Remedent USA, Inc., a developer and worldwide supplier of high-technology dental equipment and oral hygiene products, today announced it has reached an agreement with a third-party distributor for the sale of the Company's Remedent Tooth & Gumbrush division.
The division, which engages in the worldwide distribution of the Remedent Tooth & Gumbrush, had been the sole revenue-generating activity of the Company since its creation in 1996. However, due to recurring net losses and increasing working capital and shareholder deficits, the Company implemented, in July 2001, a complete corporate reorganization plan. This plan included the ceasing of direct sales and marketing of the Remedent Tooth & Gumbrush, and acquisition of and expansion into diversified business ventures.
Under the terms of the agreement, the purchaser will receive the Remedent Tooth & Gumbrush division and assume the liabilities relating to this division. As the liabilities of this division exceed the value of the division's business assets, the Company will issue 750,000 shares of common stock in consideration for the purchaser agreeing to receive the division and its related liabilities. This transaction, which the Company expects to result in a gain, will still need to be approved by the Company's shareholders.
The Company has been developing technologies for introduction within the professional dental equipment market, and initiated shipments of its first product, a high-speed dental curing light, in the first quarter 2002. Additionally, also during the first quarter of 2002, the Company completed the acquisition of a dental employee outsourcing firm in Belgium.
"Reaching this agreement regarding our Tooth & Gumbrush division marks the near completion of our corporate reorganization," said Remedent Chief Financial Officer Stephen F. Ross. "As our focus shifts to high technology professional dental equipment we feel our resources are better served within this market. Since inception the Tooth & Gumbrush division has generated losses and rising deficits, and we do not feel our continued dedication to this business is in our shareholders' best interest."
With operations in the United States and Europe, the Company develops and markets high-technology dental equipment within the professional dental market. The Company's objective is to become a leading developer and manufacturer of high-technology dental equipment and operator of employee leasing firms, capitalizing on the synergies and marketing inroads each division provides.
