UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
Quarterly Period Ended June 30, 2009
¨
TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from _____ to _____.
Commission File No.
001-15975
REMEDENT,
INC.
(Exact
Name of Registrant as Specified in Its Charter)
|
Nevada
|
|
86-0837251
|
|
(State
or Other Jurisdiction
Of
Incorporation or Organization)
|
(I.R.S.
Employer Identification
Number)
|
|
|
|
|
Xavier
De Cocklaan 42, 9831 Deurle, Belgium
|
N/A
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code
011 32 9
321 70 80
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports); and (2) has been subject to such filing requirements for
the past 90 days.
Yes
x
No
¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T ( § 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-3 of the Exchange Act. (Check
one):
|
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
|
|
|
|
|
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company
|
x
|
|
(Do
not check if a smaller reporting company)
|
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.
Yes
¨
No
x
As of
August 7, 2009, there were 19,995,969 outstanding shares of the registrant’s
common stock, includes 723,000 shares of treasury stock.
REMEDENT,
INC.
FORM
10-Q INDEX
|
|
Page Numbe
r
|
|
|
|
|
PART
I – FINANCIAL INFORMATION
|
|
|
Item
1. Financial Statements
|
|
|
Condensed
Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and March 31,
2009
|
1
|
|
Condensed
Consolidated Statements of Operations for the Three Months Ended
June 30, 2009 and June 30, 2008 (Unaudited)
|
2
|
|
Condensed
Consolidated Statements of Comprehensive Income (Loss) for the Three
Months Ended June 30, 2009 and June 30, 2008 (Unaudited)
|
3
|
|
Condensed
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 2009 and June 30, 2008 (Unaudited)
|
4
|
|
Notes
to Interim Condensed Consolidated Financial Statements
(Unaudited)
|
5
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
|
18
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
21
|
|
Item
4T. Controls and Procedures
|
21
|
|
|
|
|
PART
II – OTHER INFORMATION
|
|
|
Item
1. Legal Proceedings
|
22
|
|
Item
1A. Risk Factors
|
22
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
22
|
|
Item
3. Defaults Upon Senior Securities
|
22
|
|
Item
4. Submission of Matters to a Vote of Security
Holders
|
22
|
|
Item
5. Other Information
|
22
|
|
Item
6. Exhibits
|
22
|
|
Signature
Page
|
25
|
PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements
REMEDENT, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
June 30, 2009
|
|
|
March 31, 2009
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,598,294
|
|
|
$
|
1,807,271
|
|
|
Accounts
receivable, net of allowance for doubtful accounts of $36,188 at June 30,
2009 and $33,966 at March 31, 2009
|
|
|
3,373,343
|
|
|
|
3,208,120
|
|
|
Inventories,
net
|
|
|
2,056,141
|
|
|
|
1,937,946
|
|
|
Prepaid
expenses
|
|
|
1,321,700
|
|
|
|
1,310,900
|
|
|
Total
current assets
|
|
|
8,349,478
|
|
|
|
8,264,237
|
|
|
PROPERTY
AND EQUIPMENT, NET
|
|
|
1,001,394
|
|
|
|
1,024,999
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
|
Long
term investments and advances
|
|
|
750,000
|
|
|
|
750,000
|
|
|
Patents,
net
|
|
|
75,092
|
|
|
|
163,106
|
|
|
Total
assets
|
|
$
|
10,175,964
|
|
|
$
|
10,202,342
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
Current
portion, long term debt
|
|
$
|
59,414
|
|
|
$
|
78,798
|
|
|
Line
of Credit
|
|
|
1,477,140
|
|
|
|
660,200
|
|
|
Accounts
payable
|
|
|
1,508,368
|
|
|
|
1,398,420
|
|
|
Accrued
liabilities
|
|
|
987,286
|
|
|
|
1,590,360
|
|
|
Income
taxes payable
|
|
|
37,107
|
|
|
|
39,339
|
|
|
Total
current liabilities
|
|
|
4,069,315
|
|
|
|
3,767,117
|
|
|
Long
term debt less current portion
|
|
|
100,542
|
|
|
|
100,542
|
|
|
Total
liabilities
|
|
|
4,169,857
|
|
|
|
3,867,659
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
|
REMEDENT,
INC. STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Preferred
Stock $0.001 par value (10,000,000 shares authorized, none issued and
outstanding)
|
|
|
—
|
|
|
|
—
|
|
|
Common
stock, $0.001 par value; (50,000,000 shares authorized, 19,995,969 shares
issued and outstanding at June 30, 2009 and March 31,
2009)
|
|
|
19,996
|
|
|
|
19,996
|
|
|
Treasury
stock, at cost; 723,000 shares at June 30, 2009 and March 31,
2009
|
|
|
(831,450
|
)
|
|
|
(831,450
|
)
|
|
Additional
paid-in capital
|
|
|
24,207,505
|
|
|
|
24,106,055
|
|
|
Accumulated
deficit
|
|
|
(17,765,460
|
)
|
|
|
(17,216,028
|
)
|
|
Accumulated
other comprehensive (loss) (foreign currency translation
adjustment)
|
|
|
(583,027
|
)
|
|
|
(640,595
|
)
|
|
Total
Remedent, Inc. stockholders’ equity
|
|
|
5,047,564
|
|
|
|
5,437,978
|
|
|
Non-controlling
interest (Note 2)
|
|
|
958,543
|
|
|
|
896,705
|
|
|
Total
stockholders’ equity
|
|
|
6,006,107
|
|
|
|
6,334,683
|
|
|
Total
liabilities and equity
|
|
$
|
10,175,964
|
|
|
$
|
10,202,342
|
|
COMMITMENTS
(Note 19)
The
accompanying notes are an integral part of these consolidated financial
statements.
