SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
       [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2003
                                       or
         [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        Commission File Number 001-15975

                               REMEDENT USA, INC.
           (Name of small business issuer as specified in its charter)

         Nevada                                   86-0837251
         ------                                   ----------
    (State or other jurisdiction of             (I.R.S. Employer
    incorporation or organization)              Identification Number)


    Xavier de Cocklaan 42, 9831 Deurle, Belgium                 N/A
    -----------------------------------------------             ---
      (Address of principal executive offices)               (Zip code)


                                011-329-321-70-80
                (Issuer's telephone number, including area code)


Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Number of shares of issuer's common stock outstanding as of September 22, 2004:
39,579,158.

Transitional Small Business Disclosure Format (check one).  Yes [ ]   No [X]

                       DOCUMENTS INCORPORATED BY REFERENCE




<PAGE>


                                TABLE OF CONTENTS


PART I                                                                   PAGE

Item 1    Description of Business........................................1

PART II

Item 5    Market for Registrant's Common Equity and Related
          Stockholder Matters............................................7

Item 6    Management's Discussion and Analysis of
          Financial Condition and Results of Operations..................8

Item 7    Financial Statements..........................................12

PART III

Item 9    Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act.............13

Item 10   Executive Compensation........................................14

Item 11   Security Ownership of Certain Beneficial Owners and
          Management....................................................17

Item 12   Certain Relationships and Related Transactions................18

Item 13   Exhibits and Reports on Form 8-K..............................21

          Financial Statements..........................................F-1



THIS ANNUAL REPORT ON FORM 10-KSB/A IS BEING FILED FOR THE PURPOSE OF AMENDING
PARTS OF OUR ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED MARCH 31,
2003. ALL INFORMATION IN THIS 10-KSB IS AS OF THE DATE OF OUR ANNUAL REPORT ON
FORM 10-KSB, JULY 14, 2003 EXCEPT AS STATED HEREIN. THIS REPORT INCLUDES
AMENDMENTS TO SECTIONS 1, 4, 6, 7, 8, 11, 12, 13 AND 14.



<PAGE>


                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

Remedent USA, Inc. was incorporated under the laws of Arizona in September 1996.
We  were  initially  formed  for  the  purposes  of  developing,  marketing  and
distributing the Remedent Toothbrush, a new single-handle  toothbrush,  gumbrush
and tongue cleaner designed to improve oral care at an affordable price. We have
never  been a party  to any  bankruptcy,  receivership  or  similar  proceeding.
Remedent USA, Inc. is now  headquartered  in Ghent,  Belgium and has no offices,
employees or assets in the United  States.  Stephen Ross is our only officer and
director who currently resides in the United States.

Our Business

We plan to  develop  and  market  high-technology  dental  equipment.  Our first
product is the RemeCure CL-15 high speed dental curing light. On January 9, 2003
we received FDA approval to market this product in the United States.  As of the
date of this  Annual  Report,  we do not have FDA  approval  to market any other
products.

Prior to our entering the high technology dental equipment business, our primary
product  was  the  Remedent  Tooth  and  Gumbrush  ("Remedent  Toothbrush"),   a
toothbrush,  gumbrush and tongue cleaner in a single instrument. However, due to
the  extremely  cost-intensive  nature of retail  marketing,  we were  unable to
adequately  increase the exposure of this product. As a result, we have incurred
substantial net losses resulting in working capital and shareholder deficits. As
a result of these  substantial  net losses,  at the beginning of the fiscal year
ended March 31, 2002, we reassessed our  operations  and business  structure and
implemented a complete  corporate  reorganization  plan.  This plan included the
sale of the Remedent Toothbrush division and expansion into diversified business
ventures,  including the  development of  high-technology  dental  equipment for
marketing within the professional  dental market and the acquisition of a dental
employee leasing  concept.  On March 14, 2002, we entered into an Asset Purchase
Agreement  selling  our  Remedent  Toothbrush  division  to Famcare  2000,  LLC,
although this  transaction  was not  consummated  until  September 2002, 20 days
following the mailing to our shareholders of a Definitive  Information Statement
on Schedule 14C for this transaction.

On July 1,  2001,  in  connection  with this  diversification,  we formed  three
wholly-owned   subsidiaries,   Remedent  Professional  Holdings,  Inc.  ("RPH"),
Remedent  Professional,  Inc.  ("Remedent  Professional") and Remedent N.V., and
began developing  high-technology  dental equipment.  Remedent N.V. is a Belgian
company established to serve as a manufacturer of the dental equipment. Remedent
Professional  was  formed  to  serve  as  a  sales   organization  for  products
manufactured by Remedent N.V. RPH was formed as a holding company.

The Company  retained  Robin List, Guy De Vreese and New Bitsnap N.V. (now named
Lident N.V), a company  controlled by Mr. De Vreese, as consultants to establish
and run Remedent N.V. in Belgium.

On January 15, 2002, Remedent NV acquired International Medical & Dental Support
("IMDS") from a company  controlled by Guy De Vreese,  Lident N.V. (formerly New
Bitsnap, NV.) (See "Certain Relationships and Related Transactions.") IMDS was a
business  concept  and  related  assets  for  dental  practitioner   outsourcing
business.  The idea behind IMDS was to exploit a shortage of dentists in Holland
and a surplus of dentists in Belgium by placing Belgian dentists in Dutch dental
offices.  The IMDS concept was never  implemented and the Company decided not to
pursue it further. The assets we acquired consisted of the following: a business
plan for the concept with supporting market data, a software package,  two staff
members who had experience in telemarketing,  a list of Belgium dentists, a list
of  Dutch  dentists,  forms  of  contracts,  and  a  website  domain  name.  The


                                       1
<PAGE>

consideration we paid for IMDS was for a total of 6,000,000 shares of our common
stock, valued at $330,000.  The value of the common shares issued was determined
based  on the  market  price  of the  Company's  common  stock  on the  date  of
acquisition.  On March 31, 2003 the Company  recorded a full  impairment loss of
$330,000  against the goodwill  recorded in fiscal year 2002 in  connection  the
acquisition of IMDS.

During the fourth  quarter of the fiscal year ended March 31, 2002, we initiated
our  entrance  into  the  high  technology  dental  equipment  market,  with the
introduction of the RemeCure CL-15,  high-speed  dental curing light. We plan to
market  this   product   domestically   through   Remedent   Professional,   and
internationally through Remedent NV.

In connection  with the  Company's  corporate  reorganization  plan changing its
focus from the  toothbrush  business  to the high  technology  dental  equipment
business, on April 1, 2002, Rebecca M. Inzunza,  Robert Hegemann, Earl Moore and
Edward  Quincy  resigned  their  positions as members of the Board of Directors.
Additionally,  Rebecca M. Inzunza  tendered her resignation as President and CEO
and Robert  Hegemann  tendered  his  resignation  as Senior Vice  President  and
Secretary.  The Board of Directors filled the vacancies left on the Board by the
resignations  described  above by appointing Guy de Vreese,  Robin List and Fred
Kolsteeg to the Board of Directors. Guy de Vreese shall serve as Chairman of the
Board of Directors.  Additionally,  the Board of Directors elected Robin List to
serve as Chief Executive Officer and elected Stephen Ross as Secretary.  Stephen
Ross was also  re-elected  as Chief  Financial  Officer.  The new  officers  and
directors  were  selected  by the Board of  Directors  for their  experience  in
involvement in the Company's high technology  dental equipment  business and the
management  and board  changes  were made on April 1, 2002 to coincide  with the
commencement of a new fiscal year for the Company.

In December  2002, as a result of losses  incurred  during its start-up  period,
Remedent  N.V.'s  shareholder  equity  fell below that which is  required  under
Belgium law. In accordance with Belgium law, Remedent N.V. retained the services
of an  independent  Belgium  certified  accountant  to  determine  the amount of
additional capital contribution  necessary to bring Remedent N.V's balance sheet
into compliance. As a result of this analysis, it was determined that additional
capital of 310,000 Euros  ($321,687 as of December  2002) would be required and,
further,  that Remedent N.V.'s valuation prior to such capital  contribution was
88,500  Euros.  In as much as Remedent  USA lacked the  financial  resources  to
provide the additional  capital  required,  Remedent N.V. elected to issue 7,171
shares of its common stock to Lausha N.V., a company controlled by Guy De Vreese
in exchange for conversion of 50,000 Euros in notes payable and  contribution of
the 235,000 Euros in fixed income marketable securities discussed above, both as
an irrevocable capital  contribution to Remedent N.V.. In addition,  Remedent NV
issued 629 shares to Robin List in exchange  for  conversion  of 25,000 Euros in
notes payable as an  irrevocable  capital  contribution  to Remedent N.V. Mr. De
Vreese and Mr.  List are both  officers  and  directors  of  Remedent  N.V.  and
Remedent USA, Inc. As a result of this  transaction,  as previously  reported in
earlier filings, we currently own 22% of our subsidiary,  Remedent N.V Since the
other  shareholders  of Remedent NV are  officers of Remedent  USA or  companies
owned by officers of Remedent  USA,  the Company  believes  that it continues to
retain  "control" of Remedent NV, as defined by ARB 51  "Consolidated  Financial
Statements."

Competition

The dental products market is intensely  competitive.  Within this market, there
are at least 12 companies  which offer  dental  curing and  whitening  lamps and
intraoral  cameras.  Our competitors have greater financial and other resources,
and, consequently,  are better able to market and generate consumer awareness of
their product.

Within the dental  products  market,  we will be competing with other  companies
primarily on the basis of price,  technology,  customer  service and value-added
services,  with our principal  competitors  being  Patterson  Dental Co.,  Henry

                                       2
<PAGE>

Schein,  Inc.,  Dentsply,  Ultrak,  Air Techniques,  Kreativ Products,  American
Dental Technologies and Argon Laser.

Business Strategy

We  compete  within  the  high-technology  dental  equipment  market,  a  highly
competitive market. To compete within this market, our business strategy is to:

     o    Strengthen and broaden core brands through  marketing and advertising,
          product development and manufacturing;

     o    Emerge with cutting-edge technology.

     o    Expand our  presence  in all markets in which we compete and enter new
          markets where there are opportunities for growth; and

     o    Continue  to reduce  costs and manage  working  capital,  and  improve
          operating efficiencies, customer service and product quality.

Marketing Strategies

Within the dental  equipment  market,  we market our  technology  through dental
equipment  distributors,  sharing the marketing efforts with these  distributors
through  attendance  at dental  conferences  and a  combination  of direct  mail
solicitations, professional publications and website-based advertising.

In connection with our entrance into the dental equipment market, we continue to
analyze the most  cost-effective  manufacturing  and distribution  methods.  The
current method entails turn-key  manufacturing  with a large  manufacturer  with
distribution  occurring  through both drop shipments from the  manufacturer  and
shipments  from  our  own  facility.   This  provides  highly   predictable  and
controllable cost of sales and essentially eliminates all indirect manufacturing
overhead costs.

Distribution Methods

We currently  distribute our dental  equipment  through both drop shipments from
the  manufacturer  and  shipments  from  our  own  facility,   providing  highly
predictable  and  controllable  cost of sales and  essentially  eliminating  all
indirect manufacturing overhead costs.

Principal Suppliers

Consistent with our goal for highly  predictable and controllable  cost of sales
and the elimination of indirect  manufacturing overhead costs, we do not procure
raw materials or manufacture our products in-house.  As such, we have retained a
contract  manufacturer,  located in France,  for the complete  production of our
initial professional dental product, the RemeCure CL-15 high-speed curing light.
The  agreement  provides  that the  manufacturer  will procure all raw materials
necessary for the  production of the product,  and will charge a set price to us
for the product and the  related  quality  control  testing.  Additionally,  the
manufacturer provides a 14 month warranty from the date of receipt.

While we believe our  contract  manufacturer  will enable us to meet our current
and anticipated operational requirements,  we can provide no assurance that such
availability   will  continue  or  that  the  terms  will  remain   commercially
reasonable.



                                       3
<PAGE>

Major Customers

For the fiscal year ended  March 31,  2003,  the  company had three  significant
customers,  accounting  for 31%,  21%, and 18%,  respectively,  of  consolidated
revenue.  For the  fiscal  year  ended  March  31,  2002,  the  company  had two
significant customers, accounting for 38% and 13%, respectively, of consolidated
revenue.

Intellectual Property

Within the dental products market, we are developing products,  which we believe
do not infringe upon any valid existing  proprietary rights of third parties. We
plan to seek patent  protection  for all technology  developed for  distribution
within this market.  We can provide no assurance  the steps taken to seek patent
protection  will be  successful.  Additionally,  if received,  we can provide no
assurance  third  parties  will  not  assert  infringement  claims  against  us.
Defending such claims can be both expensive and time-consuming, and there can be
no assurance  that we will be able to  successfully  defend against or similarly
prosecute  an  infringement  claim.  The loss of such  rights (or our failure to
obtain similar licenses or agreements) would have a materially adverse effect on
our business,  financial condition, and results of operations. We can provide no
assurance the steps taken to protect  intellectual  property will be adequate to
prevent  misappropriation of that intellectual property, or that our competitors
will not independently develop products substantially  equivalent or superior to
our products.

Governmental Approval

We will be market  dental  products  which are  legally  defined  to be  medical
devices, therefore, we are considered to be a medical device manufacturer and as
such we are subject to the  regulations of, among other  governmental  entities,
the United States Food and Drug Administration and the corresponding agencies of
the states and foreign  countries in which a Company sells its  products.  These
regulations  govern the introduction of new medical  devices,  the observance of
certain  standards  with  respect to the  manufacture  and  labeling  of medical
devices,  the  maintenance  of certain  records and the  reporting  of potential
product  problems and other matters.  A failure to comply with such  regulations
could have material adverse effects on our business.

The Federal Food, Drug and Cosmetic Act ("FDC Act") regulates medical devices in
the United  States by  classifying  them into one of three  classes based on the
extent of  regulation  believed  necessary to ensure  safety and  effectiveness.
Class I devices  are  those  devices  for which  safety  and  effectiveness  can
reasonably be ensured through general controls, such as device listing, adequate
labeling,  premarket notification and adherence to the Quality System Regulation
("QSR")  as well  as  medical  device  reporting  ("MDR"),  labeling  and  other
regulatory  requirements.  Some  Class I medical  devices  are  exempt  from the
requirement  of  pre-market  approval or  clearance.  Class II devices are those
devices for which safety and effectiveness can reasonably be ensured through the
use of special controls, such as performance standards, post-market surveillance
and patient registries,  as well as adherence to the general controls provisions
applicable to Class I devices. Class III devices are devices that generally must
receive premarket  approval by the FDA pursuant to a premarket  approval ("PMA")
application  to ensure  their  safety and  effectiveness.  Generally,  Class III
devices are limited to life sustaining,  life supporting or implantable devices;
however,  this classification can also apply to novel technology or new intended
uses or applications for existing devices.

Before they can be  marketed,  most  medical  devices  introduced  to the United
States market are required by the FDA to secure either clearance of a pre-market
notification pursuant to Section 510(k) of the FDC Act (a "510(k) Clearance") or
approval of a PMA.  Obtaining  approval of a PMA  application  can take  several
years. In contrast, the process of obtaining 510(k) Clearance generally requires


                                       4
<page>

a submission of substantially  less data and generally involves a shorter review
period.  Most  Class I and Class II  devices  enter the  market  via the  510(k)
Clearance procedure, while new Class III devices ordinarily enter the market via
the more rigorous PMA procedure. In general,  approval of a 510(k) Clearance may
be obtained if a manufacturer  or seller of medical devices can establish that a
new device is  "substantially  equivalent" to a predicate  device other than one
that has an approved PMA. The claim for  substantial  equivalence may have to be
supported by various types of information,  including clinical data,  indicating
that the device is as safe and  effective  for its  intended  use as its legally
marketed  equivalent  device.  The 510(k)  Clearance is required to be filed and
cleared by the FDA prior to introducing a device into  commercial  distribution.
Market clearance for a 510(k) Notification submission may take 3 to 12 months or
longer.  If the FDA finds that the device is not  substantially  equivalent to a
predicate device, the device is deemed a Class III device, and a manufacturer or
seller is required to file a PMA application.  Approval of a PMA application for
a new medical device usually requires,  among other things,  extensive  clinical
data on the safety and  effectiveness  of the device.  PMA applications may take
years to be approved after they are filed. In addition to requiring clearance or
approval for new medical devices, FDA rules also require a new 510(k) filing and
review period,  prior to marketing a changed or modified  version of an existing
legally marketed device,  if such changes or modifications  could  significantly
affect  the  safety  or  effectiveness   of  that  device.   FDA  prohibits  the
advertisement or promotion of any approved or cleared device for uses other than
those that are stated in the device's approved or cleared application.

