##### 



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended September 30, 2005
 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 000-20805
 ReGen Biologics, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    23-2476415(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)509 Commerce Street,1st Floor, East Wing,Franklin Lakes, NJ
    
    07417(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
 (201) 651-5140
 Securities registered pursuant to Section 12(b) of the Act:
None
 Securities registered pursuant to Section 12(g) of the Act:  Title of Class
 Common Stock $.01 par value per share
 þ o
 o þ
 o þ




---



##### 



REGEN BIOLOGICS, INC.
 INDEX
 Page No.PART I  Financial Information
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets at September 30, 2005 (unaudited) and December 31, 2004
    
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended September 30,
2005 (unaudited) and 2004 (unaudited), the Nine Months Ended September 30, 2005 (unaudited)
and 2004 (unaudited) and the Period from December 21, 1989 (inception) to September 30, 2005
(unaudited)
    
    
    4Consolidated Statement of Changes in Stockholders Equity (Deficit) and Series A & Series C
Redeemable Convertible Preferred Stock for the Period from December 21, 1989 (inception) to
September 30, 2005 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2005
(unaudited) and 2004 (unaudited) and the Period from December 21, 1989 (inception) to
September 30, 2005 (unaudited)
    
    
    10Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    11Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    26PART II  Other InformationItem 1. Legal Proceedings
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3. Defaults upon Senior Securities
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    27Signatures
    
    
    27Certification
    
    
    31
 2




---



##### 



PART I  Financial Information
 Item 1. Financial Statements
 REGEN BIOLOGICS, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30, 2005
    
    
    December 31, 2004(unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    14,230
    
    
    $
    12,190Short-term investments
    
    
    2,470
    
    
    
    Trade receivables
    
    
    47
    
    
    
    7Receivables from related party
    
    
    
    
    
    
    37Inventory
    
    
    306
    
    
    
    76Prepaid expenses and other current assets
    
    
    226
    
    
    
    236Total current assets
    
    
    17,279
    
    
    
    12,546Property and equipment, net
    
    
    188
    
    
    
    55Other assets
    
    
    102
    
    
    
    123Total assets
    
    $
    17,569
    
    
    $
    12,724LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    511
    
    
    $
    378Due to related parties
    
    
    8
    
    
    
    8Accrued expenses
    
    
    806
    
    
    
    638Pension liability
    
    
    163
    
    
    
    163Current portion of capital leases
    
    
    13
    
    
    
    7Total current liabilities
    
    
    1,501
    
    
    
    1,194Other liabilities
    
    
    19
    
    
    
    19Long-term portion of capital leases
    
    
    52
    
    
    
    4Long-term portion of notes payable to related party, including accrued
interest of $1,257 and $1,094 as of September 30, 2005 and December 31,
2004, respectively
    
    
    7,300
    
    
    
    7,136Total liabilities
    
    
    8,872
    
    
    
    8,353Series A redeemable convertible preferred stock, $.01 par value;
15,309,822 shares authorized; issued and outstanding 13,260,025 shares
at liquidation preference of $5,942 as of September 30, 2005 and
14,655,628 shares at liquidation preference of $6,567 as of December 31,
2004
    
    
    5,942
    
    
    
    6,567Series C redeemable convertible preferred stock, $.01 par value;
30,000,000 shares authorized; issued and outstanding 11,046,637 shares
at liquidation preference of $4,950 as of September 30, 2005 and
12,943,533 shares at liquidation preference of $5,800 as of December 31,
2004
    
    
    4,375
    
    
    
    5,033Stockholders equity (deficit):Common stock
    
    
    691
    
    
    
    517Accumulated other comprehensive loss
    
    
    
    
    
    
    (58
    )Additional paid-in capital
    
    
    64,406
    
    
    
    51,750Deficit accumulated during development stage
    
    
    (66,717
    )
    
    
    (59,438
    )Total stockholders equity (deficit)
    
    
    (1,620
    )
    
    
    (7,229
    )Total liabilities and stockholders equity (deficit)
    
    $
    17,569
    
    
    $
    12,724
  3




---



##### 



REGEN BIOLOGICS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Period fromDecember 21, 1989Three Months Ended September 30,
    
    
    Nine Months Ended September 30,
    
    
    (Inception) to2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    September 30, 2005(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Revenue:Sales
    
    $
    94
    
    
    $
    190
    
    
    $
    409
    
    
    $
    431
    
    
    $
    3,265Royalties
    
    
    9
    
    
    
    12
    
    
    
    40
    
    
    
    37
    
    
    
    224Grant and other revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    433Total revenue
    
    
    103
    
    
    
    202
    
    
    
    449
    
    
    
    468
    
    
    
    3,922Expenses:Costs of goods sold
    
    
    70
    
    
    
    169
    
    
    
    409
    
    
    
    350
    
    
    
    3,711Research and development
    
    
    1,964
    
    
    
    870
    
    
    
    4,201
    
    
    
    2,593
    
    
    
    38,414Business development,
general and
administrative
    
    
    975
    
    
    
    706
    
    
    
    2,935
    
    
    
    2,464
    
    
    
    23,175Recognition of expense
for the minimum pension
liability component of
accumulated other
comprehensive loss upon
termination of defined
benefit pension plan
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    58Total expenses
    
    
    3,009
    
    
    
    1,745
    
    
    
    7,603
    
    
    
    5,407
    
    
    
    65,358Operating loss
    
    
    (2,906
    )
    
    
    (1,543
    )
    
    
    (7,154
    )
    
    
    (4,939
    )
    
    
    (61,436
    )Merger cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (515
    )Interest and other income
    
    
    131
    
    
    