REMEDENT, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
|
|
For
the three months ended
|
|
|
|
|
June
30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
2,160,803
|
|
|
$
|
3,635,479
|
|
|
Cost
of sales
|
|
|
1,096,007
|
|
|
|
1,269,424
|
|
|
Gross
profit
|
|
|
1,064,796
|
|
|
|
2,366,055
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
Research
and development
|
|
|
26,598
|
|
|
|
124,948
|
|
|
Sales
and marketing
|
|
|
350,935
|
|
|
|
671,299
|
|
|
General
and administrative
|
|
|
1,042,764
|
|
|
|
1,130,313
|
|
|
Depreciation
and amortization
|
|
|
173,444
|
|
|
|
91,261
|
|
|
TOTAL
OPERATING EXPENSES
|
|
|
1,593,741
|
|
|
|
2,017,831
|
|
|
INCOME
(LOSS) FROM OPERATIONS
|
|
|
(528,945
|
)
|
|
|
348,224
|
|
|
OTHER
INCOME (EXPENSES)
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(24,647
|
)
|
|
|
(35,343
|
)
|
|
Other
income
|
|
|
65,998
|
|
|
|
17,621
|
|
|
TOTAL
OTHER INCOME (EXPENSES)
|
|
|
41,351
|
|
|
|
(17,723
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
(LOSS) INCOME
|
|
|
(487,594
|
)
|
|
|
330,501
|
|
|
|
|
|
|
|
|
|
|
|
|
LESS:
NET INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST
|
|
|
61,838
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
(LOSS) INCOME ATTRIBUTABLE TO REMEDENT, INC. Common
Stockholders
|
|
$
|
(549,432
|
)
|
|
$
|
330,501
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.02
|
|
|
Fully
diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
19,995,969
|
|
|
|
18,637,803
|
|
|
Fully
diluted
|
|
|
32,702,274
|
|
|
|
27,000,995
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
REMEDENT, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
For the three months
ended June 30,
(Unaudited)
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss) Income Attributable to Remedent Common Stockholders
|
|
$
|
(549,432
|
)
|
|
$
|
330,501
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS):
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment
|
|
|
57,568
|
|
|
|
27,592
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
OTHER COMPREHENSIVE (LOSS) INCOME
|
|
|
(491,864
|
)
|
|
|
358,093
|
|
|
|
|
|
|
|
|
|
|
|
|
LESS:
COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING
INTEREST
|
|
|
42,248
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
(LOSS) INCOME ATTRIBUTABLE TO REMEDENT Common Stockholders
|
|
$
|
(534,112
|
)
|
|
$
|
358,093
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
REMEDENT, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
|
|
For the three months ended
June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(487,594
|
)
|
|
$
|
330,501
|
|
|
Adjustments
to reconcile net income (loss) to net cash used by operating
activities
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
173,444
|
|
|
|
91,261
|
|
|
Inventory
reserve
|
|
|
864
|
|
|
|
(48
|
)
|
|
Allowance
for doubtful accounts
|
|
|
2,222
|
|
|
|
(98
|
)
|
|
Value
of stock options issued to employees
|
|
|
101,450
|
|
|
|
88,425
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(165,223
|
)
|
|
|
(541,169
|
)
|
|
Inventories
|
|
|
(118,195
|
)
|
|
|
(89,987
|
)
|
|
Prepaid
expenses
|
|
|
(10,800
|
)
|
|
|
92,697
|
|
|
Accounts
payable
|
|
|
109,948
|
|
|
|
(148,010
|
)
|
|
Accrued
liabilities
|
|
|
(603,074
|
)
|
|
|
34,286
|
|
|
Income
taxes payable
|
|
|
(2,232
|
)
|
|
|
—
|
|
|
Net
cash used by operating activities
|
|
|
(999,190
|
)
|
|
|
(142,152
|
)
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Purchases
of equipment
|
|
|
(68,144
|
)
|
|
|
(205,002
|
)
|
|
Net
cash used by investing activities
|
|
|
(68,144
|
)
|
|
|
(205,002
|
)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net
(repayments of) capital lease note payable
|
|
|
(19,384
|
)
|
|
|
82,611
|
|
|
Proceeds
from line of credit
|
|
|
816,940
|
|
|
|
34,286
|
|
|
Net
cash provided by financing activities
|
|
|
797,556
|
|
|
|
116,897
|
|
|
NET
(DECREASE) INCREASE IN CASH
|
|
|
(269,778
|
)
|
|
|
(312,868
|
)
|
|
Effect
of exchange rate changes on cash and cash equivalents
|
|
|
60,801
|
|
|
|
52,279
|
|
|
CASH
AND CASH EQUIVALENTS, BEGINNING
|
|
|
1,807,271
|
|
|
|
1,728,281
|
|
|
CASH
AND CASH EQUIVALENTS, ENDING
|
|
$
|
1,598,294
|
|
|
$
|
1,467,692
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
15,867
|
|
|
$
|
23,443
|
|
|
Income
taxes paid
|
|
$
|
-
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
REMEDENT, INC. AND
SUBSIDIARIES
NOTES
TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
1.
|
BACKGROUND AND
ORGANIZATION
|
The
Company is a manufacturer and distributor of cosmetic dentistry products,
including a full line of professional dental and retail “Over-The-Counter” tooth
whitening products which are distributed in Europe, 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.
|
2.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Organization
and Principles of Consolidation
The
accompanying consolidated financial statements include the accounts of: Remedent
N.V. (incorporated in Belgium)located in Deurle, Belgium, Remedent Professional,
Inc. (incorporated in California) ), Glamtech-USA, Inc. (a Delaware corporation
acquired effective August 24, 2008), Remedent OTC B.V., a Dutch Holding company
and a 50% owned subsidiary, Sylphar Holding B.V., a Dutch holding company, a
37.50% owned and controlled subsidiary by Remedent Inc, Sylphar N.V., a 100%
owned company by Sylphar Holding BV, Sylphar USA, a 100% owned Nevada
corporation by Sylphar Holding BV. and Sylphar Asia Pte, a 100 % owned Asian
company owned by Sylphar Holding BV (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. The rebranded Sylphar Asia Pte Ltd (former Remedent Asia Pte.
Ltd.), commenced operations as of July 2005.
Interim
Financial Information
The
interim consolidated financial statements of Remedent, Inc. and Subsidiaries
(the “Company”) are condensed and do not include some of the information
necessary to obtain a complete understanding of the financial data. Management
believes that all adjustments necessary for a fair presentation of results have
been included in the unaudited consolidated financial statements for the interim
periods presented. Operating results for the three months ended June 30, 2009,
are not necessarily indicative of the results that may be expected for the year
ended March 31, 2010. Accordingly, your attention is directed to footnote
disclosures found in the Annual Report on Form 10-K for the year ending
March 31, 2009, and particularly to Note 2, which includes a summary of
significant accounting policies.
Pervasiveness
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the Company to make estimates
and assumptions that affect 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 values of assets
and liabilities that are not readily apparent from other sources. Actual results
could differ from those estimates.
Basis
of Presentation
The
Company’s financial statements have been prepared on an accrual basis of
accounting, in conformity with accounting principles generally accepted in the
United States of America.
Revenue
Recognition
The
Company recognizes revenue from product sales when persuasive evidence of a sale
exists: that is, a product is shipped under an agreement with a customer; risk
of loss and title has passed to the customer; the fee is fixed or determinable;
and collection of the resulting receivable is reasonably assured. Sales
allowances are estimated based upon historical experience of sales
returns.
Non-controlling
Interest
The
Company adopted SFAS 160 —
Noncontrolling Interests in
Consolidated Financial Statements
— an Amendment of Accounting Research
Bulletin No. 51 (“SFAS 160”) as of April 1, 2009. SFAS 160 establishes
accounting and reporting standards for ownership interests in subsidiaries held
by parties other than the parent, the amount of consolidated net income
attributable to the parent and to the noncontrolling interest, changes in a
parent’s ownership interest and the valuation of retained noncontrolling equity
investments when a subsidiary is deconsolidated. SFAS 160 also establishes
reporting requirements that provide sufficient disclosures that clearly identify
and distinguish between the interest of the parent and the interests of the
noncontrolling owner. The adoption of SFAS 160 impacted the presentation of our
consolidated financial position, results of operations and cash
flows.
Fair
Value of Financial Instruments
The
Company’s financial instruments consist of cash and cash equivalents, accounts
receivable, accounts payable, accrued liabilities, line of credit and long-term
debt. The carrying amounts of cash and cash equivalents, accounts receivable,
accounts payable and accrued liabilities approximate their respective fair
values because of the short maturities of those instruments. The Company’s
long-term debt consists of its revolving credit facility and long-term capital
lease obligations. The carrying value of the revolving credit facility
approximates fair value because of its variable short-term interest
rates. The fair value of the Company’s long-term capital lease
obligations is based on current rates for similar financing.
Comparative
Figures
Certain
comparative figures have been reclassified in order to conform to the current
year’s financial statement presentation. The reclassifications
included the retrospective adoption of SFAS 160 as described in Note 2 under
“Non-controlling Interest”. The reclassification had no impact upon
previously reported net income available to common stockholders or earnings per
share.
