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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Elysee Development Corp (PK) | USOTC:ASXSF | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.04154 | 21.12% | 0.23824 | 0.193 | 0.3345 | 0.23824 | 0.23824 | 0.23824 | 1,106 | 21:00:35 |
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada | 86-0837251 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification Number) | |
Zuiderlaan 1-3, bus 8, 9000 Gent, Belgium | N/A | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | þ | |
(Do not check if a smaller reporting company) |
|
|
PART I
|
|
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ITEM 1.
|
|
BUSINESS
|
|
1
|
ITEM 1A.
|
|
RISK FACTORS
|
|
12
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ITEM 1B.
|
|
UNRESOLVED STAFF COMMENTS
|
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21
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ITEM 2.
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PROPERTIES
|
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21
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ITEM 3.
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LEGAL PROCEEDINGS
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21
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ITEM 4.
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[RESERVED AND REMOVED]
|
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21
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|
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PART II
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|
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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22
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ITEM 6.
|
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SELECTED FINANCIAL DATA
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23
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ITEM 7.
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|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
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24
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ITEM 7A.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
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36
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ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
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36
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ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
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36
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ITEM 9A
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CONTROLS AND PROCEDURES.
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36
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ITEM 9B.
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OTHER INFORMATION
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37
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PART III
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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37
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ITEM 11.
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EXECUTIVE COMPENSATION
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41
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
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42
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
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44
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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46
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PART IV
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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47
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SIGNATURES
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48
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⋅ | Remewhite in Office Whitening System . One of our first dental products that we developed for the professional dental community was the RemeCure plasma curing light (described below). Leveraging on our early success with the RemeCure light, we introduced the RemeWhite In Office Whitening System. Based upon the initial RemeCure light, a new light, called the RemeCure CL-15, was developed featuring new enhancements to the hardware and software enabling this light to be fully automated thereby eliminating the need for the dentist to hold the light during whitening treatments. In addition, a proprietary gel was formulated to be used with the system as well as a time saving method to apply the gel. |
⋅ | Remewhite Home Maintenance Kit . In 2004, the RemeWhite Home Maintenance Kit was introduced and sold by dentists to their patients, featuring 16 pre-filled trays with a level of whitening agent safe for home use yet stronger than most OTC products. |
⋅ | Metatray . In August 2005, we introduced MetaTray®, our next generation of products targeted for the professional dentist market. The MetaTray kit consists of a proprietary, reusable mouthpiece that has embedded in the mouthpiece both a heating element and an electroluminescent mesh that are powered by a rechargeable 9 volt power source providing heat and light similar to that which is delivered to the teeth by conventional dental lights. The system also introduced a proprietary foam strip that is unique in the manner in which it releases peroxide to the tooth surface without dripping or running. |
⋅ | RemeCure. The RemeCure plasma curing light uses plasma arc technology instead of LED and laser technology which provides high-energy power over the complete spectrum. |
⋅ | FirstFit. We developed the FirstFit System, a proprietary, patent-pending system for the creation and placement of dental bridges and crowns. Effective as of March 29, 2010 the intellectual property used and related to FirstFit product was sold to Den-Mat Holdings LLC (“Den-Mat”). |