Generally, if we are in compliance with FDA and California  regulations,  we may
market our products throughout the United States. International sales of medical
devices are also subject to the  regulatory  requirements  of each  country.  In
Europe,  the  regulations  of the European Union require that a device have a CE
mark before it can be sold in that market. The regulatory  international  review
process varies from country to country.  We rely upon our distributors and sales
representatives  in the  foreign  countries  in which we market our  products to
ensure we comply with the regulatory laws of such  countries.  Failure to comply
with the laws of such  country  could  have a  material  adverse  effect  on our
operations  and, at the very least,  could  prevent us from  continuing  to sell
products in such countries.  Exports of most medical devices are also subject to
certain limited FDA regulatory controls.

We will  ensure  all  regulations  are  complied  with,  all  registrations  are
performed and all required clearances are received.

Costs and Effects of Compliance with Environmental Laws and Regulations

We are not  involved in a business  which  involves  the use of  materials  in a
manufacturing  stage where such  materials are likely to result in the violation
of any existing  environmental rules and/or regulations.  Further, we do not own
any real property,  which would lead to liability as a landowner.  Therefore, we
do not anticipate that there will be any costs associated with the compliance of
environmental laws and regulations.

Employees

We currently retain seven full-time employees worldwide, all of which were hired
in  connection  with our  entrance  into the dental  equipment  market.  We hire
independent  contractors  on an "as needed"  basis only.  We have no  collective
bargaining  agreements  with  our  employees.   We  believe  that  our  employee
relationships  are  satisfactory.  Long term, we will attempt to hire additional
employees as needed based on our growth rate.



                                       5
<PAGE>

Research and Development

Research and  Development  (R&D) costs have been  decreasing  during the current
fiscal  year.  R&D costs were  $93,186 and  $270,395  for the fiscal years ended
March  31,  2003 and 2002,  respectively.  The  decrease  for  fiscal  year 2003
reflects the decrease in expenses for design and  development  of the new curing
light  technology  introduced  during the first  quarter of 2002,  and intraoral
camera technology.

ITEM 2 - DESCRIPTION OF PROPERTY

In Ghent,  Belgium,  we lease  office and  warehouse  space on a  month-to-month
lease, for approximately (euro) 6,300 ($7,107 as of July 14, 2003) per month.

ITEM 3 - LEGAL PROCEEDINGS

To the best knowledge of management,  there are no legal proceedings  pending or
threatened against the Company.

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

On March 27, 2002, the Company's  Board of Directors  approved an Asset Purchase
Agreement  for the sale of our  toothbrush  business to Famcare  2000,  LLC (the
"Asset Sale"). Eleven shareholders own a majority of the Company's voting stock,
and on July 1, 2002,  they executed a written  consent as majority  stockholders
approving the Asset Sale.











                                       6
<PAGE>

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is traded on the  Over-the-Counter  Bulletin  Board,  under the
symbol  REMM.  Prior to September  18, 2001,  our common stock was traded on the
pink sheets  included  in the NASD  Electronic  Bulletin  Board under the symbol
REMM.

The  following  is the range of high and low bid prices for our common stock for
the periods indicated:

                                                           Bid Prices
                                                      High             Low
         Quarter ended June 30, 2001                  0.36             0.09
         Quarter ended September 30, 2001             0.23             0.09
         Quarter ended December 31, 2001              0.18             0.05
         Quarter ended March 31, 2002                 0.08             0.05
         Quarter ended June 30, 2002                  0.09             0.03
         Quarter ended September, 2002                0.22             0.04
         Quarter ended December 31, 2002              0.11             0.03
         Quarter ended March 31, 2003                 0.10             0.03

Bid  quotations  represent  interdealer  prices  without  adjustment  for retail
markup,  markdown and/or  commissions and may not necessarily  represent  actual
transactions.

Stockholders

As of March  31,  2003,  the  number of  stockholders  of  record  was 429,  not
including  beneficial  owners whose shares are held by banks,  brokers and other
nominees.  The Company estimates that it has approximately 2,400 stockholders in
total.

Dividends

We have not paid any  dividends on our common  stock,  and we do not  anticipate
paying any dividends in the foreseeable  future.  Our Board of Directors intends
to follow a policy of retaining  earnings,  if any, to finance the growth of the
company.  The  declaration  and  payment  of  dividends  in the  future  will be
determined  by our Board of  Directors  in light of  conditions  then  existing,
including the company's earnings,  financial condition, capital requirements and
other factors.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The  discussion  and financial  statements  contained  herein are for the fiscal
years ended March 31, 2003 and 2002.  The  following  discussion  regarding  the
financial  statements  of the  Company  should be read in  conjunction  with the
financial statements of the Company included herewith.



                                       7

<PAGE>

Overview

The Company develops,  markets and distributes  high-technology dental equipment
for sale within the professional dental market.

Results of Operations

Comparative details of results of operations for the years ending March 31, 2003
and 2002.


<table>
<Caption>

                                                                     <c>                     <c>
                                                                       Year Ending             Year Ending
                                                                      March 31, 2003          March 31, 2002
                                                                      --------------          --------------
   Net Sales                                                           $   1,969,144            $    733,853
   Cost of Sales                                                           1,062,681                 502,013
                                                                      --------------          --------------
           Gross Profit                                                      906,463                 231,840

   Operating Expenses
      Research and Development                                                93,186                 270,395
      Sales and Marketing                                                     64,132                  49,582
      General and Administrative                                           1,354,554               1,793,361
      Impairment loss on IMDS Goodwill                                       330,000
      Depreciation and Amortization                                           21,804                  12,711
                                                                      --------------           -------------
            TOTAL OPERATING EXPENSES                                       1,863,676               2,126,049
                                                                      --------------           -------------

   LOSS FROM OPERATIONS                                                    (957,213)             (1,894,209)

   OTHER INCOME (EXPENSES)
      Interest/Other Income                                                   21,195                  44,290
      Interest Expense                                                      (70,356)               (113,887)
                                                                      --------------           -------------

            TOTAL OTHER INCOME (EXPENSES)                                   (49,161)                (69,597)

                                                                       -------------           -------------
   LOSS BEFORE INCOME TAXES                                              (1,006,374)             (1,963,806)

   Income Tax Benefit (Expense)                                                   --                      --

            NET LOSS                                                  $  (1,006,374)          $  (1,963,806)
                                                                      ==============          ==============

</table>

Fiscal Year Ending March 31, 2003 compared to Fiscal Year Ending March 31, 2002
(audited)

For the fiscal year ending March 31,  2003,  net sales  increased by  $1,235,291
from  $733,853 in 2002 to $1,969,144  in 2003.  This  represents a 168% increase
over the  comparable  period  in the prior  year.  The  increase  was due to the
commencement of dental equipment sales in our European subsidiary  ($1,964,503).
As the  Company  has  initiated  its  presence  within the  professional  dental
equipment  market,  our  European  subsidiary  has  begun  sales of our  initial
technology,  a high-speed dental curing light, as well as after-market products,
including accessories and repair services.  These revenues were partially offset
by the  continued  reduction  in oral  hygiene  revenues  throughout  the  year,
consistent with our  reorganization  plan, as we reposition assets and resources
to the professional  dental equipment market,  and finalize the sale of the oral
hygiene division.




                                       8

<page>

Cost of goods sold were  $1,062,681  in 2003 as compared to $502,013 in 2002, an
increase of $560,668 or 112% over the  comparable  period  ended March 31, 2002.
This  represents  a  corresponding  increase to the increase in sales during the
current  fiscal year end. Cost of goods sold as a percentage of sales  decreased
14%, from 68% of sales in 2002 to 54% of sales in 2003.

Gross profit was  $906,463 in 2003 as compared to $231,840 in 2002,  an increase
of $674,623 or 291% over the comparable period.  Gross profit as a percentage of
sales  increased  14%,  from 32% of sales in 2002 to 46% of sales in 2003.  This
increase is the result of our shift in sales to the  higher-margin  professional
dental equipment market during the current fiscal year.

Research and development  expenses were $93,186 for 2003 as compared to $270,395
for 2002,  a decrease of  $177,209,  or 66%,  over the prior  fiscal  year,  due
primarily to the research and  development  costs  incurred  during the start-up
phase of the Company's  high-technology  dental  equipment  segment in the prior
fiscal year. These  expenditures  relate primarily to the labor and materials to
design and  manufacture  our new curing  light  technology,  in  addition to the
completion  of 15  prototypes.  We expect we will continue to invest in research
and  development,  and  anticipate  significant  costs in the near  future as we
continue to develop products for the dental equipment markets.

Sales and marketing costs as of March 31, 2003 and 2002 were $64,132 and $49,582
respectively, which represents an increase of $14,550 or 29%. As a percentage of
sales, sales and marketing expenses decreased from 7% of sales in 2002, to 3% of
sales in 2003. This decrease is a result of the shift in business focus from the
retail selling of oral hygiene products to the wholesale selling of professional
dental products.  We have shifted into the professional dental equipment market,
whereby  we  focus  on  the  less  capital-intensive  sale  of  units  to  large
distributors.  This marketing and distribution  method allows for  significantly
less marketing and provides more predictable revenue flow.

General  and  administrative  costs  for  2003  and  2002  were  $1,354,554  and
$1,793,361  respectively,  a decrease of $438,807  or 25%.  As a  percentage  of
sales, general and administrative expenses decreased from 244% of sales in 2002,
to 69% of sales in 2003.  This  decrease  is a result of the  Company's  focused
efforts to internally reorganize in order to use resources more effectively. The
Encino,  California office was closed, and the two employees of that office were
laid off.

At March 31,  2003 the  Company  recorded  a full  impairment  loss of  $330,000
against the goodwill  recorded in fiscal 2002 in connection with the acquisition
of the assets of the business concept for the dental outsourcing  business known
as IMDS. The Company is no longer actively operating this business.

Net  interest  expense was $70,356 for 2003 as compared to $113,887  for 2002, a
decrease  of  $43,531,  or 38%,  over the  comparable  period.  The  decrease in
interest  expense was largely due to the  conversion  of debt into common  stock
during the current fiscal year.

Inflation  has  not  had a  material  effect  on our  revenue  and  income  from
continuing  operations in the past two years. We do not expect inflation to have
a material future effect.

Liquidity and Capital Resources

On March 31, 2003,  our current  liabilities  exceeded  our current  assets by $
$910,122.  Our business operations will require substantial capital financing on
a continuing  basis. The availability of that financing will be essential to our
continued  operation  and  expansion.  In addition,  cash flow and  liquidity is
contingent upon the success of our restructuring plan. The inability to continue
to develop and market  high-technology  dental  equipment  or operate our dental
outsourcing  business  will  force us to raise  additional  capital  to  support
operations by selling equity securities or incurring additional debt.



                                       9

<page>

Since our  inception in 1996,  we have  sustained  net losses and negative  cash
flow,  due  largely to start-up  costs,  general  and  administration  expenses,
inventory,  marketing and other expenses  related to market  development and new
product launch. As a result,  we have financed our working capital  requirements
principally  through  loans and the  private  placement  of our common  stock to
accredited investors.

In December  2002, as a result of losses  incurred  during its start-up  period,
Remedent  N.V.'s  shareholder  equity  fell below that which is  required  under
Belgium law. In accordance with Belgium law, Remedent N.V. retained the services
of an  independent  Belgium  certified  accountant  to  determine  the amount of
additional capital contribution  necessary to bring Remedent N.V's balance sheet
into compliance. As a result of this analysis, it was determined that additional
capital of 310,000 Euros  ($321,687 as of December  2002) would be required and,
further,  that Remedent N.V.'s valuation prior to such capital  contribution was
88,500  Euros.  In as much as Remedent  USA lacked the  financial  resources  to
provide the additional  capital  required,  Remedent N.V. elected to issue 7,171
shares of its common stock to Lausha N.V., a company controlled by Guy De Vreese
in exchange for conversion of 50,000 Euros in notes payable and  contribution of
the 235,000 Euros in fixed income marketable securities discussed above, both as
an irrevocable  capital  contribution to Remedent N.V. In addition,  Remedent NV
issued 629 shares to Robin List in exchange  for  conversion  of 25,000 Euros in
notes payable as an  irrevocable  capital  contribution  to Remedent N.V. Mr. De
Vreese and Mr.  List are both  officers  and  directors  of  Remedent  N.V.  and
Remedent USA, Inc. As a result of this transaction,  we currently own 22% of our
subsidiary, Remedent N.V.

In  February  2002,  we  entered  into a line of credit  facility  with the Bank
Brussels Lambert ("BBL") consisting of an accounts receivable factoring line for
(euro)991,000  ($1,079,298  at March 31,  2003) and a general line of credit for
(euro)250,000  ($272,275 at March 31, 2003).  As of March 31, 2003, we had drawn
$261,572 from this facility.

During the fiscal year ended March 31,  2002,  we received  advances of $150,799
from officers and directors in the form of working  capital  loans.  These loans
bear no interest and are due upon demand.  We repaid  $11,314 of these  advances
with cash and  settled  $88,308 of these  advances  with the  issuance of common
stock valued at $0.50 a share.

We expect to continue to experience  negative cash flow possibly through the end
of the current  calendar  year,  and may continue to do so  thereafter  while we
attempt to increase  development  and marketing of our  products.  Unless we are
able to  generate  sufficient  revenue  or  acquire  additional  debt or  equity
financing to cover our present and ongoing  operation costs and liabilities,  we
may not be able to continue as a going  concern.  Our auditors note that we have
sustained  substantial  net losses since our  inception in  September  1996.  In
addition,  as of March 31, 2003,  we had a working  capital  deficit  totaling $
$910,122 and a shareholders deficit of $864,286.

Our balance sheet at March 31, 2003 reflects cash and cash  equivalents  of $-0-
as compared to $31, 940 as of March 31,  2002, a decrease of $31,  940. Net cash
used by  operations  decreased  by $186,058 to $604,051 for the year ended March
31,  2003 as compared to net cash used in  operations  of $790,109  for the year
ended March 31, 2002.  The decrease in net cash used by operations  for the year
ended  March  31,  2003  as  compared  to the  year  ended  March  31,  2002  is
attributable primarily to the decrease in net loss to $1,006,374, which included
a non cash  impartment  loss of $330,000 for the loss on the IMDS  goodwill,  as
compared to a net loss of  $1,963,806  for the year ended March 31,  2002.  Also
contributing  to the  reduction in cash used in  operations  was the increase in
accounts  receivable  of  $60,739  during the  current  year as  compared  to an
increase in accounts receivable of $102,075 for the prior year, due primarily to
the improved  payment  performance  by our customers.  Partially  offsetting the
foregoing increase in net cash provided from operations for the year ended March
31, 2003 was a increase in accounts payable and accrued  liabilities  during the


                                       10

<page>

current year of $142,593 and $15,668,  respectively,  as compared to an increase
in accounts  payable and accrued  liabilities  during the prior year of $269,419
and  $426,740,   respectively,  due  to  our  efforts  to  improve  our  payment
performance with our vendors.

Net cash used in investing activities decreased $57,583 to $118,426 for the year
ended March 31, 2003 as compared  to net cash used in  investing  activities  of
$176,008  for the year ended March 31,  2002.  The  decrease in net cash used in
investing  activities  is  attributable  to the  increase in notes from  related
parties of  $142,142  during  the year ended  March 31,  2003 as  compared  to a
decrease  in notes from  related  parties of  $107,668  for the prior year and a
decrease of $59,736 in  equipment  purchases  to $5,348 for the year ended March
31, 2003 as compared to $65,084  for the prior year.  Partially  offsetting  the
foregoing was the increase in investments of $255,939.

Net cash provided by financing  activities decreased by $273,251 to $727,865 for
the year ended March 31, 2003 as compared to $1,001,115 for the year ended March
31,  2002.  The  decrease  in net  cash  provided  by  financing  activities  is
attributable  to the reduction  the need for  additional  borrowings  and common
stock private placements as sales and cash flow improve.

Frequently we have been unable to make timely  payments to our trade and service
vendors.  As of March  31,  2003,  we had past due  payables  in the  amount  of
$280,043, representing a 111% increase from the prior fiscal year. This increase
is due primarily to our inability to generate sufficient revenue from operations
to fund our ongoing  operations.  We continue to utilize funds raised from sales
of equity  instruments to fund current  operations.  Deferred payment terms have
been  negotiated  with most  vendors,  which has  allowed us to continue to make
shipments on time and no orders have been cancelled to date.