Adoption
of New Accounting Standards
Effective
April 1, 2009, we adopted Financial Accounting Standards Board (FASB) Statement
of Financial Accounting Standards (SFAS) No. 165, “
Subsequent Events
.” This
Statement establishes the accounting for, and disclosure of, material events
that occur after the balance sheet date, but before the financial statements are
issued. In general, these events will be recognized if the condition existed at
the date of the balance sheet, and will not be recognized if the condition did
not exist at the balance sheet date. Disclosure is required for non-recognized
events if required to keep the financial statements from being misleading. The
guidance in this Statement is very similar to current guidance provided in
auditing literature and, therefore, will not result in significant changes in
practice. Subsequent events have been evaluated through the date our interim
financial statements were issued—the filing time and date of our first quarter
2010 Quarterly Report on Form 10-Q.
In
April 2009, the FASB issued three FASB Staff Positions (FSP’s) that are intended
to provide additional application guidance and
enhance disclosures about fair value measurements and
impairments of securities.
|
|
·
|
FSP
No. 157-4, “
Determining
Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly
” (FSP 157-4), clarifies the
objective and method of fair value measurement even when there
has been a significant decrease in market activity for
the asset
being measured.
|
|
|
·
|
FSP
No. 115-2 and FSP No. 124-2, “
Recognition and
Presentation of Other-Than-Temporary Impairments
”,
(FSP 115-2 and FSP 124-2), establish a new model for
measuring other-than-temporary impairments for debt
securities, including criteria for when to recognize a
write-down through earnings versus other comprehensive
income.
|
|
|
·
|
FSP
No. 107-1 and APB 28-1, “
Interim Disclosures About Fair
Value of Financial Instruments
”, expand the fair
value disclosures required for all financial instruments
within the scope of SFAS, No. 107, “Disclosures about
Fair Value of Financial Instruments” (FSP 107-1 and APB 28-1)
to interim periods. This guidance increases the frequency
of fair value disclosures from annual only to quarterly. FSP
No. 107-1 is effective for interim and annual periods ending after
June 15, 2009. The adoption of FSP No. 107-1 did not have a
material effect on the Company’s results of operations or consolidated
financial position, but will enhance required
disclosures.
|
All of
these FSP’s are effective for interim and annual periods ending
after June 15, 2009, our quarter ended June 30, 2009. The
adoption of these FSP’s will not have a material impact on our consolidated
results of operations and financial condition. However, adoption of FSP 107-1
and APB 28-1 during the quarter ended June 30, 2009 resulted in
increased disclosures in our consolidated
financial statements.
Recently
Issued Accounting Pronouncement
In June
2009, the FASB issued Statement No.168,
The FASB Accounting Standards
Codification™ and the Hierarchy of Generally Accepted Accounting Principles—a
replacement of FASB Statement No. 162
("FAS 168"). The
Codification will become the source of authoritative GAAP recognized by the FASB
to be applied by nongovernmental entities. Rules and interpretive releases of
the SEC under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. On the effective date of FAS 168,
the Codification will supersede all then-existing non-SEC accounting and
reporting standards. All other non-grandfathered non-SEC accounting literature
not included in the Codification will become non-authoritative. FAS 168 is
effective for financial statements issued for interim and annual periods ending
after September 15, 2009.
The adoption of this
standard will change how we reference various elements of GAAP when preparing
our financial statement disclosures, but will have no impact on our financial
position, results of operations or cash flows.
|
3.
|
RESTRUCTURING
OF OTC BUSINESS
|
To
effectuate the restructuring Plan relating to the management led buyout of the
Over-The-Counter (“OTC”) business the Company entered into the following series
of related agreements:
On
December 10, 2008, the Company entered into a Contribution Agreement with
Sylphar USA, Inc., a newly incorporated Nevada corporation and wholly owned
subsidiary of the Company (“Sylphar USA”), pursuant to which the Company made a
capital contribution of certain assets and liabilities relating to the OTC
business which was valued at $460,568 to Sylphar USA in exchange for 460,568
shares of common stock, par value $1.00, of Sylphar USA.
On
December 10, 2008, the Company entered into a Share Purchase Agreement with
Remedent, NV, a wholly owned subsidiary of the Company formed under the laws of
Belgium (“Remedent NV”), pursuant to which the Company purchased a 99% ownership
interest in Sylphar, NV, a subsidiary of the Company formed under the laws of
Belgium, from Remedent NV. As a result of the Sylphar Purchase
Agreement, Sylphar NV became a wholly owned subsidiary of the Company. As
consideration for the 99 shares (“Sylphar Shares”), the Company agreed to pay
Remedent NV €1,881,000, which was based on the valuations provided by an
independent assessor, by executing an unsecured non-interest bearing promissory
note (the “Promissory Note”) on behalf of Remedent NV for the principal amount
of €1,000,160 (the “Debt”) and having the remainder balance of €880,840
reflected on the existing intercompany account between Remedent NV and the
Company.
Then
pursuant to a Deed of Contribution, the Company transferred all of the Company’s
ownership interest in its OTC operating subsidiaries, consisting of Sylphar USA,
Remedent Asia PTE, Sylphar NV (“OTC Subsidiaries”), into Remedent OTC BV, a
Dutch holding company and a wholly owned subsidiary of the Company (“Remedent
OTC”) in exchange for €1,000,160.
Subsequent
to the contribution of the OTC Subsidiaries to Remedent OTC, the Company sold
fifty percent (50%) of its interest in Remedent OTC to Robin List, a former
Chief Executive Officer, President and Director of the Company, in exchange for
723,000 restricted shares of common stock of the Company held by Mr. List
(“Exchanged Shares”), pursuant to a Share Purchase Agreement on December 10,
2008. The Exchanged Shares were returned to treasury. The
Exchanged Shares were valued at $1.15 per share, based on the average of the 52
week high and low bid, for an aggregate value of $831,450. As a
result, Mr. List and the Company equally own 50% of Remedent OTC with the
Company currently controlling Remedent OTC through its board representations
pursuant to the terms of a certain Voting Agreement entered into by the Company
and Mr. List concurrently with the Share Purchase Agreement. The
Voting Agreement provides that, the Company will initially have 2 board
representations and Mr. List will have 1 board
representation. However upon the occurrence of a “Triggering Event”
(as defined in the Voting Agreement), the Company will have 1 board
representation and Mr. List will have 2 board representations.
On
December 11, 2008, the Company entered into an Investment and Shareholders’
Agreement with Remedent OTC, Concordia Fund V.C., a non-affiliated Dutch private
equity fund (“Concordia”), Mr. List, Sylphar Holding, BV, a Dutch holding
company and wholly owned subsidiary of Remedent OTC (“Sylphar Holding”) and the
OTC Subsidiaries pursuant to which Concordia agreed to purchase shares of
Sylphar Holding from Remedent OTC representing a 12.5% ownership interest in
Sylphar Holding for €1,000,000 and invest an additional €1,000,000 in Sylphar
Holding for an additional 12.5% ownership interest in Sylphar Holding,
representing an aggregate ownership interest of 25% in Sylphar Holding.
Furthermore, Concordia was granted a call option exercisable from January 1,
2009 until December 31, 2010, unless otherwise extended to September 30,
2011 pursuant to the terms of such agreement, to purchase an additional 24%
ownership interest in Sylphar Holding for €2,000,000 or any pro rata portion
thereof. The shares of Sylphar Holding are subject to certain drag
along rights in the event there is an offer to purchase such
shares. It was further agreed upon that the €1,000,000 received from
Concordia would be used to pay off the Debt. Such funds were received
from Concordia and used to pay off the Debt in December
2008. Subsequently, all of the OTC Subsidiaries were transferred and
are currently held and operated by Sylphar Holding.
|
4.
|
DISTRIBUTION
AGREEMENTS
|
Den-Mat
Distribution Agreement
On
August 24, 2008, and as amended June 3, 2009, the Company entered into a
distribution agreement (the “Distribution Agreement”) with Den-Mat Holdings,
LLC, a Delaware limited liability company (“Den-Mat”). Under
the Distribution, the Company appointed Den-Mat to be the sole and exclusive
distributor to market, license and sell certain products relating to the
Company’s GlamSmile tray technology, including, but not limited to, its
GlamSmile veneer products and other related veneer products (the “Products”),
throughout the world, with the exception of Australia, Austria, Belgium, Brazil,
France (including all French overseas territories “Dom-Tom”), Germany, Italy,
New Zealand, Oman, Poland, Qatar, Saudi Arabia, Singapore, Switzerland,
Thailand, and United Arab Emirates (collectively the “Excluded Markets”) and the
China Market (the “Territory”).