    46
    
    
    
    242
    
    
    
    85
    
    
    
    1,614Rental income
    
    
    89
    
    
    
    87
    
    
    
    252
    
    
    
    249
    
    
    
    2,150Rent expense
    
    
    (88
    )
    
    
    (86
    )
    
    
    (249
    )
    
    
    (247
    )
    
    
    (2,009
    )Interest and other expense
    
    
    (66
    )
    
    
    (35
    )
    
    
    (178
    )
    
    
    (95
    )
    
    
    (3,274
    )License fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,050Net loss
    
    $
    (2,840
    )
    
    $
    (1,531
    )
    
    $
    (7,087
    )
    
    $
    (4,947
    )
    
    $
    (61,420
    )Deemed dividend to Series C
Preferred Stockholders upon
issuance of Series C Preferred
Stock with a beneficial
conversion and amortization of
related issuance costs
    
    
    (27
    )
    
    
    (84
    )
    
    
    (192
    )
    
    
    (580
    )
    
    
    (5,297
    )Net loss attributable to common
stockholders
    
    $
    (2,867
    )
    
    $
    (1,615
    )
    
    $
    (7,279
    )
    
    $
    (5,527
    )
    
    $
    (66,717
    )Basic and diluted net loss per
share attributable to common
stockholders
    
    $
    (0.04
    )
    
    $
    (0.03
    )
    
    $
    (0.13
    )
    
    $
    (0.14
    )
    
    $
    (3.12
    )Weighted average number of
shares used for calculation of
net loss per share
    
    
    65,941,488
    
    
    
    48,498,899
    
    
    
    57,574,137
    
    
    
    39,640,542
    
    
    
    21,383,863
  4




---



##### 



ReGen Biologics, Inc.
( )
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) AND SERIES
A AND SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK
 Series A
    
    Series C
    
    Stockholders Equity (Deficit)Redeemable
    
    Redeemable
    
    Series A  F
    
    Series B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    DeficitConvertible
    
    Convertible
    
    Convertible
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    Accumulated
    
    TotalPreferred
    
    Preferred
    
    Preferred
    
    Preferred
    
    
    
    
    
    
    
    
    
    Additional
    
    Deferred
    
    During
    
    Other
    
    StockholdersStock
    
    Stock
    
    Stock
    
    Stock
    
    Common Stock
    
    Paid-In
    
    Stock
    
    Development
    
    Comprehensive
    
    EquityShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Compensation
    
    Stage
    
    Loss
    
    (Deficit)Issuance of common stock at
$0.03127 per share for net
assets contributed by
founders in May 1990
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    1,400,000
    
    
    $
    1
    
    
    $
    44
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    45Issuance of common stock at
$0.005 per share for cash
in November 1991
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    700,000
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Issuance of Series A
convertible preferred stock
at $1.00 per share for cash
in April 1991, net of
offering costs of $44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    725,000
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    681
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    682Issuance of Series B
convertible preferred stock
at $3.00 per share for cash
and in exchange for notes
payable in January, March,
May, and July 1992, net of
offering costs of $29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,226,338
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,650Net loss from inception
(December 21, 1989) through
December 31, 1992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,476
    )
    
    
    
    
    
    
    (2,476
    )Balance at December 31, 1992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,951,338
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,100,000
    
    
    
    1
    
    
    
    4,378
    
    
    
    
    
    
    
    (2,476
    )
    
    
    
    
    
    
    1,904Issuance of Series C
convertible preferred stock
at $4.50 per share for cash
in December 1993, net of
offering costs of $29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    550,552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,448
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,448Exercise of common stock
options at $0.30 per share
for cash in February 1993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Issuance of common stock at
$0.30 per share in 1993 in
exchange for services to a
consultant
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,342
    )
    
    
    
    
    
    
    (1,342
    )Balance at December 31, 1993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,501,890
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,105,200
    
    
    
    1
    
    
    
    6,828
    
    
    
    
    
    
    
    (3,818
    )
    
    
    
    
    
    
    3,012Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,463
    )
    
    
    
    
    
    
    (1,463
    )Balance at December 31, 1994
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,501,890
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,105,200
    
    
    
    1
    
    
    
    6,828
    
    
    
    
    
    
    
    (5,281
    )
    
    
    
    
    
    
    1,549Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,959
    )
    
    
    
    
    
    
    (1,959
    )Balance at December 31, 1995
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,501,890
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    2,105,200
    
    
    $
    1
    
    
    $
    6,828
    
    
    
    
    
    
    $
    (7,240
    )
    
    
    
    
    
    $
    (410
    )
  5




---



##### 



ReGen Biologics, Inc.
( )
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) AND SERIES
A AND SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
 Series A
    
    Series C
    
    Stockholders Equity (Deficit)Redeemable
    
    Redeemable
    
    Series A  F
    
    Series B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    DeficitConvertible
    
    Convertible
    
    Convertible
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    Accumulated
    
    TotalPreferred
    
    Preferred
    
    Preferred
    
    Preferred
    
    
    
    
    
    
    
    
    
    Additional
    
    Deferred
    
    During
    
    Other
    
    StockholdersStock
    
    Stock
    
    Stock
    
    Stock
    
    Common Stock
    
    Paid-In
    
    Stock
    
    Development
    
    Comprehensive
    
    EquityShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Compensation
    
    Stage
    
    Loss
    
    (Deficit)Balance at December 31, 1995 (carried forward)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,501,890
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    2,105,200
    
    
    $
    1
    
    
    $
    6,828
    
    
    $
    
    
    
    $
    (7,240
    )
    
    
    
    
    
