UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

(Mark One)

|X|   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
      ACT OF 1934

      For the fiscal year ended March 31, 2005

                                       OR

|_|   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

                        Commission file number 000-22673

                            SCHICK TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                     11-3374812
    (State or other jurisdiction of                        (IRS Employer
     incorporation or organization)                      Identification No.)

                  30-00 47th Avenue, Long Island City, NY 11101
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (718) 937-5765

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                     Common stock, par value $.01 per share

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes |X| No | |

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |X|

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2).

                                 Yes |X| No | |

The  aggregate  market  value of  Common  Stock  held by  non-affiliates  of the
registrant as of September 30, 2004,  the last business day of the  registrant's
most recently completed second fiscal quarter,  was approximately  $106,388,387.
Such  aggregate  market value is computed by reference to the closing sale price
of the Common Stock on such date.

As of June 8, 2005, the number of shares outstanding of the Registrant's  Common
Stock, par value $.01 per share, was 16,036,003.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE

<PAGE>

                                Table of Contents

<TABLE>
<CAPTION>
Item of Form 10-K                                                               Page
<S>                                                                              <C>
Part I
          Item 1    Business .................................................    2
          Item 2.   Properties ...............................................   10
          Item 3.   Legal Proceedings ........................................   10
          Item 4.   Submission of Matters to a Vote of Security Holders ......   11
Part II
          Item 5.   Market for the Registrant's Common Equity and Related
                    Stockholder Matters ......................................   11
          Item 6.   Selected Financial Data ..................................   12
          Item 7.     Management's Discussion and Analysis of Financial
                    Condition and Results of Operations ......................   14
          Item 7A.  Quantitative and Qualitative Disclosures About Market
                      Risk ...................................................   20
          Item 8.   Financial Statements and Supplementary Data ..............   20
          Item 9.   Changes in and Disagreements with Accountants
                      on Accounting and Financial Disclosure .................   20
          Item 9A   Controls and Procedures ..................................   20
          Item 9B.  Other Information ........................................   22
Part III
          Item 10.  Directors and Executive Officers of the Registrant .......   22
          Item 11.  Executive Compensation ...................................   26
          Item 12.  Security Ownership of Certain Beneficial Owners And
                       Management ............................................   30
          Item 13.  Certain Relationships and Related Transactions ...........   32
          Item 14.  Principal Accountant Fees and Services ...................   32
Part IV
          Item 15.  Exhibits and Financial Statement Schedules ...............   F-1
</TABLE>

FORWARD-LOOKING STATEMENTS

      This Form 10-K Annual  Report  contains  forward-looking  statements  that
involve  risk and  uncertainties.  All  statements,  other  than  statements  of
historical  facts,  included in this Annual Report  regarding  the Company,  its
financial  position,  products,  business  strategy and plans and  objectives of
management of the Company for future operations, are forward-looking statements.
When  used  in this  Annual  Report,  words  such  as  "anticipate,"  "believe,"
"estimate,"  "expect," "intend,"  "objectives," "plans" and similar expressions,
or the negatives thereof or variations thereon or comparable terminology as they
relate to the Company, its products or its management,  identify forward-looking
statements.  Such  forward-looking  statements  are based on the  beliefs of the
Company's  management,  as well as assumptions made by and information currently
available to the Company's  management.  Actual results could differ  materially
from those contemplated by the forward-looking statements as a result of various
factors,  including,  but not  limited  to,  those  contained  in  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations"  in
this  Annual  Report and the "Risk  Factors"  set forth in Exhibit  99.1 to this
Annual  Report.  All  subsequent  written  and oral  forward-looking  statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified in their entirety by this paragraph.


                                       1
<PAGE>

PART I

ITEM 1. BUSINESS

      Schick   Technologies,   Inc.  (the  "Company")   designs,   develops  and
manufactures  innovative digital radiographic imaging systems and devices, which
are based on  proprietary  digital  imaging  technologies,  for the  dental  and
medical markets.

      In the field of  dentistry,  the  Company  offers an  integrated  filmless
solution  for the dental  professional.  The  Company's  suite of CDR(R)  dental
imaging products includes:

(i)   The CDR(R) digital imaging system;

(ii)  CDR Wireless(TM);

(iii) CDR Dental Imaging Software;

(iv)  USBCam(R);

(v)   CDRPan(R);

(vi)  CDRPanX(TM); and

(vii) SDX(TM).

      The CDR(R), or Computed Dental  Radiography  system,  has become a leading
product  in the field  over the past  decade.  It uses an  intra-oral  sensor to
produce  instant,  full size,  high-resolution  dental  x-ray  images on a color
computer  monitor without the use of film or the need for chemical  development.
Additionally, CDR dramatically reduces the radiation dose to which a patient may
be  exposed  -- by up to 80% as  compared  with  conventional  x-ray  film.  CDR
Wireless(TM),  introduced in February  2003, is an innovative  wireless  instant
digital  dental x-ray  system that  combines  all of the  advantages  of digital
radiography with greater flexibility and ease of placement.  The USBCam(R),  the
first  intra-oral  dental camera to provide full motion video via a standard USB
port, was introduced by the Company in July 2002. It fully  integrates  with the
CDR system and  eliminates  the need for camera power supplies and video capture
cards. CDRPan(R),  sold since September 1999, eliminates the need for x-ray film
in panoramic  dental  diagnostic  procedures and can easily be retrofitted  onto
existing panoramic dental x-ray machines.  CDRPanX(TM) introduced by the Company
in November  2003,  internationally,  and  December  2004,  domestically,  is an
integrated  digital panoramic  device,  which allows for fully digital panoramic
dental  diagnostic  procedures.  SDX(TM),  introduced by the Company in February
2005, is a DC x-ray  generator  designed to optimize wired and wireless  digital
radiography.

      In  addition,  the Company is  continuing  to develop  other  products and
devices, as well as updated versions of its current products.

      In the field of medical  radiography,  the Company  manufactures and sells
the accuDEXA(R) bone  densitometer,  introduced by the Company in December 1997.
It is a low-cost and  easy-to-operate  device for the assessment of bone mineral
density and fracture risk.

      The  Company's  core  products  are  based  primarily  on its  proprietary
complementary  metal oxide  semiconductor  ("CMOS")  active pixel sensor ("APS")
imaging technology. APS allows the cost-effective fabrication of imaging devices
with high resolution.  APS technology was developed by the California  Institute
of  Technology  and  sublicensed  to the  Company  for a range  of  health  care
applications.  In addition, certain of the Company's products are based upon its
proprietary enhanced charged-coupled-device ("CCD") imaging technology.

      The Company's objective is to be the leading provider of innovative,  high
resolution,  cost effective digital radiography products.  The Company's primary
focus is on the  worldwide  dental  market.  The Company  plans to leverage  its
technological  advantage in the digital  imaging field to penetrate a variety of
diagnostic   imaging   markets.   The  Company  believes  that  its  proprietary
technologies  and  expertise  in  electronics,  imaging  software  and  advanced
packaging may enable it to compete  successfully in these markets.  Key elements
of the Company's strategy include (i) innovating products; (ii) leveraging brand
recognition;  (iii) expanding market  leadership in dental digital  radiography;
(iv) enhancing  international  distribution channels; and (v) broadening product
offerings.


                                       2
<PAGE>

      The  Company's  business  was founded in 1992 and it was  incorporated  in
Delaware in 1997.  On July 7, 1997,  the  Company  completed  an initial  public
offering of its Common  Stock.  Proceeds to the  Company  after  expenses of the
offering were approximately $33,508,000.

      Under generally accepted  accounting  principles,  the Company operates in
one reportable  segment:  digital  radiographic  imaging systems.  Note 1 to the
Company's  Consolidated  Financial  Statements  summarizes,  by percentage,  the
Company's revenues from its principal products.

      The Company's offices are located at 30-00 47th Avenue,  Long Island City,
New York  11101.  The  Company's  telephone  number is (718)  937-5765,  and its
website address is http://www.schicktech.com.

PRODUCTS / INDUSTRY

      Digital Imaging

      X-ray  imaging,  or  radiography,  is  widely  used as a basic  diagnostic
technique  in  a  broad  range  of  applications.   To  produce  a  conventional
radiograph,  a film  cassette  is placed  behind the  anatomy  to be  imaged.  A
generator,  which produces  high-energy  photons known as x-rays,  is positioned
opposite the film  cassette.  The  transmitted  x-rays pass through soft tissue,
such as skin and muscle,  and are absorbed by harder  substances,  such as bone.
These x-rays then form a latent image upon the film. After exposure, the film is
passed through a series of chemicals and then dried.

      Film,  however,  has certain  inherent  limitations,  including  the time,
expense,  inconvenience and uncertainty associated with film processing, as well
as the cost and  environmental  impact  resulting  from  the  disposal  of waste
chemicals.  Furthermore, the radiation dosage levels required to ensure adequate
image quality in conventional film may raise concerns regarding the health risks
associated with exposure to radiation.  Also, conventional film images cannot be
electronically  retrieved from patient records or electronically  transmitted to
health care providers or insurance  carriers at remote  locations,  a capability
which has become  increasingly  important in today's  managed care  environment.
While certain x-ray scanning  systems can convert x-rays into digital form, they
add to the time and expense  resulting from the use of conventional  film and do
not eliminate the drawbacks associated with film processing.

      Digital   radiography   products  have  been  developed  to  overcome  the
limitations of conventional  film. These systems replace the  conventional  film
cassette with an electronic receptor which directly converts the incident x-rays
to digital images.

      Dental Imaging

      In contrast to  physicians,  who often operate  within  highly-specialized
fields,  dentists  typically  perform their own radiology  work.  They utilize a
significant volume of radiographic  products and operate a substantial  quantity
of radiographic equipment. The Company believes that there is a potential market
for over one million digital dental radiography devices worldwide.  According to
the American Dental  Association,  as of 2002, there were 156,921 active private
practitioners  in the United States.  The Company believes that each of them, on
average, operates 2.5 radiological units, creating a current potential market of
over 390,000  digital  dental  radiography  devices in the United  States alone.
According to the World Health  Organization,  as of 2004,  there were  1,138,957
practicing dentists throughout the world; of these, the Company believes that at
least 600,000  practice in the world's major  healthcare  markets outside of the
United  States  and that  each of them  operates  1.25  radiological  units,  on
average,  creating a potential market of 750,000 additional devices. As reported
in March 2005 by Dental Products  Report,  only 22% of dentists who responded to
its survey use a direct digital x-ray system in their practice.

      The Company believes that dentists have a particularly  strong  motivation
to adopt digital radiography.  Radiographic examinations are an integral part of
routine  dental  checkups  and the  dentist  is  directly  involved  in the film
development  process.  The use of digital radiography  eliminates delays in film
processing,   thus  increasing  the  dentist's   potential  revenue  stream  and
efficiency,  and reduces overhead expenses.  The use of digital radiography also
allows dentists to more effectively communicate diagnoses and treatment plans to
patients and to easily store and display patients' previous dental x-ray images,
which the Company  believes have the potential to increase the rate of patients'
treatment acceptance and resulting revenues. Finally, the radiation


                                       3
<PAGE>

dosage  required  to  produce an  intra-oral  dental  x-ray,  which is high when
compared with other medical radiographs, can be reduced by up to 80% through the
use of digital radiography.

      The Company's principal  revenue-generating product is its CDR(R) computed
dental  radiography  imaging  system.  The  Company's  CDR(R)  system is easy to
operate and can be used with any dental  x-ray  generator.  To produce a digital
x-ray image using CDR(R),  the dentist selects an intra-oral  sensor of suitable
size and places it in the patient's mouth. The sensor converts the x-rays into a
digital image that is displayed on the computer  monitor within five seconds and
automatically  stored as part of the patient's  clinical records.  CDR(R) system
software  provides the dentist with a variety of tools for advanced  analysis of
the image.  The sensor can then be repositioned for the next x-ray. As the x-ray
dose is  significantly  lower than that  required for  conventional  x-ray film,
concern  over the  potential  health risk posed by multiple  x-ray  exposures is
greatly  diminished.  The  process is easy and  intuitive,  enabling  nearly any
member of the dental staff to operate the CDR(R) system with minimal training.

      The  Company  manufactures  wired  digital  sensors in three  sizes  which
correspond to the three standard sizes of conventional dental x-ray film. Size 0
is designed for  pediatric  use; size 1 is designed for taking  anterior  dental
images;  and size 2 is designed for taking bitewing images. All of the Company's
CDR(R)  sensors can be  disinfected  using cold  solutions  or gas.  The typical
CDR(R)  configuration  includes  a  computer,  display  monitor,  size 2 digital
sensor, imaging software and a USB remote module.

      In  February  2003,  the  Company   announced  the   introduction  of  CDR
Wireless(TM),  which the  Company  believes  to be the  world's  first  wireless
instant dental x-ray system. It allows dentists to produce  high-quality instant
radiographs  with low radiation  dosage and without the need for a cable between
the intra-oral sensor and computer.  The Company  currently  manufactures Size 1
and Size 2 wireless sensors.

      In April  2002,  the  Company  introduced  the  USBCam(R),  an  innovative
intra-oral camera which fully integrates with the CDR(R) system to provide color
video  images of the  structures  of the mouth.  The Company  believes  that the
USBCam was the world's  first  intra-oral  camera  with a direct USB  interface.
Since their introduction in 1991, intra-oral cameras have become widely accepted
in dentistry as a diagnostic, communication and presentation tool.

      In March 1999,  the Company  commenced  the sale of its digital  panoramic
imaging device, the CDRPan(R).  This device, which is designed to be retrofitted
into conventional panoramic dental x-ray machines, replaces film with electronic
sensors  and  a  computer.   This  obviates  the  need  for  film  and  provides
instantaneous  images,  thus offering  substantial  savings in terms of time and
costs.  Additionally,  the CDRPan(R) easily integrates with practice  management
and other computer software applications.

      In November 2003 and December 2004,  respectively,  the Company introduced
an integrated digital panoramic machine, marketed under the CDRPanX(TM) name, to
the  international and U.S.  markets.  It is a stand-alone  device that performs
digital panoramic imaging for use in dentistry and maxillofacial surgery.

      In February  2005, the Company  introduced the SDX(TM),  a DC dental x-ray
generator designed to optimize wired and wireless digital  radiography.  The SDX
integrates  with the other  products  in the  Company's  suite of CDR(R)  dental
imaging products.

      Bone Mineral Density / Fracture Risk Assessment

      The  Company's  accuDEXA(R)  device,  sold  since  December  1997,  is  an
innovative bone mineral density ("BMD") assessment device which helps physicians
diagnose low bone density and predict  fracture risk.  Based on APS  technology,
accuDEXA(R) is a small  self-contained  unit capable of instantly  assessing the
BMD of a specific  portion of the  patient's  hand, a relative  indicator of BMD
elsewhere in the body.  This device is the first BMD assessment  instrument that
is virtually  automatic,  requires no external x-ray generator or computer,  and
exposes the patient to less than 1% of the  radiation  of a single  conventional
chest x-ray.

MANUFACTURING

      The Company's  manufacturing  facility is located at its  headquarters  in
Long  Island  City,  New York.  At this  facility,  which is subject to periodic
inspection by the United States Food and Drug Administration ("FDA"), the


                                       4
<PAGE>

Company  manufactures  certain of its products and components,  and performs the
majority  of the final  assembly  and  quality  assurance  testing  process.  In
addition,  the Company  outsources the  fabrication and testing of certain final
assemblies and subassemblies.

      The Company purchases various components for its products from a number of
outside  suppliers.  While the Company strives to maintain  multiple  sources of
supply for each such component, certain highly specialized components, including
semiconductor  wafers used in the assembly of sensors, are primarily provided by
a single supplier.  In these cases,  the Company strives to maintain  sufficient
inventory so as to provide extra time in which to locate an acceptable alternate
supplier in the event of a supply  interruption.  The Company  believes  that it
would be able to locate an acceptable alternate supplier in such event; however,
the need to replace a supplier could cause a disruption in the Company's ability
to timely deliver its products or increase the Company's costs.

      The Company's  quality  assurance program includes various quality control
measures,  from  inspection of raw  materials,  purchased  parts and  assemblies
through  in-process and final inspection,  and conforms to the guidelines of the
International  Quality  Standard,  ISO 9001.  In August  1998,  the  Company was
granted ISO 9001 certification and, in September 2003, was granted ISO 9001:2000
certification.  Since August 1998,  the Company has been subject to  semi-annual
audits to reaffirm its ongoing eligibility to maintain such certification.

DEPENDENCE ON CUSTOMERS

      During fiscal 2005, 2004 and 2003,  respectively,  North American sales of
approximately  $31.8 million (or 61% of total annual  sales),  $21.6 million (or
55% of total annual sales) and $15.4 million (or 52% of total annual sales) were
made to Patterson  Dental Company  ("Patterson").  During fiscal 2005,  2004 and
2003, respectively,  sales of approximately $13.9 million, $9.9 million and $6.2
million were made to international customers.

PATENTS, TRADE SECRETS AND PROPRIETARY RIGHTS

      The  Company  seeks  to  protect  its  intellectual   property  through  a
combination  of patent,  trademark  and trade secret  protection.  The Company's
future success will depend in part on its ability to obtain and enforce  patents
for its products and processes,  preserve its trade secrets and operate  without
infringing the proprietary rights of others.

      Patents

      The Company has an active corporate  patent program,  the goal of which is
to secure patent protection for its technology. The Company currently has issued
United States patents for an `Intra-Oral Sensor for Computer Aided Radiography',
U.S.  Patent No.  5,434,418,  which  expires on October 16,  2012; a `Large Area
Image Detector', U.S. Patent No. 5,834,782,  which expires on November 20, 2016;
a `Method and Apparatus for Measuring Bone Density',  U.S. Patent No. 5,852,647,
which expires on September 24, 2017;  an `Apparatus  for Measuring  Bone Density
Using Active Pixel Sensors', U.S. Patent No. 5,898,753, which expires on June 6,
2017;  a  `Dental  Imaging  System  with  Lamps and  Method',  U.S.  Patent  No.
5,908,294,  which  expires on June 12, 2017;  an `X-Ray  Detection  System Using
Active Pixel Sensors', U.S. Patent No. 5,912,942, which expires on June 6, 2017;
a `Dental  Imaging  System with White  Balance  Compensation',  U.S.  Patent No.
6,002,424,  which  expires  on June  12,  2017;  `Dental  Radiography  Using  an
Intraoral  Linear Array  Sensor,' U.S.  Patent No.  5,995,583,  which expires on
November 13, 2016; a `Method for Reading Out Data from an X-Ray  Detector,' U.S.
Patent No.  6,069,935,  which  expires on November 2, 2018;  a `Filmless  Dental
Radiography  System Using Universal Serial Bus Port', U.S. Patent No. 6,134,298,
which expires on August 7, 2018; a 'Wireless  Dental  Camera',  U.S.  Patent No.
6,761,561,  which expires on June 7, 2022; an 'Intraoral Wireless Sensor',  U.S.
Design Patent No. D493,892,  which expires on August 18, 2018; and 'Dental X-Ray
Positioning  Using  Adhesives',  U.S.  Patent No.  6,811,312,  which  expires on
February 8, 2022. The Company is also a licensee of U.S.  Patent No.  5,179,579,
for a `Radiograph  Display System with Anatomical  Icon for Selecting  Digitized
Stored  Images',   under  a  worldwide,   non-exclusive,   fully  paid  license.
Additionally,  the  Company has two  recently  allowed  U.S.  Patents as well as
another six U.S. patent applications  currently pending.  The Company also seeks
foreign patent protection when it deems it to be warranted.

      The Company is the exclusive  sub-licensee for use in medical  radiography
applications  of  certain  patents,   patent  applications  and  other  know-how
(collectively, the "Intellectual Property") related to complementary metal oxide
semiconductor  ("CMOS") active pixel sensor  technology (the "APS  Technology"),
which was developed by


                                       5
<PAGE>

the  California  Institute of Technology  and  sublicensed  to the Company.  The
Company's  exclusive rights to such technology are subject to government  rights
to use,  noncommercial  educational  and  research  rights to use by  California
Institute of Technology  and the Jet Propulsion  Laboratory,  and the right of a
third party to obtain a nonexclusive  license from the  California  Institute of
Technology with respect to such technology.  The Company  believes that,  except
for such third party's exercise of its right to obtain a nonexclusive license to
use APS  Technology  in a field  other  than  medical  radiography,  none of the
foregoing parties have given notice of their exercise of any of their respective
rights to the APS Technology.  There can be no assurance that this will continue
to be the case,  and any such exercise  could have a material  adverse effect on
the Company.

      The Company has granted several  non-exclusive  licenses on certain of its
patents and  intends to grant  additional  patent  licenses in the future as and
when it deems it appropriate.

      Trademarks

      The Company has obtained  trademark  registrations  from the United States
Patent  and  Trademark  Office  for the marks (i) "CDR" for its  digital  dental
radiography  product;  (ii) "USBCam" for its intra-oral camera (iii) "QuickZoom"
(both  textual  and  stylized)  for a  viewing  feature  in its  digital  dental
radiography  product;  (iv) "accuDEXA" for its BMD assessment  product;  and (v)
"CDRPan" for its panoramic digital dental radiography product. In addition,  the
Company  has  common  law  trademark  rights  in  several  other  names  it uses
commercially in connection with its products.

      Trade Secrets

      In  addition to patent  protection,  the  Company  owns trade  secrets and
proprietary  know-how which it seeks to protect,  in part,  through  appropriate
Non-Disclosure,  Non-Solicitation,  Non-Competition  and Inventions  Agreements,
and, to a limited degree,  employment  agreements with appropriate  individuals.
These agreements generally provide that all confidential  information  developed
by or made  known to the  individual  by the  Company  during  the course of the
individual's  relationship with the Company is the property of the Company,  and
is to be kept  confidential  and not  disclosed  to  third  parties,  except  in
specific limited  circumstances.  The agreements also generally provide that all
inventions  conceived by the  individual in the course of rendering  services to
the Company shall be the exclusive property of the Company.  However,  there can
be no assurances that these  agreements  will not be breached,  that the Company
would have  adequate  remedies  available  for any breach or that the  Company's
trade secrets will not otherwise become known to, or independently developed by,
its competitors.