Our  business  operations  will  require  substantial  capital  financing  on  a
continuing  basis.  Based upon our cash flow  projections,  significant  capital
infusion is necessary to fully implement our restructuring plan and pay existing
delinquent  payables.  We plan to finance such through loans, equity investments
and other  transactions.  We  reasonably  believe that the net proceeds from our
efforts,  assuming  the maximum  amount is raised and loans are  obtained,  plus
revenues  generated from operations,  will be sufficient to fund our operations.
However,  there can be no  assurance  that we will be able secure the  necessary
financing.  In the  event  that  we are  unsuccessful  in  completing  financing
arrangements,   we  would  have  difficulty  meeting  our  operation   expenses,
satisfying   our  existing  or  future  debt   obligations,   or  succeeding  in
implementing our restructuring  plan. Without sufficient cash flow we are unable
to satisfy our debt obligations, our ongoing growth and operations are, and will
continue to be,  restricted and there is substantial  doubt as to our ability to
continue as a going concern.

Disclosure Regarding Forward-Looking Statements

This filing  contains  statements  that  constitute  forward-looking  statements
within the meaning of Section 21E of the Exchange Act of 1934 and Section 27A of
the  Securities  Act of 1933.  The  words  "expect,"  "estimate,"  "anticipate,"
"predict,"  "believe,"  and  similar  expressions  and  variations  thereof  are
intended to identify  forward-looking  statements.  Such statements  appear in a
number of places in this filing and  include  statements  regarding  our intent,
belief or current expectations  regarding our strategies,  plans and objectives,
our product release schedules,  our ability to design, develop,  manufacture and
market  products,  our intentions  with respect to strategic  acquisitions,  the
ability of our  products to achieve or maintain  commercial  acceptance  and our
ability to obtain financing for our obligations.  Any forward-looking statements
are not guarantees of future  performance  and involve risks and  uncertainties.
Actual results may differ  materially from those  projected in this filing,  for
the reasons,  among others,  described within the various  sections.  You should
read  the  filing  carefully,  and  should  not  place  undue  reliance  on  any
forward-looking  statements,  which speak only as of the date of this filing. We



                                       11

<page>

undertake  no  obligation  to release  publicly  any updated  information  about
forward-looking  statements to reflect events or  circumstances  occurring after
the date of this filing or to reflect the occurrence of unanticipated events.

ITEM 7.  FINANCIAL STATEMENTS

The Financial  Statements that constitute Item 7 are included at the end of this
report beginning on Page F-1.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

Effective May 1, 2002,  the Board of Directors of the Company  dismissed  Siegel
Smith LLP ("Siegel Smith") as its independent auditors for the fiscal year ended
March 31,  2002 and  approved  the  engagement  of Farber & Hass LLP  ("Farber &
Hass") as Siegel  Smith's  replacement.  Siegel  Smith had  previously  been the
Company's independent auditors.  The decision to change auditors was approved by
the Company's Board of Directors. Since the date of their engagement on November
5, 1999,  there have been no  disagreements  with Siegel Smith on any matters of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure  which,  if not resolved to the  satisfaction of Siegel Smith
would have caused Siegel Smith to make reference to the matter in their report
















                                       12
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

The following  table sets forth the names and ages of the current  directors and
executive officers of the Company,  the principal offices and positions with the
Company  held by each  person  and the date such  person  became a  director  or
executive  officer of the  Company.  The  executive  officers of the Company are
elected annually by the Board of Directors. Each year the stockholders elect the
board of  directors.  The  executive  officers  serve terms of one year or until
their  death,  resignation  or removal by the Board of  Directors.  There was no
arrangement or understanding  between any executive officer and any other person
pursuant to which any person was elected as an executive officer.

Person                    Age       Position
------                    ---       --------
Guy De Vreese              48       Chairman
Robin List                 32       Director, Chief Executive Officer
Stephen Ross               43       Director, Chief Financial Officer, Secretary
Kenneth J. Hegemann        54       Director
Fred Kolsteeg              59       Director

Guy De Vreese,  Chairman-  From  April 1, 2002,  Mr. De Vreese has served as our
Chairman of the Board. From June 2001 Mr. De Vreese has also served as President
of Remedent  N.V. Mr. De Vreese  served as  President of DMDS,  Ltd., a European
subsidiary of Dental & Medical Systems,  Inc. DMDS, Ltd.  developed and marketed
high-tech  dental  equipment.  In August 1996, Mr. De Vreese founded DMD N.V., a
Belgian company that was the independent  European distributor for DMDS products
and was its Chief Executive Officer until DMD purchased its distribution  rights
in April 1998.  Mr. De Vreese also worked for Lident,  N.V.,  a Belgian  company
specializing in digital  photography and developer of imaging  software,  as CEO
from 1996 through February 1999 and as a consultant  providing services to DMDS,
Ltd. from February 1999 to June 2001.  Prior to 1997,  Mr. De Vreese served as a
board member of Dycam Inc. and New Image Industries, Inc. Mr. De Vreese was also
CEO and Chairman of the Board of Styles On Video Inc. from July 1992 to February
1995. On June 17, 1998, the Securities and Exchange  Commission  settled a civil
action it had filed  against  Mr. De  Vreese  win which it  charged  that Mr. De
Vreese,  while an officer and  director of Styles on Video,  Inc.  violated  the
antifraud,  reporting,  recordkeeping,   internal  controls,  and  lying  to  an
accountant  provisions  of the federal  securities  laws.  Without  admitting or
denying  the  SEC's  allegations,  Mr.  De  Vreese  consented  to the entry of a
permanent  injunction  against him enjoining him from  violating the  anti-fraud
provisions of the federal securities laws. Mr. De Vreese resides in Belgium.

Robin List, Chief Executive Officer - From April 1, 2002, Mr. List has served as
our CEO and as a director.  From April  2001,  Mr. List has served a director of
Remedent N.V.  From January 1998 through April 2001,  Mr. List was a director of
New BitsSnap  N.V., a Belgian  company.  In this position Mr. List consulted for
DMDS Ltd., a European  subsidiary of Dental & Medical Diagnostic  Systems,  Inc.
DMDS, Ltd. developed and marketed high-tech dental equipment .. From August 1995
to January 1998 Mr. List served as  commercial  director for WAVE Imaging B.V. a
Dutch based company that provided digital services. Mr. List resides in Belgium.

Stephen Ross,  Director,  CFO, Secretary - Mr. Ross has served as a director and
Chief  Financial  Officer of the Company  since August 2001 and as our Secretary
since April 2002.  From February 1998 through  January 2001, Mr. Ross was CFO of
Dental & Medical Diagnostic Systems, Inc., a company that developed and marketed


                                       13

<page>

high-tech dental equipment and declared  bankruptcy in July 2001.  Commencing in
1996 and  terminating  February  1998,  Mr. Ross  served as a senior  management
consultant with Kibel and Green, a corporate  restructuring and management firm.
Prior to working for Kibel and Green, Mr. Ross served as CFO and co-founder of a
personal care  company,  and as tax manager with an  accounting  firm.  Mr. Ross
resides in Los Angeles, California.

Kenneth J. Hegemann, Director - Mr. Hegemann has been the president of CRA Labs,
Inc. and Oralbotic Research, Inc. for the past five years, firms specializing in
the  development of automated  tooth brushing  technology and conduct of various
engineering projects.

Fred Kolsteeg,  Director - Mr.  Kolsteeg has served as a director of the Company
since April 2002.  Since 1996, Mr.  Kolsteeg has served as the president of WAVE
Communications,  a Dutch based  advertising  agency.  Prior to founding  WAVE in
1996, he founded several other  advertising  agencies such as ARA, Team and Team
Saatchi. Mr. Kolsteeg has also worked at Phillips and Intermarco  Publicis.  Mr.
Kolsteeg  resides in Holland.  Compliance  with Section 16(a) of the  Securities
Exchange Act of 1934

Section 16(a) of the  Securities  Exchange Act of 1934 requires our officers and
directors,  and persons who own more than ten  percent of our Common  Stock,  to
file  reports of  ownership  and changes in ownership  with the  Securities  and
Exchange  Commission ("SEC").  Officers,  directors and greater than ten percent
stockholders  are required by SEC regulations to furnish the Company with copies
of all Section  16(a) forms they file.  Based solely on our review of the copies
of such forms we received,  or written  representations  from certain  reporting
persons,  we  believe  that  during  our  2003  fiscal  year,  all  such  filing
requirements  applicable  to our  officers,  directors,  and  greater  than  10%
beneficial owners were complied with.

ITEM 10-EXECUTIVE COMPENSATION

Summary Compensation

The  following  table and  attached  notes  sets forth the  compensation  of our
executive officers and directors during each of the last three fiscal years. The
remuneration  described  in the table  does not  include  our costs of  benefits
furnished  to the  named  executive  officers,  including  premiums  for  health
insurance,  reimbursement  of  expense,  and  other  benefits  provided  to such
individual  that are extended in  connection  with the  ordinary  conduct of our
business.  The value of such benefits  cannot be precisely  determined,  but the
executive  officers named below did not receive other  compensation in excess of
the lesser of $25,000 or 10% of such officer's cash compensation:









                                       14
<PAGE>


                           Summary Compensation Table

<table>
<caption>

                  <c>      <c>        <c>            <c>             <c>            <c>             <c>          <C>
                                          Annual Compensation                       Long Term Compensation
                                                                                      Awards               Payouts
                                                                                       Securities
Name and                                                Other           Restricted     Underlying       LTIP         All other
Principal                                               Annual            stock         Options/      pay-outs     compensation
Position             Year    Salary ($)   Bonus ($)   compensation ($)    award(s) ($)  SARs (#)         ($)            ($)
----------------------------------------------------------------------------------------------------------------------------------
Guy DeVreese,(1)     2003     $-0-         $-0-       $-0-                 $-0-          -0-             $-0-         $132,000(2)
Chairman             2002     N/A          N/A        N/A                  N/A           N/A             N/A          N/A
                     2001     N/A          N/A        N/A                  N/A           N/A             N/A          N/A
----------------------------------------------------------------------------------------------------------------------------------
Robin List, (3)      2003     $110,000     $-0-       $-0-                 $-0-          -0-             $-0-         $-0-
CEO                  2002     N/A          N/A        N/A                  N/A           N/A             N/A          N/A
                     2001     N/A          N/A        N/A                  N/A           N/A             N/A          N/A
----------------------------------------------------------------------------------------------------------------------------------
Stephen F. Ross,     2003     $60,000      $-0-       $-0-                 $-0-          -0-             $-0-         $-0-
CFO, Secretary       2002     $28,951      $-0-       $-0-                 $-0-          1,000,000(4)    $-0-         $-0-
                     2001     N/A          N/A        N/A                  N/A           N/A             N/A          N/A
==================== ======== ============ ========== ==================== ============= =============== ============ ============

</table>

Employment Agreements

While we do not currently have any written employment agreements,  we anticipate
having  employment  contracts  with  executive  officers  and key  personnel  as
necessary, in the future.

Compensation of Directors

Except for the  Chairman  of the Board,  our  directors  do not receive any cash
compensation,  but are entitled to reimbursement  of their  reasonable  expenses
incurred in attending directors' meetings.

Stock Option Plan

On May 29, 2001,  the Board of Directors  adopted an Incentive and  Nonstatutory
Stock Option Plan (the "Plan"),  reserving  5,000,000 shares underlying  options
for issuance under this plan. There is a restriction that no more than 1,000,000
options may be granted to any one  individual or entity in any one calendar year
under the Plan. As of March 31, 2003, 4,620,900 options are outstanding.

---------------
(1) In March 2002, prior to Mr. De Vreese becoming an officer or director of the
Company,  the Company issued to Mr. De Vreese  1,000,000  shares of Common Stock
underlying options, which vested on March 29, 2002 and have an exercise price of
$0.05 (fair market value at date of grant) per share.

(2) Consulting fees paid by Remedent N.V. to Lausha,  N.V. and Lident N.V., both
companies controlled by Mr. De. Vreese, pursuant to an oral consulting agreement
between these companies and Remedent N.V.

(3) In March  2002,  prior to Mr.  List  becoming  an officer or director of the
Company,  the  Company  issued to Mr.  List  1,000,000  shares  of Common  Stock
underlying  options which vested on March 29, 2002 and have an exercise price of
$0.05 (fair market  value at date of grant) per share,  however Mr. List was not
an officer of the Company during fiscal year 2002.

(4) In March 2002 the  Company  issued to Mr.  Ross  1,000,000  shares of Common
Stock  underlying  options  which  vested on March 29, 2002 and have an exercise
price of $0.05 (fair market value at date of grant) per share.



                                       15

<PAGE>>


ITEM 11- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of March 31, 2003 certain information relating
to the  ownership  of our common  stock by (i) each person known by us to be the
beneficial  owner of more  than 5% of the  outstanding  shares  of the  class of
equity  security,  (ii) each of our  Directors,  (iii) each of the our executive
officers,  and (iv) all of our  executive  officers  and  directors  as a group.
Except  as may be  indicated  in the  footnotes  to the  table  and  subject  to
applicable community property laws, each of such persons has the sole voting and
investment power with respect to the shares owned.

<table>
<caption>
<S>                                                   <C>                         <C>
      Name and address of beneficial owner            Amount and nature of       Percent of class
                                                      beneficial owner (1)
-------------------------------------------------- --------------------------- ----------------------

Guy De Vreese (2)                                          8,268,571                  23.8%
(Chairman)
Xavier de Cocklaan 42
9831 Deurle, Belgium
-------------------------------------------------- --------------------------- ----------------------
Robin List (3)
(Director, CEO)
Xavier de Cocklaan 42                                      2,212,500                   6.4%
9831 Deurle, Belgium
-------------------------------------------------- --------------------------- ----------------------
Stephen Ross (4)
(Director, CFO)
1921 Malcolm #101                                          1,000,000                   2.9%
Los Angeles, CA 90025
-------------------------------------------------- --------------------------- ----------------------
Fred Kolsteeg (5)
(Director)
Managelaantje 10                                           2,200,000                  6.84%
3062 CV Rotterdan
The Netherlands
-------------------------------------------------- --------------------------- ----------------------
Kenneth Hegemann (7)
(Director)
1220 Birch Way                                             1,045,000                   3.1%
Escondido, CA 92097
-------------------------------------------------- --------------------------- ----------------------
All Officers and Directors as a group                     14,726,071                 41.50%
(5 persons)
-------------------------------------------------- --------------------------- ----------------------
Dental Advisors, Inc. (8)
1220 Birch Way                                             3,388,000                   9.6%
Escondido, CA 92027
-------------------------------------------------- --------------------------- ----------------------
Rebecca Inzunza
1220 Birch Way                                             2,679,495                   8.0%
Escondido, CA 92027
-------------------------------------------------- --------------------------- ----------------------
Jonathan J. Marine (9)
448 21st Street                                            2,300,000                   6.8%
Manhattan Beach, CA 90266
-------------------------------------------------- --------------------------- ----------------------
KolsteegBeleggingsmaatschappij B.V.(6)
Managelaantje 10
3062 CV Rotterdan                                          1,200,000                   3.6%
The Netherlands
-------------------------------------------------- --------------------------- ----------------------

</table>
                                       16

<page>

* Less than 1%

(1)  Beneficial  ownership has been  determined  in  accordance  with Rule 13d-3
     under  the  Exchange  Act.  Pursuant  to the  rules of the  Securities  and
     Exchange  Commission,  shares of Common Stock which an  individual or group
     has a right to acquire  within 60 days  pursuant to the exercise of options
     or warrants are deemed to be  outstanding  for the purpose of computing the
     percentage  ownership of such individual or group, but are not deemed to be
     beneficially  owned  and  outstanding  for the  purpose  of  computing  the
     percentage ownership of any other person shown in the table.
(2)  Guy De Vreese holds 1,060,000 shares in his own name,  including  1,000,000
     shares of Common Stock  underlying  options  which were  exercisable  on or
     which will become exercisable  within 60 days of April 15, 2002;  5,949,971
     shares of Common  Stock  held in the name of New  Bitsnap  N.V.,  a Belgian
     company  controlled  by Guy De Vreese,  including  26,400  shares of Common
     Stock  underlying  warrants which were  exercisable on or which will become
     exercisable  within 60 days of April 15, 2002; and 1,258,600 shares held in
     the name of Lausha N.V.,  a Belgian  company  controlled  by Guy De Vreese,
     including  173,600  shares of Common Stock  underlying  warrants which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002.
(3)  Includes  1,000,000  shares of Common Stock  underlying  options which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002.
(4)  Includes  1,000,000  shares of Common Stock  underlying  options which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002.
(5)  1,000,000 are in Fred  Kolsteeg's  own name,  including  100,000  shares of
     Common Stock  underlying  options which were  exercisable  on or which will
     become  exercisable  within 60 days of June 21, 2002;  and 1,200,000 are in
     the name of  KolsteegBeleggingsmaatschappij  B.V., a company  controlled by
     Fred Kolsteeg, including 200,000 shares of Common Stock underlying warrants
     which were exercisable on or which will become  exercisable  within 60 days
     of June 21, 2002.
(6)  Includes  200,000  shares of Common Stock  underlying  warrants  which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002. Fred Kolsteeg is a beneficial owner of these shares.
(7)  Includes  100,000  shares of Common  Stock  underlying  options  which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002.
(8)  Includes  1,694,000 shares of Common Stock  underlying  warrants which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002.
(9)  Includes  250,000  shares of Common Stock  underlying  warrants  which were
     exercisable on or which will become  exercisable within 60 days of June 21,
     2002.