    $
    (410
    )Issuance of Series D convertible preferred stock at $7.25 per
share for cash in March and April 1996, net of offering costs
of $536
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,191,321
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,101Exercise of common stock options at $0.10, $0.30, and $0.45
per share in August and October 1996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,333
    
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,931
    )
    
    
    
    
    
    
    (1,931
    )Balance at December 31, 1996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,693,211
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,268,533
    
    
    
    1
    
    
    
    14,972
    
    
    
    
    
    
    
    (9,171
    )
    
    
    
    
    
    
    5,803Issuance of Series E convertible preferred stock at $7.25 per
share for cash in August and September 1997, net of offering
costs of $53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335,314
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,378
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,378Exercise of common stock options at $0.10, $0.30, and $0.45
per share in April, August, and September 1997
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,111
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,868
    )
    
    
    
    
    
    
    (3,868
    )Balance at December 31, 1997
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,028,525
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,300,644
    
    
    
    1
    
    
    
    17,355
    
    
    
    
    
    
    
    (13,039
    )
    
    
    
    
    
    
    4,318Exercise of common stock options at $0.10, $0.20, $1.27, and
$1.45 per share in May, July, November and December 1998,
respectively
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,879
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108Compensation expense associated with stock option modifications
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,815
    )
    
    
    
    
    
    
    (3,815
    )Balance at December 31, 1998
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,028,525
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,460,523
    
    
    
    1
    
    
    
    17,519
    
    
    
    
    
    
    
    (16,854
    )
    
    
    
    
    
    
    667Exercise of common stock options at $.725 and $1.45 per share
in April, June and August 1999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,396
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32Issuance of Series F convertible preferred stock at $8.73 per
share for cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    453,310
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,956
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,956Compensation expense associated with stock option grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,436
    
    
    
    (3,247
    )
    
    
    
    
    
    
    
    
    
    
    189Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,458
    )
    
    
    
    
    
    
    (5,458
    )Balance at December 31, 1999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,481,835
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    2,502,919
    
    
    $
    1
    
    
    $
    24,943
    
    
    $
    (3,247
    )
    
    $
    (22,312
    )
    
    
    
    
    
    $
    (614
    )
  6




---



##### 



ReGen Biologics, Inc.
( )
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) AND SERIES
A AND SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
 Series A
    
    Series C
    
    Stockholders Equity (Deficit)Redeemable
    
    Redeemable
    
    Series A  F
    
    Series B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    DeficitConvertible
    
    Convertible
    
    Convertible
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    Accumulated
    
    TotalPreferred
    
    Preferred
    
    Preferred
    
    Preferred
    
    
    
    
    
    
    
    
    
    Additional
    
    Deferred
    
    During
    
    Other
    
    StockholdersStock
    
    Stock
    
    Stock
    
    Stock
    
    Common Stock
    
    Paid-In
    
    Stock
    
    Development
    
    Comprehensive
    
    EquityShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Compensation
    
    Stage
    
    Loss
    
    (Deficit)Balance at December 31, 1999 (brought forward)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,481,835
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    2,502,919
    
    
    $
    1
    
    
    $
    24,943
    
    
    $
    (3,247
    )
    
    $
    (22,312
    )
    
    
    
    
    
    $
    (614
    )Compensation expense associated with stock option grants
in prior year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    738
    
    
    
    
    
    
    
    
    
    
    
    738Compensation expense associated with stock option grants
in current year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,124
    
    
    
    (1,642
    )
    
    
    
    
    
    
    
    
    
    
    482Stock options cancelled during 2000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,089
    )
    
    
    1,089
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,229
    )
    
    
    
    
    
    
    (5,229
    )Balance at December 31, 2000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,481,835
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    2,502,919
    
    
    
    1
    
    
    
    25,978
    
    
    
    (3,062
    )
    
    
    (27,541
    )
    
    
    
    
    
    
    (4,623
    )Exercise of common stock options at $.10 per share in 2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Exercise of common stock options at $1.45 per share in 2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Compensation expense associated with stock option grants
in prior years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    935
    
    
    
    
    
    
    
    
    
    
    
    935Compensation expense associated with stock option grants
in current year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,010
    
    
    
    (833
    )
    
    
    
    
    
    
    
    
    
    
    177Stock options cancelled during 2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (161
    )
    
    
    161
    
    
    
    
    
    
    
    
    
    
    
    Deferred stock compensation associated with stock option
grants to non-employees in 2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    228
    
    
    
    (131
    )
    
    
    
    
    
    
    
    
    
    
    97Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,330
    )
    
    
    
    
    
    
    (4,330
    )Balance at December 31, 2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,481,835
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    2,528,044
    
    
    $
    1
    
    
    $
    27,058
    
    
    $
    (2,930
    )
    
    $
    (31,871
    )
    
    
    
    
    
    $
    (7,741
    )
  7




---



##### 



ReGen Biologics, Inc.
( )
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) AND SERIES
A AND SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
P
 Series A
    
    Series C
    
    Stockholders Equity (Deficit)Redeemable
    
    Redeemable
    
    Series A  F
    
    Series B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    DeficitConvertible
    
    Convertible
    
    Convertible
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    Accumulated
    
    TotalPreferred
    
    Preferred
    
    Preferred
    
    Preferred
    
    
    
    
    
    
    
    
    
    Additional
    
    Deferred
    
    During
    
    Other
    
    StockholdersStock
    
    Stock
    
    Stock
    
    Stock
    
    Common Stock
    
    Paid-In
    
    Stock
    
    Development
    
    Comprehensive
    
    EquityShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Compensation
    
    Stage
    
    Loss
    
    (Deficit)Balance at December 31, 2001 (brought forward)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,481,835
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    2,528,044
    