⋅ | Remewhite Formulation+ by GlamSmile. Formulation+ was the first available in-office power whitening gel featuring Remedent’s proprietary CRM-Technology. The Continuous Release Matrix assures a prolonged and continuous release of Hydrogen Peroxide throughout the entire session, thus improving the exposure time of the whitening agent to the enamel. Still today Formulation+ for in-office use by dentists is one of the top products giving consumers whitening results up to 10 shades whiter without sensitivity. |
⋅ | WHITE Boost & WHITE Finishing . Other than Formulation+, Remedent created and sells the White Boost & White Finishing through dentists for home use. It is an oxygen-induced whitening system using a revolutionary and comfortable tray and 2 thin, flexible foam strips impregnated with super tooth whitening gel. The foam strips’ unique formula guarantees a steady release of oxygen that first triggers and then speeds up the whitening process. Our ergonomic delivery tray means ease-of-use and superb whitening results in just 10 minutes. |
• | no local anesthesia is required to prepare the teeth; |
• | reduced (if any) tooth sensitivity post-procedure; and |
• | the process is reversible. |
⋅ | Beijing Glamsmile Studio . Through Glamsmile Asia and its subsidiaries we opened a GlamSmile clinic in Beijing, China, during the third calendar quarter of 2009. The Beijing GlamSmile clinic was the first dental spa to offer pain free cosmetic dentistry in Beijing. |
⋅ | Hong Kong Dental Spa . In April 2010, through GlamSmile Asia Ltd. we expanded our business to consumer model in the Asian market by opening a dental spa in Hong Kong. |
⋅ | Munich, Germany Glamsmile Studio . In October 2010, through GlamSmile Deutschland GmbH a studio in Munich, Germany was opened. |
⋅ | Shanghai Studio . In February 2011, we opened the Shanghai Studio through GlamSmile Asia. |
⋅ | Rome, Italian Glamsmile Studio . In June 2011, through GlamSmile Rome SRL a studio in Rome, Italy was opened. |
⋅ | Wenzhou Studio . In February 2012, we opened the Wenzhou Studio through GlamSmile Asia. |
⋅ | Guangzhou Studio. Planned to open in October 2013; the third largest city in Mainland China, with a population of 13 million. |
⋅ | Owned Centers. These are centers in which the Company will own, control and/or manage all aspects of the operation including the facilities, equipment, personnel, marketing, insurance risk and other operating costs and will either employ or contract with dentists to perform the necessary dental services. In China, we will continue to principally rely on our owned and operated dental GlamSmile clinics or centers. |
⋅ | Licensed Centers . In many markets we will seek to identify and recruit cosmetic dentists that have existing practices and who endorse the GlamSmile veneer products. In these markets, we will contract with dental practices and the Company will recognize revenue through the sale of veneer trays plus marketing and other service fees to be charged to the dentist for services performed by the Company. |
⋅ | Distributors . In markets where we lack the expertise with respect to managing marketing and where local regulation and/or custom may make it impractical to deploy an owned or licensed center approach we will look to appoint distributors who will be granted exclusive rights to market and distribute our GlamSmile products directly to consumers subject to minimum performance criteria and/or initial territory fees. In this model the distributor will be expected to invest in all marketing and sales conversion costs in their market. Our revenues will be derived principally from sales of our GlamSmile veneer products to the distributor. |
• | 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. |
• | We are unable to control the resources our corporate partners devote to our programs or products; |
• | disagreements with our corporate partners could cause delays in, or termination of, the research, development or commercialization of product candidates or result in litigation or arbitration; |
• | contracts with our corporate partners may fail to provide significant protection or may fail to be effectively enforced if one of these partners fails to perform; |
• | our corporate partners with marketing rights may choose to pursue competing technologies or to devote fewer resources to the marketing of our products; and |
• | our distributors and our corporate partners may be unable to pay us, particularly in light of current economic conditions. |
• | 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. |
• | 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. |
• | 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. |
|
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Bid Prices
|
|
||||
|
|
High
|
|
Low
|
|
||
Quarter ended June 30, 2011
|
|
$
|
0.47
|
|
$
|
0.32
|
|
Quarter ended September 30, 2011
|
|
$
|
0.45
|
|
$
|
0.19
|
|
Quarter ended December 31, 2011
|
|
$
|
0.30
|
|
$
|
0.18
|
|
Quarter ended March 31, 2012
|
|
$
|
0.50
|
|
$
|
0.16
|
|
Quarter ended June 30, 2012
|
|
$
|
0.50
|
|
$
|
0.25
|
|
Quarter ended September 30, 2012
|
|
$
|
0.27
|
|
$
|
0.19
|
|
Quarter ended December 31, 2012
|
|
$
|
0.24
|
|
$
|
0.10
|
|
Quarter ended March 31, 2013
|
|
$
|
0.14
|
|
$
|
0.10
|
|
|
|
2001 Plan
|
|
2004 Plan
|
|
2007 Plan
|
|
Other
|
|
||||||||||||||||
|
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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, 2011
|
|
|
250,000
|
|
|
1.20
|
|
|
557,500
|
|
|
0.89
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Cancelled or expired
|
|
|
(237,500)
|
|
|
|
|
|
(25,000)
|
|
|
4.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, March 31, 2012
|
|
|
12,500
|
|
|
1.20
|
|
|
532,500
|
|
|
0.96
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Options expired
|
|
|
|
|
|
|
|
|
(100,000)
|
|
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, March 31, 2013
|
|
|
12,500
|
|
|
1.20
|
|
|
432,500
|
|
|
0.84
