##### 



UNITED STATES 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 March 31, 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
    
    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
 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 March 31, 2007 (unaudited) and December 31, 2006
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended March 31,
2007 (unaudited) and 2006 (unaudited), and the Period from December 21, 1989 (inception)
to March 31, 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 March 31, 2007 (unaudited)
    
    5Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31,
2007 (unaudited) and 2006 (unaudited) and the Period from December 21, 1989 (inception)
to March 31, 2007 (unaudited)
    
    10Notes to Condensed Consolidated Financial Statements (unaudited)
    
    11Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    19Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    27Item 4. Controls and Procedures
    
    27PART II  Other InformationItem 1. Legal Proceedings
    
    27Item 1A. Risk Factors
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    28Item 3. Defaults upon Senior Securities
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    29Item 5. Other Information
    
    29Item 6. Exhibits
    
    30Signatures
    
    34Certification
 2




---



##### 



PART I  Financial Information
 Item 1. Financial Statements
 REGEN BIOLOGICS, INC.   CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31, 2007
    
    
    December 31, 2006(unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    9,589
    
    
    $
    7,268Short-term investments
    
    
    898
    
    
    
    648Trade receivables, net of allowance for doubtful accounts of $20 and
$8, as of March 31, 2007 and December 31, 2006, respectively
    
    
    131
    
    
    
    83Inventory
    
    
    261
    
    
    
    220Prepaid expenses and other current assets
    
    
    272
    
    
    
    350Total current assets
    
    
    11,151
    
    
    
    8,569Property and equipment, net
    
    
    311
    
    
    
    321Other assets
    
    
    131
    
    
    
    141Total assets
    
    $
    11,593
    
    
    $
    9,031LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    325
    
    
    $
    438Accounts payable to related party
    
    
    7
    
    
    
    9Accrued expenses
    
    
    851
    
    
    
    825Other current liabilities
    
    
    37
    
    
    
    66Total current liabilities
    
    
    1,220
    
    
    
    1,338Other liabilities
    
    
    62
    
    
    
    57Long-term portion of capital leases
    
    
    33
    
    
    
    36Long-term portion of notes payable to related party, including
accrued interest of $1,796 and $1,702 as of March 31, 2007 and
December 31, 2006, respectively
    
    
    7,839
    
    
    
    7,744Total liabilities
    
    
    9,154
    
    
    
    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
March 31, 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 March 31, 2007 and December 31, 2006, respectively
    
    
    2,705
    
    
    
    4,512Stockholders equity (deficit):Series D convertible preferred stock, options and warrants;
preferred stock , $.01 par value; 500,000 shares authorized; issued
and outstanding 119,048 shares at liquidation preference of $5,000
as of March 31, 2007
    
    
    4,849
    
    
    
    Common stock, $.01 par value; 165,000,000 shares authorized; issued
103,948,369 shares at March 31, 2007, and 88,708,171 shares at
December 31, 2006
    
    
    1,040
    
    
    
    887Additional paid-in capital
    
    
    80,450
    
    
    
    73,349Deficit accumulated during development stage
    
    
    (87,718
    )
    
    
    (84,834
    )Total stockholders deficit
    
    
    (1,379
    )
    
    
    (10,598
    )Total liabilities and stockholders deficit
    
    $
    11,593
    
    
    $
    9,031
 
 See accompanying Notes to Condensed Consolidated Financial Statements. 3




---



##### 



REGEN BIOLOGICS, INC.   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Period fromDecember 21, 1989Three Months Ended March 31,
    
    
    (Inception) to2007
    
    
    2006
    
    
    March 31, 2007Revenue:Sales
    
    $
    169
    
    
    $
    157
    
    
    $
    4,083Royalties
    
    
    12
    
    
    
    11
    
    
    
    294Grant and other revenue
    
    
    
    
    
    
    
    
    
    
    433Total revenue
    
    
    181
    
    
    
    168
    
    
    
    4,810Expenses:Costs of goods sold
    
    
    92
    
    
    
    146
    
    
    
    4,513Research and development
    
    
    1,063
    
    
    
    2,917
    
    
    
    49,718Business development, general and administrative
    
    
    1,694
    
    
    
    1,123
    
    
    
    32,570Recognition of expense for the minimum pension liability upon
termination of defined benefit pension plan
    
    
    
    
    
    
    
    
    
    
    58Total expenses
    
    
    2,849
    
    
    
    4,186
    
    
    
    86,859Operating loss
    
    
    (2,668
    )
    
    
    (4,018
    )
    
    
    (82,049
    )Merger cost
    
    
    
    
    
    
    
    
    
    
    (515
    )Interest and other income
    
    
    91
    
    
    
    119
    
    
    
    2,164Rental income
    
    
    
    
    
    
    79
    
    
    
    2,547Rent expense
    
    
    
    
    
    
    (78
    )
    
    
    (2,409
    )Interest and other expense
    
    
    (114
    )
    
    
    (84
    )
    
    
    (3,879
    )License fees
    
    
    
    
    
    
    
    
    