    
    $
    1
    
    
    $
    27,058
    
    
    $
    (2,930
    )
    
    $
    (31,871
    )
    
    
    
    
    
    $
    (7,741
    )Issuance of Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    301,930
    
    
    
    1
    
    
    
    104
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105Issuance of Convertible Preferred Stock for
cash and conversion of bridge financing net of
issuance costs of $138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,564,047
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,717Deferred stock compensation associated with
stock option grants in 2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    370
    
    
    
    (370
    )
    
    
    
    
    
    
    
    
    
    
    Compensation expense associated with stock
options outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    452
    
    
    
    
    
    
    
    
    
    
    
    452Effect of reverse merger and recapitalization:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Valuation of warrants associated with bridge
financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    657
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    657Valuation of beneficial conversion associated
with bridge financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    843
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    843Compensation expense associated with stock
options outstanding recognized as a result of
the reverse merger
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,848
    
    
    
    
    
    
    
    
    
    
    
    2,848Conversion of convertible preferred shares to
Redeemable Convertible Preferred Series A at
liquidation / redemption value
    
    
    15,298,351
    
    
    $
    6,855
    
    
    
    
    
    
    
    
    
    
    
    (5,564,047
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,854
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,855
    )Conversion of convertible preferred shares to
Common Stock and Series B Preferred Shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,481,835
    )
    
    
    (1
    )
    
    
    12,025,656
    
    
    $
    120
    
    
    
    297,146
    
    
    
    3
    
    
    
    (122
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Conversion of Subsidiary Common Stock into
Company Common Stock and Series B Preferred
Shares:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Elimination of Subsidiary Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,829,974
    )
    
    
    (1
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of Company Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,781,018
    
    
    
    78
    
    
    
    (78
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company Common Stock and related equity held
by existing shareholders (net of 18,115 shares
held treasury)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,966,966
    
    
    
    89
    
    
    
    2,678
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,767Conversion of Convertible Preferred Series B
Stock to Company Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,025,656
    )
    
    
    (120
    )
    
    
    12,025,656
    
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minimum Pension Liability Adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (58
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,951
    )
    
    
    
    
    
    
    Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,009
    )Balance at December 31, 2002
    
    
    15,298,351
    
    
    
    6,855
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,070,786
    
    
    
    291
    
    
    
    31,373
    
    
    
    
    
    
    
    (41,822
    )
    
    
    (58
    )
    
    
    (10,216
    )Compensation expense associated with stock
options outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    405
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    405Issuance of Redeemable Convertible Preferred
Series C Stock, net of issuance costs of $612,
which include the issuance of non-cash
consideration in the form of warrants
    
    
    
    
    
    
    
    
    
    
    22,246,153
    
    
    $
    9,357
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97Issuance of Common Stock warrants to Series C
Stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (969
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    969Valuation of beneficial conversion associated
with Series C Stock financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,292
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,292Accretion of beneficial conversion associated
with Series C Stock financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,292
    )
    
    
    
    
    
    
    (4,292
    )Issuance of Common Stock  warrants exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    230,000
    
    
    
    2
    
    
    
    113
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Accretion of Series C Stock issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )
    
    
    
    
    
    
    (51
    )Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,730
    )
    
    
    
    
    
    
    (5,730
    )Balance at December 31, 2003
    
    
    15,298,351
    
    
    $
    6,855
    
    
    
    22,246,153
    
    
    $
    8,439
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    29,300,786
    
    
    $
    293
    
    
    $
    37,249
    
    
    $
    
    
    
    $
    (51,895
    )
    
    $
    (58
    )
    
    $
    (14,411
    )
  8




---



##### 



ReGen Biologics, Inc.
( )
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) AND SERIES
A AND SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
 Series A
    
    Series C
    
    Stockholders Equity (Deficit)Redeemable
    
    Redeemable
    
    Series A  F
    
    Series B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    DeficitConvertible
    
    Convertible
    
    Convertible
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    Accumulated
    
    TotalPreferred
    
    Preferred
    
    Preferred
    
    Preferred
    
    
    
    
    
    
    
    
    
    Additional
    
    Deferred
    
    During
    
    Other
    
    StockholdersStock
    
    Stock
    
    Stock
    
    Stock
    
    Common Stock
    
    Paid-In
    
    Stock
    
    Development
    
    Comprehensive
    
    EquityShares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Compensation
    
    Stage
    
    Loss
    
    (Deficit)Balance at December 31,
2003 (brought forward)
    
    
    15,298,351
    
    
    $
    6,855
    
    
    
    22,246,153
    
    
    $
    8,439
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    29,300,786
    
    
    $
    293
    
    
    $
    37,249
    
    
    $
    
    
    
    $
    (51,895
    )
    
    $
    (58
    )
    
    $
    (14,411
    )Compensation expense associated
with stock options outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264Accretion of Series C Stock
issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173
    )
    
    
    
    
    
    
    (173
    )Recognition of Series C Stock
issuance cost upon conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    589
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (589
    )
    
    
    
    
    
    
    (589
    )Issuance of Common Stock 
warrants exercised net of 8,901
shares held treasury
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141,152
    
    
    
    1
    
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Issuance of Common Stock 
options exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261,109
    
    
    
    3
    
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80Issuance of Common Stock 
common stock offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,074,595
    
    
    
    121
    
    
    
    9,745
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,866Conversion of Series A Stock to
Common Stock
    
    
    (642,723
    )
    
    
    (288
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    642,723
    
    
    
    6
    
    
    
    282
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    288Conversion of Series C Stock to
Common Stock
    
    
    
    
    
    
    
    
    