ITEM 12-CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On January 15, 2002 our subsidiary,  Remedent NV, acquired International Medical
& Dental Support ("IMDS") from New Bitsnap,  NV. IMDS was a business concept and
related assets for dental practitioner outsourcing business. The assets acquired
consisted of the  following:  a business  plan for the concept  with  supporting
market  data,  a software  package,  two staff  members  who had  experience  in
telemarketing,  a list of Belgium dentists,  a list of Dutch dentists,  forms of
contracts, and a website domain name. The consideration we paid for IMDS was for
a total of 6,000,000 shares of our common stock,  valued at $330,000.  The value
of the common  shares  issued was  determined  based on the market  price of the
Company's common stock on the date of acquisition. The principal of New Bitsnap,
N.V.  prior  to its sale to  Remedent  NV was Guy  DeVreese.  Guy  DeVreese  was
appointed  a director  of  Remedent,  USA on April 1, 2002.  We did not take any
procedural  steps to insure  fairness  in the terms of this  transaction  to the
Company.



                                       17

<PAGE>

On January 24,  2002,  the Company  entered  into an  agreement  with Kenneth J.
Hegemann,  an  officer,  for the  repayment  of  various  related  party  debts,
including  accrued payroll,  interest and advances,  with the issuance of common
stock. $472,550 of indebtedness was fully satisfied with the issuance of 945,100
shares of common stock.

On March 14, 2002,  we entered  into an Asset  Purchase  Agreement  with Famcare
2000,  LLC,  a Nevada  limited  liability  company,  owned and  operated  by Rob
Hegemann,  the son of Ken Hegemann,  who a director of the Company. On March 14,
2002,  we  entered  into  an  Asset  Purchase  Agreement  selling  our  Remedent
Toothbrush division to Famcare 2000, LLC, The Agreement provided for the sale of
the old Remedent Toothbrush business,  which accounted for approximately $50,000
in revenues  for the fiscal  year ended  March 31,  2002.  The  business,  which
engages in the worldwide  distribution of the Remedent Toothbrush,  had been our
sole  activity  since 1996.  As a condition of the sale,  Famcare 2000 agreed to
assume  responsibility for the liabilities  relating to the toothbrush business,
which liabilities exceeded the value of the toothbrush business by approximately
$310,000.  Therefore  the terms of the  agreement  provided for Company to issue
750,000 shares of common stock to Famcare 2000 in consideration of Famecare 2000
taking over the toothbrush business and assuming  responsibility for the related
liabilities.  Famcare  2000  received  an  effective  price of $0.41 per  share,
representing an approximate  400% premium over the Company's market value at the
time.  This  transaction  was not  consummated  until  September  2002,  20 days
following the mailing to our shareholders of a Definitive  Information Statement
on Schedule 14C for this transaction.

On February 11, 2002 the Company established a line of credit with ING (formerly
Bank Brussel Lambert) for (euro)250,000  ($218,100 at March 31, 2002. Due to the
insufficient  assets  maintained  by  Remedent  NV as of the date of the line of
credit,  ING imposed two  requirements  for the extension of credit;  (1) Mr. De
Vreese personally guarantee the line of credit, and (2) Remedent NV use the line
of credit repay in full the 125,000  outstanding  balance on BBL's existing line
of credit to Dental  Marketing  Development  N.V  ("DMD"),  a company  owned and
operated by Guy De Vreese. Accordingly,  Guy De Vreese personally guaranteed the
(euro)250,000  BBL line of credit,  including  pledging as  collateral  specific
investments  owned by Mr.  De  Vreese  valued  at  approximately  $250,000,  and
Remedent  NV drew  (euro)125,000  from this line of credit to advance to DMD and
booked this amount as an interest-free loan to DMD. DMD must repay this loan (i)
if the line of credit is cancelled by BBL due to insufficient security,  (ii) if
Remedent NV finds other  facilities to secure  payment of Guy De Vreese's  funds
and no longer needs the line of credit,  or (iii) Remedent NV is still using the
line of credit  but has found  other  facilities  to  secure  payment  of Guy De
Vreese's funds. Remedent NV did not take any procedural steps to insure fairness
in the terms of this transaction to the Company or to Remedent NV.

In December  2002, as a result of losses  incurred  during its start-up  period,
Remedent  N.V.'s  shareholder  equity  fell below that which is  required  under
Belgium law. In accordance with Belgium law, Remedent N.V. retained the services
of an  independent  Belgium  certified  accountant  to  determine  the amount of
additional capital contribution  necessary to bring Remedent N.V's balance sheet
into compliance. As a result of this analysis, it was determined that additional
capital of 310,000 Euros  ($321,687 as of December  2002) would be required and,
further,  that Remedent N.V.'s valuation prior to such capital  contribution was
88,500  Euros.  In as much as Remedent  USA lacked the  financial  resources  to
provide the additional  capital  required,  Remedent N.V. elected to issue 7,171
shares of its common stock to Lausha N.V., a company controlled by Guy De Vreese
in exchange for conversion of 50,000 Euros in notes payable and  contribution of
the 235,000 Euros in fixed income  marketable  securities which had been pledged
as collateral as discussed above, both as an irrevocable capital contribution to
Remedent  N.V..  In  addition,  Remedent  NV issued  629 shares to Robin List in
exchange  for  conversion  of 25,000  Euros in notes  payable as an  irrevocable
capital  contribution  to  Remedent  N.V.  Mr. De Vreese  and Mr.  List are both
officers and  directors of Remedent  N.V. and Remedent  USA, Inc. As a result of
this transaction we currently own 22% of our subsidiary, Remedent N.V.


                                       18
<page>

On March 20, 2002,  the Company  entered  into an  agreement to issue  3,000,000
share  of  common  stock to New  BitSnap,  N.V.,  a  company  controlled  by the
Company's  Chairman  of the Board,  Guy De  Vreese,  in  repayment  of a debt of
$240,000  owed to New  BitSnap,  N.V. for  $201,000 in  consulting  services and
$39,000 in advanced  expenses  from March 1, 2001 through  March 31,  2002.  The
consulting  services  consisted of the set-up and implementation of the Remedent
N.V. and were  provided  pursuant to an oral  agreement,  prior to Mr. De Vreese
becoming an officer and director of Remedent USA, Inc

Pursuant to the same agreement dated March 20, 2002, the Company agreed to issue
712,500  shares of common stock to Robin List,  its CEO, in repayment of $57,000
in  accrued  fees for  consulting  services  by Robin List from March 1, 2001 to
March  31,  2002.   The  consulting   services   consisted  of  the  set-up  and
implementation  of the  Remedent  N.V.  and were  provided  pursuant  to an oral
agreement,  prior to Mr. List  becoming an officer and director of Remedent USA,
Inc.

Also  pursuant to the March 20,  2002  agreement,  the  Company  agreed to issue
60,000  shares of common stock to Guy De Vreese,  its Chairman of the Board,  in
repayment  of $30,000 in accrued fees for  consulting  services by Guy De Vreese
from March 1, 2001 to March 31, 2002.  The  consulting  services  were  provided
prior to Mr. De Vreese  becoming an officer and director of Remedent  USA,  Inc.
and pursuant to an oral agreement and consisted of the set-up and implementation
of Remedent N.V.

On January 11, 2002, Lausha N.V., a Belgian company controlled by Guy De Vreese,
our Chairman of the Board,  purchased 1,250,000 shares of common stock for $0.08
per share for a total price of $100,000.

Guy De Vreese,  our  Chairman  of the Board,  is the  managing  director  of our
subsidiary, Remedent N.V. Mr. De Vreese provides his services as Remedent N.V.'s
Managing  Director  through two  companies,  Lausha,  N.V.  and New Bitsnap N.V.
Lausha,  N.V. and New Bitsnap N.V. have  consulting  arrangements  with Remedent
N.V. to provide Mr. De Vreese's  services and are both  companies  controlled by
Mr. De Vreese

Between  April 15, 2001 and August 21, 2001,  in  consideration  of $69,002,  we
issued convertible debentures issued to Edward Quincy, who was a director of the
Company from inception to April 1, 2002. These convertible debentures are due on
demand,  bearing interest at 10% per annum, and convertible into common stock at
the sole discretion of the holder.  The debentures are  convertible  into common
stock at percentages  between 30% and 37.5% of the average trading price for the
stock for the 30 day period  immediately prior to the maturity date.  $54,002 of
the debentures  carry a 37.5% conversion  percentage,  while $15,000 carry a 30%
conversion  percentage.  In connection with this conversion feature, the Company
recorded a charge of $59,002 and $10,000 to interest  expense  during the fiscal
years ended March 31, 2003 and 2002, respectively. These amounts were calculated
on the 30 day period prior to the dates of the notes,  and are subject to change
based on the 30 day period  prior to the maturity  dates.  As of March 31, 2003,
$20,472 was accrued for unpaid interest.

We  formerly  leased  1,000  square  feet of  office  space at 1220  Birch  Way,
Escondido,  California.  This dwelling  belongs to Ms.  Inzunza and acted as our
headquarters. We also utilized warehouse space located within the home of one of
our officers,  Robert Hegemann, in Phoenix,  Arizona,  rent-free.  In connection
with her resignation as an officer and director on April 1, 2002, as part of our
corporate  reorganization,  we no longer  utilize the dwelling  belonging to Ms.
Inzunza,  and as such no longer incur monthly  rental  charges for the property.
Additionally,  in connection with the sale of the Remedent Toothbrush  business,
which was operated solely out of the personal  residence of Robert Hegemann,  we
no longer utilize, or incur monthly rental charges for, that space.



                                       19
<page>

On  October  5,  1996,  we  entered  into a royalty  agreement  with Jean  Louis
Vrignaud, who at the time was a holder of more than 5% of our outstanding stock,
under which Mr.  Vrignaud  was to receive a 4.5% royalty of the net sales with a
cap of $2 million as compensation for the assignment of all Remedent patents. No
royalties  have been paid and the balance owed has been  accruing in the general
ledger and as of March 31, 2002 the total due is $52,421. In connection with the
sale of the  Remedent  Toothbrush  division  on March 14,  2002,  the  purchaser
assumed this obligation and the underlying agreement.

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

2.1  Stock Exchange Agreement with Resort World Enterprises, Inc.*
3.1  Articles of Incorporation of Jofran  Confectioners  International,  Inc., a
     Nevada corporation, dated July 31, 19861
3.2  Amendment  to  Articles  of   Incorporation   changing   name  from  Jofran
     Confectioners   International,   Inc.,  a  Nevada  corporation,   to  Cliff
     Typographers, Inc., a Nevada corporation, dated July 31, 1986*
3.3  Amendment   to  Articles  of   Incorporation   changing   name  from  Cliff
     Typographers,  Inc., a Nevada corporation, to Cliff Graphics International,
     Inc., a Nevada corporation, dated January 9, 1987*
3.4  Amendment to Articles of  Incorporation  changing name from Cliff  Graphics
     International, Inc., a Nevada corporation, to Global Golf Holdings, Inc., a
     Nevada corporation, dated March 8, 1995*
3.5  Amendment  to  Articles  of  Incorporation  changing  name from Global Golf
     Holdings, Inc., a Nevada corporation, to Dino Minichiello Fashions, Inc., a
     Nevada corporation, dated November 20, 1997*
3.6  Amendment to Articles of Incorporation  changing name from Dino Minichiello
     Fashions, Inc., a Nevada corporation, to Resort World Enterprises,  Inc., a
     Nevada corporation, dated August 18, 1998*
3.7  Amendment  to Articles of  Incorporation  changing  name from Resort  World
     Enterprises,  Inc., a Nevada  corporation,  to Remedent  USA,  Inc.,  dated
     October 5, 1998*
3.8  By-laws*
10.1 Incentive and Nonstatutory Stock Option Plan, dated May 29, 2001*
10.6 Loan Agreement, dated September 9, 2001*
10.7 Investment  Banking  Agreement  with Lincoln  Equity  Research,  LLC, dated
     September 13, 2001*
10.8 Stock Purchase Agreement with Dental Advisors, dated September 14, 2001*
10.9 Loan Agreement, dated September 21, 2001*
10.10 Renegotiated Loan Agreement, dated December 21, 2001*
10.11 Asset Purchase Agreement for IMDS, dated January 15, 2001*
10.12 Line of Credit Agreement, dated February 11, 2002*
10.13 Loan Agreement, dated February 12, 2002*
10.14 Repayment Agreement, dated March 20, 2002*
10.15 Repayment Agreement, dated January 24, 2002*
10.16 Stock Purchase Agreement, dated January 11, 2002.*
10.17 Repayment Agreement, dated April 26, 2002*
10.18 Repayment Agreement, dated May 1, 2002*
10.19 Repayment Agreement, dated May 1, 2002*
10.20 Repayment Agreement, dated May 1, 2002*
10.21 Stock Purchase Agreement, dated May 1, 2002*
10.24 Code of Ethics, adopted March 25, 2003



                                       20
<page>

23    Consent of Farber & Hass, LLP
31.1 Certification  of  Chief  Executive  Officer  Pursuant  to  the  Securities
     Exchange  Act of 1934,  Rules  13a-14 and  15d-14,  as adopted  pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification  of  Chief  Financial  Officer  Pursuant  to  the  Securities
     Exchange  Act of 1934,  Rules  13a-14 and  15d-14,  as adopted  pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002
32.  Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted  Pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002
* Previously filed with Registration Statement on Form SB-2 filed by the Company
on July 24, 2002.

Reports on Form 8-K:

         None.

ITEM 14.  CONTROLS AND PROCEDURES.

During the  preparation  of our  quarterly  report on Form 10-QSB for the period
ending September 30, 2004, we detected two errors in certain  previously  issued
financial statements. The errors relate to the classification of certain assets,
minority interest and paid in capital.

In  March  2003  we did  not  properly  record  a  capital  contribution  to our
subsidiary,  Remedent N.V. by two of our officers.  The capital contribution was
the value of certain fixed income securities which were assigned and irrevocably
transferred  to Remedent N.V on March 5, 2003 (the  "Transfer  Date") as well as
forgiveness  of 75,000 Euros  ($77,827) in notes payable from the same officers.
The initial  value of the  securities  on the  Transfer  Date was 235,000  Euros
($243,860).  These  securities  are collateral for a bank line of credit and are
therefore  shown as restricted  investments on our balance sheet as of March 31,
2003.  As of March 31,  2003,  the value of these  securities  has  increased to
$255,939  as a result in changes in the  currency  valuation  as between  the US
Dollar  and  the  Euro.  The  $321,687  historical  value  of the  fixed  income
securities  and notes  payable has now been  recorded and credited to additional
paid in capital in our Form 10-KSB/A for the period ending March 31, 2003.

This foregoing capital contribution occurred as a result of the sale by Remedent
N.V of 7,200 shares of Remedent N.V stock,  representing  78% of the outstanding
shares of Remedent N.V.  after  conclusion  of the sale. In December  2002, as a
result  of  losses  incurred  during  its  start-up   period,   Remedent  N.V.'s
shareholder  equity  fell below that which is  required  under  Belgium  law. In
accordance  with  Belgium  law,  Remedent  N.V.  retained  the  services  of  an
independent  Belgium certified  accountant to determine the amount of additional
capital  contribution  necessary  to bring  Remedent  N.V's  balance  sheet into
compliance.  As a result of this  analysis,  it was determined  that  additional
capital of 310,000 Euros  ($321,687 as of December  2002) would be required and,
further,  that Remedent N.V.'s valuation prior to such capital  contribution was
88,500  Euros.  In as much as we lacked the  financial  resources to provide the
additional capital required,  Remedent N.V. elected to issue 7,171 shares of its
common stock to Lausha N.V., a company controlled by Guy De Vreese, our Chairman
of the Board,  in exchange for  conversion  of 50,000 Euros in notes payable and
contribution  of  the  235,000  Euros  in  fixed  income  marketable  securities
discussed above, both as an irrevocable  capital  contribution to Remedent N.V..
In addition,  Remedent NV issued 629 shares to Robin List,  our Chief  Executive
Officer,  in exchange  for  conversion  of 25,000  Euros in notes  payable as an
irrevocable capital contribution to Remedent N.V. Mr. De Vreese and Mr. List are
both officers and directors of us and our subsidiary,  Remedent N.V. As a result
of this transaction, as previously reported in earlier filings, we currently own
22% of our subsidiary, Remedent N.V.



