2300 Riverchase Center
Birmingham, Alabama 35244
(205) 967-7880
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

R. Steven Boggan
President and Chief Executive Officer
BioHorizons, Inc.
2300 Riverchase Center
Birmingham, Alabama 35244
(205) 967-7880
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Approximate date of commencement of proposed sale to public:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

The underwriters have a 30-day option to purchase up to additional shares of our common stock from the selling stockholders at the initial public offering price, less the underwriting discount, to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of common stock.

Unless the context otherwise requires, throughout this prospectus "we," "our" and "us" refer to BioHorizons, Inc. and its consolidated subsidiaries, including its primary operating subsidiary, BioHorizons Implant Systems, Inc.

Unless otherwise specified or the context requires, references to "dollars," "U.S. dollars" and "$" are to United States dollars.

This prospectus contains market data and industry forecasts that were obtained from industry publications. These publications generally state that the information contained therein is believed to be accurate at the time of publishing but is not guaranteed. We have not independently verified, and make no representation as to the accuracy of, this information.

Throughout this prospectus, when we refer to a product being cleared by the U.S. Food and Drug Administration, or FDA, or clearance from the FDA, we mean that the FDA reviewed the product as presented in a type of pre-market submission referred to as a 510(k) and agreed that the product could be marketed and sold.

Autotac, Bio-cera, BIOHORIZONS, BIOHORIZONS (with design), Laser-Lok, Lok-Screw, Mem-Lok, MinerOss and Osseo-Lok are our trademarks. AlloDerm is a registered trademark of LifeCell Corporation. Grafton is a registered trademark of Osteotech, Inc. This prospectus also contains trademarks of other companies.

This summary highlights the most important features of this offering and the information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, especially the risks of investing in our common stock discussed under "Risk Factors."

BioHorizons, Inc. is a medical technology company focused on developing, manufacturing and marketing a broad and comprehensive line of innovative, proprietary and evidence-based dental implants, as well as hard and soft tissue regeneration products, for the replacement of missing teeth. We have designed our dental implant product portfolio to address substantially all of the clinical requirements in implant dentistry. In 2009, our net sales were $69.0 million and, according to iData Research Inc., or iData, we were the sixth largest dental implant company based on net sales in North America. From 2006 to 2009, our net sales grew at a compounded annual growth rate, or CAGR, of 16%. We believe the growth in our net sales since 2006 exceeded the growth in the overall dental implant market based on our innovative product solutions and our ability to serve the dental professionals who refer and perform dental implant procedures.

According to the World Health Organization, dental diseases are the most prevalent chronic diseases worldwide. Tooth loss generally results from tooth decay, periodontal disease, genetic defects, severe malnutrition and trauma. We believe tooth loss can have a considerable impact on a person's quality of life and can negatively impact a person's eating ability, nutrition, appearance, speech, self-esteem and overall general health. The treatments for replacing missing teeth are dentures, bridgework and dental implants.

Dental implants can be used to replace individual or multiple teeth and are highly effective in restoring function for the patient as well as improving aesthetic outcomes. Dental implants consist of three main components: the implant, the abutment and the crown. The implant is typically made from titanium and secured into the jaw bone, acting as an artificial tooth root to provide a stable foundation for the replacement tooth. The abutment is customarily made from titanium, ceramic or gold and is attached to the top of the implant to support a prosthetic device, such as a crown. The crown is usually made of porcelain, ceramic and/or metal and is a replacement tooth that is secured to the top of the abutment. Generally, dental implant companies, such as BioHorizons, manufacture and sell implants and abutments, while dental laboratories custom manufacture and sell crowns.

We provide an extensive line of implants for the replacement of individual or multiple teeth. Our implant product line addresses substantially all of the clinical requirements in implant dentistry and includes virtually all shapes and types of implants and connections. Our implant products feature our proprietary Laser-Lok platform technology as well as our enhanced biomechanically-engineered threads. We believe that our proprietary Laser-Lok platform technology is the only technology on the market today for which there is clinical data that supports reduced bone and soft tissue loss which are frequent complications associated with conventional dental implant procedures. Moreover, we offer a broad line of implants that can be used to replace missing teeth with only a single surgical procedure, which is referred to as same-day or immediate loading. We also offer a complete line of abutments, tissue regeneration products, implant tools and specialty instruments, as well as Virtual Implant Placement, or VIP, computer-guided surgical software and surgical guides to assist in reconstruction procedures. We refer to tissue regeneration products as biologics.

We currently market our products through a direct sales force of over 70 sales representatives in North America and through our sales offices in Australia, Chile, Germany, Spain and the United Kingdom.

We also maintain a complementary network of over 50 third-party distributors outside of the United States, substantially all of which market our products on an exclusive basis. Through our direct sales force and our distribution network, we market our products in more than 80 countries worldwide.

According to iData, the worldwide dental implant market, including implants, final abutments and biologics, was $3.7 billion in 2009 and is expected to grow to $7.9 billion by 2015, which represents a CAGR of 13%. We believe the worldwide and North American dental implant markets are underpenetrated.

Tooth loss is highly correlated with increase in age and is primarily due to tooth decay and periodontal disease. Full dentition is defined as having 28 natural teeth. According to the U.S. National Institute of Dental and Craniofacial Research, a person between the ages of 20 and 34 has an average of 27 teeth, a person between the ages of 35 and 49 has an average of 25 teeth and a person over 65 years of age has an average of 19 teeth. According to the American Dental Association, approximately 45 million teeth are removed annually in the United States while only approximately 2 million dental implants are placed annually.

