOTAL OPERATING EXPENSES
        51.02 %
        82.72 %
        
        70.68 %
        103.34 %LOSS FROM OPERATIONS
        (1.12)%
        (23.75)%
        
        (23.38)%
        (46.69)%Other income (expense)
        (2.93)%
        (0.20)%
        
        (1.88)%
        (2.38)%LOSS BEFORE INCOME TAXES
        (4.05)%
        (23.95)%
        
        (25.27)%
        (49.07)%Income tax benefit (expense)
        0.00 %
        6.46%
        
        0.00 %
        4.15%NET INCOME (LOSS)
        (4.05)%
        (17.49)%
        
        (25.27)%
        (44.92)%
  Net Sales.  Net sales increased for the three months ended September 30, 2006 by $980,988, or 68.4%, to $2,415,114 compared to $1,434,126 for the three months ended September 30, 2005.  For the three months ended September 30, 2006, the increase in sales is a result of the continued expansion of countries launching the new iWhite products most notably Italy which accounted for $1,822,528 or 75.5% of sales for the three months ended September 30, 2006.  19
    For the six months ended September 30, 2006, sales increased by $898,319 to $3,710,753 as compared to $2,812,434 for the six months ended September 30, 2005.  The increase in net sales for the six months is primarily attributable to our successful launch of our iWhite products.  Cost of Sales
  Cost of sales increased for the three months ended September 30, 2006 by $621,499, or 105.6% to $1,210,012 as compared to $588,513 for the three months ended September 30, 2005.  The increase in cost of sales is attributable in part to the increase in sales as described above.  Also contributing to the increase in cost of sales, cost of sales as a percentage of net sales increased 9.1% from 41.0% for the three months ended September 30, 2005 to 50.1% for the three months ended September 30, 2006.  This increase in cost of sales is due primarily to additional third party costs incurred in manufacturing and fulfillment of large initial orders of our iWhite products. We anticipate that we will achieve reductions in these costs for future orders as we gain expertise on how the handling of larger orders in a more cost efficient manner.  For the six months ended September 30, 2006, cost of sales increased by $736,476 from $1,219,198 for the six months ended September 30, 2005 to $1,955,674 for the six months ended September 30, 2006.  This increase is primarily the result of the increased sales volume for the period.  Cost of sales as a percentage of net sales increased 9.3% from 43.4% for the six months ended September 30, 2005 to 52.7% for the six months ended September 30, 2005 primarily for the same reasons discussed above for the three month period.  Gross Profit  Gross profit increased by $359,489 to $1,205,102 for the three month period ended September 30, 2006 as compared to $845,613 for the three month period ended September 30, 2006.  This increase was a result of the increase in sales. For the three month period ended September 30, 2006, our gross profit as a percentage of sales decreased 9.1% from 59.0% to 49.9% as compared to the three months ended September 2005. This decrease in percentage gross profit is the result of the increase in cost of sales discussed above.  For the six months ended September 30, 2006, gross profit increased by $161,843 to $1,755,079 as compared to $1,593,236 for the six months ended September 30, 2005.  The increase for the six month period is primarily for the same reasons discussed above for the three month period mitigated by reduced margins on the Remecure products resulting from a 28% reduction in the average selling price of the Remecure products to stay competitive in the professional dentist market.  Operating Expenses  Research and Development.  Research and development expenses increased $55,983, or 94.5%, to $115,218 for the three months ended September 30, 2006 as compared to $59,235 for the three months ended September 30, 2005.  The increase is a result of a consultant agreement for services for the development of our Meta Tray and iWhite products that was commenced January 1, 2006, consisting of a monthly fee of $ 25,000, resulting in an increase of $75,000 for the three month period.  For the six months ended September 30, 2006, research and development expenses increased $129,451 or 116.6%, to $240,500 as compared to $111,049 for the six months ended September 30, 2005.  The increase is a result of the consultant agreement discussed above as well as other research and development costs associated with the launch of the Meta Tray and iWhite products.  20
