DDS Technologies USA 10QSB 2004 Q2 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

[ X ]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File No. 000-30498

DDS Technologies USA, Inc.

(Exact name of small business issuer as specified in its charter)

Nevada	13-4253546
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

150 East Palmetto Park Road
Suite 510
Boca Raton, Florida 33432
(Address of Principal Executive Offices)

(561) 750-4450
(Issuer's telephone number)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x] No []

State the number of shares outstanding of each of the issuer's classes of common equity, as of March 31, 2004: 18,735,103 shares of common stock outstanding, $0.0001 par value per share.

PART 1 - FINANCIAL INFORMATION

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004

CONTENTS



PAGE	2	CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2004 (UNAUDITED) AND DECEMBER 31, 2003.

PAGE	3	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003 AND FOR THE PERIOD FROM JULY 17, 2002 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED).

PAGES	4 - 5	CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM JULY 17, 2002 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED).

PAGE	6	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003 AND FOR THE PERIOD FROM JULY 17, 2002 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED).

PAGES	7 - 15	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2004 (UNAUDITED).

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

	March 31, 2004			December 31, 2003
	(Unaudited)
CURRENT ASSETS
Cash	$	444,539		$	1,174,281
Prepaid expenses		268,216			318,871
Total Current Assets		712,755			1,493,152


FIXED ASSETS, NET		22,862			24,277
LICENSE		4,700,000			4,700,000
DEPOSIT ON PURCHASE OF MACHINERY		4,000,976			4,000,976
OTHER ASSETS		7,977			7,977

TOTAL ASSETS	$	9,444,570		$	10,226,382

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accrued payroll taxes	$	11,010		$	15,616
Accrued professional fees		212,500			311,048
Accrued expenses		128,304			223,215
Total Current Liabilities		351,814			549,879


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 1,000,000 shares authorized, no shares issued and outstanding		-
Common stock, $.0001 par value, 25,000,000 shares authorized, 18,735,103 and 18,715,103 shares issued and outstanding, respectively		1,873			1,871
Additional paid-in capital		16,464,861			16,347,363
Deferred consulting expense		(3,074	)		(1,356,533	)
Note receivable - related party		(3,074	)		(235,000	)
Interest receivable - related party		(3,07	)		(3,074	)
Deficit accumulated during development stage		(6,456,571	)		(5,078,124	)
Total Stockholders' Equity		9,092,756			9,676,503

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	9,444,570		$	10,226,382

See accompanying notes to the condensed consolidated financial statements.

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	For the Three Months Ended March 31, 2004		For the Three Months Ended March 31, 2003		For the Period From July 17, 2002 (Inception) Through March 31, 2004


REVENUES	$	-	$	-	$	-

EXPENSES
Professional fees		985,980		166,696		4,984,460
General and administrative		224,398		78,018		873,876
Salaries and related taxes		168,991		25,839		402,231
Merger costs		-		100,000		200,000
Total Expenses		1,379,369		370,553		6,460,567


INTEREST INCOME		922		-		3,996

NET LOSS	$	(1,378,447)	$	( 370,553)	$	(6,456,571)

NET LOSS PER SHARE - BASIC AND DILUTED	$	(0.07)	$	(0.02)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		18,725,433		15,214,477

See accompanying notes to the condensed consolidated financial statements.

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 17, 2002 (INCEPTION) THROUGH MARCH 31, 2004
(UNAUDITED)

													Interest
					Additional				Deferred		Note		Receivable
	Common Stock				Paid-in		Subscriptions		Consulting		Receivable		Related		Accumulated
	Shares		Amount		Capital		Receivable		Expense		Related Party		Party		Deficit		Total

Common stock issued for cash at inception		10,944,055	$	1,094	$	957,311	$	-	$	-		-		-		-	$	958,405

Common stock issued for license valued at $1.00 per share		3,500,000		350		3,499,650		-		-		-		-		-		3,500,000

Common stock issued for cash in December 2002 at $1.00 per share		100,000		10		99,990		-		-		-		-		-		100,000

Common stock issued for cash in January 2003 at $1.00 per share		200,000		20		199,980		-		-		-		-		-		200,000

