##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the quarterly period ended June 30, 2007.
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the Transition Period from  to
 Commission File Number 0-19278
 OSTEOTECH, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    13-3357370
(I.R.S. Employer Identification No.)
 51 James Way, Eatontown, New Jersey 07724
 (732) 542-2800
 Not Applicable
 þ o
  o þ o
 o þ




---



##### Table of Contents



OSTEOTECH, INC.
 FORM 10-Q
 Table of Contents
  
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006
    
    
    3Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2007 and 2006
    
    
    4Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risks
    
    
    18Item 4. Controls and Procedures
    
    
    18PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 6. Exhibits
    
    
    21EX-10.1: SECOND AMENDMENT TO TISSUE RECOVERY AGREEMENTEX-10.2: THIRD AMENDMENT TO TISSUE RECOVERY AGREEMENTEX-10.3: FOURTH AMENDMENT TO TISSUE RECOVERY AGREEMENTEX-10.4: 2007 STOCK INCENTIVE PLANEX-10.5: 1991 INDEPENDENT DIRECTORS STOCK OPTION PLAN AS AMENDEDEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
 - 2 -




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 OSTEOTECH,
INC. and SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (dollars in thousands)
 June 30,
    
    December 31,2007
    
    2006(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,430
    
    
    $
    17,946Accounts receivable, net of allowance of $585 in 2007
and $488 in 2006
    
    
    20,209
    
    
    
    18,507Deferred processing costs
    
    
    30,357
    
    
    
    29,067Inventories
    
    
    1,240
    
    
    
    1,005Prepaid expenses and other current assets
    
    
    3,147
    
    
    
    2,795Total current assets
    
    
    74,383
    
    
    
    69,320Property, plant and equipment, net
    
    
    34,511
    
    
    
    36,340Other assets
    
    
    5,798
    
    
    
    7,373Total assets
    
    $
    114,692
    
    
    $
    113,033LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    18,644
    
    
    $
    15,861Current maturities of capital lease obligation
    
    
    766
    
    
    
    727Total current liabilities
    
    
    19,410
    
    
    
    16,588Capital lease obligation
    
    
    14,484
    
    
    
    14,876Other liabilities
    
    
    5,778
    
    
    
    7,716Total liabilities
    
    
    39,672
    
    
    
    39,180Commitments and contingenciesStockholders equity:Preferred
stock, $.01 par value; 5,000,000 shares authorized; no shares issued
or outstandingCommon stock, $.01 par value; 70,000,000 shares
authorized; issued and outstanding 17,558,990 shares
in 2007 and 17,396,775 shares in 2006
    
    
    175
    
    
    
    174Additional paid-in capital
    
    
    66,808
    
    
    
    65,784Accumulated other comprehensive income
    
    
    1,049
    
    
    
    1,114Retained earnings
    
    
    6,988
    
    
    
    6,781Total stockholders equity
    
    
    75,020
    
    
    
    73,853Total liabilities and stockholders equity
    
    $
    114,692
    
    
    $
    113,033
  - 3 -




---



##### Table of Contents



OSTEOTECH,
INC. and SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS   (dollars in thousands, except per share data)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(Restated)
    
    
    
    
    
    (Restated)Revenue
    
    $
    26,470
    
    
    $
    25,282
    
    
    $
    51,687
    
    
    $
    50,362Cost of revenue
    
    
    13,680
    
    
    
    12,879
    
    
    
    26,580
    
    
    
    26,123Gross profit
    
    
    12,790
    
    
    
    12,403
    
    
    
    25,107
    
    
    
    24,239Marketing, selling and general and
administrative
    
    
    10,513
    
    
    
    10,009
    
    
    
    22,290
    
    
    
    20,105Research and development
    
    
    1,202
    
    
    
    1,143
    
    
    
    2,279
    
    
    
    2,31511,715
    
    
    
    11,152
    
    
    
    24,569
    
    
    
    22,420Operating income
    
    
    1,075
    
    
    