     Sales and marketing costs.  Sales and marketing costs increased $111,899, or 89.6%, to $236,839 for the three months ended September 30, 2006 as compared to $124,940 for the three months ended September 30, 2005.  The increase is related to costs associated with our sales office located in Los Angeles, California which had not been in operation during the quarter ended September 2005. This office incurred additional sales and marketing costs of $130,752 for the three month period ended September 30, 2006. In addition, we increased our presence at trade shows as part of the introduction and support of our new iWhite and MetaTray products. We believe that these costs will contribute to support our world wide sales operations and to build international awareness of our brands.  For the six months ended September 30, 2006, sales and marketing costs increased $389,588, or 166.6%, to $623,414 as compared to $233,826 for the six months ended September 30, 2005.  The increase, as discussed above, was the result of the establishment of a US sales office in Los Angeles, California and the related personnel for such office which resulted in $324,987 in costs for the six months ended September 30, 2006. On July 19, 2006, we entered into an Employment Severance Agreement (the Agreement) pursuant to which we mutually agreed to terminate the agreement between us and the Vice President of Worldwide Sales and Operations hired to head the Los Angeles office.  Under the Agreement, we agreed to make a one-time severance payment in an amount equal to the individuals base salary currently in effect as of July 19, 2006 through August 31, 2006.  In addition we agreed
to allow 110,666 of the options granted to this executive to vest at August 31, 2006.  As a result of the foregoing we incurred severance costs of $31,731 and compensation related to the vesting of the options of $36,329 as of the date of termination. We have significantly reduced other personnel and sales related costs associated with our US sales operations, electing instead to focus on using third party distributors to distribute our products in the US market.  General and administrative costs.  General and administrative costs for the three months ended September 30, 2006 and 2005 were $833,762 and $977,382, respectively, representing a decrease of $143,620 or 14.7%.  The decrease in general and administrative costs for the three months ended September 30, 2006 as compared to the prior year is the result of improving our cost controls of our business in general. In addition, for the three months ended September 30, 2005, we had incurred approximately $113,000 in costs associated with the private placement which took place during that period that did not reoccur during the three months ended September 30, 2006. For the six months ended September 30, 2006, general and administrative costs decreased $88,366, or 5.0%, to $1,671,112 as compared to $1,759,478 for the six months ended September 30, 2005. The foregoing decrease is the result of three month decrease discussed above offset by the increases in costs incurred during the prior three months ended June 30, 2006 due to the establishment of new offices in Los Angeles, California and Singapore totaling $67,604 and $32,051 in general administrative costs, respectively, during that prior three month period. In July 2006, we significantly reduced both personnel and other fixed costs including rent associated with our Los Angeles office.  Restructuring expense.  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  21
    (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.  Depreciation and amortization.  Our depreciation and amortization expense increased from $24,706 to $46,432 for the three months ended September 30, 2006 compared to the three months ended September 30, 2005, an increase of 87.9%. This increase was a result of amortization of a patent acquired as a result of an exercise of option in December 2005 recorded at 100,000 ($118,840). The patent is being amortized over five (5) years.  For the six months ended September 30, 2006, depreciation and amortization costs increased $49,845, or 131.7%, to $87,694 as compared to $37,849 for the six months ended September 30, 2005. The foregoing increase is the result of three month decrease discussed above as well as depreciation expense associated with additional equipment purchases related to our manufacturing activities of approximately $178,000 in the previous twelve months.  Net interest expense.  Net interest expense increased by $69,337 to $73,454 from $4,117 during the three months ended September 30, 2006 over the comparable three months ended September 30, 2005.  The increase was a result of our utilization of our bank credit facility to finance the launch of our new retail products.  For the six months ended September 30, 2006, interest expense decreased $9,440 to $97,469 as compared to $106,909 for the six months ended September 30, 2005.  Included in interest expense for the six months ended September 30, 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 increased for the six months ended September 30, 2006 by $90,560 as a result of our utilization of our bank credit facility to finance the launch of our new retail products.  Liquidity and Capital Resources  We believe we have sufficient cash and available cash resources to meet our capital expenditures and continue our operations for the next twelve months.  However, we anticipate that we may require additional financing to expand our product line and customer base, and establish operations in markets other than Europe.  We intend to obtain the additional capital required for expansion by obtaining debt or through the sale of our equity securities.  22