    
    (9,302,620
    )
    
    
    (4,168
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,302,620
    
    
    
    93
    
    
    
    4,075
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,168Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,781
    )
    
    
    
    
    
    
    (6,781
    )Balance at December 31, 2004
    
    
    14,655,628
    
    
    
    6,567
    
    
    
    12,943,533
    
    
    
    5,033
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,722,985
    
    
    
    517
    
    
    
    51,750
    
    
    
    
    
    
    
    (59,438
    )
    
    
    (58
    )
    
    
    (7,229
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95Accretion of Series C Stock
issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82
    )
    
    
    
    
    
    
    (82
    )Recognition of Series C Stock
issuance cost upon conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (110
    )
    
    
    
    
    
    
    (110
    )Conversion of Series A
Preferred Stock to Common Stock
    
    
    (1,395,603
    )
    
    
    (625
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,395,603
    
    
    
    14
    
    
    
    611
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625Conversion of Series C
Preferred Stock to Common Stock
    
    
    
    
    
    
    
    
    
    
    (1,896,896
    )
    
    
    (850
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,896,896
    
    
    
    19
    
    
    
    831
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    850Issuance of Common Stock work
completed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    1
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50Issuance of Common Stock 
options exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Issuance of Common Stock and
warrants  common stock
offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,011,178
    
    
    
    140
    
    
    
    11,067
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,207Recognition of expense for the
minimum pension liability upon
termination of defined benefit
pension plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,087
    )
    
    
    
    
    
    
    Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,029
    )Balance at September 30, 2005
(unaudited)
    
    
    13,260,025
    
    
    $
    5,942
    
    
    
    11,046,637
    
    
    $
    4,375
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    69,096,662
    
    
    $
    691
    
    
    $
    64,406
    
    
    $
    
    
    
    $
    (66,717
    )
    
    $
    
    
    
    $
    (1,620
    )
  9




---



##### 



REGEN BIOLOGICS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Period fromDecember 21, 1989Nine Months Ended September 30,
    
    
    (Inception) to2005
    
    
    2004
    
    
    September 30, 2005(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Operating ActivitiesNet loss
    
    $
    (7,087
    )
    
    $
    (4,947
    )
    
    $
    (61,420
    )Adjustments to reconcile net loss to net cash used in operating activities:Stock-based compensation
    
    
    186
    
    
    
    199
    
    
    
    6,772Amortization of debt discount for warrant and beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    1,500Depreciation and amortization
    
    
    29
    
    
    
    47
    
    
    
    2,208Loss on disposal of property and equipment
    
    
    
    
    
    
    
    
    
    
    9Recognition of expense for the minimum pension liability component of
accumulated other comprehensive loss upon termination of defined benefit
pension plan
    
    
    58
    
    
    
    
    
    
    
    58Exchange loss
    
    
    12
    
    
    
    
    
    
    
    12Changes in operating assets and liabilities:Other current assets and receivables
    
    
    (34
    )
    
    
    (71
    )
    
    
    (198
    )Inventory
    
    
    (230
    )
    
    
    114
    
    
    
    (306
    )Other assets
    
    
    21
    
    
    
    22
    
    
    
    (52
    )Accounts payable and accrued expenses
    
    
    462
    
    
    
    (89
    )
    
    
    2,465Other liabilities
    
    
    
    
    
    
    17
    
    
    
    38Net cash used in operating activities
    
    
    (6,583
    )
    
    
    (4,708
    )
    
    
    (48,914
    )Investing ActivitiesPurchases of property and equipment
    
    
    (99
    )
    
    
    (15
    )
    
    
    (2,101
    )Changes in short-term investments
    
    
    (2,470
    )
    
    
    
    
    
    
    475Net cash provided used in investing activities
    
    
    (2,569
    )
    
    
    (15
    )
    
    
    (1,626
    )Financing ActivitiesIssuance of common stock to founders for contributed patents
    
    
    
    
    
    
    
    
    
    
    42Issuance of Series B preferred stock upon conversion of interest payable
    
    
    
    
    
    
    
    
    
    
    6Reduction in payable to stockholder
    
    
    
    
    
    
    
    
    
    
    (76
    )Proceeds from issuance of convertible preferred stock, net of offering costs
paid in cash
    
    
    
    
    
    
    
    
    
    
    34,221Proceeds from issuance of common stock and warrants
    
    
    11,210
    
    
    
    9,911
    
    
    
    21,630Repayment of capital lease obligations
    
    
    (8
    )
    
    
    (4
    )
    
    
    (131
    )Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    11,410Payments on notes payable
    
    
    
    
    
    
    
    
    
    
    (2,323
    )Net cash provided by financing activities
    
    
    11,202
    
    
    
    9,907
    
    
    
    64,779Effect of exchange rate changes on cash
    
    
    (10
    )
    
    
    
    
    
    
    (10
    )Net increase in cash and cash equivalents
    
    
    2,040
    
    
    
    5,184
    
    
    
    14,229Cash and cash equivalents at beginning of period
    
    
    12,190
    
    
    
    8,323
    
    
    
    1Cash and cash equivalents at end of period
    
    $
    14,230
    
    
    $
    13,507
    
    
    $
    14,230Supplemental Disclosure of Cash Flow InformationNon-cash disclosure:Issuance of Series B convertible preferred stock upon conversion of notes
payable
    
    $
    
    
    
    $
    
    
    
    $
    300Equipment purchased pursuant to capital leases
    
    
    63
    
    
    
    4
    
    
    
    196Cancellation of stock options associated with deferred stock compensation
    
    
    
    
    
    
    
    
    
    
    1,250Net assets assumed in merger
    
    
    
