##### 



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 000-20805
 ReGen Biologics, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    23-2476415(I.R.S. Employer
Identification No.)411 Hackensack Avenue, 
10thFloor, 
Hackensack, NJ(Address of principal executive offices)
    
    07601(Zip Code)
 Registrants telephone number, including area code:
(201) 651-5140
 þ o
  o o þ
 o þ




---



##### 



REGEN BIOLOGICS, INC.
 INDEX
 Page No.PART I  Financial InformationItem 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets at June 30, 2007 (unaudited) and December 31, 2006
    
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2007
(unaudited) and 2006 (unaudited), the Six Months Ended June 30, 2007 (unaudited) and 2006
(unaudited) and the Period from December 21, 1989 (inception) to June 30, 2007
(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 June 30, 2007 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007
(unaudited) and 2006 (unaudited) and the Period from December 21, 1989 (inception) to
June 30, 2007 (unaudited)
    
    
    10Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    11Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    27PART II  Other Information
    
    
    27Item 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3. Defaults Upon Senior Securities
    
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    
    28Item 5. Other Information
    
    
    29Item 6. Exhibits
    
    
    30Signatures
    
    
    34Certification
 2




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##### 



PART I  Financial Information
 Item 1. Financial Statements
 REGEN BIOLOGICS, INC.   CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30, 2007
    
    
    December 31, 2006(unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    7,542
    
    
    $
    7,268Short-term investments
    
    
    951
    
    
    
    648Trade receivables, net of allowance for
doubtful accounts of $7 and $8, as of June
30, 2007 and December 31, 2006, respectively
    
    
    115
    
    
    
    83Inventory
    
    
    278
    
    
    
    220Prepaid expenses and other current assets
    
    
    339
    
    
    
    350Total current assets
    
    
    9,225
    
    
    
    8,569Property and equipment, net
    
    
    309
    
    
    
    321Other assets
    
    
    114
    
    
    
    141Total assets
    
    $
    9,648
    
    
    $
    9,031LIABILITIES AND STOCKHOLDERS EQUITY
(DEFICIT)Current liabilitiesAccounts payable
    
    $
    742
    
    
    $
    438Accounts payable to related party
    
    
    3
    
    
    
    9Accrued expenses
    
    
    598
    
    
    
    825Other current liabilities
    
    
    14
    
    
    
    66Total current liabilities
    
    
    1,357
    
    
    
    1,338Other liabilities
    
    
    67
    
    
    
    57Long-term portion of capital leases
    
    
    29
    
    
    
    36Long-term portion of notes payable to related
party, including accrued interest of $1,910
and $1,702 at June 30, 2007 and December 31,
2006, respectively
    
    
    7,952
    
    
    
    7,744Total liabilities
    
    
    9,405
    
    
    
    9,175Series A redeemable convertible preferred
stock, $.01 par value; 15,309,822 shares
authorized; issued and outstanding 2,483,116
and 13,260,025 shares at liquidation
preference of $1,113 and $5,942 at June 30,
2007 and December 31, 2006, respectively
    
    
    1,113
    
    
    
    5,942Series C redeemable convertible preferred
stock, $.01 par value; 30,000,000 shares
authorized; issued and outstanding 6,583,348
and 11,046,637 shares at liquidation
preference of $2,950 and $4,950 as of June
30, 2007 and December 31, 2006, respectively
    
    
    2,723
    
    
    
    4,512Stockholders equity (deficit)Series D convertible preferred stock, options
and warrants; preferred stock , $.01 par
value; 500,000 shares authorized; issued and
outstanding 135,715 shares at liquidation
preference of $5,700 as of June 30, 2007
    
    
    5,491
    
    
    
    Common stock, $.01 par value; 165,000,000
shares authorized; issued 104,068,369 shares
at June 30, 2007, and 88,708,171 shares at
December 31, 2006
    
    
    1,041
    
    
    
    887Additional paid-in capital
    
    
    80,746
    
    
    
    73,349Deficit accumulated during development stage
    
    
    (90,871
    )
    
    
    (84,834
    )Total stockholders deficit
    
    
    (3,593
    )
    