GOVERNMENT REGULATION

      Products  that the Company is currently  developing  or may develop in the
future are likely to require certain forms of governmental clearance, including,
but  not  limited  to,   marketing   clearance   by  the  U.S.   Food  and  Drug
Administration.  The FDA review process typically requires extended  proceedings
pertaining to product safety and efficacy.  The Company believes that its future
success will depend to a large degree upon commercial sales of improved versions
of its current products and sales of new products;  the Company will not be able
to market such  products in the United States  without FDA marketing  clearance.
There can be no  assurance  that any  products  developed  by the Company in the
future will be given  clearance by applicable  governmental  authorities or that
additional  regulations  will not be adopted or current  regulations  amended in
such a manner as to adversely affect the Company.

      Pursuant to the Federal Food, Drug and Cosmetic Act, as amended (the "FD&C
Act"),  the FDA  classifies  medical  devices  intended for human use into three
classes:  Class I, Class II,  and Class III.  In  general,  Class I devices  are
products  for which the FDA  determines  that  safety and  effectiveness  can be
reasonably  assured  by general  controls  under the FD&C Act  relating  to such
matters as adulteration,  misbranding,  registration,  notification, records and
reports. The USBCam(R) is a Class I device.

      Class II devices are  products for which the FDA  determines  that general
controls  are  insufficient  to  provide a  reasonable  assurance  of safety and
effectiveness,  and  that  require  special  controls  such as  promulgation  of
performance  standards,  post-market  surveillance,  patient  registries or such
other actions as the FDA deems necessary.  CDR(R), CDR Wireless(TM),  CDRPan(R),
CDRPanX(TM), SDX(TM) and accuDEXA(R) have been classified as Class II devices.


                                       6
<PAGE>

      Class  III  devices  are  devices  for  which  the  FDA  has  insufficient
information to conclude that either general  controls or special  controls would
be sufficient to assure safety and effectiveness, and which are life-supporting,
life-sustaining,  of  substantial  importance in preventing  impairment of human
health, or present a potential  unreasonable risk of illness or injury.  Devices
in this class  require  pre-market  approval,  as described  below.  None of the
Company's existing products are in the Class III category.

      The FD&C Act further provides that, unless exempted by regulation, medical
devices may not be  commercially  distributed  in the United  States unless they
have been cleared by the FDA.  There are two review  procedures by which medical
devices can receive such  clearance.  Some  products  may qualify for  clearance
under a Section 510(k) procedure, in which the manufacturer submits to the FDA a
pre-market  notification  that it intends to begin  marketing  the product,  and
shows that the product is  substantially  equivalent to another legally marketed
product  (i.e.,  that it has the  same  intended  use and that it is as safe and
effective as a legally marketed device,  and does not raise different  questions
of safety and effectiveness than does a legally marketed device). In some cases,
the 510(k) notification must include data from human clinical studies.

      Marketing may commence once the FDA issues a clearance letter finding such
substantial equivalence. According to FDA regulations, the agency has 90 days in
which to respond to a 510(k) notification.  There can be no assurance,  however,
that the FDA will provide a timely response,  or that it will reach a finding of
substantial equivalence.

      If a product does not qualify for the 510(k) procedure  (either because it
is not substantially  equivalent to a legally marketed device or because it is a
Class  III  device),   the  FDA  must  approve  a  Pre-Market  Approval  ("PMA")
application before marketing can begin. PMA applications must demonstrate, among
other things,  that the medical device is safe and effective.  A PMA application
is typically a complex submission that includes the results of clinical studies.
Preparation  of such an application  is a detailed and  time-consuming  process.
Once a PMA  application  has been  submitted,  the FDA's  review  process may be
lengthy and include requests for additional data. By statute and regulation, the
FDA may take 180 days to  review a PMA  application,  although  such time may be
extended. Furthermore, there can be no assurance that the FDA will approve a PMA
application.

      In January 1994,  the FDA cleared the  Company's  510(k)  application  for
general use and marketing of the CDR(R)  system;  in October  2002,  cleared the
Company's expanded 510(k) application for the CDR Wireless product;  and in June
2004, cleared the Company's 510(K) application in connection with a modification
of the CDR system for optimization for use with the SDX(TM) product. In November
1996,  the FDA  cleared the  Company's  510(k)  application  for general use and
marketing of CDRCam (USBCam(R)). In December 1997, the FDA cleared the Company's
510(k) application for general use and marketing of accuDEXA(R). The FDA granted
the Company additional clearances in connection with the accuDEXA(R), on June 4,
1998,  to market  accuDEXA(R)  as a predictor of fracture  risk,  and on May 26,
2000,  to further  clarify  issues  regarding  the  collection  of the normative
database.  In December 1998 and May 2003,  the FDA cleared the Company's  510(k)
applications for CDRPan(R) and CDRPanX(TM), respectively.

      In addition to the  requirements  described  above,  the FD&C Act requires
that all medical device  manufacturers  and  distributors  register with the FDA
annually  and provide the FDA with a list of those  medical  devices  which they
distribute  commercially.  The FD&C Act also requires that all  manufacturers of
medical devices comply with labeling requirements and manufacture their products
and  maintain   their   documents  in  a  prescribed   manner  with  respect  to
manufacturing, testing, and quality control activities. The FDA's Medical Device
Reporting   regulation   subjects  medical  devices  to  post-market   reporting
requirements  for death or serious  injury,  and for certain  malfunctions  that
would  be  likely  to cause  or  contribute  to a death  or  serious  injury  if
malfunction  were to recur.  In addition,  the FDA  prohibits a device which has
received  marketing  clearance  from being marketed for  applications  for which
marketing  clearance  has not  been  obtained.  Furthermore,  the FDA  generally
requires  that medical  devices not cleared for  marketing in the United  States
receive  FDA  marketing  clearance  before they are  exported,  unless an export
certification has been granted.

      The Company must obtain certain approvals by and marketing clearances from
governmental  authorities,  including the FDA and similar health  authorities in
foreign countries,  to market and sell its products in those countries.  The FDA
regulates the marketing,  manufacturing,  labeling, packaging, advertising, sale
and  distribution of "medical  devices",  as do various  foreign  authorities in
their respective jurisdictions. The FDA


                                       7
<PAGE>

enforces  additional  regulations  regarding  the safety of equipment  utilizing
x-rays. Various states also impose their own regulations.

      The FDA review process typically requires extended proceedings  pertaining
to the safety and efficacy of new products.  A 510(k) application is required in
order to market a new or modified  medical device.  If specifically  required by
the FDA, a pre-market approval ("PMA") may be necessary. Such proceedings, which
must be completed  before  marketing a new medical device,  are potentially very
expensive and time consuming.  They may delay or hinder a product's timely entry
into the  marketplace.  Moreover,  there can be no assurance  that the review or
approval  process  for  these  products  by  the  FDA or  any  other  applicable
governmental  authorities  will occur in a timely  fashion,  if at all,  or that
additional  regulations  will not be adopted or current  regulations  amended in
such a manner as will adversely  affect the Company.  The FDA also regulates the
content of  advertising  and marketing  materials  relating to medical  devices.
Failure  to comply  with such  regulations  may  result in a delay in  obtaining
approval for the marketing of such  products or the  withdrawal of such approval
if previously obtained.

      The  Company  is  currently  developing  new  products  for the dental and
medical markets. The Company expects to file 510(k) applications with the FDA in
connection  with its future  products,  as necessary.  There can be no assurance
that  the  Company  will  file  such  510(k)  applications  and/or  will  obtain
pre-market clearance for any future products,  or that in order to obtain 510(k)
clearance,  the Company will not be required to submit  additional  data or meet
additional FDA requirements that may substantially  delay the 510(k) process and
result in substantial additional expense.  Moreover,  such pre-market clearance,
if obtained,  may be subject to conditions on marketing or manufacturing,  which
could impede the  Company's  ability to  manufacture  and/or  market the product
and/or  adversely affect its  profitability.  If the Company is unable to obtain
regulatory  clearance for and market new products and  enhancements  to existing
products, it will have a material adverse effect on the Company.

      The Company's CDR(R) wireless product complies with the relevant technical
standards established by the U.S. Federal Communications  Commission ("FCC"), as
set forth in FCC Rule 15.249. CDR Wireless(TM) is not subject to any wireless or
transmission licensing requirements.

      Failure to comply with applicable regulatory requirements can, among other
consequences, result in fines, injunctions, civil penalties, suspensions or loss
of  regulatory  approvals,  product  recalls,  seizure  of  products,  operating
restrictions and criminal prosecution. In addition, governmental regulations may
be established that could prevent or delay regulatory clearance of the Company's
products.  Delays in receipt of clearance,  failure to receive  clearance or the
loss of previously  received  clearance would have a material  adverse effect on
the Company's business, financial condition and results of operations.

      In  addition  to laws and  regulations  discussed  above,  the  Company is
subject to government regulations applicable to all businesses, including, among
others, regulations related to occupational health and safety, workers' benefits
and  environmental  protection.  The extent of government  regulation that might
result from any future legislation or administrative action cannot be accurately
predicted.  Failure to comply with regulatory requirements could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

      Distribution of the Company's  products in countries other than the United
States may be subject to regulations in those countries.  These regulations vary
significantly  from  country to  country;  the Company  typically  relies on its
independent  distributors  in such  foreign  countries  to obtain the  requisite
regulatory approvals.

      The Company's  dental products bear the "CE Mark," a European Union symbol
of compliance  with quality  assurance  standards and with the European  Union's
Medical Device Directive  ("MDD").  In order to market the Company's products in
the member  countries of the European Union, it is necessary that those products
conform to these  standards and the MDD. It is also necessary that the Company's
products  comply with any  revisions  which may be made to the  standards or the
MDD. To date, the Company has maintained such compliance on its core products.

      The Company has developed and implemented a quality  assurance  program in
accordance with the guidelines of the International Quality Standard,  ISO 9001.
In August 1998, the Company was granted ISO 9001


                                       8
<PAGE>

certification.  The Company's products also comply with the requirements for the
"UL" 60601-1  (formerly UL 2601-1)  (U.S.A.) and "CSA" C22.2 No. 601-1  (Canada)
standards,  the applicable standards for obtaining North American safety marking
from an "NRTL" (Nationally Recognized Testing Lab). All of the Company's current
products  either bear an NRTL  marking or are in the process of  obtaining  such
marking.

PRODUCT LIABILITY INSURANCE

      The  Company  is  subject  to the  risk of  product  liability  and  other
liability  claims in the event that the use of its products  results in personal
injury or other  claims.  Although the Company has not  experienced  any product
liability  claims to date,  any such claims could have an adverse  impact on the
Company.  The Company maintains  insurance coverage related to product liability
claims,  but there can be no assurance  that  product  liability or other claims
will not exceed its  insurance  coverage  limits,  or that such  insurance  will
continue  to be  maintained  or  that  it  will  be  available  on  commercially
acceptable terms, or at all.

RESEARCH AND DEVELOPMENT

      During fiscal 2005, 2004 and 2003, research and development  expenses were
$4.9 million, $3.3 million and $2.6 million, respectively.

BACKLOG

      The backlog of orders was approximately $1.0 million at June 6, 2005, $0.8
million at June 10, 2004, and $0.5 million at June 3, 2003.  Orders  included in
backlog  may  generally  be  cancelled  or  rescheduled  by  customers   without
significant penalty.

EMPLOYEES

      As of June 1, 2005,  the Company had 139 full-time  employees,  engaged in
the following  capacities:  sales and marketing (44); general and administrative
(23);  operations (44); and research and development  (28). The Company believes
that its  relations  with its  employees  are good.  No  Company  employees  are
represented  by  a  labor  union  or  are  subject  to a  collective  bargaining
agreement,  nor has the  Company  experienced  any work  stoppages  due to labor
disputes.

SALES AND MARKETING

      Dental Products

      In April 2000, the Company and Patterson  Dental  Company  entered into an
exclusive  distribution  agreement  covering the United States and Canada; as of
May 1, 2000, the Company began  marketing and selling its CDR(R) dental products
in the United States and Canada  through  Patterson.  The Company  believes that
Patterson has the largest  direct sales force in the dental  industry,  totaling
nearly 1,300 sales  representatives and  equipment/software  specialists serving
the United States and Canada.

      The Company has a government  sales  program to sell directly to the Armed
Services, Veterans Administration hospitals, United States Public Health Service
and other government-sponsored health institutions.

      The  Company  currently  has 16 area  sales  manager  ("ASM")  territories
located  throughout  the United  States and one in Canada to interface  with and
assist Patterson in its sales effort;  two individuals  manage the ASM staff. In
addition,  a sales and marketing support staff of seven,  based at the Company's
offices  in New  York and at  other  locations  throughout  the  United  States,
supports the sales managers and the ASMs by planning events and product seminars
and developing promotional and marketing materials.

      In the  international  market,  the  Company  sells the CDR(R)  system via
independent  regional  distributors.   There  are  currently   approximately  65
independent  CDR(R) dealers,  covering about 57 countries.  A dedicated in-house
staff,  as well as four  individuals  based in Europe,  Asia and Latin  America,
provide  the foreign  distributors  with  materials,  sales  support,  technical
assistance and training, both in New York and abroad.


                                       9
<PAGE>

      Our goal is to develop and introduce new  technologies  and products while
maintaining market leadership in our core domestic  business,  strengthening and
expanding our international distribution network and securing as many productive
sales channels as possible.

      BMD / Fracture Risk Assessment

      The Company currently sells the accuDEXA(R) primarily through a network of
manufacturer  representatives.  To date,  accuDEXA(R)  sales  have  taken  place
primarily  within the United  States,  with a  relatively  small number of sales
abroad.  The primary  end-users  for  accuDEXA(R)  are primary care  physicians,
including OB/GYN practices, and osteopathic and geriatric specialists.

COMPETITION

      Competition  relating  to the  Company's  current  products is intense and
includes various companies,  both within and outside of the United States.  Many
of the Company's  competitors  are large  companies  with  financial,  sales and
marketing,  and other resources that are substantially greater than those of the
Company. In addition,  there can be no assurance that the Company's  competitors
are not currently developing,  or will not attempt to develop,  technologies and
products  that are  more  effective  than  those of the  Company  or that  would
otherwise render the Company's products obsolete or noncompetitive.

      Dental Products

      A number of companies  currently  sell  intra-oral  digital dental sensors
under various brand names.  These include Eastman Kodak Co.  ("Trophy"),  Gendex
Dental  Systems  ("Visualix"),   Dentrix  Dental  Systems,  Inc.  ("ImageRAYi"),
Provision Dental Systems, Inc. ("Dexis"),  Sirona Dental Systems ("Sidexis") and
Suni Medical  Imaging,  Inc. In addition,  Gendex,  Air  Techniques  and Soredex
Corporation sell  storage-phosphor  based intra-oral dental systems. The Company
believes  that its CDR system has thus far competed  successfully  against other
products.  If other companies enter the digital radiography field, it may result
in a significantly more competitive market in the future.  Several companies are
involved in the manufacture and sale of intra-oral  cameras,  including  Gendex,
Henry Schein, Inc., Digital Doc and Air Techniques. Several companies, including
Kodak,  Sirona,  Instrumentarium  Imaging,  Panoramic  Corporation and Planmeca,
manufacture digital panoramic dental devices.

      BMD / Fracture Risk Assessment

      Several  companies  including  General  Electric,  Lunar,  Hologic,  Inc.,
Sunlight,  Inc.  and  Norland  are  marketing  competitive  equipment,  such  as
peripheral  ultrasound  devices. A number of other companies market devices that
assess hand densitometry.

ITEM 2. PROPERTIES

      The Company presently leases  approximately 50,000 square feet of space in
Long Island City,  New York.  That lease expires in June 2007.  The leased space
houses our executive  offices,  sales and marketing  headquarters,  research and
development  laboratories  and production and shipping  facilities.  The Company
believes  that such space  will be  adequate  for its needs for the  foreseeable
future  and that,  if such  space  proves to be  inadequate,  it will be able to
procure additional or replacement space that will be adequate for its needs.

ITEM 3. LEGAL PROCEEDINGS

      The Company  and/or  certain of its former  officers  are  involved in the
matters described below:

      In August 1999, the Company,  through its outside  counsel,  contacted the
Division of Enforcement of the  Securities  and Exchange  Commission  ("SEC") to
advise it of certain  matters  related to the Company's  restatement of earnings
for  interim  periods  of  fiscal  1999.  The  SEC  subsequently   conducted  an
investigation  of the  Company and certain  individuals,  including  current and
former  officers and  employees  of the  Company,  pursuant to a Formal Order of
Investigation.  The Company  cooperated with the SEC staff throughout the course
of the investigation.


                                       10
<PAGE>

      The Company has been  informed  that since January 2002 the SEC and/or the
United  States  Attorney's  Office for the  Southern  District  of New York have
served subpoenas upon and/or contacted  certain  individuals,  including current
and former  officers and employees of the Company,  and a current  Director,  in
connection  with this  matter.  On June 13,  2002,  the  Company  was advised by
counsel to David Schick, the Company's former chief executive officer,  that the
United  States  Attorney's  Office  for the  Southern  District  of New York had
notified  such  counsel  that Mr.  Schick  was a  target  of the  United  States
Attorney's investigation of this matter. The Company has cooperated with the SEC
staff and U.S. Attorney's Office.

      On November  14, 2003,  the SEC filed a civil action in the United  States
District  Court for the Eastern  District of New York against the  Company,  its
former  chief  executive  officer,  and its  former  vice  president  of sales &
marketing.  The SEC complaint alleges fraud, and books and records and reporting
violations under Sections 10(b),  13(a) and 13(b)(2) of the Securities  Exchange
Act and various rules  promulgated  thereunder in connection  with the financial
statements included in the Company's reports on Form 10-Q for the quarters ended
June 30,  September 30 and December 31, 1998. The SEC complaint  seeks to enjoin
the Company from future  violations of those  provisions of the Exchange Act and
the rules thereunder, as well as disgorgement of any allegedly ill-gotten gains,
which the Company does not believe to be material in amount. With respect to the
other  defendants,  the complaint  seeks  injunctive  relief,  civil  penalties,
disgorgement and an officer/director bar.

      The Company has had discussions  with the  Enforcement  Staff of the SEC's
northeast  regional  office in an effort to resolve  the  complaint  against the
Company,  and the Company intends to continue such discussions.  On May 4, 2005,
the Court ordered that  discovery in this case be suspended  until June 18, 2005
to permit the  consideration  of  settlement  proposals.  Any  settlement  would
require approval by the Commission before it could become  effective.  There can
be no  assurance  that  settlement  discussions  will  continue  and/or  will be
successful.

      During the three months ended  December 31, 2004,  the insurance  coverage
available to the Company for legal fee reimbursements and indemnification  costs
was fully depleted. If this matter remains unresolved, the Company will continue
to incur significant legal fees and may incur  indemnification  costs.  However,
the Company believes that the magnitude of such  expenditures will not adversely
affect its ongoing business operations.

      The  Company  could  become a party to a  variety  of  legal  actions  (in
addition  to  that  referred  to  above),  such  as  employment  and  employment
discrimination-related  suits,  employee  benefit  claims,  breach  of  contract
actions,  tort  claims,  shareholder  suits and  intellectual  property  related
litigation.  In addition,  because of the nature of its business, the Company is
potentially  subject  to a variety of legal  actions  relating  to its  business
operations.  Recent court  decisions and  legislative  activity may increase the
Company's exposure for any of these types of claims. In some cases,  substantial
punitive damages could be sought.  The Company currently has insurance  coverage
for some of these potential liabilities.  Other potential liabilities may not be
covered by insurance,  insurers may dispute coverage, or the amount of insurance
may not be sufficient to cover the damages awarded.  In addition,  certain types
of  damages,  such as  punitive  damages,  may not be covered by  insurance  and
insurance  coverage for all or certain forms of liability may become unavailable
or prohibitively expensive in the future.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of security holders during the quarter
ended March 31, 2005.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Since January 30, 2002, the Company's  Common Stock has been traded on the
over-the-counter Bulletin Board under the symbol "SCHK".

      The following table sets forth,  for the periods  indicated,  the high and
low bid prices of the Company's  Common Stock as quoted on the  over-the-counter
Bulletin Board for each of the fiscal  quarters during the years ended March 31,
2005 and 2004.


                                       11
<PAGE>

Fiscal Year Ended March 31, 2005                                High        Low
--------------------------------                               ------      -----
First Quarter ............................................     $13.95      $9.65
Second Quarter ...........................................     $13.90      $8.55
Third Quarter ............................................     $16.50      $9.50
Fourth Quarter ...........................................     $19.20     $14.90

Fiscal Year Ended March 31, 2004                                High        Low
--------------------------------                               ------      -----
First Quarter ............................................      $8.80      $4.30
Second Quarter ...........................................      $8.58      $6.85
Third Quarter ............................................      $8.40      $6.50
Fourth Quarter ...........................................     $12.15      $7.05

      On June 8,  2005,  the  closing  bid and  asked  prices  per  share of the
Company's Common Stock, as quoted on the  over-the-counter  Bulletin Board, were
$19.20 and $19.35 per share,  respectively.  Such  prices  represent  quotations
between  dealers,  without dealer mark-up,  markdown or commission,  and may not
represent  actual  transactions.  On  June  8,  2005,  there  were  one  hundred
forty-three (143) holders of record of the Company's Common Stock.  However, the
Company  believes  that  the  number  of  beneficial  owners  of such  stock  is
substantially higher.

      To date,  the Company has  retained its earnings to finance the growth and
development  of the  Company's  business,  and has not paid any dividends on its
Common  Stock.  The Company may consider  paying  dividends  in the future,  but
currently  has no plans  to do so.  The  payment  of  dividends  is  within  the
discretion  of the  Board of  Directors  and  will  depend  upon  the  Company's
earnings,  its capital  requirements,  financial  condition  and other  relevant
factors.