Common stock issued for license in January 2003 at $1.00 per share		500,000		50		499,950		-		-		-		-		-		500,000

Note receivable - related party in February 2003		-		-		-		-		-		(235,000)		-		-		(235,000)

Interest receivable - related party		-		-		-		-		-		-		(3,074)		-		(3,074)

Common stock issued for cash in February, March and April 2003 at $1.00 per share		800,000		80		799,920		-		-		-		-		-		800,000

Recapitalization for merger in April 2003		429,000		43		(43)		-		-		-		-		-		-

Common stock issued for cash in May 2003 at $1.00 per share		100,000		10		99,990		-		-		-		-		-		100,000

Common stock subscribed at $1.00 per share		1,500,000		150		1,499,850		(1,500,000)		-		-		-		-		-

Collection of subscription receivable in July 2003		-		-		-		500,000		-		-		-		-		500,000

Warrants issued for consulting expense in April 2003		-		-		1,274,848		-		(1,274,848)		-		-		-		-

Common stock issued for cash in July and August 2003 at $3.50 per share, net		502,714		50		1,020,444		-		-		-		-		-		1,020,494

See accompanying notes to the condensed consolidated financial statements.

							Interest
			Additional		Deferred	Note	Receivable
	Common Stock		Paid-in	Subscriptions	Consulting	Receivable	Related	Accumulated
	Shares	Amount	Capital	Receivable	Expense	Related Party	Party	Deficit	Total

Warrants issued with the sale of common stock in July and August 2003	-	-	563,056	-	-	-	-	-	563,056

Common stock issued for services in August and September 2003	175,000	8	1,298,232	-	(1,298,250)	-	-	-	-

Common stock issued for settlement	60,000	6	464,994	-	-	-	-	-	465,000

Cancellation of subscription receivable	(1,000,000)	(100)	(999,900)	1,000,000	-	-	-	-	-

Common stock issued for cash in October 2003 at $6.00 per share, net	904,334	90	2,896,206	-	-	-	-	-	2,896,296

Warrants issued with the sale of common stock in October 2003	-	-	1,962,114	-	-	-	-	-	1,962,114

Warrants issued for consulting expense in December 2003	-	-	29,761	-	(29,761)	-	-	-	-

Options issued for consulting services in August and November 2003	-	-	181,010	-	(181,010)	-	-	-	-

Amortization of deferred consulting expenses	-	-	-	-	1,427,336	-	-	-	1,427,336

Net Loss:

July 17, 2002 (Inception) through December 31, 2002	-	-	-	-	-	-	-	(407,803)	(407,803)

Year ended December 31, 2003	-	-	-	-	-	-	-	(4,670,321)	(4,670,321)

Balance December 31, 2003	18,715,103	1,871	16,347,363	-	(1,356,533)	(235,000)	(3,074)	(5,078,124)	9,676,503

See accompanying notes to the consolidated financial statements.

													Interest
					Additional				Deferred		Note		Receivable
	Common Stock				Paid-in		Subscriptions		Consulting		Receivable		Related		Accumulated
	Shares		Amount		Capital		Receivable		Expense		Related Party		Party		Deficit		Total


Common stock issued for services in February 2004	20,000		2		117,498		-		(117,500)		-		-		-		-

Interest receivable related party	-		-		-		-		-		-		(922)		-		(922)

Amortization of deferred consulting expenses	-		-		-		-		795,622-		-		-		-		795,622

Net loss for the three months ended March 31, 2004	-		-		-		-		-		-		-		(1,378,447)		(1,378,447)

Balance March 31, 2004	18,735,103	$	1,873	$	16,464,861	$	-	$	(678,411)	$	(235,000)	$	(3,996)	$	(6,456,571)	$	(9,092,756)

See accompanying notes to the condensed consolidated financial statements.