As
consideration for such distribution, licensing and manufacturing rights, Den-Mat
will pay the Company:
|
|
(i)
|
an
initial payment of $2,425,000;
|
|
|
(ii)
|
a
payment of $250,000 for each of the first three contract periods in the
initial Guaranty Period, subject to certain terms and
conditions;
|
|
|
(iii)
|
certain
periodic payments as additional paid-up royalties in the aggregate amount
of $500,000;
|
|
|
(iv)
|
a
payment of $1,000,000 promptly after Den-Mat manufactures a limited
quantity of products at a facility owned or leased by
Den-Mat;
|
|
|
(v)
|
a
payment of $1,000,000 promptly upon completion of certain training of
Den-Mat’s personnel;
|
|
|
(vi)
|
a
payment of $1,000,000 upon the first to occur of (a) February 1, 2009
or (b) the date thirty (30) days after den-Mat sells GlamSmile
Products incorporating twenty thousand (20,000) Units/Teeth to customers
regardless of whether Den-Mat has manufactured such Units/Teeth in a
Den-Mat facility or has purchased such Units/Teeth from
Remedent;
|
|
|
(vii)
|
certain
milestone payments; and
|
|
|
(viii)
|
certain
royalty payments.
|
Further,
as consideration for Den-Mat’s obligations under the Distribution Agreement, the
Company agreed to, among other things:
|
|
(i)
|
issue
to Den-Mat or an entity to be designated by Den-Mat, warrants to purchase
up to 3,378,379 shares of the Corporation’s common stock, par value $0.001
per share (the “Warrant Shares”) at an exercise price of $1.48 per share,
exercisable for a period of five years (the “Den-Mat Warrant”) (issued in
the period ended September 30,
2008);
|
|
|
(ii)
|
execute
and deliver to Den-Mat a registration rights agreement covering the
registration of the Warrant Shares (the “Registration Rights Agreement”)
which as of March 31, 2009 has not yet been filed;
and
|
|
|
(iii)
|
cause
its Chairman of the Board, Guy De Vreese, to execute and deliver to
Den-Mat a non-competition
agreement.
|
On June
3, 2009, the Distribution Agreement was amended and restated (the “Amended
Agreement”). The Amended Agreement modifies and clarifies certain terms and
provisions which among other things includes:
(1) the
expansion of the list of Excluded Markets to include Spain, Japan, Portugal,
South Korea and South Africa for a period of time;
(2)
clarification that Den-Mat’s distribution and license rights are non-exclusive
to market, sell and distribute the Products directly to consumers through retail
locations (“B2C Market”) in the Territory and an undertaking to form a separate
subsidiary to and to issue warrants to Den-Mat in the subsidiary in the event
that the Company decides to commercially exploit the B2C Market in North America
after January 1, 2010;
(3)
subject to certain exceptions, a commitment from the Company to use Den-Mat as
its supplier to purchase all of its, and its licensee’s, GlamSmile products in
the B2C Market from Den-Mat, with reciprocal commitment from Den-Mat to sell
such products;
(4)
modification of certain defined terms such as “Guaranty Period,” “Exclusivity
Period” and addition of the term “Contract Period”; and
(5) the
“Guaranty Period” (as defined therein) is no longer a three year
period but has been changed to the first three “Contract
Periods”. The first Contract Period commences on the first day of the
Guaranty Period (which the Parties agreed has commenced as of April 1, 2009),
and continues for fifteen (15) months or such longer period that would be
necessary in order for Den-Mat to purchase a certain minimum number of
Units/Teeth as agreed upon in the Amended Agreement (“Minimum Purchase
Requirement”) in the event that the Company’s manufacturing capacity falls below
a certain threshold. The second and each subsequent GlamSmile
Contract Period begins on the next day following the end of the preceding
“Contract Period” and continues for twelve (12) months or such longer period
that would be necessary in order for Den-Mat to meet its Minimum Purchase
Requirement in the event that the Company’s manufacturing capacity falls below a
certain threshold
First
Fit Distribution Agreement
On June
3, 2009, the Company entered into the First Fit-Crown Distribution and License
Agreement (the “First Fit Distribution Agreement”) with
Den-Mat. Under the terms of the First Fit Distribution Agreement, the
Company appointed Den-Mat to be its sole and exclusive distributor to market,
license and sell certain products relating to the Company’s proprietary First
Fit technology (the “First Fit Products”), in the United States, Canada and
Mexico (the “First Fit Territory”). In connection therewith, the
Company also granted Den-Mat certain non-exclusive rights to manufacture and
produce the First Fit Products in the First-Fit Territory; and a sole and
exclusive transferable and sub-licensable right and license to use the Company’s
intellectual property rights relating to the First Fit Products to perform its
obligations as a distributor (provided the Company retains the right to use and
license related intellectual property in connection with the manufacture of the
First Fit Products for sale outside of the First Fit
Territory).
Consummation
of the First Fit Distribution Agreement is subject to: completion of Den-Mat’s
due diligence; execution and delivery of Non-Competition Agreements; and the
delivery of the Development Payment and first installment of the License Payment
(the “Development Payment” and License Payment” are defined
below).
Under the
First Fit Distribution Agreement, the Company granted such distribution rights,
licensing rights and manufacturing rights, in consideration for the
following: (i) a non-refundable development fee of Four Hundred
Thousand Dollars ($400,000) (the “Development Payment”) payable in two
installments of $50,000 each, one within seven days after the effective date of
the First Fit Distribution Agreement, and another $350,000 payment within twenty
one days after the Effective Date ($400,000 received as at June 30, 2009); (ii)
a non-refundable license fee of $600,000 payable in three equal installments of
$200,000 each, with the first installment payable on the Closing Date, and with
the second and third installments payable on the 30th and 60th day,
respectively, after the Closing Date; (iii) certain royalty payments based on
the sales of the First Fit Products by Den-Mat or its sublicensees; and (iv)
certain minimum royalty payments to maintain exclusivity.
Den-Mat’s
rights as an exclusive distributor and licensee will continue at least through
the first Contract Period (defined below) and until the termination of the First
Fit Distribution Agreement. Den-Mat’s exclusivity ends at the end of
any Contract Period in which Den-Mat fails to make certain minimum royalty
payments. In the event that such exclusivity is terminated, Den-Mat
has the option to either terminate the First Fit Distribution Agreement upon
ninety (90) days written notice, or become a non-exclusive distributor and
licensee, in which event Den-Mat’s obligation to pay certain agreed upon
royalties would continue. “Contract Period” means the
following periods: (A) the first eighteen months beginning on the first day of
the month following the month in which the Closing occurs, provided that if
Den-Mat is not fully operational within sixty days after the Closing Date, the
first Contract Period will be extended by one day for each day after the
sixtieth day until Den-Mat becomes fully operational; (B) the subsequent twelve
months; and (C) each subsequent twelve month period thereafter, in each case
during which the First Fit Distribution Agreement is in effect.
Financial
Instruments — Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of trade accounts
receivable.
Concentrations
of credit risk with respect to trade receivables are normally limited due to the
number of customers comprising the Company’s customer base and their dispersion
across different geographic areas. At June 30, 2009.two customers accounted for
a total of 55% of the Company’s trade accounts receivable. At June
30, 2008, one customer accounted for a total of 44% 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 three months ended June 30, 2009 the
Company had five suppliers who accounted for 28% of gross
purchases. For the three months ended June 30, 2008 the Company had
five suppliers who accounted for 29% of gross purchases.