The treatments for replacing missing teeth are dentures, bridgework and dental implants. We believe dental implants provide a superior solution for patients who want the following:

We believe that the demand for dental implants and the number of dental implant procedures performed relative to the total number of tooth replacement procedures performed will increase as a result of:

Our comprehensive line of dental implant and biologics products enables dental professionals to provide permanent tooth replacement solutions using clinically-proven technologies to achieve superior functional and aesthetic outcomes in shorter treatment cycles. We believe we can increase our sales in the worldwide tooth replacement market as a result of our:

We believe we can increase the demand for our products, increase our net sales and generate stockholder value by pursuing the following strategies:

Our business is subject to numerous risks, as more fully described in the section entitled "Risk Factors" immediately following this prospectus summary. We may be unable, for many reasons, including those that are beyond our control, to implement our business strategy. Those reasons could include our inability to maintain and expand our direct sales capabilities and global network of distributors, our inability to effectively market our products to dental professionals, our ability to maintain regulatory clearance or approvals to market our products and to obtain regulatory clearance or approval to market any new product or enhancement and our failure to maintain and to protect our intellectual property assets. In addition, the lack of reimbursement for dental implant procedures increases our exposure to a cyclical business environment, which may have a negative impact on our business. As of March 31, 2010, we had an accumulated deficit of $59.6 million and we have incurred net losses of $18.0 million, $18.6 million, $14.5 million and $3.1 million for the years ended December 31, 2007, 2008 and 2009 and for the quarter ended March 31, 2010, respectively, and we may need additional capital to fund our operations.

Our primary operating subsidiary, BioHorizons Implant Systems, Inc., or BIS, was incorporated in Delaware on November 3, 1995 and since its inception has developed, sold and distributed dental implants and related products. BioHorizons, Inc. was incorporated in Delaware on May 5, 2006 in connection with the August 26, 2006 acquisition of BIS by affiliates of HealthpointCapital, LLC.

Our principal executive offices are located at 2300 Riverchase Center, Birmingham, Alabama 35244, and our telephone number is (205) 967-7880. Our web site address is www.biohorizons.com. The information contained on our web site is not incorporated by reference into this prospectus. We have included our web site address as a factual reference and do not intend it to be an active link to our web site.

Founded in 2002 and headquartered in New York City, HealthpointCapital, LLC, is a values-driven, research-based private equity firm exclusively focused on the musculoskeletal sector — specifically orthopedics and dental. HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P., together referred to herein as HealthpointCapital, are private equity funds affiliated with HealthpointCapital, LLC. HealthpointCapital has over $700 million in institutional capital under management. HealthpointCapital is our largest stockholder.


Common stock offered		shares
Common stock offered by the selling stockholders		shares
Common stock to be outstanding after this offering		shares
Use of proceeds		We intend to use the net proceeds of this offering to pay down debt; to expand our domestic and international distribution channels; and for general corporate purposes, including for ongoing capital expenditures. See "Use of Proceeds" for a more complete description of our intended use of the net proceeds from this offering. We will not receive any proceeds from the sale of our shares by the selling stockholders.
Proposed NASDAQ Global Market symbol		BHZN

Unless otherwise indicated, all information contained in this prospectus reflects:

Unless otherwise indicated, all information contained in this prospectus excludes:

The summary financial data set forth below should be read in conjunction with our financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

We have derived the following summary of our consolidated statement of operations data for the years ended December 31, 2007, 2008 and 2009 from our audited consolidated financial statements. The following summary of our consolidated statement of operations data for the three months ended March 31, 2009 and 2010 has been derived from our unaudited condensed consolidated financial statements.

	Fiscal Year Ended December 31,									Three Months Ended March 31,

	2007			2008			2009			2009			2010
										(unaudited)
	(in thousands, except per share data)
Consolidated Statement of Operations Data:
Net sales	$	56,432		$	68,644		$	69,038		$	16,455		$	18,972

Cost of goods sold, excluding depreciation and amortization, which are included in total operating costs and expenses below		21,163			22,611			22,487			5,112			5,769

Gross profit		35,269			46,033			46,551			11,343			13,203

Total operating costs and expenses		52,078			59,880			52,248			13,629			13,418

Loss from operations		(16,809	)		(13,847	)		(5,697	)		(2,286	)		(215	)

Total other expense, net		(1,480	)		(2,860	)		(3,030	)		(1,588	)		(672	)

Loss from continuing operations before income taxes		(18,289	)		(16,707	)		(8,727	)		(3,874	)		(887	)

Income tax benefit		6,619			5,465			2,685			1,157			299

Loss from continuing operations		(11,670	)		(11,242	)		(6,042	)		(2,717	)		(588	)

Net loss from continuing operations per common share (basic and diluted)⁽¹⁾	$	(0.74	)	$	(0.55	)	$	(0.28	)	$	(0.13	)	$	(0.03	)

Weighted-average shares used in computing net loss from continuing operations per common share (basic and diluted)⁽¹⁾		15,762			20,529			21,302			21,079			21,528

Pro forma as adjusted net loss from continuing operations per common share (basic and diluted)	$			$			$			$			$

Weighted-average shares used in computing pro forma as adjusted net loss per share

Cash dividends declared per common share		—			—			—			—			—

The following table presents a summary of our consolidated balance sheet data as of March 31, 2010:

An investment in our common stock involves a high degree of risk. You should carefully read and consider the risks described below before deciding to invest in our common stock. If any of the following risks actually occur, our business, financial condition, results of operations or cash flows could be materially harmed. In any such case, the trading price of our common stock could decline, and you could lose all or part of your investment. When determining to buy our common stock in this offering, you should also read carefully the other information in this prospectus, including our financial statements and related notes.