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Options exercisable March 31, 2013
|
|
|
12,500
|
|
|
1.20
|
|
|
432,500
|
|
|
0.96
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Exercise price range
|
|
$
|
2.00
|
|
|
|
|
$
|
0.50 - $2.46
|
|
|
|
|
$
|
0.50 - $1.75
|
|
|
|
|
$
|
0.39 - 1.75
|
|
|
|
|
Weighted average remaining life
|
|
|
1 years
|
|
|
|
|
|
5.28 years
|
|
|
|
|
|
5.12 years
|
|
|
|
|
|
3.6 years
|
|
|
|
|
Plan Category
|
|
Number of
securities to be issued upon exercise of of outstanding options, warrants and rights |
|
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
|
|
|
1,445,000
|
|
$
|
1.17
|
|
|
605,000
|
|
Equity Compensation Plans not approved by security holders
|
|
|
820,000
|
|
$
|
0.97
|
|
|
NA
|
|
Total
|
|
|
2,265,000
|
|
$
|
1.10
|
|
|
605,000
|
|
⋅ | Both (a) & (b) have value to our customers on a standalone basis and can be sold by our customers separately. |
⋅ | Delivery or performance of the undelivered item or items is considered probable and substantially in our control. |
Tooling
|
3 Years
|
Furniture and fixtures
|
4 Years
|
Machinery and Equipment
|
4 Years
|
|
|
Year ended
March 31, 2013 |
|
Year ended
March 31, 2012 |
|
||
Product warranty liability:
|
|
|
|
|
|
|
|
Opening balance
|
|
$
|
20,019
|
|
$
|
21,260
|
|
Accruals for product warranties issued in the period
|
|
|
(973)
|
|
|
(2,002)
|
|
Adjustments to liabilities for pre-existing warranties
|
|
|
255
|
|
|
761
|
|
Ending liability
|
|
$
|
19,301
|
|
$
|
20,019
|
|
|
|
2013
|
|
|
2012
|
|
||
NET SALES
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
COST OF SALES
|
|
|
48.80
|
%
|
|
|
23.00
|
%
|
GROSS PROFIT
|
|
|
51.20
|
%
|
|
|
77.00
|
%
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
2.04
|
%
|
|
|
3.70
|
%
|
Sales and marketing
|
|
|
26.88
|
%
|
|
|
22.40
|
%
|
General and administrative
|
|
|
73.34
|
%
|
|
|
41.08
|
%
|
Depreciation and amortization
|
|
|
10.69
|
%
|
|
|
5.84
|
%
|
TOTAL OPERATING EXPENSES
|
|
|
112.95
|
%
|
|
|
99.32
|
%
|
(LOSS) INCOME FROM OPERATIONS
|
|
|
(61.75)
|
%
|
|
|
(5.19)
|
%
|
Other income (expense)
|
|
|
28.33
|
%
|
|
|
21.84
|
%
|
INCOME (LOSS) BEFORE INCOME TAXES & NON-CONTROLLING INTEREST
|
|
|
(33.42)
|
%
|
|
|
16.66
|
%
|
Income tax expense
|
|
|
(0.01)
|
%
|
|
|
(3.25)
|
%
|
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST
|
|
|
(33.43)
|
%
|
|
|
13.40
|
%
|
NON-CONTROLLING INTEREST
|
|
|
|
%
|
|
|
8.34
|
%
|
NET INCOME (LOSS)
|
|
|
(33.43)
|
%
|
|
|
5.06
|
%
|
(a) | Evaluation of Disclosure Controls and Procedures |
(b) | Management’s Report on Internal Control over Financial Reporting |
Person | Age | Position | ||
Guy De Vreese | 58 | Chairman, Chief Executive Officer | ||
Fred Kolsteeg | 70 | Director | ||
Philippe Van Acker | 48 | Director, Chief Financial Officer and Chief Accounting Officer |
Name and
Principal Position (a) |
|
Year
(b) |
|
Salary
($) (c) |
|
Bonus
($) (d) |
|
Stock
Awards ($) (e) |
|
Option
Awards ($) (f) |
|
Non-Equity
Incentive Plan Compensation ($) (g) |
|
Nonqualified
Deferred Compensation Earnings ($) (h) |
|
All Other
Compensation ($) (i) |
|
|
Total
($) (j) |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guy De Vreese,
|
|
2013
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
324,692
|
(1)
|
|
$
|
324,692
|
(1)
|
CEO and Chairman
|
|
2012
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
348,299
|
(1)
|
|
$
|
348,249
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Van Acker,
|
|
2013
|
|
$
|
175,783
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
|
$
|
175,783
|
|
Chief Accounting Officer, Director
|
|
2012
|
|
$
|
189,403
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
|
$
|
189,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Ross
|
|
2013
|
|
$
|
45,000
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
|
$
|
45,000
|
|
Former CFO & Director
|
|
2012
|
|
$
|
120,000
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
$
|
-0-
|
|
|
$
|
120,000
|
|
(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. |
Name
(a) |
|
Number of
Securities Underlying Unexercised Options (#) Exercisable (b) |
|
Number of
Securities Underlying Unexercised Options (#) Unexercisable (c) |
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) |
|
Option
Exercise Price ($) (e) |
|
Option
Expiration Date (f) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guy De Vreese
|
|
|
100,000
|
|
|
-0-
|
|
|
|
|
$
|
1.75
|
|
20-Sept-2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe Van Acker
|
|
|
75,000
|
|
|
-0-
|
|
|
|
|
$
|
2.46
|
|
23-Dec-2015
|
|
Philippe Van Acker
|
|
|
50,000
|
|
|
-0-
|
|
|
|
|
$
|
1.75
|
|
20-Sept-2017
|
|
Philippe Van Acker
|
|
|
100,000
|
|
|
-0-
|
|
|
|
|
$
|
0.50
|
|
19-Mar-2019
|
|
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; and |
d. | our executive officers, directors and director nominees as a group. |
Name of Beneficial Owner (1)
|
|
Shares
Beneficially Owned |
|
Percentage
Beneficially Owned |
|
||
|
|
|
|
|
|
|
|
Guy De Vreese, CEO, Chairman (2)
|
|
|
|
|
|
|
|
Xavier de Cocklaan 42
|
|
|
|
|
|
|
|
9831 Deurle, Belgium
|
|
|
4,733,680
|
|
|
23.67
|
%
|
|
|
|
|
|
|
|
|
Philippe Van Acker, Chief Financial Officer, Chief Accounting Officer, Director (3)
|
|
|
|
|
|
|
|
Xavier de Cocklaan 42
|
|
|
|
|
|
|
|
9831 Deurle, Belgium
|
|
|
225,000
|
|
|
1.13
|
%
|
|
|
|
|
|
|
|
|
Stephen Ross, former CFO, Secretary, Director (4)
|
|
|
|
|
|
|
|
1921 Malcolm #101
|
|
|
|
|
|
|
|
Los Angeles, CA 90025
|
|
|
576,327
|
|
|
2.88
|
%
|
|
|
|
|
|
|
|
|
Fred Kolsteeg, Director (5)
|
|
|
|
|
|
|
|
Managelaantje 10
|
|
|
|
|
|
|
|
3062 CV Rotterdam
|
|
|
|
|
|
|
|
The Netherlands
|
|
|
295,000
|
|
|
1.48
|
%
|
|
|
|
|
|
|
|
|
All Officers and Directors as a Group (4 persons)
|
|
|
5,945,007
|
|
|
29.16
|
%
|
|
|
|
|
|
|
|
|
5% or Greater Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Austin W. Marxe and David M. Greenhouse (6)
|
|
|
|
|
|
|
|
153 East 53rd Street, 55th Floor
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
4,520,933
|
|
|
22.61
|
%
|
|
|
|
|
|
|
|
|
Den-Mat Holdings, LLC (7)
|
|
|
|
|
|
|
|
2727 Skyway Drive
|
|
