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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 001-15975
 REMEDENT, INC.
  Nevada
    
    86-0837251(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)Xavier de Cocklaan 42, 9831 Deurle, Belgium
    
    N/A(Address of principal executive offices)
    
    (Zip code)
 011-329-321-70-80
 Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
 o
 þ o
 þ
 o þ
  
   Documents incorporated by reference:
 Transitional Small Business Disclosure Format o þ




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##### 



TABLE OF CONTENTS
 PART I
    
    
    3Item 1. Description of Business
    
    
    3Item 2. Description of Property
    
    
    12Item 3. Legal Proceedings
    
    
    13Item 4. Submission of Matters to a Vote of Security Holders
    
    
    13PART II
    
    
    13Item 5. Market for Common Equity and Related Stockholder Matters
    
    
    13Item 6. Managements Discussion and Analysis or Plan of Operation
    
    
    14Item 7. Financial Statements
    
    
    30Item 8. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure
    
    
    30Item 8A. Controls and Procedures
    
    
    30Item 8A(T). Controls and Procedures
    
    
    31Item 8B. Other Information
    
    
    31PART III
    
    
    31Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act
    
    
    31Item 10. Executive Compensation
    
    
    34Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    34Item 12. Certain Relationships and Related Transactions
    
    
    37Item 13. Exhibits
    
    
    38Item 14. Principal Accountant Fees and Services
    
    
    39Exhibit Index
    
    
    41Financial Statements
    
    
    44EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  In addition to historical information, this Annual Report on Form 10-KSB (Annual Report) for
Remedent, Inc. (Remedent the Company, we, our or us) contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including statements
regarding the growth of product lines, optimism regarding the business, expanding sales and other
statements. Words such as expects, anticipates, intends, plans, believes, sees, estimates and
variations of such words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and involve certain risks and
uncertainties that are difficult to predict. Actual results could vary materially from the
description contained herein due to many factors including continued market acceptance of our
products. In addition, actual results could vary materially based on changes or slower growth in
the oral care and cosmetic dentistry products market; the potential inability to realize expected
benefits and synergies; domestic and international business and economic conditions; changes in the
dental industry; unexpected difficulties in penetrating the oral care and cosmetic dentistry
products market; changes in customer demand or ordering patterns; changes in the competitive
environment including pricing pressures or technological changes; technological advances; shortages
of manufacturing capacity; future production variables impacting excess inventory and other risk
factors listed in the section of this Annual Report entitled Risk Factors and from time to time
in our Securities and Exchange Commission filings under risk factors and elsewhere.
 Each forward-looking statement should be read in context with, and with an understanding of,
the various disclosures concerning our business made elsewhere in this Annual Report, as well as
other public reports filed by us with the United States Securities and Exchange Commission. Readers
should not place undue reliance on any forward-looking statement as a prediction of actual results
of developments. Except as required by applicable law or regulation, we undertake no obligation to
update or revise any forward-looking statement contained in this Annual Report.




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PART I
 
 ITEM 1  DESCRIPTION OF BUSINESS
 Introduction
   
    
    Entered into distribution agreement with Vemedia N.V., a corporation under the
laws of the Netherlands (Vemedia) whereby Vemedia agreed to be the exclusive
distributor of our products in the Netherlands.
    
    Entered into a distribution agreement with GlamTech USA, Inc., a corporation
under the laws of Delaware (GlamTech) whereby GlamTech agreed to be the exclusive
distributor of our GlamSmile products in the United States and Canada.
    
    Continued to advance our sales and distribution channels for our new teeth
whitening products, iWhite and MetaTray®, in Europe and the United States;
    
    Continued to advance our new Reme)Sense Tray and Foam Strips products, which
provide a remedy for sensitive teeth.
    3




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Current Products and Business Strategy
 Products
  Professional Dental Products
 GLAMSMILE
 
    
    no local anesthesia is required to prepare the teeth;
    
    reduced (if any) tooth sensitivity post-procedure; and
    
    the process is reversible.
 
    4




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REMEWHITE IN OFFICE WHITENING SYSTEM
 REMEWHITE HOME MAINTENANCE KIT
 METATRAY ®
 
    
    Does not require chair time.
    
    Incorporates all the benefits of heat and light for activating gel.
    
    Introduces a proprietary gel delivery system that eliminates dripping and
running while enhancing protection for surrounding gums and tissue.
   REMECURE
 5




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Over-The-Counter Products
 CLEVERWHITE
 CLEVERWHITE DAY & NIGHT
 IWHITE
 REME)SENSE TRAY AND FOAM STRIPS
 Distribution
    6




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Locations
    7




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Manufacturing
   Research and Development
    8




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New Product Development
 Universal Applicator Intellectual Property
 Intellectual Property
         
 9




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® ® 
 Major Customers
  Competition
   
    
    Better combined pricing strategy than the competition when considering net cost
for whitening materials and initial cost of light.
    
    Dual purpose light to maximize value of initial investment.
    
    Ease of use from automated functionality of light, speed and gel application
method.
    
    Superior gel formulation which maximizes performance while minimizing
sensitivity.
    
    Home maintenance kit for improved patient satisfaction.
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Regulatory Issues
    11




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® ®
  Costs and Effects of Compliance with Environmental Laws and Regulations
  Employees
  
 ITEM 2  DESCRIPTION OF PROPERTY
  
 12




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
 
 ITEM 3  LEGAL PROCEEDINGS
  
 ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 Market Information
   Bid PricesHigh
    
    LowQuarter ended June 30, 2006
    
    $
    2.75
    
    
    $
    1.80Quarter ended September 30, 2006
    
    $
    2.10
    
    
    $
    1.40Quarter ended December 31, 2006
    
    $
    1.80
    
    
    $
    0.95Quarter ended March 31, 2007
    
    $
    2.05
    
    
    $
    1.39Quarter ended June 30, 2007
    
    $
    1.85
    
    
    $
    1.40Quarter ended September 30, 2007
    
    $
    1.95
    
    
    $
    1.40Quarter ended December 31, 2007
    
    $
    3.15
    
    
    $
    1.45Quarter ended March 31, 2008
    
    $
    1.75
    
    
    $
    0.90
  Stockholders
  Dividends
  13




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Securities Authorized for Issuance under Equity Compensation Plans
    Number of
    
    
    
    
    
    Number of securitiessecurities to be
    
    
    
    
    
    remaining available forissued upon
    
    
    
    
    
    future issuance underexercise of
    
    Weighted-average
    
    equity compensationof outstanding
    
    exercise price of
    
    plans (excludingoptions, warrants
    
    outstanding options
    
    securities reflectedPlan Category
    
    and right
    
    warrants and rights
    
    in column (a))Equity Compensation Plans approved by security holders
    
    
    1,103,166
    
    
    $
    2.01
    
    
    
    96,834Equity Compensation Plans not approved by security holders
    
    
    297,298
    
    
    $
    1.50
    
    
    NATotal
    
    
    1,400,464
    
    
    $
    1.91
    
    
    
    96,834
 
 ITEM 6  MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 In addition to historical information, this section contains forward-looking statements,
including statements regarding the growth of product lines, optimism regarding the business,
expanding sales and other statements. Words such as expects, anticipates, intends, plans, believes,
sees, estimates and variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future performance and involve
certain risks and uncertainties that are difficult to predict. Actual results could vary materially
from the description contained herein due to many factors including continued market acceptance of
our products. In addition, actual results could vary materially based on changes or slower growth
in the oral care and cosmetic dentistry products market; the potential inability to realize
expected benefits and synergies; domestic and international business and economic conditions;
changes in the dental industry; unexpected difficulties in penetrating the oral care and cosmetic
dentistry products market; changes in customer demand or ordering patterns; changes in the
competitive environment including pricing pressures or technological changes; technological
advances; shortages of manufacturing capacity; future production variables impacting excess
inventory and other risk factors listed in the section of this Annual Report entitled Risk
 14




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Factors and from time to time in our Securities and Exchange Commission filings under risk
factors and elsewhere.
 Each forward-looking statement should be read in context with, and with an understanding of,
the various disclosures concerning our business made elsewhere in this Annual Report, as well as
other public reports filed by us with the Securities and Exchange Commission. Readers should not
place undue reliance on any forward-looking statement as a prediction of actual results of
developments. Except as required by applicable law or regulation, we undertake no obligation to
update or revise any forward-looking statement contained in this Annual Report. This section should
be read in conjunction with our consolidated financial statements.
 Overview
   ® ®
    15




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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis for Presentation
  Revenue Recognition
  Impairment of Long-Lived Assets
  Pervasiveness of Estimates
  16




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Accounts Receivable and Allowance for Doubtful Accounts
  Research and Development Costs
  Inventories
   Patents
  Conversion of Foreign Currencies
  17




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Stock Based Compensation
  Recent Accounting Pronouncements
    18




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Results of Operations
  2008
    
    2007NET SALES
    
    
    100.00
    %
    
    
    100.00
    %COST OF SALES
    
    
    53.14
    %
    
    
    50.07
    %GROSS PROFIT
    
    
    46.86
    %
    
    
    49.93
    %OPERATING EXPENSESResearch and development
    
    
    4.45
    %
    
    
    5.12
    %Sales and marketing
    
    
    25.21
    %
    
    
    13.31
    %General and administrative
    
    
    54.22
    %
    
    
    49.26
    %Depreciation and amortization
    
    
    4.03
    %
    
    
    3.14
    %TOTAL OPERATING EXPENSES
    
    
    87.91
    %
    
    
    70.83
    %INCOME (LOSS) FROM OPERATIONS
    
    
    (41.05
    )%
    
    
    (20.89
    )%Other income (expense)
    
    
    (0.23
    )%
    
    
    (1.51
    )%INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (41.27
    )%
    
    
    (22.41
    )%Income tax benefit (expense)
    
    
    (0.36
    %
    
    
    0.00
    )%NET INCOME (LOSS)
    
    
    (41.64
    )%
    
    
    (22.41
    )%
 19




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Net Sales
   Cost of Sales
   Gross Profit
  Operating Expenses
 Research and Development
 Sales and marketing costs
 General and administrative costs
 20




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Depreciation and amortization
 Net interest expense
 Liquidity and Capital Resources
     21




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     
   Risks Relating To Our Business
 We have a history of losses and we could suffer losses in the future.
   22




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Our quarterly sales and operating results have fluctuated and may continue to fluctuate in future
periods which may cause the price of our common stock to decline.
  
    
    variation in demand for our products, including variation due to seasonality;
    
    our ability to research, develop, introduce, market and gain market acceptance
of new products and product enhancements in a timely manner;
    
    our ability to control costs;
    
    the size, timing, rescheduling or cancellation of orders from distributors;
    
    the introduction of new products by competitors;
    
    long sales cycles and fluctuations in sales cycles;
    
    the availability and reliability of components used to manufacture our
products;
    
    changes in our pricing policies or those of our suppliers and competitors, as
well as increased price competition in general;
    
    the risks and uncertainties associated with our international business;
    
    costs associated with any future acquisitions of technologies and businesses;
    
    developments concerning the protection of our proprietary rights; and
    
    general global economic, political, international conflicts, and acts of
terrorism.
  The government extensively regulates our products and failure to comply with applicable regulations
could result in fines, suspensions, seizure actions, product recalls, injunctions and criminal
prosecutions.
  23




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® ®
  We may not have effective internal controls if we fail to remedy any deficiencies we may identify
in our system of internal controls.
  The loss of or a substantial reduction in, or change in the size or timing of, orders from
distributors could harm our business .
  We do not have long term commitments from our suppliers and manufacturers.
  24




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We face intense competition, and many of our competitors have substantially greater resources than
we do.
  Our success will depend on our ability to update our technology to remain competitive.
  We depend on market acceptance of the products of our customers. If our products do not gain market
acceptance, our ability to compete will be adversely affected.
 ® ®
 25




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Failure to meet customers expectations or deliver expected performance of our products could
result in losses and negative publicity, which will harm our business
  If product liability lawsuits are successfully brought against us, we may incur substantial
liabilities and may be required to limit commercialization of our products.
  
    
    decreased demand for our products;
    
    injury to our reputation;
    
    costs of related litigation;
    
    substantial monetary awards to customers;
    
    product recalls;
    
    loss of revenue; and
    
    the inability to commercialize our products.
 We may have difficulty managing our growth.
  It may be difficult to enforce a United States judgment against us, our officers and directors, or
to assert United States securities laws claims in Belgium and to serve process on substantially all
our of our directors and officers and these experts.
  26




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If we are unable to protect our intellectual property rights or our intellectual property rights
are inadequate, our competitive position could be harmed or we could be required to incur expenses
to enforce our rights .
   If we are unable to meet customer demand or comply with quality regulations, our sales will suffer .
  We are dependent on Guy De Vreese, our Chairman, and/or Robin List, our Chief Executive Officer,
and any loss of such key personnel could result in the loss of a significant portion of our
business.
  27




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Substantially all of our assets are secured under a credit facility with Fortis Bank, a bank
located outside of the United States, and in the event of default under the credit facility we may
lose all of our assets.
      