If we cannot successfully implement our business strategy, our business, results of operations and potential for growth will be adversely affected.

Our business strategy includes expanding our sales efforts through a combination of expanding our direct sales force, engaging new distributors to sell our products and obtaining regulatory approval to sell our products in certain key markets. Our ability to achieve our business strategy is subject to a variety of factors, many of which are beyond our control. For example, in 2009, we and many of our distributors faced challenging local economic conditions, which had a negative impact on our sales of our products. Our business strategy is also dependent on the acceptance of our products and the timing of regulatory approvals for our new products and enhancements, in particular the launch of additional products incorporating our proprietary Laser-Lok platform technology. If our assumptions regarding these matters prove to be incorrect, we may not be successful in implementing our business strategy. As of March 31, 2010, we had an accumulated deficit of $59.6 million and we have incurred net losses of $18.0 million, $18.6 million, $14.5 million for the years ended December 31, 2007, 2008 and 2009, respectively, and a loss of $3.1 million for the three months ended March 31, 2010. In order to implement our business strategy, we will require additional capital. We may obtain this additional capital through the sale of additional equity or debt securities or may borrow additional money. There can be no assurance, however, that we will be able to obtain such capital on acceptable terms, or at all. The sale of additional equity or convertible debt securities could result in further dilution to our stockholders. If additional capital is raised through the issuance of equity or debt securities or through borrowing money, these securities could have rights senior to those associated with our common stock and the securities and the borrowing arrangements could contain covenants that would restrict our operations. In addition, the implementation of our business strategy may not improve our operating results. We may decide to alter or discontinue aspects of our business strategy and may adopt alternative or additional strategies due to business or competitive factors not currently foreseen, such as the introduction of new products or technologies by our competitors. Any failure to successfully implement our business strategy would have a material adverse effect on our business, financial condition and results of operations.

The dental implant and biologics markets are highly competitive and characterized by frequent product improvements and evolving technology. Other companies in these markets have larger sales forces, more resources and greater brand recognition than we do, making it difficult for us to compete against them. Our ability to compete successfully in these markets depends, in part, on our ability to develop innovative new products. The development of innovative new products by competitors or the discovery of alternative treatments to dental implants and biologics products could result in our products becoming non-competitive or obsolete.

Additionally, some of our competitors have, or belong to groups which have, greater financial, research and development, manufacturing and marketing resources than we do, including Nobel Biocare

Holding AG, Straumann Holding AG, Biomet 3i (a subsidiary of Biomet, Inc.), Astra Tech AB (a subsidiary of AstraZeneca Group), Zimmer Holdings, Inc. and DENTSPLY International Inc. Industry consolidation could make our competitors stronger. This competition could increase pressure on us to reduce the selling prices of our products, or cause us to increase our spending on research and development and sales and marketing. If we are unable to develop innovative new products, maintain competitive pricing and offer products that consumers perceive to be as reliable as those of our competitors, our sales and margins would decrease, thereby harming our business.

In addition, the dental implant and biologics markets offer relatively low cost and regulatory barriers to entry for potential competitors, in part because most products sold in these markets do not have to undergo clinical trials before they receive marketing clearance from the FDA, but rather obtain such clearances through a premarket notification under Section 510(k) of the Federal Food, Drug and Cosmetic Act. The relatively low cost and regulatory barriers to entry may attract new competitors that can produce dental implants and biologics products at lower cost than us or our existing competitors. Such price competition could force us to lower our prices in order to remain competitive, which would have a material adverse effect on our business, financial condition and results of operations.

Product sales, introductions, enhancements or modifications may be delayed or cancelled as a result of requirements of the FDA or foreign or other regulatory bodies, which could cause our sales to decline.

Before we can market or sell a new regulated product, or a new use of or a claim for, an approved or cleared product in the United States, we must obtain either 510(k) clearance or premarket approval from the FDA unless an exemption applies. In the 510(k) clearance process, the FDA must determine that a proposed new device is "substantially equivalent" to a device legally on the market by way of a 510(k) or for which a premarket approval application, or PMA, was not required with respect to intended use, technology and safety and effectiveness. The device to which the proposed device is compared is known as a "predicate" device. Clinical data is sometimes required to support substantial equivalence. The PMA pathway requires an applicant to demonstrate the safety and effectiveness of the device based, in part, on data obtained in clinical studies. Both of these processes can be expensive and lengthy. In the United States, our marketed products have either been the subject of a cleared 510(k) or been exempt from the 510(k) clearance process. Even after we receive the required clearances or approvals, our clearances or approvals can be revoked if safety or effectiveness problems develop or if we modify any of our products in a manner that would significantly affect their safety or effectiveness or that would constitute a major change in their intended use. We have modified some of our 510(k) cleared products without submitting new 510(k) notices after our determination that a new 510(k) was not necessary. Although we may make this determination in the first instance, our analysis and determination could later be subject to FDA review and scrutiny. If the FDA disagrees with us and requires us to submit new 510(k) notifications for modifications to our existing products, we may be required to recall any products we have distributed and/or stop marketing the products while the FDA reviews the 510(k). Any new product introduction or existing product modification could be subjected to a lengthier, more rigorous FDA review process. For example, in certain cases we may need to conduct clinical trials of a new product prior to submitting a 510(k). Additionally, we may be required to obtain pre-market approvals for our products. The requirements of these more rigorous processes could delay product introductions and increase the costs associated with FDA compliance. We may not be able to obtain additional clearances or approvals for new products or for modifications to, or additional indications for, our existing products in a timely fashion, or at all. Delays in obtaining future clearances or approvals may result in recalls of the modified products, may require us to stop marketing the modified products, and could adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn could have a material adverse effect on our business, financial condition and results of operations.

