UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.c. 20549
FORM 10-Q/A
(AMENDMENT NO. 1)
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934.
For the period ended December 31, 2005.
Transition Report Pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934.
For the transition period from__ to__.
Commission File Number: 0-16128
TUTOGEN MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3100165
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
13709 Progress Boulevard, Alachua, Florida 32615
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (386) 462-0402
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No X .
--- ---
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2of the Exchange Act).
(Check one): Large accelerated filer Yes No
--- ---
Accelerated filer Yes No Non-accelerated filer Yes X No
--- --- --- ---
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes No X
--- ---
As of January 15 2006 there were outstanding 15,950,460 shares of Tutogen
Medical, Inc. Common Stock, par value $0.01.
TUTOGEN MEDICAL, INC. AND SUBSIDIARIES
EXPLANATORY NOTE
Tutogen Medical, Inc. ("the Company") is filing this Amendment to its Quarterly
report on Form 10-Q for the Company's fiscal quarter ended December 31, 2005,
which was originally filed with the Securities and Exchange Commission (the
"SEC") on February 13, 2006 (the "Original Filing"), to reflect the restatement
of the Company's audited consolidated financial statements for the fiscal year
ended September 30, 2005, the unaudited condensed consolidated financial
statements for the three months ended December 31, 2005 and 2004, as well as the
notes related thereto, as described in Note 11 ("Restatement") to the
accompanying unaudited condensed consolidated financial statements in Part I,
Item 1 of this Form 10-Q/A.
As part of the financial review for the three and six months ended March 31,
2006, the Company became aware of misstatements in previously reported inventory
and cost of revenue. The Company discovered that the misstatements were
attributable to errors in the calculation of intercompany profit to be
eliminated during the consolidation process in prior periods. While
investigating the inventory errors, the Company also discovered other errors
affecting the Company's deferred tax benefit, accrued expenses, general and
administrative and distribution and marketing expenses for the fiscal year ended
September 30, 2005 and the three months ended December 31, 2005. As a result,
the Company has restated the accompanying consolidated financial statements for
the years ended September 30, 2005, and the three months ended December 31, 2005
and 2004 to correct these errors with this Form 10-Q/A.
In addition, the Company's management has determined that the accounting errors
referenced above were the result of a material weakness in the Company's
internal control over financial reporting related to its inventory valuation and
certain journal entries recorded in the financial close process. The Company has
taken steps to remediate the weakness as of the date of this report. See Item 4
"Controls and Procedures".
This Form 10-Q/A sets forth the Original Filing in its entirety. However, this
Form 10-Q/A amends and restates certain information in Items 1, 2, and 4 of Part
I and Part II of the Original filing, in each case, solely as a result of, and
to reflect, the restatement. No other information in the Original Filing is
amended hereby.
Except for the amended information referred to above, this Form 10-Q/A continues
to describe conditions as of the date of the Original Filing and the company has
not modified or updated other disclosures presented in the Original Filing. This
Form 10-Q/A does not reflect events occurring after the date of the Original
Filing or modify or update disclosures (including, except as otherwise provided
herein, the exhibits to the Original Filing) affected by subsequent events.
Accordingly, this Form 10-Q/A includes updated certifications from the Company's
Chief Executive Officer and Chief Financial Officer at Exhibits 31.1, 31.2, and
32.
INDEX
PART I. Financial Information. Page
No.
ITEM 1. Financial Statements.
Unaudited - Condensed Consolidated Balance 1
Sheets - December 31, 2005 and
September 30, 2005.
Unaudited - Condensed Consolidated Statements 2
of Operations for the three months ended
December 31, 2005 and 2004.
Unaudited - Condensed Consolidated Statements 3
of Cash Flows for the three months ended
December 31, 2005 and 2004.
Unaudited - Condensed Consolidated Statements 4
of Stockholders' Equity for the year ended
September 30, 2005 and the three months
ended December 31, 2005.
Notes to Condensed Consolidated Financial 5
Statements (unaudited).
ITEM 2. Management's Discussion and Analysis of Financial 13
Condition and Results of Operations.
ITEM 3. Quantitative and Qualitative Disclosures 18
about Market Risk
ITEM 4. Controls and Procedures. 18
PART II. Other Information. 20
SIGNATURES 21
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
TUTOGEN MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unauditd)
December 31, September 30,
2005 2005
------------- -------------
(AS RESTATED, SEE NOTE 11)
ASSETS
Current Assets
Cash and cash equivalents $ 1,834 $ 3,562
Accounts receivable - net of allowance for doubtful accounts
of $467 in December 2005 and $462 in September 2005 3,749 3,473
Inventories - net 10,852 9,554
Deferred tax asset 1,177 1,149
Other current assets 622 623
------------- -------------
Total current assets 18,234 18,361
Property, plant and equipment, net 6,904 6,612
Deferred tax asset 1,275 1,232
------------- -------------
TOTAL ASSETS $ 26,413 $ 26,205
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and other liabilities $ 6,159 $ 6,342
Accrued commissions 2,128 1,765
Short-term borrowing 1,436 1,048
Current portion of deferred distribution fees 558 589
Current portion of long-term debt 185 184
------------- -------------
Total current liabilities 10,466 9,928
Noncurrent Liabilities
Deferred distribution fees 1,784 1,925
Long-term debt 584 630
------------- -------------
TOTAL LIABILITIES 12,834 12,483
SHAREHOLDERS' EQUITY:
Common stock, $0.01 par value, 30,000,000 authorized; 15,932,960
and 15,950,460 shares issued and outstanding 160 159
Additional paid-in capital 36,521 36,381
Accumulated other comprehensive income 1,475 1,678
Accumulated deficit (24,577) (24,496)
------------- -------------
Total shareholders' equity 13,579 13,722
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 26,413 $ 26,205
============= =============
See accompanying Notes to Condensed Consolidated Financial Statements.