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		For the Three Months Ended		For the Three		For the Period From July 17, 2002
		March 31,		Months Ended		(Inception) Through
		2004		March 31, 2004		March 31, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,378,447)	$	(370,553)	$	(6,456,571)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		1,416		571		5,431
Amortization of deferred consulting expense		795,622		-		2,222,958
Common stock issued for services		-		-		465,000
Other non-cash expenses		-		16,665		-
Changes in operating assets and liabilities:
Prepaid expenses and other assets		50,655		-		(276,193)
Accrued expenses		(198,064)		5,231		351,815
Net Cash Used In Operating Activities		(728,818)		(348,086)		(3,687,560)


CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit on purchase of machinery		-		-		(4,000,976)
Purchases of fixed assets		-		(16,975)		(28,293)
Acquisition of license		-		(200,000)		(700,000)
Note receivable and accrued interest -related party		(924)		(235,000)		(238,996)
Net Cash Used In Investing Activities		(924)		(451,975)		(4,968,265)


CASH FLOWS FROM FINANCING ACTIVITIES:
Sales of common stock		-		850,000		9,100,364
Net Cash Provided By Financing Activities		-		850,000		9,100,364


NET (DECREASE) INCREASE IN CASH		(729,742)		49,939		444,539

CASH - BEGINNING OF PERIOD		1,174,281		125,105		-

CASH - END OF PERIOD	$	444,539	$	175,044	$	444,539

Common stock issued for license valued at $1.00 per share	$	-	$	500,000	$	4,000,000

Warrants issued for deferred consulting services	$	-	$	-	$	1,284,848

Common stock issued for deferred consulting expenses	$	117,500	$	-	$	1,425,750

Options issued for deferred consulting services	$	-	$	-	$	99,636

Common stock issued to consultant to settle contract dispute	$	-	$	-	$	60,000

See accompanying notes to the condensed consolidated financial statements.

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

NOTE 1

BACKGROUND AND BASIS OF PRESENTATION

DDS Technologies USA, Inc. (formerly Fishtheworld Holdings, Inc.) and subsidiary (the "Company") is a development stage company with no revenues since its inception on July 17, 2002. The Company has been engaged in the process of obtaining the license rights and exclusive marketing rights for North America, Central America, the Caribbean (excluding Cuba), South America and Africa for a dry disaggregation system, which is a system that converts certain waste into value added products for further processing or resale.

Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's product development will be successfully completed or that it will be a commercial success. The Company's ability to execute its business plan will depend on its ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained. Nor can the Company give any assurance that it will generate substantial revenues or that its business operations will prove to be profitable.

On November 14, 2002, Black Diamond Industries, Inc., ("Black Diamond") a public Florida corporation, conducting no business other than to seek a suitable acquisition partner, acquired all of the outstanding shares of common stock of DDS Holdings, Inc., a Nevada company pursuant to a securities exchange agreement dated October 27, 2002. Under the terms of the securities exchange agreement, the stockholders of DDS Holdings, Inc. agreed to transfer all of the issued and outstanding shares of common stock in exchange for an aggregate of 12,915,525 shares of common stock, or approximately 93% of Black Diamond. Immediately prior to, and in conjunction with the transaction, the sole director and officer and majority shareholder of Black Diamond returned 13,564,350 shares of common stock to treasury.

In December 2002, the Company changed its name to DDS Technologies USA, Inc. and reincorporated in the state of Delaware.

Under a share exchange agreement entered into on April 4, 2003, Fishtheworld Holdings, Inc. ("Fishtheworld") a public Florida corporation conducting no business other than to seek a suitable acquisition partner, acquired 88.5% of DDS Technologies USA, Inc. in exchange for 15,367,255 shares of common stock or approximately 97% of the then issued and outstanding shares of Fishtheworld. DDS Technologies USA, Inc. also paid a cash consideration of $200,000 to the shareholders of Fishtheworld, which has been accounted for as merger costs in the December 31, 2003 statement of operations. Immediately prior to the share exchange, the majority shareholder of Fishtheworld returned 8,571,000 shares to treasury and resigned as the sole director and officer of Fishtheworld. The members of the Board of Directors of the

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

Company became members of the Board of Directors of Fishtheworld. DDS Technologies USA, Inc. adopted the December 31^st year-end of Fishtheworld. In May 2003, Fishtheworld changed its name to DDS Technologies, USA, Inc. and reincorporated in the state of Nevada. As a result of the reincorporation, the Company's par value for its preferred and common stock changed to $.0001 per share.