    
    (10,598
    )Total liabilities and stockholders deficit
    
    $
    9,648
    
    
    $
    9,031
  3




---



##### 



REGEN BIOLOGICS, INC.   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Period fromDecember 21, 1989Three Months Ended June 30
    
    
    Six Months Ended June 30,
    
    
    (Inception) to2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    June 30, 2007Revenue:Sales
    
    $
    159
    
    
    $
    102
    
    
    $
    328
    
    
    $
    259
    
    
    $
    4,242Royalties
    
    
    12
    
    
    
    13
    
    
    
    24
    
    
    
    24
    
    
    
    306Grant and other revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    433Total revenue
    
    
    171
    
    
    
    115
    
    
    
    352
    
    
    
    283
    
    
    
    4,981Expenses:Costs of goods sold
    
    
    86
    
    
    
    94
    
    
    
    178
    
    
    
    240
    
    
    
    4,599Research and development
    
    
    1,193
    
    
    
    1,643
    
    
    
    2,256
    
    
    
    4,560
    
    
    
    50,911Business development,
general and
administrative
    
    
    2,027
    
    
    
    1,414
    
    
    
    3,721
    
    
    
    2,537
    
    
    
    34,597Recognition of expense
for the minimum pension
liability upon
termination of defined
benefit pension plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58Total expenses
    
    
    3,306
    
    
    
    3,151
    
    
    
    6,155
    
    
    
    7,337
    
    
    
    90,165Operating loss
    
    
    (3,135
    )
    
    
    (3,036
    )
    
    
    (5,803
    )
    
    
    (7,054
    )
    
    
    (85,184
    )Merger cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (515
    )Interest and other income
    
    
    121
    
    
    
    86
    
    
    
    212
    
    
    
    205
    
    
    
    2,285Rental income
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    164
    
    
    
    2,547Rent expense
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    (148
    )
    
    
    (2,409
    )Interest and other expense
    
    
    (121
    )
    
    
    (112
    )
    
    
    (235
    )
    
    
    (196
    )
    
    
    (4,000
    )License fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,050Net loss
    
    
    (3,135
    )
    
    
    (3,047
    )
    
    
    (5,826
    )
    
    
    (7,029
    )
    
    
    (85,226
    )Deemed dividend to Series C
Preferred Stockholders upon
issuance of Series C
Preferred Stock with a
beneficial conversion and
amortization of related
issuance costs
    
    
    (18
    )
    
    
    (27
    )
    
    
    (211
    )
    
    
    (54
    )
    
    
    (5,645
    )Net loss attributable to
common stockholders
    
    $
    (3,153
    )
    
    $
    (3,074
    )
    
    $
    (6,037
    )
    
    $
    (7,083
    )
    
    $
    (90,871
    )Basic and diluted net loss
per share attributable to
common stockholders
    
    $
    (0.03
    )
    
    $
    (0.04
    )
    
    $
    (0.06
    )
    
    $
    (0.10
    )
    
    $
    (3.34
    )Weighted average number of
shares used for calculation
of net loss per share
    
    
    103,890,480
    
    
    
    69,698,052
    
    
    
    103,003,965
    
    
    
    69,493,395
    
    
    
    27,226,211
  4




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##### 



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 and Series D
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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




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##### 



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 and Series D
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
(brought 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 and Series D
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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)
 Series A
    
    
    Series C
    
    
    Stockholders Equity (Deficit)Redeemable
    
    
    Redeemable
    
    
    Series A - F
    
    
    Series B and Series D
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    664
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    664Issuance 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,989
    )
    
    
    
    
    
    
    (5,989
    )Balance at December 31, 2003
    
    
    15,298,351
    
    
    $
    6,855
    
    
    
    22,246,153
    
    
    $
    8,439
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    29,300,786
    
    
    $
    293
    
    
    $
    37,508
    
    
    $
    
    
    
    $
    (52,154
    )
    
    $
    (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 and Series D
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    $
    37,508
    
    
    $
    
    
    
    $
    (52,154
    )
    
    $
    (58
    )
    