1
TUTOGEN MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(unaudited)
Three Months Ended
------------------
December 31,
------------
2005 2004
---- ----
(AS RESTATED, SEE NOTE 11)
REVENUE $ 8,034 $ 7,073
COST OF REVENUE 3,415 4,292
------------- -------------
Gross profit 4,619 2,781
OPERATING EXPENSES
General and administrative 1,576 1,142
Distribution and marketing 2,859 2,711
Research and development 427 390
------------- -------------
4,862 4,243
OPERATING LOSS (243) (1,462)
FOREIGN EXCHANGE GAIN (LOSS) 119 (579)
OTHER INCOME (EXPENSE) 15 (4)
INTEREST EXPENSE (78) (17)
------------- -------------
56 (600)
LOSS BEFORE INCOME TAX BENEFIT (187) (2,062)
Income tax benefit (106) (148)
------------- -------------
NET LOSS $ (81) $ (1,914)
============= =============
Comprehensive (loss) income:
Foreign currency translation (loss) gain (203) 286
------------- -------------
COMPREHENSIVE LOSS $ (284) $ (1,628)
============= =============
AVERAGE SHARES OUTSTANDING FOR BASIC AND DILUTED
LOSS PER SHARE 15,945,243 15,915,960
============= =============
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.12)
============= =============
See accompanying Notes to Condensed Consolidated Financial Statements
2
TUTOGEN MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
THREE MONTHS ENDED
------------------
DECEMBER 31,
------------
2005 2004
---- ----
(AS RESTATED, SEE NOTE 11)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (81) $ (1,914)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 172 190
Amortization of deferred distribution fees revenue (139) (172)
Deferred income taxes (173) (148)
Provision for inventory write-downs (58) (62)
Share-based compensation 96 -
Changes in assets and liabilities:
Accounts receivable (303) 469
Inventories (1,296) 891
Other current assets (4) 633
Accounts payable and other liabilities (52) (1,737)
Accrued commissions 363 107
------------- -------------
Net cash used in operating activities (1,475) (1,743)
CASH FLOWS USED IN INVESTING ACTIVITIES
Investment in a marketable security - (491)
Purchase of property and equipment (554) (389)
------------- -------------
Net cash used in investing activities (554) (880)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 44 -
Proceeds from short-term borrowings 406 -
Repayment of long-term borrowings (37) (34)
------------- -------------
Net cash provided by (used in) financing activities 413 (34)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (112) 793
------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,728) (1,864)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,562 5,063
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,834 $ 3,199
============= =============
------------------------------------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ 41 $ 17
============= =============
Income taxes paid $ - $ 61
============= =============
See accompanying Notes to Condensed Consolidated Financial Statements
3
TUTOGEN MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED DECEMBER 31, 2005
(Unaudited)
(In Thousands, Except for Share Data)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED COMMON
COMMON ADDITIONAL OTHER SHARES
STOCK PAID-IN COMPREHENSIVE ACCUMULATED ISSUED AND
($.01 PAR) CAPITAL INCOME (1) DEFICIT TOTAL OUTSTANDING
BALANCE, SEPTEMBER 30, 2005 $ 159 $ 36,381 $ 1,478 $ (23,290) $ 14,728 15,932,960
Prior period adjustment - - 200 (1,206) (1,006)
------ -------- --------- --------- ---------
BALANCE, SEPTEMBER 30, 2005 (as restated, $ 159 $ 36,381 $ 1,678 $ (24,496) $ 13,722
see Note 11)
Stock issued on exercise of options 1 44 - - 45 17,500
Share-based compensation 96 - - 96 -
Net loss (as restated, see Note 11) - - - (81) (81) -
Foreign currency translation adjustment - - (203) - (203) -
------ -------- --------- --------- --------- ----------
BALANCE, December 31, 2005 $ 160 $ 36,521 $ 1,475 $ (24,577) $ 13,579 15,950,460
====== ======== ========= ========= ========= ==========
(1) Represents foreign currency translation adjustments. See accompanying Notes
to Condensed Consolidated Financial Statements.
4
TUTOGEN MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 2005
(IN THOUSANDS, EXCEPT SHARE DATA)
(1) OPERATIONS AND ORGANIZATION
Tutogen Medical, Inc. with its consolidated subsidiaries (the "Company")
processes manufactures and distributes worldwide, specialty surgical
products and performs tissue processing services for neuro, orthopedic,
reconstructive and general surgical applications. The Company's core
business is processing human donor tissue, utilizing its patented
Tutoplast(R) process, for distribution to hospitals and surgeons. The
Company processes at its two manufacturing facilities in Germany and the
United States and distributes its products and services to over 30
countries worldwide.
(2) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in conformity with accounting principles generally
accepted in the United States of America for interim financial reporting.
In the opinion of management, all adjustments necessary in order to make
the financial statements not misleading have been made. Operating results
for the three months ended December 31, 2005 are not necessarily
indicative of the results which may be expected for the fiscal year ending
September 30, 2006. The interim financial statements should be read in
conjunction with the audited consolidated financial statements of the
Company included in the Company's Annual Report on Form 10-K/A for the
year ended September 30, 2005.
(3) NEW ACCOUNTING PRONOUNCEMENTS
In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement No. 123R ("SFAS No. 123R"), SHARE-BASED PAYMENT, that require
compensation costs related to share-based payment transactions to be
recognized in the financial statements. The Company is required to comply
with SFAS No. 123R for the three months ended December 31, 2005. In March
2005, the Securities and Exchange Commission (the "SEC") issued Staff
Accounting Bulletin ("SAB") No. 107, SHARE-BASED PAYMENT ("SAB No. 107"),
which provides interpretive guidance related to the interaction between
SFAS No. 123R and certain SEC rules and regulations, as well as provides
the SEC staff's views regarding the valuation of share-based payment
arrangements. See footnote 4, STOCK-BASED Awards regarding the impact of
these pronouncements on the Company's financial statements.