    1,251
    
    
    
    538
    
    
    
    1,819Other expenses:Interest income
    
    
    252
    
    
    
    171
    
    
    
    512
    
    
    
    325Interest expense
    
    
    (404
    )
    
    
    (420
    )
    
    
    (814
    )
    
    
    (844
    )Other
    
    
    (114
    )
    
    
    246
    
    
    
    22
    
    
    
    490(266
    )
    
    
    (3
    )
    
    
    (280
    )
    
    
    (29
    )Income before income taxes
    
    
    809
    
    
    
    1,248
    
    
    
    258
    
    
    
    1,790Income tax provision (benefit)
    
    
    (46
    )
    
    
    136
    
    
    
    51
    
    
    
    179Net income
    
    $
    855
    
    
    $
    1,112
    
    
    $
    207
    
    
    $
    1,611Earnings per share:Basic
    
    $
    .05
    
    
    $
    .06
    
    
    $
    .01
    
    
    $
    .09Diluted
    
    $
    .05
    
    
    $
    .06
    
    
    $
    .01
    
    
    $
    .09Shares used in computing earnings
per share:Basic
    
    
    17,466,368
    
    
    
    17,273,778
    
    
    
    17,442,969
    
    
    
    17,274,846Diluted
    
    
    18,009,774
    
    
    
    17,336,679
    
    
    
    17,912,380
    
    
    
    17,354,906
  - 4 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  (dollars in thousands)
 Six Months EndedJune 30,2007
    
    2006(Restated)Cash Flow From Operating ActivitiesNet income
    
    $
    207
    
    
    $
    1,611Adjustments to reconcile net income
to net cash provided by operating activities:Depreciation and amortization
    
    
    2,765
    
    
    
    2,871Stock-based compensation expense
    
    
    231
    
    
    
    118Changes in current assets and liabilities:Accounts receivable
    
    
    (1,702
    )
    
    
    (2,494
    )Deferred processing costs
    
    
    14
    
    
    
    (141
    )Inventories
    
    
    (235
    )
    
    
    (300
    )Prepaid expenses and other current assets
    
    
    (352
    )
    
    
    (112
    )Note receivables from patent litigation settlement
    
    
    500
    
    
    
    500Accounts payable and other liabilities
    
    
    810
    
    
    
    (324
    )Net cash provided by operating activities
    
    
    2,238
    
    
    
    1,729Cash Flow From Investing ActivitiesCapital expenditures
    
    
    (807
    )
    
    
    (1,325
    )Other, net
    
    
    (404
    )
    
    
    (41
    )Net cash used in investing activities
    
    
    (1,211
    )
    
    
    (1,366
    )Cash Flow From Financing ActivitiesProceeds from issuance of common stock
    
    
    794
    
    
    
    140Principal payments on capital lease obligation
    
    
    (353
    )
    
    
    (319
    )Net cash provided by (used in) financing activities
    
    
    441
    
    
    
    (179
    )Effect of exchange rate changes on cash
    
    
    16
    
    
    
    145Net increase in cash and cash equivalents
    
    
    1,484
    
    
    
    329Cash and cash equivalents at beginning of period
    
    
    17,946
    
    
    
    13,484Cash and cash equivalents at end of period
    
    $
    19,430
    
    
    $
    13,813Supplementary cash flow data:Cash paid during the period for interest
    
    $
    814
    
    
    $
    844Cash paid during the period for taxes
    
    $
    61
    
    
    $
    27
  - 5 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 
 Notes to Unaudited Condensed Consolidated Financial Statements
 (dollars in thousands, except per share data)
 1. Basis of Presentation
 General
  Adoption of New Accounting Pronouncement
   2. Deferred Processing Costs
  June 30,
    
    December 31,2007
    
    2006Unprocessed donor tissue
    
    $
    13,532
    
    
    $
    11,957Tissue in process
    
    
    4,738
    
    
    
    5,533Implantable donor tissue
    
    
    12,087
    
    
    