Equity Compensation Plan Information

      The following table sets forth the following information,  as of March 31,
2005,  with respect to compensation  plans  (including  individual  compensation
arrangements)  under which equity  securities of the Company are  authorized for
issuance: the number of securities to be issued upon the exercise of outstanding
options,  warrants  and  rights;  the  weighted-average  exercise  price of such
options,  warrants and rights;  and, other than the securities to be issued upon
the  exercise of such  options,  warrants and rights,  the number of  securities
remaining available for future issuance under the plan:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                (a)                  (b)                (c)
------------------------------------------------------------------------------------------------------------
Plan category                                   Number of            Weighted-average   Number of securities
                                                securities to be     exercise price     remaining available
                                                issued upon          of outstanding     for future issuance
                                                exercise of          options,           under equity
                                                outstanding          warrants and       compensation plans
                                                options,             rights             (excluding
                                                warrants and                            securities reflected
                                                rights                                  in column (a) )
------------------------------------------------------------------------------------------------------------
<S>                                               <C>                   <C>                  <C>
Equity compensation plans approved                2,728,747             $5.52                968,753
by security holders
------------------------------------------------------------------------------------------------------------
Equity compensation plans not approved
by security holders                                      --                --                     --
------------------------------------------------------------------------------------------------------------
Total                                             2,728,747             $5.52                968,753
------------------------------------------------------------------------------------------------------------
</TABLE>

ITEM 6. SELECTED FINANCIAL DATA

      The following  selected financial data are derived from, and are qualified
by reference to, the audited financial  statements of the Company for the period
indicated.  The information  presented below should be read in conjunction  with
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" in Item 7 and the Financial  Statements  included in Item 15 of this
Report.


                                       12
<PAGE>

Schick Technologies, Inc.
Selected Financial Data

<TABLE>
<CAPTION>
                                                           Year ended March 31,
                                            2005       2004        2003        2002        2001
                                          --------   --------    --------    --------    --------
                                                   (in thousands, except per share data)
<S>                                       <C>        <C>         <C>         <C>         <C>
Statement of Operations Data:

Revenue, net                              $ 52,418   $ 39,393    $ 29,817    $ 24,399    $ 21,252
Total cost of sales                         14,857     11,495       9,628       8,832      10,306
                                          --------   --------    --------    --------    --------
Gross profit                                37,561     27,898      20,189      15,567      10,946
Operating expenses:
   Selling and marketing                     7,107      6,118       5,911       5,291       5,314
   General and administrative                6,851      6,291       5,041       4,148       4,161
   Research and development                  4,812      3,301       2,598       2,176       2,220
   Bad debt expense (recovery)                  --        105          --         (93)       (454)
   Abandonment of leasehold                     --         --          --         118         275
                                          --------   --------    --------    --------    --------
    Total operating expenses                18,770     15,815      13,550      11,640      11,516
                                          --------   --------    --------    --------    --------
Income (loss) from operations               18,791     12,083       6,639       3,927        (570)
Total other income (expense)                   468        109        (174)       (839)     (1,068)
                                          --------   --------    --------    --------    --------
Income (loss) before income taxes           19,259     12,192       6,465       3,088      (1,638)
Income tax provision(benefit)                7,187     (5,917)     (5,360)         --          --
                                          --------   --------    --------    --------    --------
    Net income (loss)                     $ 12,072   $ 18,109    $ 11,825    $  3,088    $ (1,638)
                                          ========   ========    ========    ========    ========
    Basic earnings (loss) per share       $   0.78   $   1.69    $   1.17    $   0.30    $  (0.16)
                                          ========   ========    ========    ========    ========
    Diluted earnings (loss) per share     $   0.70   $   1.07    $   0.78    $   0.26    $  (0.16)
                                          ========   ========    ========    ========    ========

<CAPTION>
                                                             As of March 31,
                                            2005       2004        2003        2002        2001
                                          --------   --------    --------    --------    --------
<S>                                       <C>        <C>         <C>         <C>         <C>
Balance Sheet Data:
Cash and cash equivalents                 $ 39,725   $ 20,734    $  7,100    $  1,622    $  2,167
Working capital / (deficiency)              47,109     27,400       9,157       1,133      (1,586)
Total assets                                57,534     42,743      22,610      11,957      12,646
Long-term obligations                           --         --          --       2,039       4,080
Total liabilities                            8,285      7,715       7,747       9,057      12,835
Retained earnings (accumulated deficit)      2,324     (9,748)    (27,857)    (39,682)    (42,770)
Stockholders' equity                        49,249     35,028      14,863       2,900        (189)
</TABLE>


                                       13
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      The  following   discussion   should  be  read  in  conjunction  with  the
Consolidated  Financial  Statements  included  elsewhere  in this  Report.  This
discussion  contains  forward-looking  statements based on current  expectations
that involve risks and  uncertainties.  Actual results and the timing of certain
events may differ  significantly  from those  projected in such  forward-looking
statements due to a number of factors,  including those set forth in "Results of
Operations"  in this Item and elsewhere in this Report.  See "ITEM 1 -- Business
-- Forward-Looking Statements" and Exhibit 99.1 to this Report.

Overview

      The Company designs, develops and manufactures digital imaging systems for
the worldwide dental and medical markets. In the field of dentistry, the Company
currently  manufactures  and  markets  a variety  of  digital  imaging  products
including   an   intra-oral   digital   radiography   system   (CDR(R)  and  CDR
Wireless(TM)), a digital panoramic radiography sensor (CDRPan(R)) and integrated
device (CDRPanX(TM)),  an intra-oral camera system (USBCam(R)),  and a DC dental
x-ray  generator  (SDX(TM)).  The  Company  also  manufactures  and sells a bone
mineral density assessment device  (accuDEXA(R)) which it developed to assist in
the diagnosis  and treatment of  osteoporosis.  The  Company's  revenues  during
fiscal 2005 were derived primarily from sales of its CDR(R) system.

      The Company records sales revenue upon shipment to  international  dealers
and to  end-users  in the U.S. In the case of sales made to  Patterson,  revenue
arising  from  inventory  in  Patterson's  possession  is  recorded  in deferred
revenue,  and revenue is recognized upon shipment from Patterson's  distribution
centers.  Revenues  from the sales of extended  warranties  are  recognized on a
straight-line basis over the life of the extended warranty, which is generally a
period of up to two years.  The  Company  utilizes  Patterson  as the  exclusive
distributor for non-governmental  sales of its dental products within the United
States and Canada. The Company's  accuDEXA(R)  product is sold through a network
of independent sales  representatives in the United States.  International sales
of the Company's  products are made  primarily  through a network of independent
foreign distributors.  In fiscal 2005, 2004, and 2003, sales to customers within
North  America  were   approximately   73%,  75%  and  78%  of  total  revenues,
respectively.   The  Company's  international  sales  are  principally  made  to
distributors in Europe and Asia. The Company's  sales are primarily  denominated
in United States dollars.

      Cost of sales consists of raw materials,  manufacturing labor,  facilities
overhead,  product support,  and warranty costs.  Excess and obsolete  inventory
expense  relates to the  overstocking  or  obsolescence  of various  dies and/or
obsolete x-ray inventory that the Company may not use or otherwise salvage.

      Operating  expenses  include selling and marketing  expenses,  general and
administrative  expenses  and research and  development  expenses,  and bad debt
expense.  Selling and marketing  expenses  consist of salaries and  commissions,
advertising, promotional and sales events and travel. General and administrative
expenses include executive  salaries,  professional fees,  facilities  overhead,
accounting,   human  resources,  and  general  office  administration  expenses.
Research and development  expenses are comprised of salaries,  consulting  fees,
facilities overhead and testing materials used for basic scientific research and
the  development  of new and  improved  products  and their uses.  Research  and
development  costs are  expensed as  incurred.  Bad debt  expense is a result of
product shipments that were determined to be uncollectible or not collected. Bad
debt  recovery is a result of the receipt,  in cash,  for  shipments  previously
deemed uncollectible.

Critical Accounting Policies

      The  preparation  of financial  statements in conformity  with  accounting
principles  generally accepted in the United States requires the Company to make
estimates  and  assumptions  that affect  amounts  reported in the  accompanying
consolidated  financial  statements and related  footnotes.  These estimates and
assumptions are evaluated on an ongoing basis based on historical  developments,
market conditions, industry trends and other information the Company believes to
be reasonable  under the  circumstances.  There can be no assurance  that actual
results  will  conform to the  Company's  estimates  and  assumptions,  and that
reported results of operations will not be materially  adversely affected by the
need to make  accounting  adjustments to reflect  changes in these estimates and
assumptions from time to time. The following policies are those that the Company
believes to be the most  sensitive to estimates  and  judgments.  The  Company's
significant  accounting  policies  are  more  fully  described  in Note 1 to the
consolidated statements.


                                       14
<PAGE>

Revenue recognition

      The Company  recognizes  revenue when each of the following  four criteria
are met:  1) a contract  or sales  arrangement  exists;  2)  products  have been
shipped and title has been  transferred or services have been  rendered;  3) the
price  of  the   products  or  services  is  fixed  or   determinable;   and  4)
collectibility  is  reasonably  assured.  Revenues  from sales of the  Company's
hardware  and  software  products  are  recognized  at the time of  shipment  to
customers,  and when no  significant  obligations  exist and  collectibility  is
reasonably assured. The Company provides its exclusive domestic distributor with
a 30-day return policy but allows for an  additional  15 days,  and  accordingly
recognizes  allowances for estimated returns pursuant to such policy at the time
of shipment.  Revenue from  shipments to foreign  customers is recognized at the
time of shipment in  accordance  with  foreign  sales  orders.  With  respect to
products  shipped to its  exclusive  domestic  distributor,  the Company  defers
revenue until  Patterson  ships such  inventory from its  distribution  centers.
Amounts received from customers in advance of product shipment are classified as
deposits from  customers.  Revenues from the sale of extended  warranties on the
Company's products are recognized on a straight-line  basis over the life of the
extended  warranty.  Deferred  revenues relate to extended warranty fees paid by
customers prior to the performance of extended warranty services, and to certain
shipments to Patterson, as described above.

Accounts receivable

      The Company  primarily  sells on open credit terms to Patterson and to the
U.S. Government,  and upon signed purchase orders to hospitals and universities.
The  Company's   international  sales  are  generally  prepaid,   guaranteed  by
irrevocable  letter of credit or underwritten by credit insurance.  In a limited
number of cases,  international  dealers are granted open credit terms. Warranty
shipments are prepaid.  Revenue from customers is subject to agreements allowing
limited rights of return.  Accordingly,  the Company reduces revenue  recognized
for  estimated  future  returns.  The  estimate  of future  returns is  adjusted
periodically  based upon  historical  rates of return.  The Company  provides an
allowance  for  doubtful  accounts  based  upon its  analysis  of aged  accounts
receivable.

Inventories

      Inventories  are  stated  at the  lower  of cost or  market.  The  cost of
inventories   is  determined   principally  on  the  standard  cost  method  for
manufactured goods and on the average cost method for other inventories, each of
which approximates  actual cost on the first-in,  first-out ("FIFO") method. The
Company   establishes   reserves  for   inventory   estimated  to  be  obsolete,
unmarketable or slow moving  inventory equal to the difference  between the cost
of inventory  and  estimated  market value based upon  assumptions  about future
demand and market  conditions.  If actual market  conditions  are less favorable
than  those  anticipated  or if  changes  in  technology  affect  the  Company's
products, additional inventory reserves could be required.

Goodwill and other long-lived assets

      Effective  April 1, 2002,  the  Company  adopted  Statement  of  Financial
Accounting  Standards  No.  142 ("SFAS  142"),  "Goodwill  and other  Intangible
Assets".   This  statement   requires  that  the  amortization  of  goodwill  be
discontinued  and  instead  an  annual  impairment  approach  be  applied.   The
impairment  tests  were  performed  upon  adoption  and are  performed  annually
thereafter (or more often if adverse events occur) and will be based upon a fair
value  approach  rather than an evaluation of  undiscounted  cash flows.  If the
asset has been impaired, the resulting charge reflects the excess of the asset's
carrying value over the  recalculated  goodwill.  Impairment  tests performed in
August 2002,  March 2003,  March 2004 and April 2005 indicated that goodwill had
not been impaired.

      Other long-lived assets,  such as patents and property and equipment,  are
amortized or depreciated  over their  estimated  useful lives.  These assets are
reviewed for impairment  whenever events or circumstances  provide evidence that
suggest  that the  carrying  amount of the asset  may not be  recoverable,  with
impairment being based upon an evaluation of the identifiable  undiscounted cash
flows. If the asset has been impaired,  the resulting charge reflects the excess
of the asset's carrying cost over its fair value.

      If market  conditions  become less favorable,  future cash flows,  the key
variable in assessing  the  impairment  of these  assets,  may decrease and as a
result the Company may be required to recognize impairment charges.


                                       15
<PAGE>

Deferred tax asset and income taxes

      Income taxes are  determined  in  accordance  with  Statement of Financial
Accounting  Standards  No. 109  ("SFAS  109"),  which  requires  recognition  of
deferred  income  tax  liabilities  and  assets  for  the  expected  future  tax
consequences  of events that have been included in the  financial  statements or
tax returns.  Under this method,  deferred income tax liabilities and assets are
determined based on the difference between financial statements and tax bases of
liabilities  and assets using  enacted tax rates in effect for the year in which
the  differences  are  expected  to  reverse.  SFAS  109 also  provides  for the
recognition of deferred tax assets if it is more likely than not that the assets
will be realized in future years.  Through March 31, 2003, a valuation allowance
of $11.4  million was  established  for deferred tax assets for which it was not
more likely than not that the deferred  tax asset would be realized.  During the
year ended March 31, 2003 the Company  reduced its  valuation  allowance by $5.8
million. At March 31, 2004, the Company reduced its valuation allowance to zero,
because it determined  that it was more likely than not that the total  deferred
tax asset would be realized.  During fiscal 2005,  2004, and 2003, the Company's
utilization of its net operating losses resulted in a reduction of current taxes
in the amount of $6.8 million, $4.8 million and $2.7 million,  respectively.  In
assessing the valuation allowance,  the Company considered future taxable income
and ongoing tax planning  strategies and determined that it was more likely than
not that the deferred tax asset would be realized.

Warranty obligations

      Products  sold are  generally  covered  by a warranty  against  defects in
material and workmanship for a period of up to two years.  The Company accrues a
warranty reserve for estimated costs to provide warranty  services.  The Company
estimates costs to service warranty  obligations based on historical  experience
and  expectation  of future  conditions.  To the extent the Company  experiences
increased  warranty claim activity or increased costs  associated with servicing
those  claims,  warranty  accrual will  increase,  resulting in decreased  gross
profit.

Stock-based compensation

      Stock  based  compensation  is  accounted  for under the  recognition  and
measurement  principles  of APB Opinion No. 25,  Accounting  for Stock Issued to
Employees,  and related  interpretations.  In February  2000,  an executive  was
awarded  75,000  shares of the  Company's  common  stock,  subject  to a risk of
forfeiture,  which vested as to 25,000 shares on each of December 31, 2000, 2001
and 2002.  Upon the sale of any such vested shares,  the employee is required to
pay the Company $1.32 per share sold within six months  following such sale. The
Company recorded a note receivable, which is presented as a reduction of Paid in
Capital  amounting  to $99,  relating  to the  stock  issuance.  The  charge  to
operations  relating  to this  stock  award  is not  material  to the  financial
statements. The Company determines the fair value of options issued based on the
intrinsic value method.

Litigation and contingencies

      The Company and its  subsidiary  are from time to time parties to lawsuits
and  regulatory  administrative  proceedings  arising  out of  their  respective
operations.  The Company  records  liabilities  when a loss is probable  and can
reasonably be estimated.  The Company believes it has estimated appropriately in
the past;  however court decisions  and/or other  unforeseen  events could cause
liabilities to be incurred in excess of estimates.

      Contractual Obligations and Commercial Commitments

      The following  table  summarizes  contractual  obligations  and commercial
commitments at March 31, 2005:

================================================================================
                                      PAYMENTS DUE BY PERIOD (in thousands)
                                 -----------------------------------------------
                                            Less
CONTRACTUAL                                than 1      1-3       4-5     After 5
OBLIGATIONS                       Total     year      years     years     years
--------------------------------------------------------------------------------
Operating leases                 $1,169    $  506    $  663    $   --    $   --
--------------------------------------------------------------------------------
Employment agreements             1,067       593       474        --        --
--------------------------------------------------------------------------------
Purchase obligations                850       850        --        --        --
--------------------------------------------------------------------------------
Consulting agreement                751       340       411        --        --
--------------------------------------------------------------------------------
Total Contractual
Cash Obligations                 $3,837    $2,289    $1,548    $   --    $   --
================================================================================


                                       16
<PAGE>

Results Of Operations

      The following table sets forth,  for the fiscal years  indicated,  certain
items  from  the  Statement  of  Operations  expressed  as a  percentage  of net
revenues:

                                                    Year ended March 31,
                                                 2005       2004       2003
                                                ------     ------     ------
         Revenue, net                            100.0%     100.0%     100.0%
                                                ------     ------     ------
         Total cost of sales                      28.3%      29.2%      32.3%
                                                ------     ------     ------
         Gross profit                             71.7%      70.8%      67.7%
         Operating expenses:
              Selling and marketing               13.6%      15.5%      19.8%
              General and administrative          13.1%      16.0%      16.9%
              Research and development             9.2%       8.4%       8.7%
              Bad debt expense                      --        0.3%        --
                                                ------     ------     ------
              Total operating costs               35.8%      40.1%      45.4%
                                                ------     ------     ------
         Operating income                         35.8%      30.7%      22.3%
         Other income (expense), net               0.9%       0.3%      (0.6%)
                                                ------     ------     ------
         Income before tax expense (benefit)      36.7%      30.9%      21.7%
                                                ------     ------     ------
         Income tax expense (benefit), net        13.7%     (15.0%)    (18.0%)
                                                ------     ------     ------
         Net income                               23.0%      46.0%      39.7%
                                                ======     ======     ======

Fiscal Year Ended March 31, 2005 as Compared to Fiscal Year Ended March 31, 2004

      We design, manufacture and sell innovative digital products for the dental
market. Our primary products are sensors that replace film in the x-ray process.
Growing  acceptance  of these  products have  resulted in  double-digit  revenue
growth in domestic and international  markets. In fiscal 2005, we introduced the
SDX(TM),  a DC x-ray generator  designed to optimize wired and wireless  digital
radiography.

      During fiscal 2005,  consolidation of the dental products market continued
with Danaher  Corporation's  February  2005  acquisition  of Dexis,  a seller of
dental digital  radiography  products.  Previously,  in March 2004,  Danaher had
acquired Kavo, a manufacturer of capital dental equipment, and in February 2004,
it had  acquired  Gendex,  a division  of  Dentsply  International,  Inc.  which
manufactures dental imaging products.  In addition,  during fiscal 2004, Eastman
Kodak Company entered the digital dental market when it acquired  PracticeWorks,
a practice management  software company with a digital sensor  manufacturing and
marketing  subsidiary  located in  France.  Management  believes  that the trend
towards  consolidation  in the  marketplace  is  likely  to  continue  into  the
foreseeable future. The Company will consider acquisitions whenever appropriate.
Management  believes that the  consolidation of the market did not significantly
affect the Company's revenues or operating margins in fiscal 2005.

      For the fiscal year ended March 31, 2005,  the Company's  domestic  dental
product  revenues  increased 39% to $33.3  million,  or 64% of revenue.  Foreign
dental  product  revenues,  principally  from Europe and Asia,  increased 41% to
$13.9 million,  or 26% of revenue.  Management believes that wider acceptance of
the  Company's  products as well as  continued  expansion  of sales  through our
exclusive   domestic   distributor  and   improvements   in  our   international
distribution   network  are  the  primary   factors   underlying   our  improved
performance.

      Operating  expenses,  with the exception of expenses related to compliance
with new  internal  control  reporting  requirements  and  expenses  related  to
research  and  development  activity,  declined  as a percent  of revenue as the
Company  leveraged its fixed  expense  advantage.  Income tax expense  increased
significantly  because of increasing profits and the prior year reduction of the
reserve for deferred income tax assets to zero. At


                                       17
<PAGE>

year end the Company had utilized all of its net operating loss carryover.

      Total  revenue  increased  $13.0  million (33%) to $52.4 million in fiscal
2005, from $39.4 million in fiscal 2004. The revenue  increase was due to higher
sales of CDR(R) dental  radiography  products  principally  through expansion of
sales through the Company's  exclusive  domestic  distributor,  Patterson Dental
Company  ("Patterson") and through foreign  distributors,  principally in Europe
and Asia. Total domestic revenues  increased $9.0 million (31%) to $38.5 million
(73% of revenue)  from $29.4  million  (75% of revenue)  in fiscal  2004.  Total
international  revenues  increased  $4.0 million  (40%) to $13.9 million (27% of
revenue) from $9.9 million (25% of revenue) in fiscal 2004.

      CDR(R) product revenue increased $13.4 million (40%) to $47.1 million (90%
of revenue) during fiscal 2005 from $33.7 million (86% of revenue) during fiscal
2004.  AccuDEXA(R)  product revenue  decreased to $0.4 million from $0.6 million
(1% of revenue  during each of fiscal 2005 and fiscal 2004,  respectively)  as a
result  of a decline  in the  Company's  sales of the  product  in fiscal  2005.
Warranty  revenues  decreased  $0.2 million (4%) to $4.9 million (9% of revenue)
during fiscal 2005 from $5.1 million (13% of revenue)  during fiscal 2004.  This
decrease in warranty revenues results primarily from the continued transition of
Pre-Patterson  legacy  customers  to  Patterson  for their  service and warranty
needs.

      Patterson  revenue amounted to 61% and 55% of total revenue in fiscal 2005
and 2004,  respectively.  No other  individual  customer  exceeded  10% of total
revenue.  Overall sales returns  remained under 1% of revenue in fiscal 2005 and
2004.

      Total cost of sales for fiscal 2005  increased $3.4 million (29%) to $14.9
million (28% of revenue) from $11.5 million (29% of revenue) in fiscal 2004. The
relative cost of sales declined as a result of the Company's  improved operating
efficiency and its ability to leverage  relatively fixed overhead.  This overall
improvement  is net of lower gross  margins from the  Company's  newest  product
offerings as the Company seeks to expand its product base.

      Selling and marketing expense for fiscal 2005 increased $1.0 million (16%)
to $7.1  million  (14% of revenue)  from $6.1 million (16% of revenue) in fiscal
2004.  Increased  sales and sales  activities  resulted  in higher  payroll  and
commission expenses.

      General and administrative  expense for fiscal 2005 increased $0.6 million
(9%) to $6.9  million  (13% of revenue)  from $6.3  million  (16% of revenue) in
fiscal 2004.  Increases  are  principally  the result of fees incurred to comply
with Sarbanes-Oxley Act internal control reporting requirements.