                                       21

<page>

In  connection  with the  same  transaction,  we did not  correctly  record  the
Minority  Interest  related to the  previously  mentioned  78%  ownership of our
subsidiary,  Remedent  N.V.  The  foregoing  was the  result  of a error  in the
recording  of  Minority  Interest  that  originally  occurred as of our year end
report on for 10K-SB for March 31, 2003 and has carried forward since that date.
In  addition,  the  Company had  incorrectly  recorded  the  issuance of several
private  placement  stock  issuances  and stock  issued in repayment of debt and
accrued  expenses.  The effect of these  errors as of March 31, 2003 had been to
overstate Minority Interest by $64,816,  understate the value of Additional Paid
in Capital by $817,550, understate common stock issued and outstanding by $5,967
(representing  5,967,500 shares),  overstate common stock subscribed by $437,014
and understate Investments by $255,939.

These  determinations  and  the  associated  restatement  of  previously  issued
financial statements,  suggest that, at the time of the subject transactions and
the preparation of the Company's financial  statements for the relevant periods,
the  Company's  disclosure  controls and  procedures  (as defined in Rule 13a-15
under the  Securities  Exchange Act of 1934) were  inadequate  as of the periods
covered for purposes of ensuring that all  information  required to be disclosed
by the Company was  adequately  accumulated  and  communicated  to the Company's
management at such time. However,  since that time, the Company has made various
improvements  to  enhance  the  reliability  of  its  disclosure   controls  and
procedures,  including  retaining new SEC counsel and an independent third party
financial  consultant to assist the Company in enhancing its disclosure controls
and procedures and, as a result, the Company's  principal  executive officer and
principal financial officer now believe that these improvements will ensure that
our disclosure controls and procedures will be effective pursuant to Rule 13a-15
under the Securities and Exchange Act of 1934.

                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
as amended (the "Exchange  Act") the Registrant  caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                     REMEDENT USA, INC.


Dated: January 7, 2005               By:   /s/ Robin List
                                        --------------------------------------
                                        Robin List
                                        Its:Chief Executive Officer (Principal
                                        Executive Officer) and Director


Dated: January 7, 2005               By:   /s/ Stephen F. Ross
                                        --------------------------------------
                                        Stephen F. Ross
                                        Its:Chief Financial Officer (Principal
                                        Financial Officer and Principal
                                        Accounting Officer) and Director


Dated: January 7, 2005               By:   /s/ Guy DeVreese
                                        --------------------------------------
                                        Guy DeVreese
                                        Its: Chairman (Director)





                                       22

<page>

                          INDEX TO FINANCIAL STATEMENTS



                                                                         Page

Independent Auditors' Report                                               F-1

Financial Statements:
Consolidated Balance Sheet as of March 31, 2003                            F-2

Consolidated Statements of Operations for the years ended March 31,
      2003 and 2002                                                        F-4

Consolidated Statements of Changes in Stockholders' Deficit for the
      years ended March 31, 2003 and 2002                                  F-5

Consolidated Statements of Cash Flows for the years ended March 31,
      2003 and 2002                                                        F-7

Consolidated Statements of Comprehensive Loss for the years ended
      March 31, 2003 and 2002                                              F-8

Notes to Consolidated Financial Statements                                 F-9



<PAGE>



                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
of Remedent USA, Inc.:

We have audited the  accompanying  consolidated  balance  sheet of Remedent USA,
Inc.  (the  "Company")  as of  March  31,  2003  and  the  related  consolidated
statements of operations, stockholders' deficit and cash flows for the two years
then ended.  These consolidated  financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits 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 presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion,  the  accompanying  consolidated  financial  statements  present
fairly, in all material respects, the financial position of the Company at March
31, 2003 and the results of its  operations and its cash flows for the two years
then ended in conformity with accounting  principles  generally  accepted in the
United States.

As  described  in  Note 2,  the  Company  restated  its  consolidated  financial
statements as of March 31, 2003, and for the year then ended.


/s/ Farber & Hass LLP
July 13, 2003, except Note 2
as to which the date is December 30, 2004
Camarillo, California






                                      F-1

<PAGE>


PART I--FINANCIAL INFORMATION

Item 1--Consolidated Financial Statements
                       REMEDENT USA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                                               March 31, 2003
                                                               (As Restated)
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                         $      -
   Investments, restricted                                            255,939
   Accounts receivable, net                                           178,013
   Due from related party                                             136,948
   Inventories, net                                                   116,830
   Prepaid expense                                                     39,043
                                                                  -----------
       Total current assets                                           726,773
                                                                  -----------

PROPERTY AND EQUIPMENT, NET                                            44,046

OTHER ASSETS                                                            1,790
                                                                  -----------

TOTAL ASSETS                                                      $   772,609
                                                                  ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
    Line of Credit                                                $   261,572
   Accounts payable                                                   452,756
   Due to related parties                                             218,029
   Net liabilities of Toothbrush Business to be sold                  335,713
   Accrued liabilities                                                267,278
   Notes payable                                                      101,547
                                                                  ------------
       Total current liabilities                                     1,636,895
                                                                  ------------

STOCKHOLDERS' DEFICIT:
   Common stock (50,000,000 shares authorized,
     $0.001 par value; 36,854,058 shares issued
     and outstanding)                                                   36,854
   Additional paid-in capital                                        4,822,681
   Accumulated deficit                                              (5,676,970)

   Common stock subscribed (1,342,916  shares)                           1,343
   Stock Subscription receivable                                             -
   Accumulated other comprehensive (loss)
     (foreign currency translation adjustment)                         (48,194)
                                                                     ---------
       Total stockholders' deficit                                    (864,286)
                                                                     ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                          $ 772,609
                                                                     =========

                 The accompanying notes are an integral part of
                     the consolidated financial statements.

                                      F-2


<PAGE>


                       REMEDENT USA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<table>
<caption>
<S>                                                                     <C>                      <C>
                                                                             For the years ended
                                                                       March 31, 2003           March 31, 2002
                                                                       --------------           --------------
Net Sales                                                                $  1,969,144              $   733,853

Cost of Sales                                                              1,062,681                  502,013
                                                                        ------------               ----------

         Gross Profit                                                        906,463                  231,840

Operating Expenses

   Research and Development                                                   93,186                  270,395

   Sales and Marketing                                                        64,132                   49,582

   General and Administrative                                              1,354,554                1,793,361

   Impairment loss on IMDS Goodwill                                          330,000                        -

   Depreciation and Amortization                                              21,804                   12,711
                                                                        ------------               ----------

         TOTAL OPERATING EXPENSES                                          1,863,676                2,126,049
                                                                        ------------               ----------


LOSS FROM OPERATIONS                                                        (957,213)              (1,894,209)

OTHER INCOME (EXPENSES)

   Interest/Other Income                                                      21,195                   44,290

   Interest Expense                                                          (70,356)                (113,887)
                                                                        ------------                ---------


         TOTAL OTHER INCOME (EXPENSES)                                       (49,161)                 (69,597)
                                                                        ------------                 --------


LOSS BEFORE INCOME TAXES                                                  (1,006,374)              (1,963,806)


Income Tax Benefit (Expense)                                                       -                        -

NET LOSS                                                               $  (1,006,374)           $  (1,963,806)
                                                                       ==============           ==============

LOSS PER SHARE
  Basic                                                                   $    (0.03)             $     (0.11)
                                                                          ===========             ============
  Fully diluted                                                           $    (0.03)             $     (0.11)
                                                                          ===========             ============
WEIGHTED AVERAGE SHARES OUTSTANDING

  Basic                                                                   36,333,584               18,009,722
                                                                         ===========               ==========

  Fully diluted                                                           37,214,106               18,009,722
                                                                         ===========               ==========

</table>
                 The accompanying notes are an integral part of
                     the consolidated financial statements.


                                      F-3
<PAGE>


                       REMEDENT USA, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
             For the Years ended March 31, 2003 (Restated) and 2002

<table>
<caption>
<S>                                   <C>         <C>      <C>            <C>           <C>           <C>    <C>           <C>
                                                          Additional Paid Accumulated   Common Stock         Subscription
                                                          --------------- ------------  ------------         ------------
                                      Shares      Amount     in Capital    Deficit      Subscribed    Other  Receivable    Total
                                      ------      ------    ------------   -------      ----------    -----  ----------    -----
Balance, March 31, 2001               13,187,316  $13,187   $1,768,302    $(2,706,790)                                    $(925,301)
Common stock issued under
  private placements                   5,069,000    5,069      688,431                                                      693,500

Common stock issued for services       4,210,000    4,210      455,910                                                      460,120
Common stock issued for
  repayment of debt                    2,209,100    2,209      596,241                                                      598,450
Common stock issued upon
  conversion of debentures               148,462      149       10,440                                                       10,589

Stock options issued for services                               23,870                                                       23,870
Stock options issued to employees
  and directors                                                133,000                                                      133,000

Subscription receivable                                                                                        (77,848)     (77,848)

Cumulative translation adjustment                                                                     (10,866)              (10,866)

Net loss                                       -        -            -     (1,963,806)       -              -        -   (1,963,806)
                                      ----------  -------   ----------    ------------  -------      --------  --------  -----------
Balance, March 31, 2002               30,824,058  $30,824   $4,000,194    $(4,670,596)  $    -       $(10,866) $(77,848) $ (728,292)

Subscription receivable                                                                                          77,848      77,848
Common stock issued under
 private placements                    3,625,000        188       301,188                   375                             301,751
  Common stock issued and subscribed
  in repayment of notes payable        1,500,000      1,500       105,968                   410                             107,878
  Common stock issued and subscribed
  in repayment of accrued expenses       905,000        905        93,644                   558                              95,107

Minority investment in paid in capital                            321,687                                                   321,687

Cumulative translation adjustment                                                                     (37,328)              (37,328)

Net loss                                       -          -             -   (1,006,374)       -             -         -  (1,006,374)
                                      ----------   --------    ----------  -----------     ----     ----------   ------  ----------
 Balance, March 31, 2003              36,854,058  $  36,854    $4,822,681  $(5,676,970)   1,343     $ (48,194)   $    -  $ (864,286)
                                      ==========  =========    ==========  ===========    ======    ==========   ======= ==========

</table>
                 The accompanying notes are an integral part of
                     the consolidated financial statements.

                                      F-4
<PAGE>


                       REMEDENT USA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<table>
<caption>
<S>                                                                     <C>                         <C>
                                                                                  For the years ended
                                                                         March 31, 2003
                                                                         (As Restated)              March 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES
      Net loss                                                               $  (1,006,374)          $ (1,963,806)
Adjustments to reconcile net loss
  to net cash used by operating activities
      Depreciation and amortization                                                 21,804                 13,301

      Inventory reserve                                                              3,806                 80,906
      Stock and options issued for services                                                               483,990
      Options for bonuses                                                                                 133,000
      Impairment loss on IMDS Goodwill                                             330,000
Changes in operating assets and liabilities:

      Cash within division sold                                                          -                 (2,093)
      Accounts receivable                                                          (60,739)              (102,275)

      Notes receivable                                                             (27,898)                     -
      Inventories                                                                  (23,090)               (99,858)

      Prepaid expenses                                                                 179                (29,163)
      Accounts payable                                                             142,593                269,419
      Accrued liabilities                                                           15,668                426,470
                                                                     ---------------------       -----------------
         Net cash used by operating activities                                    (604,051)              (790,109)
CASH FLOWS FROM INVESTING ACTIVITIES

      Investments                                                                 (255,939)                     -

      Purchases of equipment                                                        (5,348)               (65,084)

      Other assets                                                                     720                 (3,236)
      Notes from related parties                                                   142,142               (107,688)
                                                                     ----------------------     ------------------
         Net cash used by investing activities                                    (118,426)              (176,008)
                                                                     ----------------------     ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from notes and debentures                                                 -                120,000
      Note payments                                                                (23,537)               (11,138)
      Proceeds from line of credit                                                 123,706                136,144
      Proceeds from sale of common stock                                           305,988                693,500

      Minority investment in subsidiary                                            243,860                      -
      Subscription receivable                                                       77,848                (76,876)

      Payments to related parties                                                        -                (11,314)

      Notes to related parties                                                           -                150,799
                                                                      ---------------------     -----------------
         Net cash provided by financing activities                                 727,865              1,001,115
                                                                     ----------------------     -----------------

     NET (DECREASE) INCREASE IN CASH                                                 5,388                 34,998
      Effect of exchange rate changes
        on cash and cash equivalents                                               (37,328)               (10,744)

CASH AND CASH EQUIVALENTS, BEGINNING                                                31,940                  7,686
                                                                     ----------------------     -----------------
CASH AND CASH EQUIVALENTS, ENDING                                               $        -             $   31,940
                                                                     ======================     =================

</table>
               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      F-5
<page>

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

On August 2,  2002,  the  Company  issued  700,000  shares of common  stock as a
retainer to a public relations firm.

On June 30, 2002, the Company negotiated for the partial repayment of $19,959 in
unpaid  wages to two current  employees  by agreeing to issue  39,916  shares of
common stock.

On June 30, 2002,  the Company  negotiated  for the full repayment of $19,497 in
unpaid wages to a former employee, by agreeing to issue 243,000 shares of common
stock.

On May 13, 2002,  the Company  negotiated for the full repayment of unpaid wages
and expenses to three former  employees,  $31,202,  with the issuance of 205,000
shares of common stock and payments totaling $15,202.

On May 1, 2002,  the Company  negotiated for the full repayment of the remaining
balance of the $100,000 working capital loan,  $77,778,  subsequent to the April
and May principal  payments as agreed to on December 21, 2001, with the issuance
of 1,400,000 shares of common stock.

On May 1, 2002,  the Company  negotiated for the full repayment of the principal
and interest of the $20,000  working  capital loan, with the issuance of 410,000
shares of common stock.

On May 1, 2002,  the Company  negotiated  for the full  repayment of the balance
owed to its predecessor  auditors,  $32,650, with the issuance of 150,000 shares
of common stock.

On April 26, 2002,  the Company  entered into an agreement  with its  investment
bankers for the repayment of $10,000 of  indebtedness,  representing the monthly
retainers  for  November  and December of 2001 and January and February of 2002,
with the issuance of 125,000 shares of common stock.

Supplemental Information:
      Interest paid                      $   70,603               $   12,951
      Income taxes paid                  $      800               $        -















               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                      F-6
<PAGE>




                       REMEDENT USA, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                   For the Years Ended March 31, 2003 and 2002

                                             Year ended March 31,
                                        -----------------------------

                                           2003                2002
                                        (Restated)
                                        -----------          --------
Net loss                                $(1,006,374)      $(1,963,806)
Other comprehensive income
   (loss):
Foreign currency translation
        adjustment                          (37,328)          (10,866)

                                        ------------      -----------
Comprehensive loss                      $(1,043,702)      $(1,974,672)

                                        ============      ============

























               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                      F-7
<PAGE>



                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   General

     Remedent USA, Inc. (the  "Company") is a holding  company.  The Company was
originally  incorporated on September 30, 1996 in the state of Arizona,  and has
offices  in Los  Angeles,  California  and Ghent,  Belgium.

     On October 2, 1998,  Remedent  USA  ("Remedent")  merged with Resort  World
Enterprises,  Inc., a Nevada corporation  ("RWE"). The surviving Company was RWE
and  immediately  changed the name of the  Corporation to Remedent USA, Inc. The
exchange  was a "reverse  merger" and  accounted  for as a  recapitalization  of
Remedent.  As a  result  of the  merger,  RWE  obtained  all of the  issued  and
outstanding  stock of Remedent for  approximately  79% of the new Remedent  USA,
Inc. stock.  Financial  statements for the pre-merger periods are the historical
financial statements of Remedent.

     On  July  1,  2001,  the  Company  formed  three   subsidiaries,   Remedent
Professional Holdings,  Inc., Remedent  Professional,  Inc. and Remedent NV. The
Company  markets  professional  dental  equipment  through  these  subsidiaries.
Remedent  NV  (a  Belgian  company)  is  based  in  Ghent,   Belgium.   Remedent
Professional Holdings, Inc. and Remedent Professional,  Inc. are incorporated in
the state of Nevada in the United States.