 We may not be able to secure additional financing to meet our future capital needs.
  Our results of operations may be adversely impacted by currency fluctuations.
  28




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Substantially all of our operations are located outside of the United States, substantially all of
our sales are generated outside of the United States and substantially all of our assets are
located outside of the United States, subjecting us to risks associated with international
operations.
  
    
    difficulties in collecting accounts receivable and longer collection periods,
    
    changes in overseas economic conditions,
    
    fluctuations in currency exchange rates,
    
    potentially weaker intellectual property protections,
    
    changing and conflicting local laws and other regulatory requirements,
    
    political and economic instability,
    
    war, acts of terrorism or other hostilities,
    
    potentially adverse tax consequences,
    
    difficulties in staffing and managing foreign operations, or
    
    tariffs or other trade regulations and restrictions.
 If we cannot build and maintain strong brand loyalty our business may suffer.
  Risks Relating To Our Common Stock
 There is a limited public trading market for our common stock.
  29




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The ownership of our stock is highly concentrated in our management.
  We have a substantial number of shares authorized but not yet issued.
  We have historically not paid dividends and do not intend to pay dividends.
  
 ITEM 7  FINANCIAL STATEMENTS
  
 ITEM 8  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 8A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  30




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ITEM 8A(T). CONTROLS AND PROCEDURES
 (a)
    
    Managements Annual Report on Internal Control Over Financial Reporting.
   .
 (b)
    
    Attestation Report of the Registered Public Accounting Firm.
  (c)
    
    Changes in internal control over Financial Reporting
  
 ITEM 8B. OTHER INFORMATION
  
 PART III
 
 ITEM 9  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
16(a) OF THE EXCHANGE ACT
 Directors and Executive Officers
  31




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Person
    
    Age
    
    PositionGuy De Vreese
    
    
    53
    
    
    ChairmanRobin List
    
    
    37
    
    
    Director, Chief Executive OfficerPhilippe Van Acker
    
    
    43
    
    
    Chief Financial OfficerStephen Ross
    
    
    49
    
    
    Director, SecretaryFred Kolsteeg
    
    
    64
    
    
    Director
 Guy De Vreese, Chairman
 Robin List, Director, Chief Executive Officer
 Philippe Van Acker, Chief Financial Officer
 Stephen Ross, Director, Secretary
 Fred Kolsteeg, Director
 32




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Audit Committee Financial Expert
     Code of Ethics
  Compliance with Section 16 of the Securities Exchange Act of 1934
  33




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ITEM 10  EXECUTIVE COMPENSATION
 Summary Compensation
  Stock
    
    Option
    
    All OtherName and Principal Position
    
    Year
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    TotalGuy De Vreese,
    
    
    2008
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    
    
    
    $
    315,442
    (1)
    
    $
    315,442
    (1)Chairman, CEO of Remedent N.V.
    
    
    2007
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    294,429
    (1)
    
    $
    294,429
    (1)Robin List,
    
    
    2008
    
    
    $
    252,567
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    252,567CEO
    
    
    2007
    
    
    $
    239,045
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    239,045Philippe Van Acker,
    
    
    2008
    
    
    $
    162,658
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    162,658CFO
    
    
    2007
    
    
    $
    138,573
    
    
    $
    -0-
    
    
    $
    -0-
    
    
    $
    
    
    
    
    
    
    
    $
    138,573
 
 (1)
    
    These amounts are consulting fees including a car allowance paid by
Remedent N.V. to Lausha, N.V., a company controlled by Mr. De Vreese,
pursuant to an oral consulting agreement between Lausha N.V. and
Remedent N.V. 
 ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  a.
    
    each person known by us to be the beneficial owner of more than 5% of our
common stock;b.
    
    each of our directors;c.
    
    each of our executive officers; andd.
    
    our executive officers, directors and director nominees as a group.
  34




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Shares Beneficially
    
    PercentageBeneficial owner (1)
    
    Owned
    
    Beneficially OwnedGuy De Vreese, Chairman (2)
Xavier de Cocklaan 42
9831 Deurle, Belgium
    
    
    5,393,580
    
    
    
    28.31
    %Robin List, CEO, Director (3)
Xavier de Cocklaan 42
9831 Deurle, Belgium
    
    
    882,827
    
    
    
    4.19
    %Philippe Van Acker, CFO (4)
Xavier de Cocklaan 42
9831 Deurle, Belgium
    
    
    101,667
    
    
    
    *Stephen Ross, Secretary, Director (5)
1921 Malcolm #101
Los Angeles, CA 90025
    
    
    518,777
    
    
    
    2.77
    %Fred Kolsteeg (6)
Managelaantje 10
3062 CV Rotterdan
The Netherlands
    
    
    110,000
    
    
    
    *All Officers and Directors as a Group (5 persons)
    
    
    7,006,851
    
    
    
    36.78
    %5% or Greater ShareholdersSpecial Situations Private Equity Fund, L.P. (7)
    
    
    5,853,049
    
    
    
    27.25
    %Special Situations Cayman Fund LP (8)
    
    
    1,255,067
    
    
    
    6.62
    %Austin W. Marxe and David M. Greenhouse (9)
153 East 53rd Street, 55th FL
New York, NY 10022
    
    
    7,814,816
    
    
    
    35.57
    %Potomac Capital Partners LP (10)
    
    
    990,185
    
    
    
    5.19
    %Paul J. Solit (11)
    
    
    2,380,000
    
    
    
    12.11
    %Lagunitas Partners LP (12)
    
    
    1,384,600
    
    
    
    7.20
    %Jon D. Gruber (13)
    
    
    1,971,200
    
    
    
    10.12
    %
 
 *
    
    Less than one percent(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 3,204,426 shares in his own name, which such
amount includes 50,000 35




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shares of common stock underlying options
which vested on March 29, 2002 and have an exercise price of $1.00
per share; 100,000 shares of common stock underlying options which
vested on September 17, 2007 and have an exercise price of $1.75 per
share; 79,254 shares of common stock held in the name of Lausha N.V.,
a Belgian company controlled by Guy De Vreese and 9,900 shares of
common stock underlying warrants with an exercise price of $10.00 per
share held in the name of Lausha N.V., a Belgian company controlled
by Guy De Vreese; 2,000,000 shares of common stock held in the name
of Lausha HK, a Hong Kong company controlled by Guy De Vreese.(3)
    
    Includes 50,000 shares of common stock underlying options which
vested on March 29, 2002 and have an exercise price of $1.00 per
share, as well as 100,000 shares of common stock underlying options
which vested on September 17, 2007 and have an exercise price of
$1.75 per share.(4)
    
    Includes 10,000 shares of common stock underlying options which
vested on March 29, 2002 and have an exercise price of $1.00 per
share; includes 75,000 shares of common stock underlying options
which vested on December 2005 and have an exercise price of $2.46 per
share; and includes 16,667 shares of common stock underlying options
which vested on September 17, 2007 and have an exercise price of
$1.75 per share.(5)
    
    Includes 50,000 shares of common stock underlying options which
vested on March 29, 2002 and have an exercise price of $1.00 per
share and 12,500 shares of common stock underlying options which
vested on April 8, 2004 and have an exercise price of $2.00 per
share.(6)
    
    Consists of 50,000 shares of common stock held in his own name,
including 5,000 shares of common stock underlying options which
vested on March 29, 2002 and have an exercise price of $1.00 per
share, 60,000 shares of common stock held by Kolsteeg
Beleggingsmaatschappij B.V., a Dutch company of which Fred Kolsteeg
is the principal, including 10,000 shares of common stock underlying
warrants held by Kolsteeg Beleggingsmaatschappij B.V. with an
exercise price of $10.00 per share.(7)
    
    Consists of 3,010,667 shares of common stock of the Company held by
Special Situations Private Equity Fund, L.P. (SSF Private Equity)
and warrants to purchase 2,842,382 shares of common stock held by SSF
Private Equity. Such securities are also included and reflected in
the disclosure for Austin W. Marxe and David M. Greenhouse, per
footnote 9 below.(8)
    
    Consists of 940,067 shares of common stock held by Special Situations
Cayman Fund, L.P. (SSF Cayman) and warrants to purchase 315,000
shares of common stock held by SSF Cayman. Such securities are also
included and reflected in the disclosure for Austin W. Marxe and
David M. Greenhouse, per footnote 9 below.(9)
    
    Consists of 3,010,667 shares of common stock of the Company held by
Special Situations Private Equity Fund, L.P. (SSF Private Equity)
and warrants to purchase 2,842,382 shares of common stock held by SSF
Private Equity; 529,700 shares of common stock held by Special
Situations Fund III QP, L.P. (SSF QP) and warrants to purchase
177,000 shares of common stock held by SSF QP; 940,067 shares of
common stock held by Special Situations Cayman Fund, L.P. (SSF
Cayman) and warrants to purchase 315,000 shares of common stock held
by SSF Cayman. MGP Advisors Limited (MGP) is the general partner of
SSF QP. AWM Investment Company, Inc. (AWM) is the general partner
of MGP, the general partner of and investment adviser to SSF Cayman
and the investment adviser to SSF Private Equity. Austin W. Marxe and
David M. Greenhouse are the principal owners of MGP and AWM. Through
their control of MGP and AWM, Messrs. Marxe and Greenhouse share
voting and investment control over the portfolio securities of each
of the funds listed above. 36




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##### Table of Contents



(10)
    
    Consists of 565,820 shares of common stock of the
Company held by Potomac Capital Partners LP and
warrants to purchase 424,365 shares of common stock
held by Potomac Capital Partners LP. Such securities
are also included and reflected in the disclosure
for Paul J. Solit, per footnote 11 below.(11)
    
    Consists of 565,820 shares of common stock of the
Company held by Potomac Capital Partners LP and
warrants to purchase 424,365 shares of common stock
held by Potomac Capital Partners LP; 391,968 shares
of common stock held by Potomac Capital
International Ltd and warrants to purchase 293,976
shares of common stock held by Potomac Capital
International Ltd; and 402,212 shares of common
stock held by Pleiades Investment Partners-R LP
(Pleiades) and warrants to purchase 301,659 shares
of common stock held by Pleiades. Paul J. Solit has
disposition and voting control for Potomac Capital
Partners LP, Potomac Capital International Ltd. and
Pleiades.(12)
    
    Consists of 791,200 shares of common stock of the
Company held by Lagunitas Partners LP and warrants
to purchase 593,400 shares of common stock held by
Lagunitas Partners LP. Such securities are also
included and reflected in the disclosure for Jon D.
Gruber, per footnote 13 below.(13)
    