      Research and  development  expense in fiscal 2005  increased  $1.5 million
(46%) to $4.8  million  (9% of  revenue)  from $3.3  million  (8% of revenue) in
fiscal 2004. The increase is the result of higher payroll and research-materials
expenses that related to new and ongoing projects and to charges relating to the
Company's  three-year  consulting  agreement with a former  executive,  who is a
current shareholder, entered into in May 2004.

      Interest  expense in fiscal 2005  decreased  to zero from $0.2  million in
fiscal 2004 due to the Company's June 2003 prepayment of the outstanding balance
of its loan from Greystone Funding Corporation ("Greystone"). Interest income in
fiscal 2005 increased $0.3 million to $0.5 million as the Company  increased the
amount of cash equivalents it held in short-term investments.

      Income before income taxes in fiscal 2005  increased $7.1 million (58%) to
$19.3 million (37% of revenue) from 12.2 million (31% of revenue) in fiscal 2004
as a result of the items discussed above.

      During fiscal 2005,  income tax expenses  increased  $13.1 million to $7.2
million from a tax benefit of $5.9 million in fiscal 2004.  In fiscal 2004,  the
deferred tax valuation  allowance was reduced to zero, more than offsetting that
year's current and deferred income tax charges. Consequently, net income for the
year ended March 31, 2004 was $11.4  million  ($0.67 per diluted  share)  higher
than would otherwise have been reported if such reduction had not been recorded.
During  fiscal 2005,  the  Company's  utilization  of its net  operating  losses
resulted in a reduction of current taxes of $6.9 million. At March 31, 2005, the
Company  used  all  of  its  net  operating  loss   carryforward.   Tax  credits
approximating $2.4 million are available to offset future income taxes.

      As a result of all of the  foregoing  items,  the  Company's net income in
fiscal 2005 decreased by $6.0 million


                                       18
<PAGE>

(33%) to $12.1 million from $18.1 million in fiscal 2004.

Fiscal Year Ended March 31, 2004 as Compared to Fiscal Year Ended March 31, 2003

      In fiscal 2004, we  introduced  the first  digital  wireless  sensor and a
fully integrated  digital panoramic machine.  Continued  acceptance of these and
other digital products is important to our success.

      During  fiscal 2004,  Eastman  Kodak  Company  entered the digital  dental
market when it acquired  PracticeWorks,  a practice  management software company
with a digital sensor  manufacturing and marketing subsidiary located in France.
The entry of Kodak  into the  market  did not  adversely  affect  the  Company's
revenues or operating margins in fiscal 2004.

      Domestic dental product revenues increased 30% to $23.9 million, or 61% of
revenue.  Foreign dental  product  revenues,  principally  from Europe and Asia,
increased  64% to $9.8  million,  or 25% of revenue.  Management  believes  that
continued  improvement  in the  international  distribution  network  and  wider
acceptance  of the  Company's  products  were  the  key  elements  of  improving
performance. The pace of our international revenue increase far exceeded the 15%
decline in the value of the U.S. dollar during the year.

      Operating   expenses,   with  the  exception  of  legal  fees,  which  are
principally  related to the SEC/US attorney  investigation and SEC civil action,
declined  as a percent of revenue as the  Company  leveraged  its fixed  expense
advantage.  After  several  years of  increasingly  profitable  operations,  the
Company  reduced the reserve for  deferred  income  taxes to zero and recorded a
$6.6 million tax benefit at March 31, 2004.

      Total revenue increased $9.6 million (32%) to $39.4 million in fiscal 2004
from $29.8 million in fiscal 2003. The revenue  increase was due to higher sales
of CDR(R) dental  radiography  products  principally  through expansion of sales
through its  exclusive  domestic  distributor,  Patterson,  and through  foreign
distributors,  principally in Europe and Asia. Total domestic revenues increased
$5.8 million  (24%) to $29.4 million (75% of revenue) from $23.6 million (79% of
revenue) in fiscal 2003.  Total  international  revenues  increased $3.8 million
(62%) to $9.9  million  (25% of revenue)  from $6.2  million (21% of revenue) in
fiscal 2003.

      CDR(R) product revenue  increased $9.3 million (38%) to $33.7 million (86%
of revenue) during fiscal 2004 from $24.4 million (82% of revenue) during fiscal
2003.  AccuDEXA(R)  product  revenue was unchanged at $0.6 million (1% and 2% of
revenue  during fiscal 2004 and fiscal 2003,  respectively).  Warranty  revenues
increased $0.3 million (6%) to $5.1 million (13% of revenue)  during fiscal 2004
from $4.8 million (16% of revenue) during fiscal 2003.

      Patterson  revenue amounted to 55% and 52% of total revenue in fiscal 2004
and 2003,  respectively.  No other  individual  customer  exceeded  10% of total
revenue. Overall sales returns remained under 0.5% of revenue in fiscal 2004 and
2003.

      Total cost of sales for fiscal 2004  increased $1.8 million (19%) to $11.5
million (29% of revenue) from $9.7 million (32% of revenue) in fiscal 2003.  The
relative cost of sales declined as a result of the Company's  improved operating
efficiency.  The Company  leveraged  fixed overhead over the increase in revenue
while improved  product mix resulted in higher  margins.  Additionally,  product
improvements  resulted  in an  overall  reduction  of  expense in support of its
warranty obligations.  The Company's provision for excess and obsolete inventory
decreased to 0.5% of net revenue in fiscal 2004 from 0.9% in fiscal 2003.

      Selling and marketing  expense for fiscal 2004 increased $0.2 million (3%)
to $6.1  million  (16% of revenue)  from $5.9 million (20% of revenue) in fiscal
2003.  Increased  sales and sales  activities  resulted  in higher  payroll  and
commission expenses.

      General and administrative  expense for fiscal 2004 increased $1.3 million
(25%) to $6.3  million  (16% of revenue)  from $5.0  million (17% of revenue) in
fiscal 2003.  Increases  were  principally  the result of legal fees incurred in
connection with the SEC/US attorney  investigation and other corporate business,
other  professional  fees, a non-cash  payroll charge,  higher payroll  expense,
corporate governance costs and insurance expenses.


                                       19
<PAGE>

      Research and  development  expense in fiscal 2004  increased  $0.7 million
(27%) to $3.3  million  (8% of  revenue)  from $2.6  million  (9% of revenue) in
fiscal   2003.   The   increase   was  the   result   of  higher   payroll   and
research-materials expenses related to new and ongoing projects.

      Interest  expense in fiscal  2004  decreased  $0.1  million  (44%) to $0.2
million  from  $0.3  million  in  fiscal  2003 due to the  Company's  June  2003
prepayment of the outstanding balance of its loan from Greystone. The prepayment
resulted in the write-off of $0.2 million of deferred interest expense in fiscal
2004.  Interest  income in fiscal 2004 increased  $0.1million to $0.2 million as
the Company increased investment in bank certificates of deposit.

      During  fiscal  2004,  the Company  reduced  its  deferred  tax  valuation
allowance to zero and recorded a $6.6  million  income tax benefit.  The Company
reduced the valuation allowance because it believed it more likely than not that
the net operating loss carryforward  would be realized.  During fiscal 2004, the
Company's  utilization  of its net operating  losses  resulted in a reduction of
current taxes in the amount of $4.8 million.

      As a result of all of the  foregoing  items,  the  Company's net income in
fiscal 2004  increased by $6.3 million (53%) to $18.1 million from $11.8 million
in fiscal 2003.

Liquidity and Capital Resources

      At  March  31,  2005,  the  Company  had  $39.7  million  in cash and cash
equivalents,  and working capital of $47.1 million, compared to $20.7 million in
cash and cash  equivalents,  and $27.4 million in working capital,  at March 31,
2004. The increase in working capital is primarily attributable to the Company's
increased operating profit during fiscal 2005.

      During fiscal 2005,  cash provided by  operations  increased  $5.2 million
(37%) to $19.0  million,  as  compared  to $13.8  million  during  fiscal  2004.
Accounts receivable  increased to $5.7 million at March 31, 2005, as compared to
$4.0 million at March 31, 2004, due to increased sales  activity.  The allowance
for  doubtful  accounts  decreased  $81,  to $57, at March 31, 2005 from $138 at
March 31, 2004,  due to a settlement  between the Company and the single account
that had  disputed  the  amount  it owed to the  Company.  The  amount  due from
Patterson which was included in accounts  receivable  ($2.8 million at March 31,
2005) was fully collected after year-end.  Inventories increased to $3.5 million
at March 31,  2005  compared  to $3.1  million at March 31, 2004 due to products
introduced in fiscal 2005. The Company's capital expenditures  increased to $0.6
million in fiscal 2005 from $0.3 million in fiscal 2004.  The Company's  capital
expenditures  in fiscal 2005 and 2004  primarily  consisted of tooling costs and
computer upgrades.

      Management   believes  that  its  existing  capital  resources  and  other
potential sources of credit are adequate to meet its current cash requirements.

Off-Balance Sheet Arrangements

      The Company has no off-balance  sheet financing  arrangements or interests
in so-called special purpose entities.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      None.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The response to this item is included as a separate section of this Annual
Report on Form 10-K, beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DATA

      None.


                                       20
<PAGE>

ITEM 9A. CONTROLS AND PROCEDURES

      Evaluation of Disclosure Controls and Procedures

      Our management,  with the participation of our chief executive officer and
principal  accounting  officer,  evaluated the  effectiveness  of our disclosure
controls  and  procedures  (as  defined  in Rules  13a and  15d-15(e)  under the
Securities  and  Exchange Act of 1934),  as of March 31,  2005.  Based upon this
evaluation,  our  chief  executive  officer  and  principal  accounting  officer
concluded  that,  as of March 31, 2005,  the Company's  disclosure  controls and
procedures:  (1) were designed to ensure that material  information  relating to
the Company,  including our consolidated subsidiary,  is made known to our chief
executive  officer  and  principal  accounting  officer by others  within  those
entities,  particularly  during  the  period  in which  this  report  was  being
prepared, and (2) were effective, in that they provide reasonable assurance that
information  required to be  disclosed  by the Company in the reports we file or
submit  under  the  Securities  Exchange  Act of  1934 is  recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.

      Management's Annual Report on Internal Control Over Financial Reporting

      Our management is responsible for  establishing  and maintaining  adequate
internal  control over the  Company's  financial  reporting (as defined in Rules
13a-15(f)  and  15d-15(f)  under the  Exchange  Act).  Because  of its  inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements.  Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become  inadequate  because of changes
in conditions,  or that the degree of compliance with the policies or procedures
may deteriorate.

      Our  management  assessed  the  effectiveness  of the  Company's  internal
control  over  financial  reporting  as  of  March  31,  2005.  In  making  this
assessment,  our  management  used the  criteria  set forth by the  Committee of
Sponsoring   Organizations  of  the  Treadway   Commission  (COSO)  in  Internal
Control-Integrated Framework. Based on our assessment, management believes that,
as of March 31, 2005, our internal control over financial reporting is effective
based on those criteria.

      The  independent  registered  public  accounting  firm which  audited  the
Company's  financial  statements  included  in this  Form  10-K  has  issued  an
attestation report on management's  assessment of the Company's internal control
over financial reporting. The attestation report appears below.

      Report of Independent Registered Public Accounting Firm

      To the Board of Directors and Stockholders of
      Schick Technologies, Inc.

      We have  audited  management's  assessment,  included in the  accompanying
Management's  Annual Report on Internal Control over Financial  Reporting,  that
Schick  Technologies,  Inc. and subsidiary (the "Company")  maintained effective
internal  control  over  financial  reporting  as of March  31,  2005,  based on
criteria  established in Internal  Control--Integrated  Framework  issued by the
Committee  of  Sponsoring  Organizations  of the Treadway  Commission  (the COSO
criteria).  The Company's  management is responsible for  maintaining  effective
internal  control  over  financial  reporting  and  for  its  assessment  of the
effectiveness of internal control over financial  reporting.  Our responsibility
is to  express  an  opinion  on  management's  assessment  and an opinion on the
effectiveness of the Company's  internal control over financial  reporting based
on our audit.

      We  conducted  our audit in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and  perform  the audit to obtain  reasonable  assurance  about  whether
effective  internal  control over  financial  reporting  was  maintained  in all
material  respects.  Our audit included  obtaining an  understanding of internal
control over financial reporting,  evaluating management's  assessment,  testing
and evaluating the design and operating  effectiveness of internal control,  and
performing   such  other   procedures   as  we   considered   necessary  in  the
circumstances.  We believe that our audit  provides a  reasonable  basis for our
opinions.

      A  Company's  internal  control  over  financial  reporting  is a  process
designed to provide reasonable  assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in


                                       21
<PAGE>

accordance with accounting principles generally accepted in the United States of
America.  A company's  internal control over financial  reporting includes those
policies and procedures  that (1) pertain to the maintenance of records that, in
reasonable   detail,   accurately  and  fairly  reflect  the   transactions  and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions  are  recorded as  necessary  to permit  preparation  of  financial
statements in accordance with generally accepted accounting principles, and that
receipts and  expenditures of the company are being made only in accordance with
authorizations  of  management  and  directors of the  company;  and (3) provide
reasonable  assurance  regarding  prevention or timely detection of unauthorized
acquisition,  use,  or  disposition  of the  company's  assets that could have a
material effect on the financial statements.

      Because of its  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies and procedures may deteriorate.

      In our  opinion,  management's  assessment  that  the  Company  maintained
effective  internal  control over  financial  reporting as of March 31, 2005, is
fairly stated, in all material respects, based on the COSO criteria. Also in our
opinion,  the Company maintained,  in all material respects,  effective internal
control  over  financial  reporting  as of  March  31,  2005,  based on the COSO
criteria.

      We have also  audited,  in  accordance  with the  standards  of the Public
Company  Accounting  Oversight Board (United States),  the consolidated  balance
sheets of the Company as of March 31, 2005 and 2004 and the related consolidated
statements of income, changes in stockholder's equity and cash flows for each of
the three  years in the period  ended  March 31,  2005 and  financial  statement
schedule as of and for the three years ended March 31, 2005 of the Company,  and
our  report  dated  May 13,  2005  expressed  an  unqualified  opinion  on those
financial statements and financial statements schedule.


/s/ Grant Thornton LLP
New York, New York
May 13, 2005

      Changes in Internal Control over Financial Reporting

      No change in our internal control over financial  reporting (as defined in
rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act)  occurred  during the
quarter  ended March 31, 2005 that has  materially  affected,  or is  reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

ITEM 9B. OTHER INFORMATION

      None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) The Directors of the Company are as follows:

<TABLE>
<S>                        <C>
Euval Barrekette, Ph.D.    Age 74, has served as a Director of the Company since April 1992 and as a member
                           of the Executive Compensation Committee of the Board of Directors since November
                           2002. Dr. Barrekette's current term on the Board expires at the Company's Annual
                           Meeting of  Stockholders  in 2005.  Dr.  Barrekette  is a licensed  Professional
                           Engineer  in New York State.  Since 1986 Dr.  Barrekette  has been a  consulting
                           engineer and physicist.  From 1984 to 1986 Dr.  Barrekette was Group Director of
                           Optical  Technologies  of the IBM  Large  Systems  Group.  From 1960 to 1984 Dr.
                           Barrekette  was  employed  at IBM's  T.J.  Watson  Research  Center  in  various
                           capacities, including Assistant Director of Applied Research, Assistant Director
                           of Computer Science, Manager of Input/Output  Technologies and Manager of Optics
                           and Electrooptics.  Dr. Barrekette holds an A.B. degree from
</TABLE>


                                       22
<PAGE>

<TABLE>
<S>                        <C>
                           Columbia College, a B.S. degree from Columbia  University School of Engineering,
                           an M.S.  degree from its  Institute of Flight  Structures  and a Ph.D.  from the
                           Columbia  University  Graduate  Faculties.  Dr.  Barrekette  is a fellow  of the
                           American  Society  of Civil  Engineers,  a Senior  Member  of the  Institute  of
                           Electrical &  Electronics  Engineers,  and a member of The  National  Society of
                           Professional  Engineers,  The New York State Society of Professional  Engineers,
                           The  Optical  Society  of  America  and The New York  Academy  of  Science.  Dr.
                           Barrekette is the brother-in-law of Dr. Allen Schick.

William K. Hood            Age 81, has served as Chairman of the Board of Directors  since June 2004,  as a
                           Director of the Company and as Chairman of the Audit  Committee  of the Board of
                           Directors  since  February  2002,  as a  member  of the  Executive  Compensation
                           Committee  of the Board of Directors  since  November  2002,  as a member of the
                           Special Litigation Committee of the Board of Directors since September 2003, and
                           as a  member  of the  Nominating  Committee  of the  Board  of  Directors  since
                           September  2004.  Mr. Hood's  current term on the Board expires at the Company's
                           Annual Meeting of  Stockholders in 2007. From 1989 to 1996, Mr. Hood served as a
                           consultant to Harlyn  Products,  Inc. and as a member of its Board of Directors.
                           From 1983 to 1988, he was Senior  Vice-President  of American  Bakeries Company.
                           From 1981 to 1983, Mr. Hood served as Dean of the Chapman  University  School of
                           Business and Management. From 1972 to 1980, he was President and Chief Executive
                           Officer of  Hunt-Wesson  Foods,  Inc. Mr. Hood is currently a Trustee of Chapman
                           University.

Arthur D. Kowaloff         Age 58, has served as a Director  of the  Company  since  October  2004 and as a
                           member  of the  Audit  Committee  of  the  Board  of  Directors,  the  Executive
                           Compensation  Committee of the Board of  Directors,  and Chairman of the Special
                           Litigation  Committee  of the  Board  of  Directors  since  November  2004.  Mr.
                           Kowaloff's  current term on the Board expires at the Company's Annual Meeting of
                           Stockholders  in 2005.  From 1998 to 2003,  Mr.  Kowaloff  served as a  Managing
                           Director of BNY Capital Markets,  Inc. From 1991 to 1998, he was Chief Operating
                           Officer and Senior Managing Director of Patricof & Company Capital  Corporation.
                           Prior to that, Mr. Kowaloff was an attorney at the New York City firm of Willkie
                           Farr &  Gallagher,  where he served as Senior  Partner and  Executive  Committee
                           Member  and  specialized  in  corporate  and  securities  law  and  mergers  and
                           acquisitions.  Mr.  Kowaloff  is  currently  President  and  Director of the PBP
                           Foundation of New York and a Director of the Orange County  Capital  Development
                           Corporation. Mr. Kowaloff holds a Juris Doctor degree from Yale Law School.

Curtis M. Rocca III        Age 42,  has served as a Director  of the  Company  and as a member of the Audit
                           Committee of the Board of Directors since May 2002, as Chairman of the Executive
                           Compensation  Committee  of the Board of Directors  since  November  2002,  as a
                           member of the  Special  Litigation  Committee  of the Board of  Directors  since
                           September  2003 and as a member  of the  Nominating  Committee  of the  Board of
                           Directors since September 2004. Mr. Rocca's current term on the Board expires at
                           the Company's  Annual Meeting of Stockholders in 2007. Since 2000, Mr. Rocca has
                           been the Managing Partner of Douglas, Curtis & Allyn, LLC. From 1998 to 2000, he
                           served as Chief Executive  Officer of Dental  Partners,  Inc. From 1990 to 1998,
                           Mr. Rocca was Chairman and Chief  Executive  Officer of Bio-Dental  Technologies
                           Corp. (NASDAQ: BDTC).

Allen Schick, Ph.D.        Age 70, has served as a Director  of the  Company  since  April  1992,  and as a
                           member of the Executive  Compensation  Committee of the Board of Directors since
                           November 2002. Dr.  Schick's  current term on the Board expires at the Company's
                           Annual  Meeting of  Stockholders  in 2006.  Since  1981,  Dr.  Schick has been a
                           professor at the University of Maryland and, in 2000, was elected "Distinguished
                           University Professor",  a title reserved for fewer than 2% of the faculty. Since
</TABLE>


                                       23
<PAGE>

<TABLE>
<S>                        <C>
                           1988, Dr. Schick has been a Visiting  Fellow at the Brookings  Institution.  Dr.
                           Schick  holds  a  Ph.D.   degree  from  Yale  University.   Dr.  Schick  is  the
                           brother-in-law of Dr. Barrekette.

Jeffrey T. Slovin          Age 40, has served as the Company's Chief Executive  Officer since June 2004 and
                           as its President  since  December 1999. Mr. Slovin has also served as a Director
                           of the Company since December 1999. In addition,  from November 2001 to June 15,
                           2004, Mr. Slovin served as the Company's Chief Operating  Officer.  Mr. Slovin's
                           current  term  on  the  Board  expires  at  the  Company's   Annual  Meeting  of
                           Stockholders  in 2007.  Since November 2002, Mr. Slovin has been a member of the
                           Board of Directors of  Electronic  Global  Holdings  Ltd.  From 1999 to November
                           2001,  Mr. Slovin was a Managing  Director of Greystone & Co., Inc. From 1996 to
                           1999, Mr. Slovin served in various executive  capacities at Sommerset Investment
                           Capital LLC, including  Managing Director,  and as President of Sommerset Realty
                           Investment Corp.  During 1995, Mr. Slovin was a Manager at Fidelity  Investments
                           Co. From 1991 to 1994, Mr. Slovin was Chief Financial  Officer of Sports Lab USA
                           Corp.  and, from 1993 to 1994,  was also  President of Sports and  Entertainment
                           Inc. From 1987 to 1991, Mr. Slovin was an associate at Bear Stearns & Co., Inc.,
                           specializing in mergers and acquisitions and corporate finance. Mr. Slovin holds
                           an MBA degree from Harvard Business School.
</TABLE>

(b) The following  table shows the names and ages of all  executive  officers of
the  Company,  the  positions  and offices  held by such  persons and the period
during  which each such person has served as an  officer.  The term of office of
each person is generally not fixed since each person serves at the discretion of
the Board of Directors of the Company.

                                             Officer
Name                        Age              Position                     Since
----                       -----           ------------                  -------

Jeffrey T. Slovin........   40     Chief Executive Officer, President     1999
                                   and Director
Michael Stone............   52     Executive Vice-President of Sales      2000
                                   and Marketing
Stan Mandelkern..........   45     Vice President of Engineering          1999
Ari Neugroschl...........   34     Vice President of Management           2000
                                   Information Systems
Zvi N. Raskin............   42     Secretary and General Counsel          1992
Will Autz................   51     Vice President of Manufacturing        2003
Ronald Rosner............   58     Director of Finance and
                                   Administration                         2000

      The business  experience  of each of the  executive  officers who is not a
Director is set forth below.