|
|
|
|
|
|
Santa Maria, CA 93455
|
|
|
3,378,379
|
|
|
14.45
|
%
|
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 3,304,426 shares in his own name, which such amount includes 100,000 shares of common stock underlying options which vested on September 17, 2007 and have an exercise price of $1.75 per share; 72,787 shares of common stock held in the name of Lausha N.V., a Belgian company controlled by Guy De Vreese; 6,467 shares of common stock held in the name of Lident N.V., a Belgian company controlled by Guy De Vreese; and 1,400,000 shares of common stock held in the name of Lausha HK, a Hong Kong company controlled by Guy De Vreese. |
3. | Includes 75,000 shares of common stock underlying options which vested on December 2005 and have an exercise price of $2.46 per share; 50,000 shares of common stock underlying options which have vested as of September 17, 2009 and have an exercise price of $1.75 per share; and 100,000 shares of common stock underlying options which were fully vested on March 19, 2009 and have an exercise price of $0.50 per share. |
4. | Includes 12,500 shares of common stock underlying options which vested on April 8, 2004 and have an exercise price of $2.00 per share; and 100,000 shares of common stock underlying options which were fully vested on March 19, 2009 and have an exercise price of $0.50 per share. |
5. | Includes 200,000 shares of common stock underlying options which were fully vested on March 19, 2009 and have an exercise price of $0.50 per share. |
6. | Austin W. Marxe (Marxe) and David M. Greenhouse (Greenhouse) share voting and investment control over all securities owned by Special Situations Fund III QP, L.P. (QP), Special Situations Cayman Fund, L.P. (CAY) and Special Situations Private Equity Fund, LP (PE). 541,075 shares of Common Stock are owned by QP, 960,075 shares of Common Stock are owned by CAY and 3,019,783 shares of Common Stock are owned by PE. The interest of Marxe and Greenhouse in the shares of Common Stock owned by QP, CAY and PE is limited to the extent of his pecuniary interest. |
7.. | Consists of warrants to purchase 3,378,379 shares of common stock. |
|
|
2013
|
|
2012
|
|
||
Audit Fees
|
|
$
|
53,473
|
|
$
|
78,128
|
|
Audit Related Fees
|
|
$
|
7,614
|
|
$
|
12,074
|
|
Tax Fees
|
|
$
|
2,213
|
|
$
|
1,824
|
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
$
|
-
|
|
$
|
-
|
|
REMEDENT, INC. | |
Dated: July 15, 2013 | /s/ Guy De Vreese |
By: Guy De Vreese | |
Its: Chief Executive Officer (Principal Executive | |
Officer) | |
Dated: July 15, 2013 | /s/ Philippe Van Acker |
By: Philippe Van Acker | |
Its: Chief Financial Officer (Principal Financial | |
Officer and Principal Accounting Officer) |
Dated: July 15, 2013 | /s/ Guy De Vreese |
Guy De Vreese, Chairman of the Board of Directors, and | |
Chief Executive Officer (“Principal Executive Officer”) | |
Dated: July 15, 2013 | /s/ Philippe Van Acker |
Philippe Van Acker, Director and Chief Financial | |
Officer (Principal Financial Officer and | |
Principal Accounting Officer) | |
Dated: July 15, 2013 | /s/ Fred Kolsteeg |
Fred Kolsteeg, Director |
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) | |
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 (3) | |
10.1 | Incentive and Nonstatutory Stock Option Plan, dated May 29, 2001 (1) | |
10.2 | 2004 Incentive and Nonstatutory Stock Option Plan (4) | |
10.3 | Voting Agreement between Remedent, Inc., and Robin List, dated December 10, 2008 (5) | |
10.4 | Distribution, License and Manufacturing Agreement dated as of January 20, 2012, (the “Effective Date”) by and among Remedent, Inc., a Nevada corporation (“Remedent Nevada”), Remedent N.V., a company incorporated under the laws of Belgium (“Remedent Belgium) and GlamSmile Dental Technology, Ltd., a company incorporated under the laws of the Cayman Islands (8) | |
10.5 | Termination and License Agreement dated March 27, 2012 (8) | |
14.1 | Code of Ethics, adopted March 25, 2003 (22) | |
21.1 | List of Subsidiaries* |
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.* |
101.INS | XBRL Instance Document (7) | ||
101.SCH | XBRL Taxonomy Extension Schema (7) | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (7) | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase (7) | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase (7) | ||
101.FRE | XBRL Taxonomy Extension Presentation Linkbase (7) |
* | 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 SB-2 filed with the SEC on August 4, 2005. |
(4) | Incorporated by reference from Form SB-2/A filed with the SEC on October 26, 2005. |
(5) | Incorporated by reference from Form 8-K filed with the SEC on December 16, 2008. |
(6) | Incorporated by reference from Form 10-KSB filed with the SEC on July 15, 2003. |
(7) | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
(8) | Incorporated by reference from Form 10-KSB filed with the SEC on July 16, 2012. |
/s/ Gunther Loits | |
Registered Auditor |
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
64,504
|
|
$
|
203,584
|
|
Accounts receivable, net of allowance for doubtful accounts of $4,833 at March 31, 2013 and $12,361 at March 31, 2012
|
|
|
947,971
|
|
|
838,240
|
|
|
|
|
|
|
|
|
|
Inventories, net
|
|
|
991,807
|
|
|
1,077,766
|
|
Prepaid expense
|
|
|
566,500
|
|
|
1,149,264
|
|
Total current assets
|
|
|
2,570,782
|
|
|
3,268,854
|
|
PROPERTY AND EQUIPMENT, NET
|
|
|
695,084
|
|
|
641,220
|
|
OTHER ASSETS
|
|
|
|
|
|
|
|
Investment in GlamSmile Asia Ltd
|
|
|
2,441,572
|
|
|
2,092,518
|
|
Investment in MFI (Note 3)
|
|
|
787,339
|
|
|
|
|
Investment in Remedent OTC BV (Note 3)
|
|
|
|
|
|
962,505
|
|
Patents, net
|
|
|
32,059
|
|
|
|
|
Total assets
|
|
$
|
6,526,836
|
|
$
|
6,965,097
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Current portion, long term debt
|
|
$
|
1,214,266
|
|
$
|
863,501
|
|
Line of Credit
|
|
|
836,355
|
|
|
1,079,263
|
|
Accounts payable
|
|
|
971,814
|
|
|
1,009,176
|
|
Accrued liabilities
|
|
|
737,064
|
|
|
536,331
|
|
Deferred revenue
|
|
|
149,129
|
|
|
57,254
|
|