In November 2004, the FASB issued SFAS No. 151, INVENTORY COSTS, AN
AMENDMENT OF ARB NO. 43. SFAS No. 151 requires idle facility expenses,
freight, handling costs, and wasted material (spoilage) costs to be
excluded from the cost of inventory and expensed when incurred. It also
requires that allocation of fixed overheads to the costs of conversion be
based on the normal capacity of the production facilities. This statement
is effective for inventory costs incurred during fiscal years beginning
after June 15, 2005. The adoption of SFAS No. 151 during the three months
ended December 31, 2005 did not have a material impact on the results of
operations or financial position of the Company.
5
(4) STOCK-BASED AWARDS
The Company maintains the 1996 Stock Option Plan (the "Plan") (4,000,000
shares authorized) under which incentive and nonqualified options have been
granted to employees, directors and certain key affiliates. Under the Plan,
options may be granted at not less than the fair market value on the date
of grant. Options may be subject to a vesting schedule and expire four,
five or ten years from grant.
Effective October 1, 2005, the Company adopted the provisions of SFAS No.
123R which establishes the financial accounting and reporting standards for
stock-based compensation plans. SFAS No. 123R requires the measurement and
recognition of compensation expense for all stock-based awards made to
employees and directors. Under the provisions of SFAS No. 123R, stock-based
compensation cost is measured at the grant date, based on the calculated
fair value of the award, and is recognized as an expense over the requisite
service period of the entire award (generally the vesting period of the
award). As a result of adopting SFAS No. 123R, the Company's net loss
before income taxes and net loss for the three months ended December 31,
2005 was $96 more than if the Company had continued to account for
stock-based compensation under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and its related
interpretations. Basic and diluted net loss per share for the three months
ended December 31, 2005 was not affected by the adoption SFAS No. 123R. In
addition, there was no tax effect related to the adoption of SFAS No. 123R
due to the recording of a full valuation allowance against U.S. net
deferred tax assets.
The Company elected to use the modified prospective transition method as
permitted by SFAS No. 123R and, therefore, financial results for prior
periods have not been restated. Under this transition method, stock-based
compensation expense for the three months ended December 31, 2005 includes
expense for all equity awards granted prior to, but not yet vested as of
October 1, 2005, based on the grant date fair value estimated in accordance
with the original provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123,") as amended by SFAS No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure." Since the adoption of
SFAS No. 123R, there have been no changes to the Company's stock
compensation plans or modifications to outstanding stock-based awards which
would increase the value of any awards outstanding. Compensation expense
for all stock-based compensation awards granted subsequent to October 1,
2005 was based on the grant-date fair value determined in accordance with
the provisions of SFAS No. 123R. During the quarter ended December 31,
2005, the Company recognized compensation expense of $96 relating to stock
options granted during the three months ended December 31, 2005 in addition
to the vesting of options outstanding as of October 1, 2005. All such
expense was recognized within "General and administrative expense" in the
Statement of Operations. There were no significant capitalized stock-based
compensation costs at December 31, 2005.
Prior to October 1, 2005, the Company accounted for stock-based
compensation in accordance with APB 25 and also followed the disclosure
requirements of SFAS No. 123. Under APB 25, the Company accounted for
stock-based awards to employees and directors using the intrinsic value
method as allowed under SFAS No. 123. Under the intrinsic value method, no
stock-based compensation expense had been recognized in the Company's
Statement of Operations because the exercise price of the Company's stock
options granted to employees and directors equaled the fair market value of
the underlying stock at the date of grant. The following table sets forth
the computation of basic and diluted loss per share for the three months
ended December 31, 2004 and illustrates the effect on net loss per share as
if the Company had applied the fair value recognition provisions of SFAS
123 to its stock plans:
6
Three Months Ended
December 31,
2004
Net loss: ($1,914)
Deduct: Total stock-based employee compensation
expense determined under fair value based
method, net of related tax effects 10
-------
Pro forma net loss ($1,924)
=======
Basic and diluted loss per share:
As reported ($0.12)
Pro forma using the fair value method ($0.13)
The fair value of each stock option grant is estimated on the grant date
using the Black-Scholes option-pricing model with the following assumptions:
December 31,
2005 2004
----------------------
Dividend Yield 0.0% 0.0%
Expected Volatility 48.6% 48.6%
Risk-free interest rate (range) 4-4.1% 3.3-3.6%
Expected term (in years) 5.00 5.00
EXPECTED VOLATILITY. The Company's methodology for computing
the expected volatility is based solely on the Company's
historical volatility.
EXPECTED TERM. The expected term is based on employee exercise
patterns during the Company's history and expectations of
employee exercise behavior in the future giving consideration
to the contractual terms of the stock-based awards.
RISK-FREE INTEREST RATE. The interest rate used in valuing
awards is based on the yield at the time of grant of a U.S.
Treasury security with an equivalent remaining term.
DIVIDEND YIELD. The Company has never paid cash dividends, and
does not currently intend to pay cash dividends, and thus has
assumed a 0% dividend yield.
PRE-VESTING FORFEITURES. Estimates of pre-vesting option
forfeitures are based on Company experience and industry
trends. The Company will adjust its estimate of forfeitures
over the requisite service period based on the extent to which
actual forfeitures differ, or are expected to differ, from
such estimates. Changes in estimated forfeitures will be
recognized through a cumulative catch-up adjustment in the
period of change and will also impact the amount of
compensation expense to be recognized in future periods.