MICHAEL STONE has served as the Company's  Executive Vice President of Sales and
Marketing  since September 2000 and as the Company's Vice President of Sales and
Marketing  from January 2000 to September  2000.  From September 1993 to January
2000,  Mr.  Stone was  General  Manager of the Dental  Division  of  Welch-Allyn
Company,  and from October 1989 to September  1993 was Director of Marketing for
Welch-Allyn. Mr. Stone holds an MBA degree from the University of Rochester.

STAN MANDELKERN has served as the Company's Vice President of Engineering  since
November 1999. From 1998 to 1999, Mr.  Mandelkern was the Company's  Director of
Electrical Engineering, and was a Senior Electrical Engineer at the Company from
1997 to 1998.  From 1996 to 1997,  Mr.  Mandelkern  was  employed  at  Satellite
Transmission  Systems as Project  Leader for the Digital Video  Products  Group.
From 1989 to 1996, Mr.  Mandelkern held various design and management  positions
at Loral Corp. Mr.  Mandelkern  holds an M.S.  Degree in electrical  engineering
from Syracuse University.


                                       24
<PAGE>

ARI  NEUGROSCHL  has  served  as the  Company's  Vice  President  of  Management
Information  Systems  since  July 2000.  From  November  1997 to July 2000,  Mr.
Neugroschl was the Company's  Director of Management  Information  Systems,  and
from  February  1996 to  November  1997 he served as the  Company's  Director of
Customer  Service and Support.  Mr.  Neugroschl  holds a B.S. in Economics  from
Yeshiva University.

ZVI N. RASKIN has served as  Secretary  of the  Company  since April 1992 and as
General  Counsel of the Company  since  September  1995.  From April 1992 to May
1996,  Mr.  Raskin was a Director  of the  Company.  Mr.  Raskin is  admitted to
practice  law  before  the Bars of the  State of New  York,  the  United  States
District  Courts for the  Southern  and  Eastern  Districts  of New York and the
United States Court of Appeals for the Second  Circuit.  From 1992 to 1995,  Mr.
Raskin was a senior associate at the New York law firm of Townley & Updike.  Mr.
Raskin holds a J.D. degree from Yale Law School.

WILL AUTZ has served as the  Company's  Vice  President of  Manufacturing  since
January  2003.  From January 2000 to December  2002,  Mr. Autz was the Company's
Director  of  Manufacturing.  From 1996 to 1999,  Mr.  Autz was the  Manager  of
Manufacturing  Engineering at Trident International Inc., a division of Illinois
Tool Works Inc. From 1991 to 1996, Mr. Autz was the Director of  Manufacturing &
Manufacturing  Engineering  at General  Signal  Networks,  a division of General
Signal Inc.  Mr. Autz holds a BS in  Electromechanical  Technology  from the New
York  Institute  of  Technology  and is a  member  of the  American  Society  of
Manufacturing Engineers.

RONALD ROSNER has served as the Company's Director of Finance and Administration
since August 2000. From March 1999 to August 2000, Mr. Rosner served the Company
in several  senior  accounting  and financial  capacities.  From October 1998 to
February 1999, Mr. Rosner was a Consultant at Mercantile Ship  Corporation,  and
from April 1997 to October  1998 was the CFO at Coast MFG.  Mr.  Rosner  holds a
B.S. degree in Accounting from Brooklyn  College and has been a Certified Public
Accountant in the State of New York since May 1972.  Prior to 1999, for a period
of  approximately  four  years,  Mr.  Rosner  was  an  audit  manager  with  the
predecessor to Ernst & Young LLP.

(c) Not applicable.

(d) Family Relationships

      See Item 10(a).

(e) Business Experience

      See Items 10(a) and 10(b).

(f) Involvement in Certain Legal Proceedings

      There are no legal proceedings involving any of the Company's Directors or
Officers which are reportable hereunder.

Audit Committee Financial Experts

      The Company's  Board of Directors has determined that three members of the
Audit  Committee,  Mr.  Hood,  Mr.  Rocca  and Mr.  Kowaloff,  are  "independent
directors" and "audit committee  financial  experts," as those terms are defined
by the Securities and Exchange Commission.

Section 16(A) Beneficial Ownership Reporting Compliance

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  the
Company's executive officers and directors and persons who beneficially own more
than 10% of the Company's  Common Stock to file initial reports of ownership and
reports of changes in ownership with the Commission. Such executive officers and
directors and greater than 10% beneficial owners are required by the regulations
of the  Commission  to furnish  the Company  with  copies of all  Section  16(a)
reports they file.

      Based  solely on a review of the copies of such  reports  furnished to the
Company and/or written  representations  from executive  officers and directors,
the Company believes that all Section 16(a) filing


                                       25
<PAGE>

requirements applicable to its executive officers and directors and greater than
10% beneficial owners were complied with.

Code of Ethics

      On June 2, 2004,  by  resolution  of its Board of  Directors,  the Company
adopted a code of ethics governing the conduct of Company  personnel,  including
its  principal  executive  officer,   principal  financial  officer,   principal
accounting officer or controller,  or persons  performing  similar functions.  A
copy of the  current  code of  ethics is  available  on the  Company's  Internet
website at  http://www.schicktech.com.  In  addition,  a copy of the code may be
obtained  by  shareholders  upon  request  by  contacting  Michael  Friedlander,
Associate General Counsel, at 718-937-5765.

      In the event that any  amendment  is made to the code of ethics,  and such
amendment is applicable to the Company's principal executive officer,  principal
financial  officer,  principal  accounting  officer  or  controller,  or persons
performing similar functions,  the Company shall disclose the nature of any such
amendment on its Internet  website  within five business days following the date
of the amendment.  In the event that the Company  grants a waiver,  including an
implicit  waiver,  from a  provision  of the code of  ethics,  to its  principal
executive officer,  principal financial officer, principal accounting officer or
controller,  or persons performing similar functions, the Company shall disclose
the  nature of any such  waiver,  including  the name of the  person to whom the
waiver is granted and the date of such waiver,  on its Internet  website  within
five business  days  following  the date of the waiver.  The Company's  Internet
website address is http://www.schicktech.com.

ITEM 11. EXECUTIVE COMPENSATION

      The following table sets forth certain information concerning compensation
received  for the  fiscal  years  ended  March  31,  2005,  2004 and 2003 by the
Company's chief executive  officer and each of the four most highly  compensated
executive  officers of the Company  whose  total  salary and other  compensation
exceeded  $100,000  (the  "Named  Executives")  for  services  rendered  in  all
capacities  (including  service as a director  of the  Company)  during the year
ended March 31, 2005.

Summary Compensation Table

<TABLE>
<CAPTION>
                                                       Annual                  Long-Term
                                                    Compensation          Compensation Awards
                                                    ------------          -------------------
                                                                          Other
                                                                          Annual     Securities     All Other
    Name and Principal               Fiscal                              Compensa-   Underlying     Compensa-
         Position                     Year     Salary ($)    Bonus ($)    tion (1)   Options (2)   tion($) (3)
--------------------------------------------------------------------------------------------------------------
<S>                                   <C>       <C>           <C>            <C>       <C>          <C>
Jeffrey T. Slovin                     2005      313,561       243,750        --        400,000       13,519
Chief Executive Officer               2004      266,378       100,000        --          7,318        5,128
and President                         2003      246,646        90,463        --          8,502        6,710
-----------------------------------------------------------------------------------------------------------
Michael Stone                         2005      243,578       187,500        --        150,000        5,146
Executive Vice President of           2004      224,700        68,552        --          6,851        5,023
Sales and Marketing                   2003      212,487        45,232        --          7,439        5,894
-----------------------------------------------------------------------------------------------------------
Zvi N. Raskin, Esq.                   2005      195,152        17,198        --          5,800        4,605
General Counsel and                   2004      235,532        13,530        --          7,111        5,068
Secretary                             2003      222,690        28,025        --          7,793        5,078
-----------------------------------------------------------------------------------------------------------
Stan Mandelkern                       2005      189,166        98,448        --         38,000        5,162
Vice President of                     2004      172,895        35,031        --          6,606        5,057
Engineering                           2003      163,241         5,952        --          7,240        4,081
-----------------------------------------------------------------------------------------------------------
Ronald Rosner                         2005      164,884        14,558        --          6,000        4,346
Director of Finance                   2004      160,538         8,968        --          4,726        4,146
and Administration                    2003      143,846         5,287        --          6,420        3,596
-----------------------------------------------------------------------------------------------------------
David B. Schick                       2005       72,739(4)         --        --             --      270,986(5)
Former Chief Executive Officer        2004      266,185       100,000        --          7,379        5,121
and Former Chairman of the Board      2003      246,540        90,463        --          8,572        6,708
-----------------------------------------------------------------------------------------------------------
</TABLE>


                                       26
<PAGE>

(1)   Does not include other  compensation if the aggregate  amount thereof does
      not exceed the lesser of either  $50,000 or 10% of the total annual salary
      and bonus for the named officer.

(2)   Represents  options to  purchase  shares of Common  Stock  granted  during
      fiscal 2005, 2004 and 2003,  pursuant to the Company's 1996 Employee Stock
      Option Plan.

(3)   Reflects  amounts  contributed  by the  Company  in the  form of  matching
      contributions to the Named Executive's  Savings Plan account during fiscal
      2005,  2004 and 2003, as well as consulting  fees paid by the Company,  in
      the case of Mr. Schick. See Note 5, below.

(4)   Salary in the amount of $72,739 was paid to Mr.  Schick  during the period
      of April 1, 2004 through June 15, 2004, when he was the Company's CEO.

(5)   Consulting  fees in the amount of $269,167  were paid to Mr. Schick during
      the  period of June 16,  2004  through  March 31,  2005,  pursuant  to the
      Consulting and  Non-Competition  Agreement with the Company,  as described
      below.   See   "Employment   Agreements  and   Termination  of  Employment
      Arrangements."

Employment Agreements and Termination of Employment Arrangements

      In June, 2004, the Company entered into a three-year  employment agreement
with Jeffrey T. Slovin. Pursuant to the Agreement, Mr. Slovin is employed as the
Company's Chief Executive Officer and President. Mr. Slovin's annual base salary
is  $325,000,  $337,000  and  $350,000,  respectively,  during  each year of the
initial 3-year term of the Agreement.  In addition to base salary, Mr. Slovin is
eligible to receive a yearly bonus payment based on the Company's year-over-year
Earnings-Per-Share  growth,  as  defined  in  the  Agreement.  Pursuant  to  the
Agreement, Mr. Slovin was also awarded 400,000 employee stock options which vest
in equal monthly increments over a period of 48 months. Additionally,  under the
Agreement, all Company stock options held by Mr. Slovin will immediately vest in
the event that the  Company  has a change in control or is  acquired  by another
company or entity, or, under certain circumstances,  if Mr. Slovin is terminated
from employment without cause. In addition,  if Mr. Slovin is terminated without
cause, the Agreement  provides that he shall receive severance payments equal to
12 months' salary and, if applicable, a pro-rated bonus.

      In June,  2004, the Company entered into a two-year  employment  agreement
with  Michael  Stone.  Pursuant to the  Agreement,  Mr. Stone is employed as the
Company's  Executive Vice  President of Sales and Marketing.  Mr. Stone's annual
base  salary is $250,000  and  $260,000,  respectively,  during each year of the
2-year term of the Agreement.  In addition to base salary, Mr. Stone is eligible
to  receive  a  yearly  bonus  payment  based  on the  Company's  year-over-year
Earnings-Per-Share  growth,  as  defined  in  the  Agreement.  Pursuant  to  the
Agreement,  Mr. Stone was also awarded 150,000 employee stock options which vest
in equal monthly increments over a period of 48 months. Additionally,  under the
Agreement,  all Company stock options held by Mr. Stone will immediately vest in
the event that the  Company  has a change in control or is  acquired  by another
company or entity, or, under certain  circumstances,  if Mr. Stone is terminated
from employment  without cause. In addition,  if Mr. Stone is terminated without
cause, the Agreement  provides that he shall receive severance payments equal to
12 months' salary and, if applicable, a pro-rated bonus.


                                       27
<PAGE>

      In May 2004,  the Company  entered into a Consulting  and  Non-Competition
Agreement  with David Schick,  effective upon Mr.  Schick's  resignation in June
2004 as the Company's  Chief  Executive  Officer and Chairman of the Board.  The
Agreement  provided for the  termination  of Mr.  Schick's  previous  employment
agreement  with the Company,  and for Mr.  Schick to act as a consultant  to the
Company for a period of three years.  The Agreement  provides that Mr. Schick is
responsible for performing  certain specified duties,  including the exploration
and  evaluation  of new product  ideas and  enhancements,  evaluating  technical
issues  relating  to  potential  products  or  entity  acquisitions,  conducting
research  and  development  projects,  and  providing  advice  with  respect  to
intellectual  property issues.  The Agreement also provides that during the term
of the Agreement,  and for a period of two years thereafter,  Mr. Schick may not
compete with the Company or solicit Company employees,  customers or vendors. In
addition,  Mr.  Schick  is  required  to  maintain  the  confidentiality  of the
Company's  proprietary  information.  Pursuant to the  Agreement,  Mr. Schick is
compensated, as full payment for the consulting services rendered to the Company
and for his non-competition  and other covenants contained in the Agreement,  in
the amount of $28,333 per month for the term of the Agreement.  In addition, the
Agreement  provides  that 66,307  unvested  employee  stock  options held by Mr.
Schick remain eligible for continued vesting.

Compensation of Directors

      Directors  who are also paid  employees of the Company are not  separately
compensated  for any services  they provide as directors.  In fiscal 2005,  each
director of the Company who was not a paid employee  received an annual retainer
of  $10,000  as well as $1,000 for each  Board  meeting  attended  in person and
$1,000 for each Audit Committee  meeting attended in person.  In addition to the
foregoing  payments,  each  chairman of the Audit,  Executive  Compensation  and
Special Litigation Committees received an annual retainer of $5,000; each member
of the Audit Committee  received an annual retainer of $5,000;  and the Chairman
of the Board of Directors  received an annual  retainer of $30,000.  The Company
was  permitted  to,  but did  not,  pay such  fees in  Common  Stock.  Moreover,
directors  who are not paid  employees  of the Company  are  eligible to receive
annual grants of stock options under the Company's Directors Stock Option Plan.

Compensation Committee Interlocks and Insider Participation

      The Executive  Compensation  Committee  reviews and makes  recommendations
regarding the  compensation  of top management and key employees of the Company,
including  salaries  and  bonuses.  The  members of the  Executive  Compensation
Committee  during the fiscal year ended  March 31,  2005 were Euval  Barrekette,
Jonathan Blank (who resigned from the Board in February 2005),  William K. Hood,
Arthur D.  Kowaloff  (who was  appointed  to serve as a Member of the  Executive
Compensation  Committee in November 2004),  Uri Landesman (who resigned from the
Board in February  2005),  Curtis M. Rocca,  who serves as  Chairman,  and Allen
Schick.  None of such  persons is an officer or employee,  or former  officer or
employee,  of the  Company  or  any of its  subsidiaries.  Mr.  Schick  and  Mr.
Barrekette are brothers-in-law.  No interlocking relationship existed during the
fiscal year ended March 31, 2005,  between the members of the Company's Board of
Directors or  Compensation  Committee and the board of directors or compensation
committee  of any  other  company,  nor had any such  interlocking  relationship
existed in the past.

Stock Option Grants

      The following table sets forth information  regarding grants of options to
purchase  Common Stock made by the Company  during the year ended March 31, 2005
to each of the Named Executives.


                                       28
<PAGE>

                        Option Grants in Fiscal 2005 (1)

<TABLE>
<CAPTION>
                           Individual Grants
                      Number of      Percent of
                      Securities   Total Options
                      Underlying     Granted to       Exercise
                       Options      Employees in        Price       Expiration     Grant Date
Name                   Granted     Fiscal 2005 (2)    ($/Share)        Date         Value (3)
----                  ----------   ---------------    ---------        ----         ---------
<S>                     <C>              <C>            <C>            <C>         <C>
Jeffrey T. Slovin       400,000          53.0%          $10.50         6/9/14      $2,360,000
Michael Stone           150,000          19.9%          $10.50         6/9/14        $888,000
Stan Mandelkern          38,000           5.0%             (4)            (4)        $224,960
Zvi N. Raskin             5,800            .8%          $10.36        11/4/14         $34,336
Ronald Rosner             6,000            .8%          $10.36        11/4/14         $35,520
</TABLE>

(1)   One "Named  Executive",  the Company's  Former CEO, David Schick,  was not
      granted any options during fiscal 2005.

(2)   The  Company  granted  employees  options  to  purchase a total of 755,000
      shares of Common Stock in fiscal 2005.

(3)   The Company uses the Black-Scholes  valuation model to determine the grant
      date value. Assumptions used to calculate the grant date value include:

               Volatility                             70%
               Risk-free interest rate              1.11%
               Dividend yield                       None
               Time of exercise                  4 years

(4)   8,000 of Mr.  Mandelkern's  options  listed  in the  above  table  have an
      exercise price of $10.36 per share,  and an expiration date of November 4,
      2014. The remaining 30,000 of his listed options have an exercise price of
      $10.50 per share, and an expiration date of June 9, 2014.

Option Exercises and Year-End Value Table

      The following table sets forth information regarding the exercise of stock
options during fiscal 2005 and the number and value of unexercised  options held
at March 31, 2005 by each Named Executive.

           Aggregated Option Exercises in Fiscal 2005 and Fiscal 2005
                             Year-End Option Values

<TABLE>
<CAPTION>
                                                           Number of
                                                           Securities               Value of
                                                           Underlying              Unexercised
                                                          Unexercised            "In-the-Money"
                                                           Options at              Options at
                          Shares                         March 31, 2005          March 31, 2005
                       Acquired on        Value           Exercisable/            Exercisable/
Name                   Exercise(#)     Realized ($)       Unexercisable         Unexercisable(1)
----                   -----------     ------------       -------------         ----------------
<S>                       <C>            <C>             <C>                 <C>
Jeffrey T. Slovin              --               --       261,080/334,740     $3,474,422/2,308,907(2)
Michael Stone                  --               --       193,762/130,735        2,861,839/926,708
Stan Mandelkern                --               --        74,059/46,575         1,073,995/358,421
Zvi N. Raskin                  --               --        32,690/15,031          202,307/148,475
Ronald Rosner                  --               --        42,809/11,685          666,965/106,934
David B. Schick           166,840        1,070,299           0/9,820                0/110,753
</TABLE>

(1)   Options  are  "in-the-money"  if the fair market  value of the  underlying
      securities  exceeds the  exercise  price of the  options.  The amounts set
      forth represent the difference between $17.25 per share, the closing price
      per  share  on March  31,  2005,  and the  exercise  price of the  option,
      multiplied by the applicable number of options.


                                       29
<PAGE>

(2)   This chart does not include  warrants  issued to Mr. Slovin as designee of
      Greystone. Such warrants are discussed in Item 12 below.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      The following table sets forth certain  information  regarding  beneficial
ownership  of the  Company's  Common Stock as of June 8, 2005 by (i) each person
who is known by the  Company  to own  beneficially  more  than 5% of the  Common
Stock,  (ii) each director,  (iii) each Named  Executive of the Company and (iv)
all directors and executive officers of the Company as a group. Unless otherwise
noted,  the  stockholders  listed in the table have sole  voting and  investment
powers with respect to the shares of Common Stock owned by them.

<TABLE>
<CAPTION>
                                                   Number of Shares          Percentage of
            Name                                Beneficially Owned (1)     Outstanding Shares
            ----                                ----------------------     ------------------
<S>                                                  <C>                          <C>
            Euval S. Barrekette                        193,240(2)                  1.2%
            Greystone Funding Corp. (3)              4,527,716(4)                 28.2%
            William K. Hood                             90,250(5)                    *
            Arthur D. Kowaloff                          15,000(6)                    *
            Stan Mandelkern                             81,260(7)                    *
            Zvi N. Raskin                               67,691(8)                    *
            Curtis M. Rocca                             40,000(9)                    *
            Ronald Rosner                               41,740(10)                   *
            Allen Schick                               497,484(11)                 3.0%
            David B. Schick                            360,990(12)                 2.2%
            Jeffrey T. Slovin                        1,090,144(13)                 6.8%
            Michael Stone                              274,189(14)                 1.7%
            All current executive Officers
              and Directors as a group (15)          2,601,490                    15.4%
</TABLE>

*     Less than 1%

(1)   Beneficial  ownership  is  determined  in  accordance  with  rules  of the
      Securities  and  Exchange  Commission  and  includes  voting  power and/or
      investment  power  with  respect  to  securities.  Shares of Common  Stock
      subject to options or warrants currently exercisable or exercisable within
      60 days of June 8, 2005 are deemed  outstanding  for  computing the number
      and the percentage of outstanding shares  beneficially owned by the person
      holding  such  options  or  warrants  but are not deemed  outstanding  for
      computing the percentage beneficially owned by any other person.

(2)   Consists of 115,740 shares held by Dr.  Barrekette;  2,500 shares issuable
      upon the  exercise of stock  options  granted to Dr.  Barrekette  in July,
      1998; 30,000 shares issuable upon the exercise of stock options granted to
      Dr. Barrekette in June, 2000,  pursuant to the 1997 Directors Stock Option
      Plan, 30,000 shares issuable upon the exercise of stock options granted to
      Dr.  Barrekette in December  2001,  pursuant to the 1997  Directors  Stock
      Option Plan; and 15,000 shares issuable upon the exercise of stock options
      granted to Dr. Barrekette in February 2004, pursuant to the 1997 Directors
      Stock Option Plan.

(3)   Greystone's address is 152 West 57th Street, New York, New York 10019.

(4)   Consists of 3,975,216  restricted shares issued upon the cashless exercise
      of 4,250,000  warrants in March 2004 and 552,500  restricted shares issued
      upon the  exercise,  for cash, of 552,500  warrants in March 2004,  all of
      which are subject to a registration rights agreement.

(5)   Consists of 30,250 shares held by Mr. Hood,  30,000  shares  issuable upon
      the  exercise  of stock  options  granted to Mr.  Hood in  February  2002,
      pursuant to the 1997 Directors  Stock Option Plan;  15,000 shares issuable
      upon the exercise of stock options  granted to Mr. Hood in February  2004,
      pursuant  to the 1997  Directors  Stock  Option  Plan;  and 15,000  shares
      issuable  upon the exercise of stock  options  granted to Mr. Hood in June
      2004, pursuant to the 1997 Directors Stock Option Plan.