Due to related parties (Note 3)
|
|
|
|
|
|
61,836
|
|
Total current liabilities
|
|
|
3,908,628
|
|
|
3,607,361
|
|
Long term debt less current portion
|
|
|
1,131,364
|
|
|
1,452,523
|
|
Total liabilities
|
|
|
5,039,992
|
|
|
5,059,884
|
|
|
|
|
|
|
|
|
|
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 March 31, 2013 and March 31, 2012 respectively)
|
|
|
19,996
|
|
|
19,996
|
|
Treasury stock, at cost; 723,000 shares outstanding at March 31, 2013 and March 31, 2012 respectively
|
|
|
(831,450)
|
|
|
(831,450)
|
|
Additional paid-in capital
|
|
|
24,906,269
|
|
|
24,906,269
|
|
Accumulated deficit
|
|
|
(21,604,571)
|
|
|
(20,622,635)
|
|
Accumulated other comprehensive income (loss)
|
|
|
(1,118,262)
|
|
|
(1,681,829)
|
|
Obligation to issue shares (Note 3)
|
|
|
97,500
|
|
|
97,500
|
|
Total Remedent, Inc. stockholders’ equity
|
|
|
1,469,482
|
|
|
1,887,851
|
|
Non-controlling interest
|
|
|
17,362
|
|
|
17,362
|
|
Total stockholders’ equity
|
|
|
1,486,844
|
|
|
1,905,213
|
|
Total liabilities and equity
|
|
$
|
6,526,836
|
|
$
|
6,965,097
|
|
|
|
For the years ended
March 31, |
|
||||
|
|
2013
|
|
2012
|
|
||
Net sales
|
|
$
|
2,937,276
|
|
$
|
9,687,292
|
|
Cost of sales
|
|
|
1,433,348
|
|
|
2,227,891
|
|
Gross profit
|
|
|
1,503,928
|
|
|
7,459,401
|
|
Operating Expenses
|
|
|
|
|
|
|
|
Research and development
|
|
|
59,988
|
|
|
309,939
|
|
Sales and marketing
|
|
|
789,566
|
|
|
2,416,812
|
|
General and administrative
|
|
|
2,154,193
|
|
|
4,686,347
|
|
Depreciation and amortization
|
|
|
314,023
|
|
|
548,662
|
|
TOTAL OPERATING EXPENSES
|
|
|
3,317,770
|
|
|
7,961,760
|
|
OPERATING (LOSS) INCOME
|
|
|
(1,813,842)
|
|
|
(502,359)
|
|
NON-OPERATING (EXPENSE) INCOME
|
|
|
|
|
|
|
|
Gain on sale of Asset Remedent OTC BV (Note 3)
|
|
|
454,430
|
|
|
2,085,669
|
|
Equity income from investments
|
|
|
199,990
|
|
|
173,337
|
|
Interest expense
|
|
|
(186,034)
|
|
|
(387,292)
|
|
Other income
|
|
|
363,673
|
|
|
244,276
|
|
TOTAL OTHER INCOME
|
|
|
832,059
|
|
|
2,115,990
|
|
(LOSS) PROFIT FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
|
(981,783)
|
|
|
1,613,631
|
|
Income tax expense
|
|
|
(153)
|
|
|
(315,069)
|
|
NET(LOSS) INCOME
|
|
|
(981,936)
|
|
|
1,298,562
|
|
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS
|
|
|
|
|
|
(808,079)
|
|
NET (LOSS) INCOME ATTRIBUTABLE TO REMEDENT INC. Common Stockholders
|
|
$
|
(981,936)
|
|
$
|
490,483
|
|
(LOSS) PROFIT PER SHARE
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.05)
|
|
$
|
0.02
|
|
Fully diluted
|
|
$
|
(0.05)
|
|
$
|
0.02
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
|
|
|
|
Basic
|
|
|
19,995,969
|
|
|
19,995,969
|
|
Fully diluted
|
|
|
19,995,969
|
|
|
20,019,969
|
|
|
|
Shares
|
|
Amount
|
|
Additional
Paid in Capital |
|
Obligation to
Issue Shares |
|
Accumulated
Deficit |
|
Treasury
Stock |
|
Other
Comprehensive Income (Loss) |
|
Total
|
|
Non-
controlling Interest (net of OCI) |
|
Total
|
|
|||||||||
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2011
|
|
19,995,969
|
|
|
19,996
|
|
|
24,855,883
|
|
|
97,500
|
|
|
(21,113,118)
|
|
|
(831,450)
|
|
|
(834,949)
|
|
|
2,193,862
|
|
|
838,509
|
|
|
3,032,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of stock options issued to employees
|
|
|
|
|
|
|
|
50,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,386
|
|
|
|
|
|
50,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deconsolidation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,629,225)
|
|
|
(1,629,225)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign exchange gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(846,880)
|
|
|
(846,880)
|
|
|
-
|
|
|
(846,880)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
490,483
|
|
|
|
|
|
|
|
|
490,483
|
|
|
808,078
|
|
|
1,298,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2012
|
|
19,995,969
|
|
|
19,996
|
|
|
24,906,269
|
|
|
97,500
|
|
|
(20,622,635)
|
|
|
(831,450)
|
|
|
(1,681,829)
|
|
|
1,887,851
|
|
|
17,362
|
|
|
1,905,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign exchange gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,006
|
|
|
91,006
|
|
|
|
|
|
91,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment AFS investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
472,561
|
|
|
472,561
|
|
|
|
|
|
472,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(981,936)
|
|
|
|
|
|
|
|
|
(981,936)
|
|
|
|
|
|
(981,936)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2013
|
|
19,995,969
|
|
|
19,996
|
|
|
24,906,269
|
|
|
97,500
|
|
|
(21,604,571)
|
|
|
(831,450)
|
|
|
(1,118,262)
|
|
|
1,469,482
|
|
|
17,362
|
|
|
1,486,844
|
|
|
|
For the year ended March 31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net Profit (loss)
|
|
$
|
(981,936)
|
|
$
|
1,298,561
|
|
Adjustments to reconcile net (loss) to net cash used by operating activities:
|
|
|
|
|
|
|
|
Gain on Sale of Glamsmile Asia (note 3)
|
|
|
|
|
|
(1,470,776)
|
|
Gain on sale of Remedent OTC B.V.
|
|
|
(454,430)
|
|
|
|
|
Non cash revenue
|
|
|
|
|
|
(475,250)
|
|
Depreciation and amortization
|
|
|
314,023
|
|
|
548,662
|
|
Inventory reserve
|
|
|
(67,515)
|
|
|
25,832
|
|
Allowance for doubtful accounts
|
|
|
(7,528)
|
|
|
(16,614)
|
|
Value of stock options issued to employees and consultants
|
|
|
|
|
|
50,387
|
|
Investment income
|
|
|
(199,990)
|
|
|
(173,337)
|
|
Other non-cash income
|
|
|
(301,341)
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(109,731)
|
|
|
790,249
|
|
Inventories
|
|
|
85,959
|
|
|
228,790
|
|
Prepaid expenses
|
|
|
552,763
|
|
|
(804,000)
|
|
Accounts payable
|
|
|
(37,363)
|
|
|
(171,692)
|
|
Accrued liabilities
|
|
|
200,733
|
|
|
(626,896)
|
|
Due to related parties
|
|
|
(61,836)
|
|
|
61,836
|
|
Accrued and unpaid interest on debt
|
|
|
30,001
|
|
|
42,467
|
|
Deferred revenue
|
|
|
91,875
|
|
|
582,004
|
|
Net cash used by operating activities
|
|
|
(946,316)
|
|
|
(109,777)
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds on sale of Remedent OTC BV
|
|
|
1,267,870
|
|
|
|
|
Cash divested on deconsolidation of Remedent OTC B.V.
