Forward Looking Statements





The discussion contained herein is for the three and nine months ended December
31, 2019 and December 31, 2018. The following discussion should be read in
conjunction with the Company's consolidated financial statements and the notes
to the consolidated financial statements included elsewhere in this Quarterly
Report on Form 10-Q for the quarterly period ended December 31, 2019. 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 28, 2019
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 December 31, 2019. The information contained in this
Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2019
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 distribute our products using both our own internal sales force and
through the use of third party distributors.



Results of Operations

Comparative detail of results as a percentage of sales is as follows:





                                           For the three months ended             For the nine months ended
                                                  December 31,                           December 31,
                                            2019                 2018              2019                2018
NET SALES                                      100.00 %            100.00 %          100.00 %            100.00 %
COST OF SALES                                   36.08 %             34.71 %           29.41 %             30.64 %
GROSS PROFIT                                    63.92 %             65.29 %           70.59 %             69.36 %
OPERATING EXPENSES
Research and development                         0.00 %              0.00 %            0.00 %              0.01 %
Sales and marketing                             36.20 %             47.93 %           36.26 %             44.70 %
General and administrative                      68.27 %             64.44 %           62.39 %             59.43 %

Depreciation and amortization                    6.39 %              5.96 %            7.16 %              6.19 %
TOTAL OPERATING EXPENSES                       110.86 %            118.32 %          105.81 %            110.34 %
INCOME (LOSS) FROM OPERATIONS                  (46.94 )%           (53.03 )%         (35.22 )%           (40.97 )%
Other income (expense)                         (14.72 )%             4.91 %          (25.79 )%             4.20 %
INCOME (LOSS) BEFORE INCOME TAXES              (61.66 )%           (48.12 )%         (61.00 )%           (36.77 )%
Income taxes                                    (0.64 )%            (0.21 )%          (0.21 )%            (0.07 )%
NET (LOSS) INCOME                              (62.30 )%           (48.33 )%         (61.21 )%           (36.84 )%
NET INCOME (LOSS) ATTRIBUTABLE TO
NON-CONTROLLING INTEREST                        (5.63 )%            (3.56 )%           0.11 %             (1.62 )%
NET INCOME (LOSS) ATTRIBUTABLE TO
REMEDENT INC. COMMON SHAREHOLDERS              (56.67 )%           (44.77 )%         (61.33 )%           (35.23 )%




                                       17





Net Sales




Net sales decreased by approximately 32.1% to $262,077 for the three months
ended December 31, 2019 as compared to $419,326 for the three months ended
December 31, 2018. The decrease in sales is primarily due to the operational
change in our GlamSmile division. We are now receiving a royalty payment from
our Belgium customers based on quarterly production, rather than invoicing on a
finished good basis, thereby providing our customers with more flexibility and
ensuring we are paid on a timely basis for each veneer produced. The decrease in
sales is also partially due to the reduced sales of our Condor 3D Scanner in the
North American market. In anticipation of our additional tool for the Condor 3D
Scanner, which will be an easy-to-use addition (with none to minimum additional
user training required) to the already existing Condor 3D Scanner and which will
be available by the year-end, we reduced our active approach in the US market.



Net sales decreased by approximately 37.5% to $814,111 for the nine months ended
December 31, 2019 as compared to $1,199,814 for the nine months ended December
31, 2018.  Net sales decreased in the nine months ended December 31, 2019 for
the same reason as the three month variance.



Cost of Sales




Cost of sales decreased approximately 34.9% to $94,562 for the three months
ended December 31, 2019 as compared to $145,536 or the three months ended
December 31, 2018. The decrease in cost of sales is primarily due to the
operational change in our GlamSmile division as we changed our profit model for
the Belgium customers to royalty income, resulting in decreased cost of sales.
Also, the reduced sales of our Condor 3D Scanner (in anticipation of the launch
of our additional tool, the "Condor Flash") has also decreased our cost of
sales. Cost of sales, as a percentage of net sales, has increased to 36.08% in
the quarter ended December 31, 2019 as compared to 34.71% in the quarter ended
December 31 2018.




Cost of sales decreased approximately 35.0% to $239,432 for the nine months
ended December 31, 2019 as compared to $367,606 for the nine months ended
December 31, 2018. Cost of sales, as a percentage of net sales, has decreased to
29.41% in the nine months ended December 31, 2019, as compared to 30.64% in the
nine months ended December 31, 2018 mainly because of decreased sales.