    Consists of 791,200 shares of common stock of the
Company held by Lagunitas Partners LP and warrants
to purchase 593,400 shares of common stock held by
Lagunitas Partners LP; 181,600 shares of common
stock held by Gruber & McBaine International and
warrants to purchase 136,200 shares of common stock
held by Gruber & McBaine International; 153,600
shares of common stock held by the Jon D. and Linda
W. Gruber Trust and warrants to purchase 115,200
shares of common stock held by the Jon D. and Linda
W. Gruber Trust. Jon D. Gruber has disposition and
voting control for Lagunitas Partners, LP and Gruber
& McBaine International, and Jon D. Gruber and Linda
W. Gruber have disposition and voting control for
the Jon D. and Linda W. Gruber Trust. 
 ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
   37




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##### Table of Contents



   
     
 ITEM 13. EXHIBITS
  38




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
       2008
    
    2007Audit Fees
    
    $
    46,626
    
    
    $
    40,847Audit Related Fees
    
    $
    3,111
    
    
    $
    1,536Tax Fees
    
    $
    16,000
    
    
    
    -0-All Other Fees
    
    
    -0-
    
    
    
    -0-
  39




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##### Table of Contents



SIGNATURES
  REMEDENT, INC.Dated: July 11, 2008
    /s/ Robin ListBy: Robin ListIts: Chief Executive Officer (Principal
Executive Officer) and Director Dated: July 11, 2008
    /s/ Philippe Van AckerBy: Philippe Van AckerIts: Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)  Dated: July  11, 2008
    /s/ Robin ListRobin List  Chief Executive Officer and DirectorDated: July  11, 2008
    /s/ Guy De VreeseGuy De Vreese Chairman of the Board of DirectorsDated: July  11, 2008
    /s/ Stephen RossStephen Ross  Secretary and DirectorDated: July 11, 2008
    /s/ Fred KolsteegFred Kolsteeg  Director 40




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No
    
    Description2.1
    
    
    Stock Exchange Agreement with Resort World Enterprises, Inc. (1)3.1
    
    
    Articles of Incorporation of Jofran Confectioners International, Inc., a Nevada corporation,
dated July 31, 1986 (1)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 (1)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 (1)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 (1)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 (1)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 (1)3.7
    
    
    Amendment to Articles of Incorporation changing name from Resort World Enterprises, Inc., a
Nevada corporation, to Remedent , Inc., dated October 5, 1998 (1)3.8
    
    
    Amended and Restated Articles of Incorporation changing name from Remedent, USA, Inc. to
Remedent, Inc. and to effect a one-for-twenty reverse stock split on June 3, 2005 (2)3.9
    
    
    Amended and Restated Bylaws (2)4.1
    
    
    Specimen of Stock Certificate (7)4.2
    
    
    Form of Subscription Agreement (5)4.3
    
    
    Form of Warrant for Common Stock (5)4.4
    
    
    Form of Registration Rights Agreement (5)4.5
    
    
    Form of Warrant for Unit (8)4.6
    
    
    Form of Warrant for Common Stock (17)10.1
    
    
    Incentive and Nonstatutory Stock Option Plan, dated May 29, 2001 (1)10.2
    
    
    2004 Incentive and Nonstatutory Stock Option Plan (8)10.3
    
    
    Exchange Agreement by and among Remedent, Inc. and Lausha, N.V. and Robin List dated June 3,
2005 (2)10.4
    
    
    Amendment to Line of Credit Agreement by and Between Remedent, N.V. and Fortis Bank dated
May 3, 2005, subject to General Terms and Conditions (6)10.5
    
    
    Exclusive License Agreement between Remedent, Inc. and Dan Darnell dated October 11, 2004 (6)10.6
    
    
    Amendment to Development Agreement between Remedent, Inc. and P. Michael Williams dated
August 4, 2004 (6)10.7
    
    
    Option Agreement between Remedent, N.V. and Lident NV dated July 6, 2004 (6)10.8
    
    
    Development Agreement between Remedent, Inc. and P. Michael Williams dated March 15, 2004 (6)10.9
    
    
    Convertible Promissory Note dated March 23, 2004 (3)10.10
    
    
    Letter Agreement by and between MDB Capital Group, Inc. and Remedent, Inc. dated September
22, 2003 (6)10.11
    
    
    Stock Purchase Agreement with Dental Advisors, dated September 14, 2001 (1)10.12
    
    
    Asset Purchase Agreement for IMDS, dated January 15, 2001 (1)10.13
    
    
    Stock Purchase Agreement, dated January 11, 2002 (1)10.14
    
    
    Stock Purchase Agreement, dated May 1, 2002 (1)10.15
    
    
    Securities Purchase Agreement dated July 6, 2005 (5)10.16
    
    
    Registration Rights Agreement dated July 6, 2005 (5)10.17
    
    
    Warrant dated July 6, 2005 (5)10.18
    
    
    Amendment to Warrant (8)10.19
    
    
    Employment Agreement between Remedent N.V. and Philippe Van Acker (7)10.20
    
    
    Agreement between Remedent N.V. and Omega Pharma NV dated as of September 9, 2003(8)
 41




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##### Table of Contents



Exhibit No
    
    Description10.21
    
    
    Addendum to Distribution Agreement between Remedent N.V. and Omega Pharma NV dated September
24, 2003 (7)10.22
    
    
    Addendum to Distribution Agreement between Remedent N.V. and Omega Pharma NV dated February
4, 2004 (7)10.23
    
    
    Lease Agreement dated December 20, 2001 (7)10.24
    
    
    Consulting Agreement between Remedent, Inc., and P. Michael Williams dated February 10, 2006
(9)10.25
    
    
    Consulting Agreement between Remedent, Inc. and Pierre Fabre Medicament S.A. dated December
21, 2005 (10)10.26
    
    
    Agreement between Remedent N.V, and Chefaro Pharma Italia S.R.L. dated February 15, 2006 (11)10.27
    
    
    Exclusive License and Distribution Agreement between Remedent and Dream Life dated March 22,
2006 (12)10.28
    
    
    Employment Agreement between Remedent, Inc. and Judd D. Hoffman (8)10.29
    
    
    Employment Severance Agreement between Remedent, Inc. and Judd D. Hoffman (13)10.30
    
    
    Fortis Bank General Lending Conditions for Corporate Customers (General Terms and
Conditions) (14)10.31
    
    
    Line of Credit Agreement by and between Remedent, N.V. and Fortis Bank dated September 8,
2004, subject to the General Terms and Conditions (14)10.32
    
    
    Amendment to Line of Credit Agreement by and Between Remedent, N.V. and Fortis Bank dated
March 13, 2006, subject to the General Terms and Conditions (15)10.33
    
    
    Amendment to Line of Credit Agreement by and Between Remedent, N.V. and Fortis Bank dated
September 1, 2006, subject to the General Terms and Conditions (16)10.34
    
    
    Purchase Agreement between Remedent, Inc. and certain Investors, dated June 20, 2007 (17)10.35
    
    
    Registration Rights Agreement between Remedent, Inc. and certain Investors, dated June 20,
2007 (17)10.36
    
    
    Letter Agreement between Remedent, Inc. and Roger Leddington dated August 8, 2007 (18)10.37
    
    
    2007 Equity Incentive Plan (19)10.38
    
    
    Sales and Distribution Agreement between Remedent N.V. and Savant Distribution Limited,
dated October 1, 2007 (20)10.39
    
    
    Waiver Agreement between Remedent, Inc. and Consenting Holders, dated October 18, 2007 (21)10.40
    
    
    Limited Liability Company Merger and Reallocation Agreement between Remedent NV and IMDS,
LLC, dated July 15, 2007 (22)10.41
    
    
    Distribution Agreement, dated November 29, 2007, by and between Remedent, Inc. and Vemedia
N.V. (23)10.42
    
    
    Distribution Agreement, dated April 10, 2008, by and between Remedent N.V. and GlamTech USA,
Inc. (24)10.43
    
    
    Factoring Agreement between Remedent, Inc. and First Community Financial, a division of
Pacific Western Bank, dated April 24, 2008 (25)14.1
    
    
    Code of Ethics, adopted March 25, 2003 (4)21.1
    
    

List of Subsidiaries*23.1
    
    

Consent of PKF Bedrijfsrevisoren, Antwerp, Belgium*31.1
    
    

Certifications of the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act.*31.2
    
    

Certifications of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act.*32.1
    
    

Certifications of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act.*32.2
    
    

Certifications of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act.*
 
 *
    
    Filed herewith.(1)
    
    Incorporated by reference from Registration Statement on Form SB-2 filed with the SEC on July
24, 2002.(2)
    
    Incorporated by reference from Form 8-K filed with the SEC on June 8, 2005.(3)
    
    Incorporated by reference from Form 10-KSB/A filed with the SEC on February 8, 2005.(4)
    
    Incorporated by reference from Form 10-KSB filed with the SEC on July 15, 2003. 42




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##### Table of Contents



(5)
    
    Incorporated by reference from Form 8-K filed with the SEC on July 11, 2005.(6)
    
    Incorporated by reference from Form 10-KSB filed with the SEC on July 14, 2005.(7)
    
    Incorporated by reference from Form SB-2 filed with the SEC on August 4, 2005.(8)
    
    Incorporated by reference from Form SB-2/A filed with the SEC on October 26, 2005(9)
    
    Incorporated by reference from Form 8-K filed with the SEC on February 16, 2006.(10)
    
    Incorporated by reference from Form 10-QSB filed with the SEC on February 21, 2006.(11)
    
    Incorporated by reference from Form 8-K filed with the SEC on February 22, 2006.(12)
    
    Incorporated by reference from Original Filing on Form 10-KSB filed with the SEC on July 14,
2006.(13)
    
    Incorporated by reference from Form 10-QSB filed with the SEC on August 21, 2006.(14)
    
    Incorporated by reference from Form 10-KSB/A2 filed with the SEC on June 11, 2007.(15)
    
    Incorporated by reference from Form 10-KSB/A filed with the SEC on June 11, 2007.(16)
    
    Incorporated by reference from Form 10-QSB/A filed with the SEC on June 11, 2007.(17)
    
    Incorporated by reference from Form 8-K filed with the SEC on June 27, 2007.(18)
    
    Incorporated by reference from Form 8-K filed with the SEC on August 15, 2007(19)
    
    Incorporated by reference from Schedule 14A filed with the SEC on October 2, 2007(20)
    
    Incorporated by reference from Form SB-2/A3 filed with the SEC on October 23, 2007(21)
    
    Incorporated by reference from Form SB-2/A2 filed with the SEC on October 19, 2007(22)
    
    Incorporated by reference from Form 10-QSB filed with the SEC on November 19, 2007(23)
    
    Incorporated by reference from Form 8-K filed with the SEC on December 19, 2007(24)
    
    Incorporated by reference from Form 8-K filed with the SEC on April 15, 2008(25)
    
    Incorporated by reference from Form 8-K filed with the SEC on April 30, 2008 
 43




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##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES
 
 CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2008
 Index
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-1CONSOLIDATED BALANCE SHEETS
    
    
    F-2CONSOLIDATED STATEMENTS OF OPERATIONS
    
    
    F-3CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
    
    
    F-4CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    F-5CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
    
    
    F-6NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    F-7
 44




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##### Table of Contents



INDEPENDENT AUDITORS REPORT
 
 REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
 To the Board of Directors and Stockholders of Remedent, Inc.:
     
 /s/ Ria VerheyenRegistered Auditor 
  F-1




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##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS
 March 31, 2008
    
    March 31, 2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,728,281
    
    
    $
    126,966Accounts receivable, net of allowance for doubtful accounts of $32,181 at March 31,
2008 and $79,996 at March 31, 2007
    
    
    1,902,920
    
    
    
    1,724,121Inventories, net
    
    
    1,360,709
    
    
    
    1,132,941Prepaid expense
    
    
    970,173
    
    
    
    668,421Total current assets
    
    
    5,962,083
    
    
    
    3,652,449PROPERTY AND EQUIPMENT, NET
    
    
    692,609
    
    
    