(6)   Consists of 15,000  shares  issuable  upon the  exercise of stock  options
      granted to Mr. Kowaloff in


                                       30
<PAGE>

      November 2004, pursuant to the 1997 Directors Stock Option Plan.

(7)   Consists of 1,000 shares held by Mr.  Mandelkern;  2,000  shares  issuable
      upon the  exercise of stock  options  granted to Mr.  Mandelkern  in April
      1998;  5,000 shares issuable upon the exercise of stock options granted to
      Mr.  Mandelkern in July 1998;  2,560 shares  issuable upon the exercise of
      stock  options  granted to Mr.  Mandelkern  in March 1999;  29,120  shares
      issuable upon the exercise of stock options  granted to Mr.  Mandelkern in
      January 2000;  20,880  shares  issuable upon the exercise of stock options
      granted to Mr.  Mandelkern in January 2001; 9,288 shares issuable upon the
      exercise of stock options granted to Mr. Mandelkern in October 2001; 3,620
      shares  issuable  upon  the  exercise  of  stock  options  granted  to Mr.
      Mandelkern in November  2002;  1,652 shares  issuable upon the exercise of
      stock options granted to Mr. Mandelkern in November 2003; and 7,500 shares
      issuable upon the exercise of stock options  granted to Mr.  Mandelkern in
      June 2004.

(8)   Consists of 35,000  shares issued by the Company to Mr. Raskin on February
      6, 2000,  which were  subject to  restrictions  on their sale or  transfer
      which have  expired;  2,343  shares  issuable  upon the  exercise of stock
      options  granted to Mr. Raskin in July 1997; 2006 shares issuable upon the
      exercise  of options  granted to Mr.  Raskin in April 1998;  5,000  shares
      issuable upon the exercise of options  granted to Mr. Raskin in July 1998;
      10,000 shares  issuable upon the exercise of options granted to Mr. Raskin
      in October  1998,  3,306  shares  issuable  upon the  exercise  of options
      granted to Mr.  Raskin in October  2001;  6,250 shares  issuable  upon the
      exercise of stock options  granted to Mr. Raskin in December  2001;  2,008
      shares  issuable  upon the  exercise of options  granted to Mr.  Raskin in
      November  2002;  and 1,778  shares  issuable  upon the  exercise  of stock
      options granted to Mr. Raskin in November 2003.

(9)   Consists of 2,000 shares held by Mr. Rocca;  30,000  shares  issuable upon
      the exercise of stock options granted to Mr. Rocca in July 2002,  pursuant
      to the 1997 Directors  Stock Option Plan;  and 8,000 shares  issuable upon
      the  exercise of stock  options  granted to Mr.  Rocca in  February  2004,
      pursuant to the 1997 Directors Stock Option Plan.

(10)  Consists of 15,000  shares  issuable  upon the  exercise of stock  options
      granted to Mr.  Rosner in March  2000;  15,000  shares  issuable  upon the
      exercise of stock options  granted to Mr.  Rosner in January  2001;  7,348
      shares  issuable upon the exercise of stock options  granted to Mr. Rosner
      in October 2001;  3,210 shares issuable upon the exercise of stock options
      granted to Mr. Rosner in November 2002; and 1,182 shares issuable upon the
      exercise of stock options granted to Mr. Rosner in November 2003.

(11)  Consists of 375,184 shares held jointly by Dr. Schick and his wife; 44,800
      shares held by Dr.  Schick as  custodian  for the minor  children of David
      Schick;  2,500 shares  issuable upon the exercise of stock options granted
      to Dr. Schick in July 1998;  30,000  shares  issuable upon the exercise of
      stock options  granted to Dr. Schick in June,  2000,  pursuant to the 1997
      Directors  Stock Option Plan;  30,000 shares issuable upon the exercise of
      stock options granted to Dr. Schick in December 2001, pursuant to the 1997
      Directors  Stock Option Plan; and 15,000 shares issuable upon the exercise
      of stock options  granted to Dr. Schick in February 2004,  pursuant to the
      1997  Directors  Stock  Option  Plan.  Dr.  Schick  disclaims   beneficial
      ownership of the 44,800 shares held as custodian.

(12)  Consists of 360,990 shares held by Mr. Schick,  the former Chief Executive
      Officer of the Company.

(13)  Consists of 706,564  shares  issued upon the cashless  exercise of 750,000
      warrants in November,  2004;  97,500 shares  issuable upon the exercise of
      warrants  held by Mr.  Slovin  (which he received as designee of Greystone
      Funding Corp.); 150,000 shares issuable upon the exercise of stock options
      granted to Mr.  Slovin in November  2001;  4,251 shares  issuable upon the
      exercise of stock options  granted to Mr. Slovin in November  2002;  1,829
      shares  issuable upon the exercise of stock options  granted to Mr. Slovin
      in November  2003;  100,000  shares  issuable  upon the  exercise of stock
      options  granted to Mr. Slovin in June 2004;  and 30,000  shares  issuable
      upon the exercise of stock options  granted to Mr. Slovin in June 2000 and
      pursuant to the 1997 Directors Stock Option Plan .

(14)  Consists of 71,050 shares held by Mr. Stone;  25,000 shares  issuable upon
      the exercise of stock options granted to Mr. Stone in January 2000; 25,000
      shares issuable upon the exercise of stock options granted to Mr. Stone in
      January 2001;  25,000  shares  issuable upon the exercise of stock options
      granted to Mr. Stone in December  2001;  10,207  shares  issuable upon the
      exercise of stock options granted to Mr. Stone in


                                       31
<PAGE>

      October 2001;  75,000  shares  issuable upon the exercise of stock options
      granted to Mr.  Stone in January  2002;  3,719  shares  issuable  upon the
      exercise of stock  options  granted to Mr. Stone in November  2002;  1,713
      shares issuable upon the exercise of stock options granted to Mr. Stone in
      November  2003;  and 37,500  shares  issuable  upon the  exercise of stock
      options granted to Mr. Stone in June 2004.

(15)  Includes shares subject to options held by current officers and directors.

      A table  containing  information,  as of March 31,  2005,  with respect to
compensation plans (including individual compensation  arrangements) under which
equity  securities of the Company are  authorized for issuance is found above in
"Item 5 -- Market for Registrant's Common Equity and Related Stockholder Matters
-- Equity Compensation Plan Information."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In May 2004,  the Company  entered into a Consulting  and  Non-Competition
Agreement  with David Schick,  effective upon Mr.  Schick's  resignation in June
2004 as the Company's  Chief  Executive  Officer and Chairman of the Board.  The
Agreement  provided for the  termination  of Mr.  Schick's  previous  employment
agreement  with the Company,  and for Mr.  Schick to act as a consultant  to the
Company for a period of three years.  Pursuant to the  Agreement,  Mr. Schick is
compensated, as full payment for the consulting services rendered to the Company
and for his non-competition  and other covenants contained in the Agreement,  in
the amount of $28,333 per month for the term of the Agreement.  In addition, the
Agreement  provides  that 66,307  unvested  employee  stock  options held by Mr.
Schick  remain  eligible for continued  vesting.  David Schick is the son of Dr.
Allen Schick and the nephew of Dr. Barrekette.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

      The  aggregate  fees  billed by our  auditors  to date,  for  professional
services rendered for the audit of the Company's annual financial statements for
the years  ended  March 31,  2005 and,  2004,  and for  review of the  financial
statements included in the Company's quarterly reports on Form 10-Q during those
fiscal years were $ 419,474 and $ 249,258,  respectively.  The audit fees billed
for the year ended March 31, 2005 included $150,000 for the attestation required
by Section 404 of the Sarbanes-Oxley Act.

Audit-Related Fees

      For the years ended March 31, 2005 and 2004, the aggregate fees billed for
assurance and related  services by our auditors that are  reasonably  related to
the  performance of the audit or review of our financial  statements were $8,778
and $9,210, respectively,  relating to other services traditionally performed by
independent accountants.

Tax Fees

      Fees billed by our auditors for the  preparation  of corporate  income tax
returns  were  $3,732 and  $29,380  for the years ended March 31, 2005 and 2004,
respectively.

All Other Fees

      For the fiscal  years ended  March 31,  2005 and 2004,  there were no fees
incurred by the Company for  services  rendered by the  auditors to the Company,
other than the services reported above.

Pre-Approval Policies and Procedures

      Prior to engaging our  accountants  to perform a particular  service,  our
Board of  Directors  obtains an estimate  for the service to be  performed.  The
Audit  Committee,  in  accordance  with Company  procedures  and pursuant to its
Charter, approved all of the services described above.


                                       32
<PAGE>

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

                            SCHICK TECHNOLOGIES, INC.

     Index to Consolidated Financial Statements                             F-1

     Report of Independent Registered Public Accounting Firm                F-2

     Consolidated Balance Sheets as of March 31, 2005 and 2004              F-3

     Consolidated Statements of Income for the years ended
         March 31, 2005, 2004 and 2003                                      F-4

     Consolidated Statement of Changes in Stockholders' Equity
         for the years ended March 31, 2005, 2004 and 2003                  F-5

     Consolidated Statements of Cash Flows for the years ended
         March 31, 2005, 2004 and 2003                                      F-6

     Notes to Consolidated Financial Statements                             F-7

     Schedule II/Valuation and Qualifying Accounts                          F-19


                                      F-1
<PAGE>

             Report of Independent Registered Public Accounting Firm

To the Board of Directors
and Stockholders of Schick Technologies, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Schick
Technologies, Inc. and subsidiary (the "Company") as of March 31, 2005 and 2004,
and the related  consolidated  statements  of income,  changes in  stockholders'
equity and cash flows for each of the three years in the period  ended March 31,
2005.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted  our audits in  accordance  with  auditing  standards of the Public
Accounting Company Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of Schick
Technologies,  Inc.  and  subsidiary  as of March  31,  2005 and  2004,  and the
consolidated  results of their  earnings and their  consolidated  cash flows for
each of the three years in the period ended March 31, 2005, in  conformity  with
accounting principles generally accepted in the United States of America.

As discussed in Note 4 of the consolidated financial statements, effective April
1, 2002,  the  Company  changed  its  method for  accounting  for  goodwill  and
intangible  assets upon the adoption of Statement of Accounting  Standards  142,
"Goodwill and Other Intangible Assets".

Our Audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken  as  a  whole.  The  Schedule  II -  Valuation  and
Qualifying Accounts of Schick Technologies,  Inc. and subsidiary for each of the
three  years in the period  ended March 31, 2005 is  presented  for  purposes of
additional  analysis  and  is  not  a  required  part  of  the  basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in the audit of the basic financial  statements  and, in our opinion,  is fairly
stated in all material  respects in relation to the basic  financial  statements
taken as a whole.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the effectiveness of the Company's
internal  control  over  financial  reporting  as of March  31,  2005,  based on
criteria  established  in Internal  Control-Integrated  Framework  issued by the
Committee of Sponsoring  Organizations of the Treadway Commission (COSO) and our
report dated May 13, 2005 expressed an unqualified opinion thereon.


/s/ GRANT THORNTON LLP
New York, New York

May 13, 2005


                                      F-2
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Balance Sheets
(In thousands, except share amounts)
*

<TABLE>
<CAPTION>
                                                                                 March 31,
                                                                                 ---------
                                                                             2005        2004
                                                                             ----        ----
<S>                                                                        <C>         <C>
Assets
Current assets
     Cash and cash equivalents                                             $ 39,725    $ 20,734
     Accounts receivable, net of allowance for doubtful accounts of $57
         and $138, respectively                                               5,663       3,982
     Inventories                                                              3,545       3,057
     Prepayments and other current assets                                       780         861
     Deferred income taxes                                                    5,681       6,481
                                                                           --------    --------
               Total current assets                                          55,394      35,115
                                                                           --------    --------
Property and equipment, net                                                   1,317       1,405
Goodwill, net                                                                   266         266
Deferred income taxes                                                           270       5,679
Other assets                                                                    287         278
                                                                           --------    --------
               Total assets                                                $ 57,534    $ 42,743
                                                                           ========    ========

Liabilities and Stockholders' Equity
Current liabilities
     Accounts payable and accrued expenses                                 $  1,903    $  1,456
     Accrued salaries and commissions                                         1,590       1,390
     Income taxes payable                                                        --         142
     Deposits from customers                                                     30          13
     Warranty obligations                                                       446         210
     Deferred revenue                                                         4,316       4,504
                                                                           --------    --------
               Total current liabilities                                      8,285       7,715
                                                                           --------    --------

Commitments and contingencies                                                    --          --
Stockholders' equity
     Preferred stock ($0.01 par value; 2,500,000
         shares authorized; none issued and outstanding)                         --          --
     Common stock ($0.01 par value; 50,000,000 shares authorized:
         16,034,230 and 15,026,470 shares issued and outstanding,
         at March 31, 2005 and 2004, respectively)                              160         150
     Additional paid-in capital                                              46,765      44,626
     Retained earnings / (accumulated deficit)                                2,324      (9,748)
                                                                           --------    --------
               Total stockholders' equity                                    49,249      35,028
                                                                           --------    --------
               Total liabilities and stockholders' equity                  $ 57,534    $ 42,743
                                                                           ========    ========
</TABLE>

----------
*     The accompanying notes are an integral part of these financial statements


                                      F-3
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Statements of Income
(In thousands, except share and per share amounts)
*

<TABLE>
<CAPTION>
                                                                   Year ended March 31,
                                                            2005           2004            2003
                                                            ----           ----            ----
<S>                                                     <C>            <C>             <C>
Revenue, net                                            $    52,418    $    39,393     $    29,817

Total cost of sales                                          14,857         11,495           9,628
                                                        -----------    -----------     -----------
           Gross profit                                      37,561         27,898          20,189
                                                        -----------    -----------     -----------
Operating expenses:
      Selling and marketing                                   7,107          6,118           5,911
      General and administrative                              6,851          6,291           5,041
      Research and development                                4,812          3,301           2,598
      Bad debt expense                                           --            105              --
                                                        -----------    -----------     -----------
      Total operating expenses                               18,770         15,815          13,550
                                                        -----------    -----------     -----------
           Income from operations                            18,791         12,083           6,639
                                                        -----------    -----------     -----------
Other income (expense)
      Other income                                               --            138              51
      Gain on sale of investment                                 --             --              45
      Interest income                                           468            153              52
      Interest expense                                           --           (182)           (322)
                                                        -----------    -----------     -----------
           Total interest and other income (expense)            468            109            (174)
                                                        -----------    -----------     -----------
      Income before income taxes                             19,259         12,192           6,465
      Income tax expense (benefit)                            7,187         (5,917)         (5,360)
                                                        -----------    -----------     -----------
           Net income                                   $    12,072    $    18,109     $    11,825
                                                        ===========    ===========     ===========
      Basic earnings per share                          $      0.78    $      1.69     $      1.17
                                                        ===========    ===========     ===========
      Diluted earnings per share                        $      0.70    $      1.07     $      0.78
                                                        ===========    ===========     ===========
      Weighted average common shares (basic)             15,389,110     10,710,742      10,148,991
                                                        ===========    ===========     ===========
      Weighted average common shares (diluted)           17,317,719     16,864,488      15,143,999
                                                        ===========    ===========     ===========
</TABLE>

----------
*     The accompanying notes are an integral part of these financial statements


                                      F-4
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity
(In thousands, except share amounts)
*

<TABLE>
<CAPTION>
                                                                            (Accumulated
                                            Common Stock        Additional     Deficit)        Total
                                            ------------         Paid -in      Retained     Stockholders'
                                        Shares       Amount       Capital      Earnings        Equity
                                      ----------   ----------   ----------    ----------     ----------
<S>                                   <C>          <C>          <C>           <C>            <C>
Balance at March 31, 2002             10,138,325   $      101   $   42,481    $  (39,682)    $    2,900
   Issuance of common stock               68,100            1           62            --             63
   Tax benefit of stock options
   exercised                                  --           --           75            --             75
   Net income                                 --           --           --        11,825         11,825
                                      ----------   ----------   ----------    ----------     ----------
Balance at March 31, 2003             10,206,425          102       42,618       (27,857)        14,863
   Issuance of common stock            4,820,045           48          790            --            838
   Tax benefit of stock options
   exercised                                  --           --          463            --            463
   Appreciation of variable stock
   grant                                      --           --          655            --            655
   Other                                      --           --          100            --            100
   Net income                                 --           --           --        18,109         18,109
                                      ----------   ----------   ----------    ----------     ----------
Balance at March 31, 2004             15,026,470          150       44,626        (9,748)        35,028
   Issuance of common stock            1,007,760           10          627            --            637
   Tax benefit of stock options
   exercised                                  --           --          642            --            642
   Appreciation of variable stock
   grant                                      --           --          870            --            870
   Net income                                 --           --           --        12,072         12,072
                                      ----------   ----------   ----------    ----------     ----------
Balance at March 31, 2005             16,034,230   $      160   $   46,765    $    2,324     $   49,249
                                      ==========   ==========   ==========    ==========     ==========
</TABLE>

----------
*     The accompanying notes are an integral part of these financial statements


                                      F-5
<PAGE>

Schick Technologies, Inc. and Subsidiary
Consolidated Statements of Cash Flows
*(In thousands)

<TABLE>
<CAPTION>
                                                                        Year ended March 31,
                                                                   2005          2004         2003
                                                                   ----          ----         ----
<S>                                                              <C>          <C>          <C>
Cash flows from operating activities
      Net income                                                 $ 12,072     $ 18,109     $ 11,825
      Adjustments to reconcile net income to
          net cash provided by operating activities
                Deferred tax asset                                  6,209       (6,630)      (5,530)
                Tax benefit of stock options exercised                642          463           75
                Depreciation and amortization                         736        1,063        1,289
                Gain from repayment of long-term debt                  --          (50)          --
                Provision for bad debts                                --          105           --
                Provisions for excess and obsolete inventory          122          185          259
                Amortization of deferred finance charge                --          150          135
                Gain on sale of investment                             --           --          (45)
                Non-cash compensation                                 870          433          222
                Other                                                  --           --          150
                Changes in assets and liabilities:
                    Accounts receivable                            (1,681)      (1,055)        (220)
                    Inventories                                      (610)        (203)        (493)
                    Prepayments and other current assets               81         (430)        (115)
                    Other assets                                      (33)        (103)         (58)
                    Accounts payable and accrued expenses             647          620          804
                    Income taxes payable                             (142)         138            4
                    Deposits from customers                            17          (43)           1
                    Warranty obligations                              236          179          (16)
                    Deferred revenue                                 (188)         899           26
                                                                 --------     --------     --------
                    Net cash provided by operating activities      18,978       13,830        8,313
                                                                 --------     --------     --------
Cash flows from investing activities
      Proceeds of short-term investments                               --          712          431
      Purchase of short-term investments                               --           --         (671)
      Proceeds from sale of investment                                 --           --          169
      Property and equipment expenditures, net                       (624)        (292)        (476)
                                                                 --------     --------     --------
                    Net cash provided by (used in) investing
                    activities                                       (624)         420         (547)
                                                                 --------     --------     --------
Cash flows from financing activities
      Proceeds of common stock                                        637          837           63
      Payment of long-term debt                                        --       (1,453)      (2,351)
                                                                 --------     --------     --------
                    Net cash provided by (used in) financing
                    activities                                        637         (616)      (2,288)
                                                                 --------     --------     --------

Net increase in cash and cash equivalents                          18,991       13,634        5,478
Cash and cash equivalents at beginning of period                   20,734        7,100        1,622
                                                                 --------     --------     --------

Cash and cash equivalents at end of period                       $ 39,725     $ 20,734     $  7,100
                                                                 ========     ========     ========
Interest paid                                                          --     $     32     $    196
                                                                 ========     ========     ========
Income taxes paid                                                $    525     $    111     $     91
                                                                 ========     ========     ========

See Note 14 for supplemental cash flow disclosure.
</TABLE>

----------
*     The accompanying notes are an integral part of these financial statements


                                      F-6
<PAGE>

Schick Technologies, Inc. and Subsidiary
Notes to Consolidated Financial Statements
(Amounts In thousands, except share and per share amounts)

1.    Organization and Business

      Schick Technologies,  Inc. (the "Company") designs, develops, manufactures
and markets innovative digital  radiographic imaging systems and devices for the
dental and medical markets that utilize low dosage  radiation to produce instant
computer  generated,  high-resolution,  electronic  x-ray images.  The Company's
products are sold worldwide.

      The Company  operates in one  reportable  segment -- digital  radiographic
imaging systems.  The Company's  principal  products include its suite of CDR(R)
dental imaging products.

      The Company's  revenues from its principal  products  (including  warranty
revenue  related to each such product)  were 99%, 99% and 98% of total  revenues
during fiscal 2005, 2004 and 2003,  respectively.  AccuDEXA(R) revenues were 1%,
1% and 2% of total revenues during fiscal 2005, 2004 and 2003, respectively.

2.    Summary of Significant Accounting Policies

      Basis of Consolidation

      The accompanying consolidated financial statements include the accounts of
the Company  and its wholly  owned  subsidiary,  Schick New York.  All  material
intercompany accounts and transactions have been eliminated in consolidation.

      Use of Estimates

      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 the disclosure of contingent  assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  These estimates and assumptions relate to
the allowance for doubtful  accounts,  allowances  for estimated  sales returns,
estimated costs of initial  warranties,  and the valuation allowance on deferred
tax assets.  Management  has  exercised  reasonable  judgment in deriving  these
estimates.   However,   actual  results  could  differ  from  these   estimates.
Consequently,  an  adverse  change in  conditions  could  affect  the  Company's
estimates.

      Cash Equivalents

      Cash equivalents consist of short-term,  highly liquid  investments,  with
original  maturities of less than three months when  purchased and are stated at
cost. At March 31, 2005, cash balances in excess of FDIC insurance  approximates
$39.6 million.

      Accounts Receivable

      The  Company  reports   accounts   receivable  net  of  an  allowance  for
uncollectible  accounts.  The largest of the Company's accounts  receivable (49%
and 58%, at March 31,  2005 and 2004,  respectively)  is due from its  exclusive
domestic  distributor,  Patterson  Dental  Company,  Inc.  ("Patterson").  Other
accounts receivable are due from international  distributors and agencies of the
US military.  Credit is extended to distributors on varying terms between 30 and
90  days  and  is  made  without  collateral.   Most  international   credit  is
underwritten by credit insurance. The Company provides an allowance for doubtful
accounts  based upon  analysis of the  accounts  receivable  aging.  The Company
writes off  accounts  receivable  when they become  uncollectible.  Subsequently
received payments are credited to operations.