Gross Profit



Our gross profit decreased by $106,275 or 30.9% to $167,515 for the three months
ended December 31, 2019 as compared to $273,790 for the three months ended
December 31, 2018 due to the reduced sales described above. Our gross profit as
a percentage of sales decreased to 63.92% in the three months ended December 31,
2019 as compared to 65.29% for the three months ended December 31, 2018.

Our gross profit decreased by $257,529 or 30.9%, to $574,679 for the nine months ended December 31, 2019 as compared to $832,208 for the nine months ended December 31, 2018 primarily because of decreased sales.





Operating Expenses



Research and Development.



Our research and development costs were $Nil for each of the nine months ended
December 31, 2019 and 2018 reflecting our current focus on sales and marketing
efforts combined with cost cutting efforts.



Sales and marketing costs. Our sales and marketing costs for the three months
ended December 31, 2019 and 2018 were $94,867 and $200,981 respectively,
representing a decrease of $106,114 or 52.8%. The decrease is largely due to
decreased attendance at trade shows and reduced travelling due to our reduced
active approach in the US market.



Our sales and marketing costs decreased by $241,188 or 45.0% to $295,165 for the
nine months ended December 31, 2019 as compared to $536,353 for the nine months
ended December 31, 2018 mainly because of our reduced advertising and marketing
costs in reference to the new and additional Condor 3D Scanner tool.



General and administrative costs. Our general and administrative costs for the
three months ended December 31, 2019 and 2018 were $178,919 and $270,204
respectively, representing a decrease of $91,285 or 33.8%. Our general and
administrative costs for the nine months ended December 31, 2019 and 2018 were
$507,914 and $713,025 respectively, representing a decrease of $205,111 or
28.8%. The decrease in general and administration costs is largely due to
increased synergy between our internal divisions as a result of ongoing internal
reorganization.



Depreciation and amortization.  Our depreciation and amortization was $16,745
for the three months ended December 31, 2019 as compared to $24,982 for the
three months ended December 31, 2018.  Our depreciation and amortization was
$58,314 for the nine months ended December 31, 2019 versus $74,317 for the nine
months ended December 31, 2018.



Other income.  Our net other income / (loss) was ($38,583) for the three months
ended December 31, 2019 as compared to $20,581 for the three months ended
December 31, 2018, a decrease in other income of $59,164.  The decrease in other
income was primarily because of decreased equity income from our investments.
Our net other income / (loss) decreased by $260,350 to (209,933) for the nine
months ended December 31, 2019 as compared to $50,417 for the nine months ended
December 31, 2018, for the same reason as the three month variance.

Internal and External Sources of Liquidity





As of December 31, 2019, we had current assets of $768,214 compared to $655,933
at March 31, 2019. The increase of $11,281 was due to an increase in cash of
$35,010, increase in accounts receivable of $129,649, and an increase in
inventories of $8,180, offset by a decrease in prepaid expense and other current
assets of $60,558.



                                       18





As of December 31, 2019, we had cash of $101,549. We anticipate that we will
need to raise additional funds to satisfy our working capital requirements and
implement our business strategy to expand our direct to consumer business model.
We intend to continue to look for opportunities to expand the number of
GlamSmile Studios in Europe. We will continue to review our expected cash
requirements, make all efforts to collect any aged receivables, and take
appropriate cost reduction measures to ensure that we have sufficient working
capital to fund our operations. In the event additional needs for cash arise,
we may seek to raise additional funds from a combination of sources including
issuance of debt or equity securities. Additional financing may not be available
on terms favorable to us, or at all. Any additional financing activity could be
dilutive to our current stockholders. If adequate funds are not available or are
not available on acceptable terms, our ability to take advantage of
unanticipated opportunities or respond to competitive pressures could be
limited.



Cash and Cash equivalents

Our balance sheet at December 31, 2019 reflects cash of $101,549 as compared to $66,539 as of March 31, 2019, an increase of $35,010.





Operations



Net cash provided by operations was $35,093 for the nine months ended December
31, 2019 as compared to net cash used by operations of $21,948 for the nine
months ended December 31, 2018. The decrease of $57,041 in net cash used by
operations for the nine months ended December 31, 2019 as compared to the nine
months ended December 31, 2018 is primarily because of net positive cash flows
from our working capital assets.



Investing activities



Net cash used in investing activities totaled $nil for the nine months ended
December 31, 2019 as compared to net cash used by investing activities of $Nil
for the nine months ended December 31, 2018.



Financing activities

During the nine months ended December 31, 2019 and December 31, 2018, we recognized a (decrease) in cash and cash equivalents of $(83) and $12,561, respectively, from the effect of exchange rates between the Euro and the US Dollar.

Off-Balance Sheet Arrangements

At December 31, 2019, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

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