    589,623OTHER ASSETSLong term investments and advances
    
    
    675,000
    
    
    
    Patents, net
    
    
    115,827
    
    
    
    135,894TOTAL ASSETS
    
    $
    7,445,519
    
    
    $
    4,377,966LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Current portion, long term debt
    
    $
    58,583
    
    
    $
    43,499Line of Credit
    
    
    779,718
    
    
    
    1,530,276Notes payable
    
    
    
    
    
    
    11,282Accounts payable
    
    
    2,002,439
    
    
    
    1,441,502Accrued liabilities
    
    
    781,737
    
    
    
    412,435Due to related parties
    
    
    
    
    
    
    50,536Income taxes payable
    
    
    15,121
    
    
    
    Total current liabilities
    
    
    3,637,598
    
    
    
    3,489,530LONG TERM DEBT
    
    
    94,754
    
    
    
    152,343STOCKHOLDERS DEFICIT:Preferred Stock $0.001 par value (10,000,000 shares authorized, none issued and
outstanding)
    
    
    
    
    
    
    Common stock, $0.001 par value; (50,000,000 shares authorized, 18,637,803 shares
issued and outstanding at March 31, 2008 and 12,996,245 shares issued and
outstanding at March 31, 2007)
    
    
    18,638
    
    
    
    12,996Additional paid-in capital
    
    
    17,929,992
    
    
    
    11,904,000Accumulated deficit
    
    
    (14,263,113
    )
    
    
    (11,147,600
    )Accumulated other comprehensive income (loss) (foreign currency translation adjustment)
    
    
    27,650
    
    
    
    (33,303
    )Total stockholders equity (deficit)
    
    
    3,713,167
    
    
    
    736,093TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
    
    $
    7,445,519
    
    
    $
    4,377,966
 
  F-2




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##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 For the years endedMarch 31,2008
    
    2007Net sales
    
    $
    7,482,261
    
    
    $
    6,676,365Cost of sales
    
    
    3,975,777
    
    
    
    3,342,716Gross profit
    
    
    3,506,484
    
    
    
    3,333,649Operating ExpensesResearch and development
    
    
    332,958
    
    
    
    341,764Sales and marketing
    
    
    1,886,389
    
    
    
    888,810General and administrative
    
    
    4,057,007
    
    
    
    3,288,723Depreciation and amortization
    
    
    301,260
    
    
    
    209,340TOTAL OPERATING EXPENSES
    
    
    6,577,614
    
    
    
    4,728,637INCOME (LOSS) FROM OPERATIONS
    
    
    (3,071,130
    )
    
    
    (1,394,988
    )OTHER INCOME (EXPENSES)Interest expense
    
    
    (138,168
    )
    
    
    (176,344
    )Other income
    
    
    121,032
    
    
    
    75,283TOTAL OTHER INCOME (EXPENSES)
    
    
    (17,136
    )
    
    
    (101,061
    )INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (3,088,266
    )
    
    
    (1,496,049
    )Income tax (expense) benefit
    
    
    (27,247
    )
    
    
    NET LOSS
    
    $
    (3,115,513
    )
    
    $
    (1,496,049
    )LOSS PER SHAREBasic and fully diluted
    
    $
    (0.17
    )
    
    $
    (0.12
    )WEIGHTED AVERAGE SHARES OUTSTANDINGBasic and fully diluted
    
    
    17,823,012
    
    
    
    12,971,795
  F-3




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##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)  FOR THE YEARS ENDED MARCH 31, 2008 and 2007
 AdditionalPaid in
    
    Accumulated
    
    Common StockShares
    
    Amount
    
    Capital
    
    Deficit
    
    Subscribed
    
    Other
    
    Total$
    
    $
    
    $
    
    $
    
    $
    
    $Balance, March 31, 2006
    
    
    12,764,112
    
    
    
    12,764
    
    
    
    11,624,234
    
    
    
    (9,651,551
    )
    
    
    200
    
    
    
    (28,274
    )
    
    
    1,957,373Common stock issued for development services
    
    
    200,000
    
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    
    
    
    
    Common stock issued on conversion of convertible debentures
    
    
    32,133
    
    
    
    32
    
    
    
    57,807
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57,839Value of stock options issued to employees
    
    
    
    
    
    
    
    
    
    
    221,959
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221,959Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,029
    )
    
    
    (5,029
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,496,049
    )
    
    
    
    
    
    
    
    
    
    
    (1,496,049
    )Balance, March 31, 2007
    
    
    12,996,245
    
    
    
    12,996
    
    
    
    11,904,000
    
    
    
    (11,147,600
    )
    
    
    
    
    
    
    (33,303
    )
    
    
    736,093Common stock issued by private placement
    
    
    5,600,000
    
    
    
    5,600
    
    
    
    6,994,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,000,000Commissions and other costs of private placement
    
    
    
    
    
    
    
    
    
    
    (1,224,498
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,224,498
    )Shares issued on exercise of warrants
    
    
    10,000
    
    
    
    10
    
    
    
    15,890
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,900Shares issued Debt Conversion
    
    
    31,558
    
    
    
    32
    
    
    
    50,504
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,536Value of stock options issued to employees
    
    
    
    
    
    
    
    
    
    
    189,696
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189,696Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,953
    
    
    
    60,953Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,115,513
    )
    
    
    
    
    
    
    
    
    
    
    (3,115,513
    )Balance, March 31, 2008
    
    
    18,637,803
    
    
    
    18,638
    
    
    
    17,929,992
    
    
    
    (14,263,113
    )
    
    
    
    
    
    
    27,650
    
    
    
    3,713,167
  F-4




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##### Table of Contents



REMEDENT, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the year ended March 31,2008
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (3,115,513
    )
    
    $
    (1,496,049
    )Adjustments to reconcile net (loss) to net cash used by operating activitiesDepreciation and amortization
    
    
    301,260
    
    
    
    209,340Inventory reserve
    
    
    2,446
    
    
    
    Allowance for doubtful accounts
    
    
    (47,815
    )
    
    
    (1,813
    )Stock issued upon conversion of convertible debentures
    
    
    
    
    
    
    25,706Value of issued stock options to employees
    
    
    189,696
    
    
    
    221,959Changes in operating assets and liabilities:Accounts receivable
    
    
    (178,799
    )
    
    
    870,014Inventories
    
    
    (227,768
    )
    
    
    476,814Prepaid expenses
    
    
    (301,752
    )
    
    
    (297,844
    )Accounts payable
    
    
    548,811
    
    
    
    (336,606
    )Accrued liabilities
    
    
    369,302
    
    
    
    (220,360
    )Income taxes payable
    
    
    15,121
    
    
    
    (110,468
    )Net cash used by operating activities
    
    
    (2,445,011
    )
    
    
    (659,307
    )CASH FLOWS FROM INVESTING ACTIVITIESDecrease (increase) in restricted cash
    
    
    
    
    
    
    70,762Long term investments and advances
    
    
    (675,000
    )
    
    
    Purchase of patent rights
    
    
    (11,556
    )
    
    
    Purchases of equipment
    
    
    (198,994
    )
    
    
    (385,866
    )Net cash used by investing activities
    
    
    (885,550
    )
    
    
    (315,104
    )CASH FLOWS FROM FINANCING ACTIVITIESNet proceeds from share issuances
    
    
    5,791,402
    
    
    
    Net proceeds from (repayments of) capital lease note payable
    
    
    (42,505
    )
    
    
    111,231Note payments  related parties
    
    
    (0
    )
    
    
    (8,422
    )Proceeds from (repayments of) line of credit
    
    
    (750,558
    )
    
    
    837,180Net cash provided by financing activities
    
    
    4,998,339
    
    
    
    939,988NET (DECREASE) INCREASE IN CASH
    
    
    1,667,778
    
    
    
    (34,423
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (66,463
    )
    
    
    (170,756
    )CASH AND CASH EQUIVALENTS, BEGINNING
    
    
    126,966
    
    
    
    332,145CASH AND CASH EQUIVALENTS, ENDING
    
    $
    1,728,281
    
    
    $
    126,966Supplemental Cash Flow Information:Interest paid
    
    $
    62,073
    
    
    $
    111,493Income taxes paid
    
    $
    
    
    
    $
    SUPPLMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES:Common shares issued upon conversion of convertible debt
    
    $
    50,536
    
    
    $
    
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REMEDENT, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 For the year endedMarch 31,2008
    
    2007Net Loss
    
    $
    (3,115,513
    )
    
    $
    (1,496,049
    )OTHER COMPREHENSIVE LOSS:Foreign currency translation adjustment
    
    
    60,953
    
    
    
    (5,029
    )Comprehensive loss
    
    $
    (3,054,560
    )
    