Generally accepted accounting principles in the United States of America require that a company whose stockholders retain a majority interest in a business combination be treated as the acquirer for accounting purposes. Since Black Diamond and Fishtheworld were public shells and DDS Holdings, Inc. is a development stage company with no revenues, the transactions were treated as recapitalizations of the Company.

NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of DDS Technologies USA, Inc. and its wholly owned subsidiary. All material intercompany accounts and transactions have been eliminated.

(B) License

The license is recorded at its acquisition cost. Under the terms of the agreement, the license has a 20-year life, which expires in May 2022, and will be amortized over the expiration term when the Company commences operations which generate revenues.

(C) Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(D) Loss Per Common Share

Net loss per common share (basic and diluted) is based on the net loss divided by the weighted average number of common shares outstanding during each period. Common stock equivalents were not included in the calculation of diluted loss per share as their effect would be anti-dilutive.

DDDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

(E) Concentrations

The Company maintains the majority of its cash balances in a financial institution located in Boca Raton, Florida. The balance in the institution is insured by the Federal Deposit Insurance Corporation up to $100,000. At March 31, 2004, the Company's uninsured cash amounted to $355,078.

(F) Interim Consolidated Financial Statements

The condensed consolidated financial statements as of March 31, 2004 and for the three months ended March 31, 2004 and 2003, and for the period from July 17, 2002 (inception) through March 31, 2004, are unaudited. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. The consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of December 31, 2003 was derived from the audited consolidated financial statements included in the Company's Annual Report Form 10-KSB. The interim condensed consolidated financial statements should be read in conjunction with that report.

NOTE 3

RELATED PARTY TRANSACTIONS

For the three months ended March 31, 2004 and 2003, and for the period from July 17, 2002 (inception) through December 31, 2002 the Company incurred consulting expenses of $127,500, $129,200 and $67,000, respectively from stockholders of the Company.

In connection with the consulting services aforementioned, in March 2004, the Company entered into a consulting agreement with one of the stockholders. Pursuant to the terms of this agreement, the Company will pay him a monthly fee of $15,000 for a period of seven years.

In April 2004, the Company entered into another consulting agreement with one of the aforementioned stockholders. (See Note 8).

NOTE 4

STOCK OPTIONS

The Company has established a Stock Option Plan (the "Plan") to attract, retain and motivate key employees, to provide an incentive for them to achieve long-range performance goals and to enable them to participate in the long-term growth of the Company. Options granted under the Plan may include non-qualified stock options as well as incentive stock option intended to qualify under Section 422A of the Internal Revenue Code. The aggregate number of shares

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

that may be issued under the Plan or exercise of options must not exceed three million shares. Each stock option agreement specifies when all or any installment of the option becomes exercisable.

In May and October 2003, the Company granted stock options to two executive employees. The Company applies Accounting Principles Board ("APB") Opinion 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for option granted to employees. Under APB Opinion 25, if the exercise price of the Company's employee stock options equals or exceeds the market price of the underlying stock on the date of grant, no compensation cost is recognized. For the options granted in May 2003, the exercise price of each option equaled the market price of the Company's stock on the date of grant and, expire in 10 years, and were fully vested at December 31, 2003. For the option granted in October 2003, the exercise price of each option granted equaled the market price of the Company's stock on the date of grant and the options are fully vested three years from the date of grant.

In October 2003, the Company also granted stock options to the members of its Board of Directors. Each member was issued as compensation for their services, a stock option to purchase 50,000 shares at an exercise price of $8.00 per share.

SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, requires the Company to provide pro forma information regarding net income and earnings per share for each period presented as if compensation cost for the Company's stock options had been determined in accordance with the fair value based method prescribed in SFAS No. 123. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model with the following weighted average assumptions used for the grants in May 2003; no dividend yield for all years; expected volatility of 74%; risk-free interest rate of 3%, and an expected life of 5 years.