Revenues
— For the three months ended June 30, 2009 the Company had five customers that
accounted for 64% of total revenues. For the three months ended June
30, 2008 the Company had one customer that accounted for 36% of total
revenues.
|
6.
|
ACCOUNTS RECEIVABLE AND
ALLOWANCE FOR DOUBTFUL
ACCOUNTS
|
The
Company’s accounts receivable at year end were as follows:
A summary
of accounts receivable and allowance for doubtful accounts as of June 30, 2009
and March 31, 2009 is as follows:
|
|
|
June 30, 2009
|
|
|
March 31, 2009
|
|
|
Accounts
receivable, gross
|
|
$
|
3,409,531
|
|
|
$
|
3,242,086
|
|
|
Less:
allowance for doubtful accounts
|
|
|
(36,188
|
)
|
|
|
(33,966
|
)
|
|
Accounts
receivable, net
|
|
$
|
3,373,343
|
|
|
$
|
3,208,120
|
|
Inventories
at June 30, 2009 and March 31, 2009 are stated at the lower of cost (first-in,
first-out) or net realizable value and consisted of the following:
|
|
|
June 30, 2009
|
|
|
March 31, 2009
|
|
|
Raw
materials
|
|
$
|
24,488
|
|
|
$
|
20,941
|
|
|
Components
|
|
|
1,017,967
|
|
|
|
1,017,286
|
|
|
Finished
goods
|
|
|
1,027,754
|
|
|
|
912,923
|
|
|
|
|
|
2,070,209
|
|
|
|
1,951,150
|
|
|
Less:
reserve for obsolescence
|
|
|
(14,068
|
)
|
|
|
(13,204
|
)
|
|
Net
inventory
|
|
$
|
2,056,141
|
|
|
$
|
1,937,946
|
|
|
|
|
June 30, 2009
|
|
|
March 31, 2009
|
|
|
Prepaid
materials and components
|
|
$
|
1,088,187
|
|
|
$
|
1,127,225
|
|
|
Prepaid
consulting
|
|
|
16,974
|
|
|
|
18,119
|
|
|
VAT
payments in excess of VAT receipts
|
|
|
116,966
|
|
|
|
99,315
|
|
|
Royalties
|
|
|
41,609
|
|
|
|
39,053
|
|
|
Prepaid
trade show expenses
|
|
|
12,484
|
|
|
|
—
|
|
|
Prepaid
rent
|
|
|
1,688
|
|
|
|
1,584
|
|
|
Other
|
|
|
43,792
|
|
|
|
25,604
|
|
|
|
|
$
|
1,321,700
|
|
|
$
|
1,310,900
|
|
|
9.
|
PROPERTY AND
EQUIPMENT
|
Property
and equipment are summarized as follows:
|
|
|
June 30, 2009
|
|
|
March 31, 2009
|
|
|
Furniture
and Fixtures
|
|
$
|
353,788
|
|
|
$
|
350,662
|
|
|
Machinery
and Equipment
|
|
|
1,416,888
|
|
|
|
1,351,870
|
|
|
Tooling
|
|
|
188,450
|
|
|
|
188,450
|
|
|
|
|
|
1,959,126
|
|
|
|
1,890,982
|
|
|
Accumulated
depreciation
|
|
|
(957,732
|
)
|
|
|
(865,983
|
)
|
|
Property
& equipment, net
|
|
$
|
1,001,394
|
|
|
$
|
1,024,999
|
|
|
10.
|
LONG TERM INVESTMENTS AND
ADVANCES
|
Innovative 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 acquired a 10% equity interest in IMDS, LLC in consideration for
$300,000 which was converted against IMDS receivables.
The
agreement stipulates certain exclusive worldwide 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.
As of
June 30, 2009 the Company had recorded a 100% allowance against its investment
in IMDS because IMDS financial information is unavailable. The
provision will be re-evaluated as soon as information becomes
available.
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 was paid through the
issuance of 220,588 common shares of the Company’s common stock. The final
agreement is currently being negotiated and management expects to close the
agreement, and issue the 220,588 common shares during the remainder of calendar
year 2009.
Teeth
Whitening Patents
In
October 2004, the Company acquired from the inventor the exclusive, perpetual
license to two issued United States patents which are applicable to several
teeth whitening products currently being marketed by the Company. Pursuant to
the terms of the license agreement, the Company was granted an exclusive,
worldwide, perpetual license to manufacture, market, distribute and sell the
products contemplated by the patents subject to the payment of $65,000 as
reimbursement to the patent holder for legal and other costs associated with
obtaining the patents, which was paid in October 2004, and royalties for each
unit sold subject to an annual minimum royalty of $100,000 per year. The Company
is amortizing the initial cost of $65,000 for these patents over a ten year
period and accordingly has recorded $30,875 of accumulated amortization for this
patent as of June 30, 2009. The Company accrues this royalty when it becomes
payable to inventory therefore no provision has been made for this obligation as
of June 30, 2009 (March 31, 2009-Nil).
Universal
Applicator Patent
In
September 2004, the Company entered into an agreement with Lident N.V.
(“Lident”), a company controlled by Mr. De Vreese, the Company’s Chairman, to
obtain an option, exercisable through December 31, 2005, to license an
international patent (excluding the US) and worldwide manufacturing and
distribution rights for a potential new product which Lident had been assigned
certain rights by the inventors of the products, who are unrelated parties,
prior to Mr. De Vreese association with the Company. The patent is an Italian
patent which relates to a single use universal applicator for dental pastes,
salves, creams, powders, liquids and other substances where manual application
could be relevant. The Company has filed to have the patent approved throughout
Europe. The agreement required the Company to advance to the inventors through
Lident a fully refundable deposit of €100,000 subject to the Company’s due
diligence regarding the enforceability of the patent and marketability of the
product, which, if viable, would be assigned to the Company for additional
consideration to the inventors of €100,000 and an ongoing royalty from sales of
products related to the patent equal to 3% of net sales and, if not viable, the
deposit would be repaid in full by Lident. The consideration the Company had
agreed to pay Lident upon the exercise of the option is the same as the
consideration Lident is obligated to pay the original inventors. Consequently,
Lident would not have profited from the exercise of the option. Furthermore, at
a meeting of the Company’s Board of Directors on July 13, 2005, the Board
accepted Lident’s offer to facilitate an assignment of Lident’s intellectual
property rights to the technology to the Company in exchange for the
reimbursement of Lident’s actual costs incurred relating to the intellectual
property. Consequently, when the Company exercises the option, all future
payments, other than the reimbursement of costs would be paid directly to the
original inventors and not to Lident.
On
December 12, 2005, the Company exercised the option and the Company and the
patent holder agreed to revise the assignment agreement whereby the Company
agreed to pay €50,000 additional compensation in the form of prepaid royalties
instead of the €100,000 previously agreed, €25,000 of which had been paid by the
Company in September 2005 and the remaining €25,000 to be paid upon the
Company’s first shipment of a product covered by the patent. As of June 30, 2009
the Company has not yet received the final Product. The patent is being
amortized over five (5) years and accordingly, the Company has recorded $85,183
of accumulated amortization for this patent as of June 30, 2009.
On
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 June 30, 2009 and March 31, 2009, Remedent N.V. and Sylphar
N.V. had in aggregate, $1,447,140 and $660,200 in advances outstanding,
respectively, under this mixed-use line of credit facility.
On 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). On May 15, 2008, the
Company entered into a third capital lease agreement over a three year period
for additional manufacturing equipment totaling €63,395 (US
$98,516).
The
leases require monthly payments of principal and interest at 7.43% of €1,172
(US$1,649 at June 30, 2009) for the first two leases and 9.72% of €2,056 (US
$2,892 at June 30, 2009) and provide for buyouts at the conclusion of the five
year term of €2,820 (US$3,967) or 4.0% of original value for the first two
contracts and €4,933 (US $6,940) or 4.0% of the original value for the second
contract. The third lease contract requires monthly payments of principal and
interest at 9.40% of €1,761 (US $2,477 at June 30, 2009) and provides for buyout
at the conclusion of the three year term of €634 (US $892) or 1% of the original
value of this contract.