    $
    (1,501,078
    )
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    BACKGROUND AND ORGANIZATIONThe Company is a manufacturer and distributor of cosmetic dentistry products, including a full
line of professional dental and retail Over-The-Counter tooth whitening products which are
distributed in Europe, and recently in Asia and the United States. The Company manufactures many
of its products in its facility in Deurle, Belgium as well as outsourced manufacturing in China.
The Company distributes its products using both its own internal sales force and through the use
of third party distributors.The accompanying consolidated financial statements include the accounts of Remedent, Inc.
(formerly Remedent USA, Inc.), a Nevada corporation, and its four subsidiaries, Remedent N.V.
(Belgian corporation) located in Deurle, Belgium, Remedent Professional, Inc. (incorporated in
California) and a subsidiary of Remedent Professional Holdings, Inc., Remedent Asia Pte Ltd, a
wholly-owned subsidiary formed under the laws of Singapore, and Sylphar N.V. (incorporated in
Belgium as a wholly owned subsidiary on September 24, 2007) (collectively, the Company).
Remedent, Inc. is a holding company with headquarters in Deurle, Belgium and, as of October
2005, offices in Los Angeles, California. Remedent Professional, Inc. and Remedent Professional
Holdings, Inc. have been dormant since inception. Remedent Asia Pte. Ltd., commenced operations
as of July 2005. All significant inter-company accounts and transactions have been eliminated in
the consolidated financial statements.The Company was originally incorporated under the laws of Arizona in September 1996 under the
name Remedent USA, Inc. In October 1998, the Company was acquired by Resort World Enterprises,
Inc., a Nevada corporation (RWE) in a share exchange and RWE immediately changed its name to
Remedent USA, Inc. The share exchange was a reverse acquisition and accounted for as if the
Company acquired RWE and then recapitalized its capital structure. On July 1, 2001, the Company
formed three wholly-owned subsidiaries, Remedent Professional Holdings, Inc., Remedent
Professional, Inc. and Remedent N.V. (a Belgium corporation). Remedent Professional, Inc. and
Remedent Professional Holdings, Inc. are both wholly-owned subsidiaries and have been inactive
since inception. In June 2005, the Company formed Remedent Asia Pte Ltd, a wholly-owned
subsidiary formed under the laws of Singapore. In October, 2005, the Company established a sales
office in Los Angeles, California in order to introduce its products to the United States
market.During the quarter ended March 31, 2002, through the Companys Belgium based subsidiary,
Remedent N.V., the Company initiated its entrance into the high technology dental equipment
market. Since that time, the majority of the Companys operations have been conducted through
its subsidiary, Remedent N.V. For the last five fiscal years, substantially all of the Companys
revenue has been generated by Remedent N.V., which has become a provider of cosmetic dentistry
products, including a full line of professional dental and retail over-the-counter tooth
whitening products in Europe. Because the controlling stockholders of Remedent N.V. consisted of
the Companys executive officers or companies owned by these executive officers, the Company has
always had effective control over Remedent N.V., as defined by APB 51 Consolidated Financial
Statements, even though it owned only twenty two percent (22%) of this subsidiary.On June 3, 2005, the Company consummated the acquisition of the remaining 78% of Remedent N.V.,
and issued 7,715,703 shares of the Companys common stock in exchange for the 78% of the common
stock of Remedent N.V. not owned by the Company. As a result of this acquisition, Remedent N.V.
is now our wholly-owned subsidiary.In addition, on June 3, 2005, the Company amended its Articles of Incorporation pursuant to the
filing of the Amended and Restated Articles of Incorporation with the Nevada Secretary of State.
The Amended and Restated Articles of Incorporation (i) changed the name of the Company from
Remedent USA, Inc. to Remedent, Inc. (ii) increased the number of authorized shares to
60,000,000 shares consisting of 50,000,000 shares of common stock and 10,000,000 shares of
Preferred Stock, and (iii) effected a one-for-twenty reverse stock split (collectively, the
Amendments). The consolidated financial statements and accompanying notes have been
retroactively adjusted to reflect the effects of the reverse split and authorization of
10,000,000 shares of Preferred Stock.
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2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESOrganization and Principles of ConsolidationThe accompanying consolidated financial statements include the accounts of Remedent, Inc.
(formerly Remedent USA, Inc.), a Nevada corporation, and its four subsidiaries, Remedent N.V.
(Belgian corporation) located in Deurle, Belgium, Remedent Professional, Inc. (incorporated in
California) and a subsidiary of Remedent Professional Holdings, Inc., Remedent Asia Pte. Ltd, a
wholly-owned subsidiary formed under the laws of Singapore, and Sylphar N.V. (incorporated in
Belgium as a wholly owned subsidiary on September 24, 2007), (collectively, the Company).
Remedent, Inc. is a holding company with headquarters in Deurle, Belgium. Remedent Professional,
Inc. and Remedent Professional Holdings, Inc. have been dormant since inception. Remedent Asia
Pte. Ltd., commenced operations as of July 2005. All significant inter-company accounts and
transactions have been eliminated in the consolidated financial statements. Corporate
administrative costs are not allocated to subsidiaries.Basis of PresentationThe Companys financial statements have been prepared on an accrual basis of accounting, in
conformity with accounting principles generally accepted in the United States of America. These
principles contemplate the realization of assets and liquidation of liabilities in the normal
course of business. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. These financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.Revenue RecognitionThe Company recognizes revenue from product sales when persuasive evidence of a sale exists:
that is, a product is shipped under an agreement with a customer; risk of loss and title has
passed to the customer; the fee is fixed or determinable; and collection of the resulting
receivable is reasonably assured. Sales allowances are estimated based upon historical
experience of sales returns.Impairment of Long-Lived AssetsLong-lived assets consist primarily of patents and property and equipment. The recoverability of
long-lived assets is evaluated by an analysis of operating results and consideration of other
significant events or changes in the business environment. If impairment exists, the carrying
amount of the long-lived assets is reduced to its estimated fair value, less any costs
associated with the final settlement. As of March 31, 2008, management believes there was no
impairment of the Companys long-lived assets.Pervasiveness of EstimatesThe preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires the Company to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, the Company evaluates estimates and
judgments, including those related to revenue, bad debts, inventories, fixed assets, intangible
assets, stock based compensation, income taxes, and contingencies. Estimates are based on
historical experience and on various other assumptions that the Company believes reasonable in
the circumstances. The results form the basis for making judgments about the carrying vales of
assets and liabilities that are not readily apparent from other sources. Actual results could
differ from those estimates.
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Cash and Cash EquivalentsThe Company considers all highly liquid investments with maturities of three months or less to
be cash or cash equivalents.Accounts Receivable and Allowance for Doubtful AccountsThe Company sells professional dental equipment to various companies, primarily to distributors
located in Western Europe. The terms of sales vary by customer, however, generally are 2% 10
days, net 30 days. Accounts receivable is reported at net realizable value and net of allowance
for doubtful accounts. The Company uses the allowance method to account for uncollectible
accounts receivable. The Companys estimate is based on historical collection experience and a
review of the current status of trade accounts receivable.InventoriesThe Company purchases certain of its products in components that require assembly prior to
shipment to customers. All other products are purchased as finished goods ready to ship to
customers.The Company writes down inventories for estimated obsolescence to estimated market value based
upon assumptions about future demand and market conditions. If actual market conditions are less
favorable than those projected, then additional inventory write-downs may be required. Inventory
reserves for obsolescence totaled $15,812 at March 31, 2008 and $13,366 at March 31, 2007.Prepaid ExpenseThe Companys prepaid expense consists of prepayments to suppliers for inventory purchases and
to the Belgium customs department, to obtain an exemption of direct VAT payments for imported
goods out of the European Union (EU). This prepayment serves as a guarantee to obtain the
facility to pay VAT at the moment of sale and not at the moment of importing goods at the
border. Prepaid expenses also include VAT payments made for goods and services in excess of VAT
payments received from the sale of products as well as amounts for other prepaid operating
expenses.Property and EquipmentProperty and equipment are stated at cost. Major renewals and improvements are charged to the
asset accounts while replacements, maintenance and repairs, which do not improve or extend the
lives of the respective assets, are expensed. At the time property and equipment are retired or
otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of
the applicable amounts. Gains or losses from retirements or sales are credited or charged to
income.The Company depreciates its property and equipment for financial reporting purposes using the
straight-line method based upon the following useful lives of the assets:
 Tooling
    
    3 YearsFurniture and fixtures
    
    4 YearsMachinery and Equipment
    
    4 Years
 PatentsPatents consist of the costs incurred to purchase patent rights and are reported net of
accumulated amortization. Patents are amortized using the straight-line method over a period
based on their contractual lives.Research and Development CostsThe Company expenses research and development costs as incurred.
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AdvertisingCosts incurred for producing and communicating advertising are expensed when incurred and
included in sales and marketing and general and administrative expenses. For the years ended
March 31, 2008 and March 31, 2007, advertising expense was $395,964 and $350,793, respectively.Income taxesIncome 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 bases 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.WarrantiesThe Company typically warrants its products against defects in material and workmanship for a
period of 18 months from shipment. Based upon historical trends and warranties provided by the
Companys suppliers and sub-contractors, the Company has made a provision for warranty costs of
$23,718 and $20,049 as of March 31, 2008 and March 31, 2007, respectively.Segment ReportingStatement of Financial Accounting Standards No. 131 (SFAS 131), Disclosure About Segments of
an Enterprise and Related Information requires use of the management approach model for
segment reporting. The management approach model is based on the way a companys management
organizes segments within the company for making operating decisions and assessing performance.
Reportable segments are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. The Companys
management considers its business to comprise one segment for reporting purposes.Computation of Earnings (Loss) per ShareBasic net income (loss) per common share is computed by dividing net income (loss) attributable
to common stockholders by the weighted average number of shares of common stock outstanding
during the period. Net income (loss) per common share attributable to common stockholders
assuming dilution is computed by dividing net income by the weighted average number of shares of
common stock outstanding plus the number of additional common shares that would have been
outstanding if all dilutive potential common shares had been issued. Potential common shares
related to stock options and stock warrants are excluded from the computation when their effect
is anti-dilutive.
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Conversion of Foreign CurrenciesThe reporting currency for the consolidated financial statements of the Company is the U.S.
dollar. The functional currency for the Companys European subsidiaries, Remedent N.V. and
Sylphar N.V., is the Euro, for Remedent Asia the Singapore Dollar. Finally, 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 that the U.S. dollar are included in
the consolidation by translating the assets and liabilities at the exchange rates applicable at
the end of the reporting period. The statements of income of such companies are translated at
the average exchange rates during the applicable period. Translation gains or losses are
accumulated as a separate component of stockholders equity.Comprehensive Income (Loss)The Company has adopted the provisions of Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income (SFAS No. 130). SFAS No. 130 establishes standards for the
reporting and display of comprehensive income, its components and accumulated balances in a full
set of general purpose financial statements. SFAS No. 130 defines comprehensive income (loss) to
include all changes in equity except those resulting from investments by owners and
distributions to owners, including adjustments to minimum pension liabilities, accumulated
foreign currency translation, and unrealized gains or losses on marketable securities.The Companys only component of other comprehensive income is the accumulated foreign currency
translation consisting of gains and (losses) of $60,953 and $(5,029) for the years ended March
31, 2008 and 2007, respectively. These amounts have been recorded as a separate component of
stockholders equity (deficit).Stock Based CompensationIn December 2004, the Financial Accounting Standards Board issued SFAS No. 123R, Share-Based
Payment. Subsequently, the Securities and Exchange Commission (SEC) provided for a phase-in
implementation process for SFAS No. 123R, which required adoption of the new accounting standard
no later than January 1, 2006. SFAS No. 123R requires accounting for stock options using a
fair-value-based method as described in such statement and recognize the resulting compensation
expense in the Companys financial statements. Prior to April 1, 2006, the Company accounted for
employee stock options using the intrinsic value method under APB No. 25, Accounting for Stock
Issued to Employees and related Interpretations, which generally resulted in no employee stock
option expense. The Company adopted SFAS No. 123R on April 1, 2006 and does not plan to restate
financial statements for prior periods. The Company plans to continue to use the Black-Scholes
option valuation model in estimating the fair value of the stock option awards issued under SFAS
No. 123R. The adoption of SFAS No. 123R has a material impact on the Companys results of
operations. For the years ended March 31, 2008 and March 31, 2007, equity compensation in the
form of stock options and grants of restricted stock totaled $189,696 and $221,959 respectively.Adoption of New Accounting PoliciesEffective April 1, 2006, the Company adopted the provisions of the FASB Staff Position
(FSP8) on EITF Issue 00-19-2 Accounting for Registration Payment
Arrangements. This accounting position was adopted on a prospective basis with no restatement
of prior period consolidated financial statements. This position specifies that the contingent
obligation to make future payments or otherwise transfer consideration under a registration
payment arrangement, whether issued as a separate agreement or included as a provision of a
financial instrument or other agreement, should be separately recognized and measured in
accordance with FASB Statement No. 5 Accounting for Contingencies. Transition to the FSP will
be achieved by reporting a change in accounting principle through a cumulative-effect adjustment
to the opening balance of deficit.The Company adopted FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statements No. 109(FIN 48) on April 1, 2006. FIN 48 clarifies the
accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating
whether a tax position has met a more likely than not recognition threshold and second,
measuring that tax position to determine the amount of
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benefit to be recognized in the financial statements. FIN 48 provides guidance on the
presentation of such positions within a classified statement of financial position as well as on
derecognition, interest and penalties, accounting in interim periods, disclosure, and
transition. The adoption of this statement did result in a cumulative adjustment to equity and
there were no unrecognized tax benefits, penalties or interest at the time of, or subsequent to,
adoption.Recent Accounting PronouncementsIn March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities. This statement changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how derivative instruments and
related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities, and its related interpretations, and (c) how derivative instruments and
related hedged items affect an entitys financial position, financial performance, and cash
flows. This statement is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008 (the Companys fiscal year beginning April 1, 2009),
with early application encouraged. This statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption. Management is in the process of evaluating
the impact the future application of this pronouncement may have on its consolidated financial
statements.In December 2007, the FASB issued SFAS No. 141 (Revised 2007) Business Combinations. SFAS 141
(Revised) establishes principles and requirements for how the acquirer of a business recognizes
and measures in its financial statements the identifiable assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree. The statement also provides guidance
for recognizing and measuring the goodwill acquired in the business combination and determines
what information to disclose to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. The guidance will become effective for the
Companys fiscal year beginning April 1, 2009. Management is in the process of evaluating the
impact SFAS 141 (Revised) will have on the Companys financial statements upon adoption.In December 2007, the FASB issued SFAS No. 160 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51. SFAS 160 establishes accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation
of a subsidiary. The guidance will become effective for the Companys fiscal year beginning
April 1, 2009. Management is in the process of evaluating the impact SFAS 160 will have on the
Companys financial statements upon adoption.In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB
Statement No. 115. This statement permits entities to choose to measure many financial
instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply
only to entities that elect the fair value option. However, the amendment to SFAS No. 115
Accounting for Certain Investments in Debt and Equity Securities applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective for the Companys fiscal
year beginning April 1, 2008. The Company adopted SFAS No. 159 on April 1, 2008, with no
financial statement impact.In September 2006, the FASB issued SFAS Statement No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans. This new standard will require employers to
fully recognize the obligations associated with single-employer defined benefit pension, retiree
healthcare and other postretirement plans in their financial statements. The Company adopted
SFAS No. 158 on April 1, 2007, resulting in no financial statement impact since the Company
currently does not sponsor the defined benefit pension or postretirement plans within the scope
of the standard.In September 2006, FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). The
objective of SFAS 157 is to increase consistency and comparability in fair value measurements
and to expand disclosures about fair value measurements. SFAS 157 defines fair value,
establishes a framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS 157 applies under other accounting
pronouncements that require or permit fair value measurements and does not
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require any new fair value measurements. The provisions of SFAS 157 are effective for fair value
measurements made in the Companys fiscal years beginning April 1, 2008. The Company has not
determined the effect, if any, that the adoption of SFAS 157 will have on the Companys
consolidated financial position or results of operations.In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets.
This statement amends SFAS 140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, a replacement of FASB Statement 125, or SFAS 140, regarding (1)
the circumstances under which a servicing asset or servicing liability must be recognized, (2)
the initial and subsequent measurement of recognized servicing assets and liabilities, and (3)
information required to be disclosed relating to servicing assets and liabilities. The Company
adopted this standard on April 1, 2007, with no impact on its consolidated financial statements.In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
Instruments, or SFAS 155. This statement amends SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, to narrow the scope exception for interest-only and
principal-only strips on debt instruments to include only such strips representing rights to
receive a specified portion of the contractual interest or principal cash flows. SFAS 155 also
amends SFAS 140 to allow qualifying special-purpose entities to hold a passive derivative
financial instrument pertaining to beneficial interests that itself is a derivative financial
instrument. The Company adopted this standard on April 1, 2007, with no impact on its
consolidated financial statements.EITF No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services Received for
Use in Future Research and Development Activities, was issued in June 2007. The EITF reached a
consensus that nonrefundable payments for goods and services that will be used or rendered for
future research and development activities should be deferred and capitalized. Such amounts
should be recognized as an expense as the related goods are delivered and the related services
are performed. Entities should continue to evaluate whether they expect the goods to be
delivered or services to be rendered. If the entity does not expect the goods to be delivered
or services to be rendered, the capitalized advance payment should be charged to expense. This
pronouncement is effective for financial statements issued for fiscal years beginning after
December 15, 2007 (the Companys fiscal year beginning April 1, 2008) and interim periods within
those fiscal years. Earlier application is not permitted. Entities are required to report the
effects of applying this pronouncement prospectively for new contracts entered into on or after
the effective date of this pronouncement. The Company currently is not a party to research and
development arrangements that include nonrefundable advance payments. To the extent that the
Company enters into research and development arrangements in the future that include
nonrefundable advance payments, the future application of this pronouncement may have a material
effect on its financial condition and results of operations.3.
    