    
    
    
    
    
    
    
    2,733Conversion of bridge financing to equity
    
    
    
    
    
    
    
    
    
    
    2,860Beneficial Conversion of Series C Stock
    
    
    
    
    
    
    
    
    
    
    4,292Warrants associated with Series C Stock
    
    
    
    
    
    
    
    
    
    
    969Warrants associated with Series C Stock private placement agent fee
    
    
    
    
    
    
    
    
    
    
    97Conversion of Series A Preferred Stock
    
    
    625
    
    
    
    268
    
    
    
    913Warrants exercised, cashless transaction
    
    
    
    
    
    
    10
    
    
    
    10Conversion of Series C Preferred Stock
    
    
    850
    
    
    
    3,068
    
    
    
    5,018Issuance of Common Stock for services rendered
    
    
    50
    
    
    
    
    
    
    
    50Cash disclosure:Cash paid for interest
    
    
    2
    
    
    
    1
    
    
    
    318
  10




---



##### 



REGEN BIOLOGICS, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share data)
 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
 Ò
  Ô
  Disclosure about
Segments of an Enterprise and Related Information.
 Reclassifications
  Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2004
    
    
    2004(In thousands)Research and Development
    
    $
    9
    
    
    $
    28Business development, general and administrative
    
    
    33
    
    
    
    171Total stock-based compensation expense  reclassified
    
    $
    42
    
    
    $
    199
  11




---



##### 



Use of Estimates
  Cash and Cash Equivalents and Short-term Investments
   Inventories
   September 30,
    
    
    December 31,2005
    
    
    2004(In thousands)Raw material
    
    $
    26
    
    
    $
    25Work in process
    
    
    136
    
    
    
    14Finished goods
    
    
    144
    
    
    
    37$
    306
    
    
    $
    76
  Accrued Expenses
  September 30,
    
    
    December 31,2005
    
    
    2004(In thousands)Accrued professional fees
    
    $
    610
    
    
    $
    313Accrued wages and vacation
    
    
    68
    
    
    
    210Accrued printing cost
    
    
    58
    
    
    
    52Other accrued cost
    
    
    70
    
    
    
    63$
    806
    
    
    $
    638
 12




---



##### 



Defined Benefit Plan
   Foreign Currency Transactions
  Rental Activities
  Basic and Diluted Loss Per Share
  Stock Based Compensation
 Accounting for Stock Issued to Employees
 13




---



##### 



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Dollars in thousands, except per share data)Net loss attributable to common stockholders, as reported
    
    $
    (2,867
    )
    
    $
    (1,615
    )
    
    $
    (7,279
    )
    
    $
    (5,527
    )Add: Total stock-based employee compensation expense as
reported under intrinsic value method (APB No 25) for all
awards, net of related tax effects
    
    
    34
    
    
    
    36
    
    
    
    102
    
    
    
    181Deduct: Total stock-based employee compensation expense
determined under fair value based method (SFAS No. 123) for
all awards, net of related tax effects
    
    
    (191
    )
    
    
    (194
    )
    
    
    (570
    )
    
    
    (613
    )Pro forma net loss attributable to common stockholders
    
    $
    (3,024
    )
    
    $
    (1,773
    )
    
    $
    (7,746
    )
    
    $
    (5,959
    )Net loss per share attributable to common stockholders:Basic and diluted  as reported
    
    $
    (0.04
    )
    
    $
    (0.03
    )
    
    $
    (0.13
    )
    
    $
    (0.14
    )Basic and diluted  pro forma
    
    $
    (0.05
    )
    
    $
    (0.04
    )
    
    $
    (0.13
    )
    
    $
    (0.15
    )Shares
    
    
    65,941,488
    
    
    
    48,498,899
    
    
    
    57,574,137
    
    
    
    39,640,542
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2005
    
    2004Risk free interest rate
    
    
    4.14
    %
    
    
    4.21
    %
    
    
    4.14 - 4.80
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected lives
    
    
    10 years
    
    
    
    10 years
    
    
    

    10 yearsExpected volatility
    
    
    91.57
    %
    
    
    81.28
    %
    
    
    91.57-100.50
    %
  Accounting Principles Issued But Not Yet Adopted
 Share-Based Payment Accounting for Stock-Based Compensation Accounting
for Stock Issued to Employees Statement of Cash Flows
    14




---



##### 



Inventory Costs Inventory Pricing
 Accounting Changes and Error Corrections Accounting Changes, Reporting
Accounting Changes in Interim Financial Statements
 (2) COMMITMENTS AND CONTINGENCIES
   15




---



##### 



(3) CONCENTRATIONS OF RISK
 Ò
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Receivables:U.STrade
(Linvatec)
    
    
    37
    %
    
    
    38
    %
    
    
    37
    %
    
    
    38
    %SwitzerlandRelated party
(Centerpulse)
    
    
    0
    %
    
    
    62
    %
    
    
    0
    %
    
    
    62
    %Trade
(various)
    
    
    6
    %
    
    
    0
    %
    
    
    6
    %
    
    
    0
    %Germany
(Trade-various)
    
    
    41
    %
    
    
    0
    %
    
    
    41
    %
    
    
    0
    %Belgium
(Trade-various)
    
    
    16
    %
    
    
    0
    %
    
    
    16
    %
    
    
    0
    %Sales revenue:U.S. (Linvatec)
    
    
    67
    %
    
    
    31
    %
    
    
    84
    %
    
    
    51
    %SwitzerlandCenterpulse
    
    
    3
    %
    
    
    69
    %
    
    
    9
    %
    
    
    49
    %Other
    
    
    3
    %
    
    
    0
    %
    
    
    1
    %
    
    
    0
    %Germany (various)
    