    
    2,050Net loss
    
    
    (2,691
    )
    
    
    (3,982
    )
    
    
    (82,091
    )Deemed dividend to Series C Preferred Stockholders upon issuance of Series
C Preferred Stock with a beneficial conversion and amortization of related
issuance costs
    
    
    (193
    )
    
    
    (27
    )
    
    
    (5,627
    )Net loss attributable to common stockholders
    
    $
    (2,884
    )
    
    $
    (4,009
    )
    
    $
    (87,718
    )Basic and diluted net loss per share attributable to common stockholders
    
    $
    (0.03
    )
    
    $
    (0.06
    )
    
    $
    (3.36
    )Weighted average number of shares used for calculation of net loss per share
    
    
    102,107,601
    
    
    
    69,286,465
    
    
    
    26,120,073
 
 See accompanying Notes to Condensed Consolidated Financial Statements. 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 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
    )
 
 See accompanying Notes to Condensed Consolidated Financial Statements 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 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
    )
 
 See accompanying Notes to Condensed Consolidated Financial Statements 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
    )
 
 See accompanying Notes to Condensed Consolidated Financial Statements 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
    )
 
 See accompanying Notes to Condensed Consolidated Financial Statements 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)(1)
    
    
    
    
    
    
    (1)
    
    
    
    
    
    
    (1)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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327Accretion of Series C Stock issuance cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193
    )
    
    
    
    
    
    
    (193
    )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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119,048
    
    
    
    4,849
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,918Issuance of Common Stock work completed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,691
    )
    
    
    
    
    
    
    (2,691
    )Balance at March 31, 2007 (unaudited)
    
    
    2,483,116
    
    
    $
    1,113
    
    
    
    6,583,348
    
    
    $
    2,705
    
    
    
    
    
    
    $
    
    
    
    
    119,048
    
    
    $
    4,849
    
    
    
    103,887,843
    
    
    $
    1,040
    
    
    $
    80,450
    
    
    $
    
    
    
    $
    (87,718
    )
    
    $
    
    
    
    $
    (1,379
    )
 
 See accompanying Notes to Condensed Consolidated Financial Statements 9




---



##### 



REGEN BIOLOGICS, INC.   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Period fromDecember 21, 1989Three Months Ended March 31,
    
    
    (Inception) to2007
    
    
    2006
    
    
    March 31, 2007Operating ActivitiesNet loss
    
    $
    (2,691
    )
    
    $
    (3,982
    )
    
    $
    (82,091
    )Adjustments to reconcile net loss to net cash used in operating activities:Stock-based compensation
    
    
    336
    
    
    
    302
    
    
    
    9,372Amortization of debt discount for warrant and beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    1,500Depreciation and amortization
    
    
    18
    
    
    
    13
    
    
    
    2,302Loss on disposal of property and equipment
    
    
    
    
    
    
    
    
    
    
    9Recognition of expense for the minimum pension liability upon termination of
defined benefit pension plan
    
    
    
    
    
    
    
    
    
    
    58Exchange loss
    
    
    17
    
    
    
    3
    
    
    
    67Changes in operating assets and liabilities:Other current assets and receivables
    
    
    50
    
    
    
    34
    
    
    
    (289
    )Inventory
    
    
    (41
    )
    
    
    (9
    )
    
    
    (261
    )Other assets
    
    
    10
    
    
    
    7
    
    
    
    (81
    )Accounts payable and accrued expenses
    
    
    6
    
    
    
    (354
    )
    
    
    2,861Other liabilities
    
    
    (24
    )
    
    
    (19
    )
    
    
    (59
    )Net cash used in operating activities
    
    
    (2,319
    )
    
    
    (4,005
    )
    
    
    (66,612
    )Investing ActivitiesPurchases of property and equipment
    
    
    (8
    )
    
    
    (80
    )
    
    
    (2,317
    )Changes in investments
    
    
    (250
    )
    
    
    1,944
    
    
    
    2,047Net cash (used in ) provided by investing activities
    
    
    (258
    )
    
    
    1,864
    
    
    
    (270
    )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
    
    
    4,918
    
    
    
    
    
    
    
    39,139Proceeds from issuance of common stock and warrants
    
    
    
    
    
    
    
    
    
    
    28,487Repayment of capital lease obligations
    
    
    (3
    )
    
    
    (3
    )
    
    
    (152
    )Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    11,410Payments on notes payable
    
    
    
    
    
    
    
    
    
    
    (2,323
    )Net cash provided by (used in) financing activities
    
    
    4,915
    
    
    
    (3
    )
    
    
    76,533Effect of exchange rate changes on cash
    
    
    (17
    )
    
    
    (3
    )
    
    
    (63
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,321
    
    
    
    (2,147
    )
    
    
    9,588Cash and cash equivalents at beginning of period
    
    
    7,268
    
    
    
    9,535
    
    
    
    1Cash and cash equivalents at end of period
    
    $
    9,589
    
    
    $
    7,388
    
    
    $
    9,589Supplemental 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
    
    
    29
    
    
    
    
    
    
    