    PRIVATE PLACEMENTOn June 25, 2007, the Company completed its private offering of 5,600,000 shares of its common
stock, par value $.001 per share at a purchase price of $1.25 per share (the Shares) and
warrants to purchase 4,200,000 shares of common stock, par value $.001 per share, at an exercise
price of $1.55 per share (the Warrants) to certain institutional and accredited investors, for
an aggregate purchase price of $7,000,000 (the Offering).Under the terms of the Offering, the Warrants are exercisable for a period of five years and
entitle the holder to purchase one share of restricted common stock (the Warrant Shares) for
$1.55 per Warrant Share. The Company also has the right to redeem the Warrants for $0.001 per
Warrant Share covered by the Warrants if the Shares trade on the OTC Electronic Bulletin Board
or similar market above $5.25 per share for 20 consecutive trading days following the initial
effective date of the registration statement covering the resale of the Shares and Warrant
Shares, based upon the closing bid price for the Shares for each trading day (the Redemption
Right). Once the Redemption Right vests, the Company has the right, but not the obligation, to
redeem the Warrants for $0.001 per Warrant Share covered by the Warrants upon 30 days written
notice to the holders of the Warrants.Under the terms of the Purchase Agreement and the Registration Rights Agreement, the Company was
required to prepare and file with the Securities and Exchange Commission (the Commission) a
registration statement
covering the resale of the Shares and the Warrant Shares. The Company agreed to prepare and file
a registration statement covering the resale no later than 30 days after the Closing. The
registration statement became effective October 23, 2007.
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The Company engaged Roth Capital Partners, LLC, as its exclusive agent to offer the Shares and
Warrants (the Placement Agent). The Placement Agent is entitled to a fee equal to ten percent
(10%) of the gross proceeds derived from the Offering, of which the Placement Agent may, at its
option, receive up to 2% of its 10% fee in securities issued in the Offering. Further, the
Company agreed to pay the Placement Agent 5% of the exercise price of the Warrants promptly
following the Companys receipt thereof. In addition, the Company agreed to reimburse the
Placement Agent for its out-of-pocket expenses related to the Offering, including an up front
payment of $25,000 to cover such expenses, of which any unused amount will be netted against the
Placement Agents 10% fee.As of March 31, 2008, the total costs of this private placement were $1,224,498, comprising of:
commissions of $762,505; out-of-pocket costs of $25,000; professional fees of $365,013 and
direct travel costs of $71,980; and have been recorded against share capital as a cost of
financing.The Offering was conducted in reliance upon an exemption from registration under the Securities
Act of 1933, as amended (the Securities Act), including, without limitation, that under
Section 506 of Regulation D promulgated under the Securities Act. The Units were offered and
sold by the Company to accredited investors in reliance on Section 506 of Regulation D of the
Securities Act of 1933, as amended.4.
    
    CONCENTRATION OF RISKFinancial Instruments  Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of trade accounts receivable.Concentrations of credit risk with respect to trade receivables are normally limited due to the
number of customers comprising the Companys customer base and their dispersion across different
geographic areas. At March 31, 2008 two customers accounted for 25% and 10% of the Companys
trade accounts receivable. At March 31, 2007, two customers accounted for 35% and 10% of the
Companys trade accounts receivable. The Company performs ongoing credit evaluations of its
customers and normally does not require collateral to support accounts receivable.Purchases  The Company has diversified its sources for product components and finished goods
and, as a result, the loss of a supplier would not have a material impact on the Companys
operations. For the year ended March 31, 2008, the Company had one supplier who accounted for
33% of gross purchases and four other suppliers who accounted for between 14% and 21% of gross
purchases each. For the year ended March 31, 2007, the Company had one supplier who accounted
for 28% of gross purchases and four other suppliers who accounted for between 10% and 20% of
gross purchases each.Revenues  For the year ended March 31, 2008 the Company had one customer that accounted for
16% of total revenues. For the year ended March 31, 2007 the Company had two customers that
accounted for 35% and 10% respectively, of total revenues.
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5.
    
    ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTSThe Companys accounts receivable at year end were as follows:
 March 31, 2008
    
    March 31, 2007Accounts receivable, gross
    
    $
    1,935,101
    
    
    $
    1,804,117Less: allowance for doubtful accounts
    
    
    (32,181
    )
    
    
    (79,996
    )Accounts receivable, net
    
    $
    1,902,920
    
    
    $
    1,724,121
 6.
    
    INVENTORIESInventories at year end are stated at the lower of cost (first-in, first-out) or net realizable
value and consisted of the following:
 March 31, 2008
    
    March 31, 2007Raw materials
    
    $
    29,788
    
    
    $
    30,579Components
    
    
    970,101
    
    
    
    786,728Finished goods
    
    
    376,632
    
    
    
    329,0001,376,521
    
    
    
    1,146,307Less: reserve for obsolescence
    
    
    (15,812
    )
    
    
    (13,366
    )Net inventory
    
    $
    1,360,709
    
    
    $
    1,132,941
 7.
    
    PREPAID EXPENSESPrepaid expenses are summarized as follows:
 March 31, 2008
    
    March 31, 2007Prepaid materials and components
    
    $
    588,639
    
    
    $
    394,598Prepaid Belgium income taxes
    
    
    79,060
    
    
    
    66,830Prepaid consulting
    
    
    62,237
    
    
    
    66,830VAT payments in excess of VAT receipts
    
    
    117,467
    
    
    
    47,260Royalties
    
    
    39,530
    
    
    
    33,415Prepaid trade show expenses
    
    
    25,276
    
    
    
    6,523Prepaid rent
    
    
    10,812
    
    
    
    7,054Other
    
    
    47,152
    
    
    
    45,911$
    970,173
    
    
    $
    668,421
 8.
    
    PROPERTY AND EQUIPMENTProperty and equipment are summarized as follows:
 March 31, 2008
    
    March 31, 2007Furniture and Fixtures
    
    $
    182,079
    
    
    $
    137,560Machinery and Equipment
    
    
    801,251
    
    
    
    559,422Tooling
    
    
    254,450
    
    
    
    188,4501,237,780
    
    
    
    885,432Accumulated depreciation
    
    
    (545,171
    )
    
    
    (295,809
    )Property & equipment, net
    
    $
    692,609
    
    
    $
    589,623
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9.
    
    LONG TERM INVESTMENTS AND ADVANCESInnovative Medical & Dental Solutions, LLC (IMDS, LLC)Effective July 15, 2007 the Company entered into a Limited Liability Company Merger and Equity
Reallocation Agreement (the Participation Agreement) through its subsidiary, Remedent N.V.
Pursuant to the terms of the Participation Agreement, the Company has acquired a 10% equity
interest in IMDS, LLC in consideration for $300,000 which was converted against IMDS
receivables.The agreement stipulates certain exclusive world wide rights to certain tooth whitening
technology, and the right to purchase at standard cost certain whitening lights and accessories
and to sell such lights in markets not served by the LLC. The terms of the Participation
Agreement also provide that Remedent N.V. has the first right to purchase additional equity.
Parties to the Participation Agreement include two officers of IMDS, LLC, and an individual who
is both an officer and director of Remedent Inc., and certain unrelated parties.IMDS, LLC is registered with the Secretary of the State of Florida as a limited liability
company and with the Secretary of the State of California as a foreign corporation authorized to
operate in California. IMDS, LLC is merging with White Science World Wide, LLC, a limited
liability company organized under the laws of the State of Georgia. The merged companies are
operating as a single entity as IMDS, LLC, a Florida limited liability company.Soca Networks Singapore (Soca)Pursuant to the terms of a letter of intent dated December 17, 2007, the Company has agreed to
purchase 20% of Soca for a total purchase price of $750,000. Half of the purchase price has
been advanced $375,000 to Soca as a down payment, pending completion of the agreement terms.
The balance of $375,000 is to be paid through the issuance of 220,588 shares of the Companys
common stock. The final agreement is currently being negotiated and management expects to close
the agreement within the first half of the new fiscal year 2009.10.
    