    
    19
    %
    
    
    0
    %
    
    
    4
    %
    
    
    0
    %Belgium (various)
    
    
    8
    %
    
    
    0
    %
    
    
    2
    %
    
    
    0
    %Royalties:U.S. (Linvatec)
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   16




---



##### 



(4) RELATED PARTY TRANSACTIONS
  (5) CAPITAL TRANSACTIONS
    Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations (Dollars in thousands,
except per share data)
  Business
  17




---



##### 



The preliminary observations presented above are for informational purposes only and should
not be construed as providing conclusive evidence regarding the results to be expected from the
clinical trials. We are continuing to analyze the data in order to more completely interpret the
preliminary observations. The preliminary observations presented above are not in any way
indicative of the likelihood for FDA approval of the CMI. The FDA has not yet approved the CMI and
there is no guarantee that we will obtain such approval.
 18




---



##### 




    
    Obtaining FDA approval of the CMI;
    
    Developing our distribution and marketing capabilities in the U.S., Europe and certain other countries;
    
    Conducting further research and development on select product opportunities within our
research and development pipeline.
  Recent Developments
   19




---



##### 



20




---



##### 



Critical Accounting Policies
  CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
  Results of Operations
 RECLASSIFICATION OF STOCK-BASED COMPENSATION EXPENSE.
 Three Months Ended
    
    
    Nine Months EndedSeptember30,
    
    
    September 30,2004
    
    
    2004(unaudited)
    
    
    (unaudited)(In thousands)Research and Development
    
    $
    9
    
    
    $
    28Business development, general and administrative
    
    
    33
    
    
    
    171Total stock-based compensation expense  reclassified
    
    $
    42
    
    
    $
    199
 Three and Nine Months Ended September 30, 2005 Compared to Three and Nine Months Ended September 30, 2004
 REVENUE.
   21




---



##### 



COST OF GOODS SOLD.
  RESEARCH AND DEVELOPMENT.
 22




---



##### 



BUSINESS DEVELOPMENT, GENERAL AND ADMINISTRATIVE.
 RECOGNITION OF EXPENSE FOR THE MINIMUM PENSION LIABILITY
 NON-OPERATING INCOME (EXPENSE).
 Liquidity and Capital Resources
    23




---



##### 



24




---



##### 



SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
 Cautionary Note Regarding Forward-Looking Statements
      Item 3. Quantitative and Qualitative Disclosures About Market Risk
  25




---



##### 



Item 4. Controls and Procedures
  Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control Over Financial Reporting.
 PART II
 Item 1. Legal Proceedings
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (dollars in thousands, except per share data)
   26




---



##### 



Item 3. Defaults upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  Item 6. Exhibits
   Number
    
    Description2.1
    
    Agreement and Plan of Merger by and among ReGen Biologics, Inc., Aros Corporation and Aros Acquisition
Corporation dated as of June 7, 2002(1)2.2
    
    Agreement and Plan of Merger among the Company, NHA Acquisition Corporation, National Health Advisors,
Ltd., Scott A. Mason and Donald W. Seymour dated as of June 2, 1997(5)2.3
    
    Agreement and Plan of Merger among the Company and MetaContent, Inc. dated as of March 21, 2001(2)2.4
    
    Asset Purchase Agreement between Cerner Corporation and the Company dated as of April 7, 2001(3)2.5
    
    Amendment No. 1 to Asset Purchase Agreement by and between Cerner Corporation and the Company dated as
of June 11, 2001(3)3.1
    
    Amended and Restated Certificate of Incorporation (as amended)(22)3.2
    
    Amended and Restated By-Laws(4)4.1
    
    Specimen Common Stock Certificate(6)4.2
    
    Rights Agreement between the Company and First Chicago Trust Company of New York, dated as of May 6,
1997(8)4.3*
    
    ReGen Biologics, Inc. Employee Stock Option Plan, Amended and Restated Effective January 31, 2003(10)4.4*
    
    ReGen Biologics, Inc. Non-Employee Director Stock Option Plan, Amended and Restated Effective January
31, 2003(10)4.5
    
    Registration Rights Agreement between the Company and the Investors listed therein(7)4.6
    
    Registration Agreement between the Company and Certain Stockholders, dated December 28, 1995(13)
 27




---



##### 



Number
    
    Description4.7
    
    Amendment No. 1 to Rights Agreement between the Company and EquiServe Trust Company, N.A. dated as of
June 7, 2002(9)4.8
    
    Registration Agreement between the Company and each of Iowa Health Centers, P.C. d/b/a Iowa Heart
Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute dated
January 7, 1997(12)4.9
    
    Nonqualified Stock Option Agreements between the Company and each of Iowa Health Centers, P.C. d/b/a
Iowa Heart Center, P.C., Mercy Hospital Medical Center and Mark A. Tannenbaum, M.D., dated January 7,
1997(14)4.10*
    
    Form of Employee Incentive Stock Option Agreement(22)4.11*
    
    ReGen Biologics, Inc. Non-Employee Director Supplemental Stock Option Plan Amended and Restated
Effective January 31, 2003(16)4.12
    
    Common Stock Registration Rights Agreement by and among ReGen Biologics, Inc., and the stockholders
named therein, dated as of April 19, 2004(17)4.13*
    
    Form of Incentive Stock Option Agreement(18)4.14*
    
    Form of Nonqualified Director Supplemental Stock Option Agreement(18)4.15
    
    Subscription Agreement by and between ReGen Biologics, Inc. and the Investors named therein dated as
of July 14, 2005(21)4.16
    