A large percentage of our net sales are derived from the sale of our dental implant products that incorporate our proprietary Laser-Lok platform technology.

Our most popular implants are available with our proprietary Laser-Lok platform technology, and net sales of those implants represented approximately 28% and 31% of our net sales for 2009 and the three months ended March 31, 2010, respectively. The success of these implants could be negatively impacted by numerous factors, including:

A decline in sales of these products, due to market demand, the introduction by a third party of a competitive product or otherwise, would have a material adverse effect on our business, financial condition and results of operations.

We rely on third-party technologies for the development of our products and our inability to use such technologies in the future would harm our ability to make our products competitive.

We rely on contractual rights with third parties that license technologies to us that are related to or integrated into our products. If we are unable to continue to use or license these technologies on reasonable terms, we may not be able to secure alternatives in a timely manner and our ability to make our products would be harmed. For example, we exclusively license certain patents and patent applications which form the basis of our Laser-Lok platform technology from the Hospital for Joint Diseases Orthopedic Institute, or HJD, at the New York University Langone Medical Center. The HJD license shall remain in force on a country-by-country basis, unless terminated earlier pursuant to its terms, for a period of 15 years from the date of the first commercial sale of products incorporating the licensed technology in such country, or until the expiration date of the last to expire of the patents that are subject to the license. HJD can terminate the license for cause, which includes our material breach or default in the performance or observance of any provisions of the agreement that has not been cured within 60 days after receipt of notification, our failure to make the minimum royalty payments required under the license agreement that has not been cured within 30 days after receipt of notification, or our becoming insolvent. In addition, we exclusively license from UAB Research Foundation, or UABRF, certain patents and patent applications related to, among other things, methods of designing dental implants and resulting dental implant designs. UABRF can terminate the license if we fail to perform any material term or covenant of the license that has not been cured within 90 days after receipt of notification.

The loss of the UABRF and or HJD licenses will hinder or prevent us from manufacturing, marketing and selling any dental implant products that incorporate inventions claimed in the relevant licensed patents, or cause us to lose exclusive rights to do so. This could have a material adverse effect on our business, financial condition and results of operations. In addition, if we are unable to successfully license technology from third parties to develop future products, we may not be able to develop such products in a timely manner or at all.

We depend on third-party suppliers and manufacturers for most of our products and their components and are in the process of transitioning certain manufacturing operations in-house, which will expose us to additional business risks.

In some instances we purchase components, materials or final assemblies from single sources due to quality considerations, costs or constraints resulting from regulatory requirements. These sources must provide the materials and perform the activities to our standards for us to meet our quality and regulatory requirements. In some instances, we have only one approved source of supply for a component, material or assembly. Because of the long-term nature of the manufacturing agreements, regulatory requirements and the custom and proprietary nature of the components, materials and assemblies, we cannot quickly establish additional or replacement manufacturers or suppliers for many of our critical components, materials and assemblies. Failure of any of our third-party manufacturers or suppliers to deliver required components, materials or assemblies would limit our ability to meet our sales commitments to our customers and could have a material adverse effect on our business. For example, our proprietary Laser-Lok platform technology is currently only incorporated into our products by one supplier. Although we have not experienced any material problems with any of our sole-source suppliers in the past, the failure of a sole-source supplier to deliver our products on time, in sufficient quantities and up to our specifications could have a material adverse effect on our business, financial condition and results of operations.

Beginning in 2009, we commenced in-house manufacturing of some components in an effort to reduce the cost of obtaining such components and increase our profitability. The conversion to in-house manufacturing requires significant investment in plant, equipment, training and regulatory compliance, and there can be no assurance that we will develop the ability to produce products of the required quality and quantity at a cost less than that charged to us by third-party vendors. As part of this conversion, we purchase raw materials and other components of the final assemblies we manufacture at our facility from external suppliers. To date, we have not experienced any material problems or delays in our internal manufacturing capabilities as a result of our external suppliers, but we cannot assure you that we will not experience problems or delays in the future and that any such problems or delays will not have a material adverse effect on our business. If the conversion effort is unsuccessful, we would lose the entire amount of our investment, and we might not be able to reinstate our existing outsourcing arrangements, which would have a material adverse effect on our business, financial condition and results of operations.

We sell our biologics products, including AlloDerm® Regenerative Tissue Matrix, Grafton, MinerOss and Mem-Lok, as a distributor for third parties. The sales of these biologics products in the aggregate represented approximately 20% of our total net sales for each of 2009 and the three months ended March 31, 2010. The distribution arrangements we have with each of these third parties may be terminated by the particular third party in certain circumstances. The termination of any one of these distribution arrangements would prevent us from selling the biologics products covered by the particular arrangement, which could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to maintain and expand our direct sale capabilities and our international network of distributors, our ability to implement our business strategy and generate anticipated net sales may be adversely affected.

If our sales representatives fail to adequately promote, market and sell our products, our net sales could significantly decrease. Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled sales representatives and new sales managers as we increase the number of sales representatives. We intend to double our global direct sales force over the next four years through new hires. Failure to hire or retain qualified sales personnel could negatively impact our ability to expand our business and generate anticipated net sales. We face significant challenges and risks in expanding, training, managing and retaining our sales teams, including managing geographically dispersed operations. It generally takes one to two years for a new dental implant sales representative to become a fully-functioning member of a sales team. Therefore, competition for experienced sales representatives is intense, and there can be no assurance that we will be able to retain our existing sales personnel or attract, assimilate or retain enough highly qualified sales representatives. If any of our sales representatives were to leave us and join one of our competitors, we may be unable to prevent such sales representatives from helping competitors to solicit business from our existing customers, which could adversely affect our net sales. The dental implant industry in general has high turn-over rates among sales staff, in part due to the mobility of their business. If we experience high turnover in our sales force in the future, we cannot be certain that new hires will become as productive as necessary to maintain or increase our net sales. If we are unable to expand our direct sales capabilities domestically and internationally, we may not be able to effectively commercialize our products, which could adversely affect our ability to implement our business strategy and generate anticipated net sales.