    11,577$
    30,357
    
    
    $
    29,067
  - 6 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 Notes to Unaudited Condensed Consolidated Financial Statements
 (dollars in thousands, except per share data)
 3. Inventories
  June 30,
    
    December 31,2007
    
    2006Supplies
    
    $
    239
    
    
    $
    187Raw materials
    
    
    654
    
    
    
    489Finished goods
    
    
    347
    
    
    
    329$
    1,240
    
    
    $
    1,005
 4. Stock Compensation Plans
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Grants:RSUs
    
    
    39,300
    
    
    
    35,000
    
    
    
    56,500
    
    
    
    35,000Stock options
    
    
    0
    
    
    
    25,000
    
    
    
    0
    
    
    
    45,000Non-cash compensation
expense recognized in
statements of
operations
    
    $
    76
    
    
    $
    57
    
    
    $
    231
    
    
    $
    118
    - 7 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 Notes to Unaudited Condensed Consolidated Financial Statements
 (dollars in thousands, except per share data)
   Three Months Ended
    
    Six Months EndedWeighted Average Assumptions
    
    June 30, 2006
    
    June 30, 2006Expected holding period (years)
    
    
    5
    
    
    
    5Risk-free interest rate
    
    
    5.02
    %
    
    
    4.71
    %Volatility factor
    
    
    75
    %
    
    
    75
    %Dividend yield
    
    
    0
    
    
    
    0Annual forfeiture rate
    
    
    3
    %
    
    
    3
    %Fair value per share at date of
grant
    
    $
    2.82
    
    
    $
    3.25
  5. Debt and Financing Agreement
  6. Income Taxes
   - 8 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 Notes to Unaudited Condensed Consolidated Financial Statements
 (dollars in thousands, except per share data)
      7. Commitments and Contingencies
 Litigation
 Eddie Don Glenn v. Osteotech, Inc.
    - 9 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 Notes to Unaudited Condensed Consolidated Financial Statements
 (dollars in thousands, except per share data)
  8. Comprehensive Income
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(Restated)
    
    
    
    
    
    (Restated)Net income
    
    $
    855
    
    
    $
    1,112
    
    
    $
    207
    
    
    $
    1,611Currency
translation
adjustments
    
    
    (52
    )
    
    
    347
    
    
    
    (65
    )
    
    
    270Comprehensive income
    
    $
    803
    
    
    $
    1,459
    
    
    $
    142
    
    
    $
    1,881
 9. Earnings Per Share
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(Restated)
    
    
    
    
    
    (Restated)Net income available to
common stockholders
    
    $
    855
    
    
    $
    1,112
    
    
    $
    207
    
    
    $
    1,611Denominator for basic
earnings per share, weighted
average common shares
outstanding
    
    
    17,466,368
    
    
    
    17,273,778
    
    
    
    17,442,969
    
    
    
    17,274,846Effect of dilutive securities:RSUs
    
    
    143,641
    
    
    
    2,967
    
    
    
    133,499
    
    
    
    1,492Stock options after
application of the treasury
stock method
    
    
    399,765
    
    
    
    59,934
    
    
    
    335,912
    
    
    
    78,568Denominator for diluted
earnings per share
    
    
    18,009,774
    
    
    
    17,336,679
    
    
    
    17,912,380
    
    
    
    17,354,906Basic earnings per share
    
    $
    .05
    
    
    $
    .06
    
    
    $
    .01
    
    
    $
    .09Diluted earnings per share
    
    $
    .05
    
    
    $
    .06
    
    
    $
    .01
    
    
    $
    .09
  - 10 -




---



##### Table of Contents



OSTEOTECH, INC. and SUBSIDIARIES
 Notes to Unaudited Condensed Consolidated Financial Statements
 (dollars in thousands, except per share data)
 10. Operating Segments
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(Restated)
    
    
    
    
    