    LICENSED PATENTSTeeth Whitening PatentsIn October 2004, the Company acquired from the inventor the exclusive, perpetual license to two
issued United States patents which are applicable to several teeth whitening products currently
being marketed by the Company. Pursuant to the terms of the license agreement, the Company was
granted an exclusive, worldwide, perpetual license to manufacture, market, distribute and sell
the products contemplated by the patents subject to the payment of $65,000 as reimbursement to
the patent holder for legal and other costs associated with obtaining the patents, which was
paid in October 2004, and royalties for each unit sold subject to an annual minimum royalty of
$100,000 per year. The Company is amortizing the initial cost of $65,000 for these patents over
a ten year period and accordingly has recorded $22,750 of accumulated amortization for this
patent as of March 31, 2008. The Company accrues this royalty when it becomes payable to
inventory therefore no provision has been made for this obligation as of March 31, 2008
(2007-Nil).Universal Applicator PatentIn September 2004, the Company entered into an agreement with Lident N.V. (Lident), a company
controlled by Mr. De Vreese, the Companys Chairman, to obtain an option, exercisable through
December 31, 2005, to license an international patent (excluding the US) and worldwide
manufacturing and distribution rights for a potential new product which Lident had been assigned
certain rights by the inventors of the products, who are unrelated parties, prior to Mr. De
Vreese association with the Company. The patent is an Italian patent which relates to a single
use universal applicator for dental pastes, salves, creams, powders, liquids and other
substances where manual application could be relevant. The Company has filed to have the patent
approved throughout Europe. The agreement required the Company to advance to the inventors
through Lident a fully refundable deposit of 100,000 subject to the Companys due diligence
regarding the enforceability of the patent and marketability of the product, which, if viable,
would be assigned to the Company for additional consideration to the inventors of 100,000 and
an ongoing royalty from sales of products related to the patent equal to 3% of net sales and, if
not viable, the deposit would be repaid in full by Lident. The consideration the Company had
agreed to pay Lident upon the exercise of the option is the same as the consideration Lident is
 F-16




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##### Table of Contents



obligated to pay the original inventors. Consequently, Lident would not have profited from the
exercise of the option. Furthermore, at a meeting of the Companys Board of Directors on July
13, 2005, the Board accepted Lidents offer to facilitate an assignment of Lidents intellectual
property rights to the technology to the Company in exchange for the reimbursement of Lidents
actual costs incurred relating to the intellectual property. Consequently, when the Company
exercises the option, all future payments, other than the reimbursement of costs would be paid
directly to the original inventors and not to Lident.On December 12, 2005, the Company exercised the option and the Company and the patent holder
agreed to revise the assignment agreement whereby the Company agreed to pay 50,000 additional
compensation in the form of prepaid royalties instead of the 100,000 previously agreed, 25,000
of which had been paid by the Company in September 2005 and the remaining 25,000 to be paid
upon the Companys first shipment of a product covered by the patent. As of March 31, 2008 the
company has not yet received the final Product. The patent is being amortized over five (5)
years and accordingly, the Company has recorded $55,468 of accumulated amortization for this
patent as of March 31, 2008.11.
    
    LINE OF CREDITOn October 8, 2004, our wholly owned subsidiary, Remedent N.V., obtained a mixed-use line of
credit facility with Fortis Bank, a Belgian bank, for 1,070,000 (the Facility). The Facility
was secured by a first lien on the assets of Remedent N.V. The purpose of the Facility is to
provide working capital to grow our business and to finance certain accounts receivable as
necessary. Since opening the Facility in 2004, Remedent N.V. and Fortis Bank have subsequently
amended the Facility several times to increase or decrease the line of credit. On May 3, 2005
the Facility was amended to decrease the line of credit to 1,050,000. On March 13, 2006 the
Facility was amended to increase the mixed-use line of credit to 2,300,000, consisting of a
1,800,000 credit line based on the eligible accounts receivable and a 500,000 general line of
credit. The latest amendment to the Facility, dated January 3, 2008, amended and decreased the
mixed-use line of credit to 2,050,000, to be used by Remedent NV and/or Sylphar NV . Each line
of credit carries its own interest rates and fees as provided in the Facility. Remedent N.V. and
Sylphar N.V. are currently only utilizing two lines of credit, advances based on account
receivables and the straight loan. As of March 31, 2008 and March 31, 2007, Remedent N.V. and
Sylphar N.V. had in aggregate, $779,718 and $1,530,276 in advances outstanding, respectively,
under this mixed-use line of credit facility.
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12.
    
    LONG TERM DEBTOn June 15, 2005, the Company entered into two five year capital lease agreements for
manufacturing equipment totaling 70,296 (US $85,231). On October 24, 2006, the Company entered
into another five year capital lease agreement for additional manufacturing equipment totaling
123,367 (US $157,503). The leases require monthly payments of principal and interest at 7.43%
of 1,258 (US$1,989 at March 31, 2008) for the first two leases and 9.72% of 2,256 (US$3,567 at
March 31, 2008) and provide for buyouts at the conclusion of the five year term of 2,820
(US$4,459) or 4.0% of original value for the first two contracts and 4,933 (US $7,800) or 4.0 %
of the original value for the second contract. The book value as of March 31, 2008 and March 31,
2007 of the equipment subject to the foregoing leases are $149,673 and $198,225, respectively.13.
    
    DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONSBalances due to related parties consist of the following:
 March 31, 2008
    
    March 31, 2007Demand loan from a former officer and major stockholder
    
    $
    
    
    
    $
    50,536$
    
    
    
    $
    50,536
 Borrowings from employees and entities controlled by officers of the Company are, unsecured,
non-interest bearing, and due on demand.Transactions with related parties consisted of the following:Compensation:During the years ended March 31, 2008 and 2007 respectively, the Company incurred $671,170 and
$595,949 respectively, as compensation for all directors and officers.Sales Transactions:One of the Companys directors owns a minority interest in a client company, IMDS Inc., to which
goods were sold during the years ended March 31, 2008 and 2007 totaling $87,790 and $476,122
respectively. Accounts receivable at year end with this customer totaled $91,533 and $392,057 as
at March 31, 2008 and 2007 respectively.All related party transactions involving provision of services or tangible assets were recorded
at the exchange amount, which is the value established and agreed to by the related parties
reflecting arms length consideration payable for similar services or transfers. Other related
party transactions are disclosed in Note 17.14.
    
    ACCRUED LIABILITIESAccrued liabilities are summarized as follows:
 March 31, 2008
    
    March 31, 2007Accrued employee benefit taxes and payroll
    
    $
    178,645
    
    
    $
    260,676Accrued Travel
    
    
    17,667
    
    
    
    Advances and deposits
    
    
    212,736
    
    
    
    Commissions
    
    
    130,875
    
    
    
    2,834Accrued audit and tax preparation fees
    
    
    4,000
    
    
    
    27,282Reserve for warranty costs
    
    
    23,718
    
    
    
    20,049Accrued interest
    
    
    984
    
    
    
    6,180Accrued consulting fees
    
    
    35,204
    
    
    
    2,528Other accrued expenses
    
    
    177,908
    
    
    
    92,886$
    781,737
    
    
    $
    412,435
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15.
    
    INCOME TAXESThe Company accounts for income taxes under Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS No. 109). Under the asset and liability method of SFAS No.
109, deferred income tax assets and liabilities are recognized for the future tax consequences
attributable to differences between financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment date.In assessing the realizability of deferred tax assets, the Company 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. The Company
considers the scheduled reversals of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment.The domestic and foreign (Belgium and Singapore) components of income (loss) before income
taxes and minority interest were comprised of the following:
 March 31, 2008
    
    March 31, 2007Domestic
    
    $
    (1,722,134
    )
    
    $
    (1,627,604
    )Foreign
    
    
    (1,366,132
    )
    
    
    131,555$
    (3,088,266
    )
    
    $
    (1,496,049
    )
  March 31, 2008
    
    March 31, 2007Domestic  Net operating loss carryforward
    
    $
    3,561,841
    
    
    $
    3,025,488Foreign  Net operating loss carryforward
    
    
    639,893
    
    
    
    202,731Total
    
    
    4,201,734
    
    
    
    3,228,219Valuation allowance
    
    
    (4,201,734
    )
    
    
    (3,228,219
    )Net deferred tax assets
    
    $
    
    
    
    $
    
  March 31, 2008
    
    March 31, 2007DomesticPre tax income (loss)
    
    $
    (1,722,134
    )
    
    $
    (1,627,604
    )Statutory tax rate
    
    
    35
    %
    
    
    35
    %Tax benefit based upon statutory rate
    
    
    (602,747
    )
    
    
    (569,661
    )Valuation allowance
    
    
    602,747
    
    
    
    569,661Net domestic income tax (benefit)
    
    
    
    
    
    
    ForeignPre tax income (loss)
    
    
    (1,366,132
    )
    
    
    135,101Statutory tax rate
    
    
    32
    %
    
    
    32
    %Tax expense (benefit) based upon statutory rate
    
    
    (437,162
    )
    
    
    43,232Permanent differences
    
    
    437,162
    
    
    
    (43,232
    )Net operating loss
    
    
    
    
    
    
    Net foreign income tax (benefit)
    
    
    
    
    
    
    Total Income tax (benefit )
    
    $
    
    
    
    $
    
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16.
    
    CAPITAL STOCKOn June 25, 2007, the Company completed a private offering of 5,600,000 shares of its common
stock, par value $.001 per share at a purchase price of $1.25 per share (the Shares) and five
year warrants to purchase 4,200,000 shares of common stock, par value $.001 per share, at an
exercise price of $1.55 per share (the Warrants) to certain institutional and accredited
investors, for an aggregate purchase price of $7,000,000 (the Offering).Under the terms of the Offering, the Company has the right to redeem the Warrants for $0.001 per
Warrant Share covered by the Warrants if the Shares trade on the OTC Electronic Bulletin Board
or similar market above $5.25 per share for 20 consecutive trading days following the initial
effective date of the registration statement covering the resale of the Shares and Warrant
Shares, based upon the closing bid price for the Shares for each trading day (the Redemption
Right). Once the Redemption Right vests, the Company has the right, but not the obligation, to
redeem the Warrants for $0.001 per Warrant Share covered by the Warrants upon 30 days written
notice to the holders of the Warrants.Under the terms of the Purchase Agreement and the Registration Rights Agreement, the Company is
required to prepare and file with the SEC a registration statement covering the resale of the
Shares and the Warrant Shares. The Company has agreed to prepare and file a registration
statement covering the resale no later than 30 days after the Closing (the Filing Deadline).
In the event the Company is unable to file a registration statement by the Filing Deadline or
the registration statement is not declared effective on or before 90 days from the Closing (120
days from the Closing if the registration statement is reviewed by the SEC) (Effective
Deadline), then the Company will have to pay liquidated damages equal to 1.5% of the aggregate
amount invested by each investor for each 30-day period, or pro rata portion thereof, following
the date by which such registration statement should have been effective, until the registration
statement has been declared effective by the SEC. All payments must be made in cash.The Placement Agent is entitled to a fee equal to ten percent (10%) of the gross proceeds
derived from the Offering, of which the Placement Agent may, at its option, receive up to 2% of
its 10% fee in securities issued in the Offering. The Company has agreed to pay the Placement
Agent 5% of the exercise price of the Warrants promptly following the Companys receipt thereof.
In addition, the Company agreed to reimburse the Placement Agent for its out-of-pocket expenses
related to the Offering, including an up-front payment of $25,000 to cover such expenses, of
which any unused amount will be netted against the Placement Agents 10% fee.The Units were offered and sold by the Company to accredited investors in reliance on Section
506 of Regulation D of the Securities Act of 1933, as amended.During the three months ended December 31, 2007 the Company received $15,900 on the exercise of
10,000 common stock purchase warrants.On February 19, 2008, the Company entered into a formal debt conversion and Registration Rights
Agreement with a former investor of the Company. The debt was in the amount of $50,536 and was
for past services and obligations attributable to the operations of the Company and its
California subsidiaries. In exchange for the debt the Company issued 31,558 common shares of its
capital stock.17.
    