The net
book value as of June 30, 2009 and March 31, 2009 of the equipment subject to
the foregoing leases are $159,955 and $179,339, respectively.
|
14.
|
RELATED PARTY
TRANSACTIONS
|
Transactions
with related parties, not disclosed elsewhere in these financial statements,
consisted of the following:
Compensation:
During
the three months ended June 30, 2009 and 2008 the Company incurred $171,460 and
$179,632 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 three months ended June 30, 2009 and 2008
totaling $0 and $34,980 respectively. Accounts receivable at period end with
this customer totaled $33,982 and $31,895 as at June 30, 2009 and March 31, 2009
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.
Accrued
liabilities are summarized as follows:
|
|
|
June 30, 2009
|
|
|
March 31, 2009
|
|
|
Accrued
employee benefit taxes and payroll
|
|
$
|
188,449
|
|
|
$
|
246,925
|
|
|
Accrued
Travel
|
|
|
16,234
|
|
|
|
13,170
|
|
|
Advances
and deposits
|
|
|
316,572
|
|
|
|
298,809
|
|
|
Commissions
|
|
|
253,136
|
|
|
|
258,105
|
|
|
Accrued
audit and tax preparation fees
|
|
|
11,224
|
|
|
|
8,947
|
|
|
Reserve
for warranty costs
|
|
|
21,102
|
|
|
|
19,806
|
|
|
Accrued
interest
|
|
|
—
|
|
|
|
1,279
|
|
|
Accrued
consulting fees
|
|
|
13,799
|
|
|
|
37,308
|
|
|
Other
accrued expenses
|
|
|
166,770
|
|
|
|
706,011
|
|
|
|
|
$
|
987,286
|
|
|
$
|
1,590,360
|
|
|
16.
|
EQUITY COMPENSATION
PLANS
|
As of
June 30, 2009, the Company had three equity compensation plans approved by its
stockholders (1) the 2001 Incentive and Non-statutory Stock Option Plan (the
“2001 Plan”), (2) the 2004 Incentive and Non-statutory Stock Option Plan (the
“2004 Plan”); and (3) the 2007 Equity Incentive Plan (the “2007 Plan”). The
Company’s stockholders approved the 2001 Plan reserving 250,000 shares of common
stock of the Company pursuant to an Information Statement on Schedule 14C filed
with the Commission on August 15, 2001. In addition, the Company’s stockholders
approved the 2004 Plan reserving 800,000 shares of common stock of the Company
pursuant to an Information Statement on Schedule 14C filed with the Commission
on May 9, 2005. Finally, the Company’s stockholders approved the 2007
Plan reserving 1,000,000 shares of common stock of the Company pursuant to a
Definitive Proxy Statement on Schedule 14A filed with the Commission on October
2, 2007.
In
addition to the equity compensation plans approved by the Company’s
stockholders, the Company has issued options and warrants to individuals
pursuant to individual compensation plans not approved by our
stockholders. These options and warrants have been issued in exchange
for services or goods received by the Company.
The
following table provides aggregate information as of June 30, 2009 with respect
to all compensation plans (including individual compensation arrangements) under
which equity securities are authorized for issuance.
|
Plan
Category
|
|
Number
of
securities
to be
issued
upon
exercise
of
of
outstanding
options,
warrants
and
right
|
|
|
Weighted-average
exercise
price of
outstanding
options
warrants
and rights
|
|
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans
(excluding
securities
reflected
in
column (a))
|
|
|
|
Equity
Compensation Plans approved by security holders
|
|
|
1,918,166
|
|
|
$
|
1.15
|
|
|
|
131,834
|
|
|
Equity
Compensation Plans not approved by security holders
|
|
|
447,298
|
|
|
$
|
1.64
|
|
|
|
NA
|
|
|
Total
|
|
|
2,365,464
|
|
|
$
|
1.24
|
|
|
|
131,834
|
|
A summary
of the option activity for the three month period ended June 30, 2009 pursuant
to the terms of the
plans is
as follows:
|
|
|
2001
Plan
|
|
|
2004
Plan
|
|
|
2007
Plan
|
|
|
Other
|
|
|
|
|
Outstanding
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Outstanding
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Outstanding
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Outstanding
Options
|
|
|
Weighted
Average
Exercise
Price
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Options
outstanding, March 31, 2009
|
|
|
250,500
|
|
|
|
1.29
|
|
|
|
668,166
|
|
|
|
0.89
|
|
|
|
1,000,000
|
|
|
|
1.15
|
|
|
|
150,000
|
|
|
|
1.75
|
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Cancelled
or expired
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Options
outstanding, June 30, 2009
|
|
|
250,000
|
|
|
|
1.29
|
|
|
|
668,166
|
|
|
|
0.89
|
|
|
|
1,000,000
|
|
|
|
1.15
|
|
|
|
150,000
|
|
|
|
1.75
|
|
|
Options
exercisable June 30, 2009
|
|
|
222,500
|
|
|
|
1.29
|
|
|
|
522,333
|
|
|
|
1.65
|
|
|
|
756,666
|
|
|
|
1.04
|
|
|
|
100,000
|
|
|
|
1.75
|
|
|
Exercise
price range
|
|
|
|
|
|
|
|
|
|
|
$0.50
-
$4.00
|
|
|
|
|
|
|
|
$0.50 - $1.75
|
|
|
|
|
|
|
$
|
1.75
|
|
|
|
|
|
|
Weighted
average remaining life
|
|
3.5
years
|
|
|
|
|
|
|
5.10
years
|
|
|
|
|
|
|
8.70
years
|
|
|
|
|
|
|
8.23
years
|
|
|
|
|
|
For the
three month period ended June 30, 2009 the Company recognized $101,450 (2008 —
$88,425) in compensation expense in the consolidated statement of
operations
|
17.
|
COMMON STOCK WARRANTS AND OTHER
OPTIONS
|
As of
June 30, 2009, the Company has warrants to purchase the Company’s common stock
outstanding that were not granted under shareholder approved equity compensation
plans as follows:
|
|
|
Outstanding
Warrants
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Warrants
and options outstanding, March 31, 2009
|
|
|
10,638,305
|
|
|
$
|
1.58
|
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
Cancelled
or expired
|
|
|
—
|
|
|
|
—
|
|
|
Warrants
exercisable June 30, 2009
|
|
|
10,638,305
|
|
|
$
|
1.58
|
|
|
Exercise
price range
|
|
|
$1.20 to $3.00
|
|
|
|
|
|
|
Weighted
average remaining life
|
|
2.8 Years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the year ended March 31, 2009 the Company granted 3,378,379 warrants pursuant to
a Distribution Agreement (Note 4) which were valued at $4,323,207 based upon the
Black-Scholes option pricing model utilizing a market price on the date of grant
of $1.48 per share, an annualized volatility of 131%, a risk free interest rate
of 3.07% and an expected life of five years.
The
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
|
|
|
June 30, 2009
|
|
|
June 30, 2008
|
|
|
U.S.
sales
|
|
$
|
487,845
|
|
|
$
|
2,158,900
|
|
|
Foreign
sales
|
|
|
1,672,958
|
|
|
|
1,476,579
|
|
|
|
|
$
|
2,160,803
|
|
|
$
|
3,635,479
|
|
Real
Estate Lease
The
Company leases its 26,915 square feet office and warehouse facility in Deurle,
Belgium from an unrelated party pursuant to a nine year lease commencing
December 20, 2001 at a base rent of €7,266 per month ($10,222 per month at June
30, 2009).
The
Company leases a smaller office facility of 2,045 square feet in Gent, Belgium
to support the sales and marketing division of our veneer business, from an
unrelated party pursuant to a nine year lease commencing September 1, 2008 at a
base rent of €2,527 per month ($3,555 per month at June 30, 2009).