Under the accounting provisions of SFAS No. 123, as amended by SFAS No. 148, the Company's net loss and net loss per common share would have been as follows:

			For the three months ended March 31, 2004

Net loss	As Reported	$	1,378,447
	Pro Forma	$	1,378,447

Net loss per common	As Reported	$	(0.07)
share - basic and diluted	Pro Forma	$	(0.07)

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

A summary of the status of the Company's option plans as of March 31, 2004 and the changes during the period ending on that date is presented below:

		Shares		Weighted Average Exercise Price
Outstanding at December 31, 2003		1,350,000	$	6.37
Granted		-	$	-
Forfeited		-	$	-
Outstanding at March 31, 2004		1,350,000	$	6.37

Options exercisable at March 31, 2004		450,000

Weighted average fair value of options granted to employees during the period from July 17,2002 (inception) through March 31, 2004	$	3.20

The following table summarizes information about the stock options outstanding at March 31, 2004:

Options Outstanding						Options Exercisable
	Exercise Price	Number Outstanding at March 31, 2004	Weighted Average Remaining Contractual Life		Weighted Average Exercise Price	Number Exercisable at March 31, 2004		Weighted Average Exercise Price

$	5.00	600,000	9.08	$	5.00	450,000	$	5.00
$	7.00	400,000	3.68	$	7.00	-	$	7.00
$	8.00	350,000	9.68	$	8.00	-	$	8.00

NOTE 5

INVESTMENT BANKING AGREEMENT

On April 23, 2003, the Company entered into a one-year agreement with a consulting company for investment banking and other related services. Pursuant to this agreement, the Company issued to the consulting company a stock purchase warrant exercisable for a period of five years to acquire 500,000 shares of the Company's common stock at an exercise price of $6.50 per share. The warrant was valued using the Black-Scholes pricing model and resulted in a fair value of $1,274,848. The amount is being amortized over the life of the agreement resulting in consulting expense of $318,712 and $1,168,611 for the three months ended March 31, 2004, and the period from July 17, 2002 (inception) through March 31, 2004, respectively. The remaining unamortized balance of $106,237

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

is presented in the accompanying condensed consolidated balance sheet as deferred consulting expense.

NOTE 6

CONSULTING AND MARKETING AGREEMENTS

On August 14, 2003, the Company entered into a one-year agreement with a marketing company. As part of the agreement, the marketing company will be responsible to provide business advisory and various other investment and marketing services. For these services, the Company is paying monthly cash consideration of $5,000. In addition, the Company will issue 10,000 shares of restricted common stock per quarter. The obligation for the first 10,000 shares was included in accrued expenses at December 31, 2003 and the shares were subsequently issued in February 2004. Another 10,000 shares of common stock were also issued in February 2004. Based on the closing market price of the Company's common stock on the contractual dates of the agreement, $21,500 and $148,064 were expensed to consulting fees for the three months ended March 31, 2004 and the period from July 17, 2002 (inception) through March 31, 2004, respectively. The remaining unauthorized balance of $21,500 is presented in the condensed consolidated balance sheet included in deferred consulting expenses. The Company further agreed to issue 35,000 stock options per quarter with a strike price of $8.00 per share, expiring 3 years from the date of grant. The Company issued 75,000 stock options thus far under the agreement. The Company estimates the fair value of the stock options at the grant date by using the Black-Scholes option-pricing model with the following weighted average assumptions: no dividend yield for all years; expected volatility of 77%; risk-free interest rate of 3% and an expected life of 3 years, resulting in a fair value of $181,010. The amount was amortized over the life of the agreement resulting in consulting expense of $58,187 and $181,010 for the three months ended in March 31, 2004 and the period from July 17, 2002 (inception) through March 31, 2004, respectively.

On August 15, 2003 the Company entered into a six-month agreement with an investment consulting company. As part of the agreement, this consulting company will disseminate information about the Company to its investors, brokerage firms and others in the financial community. As compensation for these services, the Company paid cash consideration of $10,000 upon signing pays $5,000 per month thereafter. In addition, during 2003, the Company issued 15,000 restricted shares of the Company's common stock. In connection with this agreement, the Company recognized $19,320 and $77,251 in consulting fee expense for the three months ended March 31, 2004 and the period from July 17, 2002 (inception) through March 31 2004, respectively.