    EQUITY COMPENSATION PLANSThe Board of Directors and stockholders approved the Nonstatutory Stock Option Plan (the 2001
Plan) and adopted it on May 29, 2001. The Company has reserved 250,000 shares of its common
stock for issuance to the directors, employees and consultants under the Plan. The Plan is
administered by the Board of Directors. Vesting terms of the options range from immediately to
five years.Pursuant to an Information Statement on Schedule 14C mailed on May 9, 2005 to all stockholders
of record as of the close of business on February 1, 2005 and became effective June 3, 2005, the
Company authorized the implementation of a 2004 Incentive and Nonstatutory Stock Option Plan
(2004 Plan) reserving 800,000 shares of common stock for issuance to employees, directors and
consultants of the Company or any subsidiaries. This plan became effective as of June 3, 2005
after the Company had completed a one for twenty reverse split.
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On October 12, 2005, the Company entered into an Employment Agreement with an individual to
render full-time employment to the Company as for an initial term of three (3) years whose
duties include managing worldwide sales for the Company. The agreement automatically renews for
an additional one (1) year period at the end of each then existing term, unless one party gives
to the other written notice to terminate. The agreement provides for an annual salary of
$275,000 and quarterly bonuses in the amount of $25,000, subject to certain conditions. The
agreement also granted 400,000 options under the Companys 2004 Incentive and Nonstatutory Stock
Option Plan (the Stock Plan). The options were priced at $4.00. The options vest one third
each on the last day of the first, second and third years of employment. These options have a
term of eight (8) years from the date of grant and are subject to other standard terms and
conditions under the Stock Plan and contain standard anti-dilution language and a provision for
cashless exercise. The market value of the foregoing option grant based upon the Black-Scholes
option pricing model utilizing a market price on the date of grant of $3.50 per share, an
annualized volatility of 155%, a risk free interest rate of 4.5% and an expected life of eight
years is $3.41 per option granted, for a total value of approximately $1,364,490.On December 23, 2005, the Company granted to its Chief Financial Officer 75,000 ten year options
to purchase the Companys common stock at an exercise price of $2.46, the market value of the
Companys stock on the date of grant. The options were fully vested upon issue. The value of the
foregoing option grants based upon the Black-Scholes option pricing model utilizing a market
price on the date of grant of $2.46 per share, an annualized volatility of 155%, a risk free
interest rate of 4.5% and an expected life of eight years is $2.40 per option granted, for a
total value of approximately $180,000.On October 1, 2006, the Company granted to a marketing consultant 25,000 options to purchase the
Companys common stock at a price of $1.80 per share. These options vested immediately upon
grant and are exercisable for a period of five years. The Company valued the foregoing options
using the Black Scholes option pricing model using the following assumptions: no dividend yield;
expected volatility rate of 91.58%; risk free interest rate of 5% and an average life of 5 years
resulting in a value of $1.298 per option granted.On June 14, 2006, pursuant to an S-8 filed with the SEC, the Company registered 1,150,000 common
shares, pursuant to compensation arrangements.On August 17, 2007, pursuant to the terms of the Companys 2004 Plan, the Company granted to an
employee 100,000 options to purchase the Companys common stock at a price of $1.50 per share.
These options will vest over the next 3 years and are exercisable for a period of 5 years. The
Company valued the foregoing options using the Black Scholes option pricing model using the
following assumptions: no dividend yield; expected volatility rate of 115%; risk free interest
rate of 4.75% and an average life of 5 years resulting in a value of $1.24 per option granted.
The value of these options will be recognized on a straight-line basis over the next three years
and accordingly a value of $28,780 has been recorded in the year ended March 31, 2008.On September 21, 2007 the Company granted to employees and directors a total of 570,000 options
to purchase the Companys common stock at a price of $1.75 per share. These options will vest
over the next 3 years and are exercisable for a period of 10 years. The Company valued the
foregoing options using the Black Scholes option pricing model using the following assumptions:
no dividend yield; expected volatility rate of 115%; risk free interest rate of 4.75% and an
average life of 7 years resulting in a value of $1.47 per option granted. The value of these
options will be recognized on a straight-line basis over the next three years and accordingly a
value of $160,916 has been recorded in the year ended March 31, 2008.A summary of the option activity for the years ended March 31, 2008 and 2007 pursuant to the
terms of the plans is as follows:
 2001 Plan
    
    
    2004 Plan
    
    
    OtherWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedOutstanding
    
    
    Average
    
    
    Outstanding
    
    
    Average
    
    
    Outstanding
    
    
    AverageOptions
    
    
    Exercise Price
    
    
    Options
    
    
    Exercise Price
    
    
    Options
    
    
    Exercise PriceOptions outstanding , March 31, 2007
    
    
    222,500
    
    
    $
    1.29
    
    
    
    210,666
    
    
    $
    3.19
    
    
    
    
    
    
    
    Granted
    
    
    
    
    
    
    
    
    
    
    520,000
    
    
    
    1.71
    
    
    
    150,000
    
    
    $
    1.75Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancelled or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options outstanding, March 31, 2008
    
    
    222,500
    
    
    $
    1.29
    
    
    
    730,666
    
    
    $
    2.29
    
    
    
    150,000
    
    
    $
    1.75Options exercisable March 31, 2008
    
    
    222,500
    
    
    $
    1.29
    
    
    
    210,666
    
    
    $
    4.46
    
    
    
    
    
    
    
    Exercise price range
    
    $
    1.00 to $4.00
    
    
    
    
    
    
    $
    1.50 to $4.00
    
    
    
    
    
    
    $
    1.75Weighted average remaining life
    
    4.0 years
    
    
    
    
    
    5.43 years
    
    
    
    
    
    8.72 yearsShares available for future issuance
    
    
    27,500
    
    
    
    
    
    
    
    69,334
    
    
    
    
    
    
    
    N/A
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A summary of the Companys equity compensation plans approved and not approved by shareholders
is as follows:
 Number of
    
    
    
    
    
    
    Number of securitiessecurities to be
    
    
    
    
    
    
    remaining available forissued upon
    
    
    
    
    
    
    future issuance underexercise of
    
    
    Weighted-average
    
    
    equity compensationoutstanding
    
    
    exercise price of
    
    
    plans (excludingoptions, warrants
    
    
    outstanding options
    
    
    securities reflectedPlan Category
    
    and right
    
    
    warrants and rights
    
    
    in column (a))Equity Compensation Plans approved by security holders
    
    
    1,103,166
    
    
    $
    2.01
    
    
    
    96,834Equity Compensation Plans not approved by security holders
    
    
    297,298
    
    
    $
    1.50
    
    
    NA1,400,464
    
    
    $
    1.91
    
    
    
    96,834
 Prior to January 1, 2006, the Company accounted for employee stock-based compensation under the
recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25,
Accounting for Stock Issued to Employees, and related Interpretations, as permitted by SFAS
No. 123, Accounting for Stock-Based Compensation. Under the recognition principles of APB No.
25, compensation expense related to restricted stock and performance units was recognized in the
financial statements. However, APB No. 25 generally did not require the recognition of
compensation expense for stock options because the exercise price of these instruments was
generally equal to the fair value of the underlying common stock on the date of grant, and the
related number of shares granted were fixed at that point in time.Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No.
123(R), Share-Based Payment. In addition to recognizing compensation expense related to
restricted stock and performance units, SFAS No. 123(R) also requires recognition of
compensation expense related to the estimated fair value of stock options. The Company adopted
SFAS No. 123(R) using the modified-prospective-transition method. Under that transition method,
compensation expense recognized subsequent to adoption includes: (a) compensation cost for all
share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the
values estimated in accordance with the original provisions of SFAS No. 123, and (b)
compensation cost for all share-based payments granted subsequent to January 1, 2006, based on
the grant-date fair values estimated in accordance with the provisions of SFAS No. 123(R).
Consistent with the modified-prospective-transition method, the Companys results of operations
for prior periods have not been adjusted to reflect the adoption of FAS 123(R). For the year
ended March 31, 2008, the Company recognized $189,696 (2007  $221,959) in compensation expense
in the consolidated statement of operations18.
    
    COMMON STOCK WARRANTS AND OTHER OPTIONSOn February 10, 2006, the Company issued to an individual the right to purchase 150,000 shares
of the Companys common stock at an exercise price of $2.60 per share for a term of five (5)
years pursuant to the terms and conditions of a Stock Option Agreement as consideration for past
services performed and the release of any and all claims under this individuals prior
agreements with the Company. The 150,000 options have been valued in accordance with the
Black-Scholes pricing model utilizing an historic volatility factor of 1.55, a risk free
interest rate of 4.5% and an expected life for the options of five years, resulting in a value
of $2.41 per option granted for a total for the warrants of $361,500. The value of this option
grant was recorded as of December 31, 2005 as a research and development expense.In November 2006, the Company entered into a Settlement Agreement and Release (Settlement
Agreement) with this individual pursuant to which the prior agreement was terminated. In
connection with the Settlement Agreement, the Company agreed to pay this individual $65,000 in
settlement of all accounts which was recorded
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as an expense as of the date of the Settlement Agreement and he in turn agreed to the
cancellation of his options to purchase 150,000 shares of the Companys common stock in exchange
for certain product rights that the Company had elected not to pursue.
 As of March 31, 2008, the Company has 7,260,026 warrants to purchase the Companys common stock
outstanding that were not granted under shareholder approved equity compensation plans at prices
ranging between $1.20 and $3.00 per share with expiration dates between August 2007 and
September 2012 as follows:
 WeightedOutstanding
    
    
    Average ExerciseWarrants
    
    
    PriceWarrants and options outstanding , March 31, 2007
    
    
    3,105,651
    
    
    $
    1.72Granted
    
    
    4,200,000
    
    
    
    1.55Exercised
    
    
    (10,000
    )
    
    
    1.59Cancelled or expired
    
    
    (35,725
    )
    
    
    Warrants exercisable March 31, 2008
    
    
    7,260,026
    
    
    $
    1.67Exercise price range
    
    $
    1.20 to $10.00Weighted average remaining life
    
    4.93 Years
 19.
    
    SEGMENT INFORMATIONThe Companys only operating segment consists of dental products and oral hygiene products sold by
Remedent Inc., Remedent N.V., Sylphar N.V. and Remedent Asia Ltd.. Since the Company only has one
segment, no further segment information is presented.Customers Outside of the United States
 March 31, 2008
    
    March 31, 2007U.S. sales
    
    $
    1,598,046
    
    
    $
    561,055Foreign sales
    
    
    5,884,215
    
    
    
    6,115,310$
    7,482,261
    
    
    $
    6,676,365
 20.
    
    COMMITMENTSReal Estate LeaseThe Company leases its 26,915 square feet office and warehouse facility in Deurle, Belgium from
an unrelated party pursuant to a nine year lease commencing December 20, 2001 at a base rent of
$6,838 per month ($11,097 per month at March 31, 2008). The minimum aggregate rent to be paid
over the remaining lease term based upon the conversion rate for the  at March 31, 2008 is
$359,773. Rent expense for the forgoing lease for the years ended March 31, 2008 and March 31,
2007 was $119,097 and $105,276 respectively.Minimum monthly lease payments for real estate, and all other leased equipment for the next
three years are as follows based upon the conversion rate for the (Euro) at March 31, 2008.
 March 31, 2009
    
    $
    240,734March 31, 2010
    
    $
    76,896March 31, 2011
    
    $
    42,143Total:
    
    $
    359,773
 21.
    
    SUBSEQUENT EVENTOn April 24, 2008, the Company entered into a Factoring Agreement (Agreement) with First
Community Financial, a division of Pacific Western Bank (First Community) whereby First Community
may purchase, from time to time, on a limited recourse basis such of the Companys accounts now
existing or hereafter created and arising out of the sale of goods or service by the Company. The
factoring credit facility limit is $1,000,000 and amounts factored are subject to an interest rate
of prime plus 2%. Security for the factoring credit facility is a first
charge over all the assets of the Company. The Agreement shall remain in effect until October 16,
2008 and may be renewed for successive six month periods unless terminated under certain
conditions.On June 30, 2008, the Company entered into an OEM Agreement (Agreement) with SensAble
Technologies, Inc., a corporation under the laws of Delaware (SensAble) whereby the Company will
integrate SensAble products and technology into the Companys system. The Agreement provides the
Company with the exclusive right to distribute certain SensAble products throughout the world for a
period of twelve (12) months from the date of the Agreement. The Company has the option and right
to extend the initial twelve (12) month exclusivity period for another twelve (12) months. The term
of the Agreement will be for two years and began on June 30, 2008.
 F-23