                                      F-7
<PAGE>

      Inventories

      Inventories  are stated at the lower of cost  (determined  on a  first-in,
first-out basis) or market value. Cost is determined principally on the standard
cost  method for  manufactured  goods and on the  average  cost method for other
inventories,  each of which approximates actual cost on the first-in,  first-out
method. The Company establishes reserves for inventory estimated to be obsolete,
unmarketable or slow moving  inventory equal to the difference  between the cost
of inventory  and  estimated  market value based upon  assumptions  about future
demand and market  conditions.  If actual market  conditions  are less favorable
than  those  anticipated  or if  changes  in  technology  affect  the  Company's
products, additional inventory reserves may be required.

      Property and Equipment

      Property  and  equipment  is stated  at cost.  The cost of  additions  and
substantial  improvements to equipment is  capitalized.  The cost of maintenance
and  repairs of  equipment  and  leaseholds  is charged to  operating  expenses.
Depreciation and amortization are provided on the straight-line  method over the
lesser of the estimated  useful lives of the related assets ranging from five to
ten years.  Leasehold  improvements are amortized over the shorter of the useful
life of the asset or the lease term.

      Revenue Recognition

      The Company recognizes revenue when each of the following four criteria is
met: 1) a contract or sales  arrangement  exists;  2) products have been shipped
and title has been  transferred or services have been rendered;  3) the price of
the  products or services is fixed or  determinable;  and 4)  collectibility  is
reasonably  assured.  Revenues from sales of the Company's hardware and software
products  are  recognized  at the time of  shipment  to  customers,  and when no
significant  obligations  exist and  collectibility  is  probable.  The  Company
provides its  exclusive  domestic  distributor  with a 30-day  return policy but
allows for an additional 15 days,  and  accordingly  recognizes  allowances  for
estimated returns pursuant to such policy at the time of shipment.  Revenue from
shipments  to  foreign  customers  is  recognized  at the  time of  shipment  in
accordance  with foreign sales orders.  With respect to products  shipped to its
exclusive domestic distributor, the Company defers revenue until Patterson ships
such inventory from its distribution centers. Amounts received from customers in
advance of product  shipment are  classified  as deposits  from  customers.  The
Company records as revenue  shipping and handling charges invoiced to customers.
The cost of shipping  and handling is recorded in cost of sales.  Revenues  from
the sale of extended  warranties on the Company's  products are  recognized on a
straight-line basis over the life of the extended warranty, which is generally a
period of up to two years.  Deferred  revenues relate to extended  warranty fees
paid by customers prior to the performance of extended  warranty services and to
certain shipments to Patterson, as described above.

      Advertising Costs

      Advertising costs included in selling and marketing  expenses are expensed
as incurred  and were $520,  $437 and $568,  for the years ended March 31, 2005,
2004, and 2003, respectively.

      Warranties

      The Company  records a liability  for an estimate of costs that it expects
to incur under its basic limited  warranty when product  revenue is  recognized.
Factors affecting the Company's  warranty  liability include the number of units
sold and historical  and  anticipated  rates of claims and costs per claim.  The
Company  periodically  assesses the adequacy of its warranty  liability based on
changes in these factors.

      The Company  records  revenues on extended  warranties on a  straight-line
basis  over the term of the  related  warranty  contracts  (generally  up to two
years).  Deferred  revenues  related to extended  warranty were $2.2 million and
$2.4  million  at March 31,  2005 and  2004,  respectively.  Services  costs are
expensed as incurred.


                                      F-8
<PAGE>

      Research and Development

      Research and  development  costs consist of  expenditures  covering  basic
scientific   research  and  the  application  of  scientific   advances  to  the
development  of  new  and  improved  products  and  their  uses.   Research  and
development costs are expensed as incurred.

      Income Taxes

      Income  taxes are  accounted  for under  the asset and  liability  method.
Deferred income taxes are recorded for temporary  differences  between financial
statement carrying amounts and the tax basis of assets and liabilities. Deferred
tax assets and  liabilities  reflect the tax rates  expected to be in effect for
the  years in which  the  differences  are  expected  to  reverse.  A  valuation
allowance  is  provided  if it is more  likely  than not that some or the entire
deferred tax asset will not be realized.

      Fair Value of Financial Instruments

      The carrying value of cash and cash equivalents,  accounts  receivable and
accounts  payable  approximates  fair value due to the relatively short maturity
associated with the Company's cash, accounts receivable and accounts payable.

      Goodwill and Other Intangible Assets

      Goodwill  represents the cost of acquired  companies in excess of the fair
value of the net  assets  acquired.  At the  date of  acquisition,  goodwill  is
allocated  to  reporting  units  based  on net  assets  assigned  to that  unit.
Effective April 1, 2002, the Company adopted  Statement of Financial  Accounting
Standards  ("SFAS")  No. 142,  "Goodwill  and Other  Intangible  Assets",  which
established  financial  accounting and reporting for acquired goodwill and other
intangible assets and superseded Accounting Principles Board Opinion ("APB") No.
17,  "Intangible  Assets".  Under SFAS No.  142  goodwill  and  indefinite-lived
purchased  intangible  assets are no longer  amortized but are reviewed at least
annually for impairment. The Company has elected to perform this review annually
as of February 28.

      Identifiable  intangible  assets  that have  finite  lives  continue to be
amortized over their estimated  useful lives.  Other  intangible  assets include
costs incurred to secure patents and are included in other assets.  Finite-lived
purchased  intangible  assets are  amortized  principally  by the  straight-line
method over their expected  period of benefit.  Costs incurred to secure patents
and deferred  financing  costs are  amortized by the  straight-line  method over
periods of five years and over the term of the loan, respectively.

      Long-lived  assets and  intangibles  are reviewed for impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a  comparison  of the  carrying  amount of the  assets to the future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets.

      Stock-based compensation

      At March 31, 2005, the Company has  stock-based  compensation  plans which
are described  more fully in Note 13. As permitted by SFAS No. 123,  "Accounting
for Stock Based Compensation", the Company accounts for stock-based compensation
arrangements with employees under the recognition and measurement  principles of
APB Opinion  No. 25,  "Accounting  for Stock  Issued to  Employees,  and related
Interpretations".  The following table  illustrates the effect on net income and
earnings  per  share if the  Company  had  applied  the fair  value  recognition
provisions of FASB Statement No. 123,  Accounting for Stock-Based  Compensation,
to stock-based employee compensation.


                                      F-9
<PAGE>

<TABLE>
<CAPTION>
                                                                      Year ended March 31,
                                                                  2005        2004        2003
                                                                --------    --------    --------
<S>                                                             <C>         <C>         <C>
Net income, as reported                                         $ 12,072    $ 18,109    $ 11,825
Deduct: Total stock-based employee compensation
        expense determined under fair value based method for
        all awards, net of related tax effects                       708         359         476
                                                                --------    --------    --------
Pro forma net income                                            $ 11,364    $ 17,750    $ 11,349
                                                                --------    --------    --------
Earnings per share:
                              Basic-as reported                 $   0.78    $   1.69    $   1.17
                                                                --------    --------    --------
                              Basic-pro forma                   $   0.74    $   1.66    $   1.12
                                                                --------    --------    --------
                              Diluted-as reported               $   0.70    $   1.07    $   0.78
                                                                --------    --------    --------
                              Diluted-pro forma                 $   0.65    $   1.05    $   0.75
                                                                --------    --------    --------
</TABLE>

      Reclassifications

      Certain  reclassifications  have been made to the prior  years'  financial
statements to conform to the current presentation.

3.    Recently Issued Accounting Standards

      Stock-Based Compensation

      In December 2004 the Financial  Accounting Standards Board ("FASB") issued
FASB Statement No. 123 (revised 2004) ("FAS 123R")  "Share-Based  Payment".  The
statement  supersedes  APB  Opinion  No.  25  "Accounting  for  Stock  Issued to
Employees"  and  establishes  fair-value-based  measurement  in  accounting  for
share-based  payment  transactions  with  employees.  FASB 123R is effective for
public  companies for years  beginning  after  December 31, 2005. The Company is
currently  evaluating  the  effect  of FAS  123R on its  consolidated  financial
position, results of operations and cash flows.

      Inventory Costs

      In November  2004 the  Financial  Accounting  Standards  Board issued FASB
Statement No. 151 ("FASB 151") "Inventory  Costs".  The statement amends ARB No.
43, Chapter 4,  "Inventory  Pricing" and requires that  unallocated  overhead be
recognized  as an  expense in the  period in which it is  incurred.  FASB 151 is
effective for fiscal years beginning  after June 15, 2005. The Company  believes
that its current method of inventory  pricing  complies with the requirements of
the  statement.  Accordingly,  the adoption of FASB 151 will not have a material
impact on the Company's consolidated  financial position,  results of operations
or cash flows.

      Income Taxes

      In December  2004 the  Financial  Accounting  Standards  Board issued FASB
Staff Position on Statement 109 ("FSP  FAS109-1")  ("FSP")  "Application of FASB
Statement  No.  109,  Accounting  for  Income  Taxes,  to the Tax  Deduction  on
Qualified  Production  Activities  Provided by the American Jobs Creation Act of
2004" (the "Act").  The FSP states that the new tax rate  reductions  created in
the Act  should be  treated as special  deductions  when  accounting  for income
taxes.  Consequently,  deferred tax assets  reflect  statutory tax rates without
giving effect to those reductions.  The Tax Act is effective for years beginning
after December 31, 2004.  The Company is evaluating the potential  effect of the
FSP since the Act replaces other income tax incentives,  which will no longer be
available to the Company. These incentives have been treated in a similar manner
for financial accounting purposes.


                                      F-10
<PAGE>

4.    Accounting for Business Combinations, Intangible Assets and Goodwill

      In July 2001,  the Financial  Accounting  Standards  Board issued SFAS No.
141,  "Business  Combinations"  and SFAS 142,  "Goodwill  and  Other  Intangible
Assets".  The new  standards  require that all business  combinations  initiated
after  June 30,  2001  must be  accounted  for  under the  purchase  method.  In
addition,  all intangible assets acquired that are obtained through  contractual
or legal right, or are capable of being separately sold, transferred,  licensed,
rented or exchanged, shall be recognized as assets apart from goodwill. Goodwill
and intangibles with indefinite lives will no longer be subject to amortization,
but will be subject to at least an annual  assessment for impairment by applying
a fair value based test.

      In August  2002,  the Company  performed a  transitional  fair value based
impairment  test and in,  March  2005 and  2004,  performed  annual  fair  value
impairment  tests.  These tests indicate that the fair value is greater than the
recorded  value of goodwill.  Therefore the Company's  goodwill was not impaired
during the year ended March 31, 2005, 2004 and 2003.

5.    Earnings Per Share

      Basic  earnings  per share  ("Basic  EPS") is computed by dividing  income
available to common stockholders by the weighted-average number of common shares
outstanding during the period.  Diluted earnings per share ("Diluted EPS") gives
effect to all dilutive  potential common shares  outstanding  during the period.
The  computation  of  Diluted  EPS  does  not  assume  conversion,  exercise  or
contingent  exercise of  securities  that would have an  antidilutive  effect on
earnings. The following table is the reconciliation from basic to diluted shares
for the years ended March 31, 2005, 2004 and 2003.

                                                         March 31,
                                             2005          2004          2003
                                          ----------    ----------    ----------
Basic shares                              15,389,110    10,710,742    10,148,991
Dilutive:
    Options                                1,395,275     1,381,554       940,381
    Warrants                                 533,334     4,772,192     4,054,627
                                          ----------    ----------    ----------
Diluted shares                            17,317,719    16,864,488    15,143,999
                                          ==========    ==========    ==========

      At March 31,  2005,  2004 and 2003,  outstanding  options and  warrants to
purchase  66,425,  87,061 and 434,066 shares of common stock,  respectively,  at
exercise  prices  ranging from $4.91 to $27.72 per share have been excluded from
the computation of diluted earnings per share as they are antidilutive.

6.    Inventories

      Inventories  at March 31, 2005 and 2004,  net of provisions for excess and
obsolete inventories, are comprised of the following:

                                                               2005        2004
                                                             -------     -------
          Raw materials                                      $ 2,171     $ 2,088
          Work-in-process                                        218         246
          Finished goods                                       1,156         723
                                                             -------     -------
          Total inventories                                  $ 3,545     $ 3,057
                                                             =======     =======

7.    Property and Equipment

      Property  and  equipment  at March 31, 2005 and 2004 is  comprised  of the
following:

                                                               2005        2004
                                                             -------     -------
          Production equipment                               $ 5,984     $ 5,751
          Computer and communications equipment                1,202       2,493
          Demonstration equipment                                221         944
          Leasehold improvements                               1,986       1,907
          Other equipment                                        150         137
                                                             -------     -------
          Total property and equipment                         9,543      11,232
          Less accumulated depreciation and amortization       8,226       9,827
                                                             -------     -------
          Property and equipment, net                        $ 1,317     $ 1,405
                                                             =======     =======


                                      F-11
<PAGE>

8.    Accounts payable and accrued expenses

      Accounts  payable and accrued  expenses are summarized as follows at March
31, 2005 and 2004:

                                                               2005        2004
                                                             -------     -------
          Advertising and marketing expenses                 $   133     $   103
          Inventory                                              626         435
          Professional fees                                      265         290
          Refunds payable                                         94          95
          Royalties                                              181         120
          Travel and entertainment                               194         118
          Other                                                  410         295
                                                             -------     -------
          Accounts payable and accrued expenses              $ 1,903     $ 1,456
                                                             -------     -------

9.    Income Taxes

      The following  table provides  detail of the income tax expense  (benefit)
for the years ended March 31, 2005, 2004 and 2003:

                                                          March 31,
                                                 2005        2004        2003
                                                 ----        ----        ----
       Current expense
          Federal                              $    743    $    250    $     95
          State                                     235          --          --
                                               --------    --------    --------
                 Total current expense              978         250          95
                                               --------    --------    --------
       Deferred tax expense
          Federal                                 5,374       4,087       2,415
          State                                     835       1,101         591
                                               --------    --------    --------
                 Total deferred tax benefit       6,209       5,188       3,006
                                               --------    --------    --------
       Tax expense                                7,187       5,438       3,101
       Deferred tax asset reserve reversal           --     (11,355)     (8,461)
                                               --------    --------    --------
       Net tax expense (benefit)               $  7,187    ($ 5,917)   ($ 5,360)
                                               ========    ========    ========

      The  reconciliation  between  the  U.S.  federal  statutory  rate  and the
Company's effective tax rate is as follows:

                                                       Year Ended March 31,
                                                    2005       2004       2003
                                                  -------    -------    -------
Tax benefit at Federal statutory rate                35.0%      34.2%      34.0%
State income tax expense, net of
        Federal tax benefit                           5.6%       5.3%       5.2%
Permanent differences                                -1.0%      -0.9%      -1.0%
Research and development tax credit                  -1.2%      -1.4%      -2.3%
Deferred tax valuation allowance reversal              --      -85.7%    -118.9%
Effect of rate change                                -1.2%        --         --
Other                                                 0.1%        --        0.1%
                                                  -------    -------    -------
Effective tax rate                                   37.3%     -48.5%     -82.9%
                                                  =======    =======    =======


                                      F-12
<PAGE>

      Significant  components of the Company's deferred tax assets (liabilities)
at March 31, 2005, 2004 and 2003 are as follows:

                                                           March 31,
                                               --------------------------------
                                                 2005        2004        2003
                                               --------    --------    --------
Net operating loss carryforwards               $     --    $  6,885    $ 12,484
Reserves and allowances for inventory             1,229       1,155       1,238
Accounts receivable and warranties                1,986       1,966       1,566
Tax credit and carryforwards                      2,441       2,016       1,581
Depreciation and other                              266          91          80
Other                                                29          47         (64)
                                               --------    --------    --------
                                                  5,951      12,160      16,885
Valuation allowance                                  --          --     (11,355)
                                               --------    --------    --------
Net deferred tax asset                         $  5,951    $ 12,160    $  5,530
                                               ========    ========    ========

      During  fiscal 2005,  2004 and 2003 the Company's  utilization  of its net
operating  losses resulted in a reduction of current taxes in the amount of $6.9
million, $4.8 million and $2.9 million, respectively.

      At March  31,  2005,  the  Company  no  longer  has a net  operating  loss
carryover.

10.   Warranties

      The Company  records a liability  for an estimate of costs that it expects
to incur under its basic limited  warranty when product  revenue is  recognized.
Factors affecting the Company's  warranty  liability include the number of units
sold and historical  and  anticipated  rates of claims and costs per claim.  The
Company  periodically  assesses the adequacy of its warranty  liability based on
changes in these factors.

      The following table reconciles  aggregate  warranty  liability as at March
31:

                                                              2005        2004
                                                            -------     -------
         Beginning balance ............................        $210         $56
         Warranties issued in period ..................       2,652       2,439
         Warranties paid in period ....................      (2,416)     (2,285)
                                                            -------     -------
         Balance end of period ........................        $446        $210
                                                            =======     =======

      The Company  records  revenues on extended  warranties on a  straight-line
basis  over the term of the  related  warranty  contracts  (generally  up to two
years).  Deferred  revenues  related to extended  warranties  were $2.2 and $2.4
million at March 31, 2005 and 2004, respectively.

11.  Concentration of Risks and Customer Information

      The Company's  future results of operations  involve a number of risks and
uncertainties.  Factors that could affect the Company's future operating results
and cause actual results to vary materially from expectations  include,  but are
not  limited  to,   dependence   on  key   personnel,   government   regulation,
manufacturing  disruptions,  competition,  reliance  on  certain  customers  and
vendors,  absence of redundant  facilities,  credit risk,  product liability and
other liability claims, adequacy of insurance coverage and litigation.

      Substantially  all of the  Company's  sales are to  domestic  and  foreign
dentists,   doctors,  and  distributors  of  dental  and  medical  supplies  and
equipment. Financial instruments that potentially


                                      F-13
<PAGE>

subject the Company to  concentrations  of credit risks are  primarily  accounts
receivable  and  cash  equivalents.  The  Company  generally  does  not  require
collateral and the majority of its trade receivables are unsecured.  The Company
is  directly  affected  by the  financial  well being of the dental and  medical
industries.  The Company places its cash  equivalents in short-term money market
instruments and high-grade commercial paper.

      Approximately  $13.9  million,  $9.9  million  and  $6.2  million  of  the
Company's  revenues  in  fiscal  2005,  2004 and 2003,  respectively,  were from
foreign customers.  The majority of such foreign revenues were from customers in
Europe and Asia. Approximately $31.8 million, $21.6 million and $15.4 million of
the Company's revenues in fiscal 2005, 2004 and 2003, respectively,  were from a
single customer, Patterson.

      On April 6, 2000,  the Company  entered into an agreement  with  Patterson
Dental  Company  which granted  Patterson  exclusive  rights to  distribute  the
Company's dental products in the United States and Canada effective May 1, 2000.

12.   Commitments and Contingencies

      Employment Agreements

      The Company has employment  agreements with certain executive officers. As
of March 31,  2005,  aggregate  minimum  compensation  obligations  under  these
employment agreements are $1,067 through the year ending March 31, 2008. In June
2004, the Company entered into a Consulting and  Non-Competition  Agreement with
its former CEO, which creates a minimum compensation obligation in the amount of
$751,  consisting of $340 in fiscal 2006,  $340 in fiscal 2007 and $71 in fiscal
2008.

      In addition,  certain of the Company's agreements provide for the issuance
of common stock and/or common stock options to executives,  which generally vest
ratably  over the term of the  agreements  (2-3  years).  Additionally,  certain
executives  may earn bonus  compensation  based upon the  specific  terms of the
respective agreements.

      Operating Leases

      The Company  leases its  facilities  under an  operating  lease  agreement
expiring June 2007.  Rent expense for the years ended March 31, 2005,  2004, and
2003 was $459, $646, and $367, respectively.

      Future  minimum  payments  on a fiscal  year  basis  under  non-cancelable
operating leases are as follows:

                      2006                   506
                      2007                   526
                      2008                   137
                                          ------
                                          $1,169
                                          ======

      Product Liability

      The  Company  is  subject  to the  risk of  product  liability  and  other
liability  claims in the event that the use of its products  results in personal
injury or other  claims.  Although the Company has not  experienced  any product
liability  claims to date,  any such claims could have an adverse  impact on the
Company.  The Company maintains  insurance coverage related to product liability
claims,  but there can be no  assurance  that  product or other  claims will not
exceed its insurance coverage limits, or that such insurance will continue to be
maintained or to be available on commercially acceptable terms, or at all.

      SEC Investigation and Other

      In August 1999, the Company,  through its outside  counsel,  contacted the
Division of Enforcement of the  Securities  and Exchange  Commission  ("SEC") to
advise it of certain matters related to the


                                      F-14
<PAGE>

Company's  restatement  of earnings for interim  periods of fiscal 1999. The SEC
subsequently  conducted an investigation of the Company and certain individuals,
including current and former officers and employees of the Company,  pursuant to
a Formal  Order of  Investigation.  The  Company  cooperated  with the SEC staff
throughout the course of the investigation.

      In addition,  since January 2002 the United States  Attorney's  Office for
the Southern  District of New York has served  subpoenas  upon and/or  contacted
certain individuals,  including current and former officers and employees of the
Company,  and a current  Director,  in connection with this matter.  On June 13,
2002, the Company was advised by counsel to David Schick,  the Company's  former
chief  executive  officer,  that the  United  States  Attorney's  Office for the
Southern  District of New York had notified  such counsel that Mr.  Schick was a
target of the United States Attorney's investigation of this matter. The Company
has cooperated with the U.S. Attorney's Office.