    $
    (14,411
    )Compensation expense associated with stock options
outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    684
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    684Accretion 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,201
    )
    
    
    
    
    
    
    (7,201
    )Balance at December 31, 2004
    
    
    14,655,628
    
    
    
    6,567
    
    
    
    12,943,533
    
    
    
    5,033
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,722,985
    
    
    
    517
    
    
    
    52,429
    
    
    
    
    
    
    
    (60,117
    )
    
    
    (58
    )
    
    
    (7,229
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    454
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    454Accretion of Series C Stock issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (109
    )
    
    
    
    
    
    
    (109
    )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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    1
    
    
    
    92
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93Issuance 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,731
    )
    
    
    
    
    
    
    Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,673
    )Balance at December 31, 2005
    
    
    13,260,025
    
    
    
    5,942
    
    
    
    11,046,637
    
    
    
    4,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,146,662
    
    
    
    691
    
    
    
    65,487
    
    
    $
    
    
    
    
    (72,067
    )
    
    $
    
    
    
    
    (5,889
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,183
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,183Accretion of Series C Stock issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (110
    )
    
    
    
    
    
    
    (110
    )Issuance of Common Stock- services rendered
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Issuance of Common Stock  options exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    310,178
    
    
    
    4
    
    
    
    113
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117Issuance of Common Stock-conversion of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,967
    
    
    
    4
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of Common Stock and warrants  common stock
offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,774,838
    
    
    
    188
    
    
    
    6,552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,740Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,657
    )
    
    
    
    
    
    
    Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,657
    )Balance at December 31, 2006
    
    
    13,260,025
    
    
    
    5,942
    
    
    
    11,046,637
    
    
    
    4,512
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    88,647,645
    
    
    
    887
    
    
    
    73,349
    
    
    $
    
    
    
    
    (84,834
    )
    
    $
    
    
    
    
    (10,598
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    606
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    606Accretion of Series C Stock issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    211
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (211
    )
    
    
    
    
    
    
    (211
    )Conversion of Series A preferred stock
    
    
    (10,776,909
    )
    
    
    (4,829
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,776,909
    
    
    
    108
    
    
    
    4,721
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,829Conversion of Series C preferred stock
    
    
    
    
    
    
    
    
    
    
    (4,463,289
    )
    
    
    (2,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,463,289
    
    
    
    45
    
    
    
    1,955
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000Issuance of Series D preferred stock and preferred stock
options and warrants, net of issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,715
    
    
    
    5,491
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,560Issuance of Common Stock- work completed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,000
    
    
    
    1
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,826
    )
    
    
    
    
    
    
    (5,826
    )Balance at June 30, 2007 (unaudited)
    
    
    2,483,116
    
    
    $
    1,113
    
    
    
    6,583,348
    
    
    $
    2,723
    
    
    
    
    
    
    $
    
    
    
    
    135,715
    
    
    $
    5,491
    
    
    
    104,007,843
    
    
    $
    1,041
    
    
    $
    80,746
    
    
    $
    
    
    
    $
    (90,871
    )
    
    $
    
    
    
    $
    (3,593
    )
  9




---



##### 



REGEN BIOLOGICS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Period fromDecember 21,Six Months Ended June 30,
    
    
    1989(Inception) to2007
    
    
    2006
    
    
    June 30, 2007Operating ActivitiesNet loss
    
    $
    (5,826
    )
    
    $
    (7,029
    )
    
    $
    (85,226
    )Adjustments to reconcile net loss to net cash used in operating activities:Stock-based compensation
    
    
    669
    
    
    
    609
    
    
    
    9,705Amortization of debt discount for warrant and beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    1,500Depreciation and amortization
    
    
    38
    
    
    
    28
    
    
    
    2,322Loss on disposal of property and equipment
    
    
    
    
    
    
    
    
    
    
    9Recognition of expense for the minimum pension liability upon termination of
defined benefit pension plan
    
    
    
    
    
    
    
    
    
    
    58Exchange loss
    
    
    22
    
    
    
    27
    
    
    
    72Changes in operating assets and liabilities:Other current assets and receivables
    
    
    (37
    )
    