In those countries where we do not have a direct presence, our products are sold through a network of distributors. We do not currently sell products in several key areas of the world, including Brazil, China and most countries in Scandinavia. While we have recently received regulatory approval in Japan to sell some of our products, we are waiting for additional regulatory approvals to sell other products in this market. We expect to add distributors in many areas of the world including Scandinavia and Asia Pacific over the next few years. We also intend to increase marketing, education and training in international markets to assist our distributors. We compete with other dental implant companies to secure international distribution channels and we believe that our pricing, product portfolio, scope of education and training programs, among other things, impact our ability to enter into agreements with new distributors. We cannot guarantee that we will be able to enter into new distribution agreements on acceptable terms or at all. If we are unable to maintain our current network of distributors, expand this network, effectively educate and train our distributors or obtain the necessary regulatory approvals to sell our products in key markets, we will not be able to effectively commercialize our products, which could adversely affect our ability to implement our business strategy and generate anticipated net sales.

Our results of operations will suffer if we are unable to manage our international operations effectively.

The sale and shipment of our products across international borders subject us to extensive U.S. and foreign governmental trade, import and export, and custom regulations and laws. Compliance with these regulations is costly and exposes us to penalties for non-compliance. Other laws and regulations that can significantly impact us include various anti-bribery laws, including the U.S. Foreign Corrupt Practices Act and anti-boycott laws. Any failure to comply with applicable legal and regulatory obligations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments, restrictions on certain business activities and exclusion

or debarment from government contracting. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our distribution and sales activities.

In addition, many of the countries in which we sell our products are, to some degree, subject to political, economic or social instability. Our international operations expose us and our distributors to risks inherent in operating in foreign jurisdictions. These risks include:

These risks may limit or disrupt our operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization or expropriation without fair compensation.

Our continued success as a global company depends, in part, on our ability to develop and implement policies and strategies that are effective in anticipating and managing these and other risks in the countries in which we do business. Failure to manage these and other risks may have a material adverse effect on our operations in any particular country and on our business as a whole.

Our business depends on our ability to market our products effectively to dental professionals.

We market our products primarily to dental professionals. We believe that general dentists, oral surgeons, periodontists and prosthodontists, whom we refer to as dental professionals, play a significant role in determining which brand of dental implant a patient will be given. For example, in the United States and in parts of Europe, when a general dentist prescribes a dental implant for a patient, that patient is frequently referred to an oral surgeon, periodontist or prosthodontist, whom we refer to as dental specialists, who performs the dental implant procedure. The general dentist may or may not recommend a specific brand of dental implant to the dental specialist. If a specific brand is not recommended by the general dentist, the dental specialist may use the specific brand of his or her choice. We cannot guarantee that general dentists or dental specialists will recommend or use our

products, or that dental specialists will not substitute a competing product when our products are recommended by a general dentist. Moreover, until recently, dental schools generally did not teach dental students about dental implants and biologics products, so many dental professionals were not educated about products like the ones that we sell during their formal dental training. The success of our business depends, therefore, on our ability to effectively market our brand of products to dental professionals and educate and train current dental students. Therefore, we intend to increase our direct sales force, expand our network of international distributors and increase our marketing efforts in key markets. If we are unable to effectively implement these strategies, our business, financial condition and results of operations would be materially adversely affected.

The failure to educate and train a sufficient number of dental professionals and dental students in the use of dental implant procedures could reduce the market acceptance of our products and reduce our net sales.

In addition to specifically marketing our products to dental professionals, it is critical to the success of our sales efforts that there is an increasing number of dental professionals and dental students familiar with, trained in and proficient in the use of our dental implant products. Currently, dental professionals learn to use our dental implant products through our formal educational and training programs and through individual training by our sales representatives in conjunction with our VIP computer-guided surgical software and surgical guides. Our educational and training programs leverage our affiliations with leading private and public dental educational centers such as the Misch International Implant Institute Inc., or the Misch Institute, the Pikos Implant Institute, the Center For Advanced Dental Education, Implant Educators and several major universities. Through these and other affiliations, we participate in continuing educational and training programs to dental professionals worldwide. These programs promote the benefits of dental implants and our other products generally, educate people on the further benefits of our products over those of our competitors and train dental professionals on the use of our products. In addition, a significant number of our new customers each year are referred to us by these educational centers. The termination of our relationship with any one of these leading public or private dental educational centers could have a material adverse effect on our ability to increase the awareness of our products among dental professionals and to effectively market our products, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Even with the availability of these educational and training opportunities, we cannot predict the extent to which dental professionals and dental students will dedicate the time and energy necessary for adequate education and training in the use of our products, have the knowledge or experience in the clinical outcomes of procedures implementing our implants or feel comfortable enough performing the dental implant procedures to recommend them for their patients. Even if a dental professional is well versed in dental implant procedures, he or she may be unwilling to recommend a procedure that patients will have to pay for out-of-pocket. If dental professionals do not continue to accept and recommend our procedures, our net sales could be materially and adversely affected.

Competition in the dental implants market is characterized by frequent product introductions and products not yet available could result in significant additional competition.