    140Non-employee options exercised, net-share settled
    
    
    
    
    
    
    1
    
    
    
    1Cash disclosure:Cash paid for interest
    
    
    1
    
    
    
    1
    
    
    
    326
 
 See accompanying Notes to Condensed Consolidated Financial Statements. 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
   ® tm
 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
   March 31,
    
    
    December 31,2007
    
    
    2006(In thousands)Raw material
    
    $
    40
    
    
    $
    33Work in process
    
    
    51
    
    
    
    11Finished goods
    
    
    170
    
    
    
    176$
    261
    
    
    $
    220
  13




---



##### 



Accrued Expenses
  March 31,
    
    
    December 31,2007
    
    
    2006(In thousands)Accrued professional fees
    
    $
    364
    
    
    $
    351Accrued wages and vacation
    
    
    375
    
    
    
    378Accrued printing cost
    
    
    86
    
    
    
    65Other accrued cost
    
    
    26
    
    
    
    31$
    851
    
    
    $
    825
 Foreign Currency Transactions
  Rental Activities
  Basic and Diluted Loss Per Share
  Stock-Based Compensation
  14




---



##### 



Three Months Ended
    
    Three Months EndedMarch 31, 2007
    
    March 31, 2006Employee &
    
    
    
    
    
    Employee &Director
    
    Non-Employee
    
    Director
    
    Non-EmployeeWeighted average fair value of grants
    
    $
    0.33
    
    
    $
    0.36
    
    
    $
    0.75
    
    
    $
    0.72Risk free interest rate
    
    
    4.48  4.70
    %
    
    
    4.54
    %
    
    
    4.75
    %
    
    
    4.79
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected lives
    
    7
    years
    
    7
    years
    
    7
    years
    
    7
    yearsExpected volatility
    
    
    73.89 - 74.48
    %
    
    
    72.80
    %
    
    
    74.82
    %
    
    
    74.30
    %
 (2) COMMITMENTS AND CONTINGENCIES
   15




---



##### 



(3) CONCENTRATIONS OF RISK
     Three Months EndedMarch 31,2007
    
    2006Receivables:U.S. (Linvatec)
    
    
    28
    %
    
    
    37
    %Switzerland (various)
    
    
    2
    %
    
    
    13
    %Spain (Hoscenter, Polymedic)
    
    
    37
    %
    
    
    27
    %Italy (Xmedica)
    
    
    3
    %
    
    
    4
    %Germany (various)
    
    
    27
    %
    
    
    8
    %Belgium (various)
    
    
    3
    %
    
    
    11
    %Sales revenue:U.S. (Linvatec)
    
    
    46
    %
    
    
    39
    %Switzerland (various)
    
    
    3
    %
    
    
    7
    %Spain (Hoscenter, Polymedic)
    
    
    0
    %
    
    
    20
    %Italy (Xmedica)
    
    
    23
    %
    
    
    16
    %Germany (various)
    
    
    28
    %
    
    
    16
    %Belgium (various)
    
    
    0
    %
    
    
    2
    %Royalties:U.S. (Linvatec)
    
    
    100
    %
    
    
    100
    %
   16




---



##### 



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




---



##### 



th Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock
  Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Companys Own Stock
 (6) SUBSEQUENT EVENTS
  18




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(Dollars in thousands, except per unit and share data)
  Restatement of Consolidated Financial Statements
  Business
 tm Biologics
 ®
     19




---



##### 




    
    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.
  ®
   Critical Accounting Policies
  20




---



##### 



Accounting for Uncertainty in Income Taxes,
 INCOME TAXES 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,
 22




---



##### 



Results of Operations
 Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
 REVENUE.
   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
   24




---



##### 



Cash flows
  March 31,2007
    
    
    2006(In thousands)Net cash used in operations
    
    $
    (2,319
    )
    
    $
    (4,005
    )Net cash (used in) provided by investing activities
    
    
    (258
    )
    
    
    1,864Net cash provided by (used in) financing activities
    
    
    4,915
    
    
    
    (3
    )Effect of exchange rate changes on cash
    
    
    (17
    )
    
    
    (3
    )Net increase (decrease) in cash and cash equivalents
    
    $
    2,321
    
    
    $
    (2,147
    )
     25




---



##### 



Equity Financing
  th 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
  27




---



##### 



Historical Stock Option Practices Inquiry
  Item 1A. Risk Factors
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (dollars in thousands, except
per share data)
     28




---



##### 



Item 3. Defaults upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  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)10.7*
    
    Assignment and Royalty Agreement by and among the Company, Modified Polymer Components, Inc. and Dr. J.
Richard Steadman dated April 9, 1997(15)
 31




---



##### 



Number
    
    Description10.8
    
    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 May 10, 2007(30)31.2
    
    Section 302 Certification from Brion Umidi, dated May 10, 2007(30)32.1
    
    Section 906 Certification from Gerald E. Bisbee, Jr., dated May 10, 2007(30)32.2
    
    Section 906 Certification from Brion Umidi, dated May 10, 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).(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). 32




---



##### 



(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