     On December 31, 2001,  the Company  discontinued  the  distribution  of its
patented  tooth  &  gumbrush  in  anticipation  for  the  upcoming  sale of this
division.  On March 14, 2002,  the Company  reached an agreement for the sale of
this division.

2. Restatement

     In November, 2004, the Company detected errors in certain previously issued
financial statements including the financial statements for the year ended March
31, 2003 included  herein.  The errors relate to the  classification  of certain
assets,  minority interest and paid in capital as well as mathematical errors in
the Statement of Cash Flows.

     In March 2003 the Company did not properly record a capital contribution to
its  subsidiary,  Remedent  N.V. by two of the Company's  officers.  The capital
contribution  was the  value of  certain  fixed  income  securities  which  were
assigned  and  irrevocably  transferred  to  Remedent  N.V on March 5, 2003 (the
"Transfer  Date") as well as  forgiveness  of 75,000  Euros  ($77,827)  in notes
payable  from the same  officers.  The initial  value of the  securities  on the
Transfer Date was 235,000 Euros ($243,860).  These securities are collateral for
a bank line of credit and are therefore  shown as restricted  investments on the
Company's balance sheet (see Note 9). The $321,687 historical value of the fixed
income securities and notes payable has been recorded and credited to additional
paid in capital.

     This  foregoing  capital  contribution  occurred as a result of the sale by
Remedent  N.V of 7,200  shares of Remedent  N.V stock,  representing  78% of the
outstanding  shares of Remedent N.V.  after  conclusion of the sale. In December
2002, as a result of losses incurred during its start-up period, Remedent N.V.'s
shareholder  equity  fell below that which is  required  under  Belgium  law. In
accordance  with  Belgium  law,  Remedent  N.V.  retained  the  services  of  an
independent  Belgium certified  accountant to determine the amount of additional
capital  contribution  necessary  to bring  Remedent  N.V's  balance  sheet into
compliance.  As a result of this  analysis,  it was determined  that  additional
capital of 310,000 Euros  ($321,687 as of December  2002) would be required and,
further,  that Remedent N.V.'s valuation prior to such capital  contribution was
88,500  Euros.  In as much as Remedent  USA lacked the  financial  resources  to
provide the additional  capital  required,  Remedent N.V. elected to issue 7,171
shares of its common stock to Lausha N.V., a company controlled by Guy De Vreese
in exchange for conversion of 50,000 Euros in notes payable and  contribution of
the 235,000 Euros in fixed income marketable securities discussed above, both as

                                      F-8
<page>

an irrevocable capital  contribution to Remedent N.V.. In addition,  Remedent NV
issued 629 shares to Robin List in exchange  for  conversion  of 25,000 Euros in
notes payable as an  irrevocable  capital  contribution  to Remedent N.V. Mr. De
Vreese and Mr.  List are both  officers  and  directors  of  Remedent  N.V.  and
Remedent USA, Inc. As a result of this  transaction,  as previously  reported in
earlier  filings,  we  currently  own 22% of our  subsidiary,  Remedent  N.V.

     In  connection  with the same  transaction,  the Company did not  correctly
record the Minority  Interest related to the previously  mentioned 78% ownership
of our subsidiary,  Remedent N.V. The foregoing was the result of a error in the
recording of Minority  Interest that  originally  occurred as of March 31, 2003.
The effect of these errors as of March 31, 2003 filed had been to overstate  the
value of the Minority  Interest by $64,816,  overstate Due to Related parties by
$65,748,  understate  Investments by $255,939 and understate  Additional Paid in
Capital by $386,053.

     In addition,  the Company  determined  that there were 5,967,500  shares of
common stock that had been  previously  been reported as subscribed  stock which
were  more  appropriately  classified  as  issued  and  outstanding  in that all
conditions  necessary for the issuance of the stock had been met. The result was
in increase in Common Stock of $5,967, an increase in additional paid in capital
of $431,047 and a decrease to Common Stock Subscribed of $437,014.

     In the  process  of  preparing  the  foregoing  restatements,  the  Company
determined  that,  in addition to the changes  required in the Statement of Cash
Flows  resulting  from the  foregoing,  there  were  mathematical  errors in the
Statement  of Cash Flows  which have been  corrected.  The  restatements  had no
effect on the Statement of Income  (Loss).  The  following  tables set forth the
amounts as previously  filed and the restated  amounts for the Balance Sheet and
the Statement of Cash Flows:











                                      F-9
<PAGE>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<table>
<Caption>
<S>                                                               <C>                   <C>

                                                                         March 31, 2003
                                                                                        Previously
                                                                  Restated                reported
ASSETS
CURRENT ASSETS:

  Cash and cash equivalents                                      $      -             $          -

  Investments, restricted                                         255,939                        -

  Accounts receivable, net                                        178,013                  178,013

  Due from related party                                          136,948                  136,948

  Inventories, net                                                116,830                  116,830

  Prepaid expense                                                  39,043                   39,043
                                                                  -------                   ------

      Total current assets                                        726,773                  470,834
                                                                 --------                  -------


PROPERTY AND EQUIPMENT, NET                                        44,046                   44,046


OTHER ASSETS                                                        1,790                    1,790
                                                                   ------                    -----

TOTAL ASSETS                                                   $  772,609             $    516,670
                                                              ===========             ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
   Line of Credit                                              $  261,572             $    261,572

  Accounts payable                                                452,756                  452,756

  Due to related parties                                          218,029                  283,777

  Net liabilities of Toothbrush Business to be sold               335,713                  335,713

  Accrued liabilities                                             267,278                  267,278

  Notes payable                                                   101,547                  101,547
                                                                 --------                  -------
      Total current liabilities                                 1,636,895                1,702,643
                                                               ----------              -----------

STOCKHOLDERS' DEFICIT:
  Common stock (50,000,000 shares authorized,
    $0.001 par value; 36,854,058 shares issued

    and outstanding)                                               36,854                   30,887
  Additional paid-in capital                                    4,822,681                4,005,131
  Accumulated deficit                                          (5,676,970)              (5,676,970)

  Common stock subscribed (1,342,926 shares)                        1,343                  438,357

  Minority Interest                                                     -                   64,816
  Accumulated other comprehensive (loss)

    (foreign currency translation adjustment)                     (48,194)                 (48,194)
                                                                  --------                 --------
      Total stockholders' deficit                                (864,286)              (1,185,973)
                                                                ----------              -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                     $  772,609           $      516,670
                                                                ==========           ==============

</table>
                                      F-10

<PAGE>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<table>
<caption>
<S>                                                        <C>                    <C>

                                                                    March 31, 2003
                                                                                   Previously
                                                           Restated                reported
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                            $     (1,006,374)       $     (1,006,374)
Adjustments to reconcile net loss
  to net cash used by operating activities

     Depreciation and amortization                                 21,804                  18,343

     Inventory reserve                                              3,806                   -

     Stock and options issued for services                              -                   6,225

     Impairment loss on IMDSGoodwill                              330,000                 330,000

Changes in operating assets and liabilities:

     Accounts receivable                                          (60,739)                (19,941)

     Notes receivable                                             (27,898)                 (1,615)

     Inventories                                                  (23,090)                  2,953

     Prepaid expenses                                                 179                   1,198

     Accounts payable                                             142,593                  87,593

     Accrued liabilities                                           15,668                  (1,127)
                                                              -----------               ---------
        Net cash used by operating activities                    (604,051)               (582,745)

CASH FLOWS FROM INVESTING ACTIVITIES

     Investments                                                 (255,939)

     Purchases of equipment                                        (5,348)

     Other assets                                                     720                     1,611

     Notes from related parties                                   142,142                         -
                                                               ----------                 ---------
        Net cash used by investing activities                    (118,426)                    1,611

CASH FLOWS FROM FINANCING ACTIVITIES

     Note payments                                                (23,537)                  (33,537)

     Proceeds from line of credit                                 123,706                    76,353

     Proceeds from sale of common stock                           305,988                   607,743

     Minority investment in subsidiary                            243,860                         -

     Subscription receivable                                       77,848                  (145,319)

     Payments to related parties                                        -                    (5,952)

     Notes to related parties                                           -                    56,825
                                                                 --------                   -------
        Net cash provided by financing activities                 727,865                   556,113
                                                                 --------                   -------
     NET (DECREASE) INCREASE IN CASH                                5,388                   (25,021)

     Effect of exchange rate changes
       on cash and cash equivalents                               (37,328)                   (6,919)

CASH AND CASH EQUIVALENTS, BEGINNING                               31,940                    31,940
                                                               ----------                 ---------
CASH AND CASH EQUIVALENTS, ENDING                              $        -                 $       -
                                                               ==========                 =========
Supplemental Information:
     Interest paid                                             $  70,604                  $  70,603

     Income taxes paid                                         $     800                  $     800
</table>
                                      F-11

<PAGE>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.   Summary of Significant Accounting Policies

     Basis for Presentation

     The Company's  consolidated  financial  statements have been prepared on an
accrual basis of accounting,  in conformity with accounting principles generally
accepted in the United States.  These principles  contemplate the realization of
assets and  liquidation  of  liabilities  in the normal course of business.  The
preparation of financial  statements in conformity  with  accounting  principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and reported  amounts of revenues and expenses  during the reporting
periods.  Actual  results could differ from those  estimates.  The  consolidated
financial  statements do not include any adjustments  that might be necessary if
the  Company  is  unable  to  continue  as  a  going   concern.

     Principles  of Consolidation

     The consolidated financial statements include the accounts of Remedent USA,
Inc. and its subsidiaries,  Remedent NV, Remedent Professional Holdings Inc. and
Remedent Professional Inc. All inter-company balances and transactions have been
eliminated.  Corporate  administrative  costs are not allocated to subsidiaries.
Remedent  NV  was  the  only  operating  subsidiary  in  fiscal  2003.  Remedent
Professional Holdings, Inc. and Remedent Professional, Inc. had no operations in
fiscal 2003 and 2002.

     Reclassifications

     These financial  statements reflect certain  reclassifications  made to the
prior period balances to conform to the current year presentation.

     Concentration of Credit Risk

     Financial   instruments,   which   potentially   subject   the  Company  to
concentrations of credit risk, consist principally of trade accounts receivable.
At March 31, 2003, three customers accounted for 31%, 21% and 18%, respectively;
of  the  Company's  trade  receivables.  The  Company  performs  ongoing  credit
evaluations of its customers and normally does not require collateral to support
accounts receivable.

     Revenue  Recognition

     Sales are recorded when products are shipped to customers.  Provisions  for
discounts and rebates to customers,  estimated returns and allowances, and other
adjustments are provided for in the same period that related sales are recorded.
Impairment of Long-Lived  Assets Long-lived assets consist primarily of property
and equipment.  The recoverability of long-lived assets is annually evaluated by
an analysis of operating results and  consideration of other significant  events
or changes in the  business  environment.  If  impairment  exists,  the carrying
amount of the long-lived assets is reduced to its estimated fair value, less any
costs associated with the final settlement.

     Pervasiveness of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  The  significant  estimates
made in the preparation of the consolidated  financial  statements relate to the
assessment  of the  carrying  value  of  accounts  receivable,  inventories  and
estimated  provision  for  returns.  Actual  results  could  differ  from  those
estimates.



                                      F-12

<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Cash and Cash Equivalents

     The Company  considers all highly  liquid  investments  with  maturities of
three months or less to be cash or cash equivalents.

     Accounts Receivable

     The Company  sells  professional  dental  equipment  to various  companies,
primarily to distributors  located throughout the world. The terms of sales vary
by customer, however, generally are 2% 10 days, net 30 days. Accounts receivable
is reported at net realizable value and net of allowance for doubtful  accounts.
As of March 31, 2003 and 2002,  the allowance for doubtful  accounts was $90,617
and $0,  respectively.  The  Company  uses the  allowance  method to account for
uncollectible accounts receivable. The Company's estimate is based on historical
collection  experience  and a review of the  current  status  of trade  accounts
receivable. Customers Outside of the United States Sales to customers outside of
the United States were 100% and 93% of total sales for the years ended March 31,
2003 and 2002, respectively.  The sales were made to customers in countries that
are members of the European Union ("EU").

     Research and Development Costs

     The Company expenses research and development costs as incurred.

     Advertising Costs

     Costs  incurred for producing and  communicating  advertising  are expensed
when incurred and included in selling,  general and administrative expenses. For
the fiscal years ended March 31, 2003 and 2002, consolidated advertising expense
amounted to $30,076 and $21,459, respectively.

     Income Taxes

     Income  taxes are  provided  in  accordance  with  Statement  of  Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." Deferred
taxes are  recognized  for  temporary  differences  in the  basis of assets  and
liabilities  for  financial  statement  and income tax  reporting as well as for
operating losses and credit carry forwards. A provision has been made for income
taxes  due on  taxable  income  and  for the  deferred  taxes  on the  temporary
differences.  The  components  of the  deferred  tax  asset  and  liability  are
individually   classified   as   current   and   non-current   based   on  their
characteristics.

     Deferred  tax assets are  reduced by a  valuation  allowance  when,  in the
opinion of  management,  it is more likely than not that some  portion or all of
the  deferred  tax  assets  will  not  be  realized.  Deferred  tax  assets  and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

     Warranties

     The Company typically warrants its products against defects in material and
workmanship  for a period of 90 days from the date of shipment.  A provision for
estimated future warranty costs are recorded when products are shipped. Warranty
costs were approximately $0 and $13,000 in fiscal 2003 and 2002; respectively.

     Impact of New Accounting Standards

     Statement of Financial Standards ("SFAS") Nos. 141 "Business  Combinations"
is effective for business combinations after June 30, 2001. It requires that the
"purchase method" of accounting be used to account for all business combinations
and  specifies  criteria  for an  acquired  intangible  asset  to be  recognized
separately  from  goodwill.  SFAS No. 142 is effective for financial  statements
beginning  after  December  15,  2000.  It requires  that  goodwill no longer be
amortized, but tested for impairment on an annual basis. The Company adopted the
provisions of SFAS Nos. 141 and 142 for the fiscal year ended March 31, 2002.


                                      F-13

<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In  August  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement   Obligations."  SFAS  143  establishes   accounting   standards  for
recognition  and  measurement  of a liability for the costs of asset  retirement
obligations.  Under SFAS 143, the costs of retiring an asset will be recorded as
a liability  when the  retirement  obligation  arises,  and will be amortized to
expense  over the life of the asset.  The Company  does not expect any effect on
its  financial  position  or results of  operations  from the  adoption  of this
statement.  SFAS 144 establishes a single accounting model for the impairment or
disposal of long-lived assets, including discontinued operations.

     SFAS 144 superseded SFAS 121 and APB Opinion No. 30, "Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions." The
provisions of SFAS 144 are effective in fiscal years  beginning  after  December
15,  2001,  with early  adoption  permitted,  and in  general  are to be applied
prospectively.  The Company adopted SFAS 144 effective April 1, 2002,  which did
not  have a  material  impact  on its  consolidated  results  of  operations  or
financial position.

     In June of 2002, the FASB issued SFAS 146, "Accounting for Costs Associated
with Exit or Disposal  Activities," which nullifies EITF Issue 94-3. SFAS 146 is
effective for exit and disposal activities that are initiated after December 31,
2002  and  requires  that a  liability  for a cost  associated  with  an exit or
disposal  activity be recognized when the liability is incurred,  in contrast to
the date of an entity's  commitment  to an exit plan,  as required by EITF Issue
94-3.  The Company will adopt the  provisions of SFAS 146  effective  January 1,
2003.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and  Disclosure".  This Statement amends SFAS No. 123,
"Stock-Based  Compensation",  to provide alternative methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.  In  addition,  this  Statement  amends  the  disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used on reported results. The
alternative  methods of  transition  of SFAS 148 are  effective for fiscal years
ending after December 15, 2002. The Company follows APB 25 in accounting for its
employee  stock options.  The disclosure  provision of SFAS 148 is effective for
years  ending  after  December  15,  2002 and has been  incorporated  into these
consolidated financial statements and accompanying footnotes.

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
Statement  establishes  standards  for  how an  issuer  of debt  classifies  and
measures certain financial  instruments with characteristics of both liabilities
and equity.

     It requires that an issuer  classify  certain  financial  instruments  as a
liability (or an asset in some  circumstances)  instead of equity. The Statement
is effective for financial  instruments  entered into or modified  after May 31,
2003,  and otherwise is effective at the  beginning of the first interim  period
beginning  after June 15, 2003. The Company will adopt this Statement on July 1,
2003.  The  Company  does  not  believe  that  any of  these  recent  accounting
pronouncements  will have a  material  impact  on their  financial  position  or
results of operations.