Our current and future competitors will introduce new products or new versions of existing products that will result in near-term and long-term increased competition. Our products currently compete against numerous dental implant products in the United States and internationally. Some of the dental implants available internationally claim to have benefits equivalent or superior to leading dental implants currently available in the United States. A number of these internationally-available dental implants are the subject of current U.S. clinical studies, pending notifications for FDA clearance or applications for approval, or may be submitted for FDA review in the near future. If dental implants

are introduced in the U.S. market that offer, or are perceived to offer, benefits that are equivalent or superior to our products, demand for, and net sales of our products in the United States, could be harmed.

The frequent introduction of new dental implants may also create market confusion that may make it difficult to differentiate the benefits of our products over competing products in the United States and internationally. In addition, the entry of multiple products and new competitors into the dental implant market may lead some of our competitors to elect pricing strategies that could adversely impact the pricing of our products and the pricing in the dental implant market generally. As a result, without the timely introduction of new products and enhancements, our products may become obsolete over time. If that happens, our business, financial condition and results of operations could suffer.

If we do not enhance our product offerings, either through the acquisition of or investment in new and complementary technologies, products or businesses or our research and development efforts, we may be unable to compete effectively.

Our success depends in part on our ability to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures and technologies and our ability to increase our market share. Accordingly, we expect to consider opportunities to acquire or make investments in other technologies, products and businesses that could enhance our capabilities, complement our current products or expand the breadth of our markets or customer base. Acquisitions and strategic investments involve numerous risks, including:

We have no current commitments with respect to any acquisition or strategic investment. We do not know if we will be able to successfully complete any acquisitions, or whether we will be able to successfully integrate any acquired business, product or technology into our business or retain any key personnel, suppliers or distributors. Our ability to successfully grow through acquisitions depends upon our ability to identify, negotiate, complete and integrate suitable acquisitions and to obtain any necessary financing. If we are unable to integrate any acquired technology, products or business effectively, our business, financial condition and results of operations could be materially adversely affected. For example, an acquisition could materially impair our operating results by causing us to incur debt or requiring us to amortize significant amounts of expenses, including non-cash acquisition costs, and acquired assets.

Furthermore, research and development efforts may require a substantial investment of time and resources before we are adequately able to determine the commercial viability of a new product, technology, material or other innovation. As a result of the recent economic downturn, we elected to decrease our research and development expenses in 2009 as compared to 2008, as we conserved cash and focused fewer resources on areas of our business other than sales. In addition, even if we are able to successfully develop enhancements or new generations of our products, these enhancements or new generations of products may not produce net sales in excess of the costs of development and they may be quickly rendered obsolete by changing customer preferences or the introduction by our competitors of products embodying newer technologies or features.

The cost, length and possible side effects of the dental implant process and improving general dental health may affect the demand of our products.

Patients who choose to undergo a dental implant procedure generally face a high initial cost compared to conventional alternative treatments, such as bridges and dentures. In addition, a typical dental implant procedure may entail several visits to a dental professional over the course of several months. Alternative treatments, however, may entail only a couple of visits to a dental professional over only several weeks. The higher cost and greater number of visits to a dental professional required for recipients of dental implants relative to alternative treatments may cause patients to prefer, and dental professionals to recommend, these alternative treatments. In addition, our dental implants may not achieve broad market acceptance if they cannot effectively support immediate loading or because of a general resistance to surgery, possible nerve damage to the implant site and related bacterial or microbial infections and potential sinus problems. The profitability and expansion of our products may be materially adversely affected if our dental implant procedures are not accepted by dental professionals and their patients.

In many of our markets, including the United States, dental health is improving, such that generally fewer patients experience loss of their teeth. Because tooth replacement is a driver of demand for our products, the continued improvement in patients' dental health could result in lower demand for our products.

Lack of reimbursement for dental implant procedures exposes us to a cyclical business environment, which may have a negative impact on our business.

In general, dental implant treatments and the use of our biologics products are considered elective procedures in the markets in which we compete, the cost of which must be borne by the patient and are not reimbursable through government or private health insurance. Reimbursement and healthcare payment systems in international markets vary significantly by country and include both government sponsored healthcare and private insurance. For example, in Sweden and the Netherlands, a portion, if not all, the costs associated with our dental implants are reimbursed. However, to obtain reimbursement or pricing approval in these countries, we may be required to produce clinical data, which may involve one or more clinical studies, that compares the cost-effectiveness of our approved products to other available therapies. We may not obtain international reimbursement or pricing approvals in a timely manner, if at all. It is unlikely that the reimbursement environment for dental implant procedures and biologics products will change. We believe that dental implant treatments and the use of our biologics products will continue to be considered elective processes and, therefore, procedures for which patients will pay out-of-pocket. The willingness of individuals to pay directly for aesthetic medical procedures, in light of the lack of reimbursement by third-party payers, may contribute to fluctuations in our financial results.

Demand for dental implants and biologics products can be highly sensitive to changes in the economic environment. During times of an economic downturn, the demand for dental implants and biologics

products has generally declined significantly. For example, the global market for dental implants and biologics products declined in 2009 as compared to 2008. The cyclicality of demand for dental implants and biologics products is based in part on the relatively high cost of the procedure and the general lack of reimbursement throughout most of the world. This cyclicality in conjunction with a deterioration of the economic environment globally over the last two years, has had, and may continue to have, a material adverse effect on our business, financial condition and results of operations.

Prolonged negative economic conditions in domestic and global markets may adversely affect our suppliers, customers and consumers, which could harm our financial position.