    
    58
    
    
    
    (376
    )Inventory
    
    
    (58
    )
    
    
    35
    
    
    
    (278
    )Other assets
    
    
    27
    
    
    
    (39
    )
    
    
    (64
    )Accounts payable and accrued expenses
    
    
    279
    
    
    
    (1,397
    )
    
    
    3,134Other liabilities
    
    
    (42
    )
    
    
    23
    
    
    
    (77
    )Net cash used in operating activities
    
    
    (4,928
    )
    
    
    (7,685
    )
    
    
    (69,221
    )Investing ActivitiesPurchases of property and equipment
    
    
    (26
    )
    
    
    (126
    )
    
    
    (2,335
    )Changes in investments
    
    
    (303
    )
    
    
    754
    
    
    
    1,994Net cash (used in) provided by investing activities
    
    
    (329
    )
    
    
    628
    
    
    
    (341
    )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 and preferred stock options
and warrants, net of issuance costs paid in cash
    
    
    5,560
    
    
    
    
    
    
    
    39,781Proceeds from issuance of common stock and warrants
    
    
    
    
    
    
    117
    
    
    
    28,487Repayment of capital lease obligations
    
    
    (7
    )
    
    
    (7
    )
    
    
    (156
    )Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    11,410Payments on notes payable
    
    
    
    
    
    
    
    
    
    
    (2,323
    )Net cash provided by financing activities
    
    
    5,553
    
    
    
    110
    
    
    
    77,171Effect of exchange rate changes on cash
    
    
    (22
    )
    
    
    (27
    )
    
    
    (68
    )Net increase (decrease) in cash and cash equivalents
    
    
    274
    
    
    
    (6,974
    )
    
    
    7,541Cash and cash equivalents at beginning of period
    
    
    7,268
    
    
    
    9,535
    
    
    
    1Cash and cash equivalents at end of period
    
    $
    7,542
    
    
    $
    2,561
    
    
    $
    7,542Supplemental 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
    
    
    
    
    
    
    
    
    
    
    198Cancellation 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
    
    
    
    
    
    
    
    
    
    
    97Warrants associated with consulting services
    
    
    69
    
    
    
    
    
    
    
    69Conversion of Series A Preferred Stock
    
    
    4,829
    
    
    
    
    
    
    
    5,742Issuance of Common Stock-conversion of warrants
    
    
    
    
    
    
    4
    
    
    
    14Conversion of Series C Preferred Stock
    
    
    2,000
    
    
    
    
    
    
    
    7,018Issuance of Common Stock for services rendered
    
    
    47
    
    
    
    
    
    
    
    158Non-employee options exercised, net-share settled
    
    
    
    
    
    
    1
    
    
    
    1Cash disclosure:Cash paid for interest
    
    
    5
    
    
    
    2
    
    
    
    329
  10




---



##### 



REGEN BIOLOGICS, INC.   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per unit and per share data)
 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation and Basis of Presentation
   ®
 Disclosure about Segments of an Enterprise and
Related Information
  Risks and Going Concern Considerations
   11




---



##### 



Adoption of New Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes
 Accounting Principles Issued But Not Yet Adopted
 Fair Value Measurements.
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 12




---



##### 



Use of Estimates
  Cash and Cash Equivalents and Investments
   Accounts Receivable
  Inventories
   June 30,
    
    
    December 31,2007
    
    
    2006(In thousands)Raw material
    
    $
    35
    
    
    $
    33Work in process
    
    
    81
    
    
    
    11Finished goods
    
    
    162
    
    
    
    176$
    278
    
    
    $
    220
  13




---



##### 



Accrued Expenses
  June 30,
    
    
    December 31,2007
    
    
    2006(In thousands)Accrued professional fees
    
    $
    378
    
    
    $
    351Accrued wages and vacation
    
    
    77
    
    
    
    378Accrued printing cost
    
    
    81
    
    
    
    65Other accrued cost
    
    
    62
    
    
    
    31$
    598
    
    
    $
    825
 Foreign Currency Transactions
  Rental Activities
  Basic and Diluted Loss Per Share
  Stock-Based Compensation
 Share Based Payment
 14