7
Presented below is a summary of the status of the Company's stock options
as of December 31, 2005, and related transactions for the quarter then
ended:
WEIGHTED
WEIGHTED AVERAGE
NUMBER OF AVERAGE REMAINING AGGREGATE
COMMON EXERCISE CONTRACTUAL INTRINSIC
STOCK OPTIONS SHARES (000'S) PRICE LIFE VALUE
-------------- -------- ----------- ---------
Outstanding at September 30, 2005 2,481 $ 2.64 5.1 $ -
Granted 28 3.12 10.0 -
Canceled -
Exercised (18) 2.53 - -
-------------------------------------------------------
Outstanding at December 31, 2005 2,491 $ 2.65 5.3 $ -
Vested or expected to vest 2,242 $ 2.65 5.3 $ -
Fully vested at December 31, 2005 1,877 $ 2.50 2.4 $ -
As of December 31, 2005, 320,803 stock options were available for grant.
The weighted-average grant-date fair value of options granted during the
fiscal quarters ended December 31, 2005 and December 31, 2004 was $1.48
and $1.43, respectively. Cash received from option exercises for the
quarters ended December 31, 2005 and December 31, 2004, was $44 and $ 0.0
respectively.
As of December 31, 2005, there was $473 of total unrecognized compensation
cost related to nonvested stock options. That cost is expected to be
recognized over a weighted-average period of 1.4 years.
(5) INVENTORIES
Major classes of inventory at December 31, 2005 and September 30, 2005
were as follows:
December 31, September 30,
2005 2005
------------- -------------
Raw materials $ 1,835 $ 1,753
Work in process 5,344 4,219
Finished goods 6,868 6,860
----------- -----------
14,047 12,832
Less reserves for obsolescence 3,195 3,278
----------- -----------
$ 10,852 $ 9,554
=========== ==========
(6) INCOME TAXES
The Company has approximately $15,100 of federal net operating loss
carryforwards expiring beginning in 2008 and state net operating loss
carryforwards of approximately $14,600 that will begin to expire in 2006.
8
The Company has a corporate net operating loss carryforward for German
income tax purposes of approximately $3,863 (3,262 Euros), and a trade net
operation loss carryforward for German income tax purposes of approximately
$1,456 (1,229 Euros), which can be carried forward indefinitely.
The Company continually reviews the adequacy and necessity of the valuation
allowance in accordance with the provisions of SFAS No. 109, ACCOUNTING FOR
INCOME TAXES. As of December 31, 2005, the Company continues to maintain a
full valuation allowance on the net deferred tax assets attributable to its
domestic operations. The Company does not maintain a valuation allowance on
its International deferred tax assets, because management believes it is
more likely than not that these tax benefits will be realized through the
generation of future International taxable income.
The Company has not recorded deferred income taxes on the undistributed
earnings of its foreign subsidiaries because it is management's intent to
indefinitely reinvest such earnings. Upon distribution of these earnings,
the Company may be subject to U.S. income taxes and/or foreign withholding
taxes.
(7) SEGMENT DATA
The Company operates principally in one industry providing specialty
surgical products and tissue processing services. These operations include
two geographically determined segments: the United States and Europe
("International"). The accounting policies of these segments are
consistent with prior periods. The Company evaluates performance based on
the operating income of each segment. The Company accounts for
inter-segment sales and transfers at contractually agreed-upon prices.
The Company's reportable segments are strategic business units that offer
products and services to different geographic markets. They are managed
separately because of the unique regulatory and marketing differences in
these markets as well as their physical location.
A summary of the operations and assets by segment as of and for the three
months ended December 31, 2005 and 2004, respectively are as follows:
DECEMBER 31, 2005
---------------------------------------------
SEGMENT DATA INTERNATIONAL US TOTAL
---------------------------------------------
GROSS REVENUE $ 3,816 $ 5,409 $ 9,225
LESS: INTERCOMPANY (1,191) - (1,191)
=============================================
TOTAL REVENUE - THIRD PARTY $ 2,625 $ 5,409 $ 8,034
OPERATING INCOME (LOSS) $ 224 $ (467) $ (243)
DEPRECIATION & AMORTIZATION $ 113 $ 59 $ 172
INTEREST EXPENSE $ 28 $ 50 $ 78
NET SEGMENT INCOME (LOSS) $ 142 $ (223) $ (81)
CAPITAL EXPENDITURE $ 388 $ 166 $ 554
TOTAL IDENTIFIABLE ASSETS $ 15,425 $ 10,988 $ 26,413
----------------------------------------------
9
DECEMBER 31, 2004
---------------------------------------------
SEGMENT DATA INTERNATIONAL US TOTAL
---------------------------------------------
GROSS REVENUE $ 3,964 $ 4,916 $ 8,880
LESS: INTERCOMPANY (1,807) - (1,807)
=============================================
TOTAL REVENUE - THIRD PARTY $ 2,157 $ 4,916 $ 7,073
OPERATING LOSS $ (936) $ (526) $ (1,462)
DEPRECIATION & AMORTIZATION $ 126 $ 64 $ 190
INTEREST EXPENSE $ 12 $ 5 $ 17
NET SEGMENT LOSS $ (970) $ (944) $ (1,914)
CAPITAL EXPENDITURE $ 355 $ 34 $ 389
TOTAL IDENTIFIABLE ASSETS $ 17,761 $ 13,548 $ 31,309
----------------------------------------------
(8) LEGAL PROCEEDINGS
In 2003, the Company received a proposed judgment in Germany as the result
of a dispute between the Company and a former international distributor.
The estimated settlement, including legal costs was accrued as a litigation
contingency. In 2004, a decision by the court of appeal in Germany resulted
in a reduction of the original proposed judgment received against the
Company by $406. At December 31, 2005 and September 30, 2005 the Company
maintained an accrual of $476 with respect to the remaining appeal and
legal costs. Management believes that such accrual is sufficient and that
the final settlement will not have a material impact on results of
operations.