    (Restated)Revenue:DBM
    
    $
    16,161
    
    
    $
    14,348
    
    
    $
    31,643
    
    
    $
    29,322Traditional Tissue
    
    
    4,558
    
    
    
    4,361
    
    
    
    9,169
    
    
    
    8,115Spinal Allografts
    
    
    3,221
    
    
    
    3,573
    
    
    
    6,009
    
    
    
    7,609Hybrid/Synthetics
    
    
    408
    
    
    
    395
    
    
    
    641
    
    
    
    613Client Services
    
    
    1,944
    
    
    
    2,463
    
    
    
    3,872
    
    
    
    4,383Other
    
    
    178
    
    
    
    142
    
    
    
    353
    
    
    
    320$
    26,470
    
    
    $
    25,282
    
    
    $
    51,687
    
    
    $
    50,362
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(restated)
    
    
    
    
    
    (restated)Operating income
(loss):DBM
    
    $
    4,471
    
    
    $
    3,912
    
    
    $
    7,510
    
    
    $
    8,819Traditional Tissue
    
    
    528
    
    
    
    1,810
    
    
    
    1,927
    
    
    
    2,332Spinal Allografts
    
    
    701
    
    
    
    607
    
    
    
    1,022
    
    
    
    1,277Hybrid/Synthetics
    
    
    (43
    )
    
    
    (108
    )
    
    
    (1
    )
    
    
    (133
    )Client Services
    
    
    1,427
    
    
    
    1,228
    
    
    
    3,005
    
    
    
    1,720Other
    
    
    40
    
    
    
    118
    
    
    
    178
    
    
    
    100Corporate
    
    
    (6,049
    )
    
    
    (6,316
    )
    
    
    (13,103
    )
    
    
    (12,296
    )$
    1,075
    
    
    $
    1,251
    
    
    $
    538
    
    
    $
    1,819
  11. Other Expenses
  - 11 -




---



##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
 Results of Operations
 Critical Accounting Policies and Estimates
  Operating Segment Realignment and Adoption of Accounting Principle
    - 12 -




---



##### Table of Contents



Net Income
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,Percent
    
    
    
    
    
    
    
    
    
    
    
    
    
    Percent(dollars in thousands,
    
    2007
    
    2006
    
    Change
    
    Change
    
    2007
    
    2006
    
    Change
    
    Changeexcept per share amounts)
    
    
    
    
    
    (Restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Restated)Net income
    
    $
    855
    
    
    $
    1,112
    
    
    $
    (257
    )
    
    
    (23
    )%
    
    $
    207
    
    
    $
    1,611
    
    
    $
    (1,404
    )
    
    
    (87
    )%Earnings per share:Basic
    
    $
    .05
    
    
    $
    .06
    
    
    
    
    
    
    
    
    
    
    $
    .01
    
    
    $
    .09Diluted
    
    $
    .05
    
    
    $
    .06
    
    
    
    
    
    
    
    
    
    
    $
    .01
    
    
    $
    .09
   Revenue
  Three Months Ended
    
    Six Months EndedMarch 31,
    
    June 30,Percent
    
    
    
    
    
    
    
    
    
    
    
    
    
    Percent2007
    
    2006
    
    Change
    
    Change
    
    2007
    
    2006
    
    Change
    
    Change(dollars in thousands)
    
    
    
    
    
    (Restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Restated)DBM
    
    $
    16,161
    
    
    $
    14,348
    
    
    $
    1,813
    
    
    
    13
    %
    
    $
    31,643
    
    
    $
    29,322
    
    
    $
    2,321
    
    
    
    8
    %Traditional Tissue
    
    
    4,558
    
    
    
    4,361
    
    
    
    197
    
    
    
    5
    %
    
    
    9,169
    
    
    
    8,115
    
    
    
    1,054
    
    
    
    13
    %Spinal Allograft
    
    
    3,221
    
    
    
    3,573
    
    
    
    (352
    )
    
    
    (10
    )%
    
    
    6,009
    
    
    
    7,609
    
    
    