---



##### 



Three Months Ended
    
    Six Months EndedJune 30, 2007
    
    June 30, 2006
    
    June 30, 2007
    
    June 30, 2006Employee &
    
    Non-
    
    Employee &
    
    Non-
    
    Employee &
    
    Non-
    
    Employee &
    
    Non-Director
    
    Employee
    
    Director
    
    Employee
    
    Director
    
    Employee
    
    Director
    
    EmployeeWeighted average fair value of grants
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    $
    0.33
    
    
    $
    0.36
    
    
    $
    0.75
    
    
    $
    0.72Risk free interest rate
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    4.48 - 4.70
    %
    
    
    4.54
    %
    
    
    4.75
    %
    
    
    4.79
    %Dividend yield
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected lives
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    7 years
    
    
    
    7 years
    
    
    
    7 years
    
    
    
    7 yearsExpected volatility
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    73.89 - 74.48
    %
    
    
    72.80
    %
    
    
    74.82
    %
    
    
    74.30
    %
 (2) COMMITMENTS AND CONTINGENCIES
   15




---



##### 



(3) CONCENTRATIONS OF RISK
     Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Receivables:U.S (Linvatec)
    
    
    18
    %
    
    
    56
    %
    
    
    18
    %
    
    
    56
    %Switzerland (various)
    
    
    0
    %
    
    
    2
    %
    
    
    0
    %
    
    
    2
    %Spain (Hoscenter, Polymedic)
    
    
    17
    %
    
    
    0
    %
    
    
    17
    %
    
    
    0
    %Italy (Xmedica)
    
    
    16
    %
    
    
    0
    %
    
    
    16
    %
    
    
    0
    %Germany (various)
    
    
    48
    %
    
    
    34
    %
    
    
    48
    %
    
    
    34
    %Belgium (various)
    
    
    1
    %
    
    
    8
    %
    
    
    1
    %
    
    
    8
    %Sales revenue:U.S. (Linvatec)
    
    
    50
    %
    
    
    61
    %
    
    
    48
    %
    
    
    47
    %Switzerland (various)
    
    
    0
    %
    
    
    4
    %
    
    
    2
    %
    
    
    6
    %Spain (Hoscenter, Polymedic)
    
    
    13
    %
    
    
    1
    %
    
    
    6
    %
    
    
    13
    %Italy (Xmedica)
    
    
    0
    %
    
    
    7
    %
    
    
    12
    %
    
    
    13
    %Germany (various)
    
    
    36
    %
    
    
    27
    %
    
    
    32
    %
    
    
    20
    %Belgium (various)
    
    
    1
    %
    
    
    0
    %
    
    
    0
    %
    
    
    1
    %Royalties:U.S. (Linvatec)
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   16




---



##### 



(4) RELATED PARTY TRANSACTIONS
   (5) STOCKHOLDERS EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED STOCK
  Redeemable Convertible Preferred Stock
  Financings and Capital Transactions
  17




---



##### 



Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock
  Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(Dollars in thousands, except per share data)
  Restatement of Consolidated Financial Statements
  Business
 Biologics
 18




---



##### 



®
      
    
    Obtain FDA clearance of the Collagen Scaffold;
    
    Further develop our specialized distribution and marketing programs for the CMI and
other ReGen products in Europe and certain other countries;
    
    Develop our specialized distribution, marketing, and training programs for the Collagen
Scaffold and other ReGen products in the U.S.; and
    
    Conduct further research on selected product opportunities within our research and
development pipeline.
  ®
 19




---



##### 



Critical Accounting Policies
  Accounting for Uncertainty in Income Taxes,
 INCOME TAXES Accounting for Income Taxes
 20




---



##### 



Accounting for Uncertainty in Income Taxes
 STOCK-BASED COMPENSATION EXPENSE Share Based Payment Accounting for Stock Issued to
Employees
     21




---



##### 



INVENTORY VALUATION:
 Inventory Costs
   Recent Accounting Pronouncements
 Fair Value Measurement,
 The Fair Value Option for Financial Assets and
Financial Liabilities,
 Results of Operations
 Three and Six Months Ended June 30, 2007 Compared to Three and Six Months Ended June 30, 2006
 REVENUE.
  22