On October 12, 2005, the Company issued a voluntary recall of all
product units, which utilized donor tissue received from BioMedical
Tissue Services/BioTissue Recovery Services ("BioMedical"). This action
was taken because the Company was unable to satisfactorily confirm that
BioMedical had properly obtained donor consent. The Company quarantined
all BioMedical products in its inventory, having a value of $1,046, and
has notified all customers and distributors of record regarding this
action. In connection with this recall, the Company wrote off $174 of
inventory during 2005. At September 30, 2005 and December 31, 2005, $872
of inventory and $250 of other related costs were reserved. In January
2006, the Company was named as one of several defendants in a class
action suit related to this recall. It is management's opinion that it
is too early in the process to determine the effect of this class action
on the financial condition of the Company. However, the Company intends
to vigorously defend this matter and does not believe that settlement of
this class action will have an adverse material effect on the Company's
operations, cash flow or financial position.
The Company is party to various claims, legal actions, complaints and
administrative proceedings arising in the ordinary course of business. In
management's opinion, the ultimate disposition of these matters will not
have a material adverse effect on its financial condition, cash flows or
results of operations.
10
(9) RELATED PARTY
The Company has an exclusive license and distribution agreement with Zimmer
Spine, a wholly owned subsidiary of Zimmer Holdings, Inc., whereby Zimmer
Spine has been granted the right to act as the Company's exclusive
distributor of bone tissue for spinal applications in the United States.
For the quarters ended December 31, 2005 and 2004 product sales to Zimmer
spine totaled $374, and $1,050, respectively, representing 4.7% and 14.8%
respectively of our total revenues. Accounts receivable from Zimmer Spine
were $176 and $44 at December 31, 2005 and September 30, 2005,
respectively.
The Company has also engaged Zimmer Dental, a wholly owned subsidiary of
Zimmer Holdings, Inc., to act as an exclusive distributor for the Company's
bone tissue for dental applications in the United States and certain
international markets. Under this distribution agreement, the Company sells
directly to Zimmer Dental's customers. For the quarters ended December 31,
2005 and 2004, Zimmer Dental was paid commissions aggregating approximately
$1,565 and $1,194, respectively. Accounts payable to Zimmer Dental total
$2,123 and $1,740 at December 31, 2005 and September 30, 2005,
respectively.
Zimmer CEP (formerly Centerpulse) USA Holding Co., a subsidiary of Zimmer
Holdings, Inc., is a significant owner of the Company's outstanding shares
of Common Stock.
(10) SUBSEQUENT EVENT
In January 2006, the Company entered into a four-year exclusive worldwide
distribution agreement with Davol Inc., a subsidiary of C.R. Bard Inc., to
promote, market and distribute the Company's line of allograft biologic
tissues for hernia repair and the reconstruction of the chest and abdominal
wall. Davol, in addition to purchasing the product is required to pay
approximately $3,300 in up-front distribution fees, with the first payment
in January 2006 and the final payment due in May 2006 as certain milestones
are met. These payments will be deferred and recognized as revenue over the
term of the distribution agreement when product begins to ship.
(11) RESTATEMENT
As part of the financial review for the three and six months ended March
31, 2006, the Company became aware of misstatements in previously reported
inventory and cost of revenue. The Company discovered that the
misstatements were attributable to errors in the calculation of
intercompany profit to be eliminated during the consolidation process for
prior periods. While investigating the inventory errors, the Company also
discovered other errors affecting the Company's deferred tax benefit,
accrued expenses, general and administrative and distribution and marketing
expenses for the fiscal year ended September 30, 2005 and the three months
ended December 31, 2005. As a result, the Company has restated the
accompanying consolidated financial statements for the fiscal year ended
September 30, 2005, for the three months ended December 31, 2005 and for
the three months ended December 31, 2004, to correct these errors.
The impact of this restatement on the accompanying consolidated financial
statements is summarized below:
11
As
Previously As
FOR THE QUARTER ENDED DECEMBER 31, 2005 Reported Adjustments Restated
--------------------------------------------
Cost of revenues $ 3,797 $ (382) $ 3,415
Gross profit 4,237 382 4,619
General and administrative 1,489 87 1,576
Distribution and marketing expenses 2,862 (3) 2,859
Operating loss (541) 298 (243)
Net loss (379) 298 (81)
Comprehensive loss (582) 298 (284)
Basic and diluted loss per share (0.02) 0.01 (0.01)
Cash flows from operating activities
Net loss (379) 298 (81)
Deferred income taxes (106) (67) (173)
Inventories (903) (393) (1,296)
Accounts payable and other accrued expenses (214) 162 (52)
As of December 31, 2005:
Inventories 11,465 (613) 10,852
Deferred tax asset 2,385 67 2,452
Accounts payable and other accrued expenses 5,997 162 6,159
Accumulated other comprehensive income 1,275 200 1,475
Accumulated deficit (23,669) (908) (24,577)
Shareholders' equity 14,287 (708) 13,579
As
Previously As
AS OF SEPTEMBER 30, 2005: Reported Adjustments Restated
--------------------------------------------
Inventories, net 10,558 (1,003) 9,555
Deferred tax asset 2,314 67 2,381
Accounts payable and other accrued expenses 6,273 69 6,342
Accumulated other comprehensive income 1,478 200 1,678
Accumulated deficit (23,290) (1,206) (24,496)
Shareholders' equity 14,728 (1,006) 13,722
As
Previously As
FOR THE QUARTER ENDED DECEMBER 31, 2004 Reported Adjustments Restated
--------------------------------------------
Cost of revenues $ 3,760 $ 532 $ 4,292
Gross profit 3,313 (532) 2,781
Net loss (1,382) (532) (1,914)
Operating loss (930) (532) (1,462)
Comprehensive loss (1,096) (532) (1,628)
Basic and diluted loss per share (0.09) (0.03) (0.12)
Cash flows from operating activities
Net loss (1,382) (532) (1,914)
Inventories 359 532 891
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
DECEMBER 31, 2005
(IN THOUSANDS, EXCEPT SHARE DATA)
RESTATED FINANCIAL STATEMENTS
The Company is filing this amended report to reflect the restatement of the
Company's unaudited condensed consolidated financial statements for the three
months ended December 31, 2005 and 2004 as well as the restatement of the
Company's audited consolidated financial statements for the fiscal year ended
September 30, 2005, including the notes related thereto, as more fully described
in Note 11 ("Restatement") to the accompanying unaudited consolidated financial
statements included with this Form 10-Q/A. The determination to restate these
financial statements was made as a result of management's identification of
misstatements in previously reported inventory and cost of revenue attributable
to errors in the calculation of intercompany profit to be eliminated during the
consolidation process in prior periods as well as other errors affecting the
Company's deferred tax benefit, accrued expenses, general and administrative and
distribution and marketing expenses for the fiscal year ended September 30, 2005
and the three months ended December 31, 2005. Management's discussion and
analysis of the Company's financial condition and results of operations included
in this report has been revised to reflect the impact of the restatement.
CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements typically are identified by use of terms such as
"may," "will," "should," "plan," "expect," "anticipate," "estimate," and similar
words, although some forward-looking statements are expressed differently.
Actual results could differ significantly from those discussed herein. Some of
the matters described in this Form 10-Q/A filed with the Securities and Exchange
Commission, constitute cautionary statements, including certain risks and
uncertainties, that could cause actual results to vary materially from the
future results indicated in such forward-looking statements. Other factors could
also cause actual results to vary materially from the future results indicated
in such forward-looking statements.
MANAGEMENT'S OVERVIEW
Fiscal year 2005 for the Company was devoted to assembling an effective team of
industry professionals, re-engaging our distribution partners and dramatically
expanding our manufacturing capabilities. Product manufacturing capabilities to
support growing sales within the United States have been transitioned from the
Company's facility in Neunkirchen, Germany to Alachua, Florida. Tutogen now
manufactures 80 percent of the U.S. product requirement in our facility in
Alachua. This compares to 5 percent of the U.S. requirements at this time last
year. Additionally, manufacturing and product management executives were added
to the operations team in fiscal year 2005 with the goal of increasing revenues
and improving operating efficiencies. The Company established a strategic goal
to develop new products in the spine, dental, general surgery markets and to
enter new markets for hernia repair.
With regards to these product lines, the dental product sales continue to grow.
The Company has re-worked the fee agreement that governs the distribution
relationship with Zimmer Dental. This, combined with the transfer of
manufacturing for all dental products to the Alachua facility with improved
costs, will have a positive impact on our dental operating margins. For the
spine sales, management believes that the second half of fiscal year 2006 will
improve as it is anticipated that Zimmer will substantially work-off existing
13
inventories during the first half of the year and commence new purchases during
the second half of fiscal 2006. The Company is solidifying the product/market
foundation in 2006 by entering, as planned, the important hernia repair market
with Davol as the Company's distribution partner.
The Company is now positioned in Europe to return that business to more
historical double-digit growth patterns, starting with the first quarter. In
conjunction with this, the Company is also expanding the physical plant in
Neunkirchen, Germany in order to fully support the growing and important
international business.
The Company's ability to generate positive operational cash flow is dependent
upon increasing revenues supported by increased raw tissue recoveries by tissue
banks in the U.S. and Europe, controlling costs and the development of
additional markets and surgical applications worldwide. While the Company
believes that it continues to make progress in these areas, there can be no
assurances.
RESULTS OF OPERATIONS - THREE MONTHS ENDED DECEMBER 31, 2005 COMPARED WITH THE
THREE MONTHS ENDED DECEMBER 31, 2004
REVENUE
Revenues for the three months ended December 31, 2005, increased 14% to $8,034
from $7,073 for the same period during 2004. The U.S. operation had a 10%
increase in revenues from $4,916 in 2004 to $5,409 for the quarter ended
December 31, 2005. This increase was fueled by the continued increase in the
demand for the Company's Tutoplast(R) bone products for dental applications sold
by Zimmer Dental ("Dental"), the Company's marketing partner. The Dental
business increased 49% from a year ago. The spine revenues continue to be
impacted by the high inventory levels at the Company's marketing partner, Zimmer
Spine. The spine revenues decreased $676 from the same quarter a year ago. The
surgical specialties, consisting of urology, ophthalmic and ENT businesses
decreased 10% compared to last year from $1,266 in 2004 to $1,150 this quarter,
partially due to a backlog on certain product lines. The International revenues
for the three months ended December 31, 2005 increased 22% this quarter to
$2,625 from $2,157 in 2004. The International segment has increased its revenues
primarily through improved product sales in Germany for the Company's Xenograft
product lines, offset by decreased sales in Europe recovering from its
regulatory compliance matters, which have since been resolved. An analysis of
revenues by major business segment is as follows:
14
------------------------------------------------------------
(000's omitted) Three Three
Months Months
------------------------------------------------------------
12/30/05 12/31/04
------------------------------------------------------------
------------------------------------------------------------
Spine $ 374 $ 1,050
------------------------------------------------------------
Dental 3,885 2,600
------------------------------------------------------------
Surgical Specialties 1,150 1,266
------------------------------------------------------------
Total - U.S. $ 5,409 $ 4,916
------------------------------------------------------------
------------------------------------------------------------
Germany 795 320
------------------------------------------------------------
France 274 418
------------------------------------------------------------
ROW 1,430 1,266
------------------------------------------------------------
Other 126 153
------------------------------------------------------------
Total-International $ 2,625 $ 2,157
------------------------------------------------------------
------------------------------------------------------------
Total Consolidated $ 8,034 $ 7,073
------------------------------------------------------------
MARGIN
Gross margin, for the three months ended December 31, 2005 was 58% as compared
to 39% for the three month comparable period last year. The increased gross
margin for the three months was due primarily to the favorable impact of the
manufacturing efficiencies realized in the U.S. operating segment as the result
of transferring the manufacturing of the dental product lines from the German
operation to the U.S.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased 38% for the three months ended
December 31, 2005 from the comparable period last year. The increase for the
quarter was primarily due to higher compensation from cost related to new
personnel ($178), higher bank charges directly related to increased dental
revenues as customers pay by credit card ($30), stock compensation ($96),
compliance with Sarbanes-Oxley ($9) and other increases ($34). As a percentage
of revenues, for the three months ended December 31, 2005, General and
Administrative expenses were 20% compared to 16% of revenues for the comparable
period in 2004.