      On November  14, 2003,  the SEC filed a civil action in the United  States
District  Court for the Eastern  District of New York against the  Company,  its
former  chief  executive  officer,  and its  former  vice  president  of sales &
marketing.  The SEC complaint alleges fraud, and books and records and reporting
violations under Sections 10(b),  13(a) and 13(b)(2) of the Securities  Exchange
Act and various rules  promulgated  thereunder in connection  with the financial
statements included in the Company's reports on Form 10-Q for the quarters ended
June 30,  September 30 and December 31, 1998. The SEC complaint  seeks to enjoin
the Company from future  violations of those  provisions of the Exchange Act and
the rules thereunder, as well as disgorgement of any ill-gotten gains, which the
Company  does not believe to be material  in amount.  With  respect to the other
defendants, the complaint seeks injunctive relief, civil penalties, disgorgement
and an officer/director bar.

      The Company has had discussions  with the  Enforcement  Staff of the SEC's
northeast  regional  office in an effort to resolve  the  complaint  against the
Company,  and the Company intends to continue such discussions.  On May 4, 2005,
the Court ordered that  discovery in this case be suspended  until June 18, 2005
to permit the  consideration  of  settlement  proposals.  Any  settlement  would
require approval by the Commission before it could become  effective.  There can
be no  assurance  that  settlement  discussions  will  continue  and/or  will be
successful.

      The Company  cannot  predict the  potential  outcome of these  matters and
their impact on the Company and,  therefore,  has made no provision  relating to
these matters in the accompanying consolidated financial statements.

      Litigation

      The Company may be a party to a variety of legal  actions (in  addition to
that    referred    to   above),    such   as    employment    and    employment
discrimination-related  suits,  employee  benefit  claims,  breach  of  contract
actions,  tort  claims,  shareholder  suits and  intellectual  property  related
litigation.  In addition,  because of the nature of its business, the Company is
subject to a variety  of legal  actions  relating  to its  business  operations.
Recent court  decisions  and  legislative  activity  may increase the  Company's
exposure for any of these types of claims. In some cases,  substantial  punitive
damages may be sought.  The Company currently has insurance coverage for some of
these potential liabilities.  Other potential  liabilities,  such as those based
upon the  commission  of fraud,  may not be covered by  insurance,  insurers may
dispute coverage,  or the amount of insurance may not be sufficient to cover the
damages  awarded.  In  addition,  certain  types of  damages,  such as  punitive
damages,  may not be covered by  insurance  and  insurance  coverage  for all or
certain forms of liability may become unavailable or prohibitively  expensive in
the future.

13.   Stock Option Plan, Stock Grants and Defined Contribution Plan

      Stock Option Plan and Stock Grants

      In April 1996,  the Company  implemented  its 1996 Stock  Option Plan (the
"Plan") whereby  incentive and  non-qualified  options to purchase shares of the
Company's  common stock may be granted to employees,  directors and consultants.
In September 1998, the Plan was amended to increase the


                                      F-15
<PAGE>

number of  shares  of common  stock  issuable  under  the Plan from  470,400  to
1,000,000,  and the Plan was further  amended in November  2000 to increase  the
number of shares of common stock issuable under the Plan to 3,000,000. The Board
of Directors  determines  exercise and vesting periods and the exercise price of
options  granted under the Plan. The Plan  stipulates that the exercise price of
non-qualified  options  granted  under the Plan must  equal or exceed 85% of the
fair market value of the  Company's  common stock as of the date of grant of the
option;  however, the Company has never granted options having an exercise price
lower than the fair market value of the  underlying  common stock on the date of
grant. Additionally,  no option may be exercisable after ten years from the date
of grant.  Options  granted under the Plan  generally vest over a period of four
years.

      In 1997,  the Company  adopted the Directors  Plan. In November  2002, the
plan was amended to increase  the number of shares of Common  Stock  issuable to
600,000.  At March 31,  2005,  2004 and 2003,  a total of  528,000,  468,000 and
310,000  options to purchase  common stock  pursuant to the Directors  Plan were
outstanding,  respectively.  The  plan  stipulates  that the  exercise  price of
non-qualified  options  granted  under the plan must  equal or exceed 85% of the
fair market value of the  Company's  common stock as of the date of grant of the
option, and no option may be exercisable after ten years from the date of grant.
Options  granted under the plan generally  vest over a period of two years.  The
Company has never granted options at less than market on the date of grant.

      The fair value of options granted to employees and directors  during 2005,
2004 and 2003 has been determined on the date of the respective  grant using the
Black-Scholes  option-pricing  model  based  on the  following  weighted-average
assumptions:

                                             2005         2004          2003
                                           --------     --------      --------
Dividend yield                               None         None          None
Risk-free interest rate on date of grant     3.08%     1.04%-1.29%   2.24%-3.03%
Forfeitures                                  None         None          None
Expected life                               4 years      4 years       4 years
Volatility                                    70%          75%           82%
Weighted average fair value per share        $5.92        $4.10         $1.62

      The following  table  summarizes  information  regarding stock options for
2005, 2004 and 2003:

<TABLE>
<CAPTION>
                                    2005                     2004                     2003
                           ----------------------   ---------------------    ---------------------
                            Shares      Weighted     Shares      Weighted     Shares      Weighted
                            Under       Average      Under       Average      Under       Average
                            Option      Exercise     Option      Exercise     Option      Exercise
                                         Price                    Price                    Price
                           ---------    ---------   ---------    --------    ---------    --------
<S>                        <C>           <C>        <C>           <C>        <C>           <C>
Options outstanding,
   beginning of year       2,124,264     $ 3.36     2,077,538     $ 2.54     1,840,426     $ 2.47
Options granted              815,000      10.46       362,997       7.41       332,862       2.69
Options exercised           (301,196)      2.07      (292,328)      1.44       (68,100)      0.98
Options forfeited             (6,821)      6.20       (23,943)     10.52       (27,650)      3.72
                          ----------               ----------               ----------
Options outstanding,
   end of year             2,631,247     $ 5.70     2,124,264     $ 3.36     2,077,538     $ 2.54
                          ==========               ==========               ==========
</TABLE>

<TABLE>
<CAPTION>
         Range of exercise    Options outstanding     Exercisable options    Weighted average remaining
         -----------------    -------------------     -------------------    --------------------------
               prices          at March 31, 2005       at March 31, 2005      contractual life (years)
               ------          -----------------       -----------------      ------------------------
<S>                                 <C>                     <C>                          <C>
          $ 0.50 to $ 1.56          962,548                 961,173                      6
          $ 2.15 to $ 3.20          395,154                 311,872                      7
          $ 4.91 to $ 8.25          372,120                 153,053                      8
          $10.36 to $17.96          855,000                 154,999                      9
          $20.88 to $25.20           46,425                  46,425                      1
</TABLE>

      At March 31, 2005, there are 998,753 options available for grant under our
option  plans.  The fair value of options  granted was  $4,822,  $1,384 and $549
during fiscal 2005, 2004 and 2003, respectively.


                                      F-16
<PAGE>

      Defined Contribution Plan

      The Company has a defined contribution savings plan, which qualifies under
Section  401(k) of the Internal  Revenue  Code,  for employees  meeting  certain
service requirements. Participants may contribute up to 15% of their gross wages
not to exceed,  in any given year,  a  limitation  set by the  Internal  Revenue
Service regulations.  The plan provides for mandatory matching  contributions to
be made by the  Company  to a  maximum  amount  of 2.5% of a plan  participant's
compensation.  Company  contributions  to the plan  approximated  $190, $190 and
$171, respectively, in fiscal 2005, 2004 and 2003.

14.   Stockholders' Equity

      In February  2000, an executive was awarded 75,000 shares of the Company's
common stock, subject to a risk of forfeiture,  which vested as to 25,000 shares
on each of December  31, 2000,  2001 and 2002.  Upon the sale of any such vested
shares,  the employee is required to pay the Company $1.32 per share sold within
six months following such sale. The Company recorded a note receivable, which is
presented  as a reduction of Paid in Capital  amounting to $99,  relating to the
stock  issuance.  The charge to  operations  relating to this stock award is not
material to the financial statements.

      In December  1999,  the Company  issued  warrants for 5,000,000  shares of
common stock, to Greystone Funding Corporation  ("Greystone") in connection with
a financing transaction.  Of those warrants,  750,000 were issued to a Greystone
employee as designee of  Greystone.  That  individual  became  President  of the
Company in December 1999 and Chief  Executive  Officer in June 2004. In November
2004,  the  Company's  CEO  exercised  the  750,000  aforementioned  outstanding
warrants under the grant's cashless provision and received 706,564  unregistered
shares  of  common  stock.  In  March  2004,  Greystone  exercised  all  of  its
outstanding warrants. In one transaction, Greystone paid $414 to acquire 552,500
unregistered  shares  of  common  stock.  In  a  second  transaction,  Greystone
exercised under the cashless provision governing its grant of 4,250,000 warrants
and received 3,975,216  unregistered shares of common stock. The market price of
the Company's common stock was $11.60 at the date of exercise.

15.   Unaudited selected quarterly financial data

      The following is a summary of the Company's  unaudited quarterly operating
results for the years ended March 31, 2005 and 2004:

<TABLE>
<CAPTION>
                                      Mar 31,         Dec 31,         Sep 30,         Jun 30,
                                         2005            2004            2004            2004
                                         ----            ----            ----            ----
<S>                               <C>             <C>             <C>             <C>
Statement of Earnings Data:
Revenue, net                      $    13,854     $    16,813     $    10,870     $    10,881
Total cost of sales                     4,532           4,144           2,972           3,209
                                  -----------     -----------     -----------     -----------
Gross profit                            9,322          12,669           7,898           7,672
                                  -----------     -----------     -----------     -----------
Gross profit margin                      67.3%           75.4%           72.7%           70.5%
Operating expense:
  Selling and marketing                 1,885           2,235           1,531           1,456
  General and administrative            1,859           1,723           1,284           1,985
  Research and development                939           1,456           1,305           1,112
                                  -----------     -----------     -----------     -----------
Operating expense                       4,683           5,414           4,120           4,553
                                  -----------     -----------     -----------     -----------
Income from operations                  4,639           7,255           3,788           3,119
                                  -----------     -----------     -----------     -----------
Net income                        $     3,389     $     4,398     $     2,486     $     1,799
                                  ===========     ===========     ===========     ===========
Earnings per share:
Basic income                      $      0.21     $      0.28     $      0.16     $      0.12
                                  ===========     ===========     ===========     ===========
Diluted income                    $      0.19     $      0.25     $      0.14     $      0.10
                                  ===========     ===========     ===========     ===========
Weighted average common
  Shares outstanding (basic)       15,988,491      15,440,891      15,099,299      15,057,703
                                  ===========     ===========     ===========     ===========
Weighted average common
  Shares outstanding (diluted)     17,632,619      17,359,203      17,230,852      17,209,756
                                  ===========     ===========     ===========     ===========
</TABLE>


                                      F-17
<PAGE>

<TABLE>
<CAPTION>
                                      Mar 31,         Dec 31,         Sep 30,         Jun 30,
                                         2004            2003            2003            2003
                                         ----            ----            ----            ----
<S>                               <C>             <C>             <C>             <C>
Statement of Earnings Data:
Revenue, net                      $    10,092     $    12,124     $     8,501     $     8,676
Total cost of sales                     3,179           3,063           2,624           2,629
                                  -----------     -----------     -----------     -----------
Gross profit                            6,913           9,061           5,877           6,047
                                  -----------     -----------     -----------     -----------
Gross profit margin                      68.5%           74.7%           69.1%           69.7%
Operating expense:
  Selling and marketing                 1,613           1,655           1,415           1,435
  General and administrative            1,475           1,725           1,541           1,655
  Research and development                793             827             839             842
                                  -----------     -----------     -----------     -----------
Operating expense                       3,881           4,207           3,795           3,932
                                  -----------     -----------     -----------     -----------
Income from operations                  3,032           4,854           2,082           2,115
                                  -----------     -----------     -----------     -----------
Net income                        $     9,009     $     4,854     $     2,267     $     1,979
                                  ===========     ===========     ===========     ===========
Earnings per share:
Basic income                      $      0.76     $      0.47     $      0.22     $      0.19
                                  ===========     ===========     ===========     ===========
Diluted income                    $      0.53     $      0.29     $      0.13     $      0.12
                                  ===========     ===========     ===========     ===========
Weighted average common
  Shares outstanding (basic)       11,836,330      10,407,356      10,365,939      10,229,697
                                  ===========     ===========     ===========     ===========
Weighted average common
  Shares outstanding (diluted)     17,129,496      16,879,982      16,911,580      16,536,892
                                  ===========     ===========     ===========     ===========
</TABLE>


                                      F-18
<PAGE>

Schedule II

                    Schick Technologies, Inc. and Subsidiary
                Valuation and Qualifying Accounts (in thousands)

<TABLE>
<CAPTION>
                                                               Additions
                                                               ---------
                                              Balance     Charged      Charged                  Balance
                                                at           to          to                       at
                                             Beginning    Cost and     Other                    End of
                                             Of Period    Expenses    Accounts   Deductions     Period
                                             ---------    --------    --------   ----------     ------
<S>                                            <C>           <C>        <C>       <C>           <C>
ALLOWANCE FOR DOUBTFUL
   ACCOUNTS
      For the year ended March 31, 2005        $   138         --                $      81(a)     $    57
      For the year ended March 31, 2004             42       $105                        9(a)         138
      For the year ended March 31, 2003            717         --                      675(a)          42

RESERVE FOR OBSOLETE/SLOW
   MOVING INVENTORY
      For the year ended March 31, 2005        $ 2,833       $122                $       6(b)     $ 2,949
      For the year ended March 31, 2004          2,837        185                      189(b)       2,833
      For the year ended March 31, 2003          2,899        259                      321(b)       2,837

VALUATION ALLOWANCE --
   DEFERRED TAX ASSET
      For the year ended March 31, 2004        $11,355                           $  11,355(c)     $    --
      For the year ended March 31, 2003         19,816                               8,461(c)      11,355
</TABLE>

(a)   Accounts receivable written off
(b)   Inventory disposed of
(c)   Reduction of valuation allowance


                                      F-19
<PAGE>

(a)         Documents filed as a part of this Report

      (1)   Consolidated Financial Statements filed as part of this Report:

            Index to Consolidated Financial Statements                      F-1

            Report of Independent Registered Public Accounting Firm         F-2

            Consolidated Balance Sheets at March 31, 2005 and 2004          F-3

            Consolidated Statements of Earnings for the years ended
            March 31, 2005, 2004 and 2003                                   F-4

            Consolidated Statement of Changes in Stockholders'
            Equity for the years ended March 31, 2005, 2004 and 2003        F-5

            Consolidated Statements of Cash Flows for the years ended
            March 31, 2005, 2004 and 2003                                   F-6

            Notes to Consolidated Financial Statements                      F-7

      (2)   Financial statement schedules filed as part of this Report

Schedule II

            Valuation and Qualifying Accounts                               F-19

      Schedules  other  than  that  mentioned  above  are  omitted  because  the
conditions  requiring  their filing do not exist,  or because the information is
provided  in the  financial  statements  filed  herewith,  including  the  notes
thereto.

(b)   The following Exhibits are included in this report:

<TABLE>
<CAPTION>
                                                                               Filed  herewith or
Exhibit                                                                        incorporated
No.                               Item Title                                   by Reference
---                               ----------                                   ------------
<S>      <C>                                                                   <C>
3.1      Amended and Restated  Certificate of  Incorporation of the Company
         (incorporated  by  reference  to  Exhibit  3.1  to  the  Company's
         Registration  Statement on Form S-1, File No. 333-33731,  filed on
         June 30, 1997)                                                        *

3.2      Bylaws of the Company,  as amended  (incorporated  by reference to
         Exhibit 3.2 to the Company's  Annual Report on Form 10-K, filed on
         July 13, 2001)                                                        *

4.1      Form of Common Stock  certificate of the Company  (incorporated by
         reference to Exhibit 4.1 to the Company's  Registration  Statement
         on Form S-1, File No. 333-33731, filed on June 30, 1997)              *

4.2      Form of private-placement  Warrant of the Company (incorporated by
         reference to Exhibit 4.2 to the Company's  Registration  Statement
         on Form S-1, File No. 333-33731, filed on June 30, 1997)              *

4.3      Agreement  and Plan of  Merger,  dated as of May 15,  1997,  among
         Schick  Technologies,   Inc.,  a  New  York  corporation,   Schick
         Technologies,  Inc., a Delaware  corporation  and STI  Acquisition
         Corp,  a  Delaware  corporation   (incorporated  by  reference  to
         Exhibit 4.3 to the Company's  Registration  Statement on Form S-1,
         File No. 333-33731, filed on June 30, 1997)                           *

10.1     1996  Employee  Stock Option  Plan,  as amended  (incorporated  by
         reference to Exhibit 10.1 to the  Company's  Annual Report on Form
         10-K, filed on July 13, 2001)                                         *
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                               Filed  herewith or
Exhibit                                                                        incorporated
No.                               Item Title                                   by Reference
---                               ----------                                   ------------
<S>      <C>                                                                   <C>
10.2     1997 Stock  Option  Plan for  Non-Employee  Directors,  as amended
         (incorporated  by  reference  to  Exhibit  10.2  to the  Company's
         Annual Report on Form 10-K, filed on June 18, 2003)                   *

10.3     Form of  Non-Disclosure,  Non- Solicitation,  Non-Competition  and
         Inventions Agreements between Schick Technologies,  Inc. and Named
         Executives  of  Schick   Technologies,   Inc.   (incorporated   by
         reference to Exhibit 10.3 to the Company's  Registration Statement
         on Form S-1, File No. 333-33731, filed on June 30, 1997)              *
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                               Filed  herewith or
Exhibit                                                                        incorporated
No.                               Item Title                                   by Reference
---                               ----------                                   ------------
<S>      <C>                                                                   <C>
10.4     Service and License  Agreement  between  Photobit,  LLC and Schick
         Technologies,  Inc.  dated as of June 24,  1996  (incorporated  by
         reference to Exhibit 10.5 to the Company's  Registration Statement
         on Form S-1, File No. 333-33731, filed on June 30, 1997)              *

10.5     Registration  Rights Agreement between Schick  Technologies,  Inc.
         and  Greystone,  dated as of December  27, 1999  (incorporated  by
         reference to Exhibit 10.27 to the Company's  Annual Report on Form
         10-K, filed on June 29, 2000)                                         *

10.6     Registration  Rights Agreement between Schick  Technologies,  Inc.
         and DVI  Financial  Services,  Inc.,  dated as of March  15,  2000
         (incorporated  by  reference  to  Exhibit  10.33 to the  Company's
         Annual Report on Form 10-K, filed on June 29, 2000)                   *

10.7     Distributorship  Agreement,  dated  April 6, 2000,  by and between
         Schick   Technologies,   Inc.   and   Patterson   Dental   Company
         (incorporated  by  reference  to  Exhibit  10.34 to the  Company's
         Annual Report on Form 10-K, filed on June 29, 2000)                   *

10.8     Employment  Agreement  between  Schick   Technologies,   Inc.  and
         Jeffrey  T.  Slovin,  dated  November  9,  2001  (incorporated  by
         reference to Exhibit 10.36 to the Company's  Annual Report on Form
         10-K, filed on June 17, 2002)                                         *

10.9     Consulting   and   Non-Competition    Agreement   between   Schick
         Technologies,  Inc.  and  David  B.  Schick,  dated  May  7,  2004
         (incorporated  by  reference  to  Exhibit  10.33 to the  Company's
         Annual Report on Form 10-K, filed on June 25, 2004)                   *

10.10    Employment  Agreement  between  Schick   Technologies,   Inc.  and
         Jeffrey T. Slovin,  dated June 9, 2004  (incorporated by reference
         to  Exhibit  10.34 to the  Company's  Annual  Report on Form 10-K,
         filed on June 25, 2004)                                               *

10.11    Employment  Agreement  between  Schick   Technologies,   Inc.  and
         Michael Stone,  dated June 15, 2004  (incorporated by reference to
         Exhibit 10.35 to the Company's  Annual Report on Form 10-K,  filed
         on June 25, 2004)                                                     *

14.1     Code of Ethics  (incorporated  by reference to Exhibit 14.1 to the
         Company's Annual Report on Form 10-K, filed on June 25, 2004)         *

21.1     List of Subsidiaries of Schick Technologies, Inc.                     +

23.1     Consent of Independent Registered Public Accounting Firm              +

24.1     Powers of Attorney (included on signature page of this Report)        +

31.1     Certification of Principal  Executive  Officer pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002                                 +

31.2     Certification of Principal  Financial  Officer pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002                                 +

32.1     Certification of Principal  Executive  Officer pursuant to Section
         906 of the Sarbanes-Oxley Act of 2002                                 +

32.2     Certification of Principal  Financial  Officer pursuant to Section
         906 of the Sarbanes-Oxley Act of 2002                                 +

99.1     Cautionary Statement                                                  +
</TABLE>


<PAGE>

*     Previously filed; incorporated herein by reference

+     Filed herewith

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned,  thereunto duly  authorized,  in the City of Long
Island City, State of New York, on June 10, 2005.

                                       SCHICK TECHNOLOGIES, INC.


                                       By: /s/ Jeffrey T. Slovin
                                           -------------------------
                                           Jeffrey T. Slovin
                                           Chief Executive Officer and President

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on June 10, 2005.

KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature  appears
below  constitutes  and appoints  Jeffrey T. Slovin and Zvi N. Raskin (with full
power to act alone), as his true and lawful  attorneys-in-fact  and agents, with
full powers of substitution and  resubstitution,  for him in his name, place and
stead to sign an Annual Report on Form 10-K of Schick Technologies,  Inc, and to
file the same,  with all exhibits  thereto,  and other  documents in  connection
therewith,  with the  Securities  and Exchange  Commission,  granting  unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents  and  purposes as he or she might or could do in person,
hereby ratifying and confirming all that said  attorneys-in-fact  and agents, or
their  substitute  or  substitutes,  lawfully  do or cause to be done by  virtue
hereof.

Signature                           Title


/s/ Jeffrey T. Slovin               Chief Executive Officer, President and
----------------------------        Director
Jeffrey T. Slovin


/s/ Ronald Rosner                   Director of Finance and Administration
----------------------------        (Principal financial and accounting officer)
Ronald Rosner


/s/ William K. Hood                 Chairman of the Board and Director
----------------------------
William K. Hood


/s/ Allen Schick                    Director
----------------------------
Allen Schick


/s/ Euval Barrekette                Director
----------------------------
Euval Barrekette


/s/ Arthur Kowaloff                 Director
----------------------------
Arthur Kowaloff


/s/ Curtis M. Rocca III             Director
----------------------------
Curtis M. Rocca III