On September 12, 2003 the Company entered into a one-year agreement with a financial consulting firm. As part of the agreement, the consulting firm will provide analytical review of the Company's financial information and will assist the Company as its financial advisor and investment banker. As compensation for these services, in 2003 the Company issued

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

100,000 restricted shares of common stock. In connection with this agreement, the Company recognized $193,500 and $419,225 in consulting fee expense for the three months ended March 31 2004 and the period from July 17, 2002 (inception) through March 31 2004, respectively, and has deferred $354,750 of expenses.

On September 19, 2003 the Company entered into a one-year agreement with an individual. As part of the agreement, the individual will provide a list of names of potential investors as well as provide other services for the Company. As compensation for these services, in 2003 the Company issued 50,000 shares of restricted common stock. In connection with this agreement, the Company recognized $98,750 and $213,924 in consulting fee expense for the three months ended March 31, 2004 and the period from July 17, 2002 (inception) through March 31, 2004, respectively, and has deferred $181,076 of expenses.

On December 8, 2003 the Company entered into an eight-month agreement with a marketing company. As part of the agreement, the marketing company will be responsible to provide business advisory and various other investment and marketing services. For these services, the Company pays monthly cash consideration of $5,000. In addition, the Company issued warrants for the purchase of 10,000 shares of common stock at an exercise price of $9.00 per share. The warrants are exercisable until December 7, 2005. The warrants were valued using the Black-Scholes pricing model and resulted in a fair value of $29,761. The amount is amortized over the life of the agreement resulting in consulting expense of $11,160 and $14,880 for the three months ended March 31, 2004 and the period from July 17, 2002 (inception) through March 31, 2004, respectively. The remaining unamortized balance of $14,881 is presented in the condensed consolidated balance sheet included as deferred consulting expense. The Company terminated this agreement in February 2004.

NOTE 7

COMMITMENT AND CONTINGENCIES

(A) Contingencies

The Company granted registration rights to certain investors in the July 2, 2003 private placement of securities. Under those rights, if the Company did not file a registration statement within 45 days of closing, the Company owes the investors an aggregate of approximately $13,000 per month in penalties. The Company began incurring those penalties on August 16, 2003. The registration statement was filed on November 12, 2003. The Company has accrued $37,611 of penalties which are included in accrued expenses at March 31, 2004.

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

(B) Litigation

The Company is a defendant in a lawsuit whereby the plaintiff contends that it is entitled to a commission for allegedly procuring financing for a transaction. The Company filed a Motion to Dismiss the plaintiff's complaint, which has not yet been set for hearing. The plaintiff seeks damages totaling $175,584 plus interest from December 31, 2002. The Company believes the suit is without merit and is vigorously defending its position. In the opinion of management, this suit will not have a material effect on the Company's condensed financial position or results of operations.

The Company received a potential claim from two shareholders alleging that the Company failed to register their shares for re-sale in the Company's last registration statement, filed on Form S-1 under the Securities Act of 1933, as amended on November 12, 2003 and an amendment thereto on December 13, 2003. In addition, these shareholders have alleged that they were induced erroneously into surrendering shares of DDS Holdings, Inc. in connection with the reorganization into Black Diamond Industries, Inc. Although the Company believes that it has defenses to these alleged actions, the Company is attempting to reach an amicable settlement for these claims. There can be no assurance that these disputes will be favorably resolved, if at all, or that these claims will not have a material adverse effect on the Company. The Company does not believe a provision is necessary at March 31, 2004 for this matter.

On August 1, 2003, the Company entered into a Pre-Formation agreement with an Iowa ethanol producer. Under the terms of this agreement, a limited liability company will be formed to work together to convert corn stover and other waste materials into intermediate products for further processing into ethanol for resale. Under the agreement, each plant will be owned by a limited liability company which will be separately capitalized with an intended 50% ownership interest for each of the Company and the Iowa ethanol producer. The dry disaggregation machine will be leased to the limited liability company plus a royalty to be determined with the Company receiving a greater royalty on products made from non-fermentable sugars that can only be processed using the Company's technologies. The Company will install one of its dry disaggregation technology units in the ethanol producer's facility in Iowa. The unit has been shipped to the United States and is currently awaiting clearance through customs in transit to Iowa to be installed.