DISTRIBUTION AND MARKETING
Distribution and marketing expenses increased 5% for the three months ended
December 31, 2005 from the comparable period last year. The increase was
primarily due to an increase in U.S. sales and marketing expenses paid to Zimmer
Dental of $1,545 versus $1,252 a year ago as a result of 49% increase in dental
revenues offset partially by the benefits realized from the reorganization of
the international sales group. As a percentage of revenues, for the three months
ended December 31, 2005, Distribution and Marketing expenses decreased to 36%
from 38% in 2004.
RESEARCH AND DEVELOPMENT
Research and development expenses increased 9% for the three months ended
December 31, 2005, from the comparable period last year. The increase was
primarily due to increased spending on new product developments for the upcoming
year. As a percentage of revenues, for the three months ended December 31, 2005,
Research and Development expenses decreased to 5% from 6% in 2004.
15
FOREIGN EXCHANGE GAIN (LOSS)
The Company recognized a foreign currency exchange gain for the quarter ended
December 31, 2005 of $119 due to the dollars' improved exchange rate against the
Euro.
OTHER INCOME
Other income increased by $19 for the three months ended December 31, 2005 from
the comparable period a year ago, primarily due to favorable increases in the
investment returns recognized in interest income.
INTEREST EXPENSE
Interest expense increased $61 for the three months ended December 31, 2005 from
the comparable period a year ago, primarily due to borrowings for new equipment
used to facilitate growth and the facility expansion programs in Florida and
Germany.
NET LOSS
As a result of the above, net loss for the three months ended December 31, 2005
totaled $81 or $0.01 basic and diluted loss per share, as compared to a net
loss of $1,914 or $0.12 basic and diluted earnings per share for the comparable
period in 2004.
INVENTORY
Inventory increased 13.6%, from $9,555 at last fiscal year-end to $10,852 at
December 31, 2005. Raw materials and work-in-process ("WIP"), increased 5% and
27%, respectively, which reflects the plan to replace inventory quarantined or
destroyed last year-end as a result of the voluntary recall of certain products
(see Note 8 to condensed consolidated financial statements). Finished goods
inventory remained consistent with year end balances.
CRITICAL ACCOUNTING POLICIES
The Company's significant accounting policies are more fully described
in Note 2 to the consolidated financial statements. However, certain
of the accounting policies are particularly important to the portrayal of the
financial position and results of operations and require the application of
significant judgment by management; as a result, they are subject to an inherent
degree of uncertainty. In applying those policies, management uses its judgment
to determine the appropriate assumptions to be used in the determination of
certain estimates. Those estimates are based on historical experience, terms of
existing contracts, observance of trends in the industry, information provided
by customers and information available from other outside sources, as
appropriate. The Company's significant accounting policies include:
INVENTORIES. Inventories are valued at the lower of cost (weighted
average basis) or market. Work in process and finished goods include costs
attributable to direct labor and overhead. Reserves for slow moving and obsolete
inventories are provided based on historical experience, current product demand
and the remaining shelf life. The adequacy of these reserves is evaluated
quarterly.
REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE. Revenue on product sales
is recognized when persuasive evidence of an arrangement exists, the price is
fixed and final, delivery has occurred and there is a reasonable assurance of
collection of the sales proceeds. Oral or written purchase authorizations are
generally obtained from customers for a specified amount of product at a
specified price. Title transfers at the time of shipment. Customers are provided
with a limited right of return. Revenue is recognized at shipment. Reasonable
and reliable estimates of product returns are made in accordance with
16
SFAS No. 48 and allowances for doubtful accounts based on significant historical
experience. Revenue from service sales is recognized when the service procedures
have been completed or applicable milestones have been achieved. Revenue from
distribution fees includes nonrefundable payments received as a result of
exclusive distribution agreements between the Company and independent
distributors. Distribution fees under these arrangements are recognized as
revenue as products are delivered.
FOREIGN CURRENCY TRANSLATION. The functional currency of the Company's
German subsidiary is the Euro for the years 2005 and 2004. Assets and
liabilities of foreign subsidiaries are translated at the period end exchange
rate while revenues and expenses are translated at the average exchange rate for
the year. The resulting translation adjustments, representing unrealized,
non-cash losses are made directly to comprehensive income. Gains and losses
resulting from transactions of the Company and its subsidiaries, which are made
in currencies different from their own, are included in income as they occur.
The Company recognized a foreign currency translation loss of $203 and a
currency translation gain of $286 for the three months ending December 31, 2005
and 2004, respectively.
VALUATION OF DEFERRED TAX ASSET. We record valuation allowances to
reduce the deferred tax assets to the amounts estimated to be recognized. While
we consider taxable income in assessing the need for a valuation allowance, in
the event we determine we would be able to realize our deferred tax assets in
the future, it is more likely than not that an adjustment would be made and
income increased in the period of such determination. Likewise, in the event we
determine we would not be able to realize all or part of our deferred tax assets
in the future, an adjustment would be made and charged to income in the period
of such determination.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2005, the Company has working capital of $7,768 as compared to
September 30, 2005 of $8,434. The Company maintains current working capital
credit lines totaling 1,500euros (approximately $1,800) with several German
banks and a $1,500 credit line with a U.S. bank. At December 31, 2005, the
Company had no borrowings against the German and U.S. credit lines.