Minimum
monthly lease payments for real estate, and all other leased equipment are as
follows based upon the conversion rate for the (Euro) at June 30,
2009:
|
March
31, 2010
|
|
$
|
290,691
|
|
|
March
31, 2011
|
|
|
253,512
|
|
|
March
31, 2012
|
|
|
73,036
|
|
|
March
31, 2013
|
|
|
42,666
|
|
|
March
31, 2014
|
|
|
42,666
|
|
|
After
five years
|
|
|
159,998
|
|
|
Total:
|
|
$
|
862,569
|
|
OEM
Agreement
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
months from the date of the Agreement. The Company has the option and right to
extend the initial twelve month exclusivity period for another twelve months.
The term of the Agreement will be for two years and began on June 30,
2008.
Subsequent
events have been evaluated through August 14, 2009, the date these financial
statements were issued. No events required
disclosure.
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Forward Looking
Statements
The
discussion contained herein is for the three months ended June 30, 2009 and
2008. The following discussion should be read in conjunction with the Company’s
condensed consolidated financial statements and the notes to the condensed
consolidated financial statements included elsewhere in this Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2009. 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. Factors that could cause or
contribute to any differences are discussed in “Risk Factors” and elsewhere in
the Company’s annual report on Form 10-K filed on June 29, 2009 with the
Securities and Exchange Commission. Except as required by applicable
law or regulation, the Company undertakes no obligation to revise or update any
forward-looking statements contained in this Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2009. The information contained in this
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009 is
not a complete description of the Company’s business or the risks associated
with an investment in the Company’s common stock. Each reader should carefully
review and consider the various disclosures made by the Company in this
Quarterly Report on Form 10-Q and in the Company’s other filings with the
Securities and Exchange Commission.
Overview
We
specialize in the research, development, and manufacturing of oral care and
cosmetic dentistry products. We are one of the leading manufacturers
of cosmetic dentistry products in Europe. Leveraging our knowledge of
regulatory requirements regarding dental products and management’s experience in
the needs of the professional dental community, we design, develop, manufacture
and distribute our cosmetic dentistry products, including a full line of
professional dental products that are distributed in Europe, Asia and the United
States. We manufacture many of our products at our facility in
Deurle, Belgium as well as outsourced manufacturing in China. We
distribute our products using both our own internal sales force and through the
use of third party distributors.
Result
of Operations
Comparative
detail of results as a percentage of sales, is as follows:
|
|
|
For
the three months ended
|
|
|
|
|
June 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
NET
SALES
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
COST
OF SALES
|
|
|
50.72
|
%
|
|
|
34.92
|
%
|
|
GROSS
PROFIT
|
|
|
49.28
|
%
|
|
|
65.08
|
%
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
Research
and development
|
|
|
1.23
|
%
|
|
|
3.44
|
%
|
|
Sales
and marketing
|
|
|
16.24
|
%
|
|
|
18.47
|
%
|
|
General
and administrative
|
|
|
48.26
|
%
|
|
|
31.09
|
%
|
|
Depreciation
and amortization
|
|
|
8.03
|
%
|
|
|
2.51
|
%
|
|
TOTAL
OPERATING EXPENSES
|
|
|
73.76
|
%
|
|
|
55.50
|
%
|
|
INCOME
(LOSS) FROM OPERATIONS
|
|
|
(24.48
|
)%
|
|
|
9.58
|
%
|
|
Other
income (expense)
|
|
|
1.91
|
%
|
|
|
(0.49
|
)%
|
|
(LOSS)
INCOME
|
|
|
(22.57
|
)%
|
|
|
9.09
|
%
|
|
Non-controlling
interest
|
|
|
(2.86
|
)%
|
|
|
—
|
|
|
NET
INCOME (LOSS)
|
|
|
(25.43
|
)%
|
|
|
9.09
|
%
|
Net
Sales
We
experienced a sales decrease for the three months ended June 30, 2009 of
$1,474,676, or 40.6%, to $2,160,803 as compared to $3,635,479 for the three
months ended June 30, 2008. The decrease in sales was mainly due to the
non-recurrence of two exclusive license fees that were invoiced during the
quarter ending June 30, 2008. The exclusive license fees were for the
territories of the United States of America and the United Kingdom, and amounted
to $1,250,000. Also, during the quarter ended June 30, 2009, we experienced a
delay in the set up of our production facility, which resulted in reduced
sales.
Cost
of Sales
Our cost
of sales decreased for the three months ended June 30, 2009 by $173,417, or
13.7%, to $1,096,007 as compared to $1,269,424 for the three months ended June
30, 2008. Cost of sales, as a percentage of net sales, has increased to 50.7% in
the quarter ended June 30, 2009 as opposed to 34.9% in the quarter ended June
30, 2008. Cost of sales as a percentage of net sales has increased mainly
because June 30, 2008 net sales were higher than net sales for the period ended
June 30, 2009, as noted above.
We
continue to closely monitor and look for new strategies to optimize and improve
our current processes in order to decrease our costs.
Gross
Profit
Our gross
profit decreased by $1,301,259 or 55%, to $1,064,796 for the three month period
ended June 30, 2009 as compared to $2,366,055 for the three month period
ended June 30, 2008. Our gross profit as a percentage of sales decreased to
49.3% in the three months ended June 30, 2009 as compared to 65.1% for the three
months ended June 30, 2008. The decrease in gross profit is the result of
the licensee fees which where invoiced during last year’s quarter ending June
30, 2008, as noted above.
Operating
Expenses
Research and
Development
. Our research and development expenses decreased by
$98,350 to $26,598, 78.7%, for the three months ended June 30, 2009 as compared
to $124,948 for the three months ended June 30, 2008. The principal
reason for this decrease is that the new products, in which we invested in
R&D last year, are now products that are brought up to
new saleable products which are being sold currently.
Sales and marketing costs
. Our
sales and marketing costs decreased by $320,364 or 47.7%, to $350,935 for the
three months ended June 30, 2009 as compared to $671,299 for the three months
ended June 30, 2008. The decrease is largely due to the Company’s USA sales
reorganization. Rather than funding a direct sales office in the USA,
the Company has chosen to sell into the USA via a distributor, thereby enabling
a significant reduction in sales and marketing costs.
General and administrative
costs
. Our general and administrative costs for the three months
ended June 30, 2009 and 2008 were $1,042,764 and $1,130,313, respectively,
representing a decrease of $87,549 or 7.7%. The Company’s general and
administrative costs have also decreased as a result of the Company’s USA sales
reorganization, as noted above.
Depreciation and amortization
.
Our depreciation and amortization increased $82,183 or 90.1%, to $173,444 for
the three months ended June 30, 2009 as compared to $91,261 for the three months
ended June 30, 2008. The increase is mostly due to the investment in
a semi-automatic production machine for the production of our foam strips, which
will allow us to significantly increase our production capacity. This investment
allowed us to streamline and improve production significantly with resultant
increases in capacity and quality as well as decreased costs. Secondly,
investments are being made in software and related hardware to bring the design
of veneers to the next level which will allow the dentist to modify the design
of the final product, gaining substantial time in the production
process.
Other
income (expense). Our other income (expense)
was
$41,351 for the three months ended June 30, 2009 as compared to ($17,723) for
the three months ended June 30, 2008, a decrease of $59,074, or 333%. Interest
expense has decreased primarily because of decreased utilization of our
available bank credit line, offset by interest revenue earned on outstanding
bank balances.