    (1,600
    )
    
    
    (21
    )%Hybrid Synthetic
    
    
    408
    
    
    
    395
    
    
    
    13
    
    
    
    3
    %
    
    
    641
    
    
    
    613
    
    
    
    28
    
    
    
    5
    %Client Services
    
    
    1,944
    
    
    
    2,463
    
    
    
    (519
    )
    
    
    (21
    )%
    
    
    3,872
    
    
    
    4,383
    
    
    
    (511
    )
    
    
    (12
    )%Other Product Lines
    
    
    178
    
    
    
    142
    
    
    
    36
    
    
    
    25
    %
    
    
    353
    
    
    
    320
    
    
    
    33
    
    
    
    10
    %$
    26,470
    
    
    $
    25,282
    
    
    $
    1,188
    
    
    
    5
    %
    
    $
    51,687
    
    
    $
    50,362
    
    
    $
    1,325
    
    
    
    3
    %
  - 13 -




---



##### Table of Contents



®
 ® ®
   Gross Margin
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(dollars in thousands)
    
    
    
    
    
    (Restated)
    
    
    
    
    
    (Restated)Gross profit
    
    $
    12,790
    
    
    $
    12,403
    
    
    $
    25,107
    
    
    $
    24,239Gross margin
    
    
    48
    %
    
    
    49
    %
    
    
    49
    %
    
    
    48
    %
  - 14 -




---



##### Table of Contents



Operating Expenses
 Three Months Ended
    
    
    
    
    Six Months EndedJune 30,
    
    
    
    

    June 30,Percent
    
    
    
    
    
    
    
    
    
    
    
    
    
    Percent(dollars in thousands)
    
    2007
    
    2006
    
    Change
    
    Change
    
    2007
    
    2006
    
    Change
    
    ChangeMarketing, selling and
general and administrative
    
    $
    10,513
    
    
    $
    10,009
    
    
    $
    504
    
    
    
    5
    %
    
    $
    22,290
    
    
    $
    20,105
    
    
    $
    2,185
    
    
    
    11
    %Research and
development
    
    
    1,202
    
    
    
    1,143
    
    
    
    59
    
    
    
    5
    %
    
    
    2,279
    
    
    
    2,315
    
    
    
    (36
    )
    
    
    (2
    )%Total
    
    $
    11,715
    
    
    $
    11,152
    
    
    $
    563
    
    
    
    5
    %
    
    $
    24,569
    
    
    $
    22,420
    
    
    $
    2,149
    
    
    
    10
    %
   Operating Income
 Three Months Ended
   
    
    
    
    Six Months EndedJune 30,
    
    
    
    
    June 30,Percent
    
    
    
    
    
    
    
    
    
    
    
    
    
    Percent(dollars in thousands)
    
    2007
    
    2006
    
    Change
    
    Change
    
    2007
    
    2006
    
    Change
    
    ChangeDBM Segment
    
    $
    4,471
    
    
    $
    3,912
    
    
    $
    559
    
    
    
    14
    %
    
    $
    7,510
    
    
    $
    8,819
    
    
    $
    (1,309
    )
    
    
    (15
    )%Traditional Tissue
Segment
    
    
    528
    
    
    
    1,810
    
    
    
    (1,282
    )
    
    
    (71
    )%
    
    
    1,927
    
    
    
    2,332
    
    
    
    (405
    )
    
    
    (17
    )%Spinal Allograft Segment
    
    
    701
    
    
    
    607
    
    
    
    94
    
    
    
    15
    %
    
    
    1,022
    
    
    
    1,277
    
    
    
    (255
    )
    
    
    (20
    )%Hybrid/Synthetic Segment
    
    
    (43
    )
    
    
    (108
    )
    
    
    65
    
    
    
    (60
    )%
    
    
    (1
    )
    
    
    (133
    )
    
    
    132
    
    
    
    99
    %Client Services Segment
    
    
    1,427
    
    
    
    1,228
    
    
    