On September 12, 2003, the Company entered into a one-year Letter of Intent with a Florida Cooperative of citrus growers. Under the terms of this letter, the cooperative will lease space in its facility without charge and the Company will install one of its dry disaggregation technology units for the processing of citrus pomace into feed by-products. On January 9, 2004, the Company entered into a Memorandum of Understanding ("MOU") with a large Colombian sugar producer. Under the terms of the MOU, a joint venture pilot program will be developed in which the Company will provide and install one of its dry disaggregation technology unit for the production on ethanol in the sugar producer's facility in Colombia.

DDS TECHNOLOGIES USA, INC.
(FORMERLY FISHTHEWORLD HOLDINGS, INC.)
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(UNAUDITED)

NOTE 8

SUBSEQUENT EVENTS

In April 2004, the Company entered into a consulting services agreement with a stockholder and former president of the Company. Pursuant to the terms of the agreement, the Company will pay him a monthly fee of $15,000 for a period of three years.

ITEM 2.

Management's Discussion and Analysis or Plan of Operation

Background

DDS Technologies USA, Inc. (formerly FishtheWorld Holdings, Inc.) and subsidiary (the "Company") is a development stage company with no revenues since its inception on July 17, 2002. The Company has been engaged in the process of obtaining the license rights and exclusive marketing rights for a dry disaggregation system for North America, Central America, the Caribbean (excluding Cuba), South America and Africa.

In December 2002, the Company changed its name to DDS Technologies USA, Inc. and reincorporated in the state of Delaware.

Under a share exchange agreement entered into on April 4, 2003, FishtheWorld Holdings, Inc. ("FishtheWorld") a public Florida corporation conducting no business other than to seek a suitable acquisition partner, acquired 88.5% of DDS Technologies USA, Inc. in exchange for 15,367,255 shares of common stock or approximately 97% of the then issued and outstanding shares of FishtheWorld. Immediately prior to the share exchange, the majority shareholder of FishtheWorld returned 8,571,000 shares to treasury and resigned as the sole director and officer of the company. The members of the Board of Directors of the Company became members of the Board of Directors of FishtheWorld.

In May 2003, FishtheWorld changed its name to DDS Technologies, USA, Inc. and reincorporated in the state of Nevada.

Generally accepted accounting principles in the United States of America require that a company whose stockholders retain a majority interest in a business combination be treated as the acquirer for accounting purposes. Since Black Diamond and FishtheWorld were public shells and DDS Holdings, Inc. is a development stage company with no revenues, the transactions were treated as recapitalizations of the Company.

The Company was formed in July 2002 for the purpose of commercializing certain technology which has been licensed by DDS Technologies Ltd. ("DDST"), a United Kingdom company and a principal stockholder of the Company. The license provides for the exclusive North, South, Central American and Caribbean (excluding Cuba) rights to the pending patent, # 02425336.1, which was filed with the European patent office on May 28, 2002. The patent relates to the Longitudinal Micrometric Separator For Classifying Solid Particulate Materials. The license agreement also covers other related technologies of DDST. Management believes that this Disaggregation Dry System (DDS) technology system is a unique process, in which fragments of organic and inorganic matter are "crushed to collision" enduring violent accelerations and decelerations causing the disaggregation of the structure. This technology and its end results are believed by the various food manufacturers to have tremendous potential value both economically and nutritionally. Management believes that the results obtained utilizing the DDS technology is unattainable with any other currently available technology.

The terms of the agreement required the Company to pay at the time of signing $500,000 and 3,500,000 shares of the common stock of the company, which was paid in 2002. We subsequently issued an additional 500,000 shares of our common stock plus cash consideration of $200,000 to DDST for an extension of the license to Africa, subject to certain exceptions. The license agreement also requires the Company to pay a royalty to DDST as follows:


	a)	49% of the net profits derived from the sale of products embodying the licensed technology
	b)	24% of the net profits derived from the licensing and rental of products embodying the licensed technology;
	c)	49% of net profits derived from the sale of materials that are produced by machines embodying the licensed technology and subsequently sold for use in producing pharmaceutical additive, cosmetics or other products; and
	d)	2% of the net profits derived from any source related to the licensed technology to be donated to charity.