---



##### 



COST OF GOODS SOLD.
   RESEARCH AND DEVELOPMENT.
  23




---



##### 



BUSINESS DEVELOPMENT, GENERAL AND ADMINISTRATIVE.
 NON-OPERATING INCOME (EXPENSE).
 Liquidity and Capital Resources
 Cash and cash equivalents
   Cash flows
  June 30,2007
    
    
    2006(In thousands)Net cash used in operations
    
    $
    (4,928
    )
    
    $
    (7,685
    )Net cash (used in) provided by investing activities
    
    
    (329
    )
    
    
    628Net cash provided by financing activities
    
    
    5,553
    
    
    
    110Effect of exchange rate changes on cash
    
    
    (22
    )
    
    
    (27
    )Net increase (decrease) in cash and cash equivalents
    
    $
    274
    
    
    $
    (6,974
    )
 24




---



##### 



25




---



##### 



Equity Financing
  Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock
    26




---



##### 



Item 3. Quantitative and Qualitative Disclosures about Market Risk
  Item 4. Controls and Procedures
  Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control over Financial Reporting.
 PART II
 Item 1. Legal Proceedings
  Historical Stock Option Practices Inquiry
  Item 1A. Risk Factors
  27




---



##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (dollars in thousands, except
per share data)
      Item 3. Defaults upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  28




---



##### 



Number of
    
    Number ofName of Nominee
    
    Votes For
    
    Votes WithheldDr. Gerald E. Bisbee, Jr.
    
    
    81,238,658
    
    
    
    359,702Dr. Abhi Acharya
    
    
    81,361,257
    
    
    
    237,103Mr. Alan W. Baldwin
    
    
    81,091,357
    
    
    
    507,003Dr. Robert G. McNeil
    
    
    81,264,858
    
    
    
    333,502Dr. J. Richard Steadman
    
    
    81,264,858
    
    
    
    333,502Mr. William R. Timken
    
    
    81,361,627
    
    
    
    236,733
  Number of VotesNumber of Votes For
    
    Number of Votes Against
    
    
    Abstaining81,084,753
    
    
    448,535
    
    
    
    65,072
  Number of VotesNumber of Votes For
    
    Number of Votes Against
    
    
    Abstaining75,605,033
    
    
    5,776,680
    
    
    
    216,467
  Number of VotesNumber of Votes For
    
    Number of Votes Against
    
    
    Abstaining80,837,285
    
    
    544,608
    
    
    
    216,467
  Number of VotesNumber of Votes For
    
    Number of Votes Against
    
    
    Abstaining81,391,966
    
    
    192,267
    
    
    
    14,127
 Item 5. Other Information
  29




---



##### 



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)4.7
    
    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 the Company 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 the Company and the Investors named therein dated as of July 14,
2005(21)4.16
    
    Form of Warrant Agreement by and between the Company 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)4.21
    
    Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock of the
Company(26)
 30




---



##### 



Number
    
    Description4.22
    
    Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of
the Company(25)4.23
    
    Certificate of Designations, Preferences and Rights of Series D Convertible Preferred Stock of the
Company(28)4.24
    
    Subscription Agreement by and between the Company and the Investors named therein, dated as of
November 30, 2006(27)4.25
    
    Subscription Agreement by and between the Company and the Investors named therein, dated as of
December 1, 2006(27)4.26
    
    Form of Warrant Agreement by and between the Company and the Individuals named therein, dated as of
November 30, 2006(27)4.27
    
    Form of Warrant Agreement by and between the Company and the Individuals named therein, dated as of
December 1, 2006(27)4.28
    
    Form of Option Agreement by and between the Company and the Individuals named therein dated as of
November 30, 2006(27)4.29
    
    Form of Option Agreement by and between the Company and the Individuals named therein dated as of
December 1, 2006(27)4.30
    
    Form of Subscription Agreement by and between ReGen Biologics, Inc. and the Investors named therein
dated as of March 2, 2007(28)4.31
    