    199
    
    
    
    16
    %
    
    
    3,005
    
    
    
    1,720
    
    
    
    1,285
    
    
    
    75
    %Other Product Lines
    
    
    40
    
    
    
    118
    
    
    
    (78
    )
    
    
    (66
    )%
    
    
    178
    
    
    
    100
    
    
    
    78
    
    
    
    78
    %7,124
    
    
    
    7,567
    
    
    
    (443
    )
    
    
    (6
    )%
    
    
    13,641
    
    
    
    14,115
    
    
    
    (474
    )
    
    
    (3
    )%Corporate
    
    
    (6,049
    )
    
    
    (6,316
    )
    
    
    267
    
    
    
    4
    %
    
    
    (13,103
    )
    
    
    (12,296
    )
    
    
    (807
    )
    
    
    (7
    )%Operating income
    
    $
    1,075
    
    
    $
    1,251
    
    
    $
    (176
    )
    
    
    (14
    )%
    
    $
    538
    
    
    $
    1,819
    
    
    $
    (1,281
    )
    
    
    (70
    )%
    - 15 -




---



##### Table of Contents



Other Expense
   Income Tax Provision
      - 16 -




---



##### Table of Contents



Liquidity and Capital Resources
       Contractual Obligations
   - 17 -




---



##### Table of Contents



Less Than One Year
    
    $1.5 millionYears 2-3
    
    $8.1 millionYears 4-5
    
    $4.9 millionAfter 5 years
    
    
    Total
    
    $14.5 million
 Impact of Inflation and Foreign Currency Exchange Fluctuations
  Litigation
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  - 18 -




---



##### Table of Contents



Changes in Internal Control Over Financial Reporting
  - 19 -




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  Eddie Don Glenn v. Osteotech, Inc.
   
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    Director
    
    For
    
    WithheldKenneth P. Fallon, III
    
    
    13,807,511
    
    
    
    306,450Stephen S. Galliker
    
    
    13,507,576
    
    
    
    606,385Robert W. Gunn
    
    
    13,642,584
    
    
    
    471,377Sam Owusu-Akyaw
    
    
    13,836,435
    
    
    
    277,526Robert J. Palmisano
    
    
    13,646,816
    
    
    
    467,145James M. Shannon
    
    
    13,983,151
    
    
    
    130,810
   - 20 -




---



##### Table of Contents



Item 6. EXHIBITS AND REPORTS ON FORM 8-K
  Exhibit
    
    
    
    PageNumber
    
    Description
    
    Number10.1
    
    Second Amendment to Tissue Recovery Agreement between the Company and Community Blood Center dated May 14, 2007*
    
    +10.2
    
    Third Amendment to Tissue recovery Agreement between the Company and Community Blood Center dated May 14, 2007*
    
    +10.3
    
    Fourth Amendment to Tissue Recovery Agreement between the Company and Community Blood Center dated May 14, 2007*
    
    +10.4
    
    2007 Stock Incentive Plan**
    
    +10.5
    
    1991 Independent Directors Stock Option Plan, as amended**
    
    +31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    +31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    +32.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    +32.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    +
 
 +
    
    Filed herewith.*
    
    Portions of this exhibit have been redacted and filed separately with the Commission pursuant to
a confidential treatment request.**
    
    Management contracts or compensatory plans and arrangements required to be filed pursuant to
Item 601(b)(10)(ii)(A) or (iii) of Regulation S-K - 21 -




---



##### Table of Contents



SIGNATURES
  Date:  August 6, 2007
    
    Osteotech, Inc.(Registrant)Date:  August 6, 2007
    By:
    /s/Sam Owusu-AkyawSam Owusu-AkyawPresident and Chief Executive
Officer
(Principal Executive Officer) Date:  August 6, 2007
    By:
    /s/Mark H. BurroughsMark H. BurroughsExecutive Vice President,
Chief Financial Officer
(Principal Financial Officer and
Chief Accounting Officer) - 22 -