Results of Operations

From July 17, 2002 (inception) through March 31, 2004 we have incurred an accumulated deficit of $6,456,571. To date, we have yet to achieve revenues. During the three months ended March 31, 2004 and 2003 we incurred operating expenses of $1,379,369 and $364,722 respectively. There were several reasons for the increase in operating expenses. Beginning in the second quarter of 2003 the company entered into various agreements for services where common stock and warrants were issued for payment. These transactions resulted in a charge to expenses of approximately $721,000 for the current quarter. Other expenses increased due to increase in staffing and increases in General and Administrative, Legal and travel related expenses. We anticipate that losses from operations will continue for the remainder of the year primarily due to the relatively long sales cycle and significant due diligence and testing on the part of the customers. Testing includes the preparation of various sample products for processing using our proprietary technology process through our testing facility and submitting our analysis of results to third party labs for independent verification as well as reviewing the results with the prospective client.

We have marketed our technology to various large US and Latin American companies resulting in some letters of intent and have recently signed one contract and anticipate that other contracts may be signed soon. The contract signed is a joint venture arrangement for the processing of corn waste into fermentable sugars for the production of ethanol. However there can be no assurance that the DDS technology will achieve market acceptance or that sufficient revenues will be generated to allow us to operate profitably.

Liquidity and Capital Resources

We have funded our losses to date and license acquisitions through the private placements of our common stock and financing from accredited investors. We believe that we can continue to do so until we achieve positive cash flow from operations. We believe that the company's sources of cash is adequate for the next twelve months of operations. We have negotiated with our European Licensor, HSF, and have received a verbal commitment, for the return of one million dollars to us from the four million dollars in payments that we paid towards the purchase of machines. We are also negotiating for a significant reduction in the cost of each machine. Additionally, we are exploring other financing alternatives. While we believe that we can continue to raise capital, there can be no assurance of this. Our cash balance at March 31, 2004 is $444,539.

ITEM 1.

LEGAL PROCEEDINGS

The Company has been included as a defendant in a lawsuit whereby the plaintiff contends that it is entitled to a commission for allegedly procuring financing for a transaction. The Company has filed a Motion to Dismiss the plaintiff's complaint. The Company believes that the suit is without merit and is vigorously defending its position. The Company further believes that this suit will not have a materials effect on its financial position or results of operations.

The Company has received a potential claim from two shareholders alleging that the Company failed to register their shares for resale in the Company's last registration statement, filed on Form S-1 under the Securities Act of 1933, as amended (the "1933 Act") on November 12, 2003 and an amendment thereto on December 13, 2003. In addition, these shareholders have alleged that they were induced erroneously into surrendering shares of DDS Holdings, Inc. in connection with the reorganization into Black Diamond Industries, Inc. Although the Company believes that it has defenses to these alleged actions, the Company is attempting to reach an amicable settlement for these claims. There can be no assurance that these disputes will be favorably resolved, if at all, or that these claims will not have a material adverse affect on the Company.

ITEM 2.

CHANGES IN SECURITIES

During the first quarter of 2004, we issued 20,000 shares for services. The shares issued in this transaction were exempt from registration requirements pursuant to the exemption from registration contained in Rule 506 of Regulation D of the Securities Act of 1933 as amended.

ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits
	Exhibit 31.1 - Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	Exhibit 32.1 - Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	Exhibit 31.2 - Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	Exhibit 32.2 - Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)	Reports on Form 8-K
	Report on Form 8-K dated July 14, 2003 reporting the completion of a private placement
	Reports on Form 8-K/A providing financial statements for DDS Technologies USA, Inc.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: May 14, 2003	/s/ Spencer Sterling
	Spencer Sterling
	Chief Executive Officer

	/s/ Joseph Fasciglione
	Joseph Fasciglione
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.2	Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

DDS Technologies USA (DDSU) Inactive 10QSB2004 Q2 Quarterly report (small business)