Liquidity and Capital
Resources
Liquidity
We
believe we currently possess sufficient resources to meet the cash requirements
of our operations for at least the next year. Our basis for this is the
following.
|
|
·
|
During
December 2008, we implemented cost reduction measures, including the
reorganisation of our direct sales office in the United States of
America.
|
|
|
·
|
During
December 2008, we restructured our over-the-counter
business
|
|
|
·
|
During
August 2008, and as amended during June 2009, we entered into distribution
agreements. As a result of these developments, we have begun
the process of reducing our operations in the United States, thereby
enabling considerable cost savings.
|
|
|
·
|
We
continue to review our inventory and plan to reduce the
levels.
|
|
|
·
|
We
do not expect to purchase or sell any property or equipment over the next
12 months.
|
|
|
·
|
We
do not expect a significant change in the number of our
employees over the next 12
months.
|
We
believe that we will have sufficient resources to meet our obligations and
sustain our operations for the remainder of fiscal year
2010. However, we are substantially dependent on our major
distributor and the continued performance of this distributor to make committed
purchases of our products and associated consumables under the distribution
agreement and the receipt of cash in connection with those purchases, is
essential to our liquidity.
During
the past three months, the balance on our line of credit has increased by
$816,940, from $660,200 at March 31, 2009 to $1,477,140 at June 30,
2009. The increase in our use of the line of credit is
approximately equal to the decrease in our accounts payable and the
combined increase in our accounts receivable and inventories. At June
30, 2009 we believe we have approximately $1,522,860 available under our line of
credit. We believe that the combination of the above factors,
the availability of the balance of our line of credit and our effective
management of our use of cash will minimize our requirement to seek additional
financing. However, in the event that we are required to seek
additional funding through public or private equity or debt, there can be no
assurance that we will be able to obtain requisite financing to fund existing
obligations and operating requirements on acceptable terms or at
all.
Cash
and Cash equivalents
Our
balance sheet at June 30, 2009 reflects cash and cash equivalents of $1,598,294
as compared to $1,807,271 as of March 31, 2009, a decrease of $208,977. The
decrease of cash and cash equivalents is primarily as a result of the payment of
accrued liabilities, increased accounts receivable and
inventories.
Operations
Net cash
used by operations was $997,567 for the three months ended June 30, 2009 as
compared to net cash used by operations of $142,152 for the three months ended
June 30, 2008. The increase in net cash used by operations for the three months
ended June 30, 2009 as compared to the three months ended June 30, 2008 is
primarily as a result of net operating loss for the period, a reduction of
accrued liabilities of $603,000, and increases in inventory and accounts
receivable.
Investing activities
Net cash
used in investing activities totalled $68,144 for the three months ended June
30, 2009 as compared to net cash used in investing activities of $205,002 for
the three months ended June 30, 2008. Cash used in the three months ended June
30, 2009 was mainly for machinery and related software to support our
increasing number of veneer designers.
Cash used
in investing activities in the three months ended June 30, 2008 was mainly for
equipment to be used in the production process of Veneers, additional hardware
equipment in relation to support our GlamSmile product line in combination with
our new designed software, enabling the dentist to interfere in the production
process, investments made for moldings concerning the GlamSmile product group
and moldings for new OTC products.
Financing activities
Net cash
provided by financing activities totaled $797,556 for the three months ended
June 30, 2009, as compared to $116,897 for the three months ended June 30,
2008. Net cash provided by financing activities in the three month
period ended June 30, 2009 was higher than in the three months ended June 30,
2008 because of increased use of our credit line.
During
the three months ended June 30, 2009 and June 30, 2008, we recognized an
increase in cash and cash equivalents of $59,178 and $52,279, respectively, from
the effect of exchange rates between the Euro and the US Dollar.
Off-Balance Sheet
Arrangements
At June
30, 2009, we did not have any transactions, obligations or relationships that
could be considered off-balance sheet arrangements.
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
Not
Applicable.
Item
4T. Controls and Procedures
Disclosure
Controls and Procedures
We maintain disclosure controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), is recorded, processed, summarized, and reported within the
required time periods and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and our Chief Financial
Officer (our Principal Accounting Officer), as appropriate, to allow for timely
decisions regarding required disclosure. In designing and evaluating
the disclosure controls and procedures, management recognizes that any controls
and procedures, no matter how well designed and operated, can only provide
reasonable assurance of achieving the desired control objective, and management
is required to exercise its judgment in evaluating the cost-benefit relationship
of possible controls and procedures.
Management conducted an evaluation,
under the supervision and with the participation of the Chief Executive Officer
and the Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as of June 30,
2009. Based on this evaluation, the Chief Executive Officer and the
Chief Financial Officer have concluded that our disclosure controls and
procedures were effective as of June 30, 2009.
Changes
in Internal Control Over Financial Reporting
There have been no material changes in
our internal controls over financial reporting identified in
connection with the evaluation of disclosure controls and procedures discussed
above that occurred during the quarter ended June 30, 2009 or subsequent to that
date that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings
To the best knowledge of management,
there are no material legal proceedings pending against the
Company.
Item
1A. Risk Factors
Not
Applicable.
Item
2.
Unregistered Sales of Equity Securities and Use of
Proceeds
None.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Submission Of Matters To A Vote Of Security Holders
No
matters were submitted to a vote of security holders during the quarter ended
June 30, 2009.
Item
5. Other Information
On August 14, 2009, we
issued a press release reporting our financial results for the first quarter
ended June 30, 2009. A copy of the press release is attached hereto
as Exhibit 99.1 and incorporated herein by reference.
On August 6, 2009, we issued a press
release announcing a conference call to discuss results for our first quarter
ended June 30, 2009, on Friday, August 14, 2009.
A copy of the press
release is attached hereto as Exhibit 99.2 and incorporated herein by
reference.
Item
6. Exhibits
EXHIBIT
INDEX
|
Exhibit No
|
|
Description
|
|
2.1
|
|
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)
|
|
Exhibit No
|
|
Description
|
|
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)
|
|
|
|
|
|
10.1
|
|
Amended
and Restated Distribution, License and Manufacturing Agreement dated June
3, 2009 by and among Remedent, Inc., Remedent N.V. and Den-Mat Holdings,
LLC(3)
|
|
|
|
|
|
10.2
|
|
First
Fit-Crown Distribution and License Agreement dated June 3, 2009 by and
among Remedent, Inc., Remedent N.V. and Den-Mat Holdings,
LLC(3)
|
|
|
|
|
|
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.*
|
|
|
|
|
|
99.1
|
|
Press Release dated August 14,
2009 announcing financial results for the first
quarter ended June 30, 2009*
|
|
|
|
|
|
99.2
|
|
Press Release dated August 6, 2009
announcing conference call for Friday, August 14,
2009*
|
|
(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-K filed with the SEC on June 29,
2009
|
The information set forth under Item 5
of this Form 10-Q and Exhibits 99.1 and 99.2 attached hereto are furnished and
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, and shall not be deemed incorporated by reference in any
filing with the Securities and Exchange Commission under the Securities Exchange
Act of 1934 or the Securities Act of 1933, whether made before or after the date
hereof and irrespective of any general incorporation by reference language in
any filing.
Portions of this report constitute
“forward-looking statements” defined by federal law. Although the
Company believes any such statements are based on reasonable assumptions, there
is no assurance that the actual outcomes will not be materially different. Any
such statements are made in reliance on the “safe harbor” protections provided
under the Private Securities Litigation Reform Act of 1995. Additional
information about issues that could lead to material changes in the Company’s
performance is contained in the Company’s filings with the Securities and
Exchange Commission and may be accessed at www.sec.gov.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
|
REMEDENT,
INC.
|
|
|
|
|
Date: August
14, 2009
|
By:
|
/s/
Guy De Vreese
|
|
|
|
Name: Guy
De Vreese
|
|
|
|
Title: Chief
Executive Officer
(Principal
Executive Officer)
|
|
|
|
|
Date: August
14, 2009
|
By:
|
/s/
Stephen Ross
|
|
|
|
Name: Stephen
Ross
|
|
|
|
Title: Chief
Financial Officer
(Principal
Accounting Officer)
|
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