    Form of Warrant Agreement by and between ReGen Biologics, Inc. and the Individuals named therein,
dated as of July 14, 2005(21)4.17*
    
    Form of Nonqualified Non-Employee Director Stock Option Agreement(22)4.18*
    
    Form of Nonqualified Employee, Non-Employee Director or Consultant Stock Option Agreement(22)4.19*
    
    Form of Nonqualified Non-Employee Director Stock Option Agreement for the Supplemental Stock Option
Plan(22)4.20
    
    Amended and Restated Stockholders Agreement by and among the Company and the Stockholders named
therein dated as of September 21, 2005(23)10.1*
    
    Employment agreement by and between Gerald E. Bisbee, Jr., Ph. D. and ReGen Biologics, Inc. dated
September 22, 1998 and amended September 12, 2000(11)10.2
    
    Form of Indemnification Agreement(4)10.3*
    
    Employment Agreement by and between Brion D. Umidi and ReGen Biologics, Inc. dated March 23, 2004(15)10.4
    
    License Agreement by and between ReGen Biologics, Inc. and Linvatec Corporation dated April 7, 2000(15)
 28




---



##### 



Number
    
    Description10.5
    
    Credit Agreement by and between ReGen Biologics, Inc. and Sulzer Medica USA Holding Company dated
March 14, 2000(15)10.6
    
    Agreement by and among Sulzer Medica USA Holding Co., Sulzer Biologics Inc. Sulzer Orthopedics Ltd.
and ReGen Biologics, Inc. dated February 20, 2001(15)10.7*
    
    Assignment and Royalty Agreement by and among ReGen Biologics, Inc. Modified Polymer Components, Inc.
and Dr. J. Richard Steadman dated April 9, 1997(15)10.8
    
    Exclusive License Agreement by and between ReGen Biologics, Inc. and Dr. Shu-Tung Li dated August 24,
1995(15)10.9*
    
    First Amendment to Employment Agreement by and between Gerald E. Bisbee, Jr., Ph. D. and ReGen
Biologics, Inc. dated March 23, 2004(15)10.10
    
    Common Stock Purchase Agreement by and among ReGen Biologics, Inc., and the Individuals named therein,
dated as of April 19, 2004(17)10.11
    
    Agreement by and between ReGen Biologics, Inc. and MedWork AG dated as of January 1, 2005(19)10.12
    
    Credit Agreement by and between ReGen Biologics, Inc. and Sulzer Medica USA Holding Company dated
November 30, 1998(20)10.13
    
    Distributor Agreement by and between ReGen Biologics, Inc. and XMedica effective as of October 24,
2005(24)21.1
    
    Subsidiaries of the Registrant(19)31.1
    
    Section 302 Certification from
Gerald E. Bisbee, Jr., dated November 10, 2005(24)31.2
    
    Section 302 Certification from
Brion Umidi, dated November 10, 2005(24)32.1
    
    Section 906 Certification from
Gerald E. Bisbee, Jr., dated November 10, 2005(24)32.2
    
    Section 906 Certification from
Brion Umidi, dated November 10, 2005(24)
 
 (1)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
June 30, 2002 (File No. 000-20805).(2)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q/ A for the quarter
ended March 31, 2001 (File No. 000-20805).(3)
    
    Incorporated herein by reference to the Companys Report on Form 8-K filed on July 18, 2001
(File No. 000-20805).(4)
    
    Incorporated herein by reference to the Companys Report on Form 8-K filed on March 17, 2004
(File No. 000-20805).(5)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
June 30, 1997 (File No. 000-20805). 29




---



##### 



(6)
    
    Incorporated herein by reference to the Companys Registration Statement on Form S-3, filed
on November 19, 2003 (File No. 333-110605).(7)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on September 25,
2003 (File No. 000-20805).(8)
    
    Incorporated herein by reference to the Companys Report on Form 8-K filed on June 4, 1997
(File No. 000-20805).(9)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
June 30, 2002 (File No. 000-20805).(10)
    
    Incorporated herein by reference to the Companys Proxy Statement on Schedule 14A filed on
April 14, 2003 (File No. 000-20805).(11)
    
    Incorporated herein by reference to the Companys Report on Form 8-K/A, filed on September 4,
2002 (File No. 000-20805).(12)
    
    Incorporated herein by reference to the Companys Current Report on Form 8-K filed on January
14, 1997 (File No. 000-20805).(13)
    
    Incorporated herein by reference to the Companys Registration Statement on Form S-1, filed
on June 4, 1996 (File No. 333-04106).(14)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
March 31, 1997 (File No. 000-20805).(15)
    
    Incorporated herein by reference to the Companys Report on Form 10-K for the year ended
December 31, 2003 (File No. 000-20805)(16)
    
    Incorporated herein by reference to the Companys Registration Statement on Form S-1/A, filed
on January 14, 2004 (File No. 333-110605).(17)
    
    Incorporated herein by reference to the Companys Registration Statement on Form S-1, filed
on April 26, 2004 (File No. 33-114867).(18)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
September 30, 2004 (File No. 000-20805).(19)
    
    Incorporated herein by reference to the Companys Report on Form 10-K for the year ended
December 31, 2004 (File No. 000-20805)(20)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
March 31, 2005 (File No. 000-20805).(21)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on July 18, 2005
(File No. 000-20805).(22)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
June 30, 2005 (File No. 000-20805).(23)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on September 22,
2005 (File No. 000-20805).(24)
    
    Included with this filing. 
  30




---



##### 



SIGNATURES
  REGEN BIOLOGICS, INC.By:
    
    /s/ BRION D. UMIDIBrion D. UmidiSenior Vice President andChief Financial Officer
 31