     Computation of Earnings Per Share

     Basic net income (loss) per common share is computed by dividing net income
(loss)  attributable to common  stockholders  by the weighted  average number of
shares of common  stock  outstanding  during the period.  Net income  (loss) per
common share attributable to common  stockholders  assuming dilution is computed
by dividing net income by the weighted  average number of shares of common stock


                                      F-14
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

outstanding  plus the number of  additional  common  shares that would have been
outstanding if all dilutive  potential common shares had been issued.  Potential
common shares  related to stock options and stock warrants are excluded from the
computation when their effect is antidilutive.

     Common  shares  related  to  stock  options  and  stock  warrants  that are
antidilutive  amounted to  6,844,000  and  6,819,000  for the fiscal years ended
March 31, 2003 and 2002, respectively.

     Conversion of Foreign Currencies

     The reporting  currency for the  consolidated  financial  statements of the
Company is the U.S. dollar.  The functional  currency for the Company's European
subsidiary,  Remedent N.V., is the Euro.  The  functional  currency for Remedent
Professional,  Inc. is the U.S. Dollar.  The Company translates foreign currency
statements to the reporting  currency in accordance with FASB 52. The assets and
liabilities of companies whose functional currency is other than the U.S. dollar
are included in the  consolidation  by translating the assets and liabilities at
the exchange rates applicable at the end of the reporting period. The statements
of  income  and cash  flows of such  companies  are  translated  at the  average
exchange rates during the  applicable  period.  Translation  gains or losses are
accumulated as a separate  component of stockholders'  deficit.  The Company has
not tax-effected the cumulative  translation adjustment as there is no intention
to remit the earnings.

     Accounting for Stock Based Compensation

     Stock option grants are set at the closing  price of the  Company's  common
stock on the day prior to the date of grant. Therefore,  under the principles of
APB  Opinion  No.  25,  the  Company  does not  recognize  compensation  expense
associated  with the  grant of stock  options.  SFAS No.  123,  "Accounting  for
Stock-Based  Compensation,"  requires  the use of  option  valuation  models  to
provide supplemental information regarding options granted after 1994.

4.   Investments, Restricted

     The following is a summary of the Company's  investments available for sale
as of March 31, 2003:

                Private bonds                      $   22,292
                Fixed income mutual funds             233,647
                                                   ----------
                Total                              $  255,939
                                                   ==========

     These  investments  are pledged as  collateral  to the Company Bank Line of
Credit (see Note11).

5.   Inventories

     Inventories  are stated at the lower of cost (weighted  average) or market.
Inventory costs include material,  labor and manufacturing overhead.  Individual
components of inventory are listed below as follows:

                                March 31, 2003                 March 31, 2002
                                --------------                 --------------

Inventory-Supplies              $         --                   $          --
Displays and Raw
   Materials                          88,717                           5,270
Finished Goods                        36,281                          96,638
Less: Inventory
   reserve                            (8,168)                         (4,362)
                                ------------                    ------------

Inventories, net                $    116,830                    $     97,546
                                ============                    ============



                                      F-15
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.   Due from Related Party

     On February 12, 2002,  Remedent NV entered into a loan agreement for (euro)
125,000 (US$136,138 at March 31, 2003), with a company owned and operated by Guy
De Vreese, the Company's Chairman.  The agreement was entered into in connection
with a line of credit  established  with the Bank  Brussel  Lambert  ("BBL") for
amounts up to (euro) 250,000 (US$272,275) (see Note 10). Due to the insufficient
assets maintained by the Company as of inception date of the line of credit, the
BBL imposed two  requirements  for the  extension  of credit;  (1) Mr. De Vreese
personally  guaranteed the line of credit,  and (2) another company owned by Mr.
De Vreese was  required to repay its existing  line of credit in full.  As such,
the loan  received was utilized to repay the other  company's  existing  line of
credit.  Repayment of the loan will occur upon the Company's  ability to provide
sufficient assets to replace the personal guarantee of Mr. De Vreese.

7.   Property and Equipment

     Property and equipment are summarized as follows:

                                  March 31, 2003                 March 31, 2002
                                  --------------                 --------------

Machinery and equipment           $          --                  $        3,548
Tooling                                  49,782                          49,782
Furniture and fixtures                   16,361                           9,919
Less accumulated depreciation           (22,097)                         (2,747)
                                       --------                      ----------

Property and equipment, net        $     44,046                   $      60,502
                                   ============                   =============

                See Note 9 regarding property and equipment sold.

8.   Goodwill

     On January 15, 2002,  Remedent NV acquired  International  Medical & Dental
Support ("IMDS"),  a dental  practitioner  outsourcing firm. The acquisition was
for a total of 6,000,000 shares of common stock,  valued at $330,000.  The value
of the common  shares  issued was  determined  based on the market  price of the
Company's  common  stock  on the  date of  acquisition.  As the  firm was in the
development  stage,  there were no assets and  liabilities as of the acquisition
date. As a result,  the balance of the purchase price was allocated to goodwill.
On January 1, 2002, the Company adopted SFAS 142 and has ceased  amortization of
goodwill,  which is deemed to have an indefinite  life. Under the new rules, the
Company is no longer  permitted to amortize  intangible  assets with  indefinite
lives;  instead they will be subject to periodic tests for impairment.  SFAS 142
supercedes APB Opinion #17,  Intangible  Assets. In accordance with SFAS 142, as
of March 31, 2002,  management  assessed the present value of the projected cash
flows  of  the  acquired  business  and  the  increased  dental  hardware  sales
attributable to outsourced dental practitioners,  and believed there has been no
impairment of the goodwill. For the year ended March 31, 2003, management deemed
the IMDS Goodwill to be fully impaired, as the dental outsourcing company is now
dormant.


                                      F-16


<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   Due to Related Parties

     Due to related parties are summarized as follows:

                                             March 31, 2003      March 31, 2002
                                             --------------      --------------

Borrowings from a former director in
  the form of convertible debentures         $  69,002            $ 69,002
Borrowings from employees in the form
  of working capital loans                      51,296              84,713
Borrowings in the form of
  working capital loans                         97,731                  --
                                              --------          ----------

Due to related parties                       $ 218,029            $153,715
                                             =========          ==========

     The  convertible  debentures  issued  to the  director  are due on  demand,
bearing interest at 10% per annum, and convertible into common stock at the sole
discretion of the holder.  The debentures are  convertible  into common stock at
percentages between 30% and 37.5% of the average trading price for the stock for
the 30 day period  immediately  prior to the maturity  date. In connection  with
this conversion feature, the Company recorded a charge of $59,002 and $10,000 to
interest  expense  during  the  fiscal  years  ended  March  31,  2001 and 2000,
respectively.  These  amounts were  calculated on the 30 day period prior to the
dates of the notes,  and are subject to change  based on the 30 day period prior
to the  maturity  dates.  As of March 31, 2003 and 2002,  $20,472  and  $13,572,
respectively, was accrued for unpaid interest.

10.  Accrued Liabilities

     Accrued liabilities are summarized as follows:

                                            March 31, 2003     March 31, 2002
                                            --------------     --------------

Accrued salaries and payroll taxes          $          --      $     167,535
Accrued interest                                   38,525             34,155
Accrued audit and tax fees                         77,500            106,022
Accrued consulting                                 61,500             18,000
Accrued social taxes                               63,189
Accrued other                                      26,564             20,305
                                            -------------      -------------

Accrued liabilities                         $     267,278      $     346,017
                                            =============      =============


11.   Net Liabilities to be Sold

     On March  27,  2002,  the Board of  Directors  approved  an Asset  Purchase
Agreement (the  "Agreement")  entered into by the Company on March 14, 2002 with
Famcare 2000, LLC, ("Famcare") a Nevada limited liability company. The Agreement
provides for the sale of the Company's  Remedent Tooth & Gumbrush  business (the
"Toothbrush Business") which accounted for approximately $50,000 in revenues for
the fiscal year ended March 31, 2002.

     The business,  which engages in the worldwide  distribution of the Remedent
Tooth & Gumbrush,  had been the sole  activity of the Company since its creation
in 1996. However, due to recurring net losses and increasing working capital and
shareholder  deficits,  the  Company  implemented,  in  July  2001,  a  complete


                                      F-17

<page>
                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

corporate  reorganization  plan.  This plan included the ceasing of direct sales
and marketing of the Remedent Tooth & Gumbrush, and acquisition of and expansion
into diversified business ventures.

     As  further   discussed  in  Note  16,  the  Company  has  been  developing
technologies for introduction  within the professional  dental equipment market,
and initiated  shipments of its first product, a high-speed dental curing light,
in the first quarter 2002.

     In  connection  with  the  Company's  shift  in  focus  to high  technology
professional  dental equipment,  the Company  discontinued the operations of the
Toothbrush  Business on December  31, 2001,  in  anticipation  of the sale.  The
Company  felt  continued  dedication  to  this  business  would  not  be in  its
shareholders'  best  interest.   Additionally,   with  the  business  generating
recurring  net  losses  and  raising  deficits,  Company  resources  can be more
effectively utilized within these new markets.  Throughout the fiscal year ended
March 31, 2002, as the Company had been experiencing significant working capital
shortages,  the Company had been  downsizing  this business in anticipation of a
sale or  license  of these  operations.  As such,  the  volume of the  business,
revenues and  expenses,  had been  significantly  reduced from  previous  fiscal
years.  Further,  with the cost reduction measures taken, aside from the cost of
the toothbrush, the overhead of the entire business include solely related party
expenses of the salary of the sole  employee,  Rob  Hegemann,  and the allocated
cost of the use of his personal  residence as the primary place of operation for
this business. As a result, the business has not been accruing expenses upon its
shutdown on January 1, 2002.

     In accordance  with Article  210.11-02(a)  of Regulation S-X, the following
narrative  description of the pro-forma  adjustments  related to the sale of the
Company's  Toothbrush  Business  is made a part  of the  Annual  Report  on Form
10-KSB.  Pro-forma five-year information required by Item 301 of Regulation S-K,
in the opinion of  management,  is not applicable as prior to April 1, 2001, the
Company sole business was the Toothbrush Business.  Effective April 1, 2001, the
Company began operating a professional high-technology dental equipment business
and during the fourth fiscal quarter of 2002,  entered into the dental  employee
leasing  business.  During the fiscal years ended March 31, 2001, 2000 and 1999,
which  represent  the  entirety  of the fiscal  years  publicly  reported by the
Company,  the  sole  operating  business  was  the  Toothbrush   Business.

     The preparation of pro-forma financial  disclosures  requires management to
make  estimates  and  assumptions  that affect the  reported  amounts of assets,
liabilities  and  results of  operations  during the  reporting  period.  Actual
results could differ from those estimates.  The sale of the Company's Toothbrush
Business  positions  the  Company  to  operate  on a  going-forward  basis  as a
developer and marketer of high-technology dental equipment.

     The transaction sold all of the assets of the Tooth & Gumbrush  division as
well as obligated  the Buyer to be  responsible  for the  Company's  liabilities
relating to the division.  The business  accounted for approximately  $50,000 in
revenues,  from unit sales, for the fiscal nine months ending December 31, 2001,
and approximately $440,000 for the fiscal year ended March 31, 2001.

The following table reports  pro-forma
adjusted balance sheet accounts and results of operations when compared to March
31, 2002.





                                      F-18
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<table>
<caption>
<S>                                               <C>                    <C>                     <C>
                                                  03/31/02               Pro-Forma               03/31/02
                                                  As Reported            Adjustment              Pro-Forma
                                                  -----------            ----------             ----------
Total Sales                                           733,853              50,270(a)                683,583
Cost of Sales                                         502,013              99,152(b)                402,861
Gross Profit                                          231,840            (48,882)(c)                280,722
Operating Expenses                                  2,126,049              76,128(d)              2,049,921
Operating Loss                                    (1,894,209)           (125,010)(e)            (1,769,199)
Current Assets                                        395,032              25,303(f)                369,729
Total Assets                                          788,044              69,065(g)                718,979
Current Liabilities                                 1,516,336             404,778(h)              1,111,558
Total Liabilities                                   1,516,336             404,778(i)              1,111,558

</table>

a) Elimination of revenues reported for the nine months ended December 31, 2001,
that related to Toothbrush Business revenue being sold
b) Elimination  of the  associated  cost of sales related to the sale of Tooth &
Gumbrush units
c) Effect on gross profit on a pro-forma basis
d) Elimination of associated general and administrative  expenses related to the
sale.
e) Net effect of the transaction on operating results
f) Current assets being sold are primarily inventory and accounts receivable
g)  Total  assets  being  sold are  primarily  inventory,  accounts  receivable,
furniture, fixtures and equipment, and patents.
h) Current  liabilities being sold are primarily  accounts payable and royalties
payable.
i) Total  liabilities  being sold are primarily  accounts  payable and royalties
payable.

     Net liabilities to be sold,  representing the assets and liabilities of the
business  upon its  discontinuance  on December  31,  2001,  are  summarized  as
follows:

                  Cash                                   $   2,092
                  Accounts receivable                        7,729
                  Due from related parties                   9,952
                  Inventory                                  5,530
                  Property & equipment, net                 14,580
                  Patents, net                              25,527
                  Other assets                               3,655
                  Accounts payable                       (343,198)
                  Accrued liabilities                     (61,580)
                                                          --------
                  Net liabilities to be sold           $ (335,713)
                                                       ===========
12.  Line of Credit

     On  February  11,  2002,  Remedent  N.V.  entered  into  a  (euro)1,241,000
(US$1,351,573  at March 31, 2003) Line of Credit Facility (the  "Facility") with
the  BBL,  consisting  of a  (euro)991,000  (US$1,079,298)  accounts  receivable
factoring  line of  credit  and a  (euro)250,000  (US$272,275)  general  line of
credit.  The  factoring  line of credit,  to be secured by  qualifying  accounts
receivable, will provide the Company 75% of the amount of qualifying invoices up
to the maximum credit line. For each qualifying invoice, the BBL will assume all
collection  duties  and  charge a 0.47%  fee on the  invoice  amount  for  these
services. Advances on this line will bear interest at a rate of prime + 2.5%. As
of March 31,  2003,  no amounts  were  outstanding  on this line of credit.  The
general  line of credit is secured  by the fixed  income  marketable  securities



                                      F-19

<page>

owned by Remedent  N.V. as  described  in Note 3 with a market value of $255,539
(235,000  Euros)  as  well  as the  personal  guarantee  of Guy de  Vreese,  the
Company's  Chairman,  and bears  interest at a rate of prime + 2.5%. As of March
31, 2003, $261,572 was outstanding under this line of credit.

13.  Notes Payable

     Since the  commencement  of  operations,  the Company has borrowed  various
amounts from  shareholders  not considered  related  parties to provide  working
capital and fund operations. Included in Notes Payable is $78,576 in the form of
unsecured convertible debentures,  due on demand and bearing an interest rate of
10%. In  addition,  at the sole  discretion  of the  holder,  the  debenture  is
convertible  into  common  stock at a  percentage  between  30% and 37.5% of the
average trading price for the stock for the 30 day period  immediately  prior to
the  maturity  date.  As of  March  31,  2003 and  2002,  $17,853  and  $10,583,
respectively, was accrued for unpaid interest.

     On December 11, 1998, the Company  entered into a one-year  Promissory Note
for $50,000 with a bank, bearing interest at 10.25% annually. On April 26, 2000,
the Company refinanced the debt by converting the original note into a five-year
variable  Promissory Note,  payable on demand. The Note is secured by all of the
Company's assets. The Note does not contain any restrictive financial covenants.

     On September 9, 2001, the Company entered into a short-term working capital
loan in the amount of  $20,000.  The loan  matured in  November  2001,  with the
principal  and interest of $30,000 to be repaid in either cash or stock,  at the
Company's discretion. In May 2002, the Company negotiated for the full repayment
of the  principal and  interest,  with the issuance of 375,000  shares of common
stock.

     On September  21,  2001,  the Company  entered  into a  short-term  working
capital loan in the amount of $100,000.  The loan matured in December 2001, with
the principal and interest of $150,000 to be repaid in either cash or stock,  at
the Company's  discretion.  On December 21, 2001, the Company  renegotiated  the
terms of the  loan to  provide  for  monthly  principal  repayments  of  $11,111
commencing April 1, 2002, and the issuance of 650,000 shares of common stock for
the full repayment of the interest  portion of the loan.  Further,  in May 2002,
the Company  negotiated for the full  repayment of the remaining  balance of the
principal,  $77,778,  subsequent  to the March and April  principal  payments as
agreed to on December 21, 2001, with the issuance of 1,400,000  shares of common
stock.