    Cash and cash equivalent.  Our balance sheet at September 30, 2006 reflects cash and cash equivalents of $151,761 as compared to $332,145 as of March 31, 2006, a decrease of $180,384.  During the six months ended September 30, 2006, we recognized an increase in cash and cash equivalents of $25,415 from the effect of exchange rates between the Euro and the Singapore Dollar to the US Dollar  Operations.   Net cash used by operations increased by $353,619 resulting in net cash being used by operations of $974,522 for the six months ended September 30, 2006 as compared to net cash used by operations of $620,903 for the six months ended September 30, 2005.  The increase in net cash used operations for the six months ended September 30, 2006 as compared to the six months ended September 30, 2005 is attributable to the $318,675 increase in net loss before the non cash restructuring charges of $764,151.  Investing activities.  Net cash used in investing activities totaled $121,607 for the six months ended September 30, 2006 as compared to net used in investing activities of $279,579 for the six months ended September 30, 2005.  The decrease in net cash used in investing activities for the six months ended September 30, 2005 is attributable to a decrease in the rate of our expansion of our in house manufacturing capability and associated equipment cost and investments in office equipment as staffing levels stabilized and, in the case of our Los Angeles office, decreased, resulting in a decrease of $168,257 of equipment purchases the six months ended September 30, 2006 as compared to the six months ended September 30, 2005.  Financing activities.  Net cash provided by financing activities totaled $967,968 for the six months ended September 30, 2006 as compared to net cash provided in financing activities of $3,129,159 for the six months ended September 30, 2005.  Net cash provided from financing activities for the six months period ended September 30, 2006 is primarily attributable to the increase in utilization of our bank line of credit facilities which had an outstanding balance of $1,648,010 as of September 30, 2006 as compared to $605,200 and $0 as of March 31, 2006 and September 30, 2005 respectively. Net cash provided from financing activities for the six months period ended September 30, 2005 is primarily attributable to net proceeds from our private placement which totaled $3,202,923.  Principal Commitments  We lease a 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 ($8,316 per month at September 30, 2006).  In addition, we are responsible for the payment of annual real estate taxes for the property which totaled  3,245 ($4,114 for calendar year 2005).  The minimum aggregate rent to be paid over the remaining lease term based upon the conversion rate for the (Euro) at September 30, 2006 is $430,538.  Rent expense for the foregoing lease for the six months ended September 30, 2006 and 2005 was $51,452 and $53,397 respectively.  From November 2, 2005 to July 2006, we leased an office space in Los Angeles, California on a month to month base. The monthly rent was $4,675.00.  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 ($1,274).  The aggregate rent to be paid over the remaining lease term is $17,837.  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 September 30, 2006.  23
     March 31, 2007
        $    57,540March 31, 2008
        $  111,697March 31, 2009
        $  101,504March 31, 2010
        $  101,504March 31, 2011
        $    76,128
  Off-Balance Sheet Arrangements  At September 30, 2006, 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 Procedures
  Disclosure 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.  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 Controls
  There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  PART II - OTHER INFORMATION  Item 1.  Legal Proceedings.  None.  24
    Item 2.  Unregistered Sale of Equity Securities.  In July 2006, we issued 32,133 shares of our common stock (the Shares)  to a holder of our 10% Convertible Debenture in exchange for $20,000 in convertible debentures inclusive of accrued interest of $12,133.  The conversion as based on a purchase price of $1.00 per share.  The Shares were issued pursuant to an exemption under Section 4(2) of the Securities Act of 1933, as amended.  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.  10.29
        Employment Severance Agreement (1)
  31.1
        Certifications of the Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act
  31.2
        Certifications of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act
  32.1
        Certifications of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act
  32.2
        Certifications of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act_____________________________________________
 (1) Incorporated by reference to the Form 10-QSB filed with the SEC on August 21, 2006.   25
    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: November 20, 2006
        /s/ Robin List
 By:  Robin List
 Its: Chief Executive Officer (Principal
 Executive Officer) and Director
   Dated: November 20, 2006
        /s/ Philippe Van Acker
 By:  Philippe Van Acker
 Its: Chief Financial Officer (Principal
 Financial Officer and Principal
 Accounting Officer)
   26