    Form of Warrant Certificate by and between ReGen Biologics, Inc. and the Individuals named therein,
dated as of March 2, 2007(28)4.32
    
    Form of Option Agreement by and between ReGen Biologics, Inc. and the Individuals named therein dated
as of March 2, 2007(28)4.33
    
    Consulting Agreement by and between ReGen Biologics, Inc. and Sanderling Ventures Management VI, dated
as of March 2, 2007(28)4.34
    
    Form of Warrant Certificate by and between ReGen Biologics, Inc. and Sanderling Ventures Management
VI, dated as of March 2, 2007(28)4.35
    
    Subscription Agreement by and between ReGen Biologics, Inc. and Ivy Healthcare Capital II, L.P., dated
as of March 30, 2007(29)4.36
    
    Warrant Certificate by and between ReGen Biologics, Inc. and Ivy Healthcare Capital II, L.P., dated as
of March 30, 2007(29)4.37
    
    Option Agreement by and between ReGen Biologics, Inc. and Ivy Healthcare Capital II, L.P., dated
as of March 30, 2007(29)4.38
    
    Form of Subscription Agreement by and between ReGen Biologics, Inc. and the Investors named therein
dated as of April 5, 2007(29)4.39
    
    Form of Warrant Certificate by and between ReGen Biologics, Inc. and the Individuals named therein,
dated as of April 5, 2007(29)4.40
    
    Form of Option Agreement by and between ReGen Biologics, Inc. and the Individuals named therein dated
as of April 5, 2007(29)10.1*
    
    Employment agreement by and between Gerald E. Bisbee, Jr., Ph. D. and the Company 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 the Company dated March 23, 2004(15)10.4
    
    License Agreement by and between the Company and Linvatec Corporation dated April 7, 2000(15)10.5
    
    Credit Agreement by and between the Company 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 the Company dated February 20, 2001(15)
 31




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##### 



Number
    
    Description10.7*
    
    Assignment and Royalty Agreement by and among the Company, Modified Polymer Components, Inc. and
Dr. J. Richard Steadman dated April 9, 1997(15)10.8
    
    Exclusive License Agreement by and between the Company 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 the Company dated March 23, 2004(15)10.10
    
    Common Stock Purchase Agreement by and among the Company and the Individuals named therein, dated as of April 19, 2004(17)10.11
    
    Agreement by and between the Company and MedWork AG dated as of January 1, 2005(19)10.12
    
    Credit Agreement by and between the Company and Sulzer Medica USA Holding Company dated November 30, 1998(20)10.13
    
    Distributor Agreement by and between the Company and XMedica effective as of October 24, 2005(24)21.1
    
    Subsidiaries of the Registrant(29)31.1
    
    Section 302 Certification from Gerald E. Bisbee, Jr., dated August 9, 2007(30)31.2
    
    Section 302 Certification from Brion Umidi, dated August 9, 2007(30)32.1
    
    Section 906 Certification from Gerald E. Bisbee, Jr., dated August 9, 2007(30)32.2
    
    Section 906 Certification from Brion Umidi, dated August 9, 2007(30)
 
 (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).(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). 32




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##### 



(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. 333-114867).(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 19, 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)
    
    Incorporated herein by reference to the Companys Report on Form 10-Q for the quarter ended
September 30, 2005 (File No. 000-20805).(25)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on September 25,
2003 (File No. 000-20805).(26)
    
    Incorporated herein by reference to the Companys Post-Effective Amendment No. 1 to
Registration Statement on Form S-1, filed on April 28, 2006 (File No. 333-126835).(27)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on December 6,
2006 (File No. 000-20805).(28)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on March 8, 2007
(File No. 000-20805).(29)
    
    Incorporated herein by reference to the Companys Report on Form 8-K, filed on April 5, 2007
(File No. 000-20805).(30)
    
    Included with this filing.*
    
    Management Contract or Compensatory Plan or Arrangement 33




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##### 



SIGNATURES
  REGEN BIOLOGICS, INC.By:
    /s/ BRION D. UMIDIBrion D. UmidiSenior Vice President and Chief Financial Officer 34