|
|
|
|
|
|
(2,372,445)
|
|
Cash divested on deconsolidation of GlamSmile Asia
|
|
|
|
|
|
(1,044,674)
|
|
Purchases of patent rights
|
|
|
(37,467)
|
|
|
(101,759)
|
|
Purchases of equipment
|
|
|
(142,821)
|
|
|
(321,170)
|
|
Net cash used by investing activities
|
|
|
1,087,582
|
|
|
(3,840,048)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Short term loan
|
|
|
132,820
|
|
|
1,000,000
|
|
Proceeds from issuance of GlamSmile Asia preferred stock (Note 3)
|
|
|
|
|
|
2,000,000
|
|
Repayments of capital lease note payable
|
|
|
(103,214)
|
|
|
(61,527)
|
|
Advances (repayments) of line of credit
|
|
|
(242,908)
|
|
|
(414,061)
|
|
Net cash provided by financing activities
|
|
|
(213,302)
|
|
|
2,524,412
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
(72,036)
|
|
|
(1,425,413)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(67,044)
|
|
|
(33,523)
|
|
CASH AND CASH EQUIVALENTS, BEGINNING
|
|
|
203,584
|
|
|
1,662,520
|
|
CASH AND CASH EQUIVALENTS, ENDING
|
|
$
|
64,504
|
|
$
|
203,584
|
|
Supplemental Cash Flow Information :
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
155,908
|
|
$
|
252,208
|
|
Income taxes paid
|
|
$
|
|
|
$
|
|
|
SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expense converted to investment in MFI
|
|
$
|
314,778
|
|
|
|
|
Deferred revenue converted to loan
|
|
$
|
|
|
$
|
500,000
|
|
|
|
For the year ended
March 31, |
|
||||
|
|
2013
|
|
2012
|
|
||
Net (Loss) Profit attributable to Remedent, Inc. common shareholders
|
|
$
|
(981,936)
|
|
$
|
490,483
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
Fair value adjustment on AFS investment
|
|
|
472,561
|
|
|
|
|
Foreign currency translation adjustment
|
|
|
91,006
|
|
|
(846,880)
|
|
COMPREHENSIVE PROFIT(LOSS) ATTRIBUTABLE TO REMEDENT, INC. common shareholders
|
|
$
|
(418,369)
|
|
$
|
(356,397)
|
|
|
•
|
Both (a) & (b) have value to our customers on a standalone basis and can be sold by our customers separately.
|
|
•
|
Delivery or performance of the undelivered item or items is considered probable and substantially in our control.
|
Tooling
|
3
Years
|
Furniture and fixtures
|
4
Years
|
Machinery and Equipment
|
4
Years
|
|
|
Year ended
March 31, 2013 |
|
Year ended
March 31, 2012 |
|
||
Product warranty liability:
|
|
|
|
|
|
|
|
Opening balance
|
|
$
|
20,019
|
|
$
|
21,260
|
|
Accruals for product warranties issued in the period
|
|
|
(973)
|
|
|
(2,002)
|
|
Adjustments to liabilities for pre-existing warranties
|
|
|
255
|
|
|
761
|
|
Ending liability
|
|
$
|
19,301
|
|
$
|
20,019
|
|
|
1.
|
325,000
Euro (US$
466,725
). As of March 31, 2011 the full amount was paid.
|
|
2.
|
250,000
shares of common stock to be issued during the fiscal year ended March 31, 2011($
97,500
was recorded as an obligation to issue shares as at March 31, 2010). The parties have agreed that the shares will be issued during fiscal year ended March 31, 2014.
|
|
3.
|
100,000
options on closing (issued);
|
|
4.
|
100,000
options per opened store at closing (issued);
|
|
5.
|
100,000
options for each additional store opened before the end of 2011 at the price of the opening date of the store;
|
|
6.
|
Assumption of Glamsmile’s January 1, 2010 deficit of $
73,302
.; and
|
|
7.
|
Repayment of the founding shareholder’s original advances in the amount of $
196,599
. The balance of $
196,599
, recorded as due to related parties at March 31, 2010, is unsecured, non-interest bearing and has no specific terms of repayment other than it will be paid out of revenues from Glamsmile, as working capital allows. During the year ended March 31, 2011 a total of $
101,245
was paid to the founding shareholder, leaving a balance due of $
95,354
on June 27, 2011. As at March 31, 2012 the full amount was paid.
|
|
(a)
|
Details of the acquisition date fair value transferred, and allocation thereof are as follows:
|
Common shares (250,000 at $0.39/share) (rate at December 31, 2009)
|
$
|
97,500
|
325,000 Euro (at 1.436077)
|
|
466,725
|
200,000 stock options (*)
|
|
62,108
|
Total consideration
|
$
|
626,333
|
|
|
|
Cash
|
$
|
167,288
|
Accounts receivable
|
$
|
27,836
|
Inventory
|
$
|
23,347
|
Equipment, net
|
$
|
76,647
|
Accounts payable
|
$
|
(145,996)
|
Accruals
|
$
|
(25,446)
|
Other payables
|
$
|
(196,978)
|
|
|
|
Net liability (sub-consolidated financial statements of GlamSmile Asia Ltd including the Mainland China Subsidiaries)
|
|
(73,302)
|
Goodwill
|
$
|
699,635
|
Consideration received
|
|
$
|
2,000,000
|
|
Fair value of 29.4% interest
|
|
|
2,055,884
|
|
Carrying value of non-controlling interest
|
|
|
1,117,938
|
|
Less: carrying value of former subsidiary’s net assets
|
|
|
(2,002,329)
|
|
Goodwill
|
|
|
(699,635)
|
|
Investment China & Hong Kong
|
|
|
(1,082)
|
|
Rescission agreement Excelsior (Note 14)
|
|
|
(1,000,000)
|
|
|
|
$
|
1,470,776
|
|
|
|
Year ended
|
|
Year ended
|
|
||
Operating data:
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
7,479,281
|
|
$
|
3,693,113
|
|
Gross profit
|
|
|
7,221,627
|
|
|
3,517,406
|
|
Income (loss) from operations
|
|
|
1,999,783
|
|
|
1,474,736
|
|
Net income
|
|
$
|
1,378,182
|
|
$
|
1,273,324
|
|
|
(i)
|
an initial payment of $
2,425,000
(received);
|
|
(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
(received);
|
|
(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 the Company;
|
(vii)
|
certain milestone payments; and
|
(viii)
|
certain royalty payments.