Global credit and financial markets have experienced extreme disruptions over the last two years, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. Although these markets have recently shown signs of rebounding, there can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by the recent economic downturn, volatile business environment and continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate further, or do not improve, it may make debt or equity financings, if needed, more difficult, more costly and more dilutive. Failure to secure financing, if needed, in a timely manner, on favorable terms or at all could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon certain aspects of our business strategy. In addition, there is a risk that one or more of our current service providers, third-party distributors, manufacturers and other partners may not survive these or future difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget. These negative changes in domestic and global economic conditions or additional disruptions of either or both of the financial and credit markets may affect our supply chain and the customers and consumers of our products and may have a material adverse effect on our business, financial condition and results of operations.

We may not generate sufficient cash flow to service our debt, pay our contractual obligations and operate our business.

Our ability to make payments on our indebtedness and contractual obligations, and to fund our operations depends on our future performance and financial results, which, to a certain extent, are subject to general economic, financial, competitive, regulatory and other factors, including the interest rate environment, that are beyond our control. Although our management believes that we have and will continue to have sufficient liquidity, there can be no assurance that our business will generate sufficient cash flow from operations in the future to service our debt, pay our contractual obligations and operate our business as currently planned.

Volatility in the capital markets or investment vehicles could limit our ability to access capital or could raise the cost of capital.

Until recently, we have had negative operating cash flow. A further disruption in the credit markets may reduce the sources of financing available to us. Any financial institution that is obligated to provide us funding under any existing or future credit agreement may not be able to provide funding in a timely manner, or at all, when we require it. The cost of or lack of available credit could impact our ability to develop sufficient liquidity to maintain or grow our company, which in turn may have a material adverse effect on our business, financial condition and results of operations.

We also manage cash and cash equivalents through various institutions. There may be a risk of loss on investments based on the volatility of the underlying instruments that will not allow us to recover the full principal of our investments.

Our business could suffer if we lose the services of key members of our management.

We are dependent upon the continued services of key members of our senior management, including R. Steven Boggan, our President and Chief Executive Officer, and J. Todd Strong, our Executive Vice President and Chief Operating Officer, as well as a limited number of other key employees. The loss of any one of these individuals could disrupt our operations. Additionally, our future success will depend on, among other things, our ability to continue to hire and retain the necessary qualified scientific, technical and managerial personnel. We compete for such personnel with numerous other companies, academic institutions and organizations and recruitment of qualified individuals to work at our Birmingham, Alabama headquarters has been and we expect will continue to be more difficult than if our headquarters were located elsewhere. Failure to attract and retain qualified employees will have a negative impact on our business.

We may not be able to retain the interest and services of the members of our Scientific Advisory Board.

We depend on our Scientific Advisory Board, consisting of between five and ten leading dental professionals, to provide input and guidance on product and market trends. The dental professionals currently serving on our Scientific Advisory Board use and endorse, and in some cases, developed, our products and their failure to continue using or endorsing our products could affect the net sales we derive from them as both purchasers and marketers of our products. In addition, increased state regulation of payments made to physicians, including dental professionals, for marketing purposes may have a material adverse effect on our ability to retain these personnel. Our inability to provide our Scientific Advisory Board with honoraria for their participation in our education and training programs may negatively impact our marketing strategy and the quality of our education and training courses. Competition for personnel and, in particular, our current Scientific Advisory Board members, is intense. We may be unable to retain our current Scientific Advisory Board members and the loss of any one of these individuals to competitors might significantly delay or prevent the achievement of our marketing and financial objectives. The educational courses and training programs we offer through arrangements with members of our Scientific Advisory Board are a central component of our marketing strategy and expose dental professionals and dental students to the features and benefits of our dental implants. For example, we have arrangements with the Misch Institute and the Pikos Implant Institute, through which these institutions offer continuing educational programs that highlight our product offerings to dental professionals. In particular, our relationship with Dr. Carl E. Misch and the Misch Institute has generated significant net sales for us in the past and we believe the continued growth of our net sales is dependent in part on the ability of the Misch Institute to introduce additional dental professionals to our products. Therefore, the termination of our relationship with Dr. Misch and the Misch Institute could have a material adverse effect on our business, financial condition and results of operations.

Exchange rate fluctuations may decrease our earnings if we are not able to hedge our currency exchange risks successfully or elect not to enter into hedging transactions.

Our products are sold in more than 80 countries. We have six foreign sales offices and approximately 49% of our net sales in 2009 came from customers outside of the United States and approximately 29% of our net sales in 2009 were reported in the relative local currency. The results of operations and the financial position of our local operations are reported in the relevant local currencies and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial

statements, exposing us to translation risk. In 2009, our most significant currency exposures were to the Canadian dollar, the Euro and the British pound. The exchange rates between these and other local currencies and the U.S. dollar may fluctuate substantially. In addition, we are exposed to transaction risk because some of our expenses are incurred in a different currency from the currency in which our net sales are received. Fluctuations in the value of the U.S. dollar against other currencies may have a material effect on our operating margins and profitability in the future.

To date, we have not hedged the risks associated with fluctuations in currency exchange rates. In the future, if we do not successfully engage in hedging transactions or continue to elect not to engage in such transactions, our results of operations may be subject to losses from fluctuations in foreign currency exchange rates.

We may incur product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses.

We could become the subject of product liability lawsuits alleging that component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition or injury to patients. Product liability lawsuits and claims, safety alerts or product recalls, regardless of their ultimate outcome, could have a material adverse effect on our business and reputation and on our ability to attract and retain customers.

Although we maintain third-party product liability insurance coverage, it is possible that claims against us may exceed the coverage limits of our insurance policies or cause us to record a self-insured loss. Even if any product liability loss is covered by an insurance policy, these policies typically have substantial retentions or deductibles that we are responsible for. Product liability claims in excess of applicable insurance could have a material adverse effect on our business, financial condition and results of operations. In addition, any product liability claim brought against us, with or without merit, could result in the increase of our product liability insurance rates. Insurance coverage varies in cost and can be difficult to obtain, and we cannot guarantee that we will be able to obtain insurance coverage in the future on terms acceptable to us or at all.