Notes payable are summarized as follows:
                                              March 31, 2003     March 31, 2002
                                              --------------     --------------
Promissory Note at 7.25% (Prime +
   2.5%), due on demand, principal and
   interest payable in monthly installments
   of $1,099, final maturity April 2005          $ 22,971           $ 32,862
Convertible debentures at 10%, due on demand       78,576             80,000
Working capital loan, due on demand                    --             20,000
Working  capital  loan,  final  maturity
December 2001                                          --            100,000
                                                 --------           --------
         Notes payable                           $101,547           $232,862
                                                 ========           ========



                                      F-20

<page>


                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.  Income Taxes

     A reconciliation  of the provision  (benefit) for income taxes with amounts
determined  by applying the  statutory  U.S.  federal  income tax rate to income
before income taxes is as follows:

                                        2003             2002
Computed tax at the federal
   statutory rate of 34%                $(342,167)       $(667,694)
Valuation allowance                     $ 342,167        $ 667,694
Provision (benefit) for income taxes    $     800        $     800
Change in Valuation Allowance           $ 229,970        $ 633,014

     For  the  period   ended  March  31,  2003,   the  Company  had   available
approximately  $3.1  million of unused net  operating  loss  carry-forwards  for
federal tax and  approximately  $1.5 million for the State of California.  These
loss carry-forwards begin to expire in the year 2013 if not previously utilized.
The tax laws related to the  utilization of loss  carryforwards  are complex and
the amount of the Company's loss  carryforward that will ultimately be available
to offset future taxable income may be subject to annual  limitations  resulting
from changes in the ownership of the Company's common stock.

     The tax  effects of  temporary  differences  that give rise to  significant
portions of the deferred tax assets at March 31, 2003 are substantially composed
of the  Company's net operating  loss  carryforwards,  for which the Company has
made a full valuation allowance.

         In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected future
taxable income and tax planning strategies in making this assessment.

15.  Shareholders' Deficit

Capital Transactions

     In  December  2002,  as a result of losses  incurred  during  its  start-up
period,  Remedent  N.V.'s  shareholder  equity fell below that which is required
under Belgium law. In accordance  with Belgium law,  Remedent N.V.  retained the
services of an independent Belgium certified  accountant to determine the amount
of additional  capital  contribution  necessary to bring  Remedent N.V's balance
sheet into  compliance.  As a result of this analysis,  it was  determined  that
additional  capital of 310,000  Euros  ($321,687  as of December  2002) would be
required and,  further,  that Remedent  N.V.'s  valuation  prior to such capital
contribution  was 88,500 Euros.  In as much as Remedent USA lacked the financial
resources to provide the additional  capital required,  Remedent N.V. elected to
issue 7,171 shares of its common stock to Lausha N.V., a company  controlled  by
Guy De Vreese in exchange for  conversion  of 50,000 Euros in notes  payable and
contribution  of  the  235,000  Euros  in  fixed  income  marketable  securities
discussed above, both as an irrevocable capital contribution to Remedent N.V. In
addition, Remedent NV issued 629 shares to Robin List in exchange for conversion
of 25,000  Euros in notes  payable as an  irrevocable  capital  contribution  to
Remedent  N.V.  Mr. De Vreese and Mr. List are both  officers  and  directors of
Remedent  N.V.  and  Remedent  USA,  Inc.  As a result of this  transaction,  we
currently own 22% of our subsidiary, Remedent N.V.



                                      F-21
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On October 1, 2002,  the  Company  completed a $45,000  private  placement,
selling an  aggregate of 562,500  shares of common  stock at $0.08 a share,  and
warrants  to purchase  112,500  shares of common  stock at an exercise  price of
$0.50 per share for 5 years.

     On August 2, 2002,  the Company  issued 700,000 shares of common stock as a
retainer to a public relations firm.

     On July 25,  2002,  the  Company  completed a $230,000  private  placement,
selling an aggregate of 2,875,000  shares of common stock at $0.08 a share,  and
warrants  to purchase  575,000  shares of common  stock at an exercise  price of
$0.50 per share for 5 years.

     On May 1,  2002,  the  Company  negotiated  for the full  repayment  of the
remaining balance of the $100,000 working capital loan,  $77,778,  subsequent to
the April and May principal payments as agreed to on December 21, 2001, with the
issuance of 1,400,000 shares of common stock.

     On May 1,  2002,  the  Company  negotiated  for the full  repayment  of the
principal and interest of the $20,000 working capital loan, with the issuance of
410,000 shares of common stock.

     On May 1,  2002,  the  Company  negotiated  for the full  repayment  of the
balance owed to its predecessor auditors,  $32,650, with the issuance of 150,000
shares of common stock.

     On  April  26,  2002,  the  Company  entered  into an  agreement  with  its
investment  bankers for the repayment of $10,000 of  indebtedness,  representing
the monthly retainers for November and December of 2001 and January and February
of 2002, with the issuance of 125,000 shares of common stock.

     On January 24, 2002, the Company  entered into an agreement with Kenneth J.
Hegemann,  an  officer,  for the  repayment  of  various  related  party  debts,
including  accrued payroll,  interest and advances,  with the issuance of common
stock. $472,550 of indebtedness was fully satisfied with the issuance of 945,100
shares of common stock.

     On January  15,  2002,  the  Company  acquired a dental  employee  business
concept and related assets for 6,000,000 shares of the Company's common stock.

     On January 11, 2002, the Company  completed a $270,000  private  placement,
selling an aggregate of 3,375,000  shares of common stock at $0.08 a share,  and
warrants  to purchase  675,000  shares of common  stock at an exercise  price of
$0.50 per share for 5 years.

     On December 21, 2001, the Company  renegotiated  the repayment terms on the
$100,000  short-term  working  capital loan.  The revised  payment terms include
monthly  principal  payments,  commencing on April 1, 2002, of $11,111,  and the
issuance of 650,000  shares of common  stock as repayment of the interest on the
loan.

     On September 14, 2001, the Company completed a $110,500 private  placement,
selling an  aggregate of 442,000  shares of common  stock at $0.25 a share,  and
warrants  to purchase  442,000  shares of common  stock at an exercise  price of
$0.25 per share for 5 years.

     On September  13, 2001,  the Company  entered  into an  Investment  Banking
Agreement with a firm to provide investment banking services including,  but not
limited to, providing ongoing research coverage, identifying and introducing the
Company to potential investors and preparing and maintaining research reports on
the Company. The terms of the agreement included non-refundable consideration of



                                      F-22
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

100,000  shares of common stock and 200,000  stock  options for the execution of
the agreement, with a monthly retainer of $2,500.

     On  August  24,  2001,  the  Company  agreed  to a  repayment  plan for its
indebtedness to Southwest Multimedia, an advertising placement agent retained by
the Company in August 1999.  The  indebtedness  of $35,675 was to be repaid with
$4,025  paid in cash on October 15, 2001 with the  remainder  paid with  126,600
shares of common stock.

     On June 20, 2001, the Company entered into a Business Consulting  Agreement
with a  business  acquisition  advisory  firm  to  provide  consulting  services
including,  but not limited to, the identification and completion of acquisition
targets and general  consulting needs as expressed by the Company.  The terms of
the agreement included non-refundable  consideration of 300,000 shares of common
stock for the  execution  of the  agreement,  with future fees  calculated  as a
percentage of the value of each acquisition completed by the Company. These fees
are payable in the same ratio of cash to stock as the transaction.

     On May 21, 2001, the Company issued 148,642 shares of common stock upon the
conversion  of a debenture  for full  settlement  of the $10,000 face amount and
$589 in accrued interest.

     On April 25,  2001,  the Company  completed a $313,000  private  placement,
selling an aggregate of 1,252,000  shares of common stock at $0.25 a share,  and
warrants to purchase  1,252,000  shares of common stock at an exercise  price of
$0.25 per share for five years.

     On April 1, 2001,  the Company  entered into a Retainer  Agreement with its
former legal counsel for legal  services  including the review of SEC documents,
preparation of other documents as needed,  and general advisory  services on any
matters which arise in the ordinary course of business.  In connection with this
agreement,  the Company  issued  250,000  shares of common stock for the initial
$20,000 in legal services.

Stock Options

     On  May  29,  2001,  the  Board  of  Directors  adopted  an  Incentive  and
Nonstatutory  Stock  Option  Plan  (the  "Plan"),   reserving  5,000,000  shares
underlying  options for issuance under this plan. There is a restriction that no
more than  1,000,000  options may be granted to any one  individual or entity in
any one calendar  year under the plan. As of March 31, 2003,  4,620,900  options
were outstanding under the Plan.

     The Plan provides for the issuance of incentive  stock options to employees
of the Company and non-qualified options to employees, directors and consultants
of the Company  with  exercise  prices  greater than or equal to the fair market
value of the  Company's  common  stock on the date of grant.  The  options  have
vesting periods ranging from issuance date to five years,  have maximum terms of
five  years and are  subject  to  cancellation  in the event of  termination  of
employment.







                                      F-23
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The following table summarizes stock option activity:

                                             Options         Weighted Avg.
                                             Outstanding     Exercise Price
Balance at March 31, 2002                    4,595,900       $      0.07
Granted                                         25,000       $      0.06
Canceled or expired                                 --                --
Exercised                                           --                --
                                            ----------       -----------
Balance at March 31, 2003                    4,620,900       $      0.07
                                            ==========       ===========

Options Exercisable at March 31, 2003        4,523,633       $      0.06
                                             =========       ===========


The following table summarizes significant option groups outstanding as of March
31, 2003 and related weighted  average exercise price and remaining  contractual
life information as follows:

<table>
<caption>
<S>      <C>               <C>            <C>                <C>               <C>           <C>
                   Options Outstanding              Options Exercisable
                   -------------------              -------------------
         Range of                         Weighted Avg.      Weighted Avg.
         Exercise                         Remaining          Exercise          Number        Weighted Avg.
         Prices            Shares         Contractual Life   Price             Exercisable   Exercise Price
       $0.05-$0.09        3,825,000           10.00          $    0.05         3,825,000     $    0.05
       $0.10-$0.19          550,000            9.50          $    0.12           550,000     $    0.12
       $0.20-$0.26          245,900            9.35          $    0.24           148,633     $    0.20
</table>

Compensation  cost for stock  options is measured as the excess,  if any, of the
quoted  market  price of the  Company's  stock at the date of the grant over the
exercise price. Had  compensation  cost for these plans been determined based on
the fair value of the grant dates,  as  prescribed by SFAS No. 123, net loss and
net loss per share would have been as follows:

                  Net Loss:
                        As reported                   $   (1,006,374)
                        Pro forma                     $   (1,008,466)
                  Loss per share:
                        As reported                   $        (0.03)
                        Pro forma                     $        (0.03)

The fair value of each option granted during the periods  reported was estimated
on the date of grant using the Black-Scholes option pricing model based upon the
weighted  average  assumptions of:  risk-free  interest rate of 4.00%;  expected
volatility of 50.0%;  expected life of 10 years; and an expected  dividend yield
of zero.

16.  Common Stock Subscribed

     On June 30,  2002,  the Company  negotiated  for the partial  repayment  of
unpaid  wages to two current  employees,  $19,959,  with the  issuance of 39,916
shares of common stock.

     On June 30, 2002,  the Company  negotiated for the full repayment of unpaid
wages to a former  employee,  $19,497,  with the  issuance of 243,000  shares of
common stock.

     On May 1, 2002, the Company completed a $30,000 private placement,  selling
an aggregate of 375,000 shares of common stock at $0.08 a share, and warrants to
purchase  75,000 shares of common stock at an exercise  price of $0.50 per share
for 5 years.



                                      F-24
<page>

                       REMEDENT USA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On May 1,  2002,  the  Company  negotiated  for the full  repayment  of the
principal and interest of the $20,000 working capital loan, with the issuance of
410,000 shares of common stock.

     On May 1,  2002,  the  Company  negotiated  for the full  repayment  of the
balance owed to its predecessor auditors,  $32,650, with the issuance of 150,000
shares of common stock.

     On  April  26,  2002,  the  Company  entered  into an  agreement  with  its
investment  bankers for the repayment of $10,000 of  indebtedness,  representing
the monthly retainers for November and December of 2001 and January and February
of 2002, with the issuance of 125,000 shares of common stock.

17.  Segment Information

     The Company's  reportable operating segments consist of professional dental
products and oral hygiene  products.  The "Other"  segment column below includes
centralized services including corporate consulting, legal, accounting, investor
relations and unallocated  corporate  payroll and interest.  The chief operating
decision  making  group  for the  Company's  reportable  operating  segments  is
comprised of the Company's Chief Executive Officer, Chief Financial Officer, and
the lead executives of each of the Company's two primary operating segments. The
operating segments are managed separately as each operating segment represents a
business unit with a distinctive  marketing  strategy,  distribution  method and
target customer.  The accounting policies of the operating segments are the same
as those described in the summary of significant accounting policies.

The following are segment information for the fiscal years ended March 31:

<table>
<S>                 <C>              <C>              <C>               <C>             <C>
                                      European Operations
                             -------------------------------------------
                    Professional     Employee         Total             United
                    Dental           Out-             European          States
                    Products         sourcing         Operations        Operations       Total
2003
----
Net sales           $    1,964,503    $   4,641       $  1,969,144      $         0      $ 1,969,144
Income(loss)
  from
  operations        $     (461,482)   $       0       $   (461,482)     $  (495,731)     $  (957,213)
Total assets        $      516,670    $       0       $    516,670      $         0      $   516,670
Depreciation
  and
  amortization      $       21,804    $       0       $     21,804      $         0      $    21,804
Capital
  expenditures      $            0    $       0       $          0      $         0      $         0

2002
----
Net sales           $      683,583    $       0       $    683,583      $    50,270      $    733,853
Income(loss)
  from
  operations        $     (718,258)   $       0       $   (718,258)     $ 1,175,951)     $  (1,894,209)
Total assets        $      782,217    $       0       $    782,217      $     5,827      $     788,044
Depreciation
  and
  amortization      $       13,301    $       0       $     13,301      $          0     $      13,301
Capital
  expenditures      $       65,084    $       0       $     65,804      $          0     $      65,804
</table>
                                      F-25
<page>

18.  Going Concern

     The Company has incurred substantial net losses since inception,  and as of
March 31, 2003 and 2002 had a shareholders' deficit of $(864,286) and $(728,292)
respectively,  raising substantial doubt about the Company's ability to continue
as a going  concern.  The Company has  reassessed  its  operations  and business
structure and has implemented a complete corporate reorganization plan. The plan
includes the acquisition of and expansion into diversified business ventures.

     On July 1, 2001, the Company began developing, manufacturing, marketing and
distributing high-technology dental equipment. The Company retained 9 additional
personnel,  2 engineers and 7 operations and finance, with strong backgrounds in
the business of high-technology dental equipment,  and will market dental curing
and whitening lamps,  interoral  cameras and digital X-ray systems.  The Company
previewed its first offering within this market at dental shows around the world
in October  2001,  and  initiated  shipments  of initial  units during the first
quarter of 2002.

     In  connection  with  the  Company's  shift  in  focus  to high  technology
professional  dental equipment,  the Company  discontinued the operations of the
Toothbrush  Business on December  31, 2001,  and on March 14, 2002,  the Company
entered into an agreement to sell the business to a third party distributor. The
Company  felt  continued  dedication  to  this  business  would  not  be in  its
shareholders'  best  interest.   Additionally,   with  the  business  generating
recurring  net  losses  and  raising  deficits,  Company  resources  can be more
effectively utilized within these new markets.  Throughout the fiscal year ended
March 31, 2002, as the Company had been experiencing significant working capital
shortages,  the Company had been  downsizing  this business in anticipation of a
sale or  license  of these  operations.  As such,  the  volume of the  business,
revenues and  expenses,  had been  significantly  reduced from  previous  fiscal
years.  For  the  fiscal  year  ended  March  31,  2003,  as  a  result  of  the
implementation  of  this  reorganization  plan,  gross  profits  have  increased
significantly and operating  expenses,  and the resulting operating losses, have
decreased substantially.

         Upon the completion of its reorganization plan, the Company's objective
is to become a leading developer and manufacturer of high-technology dental
equipment and operator of employee leasing firms, capitalizing on the synergies
and marketing inroads each division provides Management believes that if the
Company can complete its restructuring plan, the Company can generate sufficient
revenues and cash flows to sustain operations. There can be no assurance that
the Company will be successful in its efforts and if unsuccessful in its
efforts, it may be necessary to undertake other actions to preserve asset value.
The financial statements do not include adjustments that might result from the
outcome of this uncertainty.

19.     Subsequent Events (Unaudited)

In May 2003,  the Company  initiated a $900,000  private  placement,  seeking an
aggregate of 900,000 shares of convertible preferred shares at $1.00 a share.



                                      F-26