|
|
(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”) (The warrants were issued in the period ended September 30, 2008 and 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 expense was originally classified as a non-operating expense however, we have subsequently reclassified the expense to operations since our agreement with Den-Mat is in the normal course of our operations. The reclassification increased our operations expenses by $
4,323,207
, while reducing our other expenses by the same amount, resulting in no net impact upon our consolidated net loss for the year ended March 31, 2009.
|
|
(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, 2011 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.
|
|
(a)
|
the parties have agreed to terminate the distribution, manufacturing and license agreement and any ancillary agreements (the “Agreements”);
|
|
(b)
|
Den-Mat will pay the Company $
200,000
cash in complete satisfaction of any and all payments due ($
110,000
received and $
90,000
subsequently received); and
|
|
(c)
|
the Company grants to Den-Mat a non-exclusive, irrevocable, perpetual, royalty free license to use within the territory of intellectual property that was the subject of the Agreements and license with Den-Mat.
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Accounts receivable, gross
|
|
$
|
952,804
|
|
$
|
850,601
|
|
Less: allowance for doubtful accounts
|
|
|
(4,833)
|
|
|
(12,361)
|
|
Accounts receivable, net
|
|
$
|
947,971
|
|
$
|
838,240
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Raw materials
|
|
$
|
38,452
|
|
$
|
58,189
|
|
Components
|
|
|
214,723
|
|
|
283,572
|
|
Finished goods
|
|
|
827,356
|
|
|
892,244
|
|
|
|
|
1,080,531
|
|
|
1,234,005
|
|
Less: reserve for obsolescence
|
|
|
(88,724)
|
|
|
(156,239)
|
|
Net inventory
|
|
$
|
991,807
|
|
$
|
1,077,766
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Prepaid materials and components
|
|
$
|
196,876
|
|
$
|
882,998
|
|
Prepaid consulting
|
|
|
73,854
|
|
|
|
|
VAT payments in excess of VAT receipts
|
|
|
41,241
|
|
|
60,252
|
|
Royalties
|
|
|
|
|
|
18,109
|
|
Prepaid trade show expenses
|
|
|
4,632
|
|
|
|
|
Prepaid rent
|
|
|
129,957
|
|
|
145,138
|
|
Other
|
|
|
119,940
|
|
|
42,767
|
|
|
|
$
|
566,500
|
|
$
|
1,149,264
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Furniture and Fixtures
|
|
$
|
596,471
|
|
$
|
540,104
|
|
Machinery and Equipment
|
|
|
1,619,770
|
|
|
1,499,271
|
|
|
|
|
2,216,241
|
|
|
2,039,375
|
|
Accumulated depreciation
|
|
|
(1,521,157)
|
|
|
(1,398,155)
|
|
Property & equipment, net
|
|
$
|
695,084
|
|
$
|
641,220
|
|
Year ending March 31:
|
|
|
|
|
|
|
|
|
|
2014
|
|
$
|
82,812
|
|
2015
|
|
|
83,509
|
|
2016
|
|
|
|
|
Later years
|
|
|
|
|
Total minimum lease payments
|
|
|
166,321
|
|
Less: Amount representing estimated executory costs (such as taxes, maintenance, and insurance), including profit thereon, included in total minimum lease payments
|
|
|
|
|
Net minimum lease payments
|
|
|
166,321
|
|
Less: Amount representing interest (*)
|
|
|
6,265
|
|
Present value of minimum lease payments (**)
|
|
$
|
160,056
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Accrued employee benefit taxes and payroll
|
|
$
|
397,666
|
|
$
|
358,148
|
|
Accrued travel
|
|
|
9,650
|
|
|
10,010
|
|
Commissions
|
|
|
|
|
|
687
|
|
Accrued audit and tax preparation fees
|
|
|
14,264
|
|
|
11,318
|
|
Reserve for warranty costs
|
|
|
19,301
|
|
|
20,019
|
|
Reserve for income taxes
|
|
|
|
|
|
2,936
|
|
Advances received on account
|
|
|
11,823
|
|
|
|
|
Accrued advertising
|
|
|
9,864
|
|
|
|
|
Accrued interest
|
|
|
12,578
|
|
|
1,322
|
|
Accrued consulting fees
|
|
|
2,500
|
|
|
16,129
|
|
Other accrued expenses
|
|
|
259,418
|
|
|
115,762
|
|
|
|
$
|
737,064
|
|
$
|
536,331
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Domestic
|
|
$
|
(169,271)
|
|
$
|
(776,668)
|
|
Foreign
|
|
|
(812,512)
|
|
|
2,176,183
|
|
|
|
$
|
(981,783)
|
|
$
|
1,399,515
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
Domestic Net operating loss carryforward
|
|
$
|
7,864,378
|
|
$
|
7,805,133
|
|
Foreign Net operating loss carryforward
|
|
|
529,153
|
|
|
244,774
|
|
Total
|
|
|
8,393,531
|
|
|
8,049,907
|
|
Valuation allowance
|
|
|
(8,393,531)
|
|
|
(8,049,907)
|
|
Net deferred tax assets
|
|
$
|
|
|
$
|
|
|
|
|
March 31, 2013
|
|
|
March 31, 2012
|
|
||
Domestic
|
|
|
|
|
|
|
|
|
Pre tax income (loss)
|
|
$
|
(169,271)
|
|
|
$
|
(776,668)
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
Tax benefit based upon statutory rate
|
|
|
(59,245)
|
|
|
|
(271,833)
|
|
Valuation allowance
|
|
|
59,245
|
|
|
|
271,833
|
|
Net domestic income tax (benefit)
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
|
|
|
|
|
Pre tax income (loss)
|
|
|
(812,512)
|
|
|
|
2,176,183