The Company has experienced a negative cash flow of $1,728 for the three months
ended December 31, 2005 as compared to a negative cash flow of $1,864 for the
same period in 2004. The primary reasons for the negative cash flow during the
quarter ended December 31, 2005 was due to higher inventory levels compared to
year-end caused by a plan to manufacture and replace recalled products,
increased capital spending levels associated with the expansion of the U.S. and
German manufacturing facilities, partially offset by an increase in short-term
borrowings.
The Company's ability to generate positive operational cash flow is dependent
upon increasing revenues supported by increased raw tissue recoveries by tissue
banks in the U.S. and Europe, controlling costs and the development of
additional markets and surgical applications worldwide. While the Company
believes that it continues to make progress in these areas, there can be no
assurances.
Future minimum rental payments required under the Company's leases that have
initial or remaining non-cancelable lease terms in excess of one year as of
December 31, 2005 are as follows:
17
2006 $ 886
2007 616
2008 590
2009 338
2010 25
----------
$ 2,455
==========
Long-term debt consists of senior debt, 5.75% interest until March 30, 2008 when
terms are renegotiable, due 2008. Future minimum payments as of December 31,
2005 are as follows:(1)
2006 $ 388
2007 196
2008 121
2009 60
2010 4
----------
769
----------
Less current portion $ 185
----------
$ 584
==========
(1) The above payments do not include interest.
ITEM 3. QUANTITATIVE STATEMENTS AND SUPPLEMENTARY DATA
For information regarding the Company's exposure to certain market risks, see
Item 7A, Quantitative Statements and Supplementary Data, in the Annual Report on
Form 10-K/A for the year ended September 30, 2005. There have been no
significant changes in our market risk exposures from the fiscal 2005 year-end.
We are subject to market risk from exposure to changes in interest rates based
upon our financing, investing and cash management activities. A 1% increase in
interest rates would not have a material effect on our results of operations.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
In the Form 10-Q for the Company's fiscal quarter ended December 31, 2005,
initially filed with the SEC on February 13, 2006, the Company's management,
with the participation of the Company's chief executive officer and former chief
financial officer, evaluated the Company's disclosure controls and procedures
(as defined in Rule 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934, as amended (the "34 Act")) as of December 31, 2005, (the "Evaluation
Date"). Based on that evaluation, the chief executive officer and former chief
financial officer of the Company concluded that, as of the Evaluation Date, the
disclosure controls and procedures established by the Company were adequate to
ensure that information required to be disclosed by the Company in reports that
the Company files under the Exchange Act, was recorded, processed, summarized
and reported on a timely basis in accordance with applicable rules and
regulations.
Subsequent to that filing (and as part of the financial review for the three and
six months ended March 31, 2006) under the direction of the Company's chief
executive officer and new chief financial officer, the Company conducted an
analysis of the Company's inventory on hand as of prior reporting periods, its
policies and procedures over certain journal entries recorded in the financial
close process, and the effectiveness of the design and operation of the
Company's disclosure controls and procedures, (as defined in Rule 13(a) - 15(e)
under the 34 Act). The evaluation led the Company to conclude that as of
September 30, 2005, the Company's controls and procedures relating to the
calculation of intercompany profit and certain journal entries recorded in the
financial close process were deficient, resulting in a material weakness in
internal control over financial reporting. Accordingly, the Company concluded
that as of December 31, 2005 the Company's disclosure controls and procedures
18
were not effective in ensuring that information required to be disclosed by us
in the reports that we file under the Securities and Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the
Securities and Exchange Commission rules and forms.
As a result, the Company has restated the financial statements for the periods
covered in the Company's quarterly report on Form 10-Q/A for the quarter ended
December 31, 2005. (See Note 11 to the accompanying unaudited interim Condensed
Consolidated Financial Statements.)
A material weakness in internal control is a significant deficiency or
combination of significant deficiencies that results in more than a remote
likelihood that a material misstatement of the financial statements would not be
prevented or detected on a timely basis by the Company. The Company has
subsequently taken steps to remediate this material weakness including designing
and implementing a more effective and precise analytic model for calculating
intercompany profit. Additionally, the Company has developed a system for
assuring the accuracy of this model. This system includes an enhanced reporting
process for determining actual costs and transfer prices used in the calculation
of intercompany profit to be eliminated during the consolidation process. Also,
the Company has designed and documented new policies and procedures to
strengthen its controls over certain journal entries recorded in its financial
close process.
Management believes that these subsequent changes in the design of internal
controls will strengthen the Company's disclosure controls and procedures, as
well as its internal control over financial reporting, and will remediate the
material weakness that the Company identified in its internal control over
financial reporting as of December 31, 2005. The Company has discussed this
material weakness and its remediation program with its Audit Committee. The
Company recognizes that controls and procedures can provide only reasonable
assurance of achieving the desired control objectives. Accordingly, the Company
intends to continue to refine its internal control over financial reporting on
an ongoing basis as it deems appropriate.
The Company instituted the changes noted above during its financial close
process during the quarter ended March 31, 2006 to materially enhance its
internal control over financial reporting of inventory, net revenues, cost of
revenues and financial close process.
CHANGES IN CONTROL:
Except as described above, there has not been any change in our internal control
over financial reporting during the quarter ended December 31, 2005 that has
materially affected, or is reasonably likely to materially affect, those
controls.
19
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Please refer to Footnote 8 of the Interim Financial Statements.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
31.1 Certification of Chief Executive Officer, pursuant to
Rule 13a-14. ***
31.2 Certification of Chief Financial Officer, pursuant to
Rule 13a-14. ***
32. Certification of Chief Executive Officer and the Chief
Financial Officer, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***
*** Filed herewith
20
SIGNATURES
Registrant has duly caused this report to be signed on its behalf by the
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
undersigned, thereunto duly authorized.
TUTOGEN MEDICAL, INC.
Date: July 6, 2006 /s/ Guy L. Mayer
---------------------------
Chief Executive Officer
Date: July 6, 2006 /s/ L. Robert Johnston, Jr.
---------------------------
Chief Financial Officer
(Principal Financial
and Accounting Officer)
21