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
Tax expense (benefit) based upon statutory rate
|
|
|
(284,379)
|
|
|
|
761,664
|
|
Permanent differences
|
|
|
284,379
|
|
|
|
446,595
|
|
|
|
|
|
|
|
|
|
|
Net foreign income tax expense (benefit)
|
|
|
153
|
|
|
|
315,069
|
|
Total Income tax (benefit )
|
|
$
|
153
|
|
|
$
|
315,069
|
|
|
|
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, 2011
|
|
|
250,000
|
|
|
1.20
|
|
|
557,500
|
|
|
0.89
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Cancelled or expired
|
|
|
(237,500)
|
|
|
|
|
|
(25,000)
|
|
|
4.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, March 31, 2012
|
|
|
12,500
|
|
|
1.20
|
|
|
532,500
|
|
|
0.96
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Options expired
|
|
|
|
|
|
|
|
|
(100,000)
|
|
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, March 31, 2013
|
|
|
12,500
|
|
|
1.20
|
|
|
432,500
|
|
|
0.84
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Options exercisable March 31, 2013
|
|
|
12,500
|
|
|
1.20
|
|
|
432,500
|
|
|
0.96
|
|
|
1,000,000
|
|
|
1.15
|
|
|
350,000
|
|
|
0.97
|
|
Exercise price range
|
|
$
|
2.00
|
|
|
|
|
$
|
0.50 - $2.46
|
|
|
|
|
$
|
0.50 - $1.75
|
|
|
|
|
$
|
.39 - 1.75
|
|
|
|
|
Weighted average remaining life
|
|
|
1 years
|
|
|
|
|
|
5.0 years
|
|
|
|
|
|
5.12 years
|
|
|
|
|
|
3.6 years
|
|
|
|
|
Plan Category
|
|
Number of
securities to be issued upon exercise of of outstanding options, warrants and rights |
|
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
|
|
|
1,445,000
|
|
$
|
1.17
|
|
|
605,000
|
|
Equity Compensation Plans not approved by security holders
|
|
|
820,000
|
|
$
|
0.97
|
|
|
NA
|
|
Total
|
|
|
2,265,000
|
|
$
|
1.10
|
|
|
605,000
|
|
|
|
Outstanding
Warrants |
|
Weighted
Average Exercise Price |
|
||
Warrants and options outstanding, March 31, 2011
|
|
|
7,794,627
|
|
$
|
1.50
|
|
Expired
|
|
|
(4,056,248)
|
|
|
|
|
Warrants outstanding March 31, 2012 and March 31, 2013
|
|
|
3,738,379
|
|
|
1.50
|
|
Warrants exercisable March 31, 2012 and March 31, 2013
|
|
|
3,738,379
|
|
$
|
1.50
|
|
Exercise price range
|
|
$
|
1.00 to $1.65
|
|
|
|
|
Weighted average remaining life
|
|
|
.40 Years
|
|
|
|
|
|
|
Revenues
For the year ended March 31, 2013 |
|
Revenues
For the year ended March 31, 2012 |
|
||
|
|
Revenues (a)
|
|
Revenues (a)
|
|
||
United States
|
|
$
|
|
|
$
|
1,120,437
|
|
Europe
|
|
|
2,937,276
|
|
|
5,010,610
|
|
China
|
|
|
|
|
|
3,556,245
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,937,276
|
|
$
|
9,687,292
|
|
|
|
Long-lived Assets
As at |
|
Long-lived Assets
As at |
|
||
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||
United States
|
|
$
|
|
|
$
|
3,055,023
|
|
Europe
|
|
$
|
3,956,054
|
|
|
641,220
|
|
China
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,956,054
|
|
$
|
3,696,243
|
|
March 31, 2014
|
|
|
395,214
|
|
March 31, 2015
|
|
|
340,335
|
|
March 31, 2016
|
|
|
245,336
|
|
March 31, 2016
|
|
|
207,493
|
|
After five years
|
|
|
91,247
|
|
Total:
|
|
$
|
1,279,625
|
|
|
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
|
||||||||
|
|
|
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
|
||||
|
|
Level
|
|
value
|
|
Value
|
|
value
|
|
value
|
|
|||||
Cash
|
|
|
1
|
|
$
|
64,504
|
|
$
|
64,504
|
|
$
|
203,584
|
|
$
|
203,584
|
|
Accounts receivable
|
|
|
2
|
|
$
|
947,971
|
|
$
|
947,971
|
|
$
|
838,240
|
|
$
|
838,240
|
|
Long term investments and advances OTC
Division |
|
|
2
|
|
$
|
|
|
$
|
|
|
$
|
962,505
|
|
$
|
962,505
|
|
Long Term investment and advance -
GlamSmile Dental Technology Asia |
|
|
2
|
|
$
|
2,441,572
|
|
$
|
2,441,572
|
|
$
|
2,092,518
|
|
$
|
2,092,518
|
|
Long term investments and advances MFI
|
|
|
1
|
|
$
|
787,339
|
|
$
|
787,339
|
|
$
|
|
|
$
|
|
|
Line of credit
|
|
|
2
|
|
$
|
836,355
|
|
$
|
836,355
|
|
$
|
1,079,263
|
|
$
|
1,079,263
|
|
Short term debt
|
|
|
2
|
|
$
|
1,214,266
|
|
$
|
1,214,266
|
|
$
|
863,501
|
|
$
|
863,501
|
|
Deferred revenue
|
|
|
2
|
|
$
|
149,129
|
|
$
|
149,129
|
|
$
|
57,254
|
|
$
|
57,254
|
|
Accounts payable
|
|
|
2
|
|
$
|
971,813
|
|
$
|
971,813
|
|
$
|
1,009,176
|
|
$
|
1,009,176
|
|
Accrued liabilities
|
|
|
2
|
|
$
|
737,064
|
|
$
|
737,064
|
|
$
|
536,331
|
|
$
|
536,331
|
|
Long term debt
|
|
|
2
|
|
$
|
1,131,364
|
|
$
|
1,131,364
|
|
$
|
1,452,523
|
|
$
|
1,452,523
|
|
|
|
Year ended March 31,
2013 |
|
Year ended March 31,
2012 |
|
||
Long term investments and advances:
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
2,092,518
|
|
$
|
|
|
Gains (losses) included in net loss
|
|
|
|
|
|
|
|
Transfers in (out of level 3)
|
|
|
349,054
|
|
|
2,092,518
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
2,441,572
|
|
$
|
2,092,518
|
|
1 Year Elysee Development (PK) Chart |
1 Month Elysee Development (PK) Chart |
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