We rely on our information technology systems for accounting and finance, inventory management, engineering, distribution and other functions and to maintain our research and development data. If our information technology systems fail to adequately perform these functions, or if we experience an interruption in their operation, our business, financial condition and results of operations could be adversely affected.

The efficient operation of our business is dependent on our information technology systems. We rely on our information technology systems to effectively manage:

The failure of our information technology systems to perform as we anticipate, or our failure to effectively implement new systems, could disrupt our business and product development and could result in decreased sales, increased overhead costs, excess inventory and product shortages, all of which

could have a material adverse effect on our business, financial condition and results of operations. In addition, our information technology systems are vulnerable to damage or interruption from:

Any such interruption could have material adverse effect on our business, financial condition and results of operations.

Our international operations may expose us to liabilities under the Foreign Corrupt Practices Act and Money Laundering Laws.

We may be exposed to liabilities under the U.S. Foreign Corrupt Practices Act, or FCPA, which generally prohibits companies and their intermediaries from making corrupt payments to foreign officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment, and requires companies to maintain adequate record-keeping and internal accounting practices to accurately reflect the transactions of the company. We are also subject to a number of other laws and regulations relating to money laundering, international money transfers and electronic fund transfers, which we collectively refer to as Money Laundering Laws. These laws apply to companies, individual directors, officers, employees and agents.

We operate in a number of jurisdictions with developing economies that pose a high risk of potential violations of the FCPA and Money Laundering Laws, and we utilize third-party distributorships that have government customers. Until recently, we did not have formal policies in place regarding the requirements of the FCPA and Money Laundering Laws and cannot assure you that our employees, third-party distributors or other agents have not engaged or will not engage in conduct for which we might be held responsible under the FCPA or Money Laundering Laws. Additionally, our formal polices are new and have not been tested. If our employees, third-party distributors or other agents are found to have engaged in such practices, we could suffer severe penalties, including criminal and civil penalties, disgorgement and other remedial measures, any of which could have a material adverse effect on our business, financial condition and results of operations.

Changes in, or interpretations of, accounting principles could result in unfavorable accounting charges.

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States. These principles are subject to interpretation by the Securities and Exchange Commission, or SEC, and various bodies formed to interpret and create appropriate accounting principles. Market conditions have prompted accounting standard setters to issue new guidance which further interprets or seeks to revise accounting pronouncements related to financial instruments, structures or transactions as well as to issue new standards expanding disclosures. It is possible that future accounting standards we are required to adopt could change the current accounting treatment applied to the consolidated financial statements and that such changes could have a material adverse effect on our business, financial condition and results of operations.

If we experience a significant increase in warranty claims, our costs could substantially increase and our reputation and brand could suffer.

We offer lifetime warranties for all of our implant and abutment products, in which we replace any of these products previously placed if the product is replaced due to failure of the original product. We also offer limited warranties on our implant tools and specialty instruments, and VIP computer-guided surgical software. We have not established any reserves for potential warranty claims because historically we have experienced few warranty claims and costs associated with warranty claims have been immaterial. If we experience a significant increase in the number of warranty claims for our implants and abutment products, it could substantially increase our costs and harm our reputation and brand. Any such increase in warranty claims could have a material adverse effect on our business, financial condition and results of operations.

Changes in, or interpretations of, tax rules, structures, country profitability mix and regulations may adversely affect our effective tax rates.

We are a U.S. based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Unanticipated changes in our tax rates could affect our future results of operations. Our future effective tax rates could be unfavorably affected by changes in, or interpretation of, tax rules and regulations in the jurisdictions in which we do business, by structural changes in our businesses, by unanticipated decreases in the amount of net sales or earnings in countries with low statutory tax rates, by lapses of the availability of the U.S. research and development tax credit, or by changes in the valuation of our deferred tax assets and liabilities.

We may unknowingly fail to comply with regulations issued by the FDA and similar foreign regulatory agencies.

Our products are subject to extensive regulation by the FDA and foreign regulatory entities. In the United States we will be subject to numerous post-marketing regulatory requirements, which include quality system regulations related to the manufacturing and record keeping for our devices, labeling regulations and medical device reporting regulations, which require us to report to the FDA if our devices cause or contribute to a death or serious injury, or malfunction in a way that would likely cause or contribute to a death or serious injury.

Further, even if we successfully obtain approval or clearance of our products from the FDA, we are only permitted to market our products for the uses indicated on the labeling approved or cleared by the FDA. Moreover, the FDA may impose limitations on the intended use of a product as a condition of clearance or approval. We may request additional label indications for our current products. The FDA may deny those requests outright or require clinical data to support any additional indications. If the FDA determines that we have marketed our products for uses for which we do not have approval or clearance, or off-label use, we could be subject to fines, injunctions or other penalties.

We and our suppliers are required to comply with the FDA's quality system regulations, or QSRs, which regulate, among other things, the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products. In addition, suppliers and processors of allograft bone tissue, which is used in some of our biologics products must comply with the FDA's current good tissue practice regulations, or GTPs, which govern the methods used in and the facilities and controls used for the recovery and processing of human cell tissue and cellular and tissue-based products, record-keeping and the establishment of a quality program.

The FDA audits compliance with the QSRs and GTPs through inspections of manufacturing and other facilities. If we or our suppliers have significant non-compliance issues or if any corrective action plan is not sufficient, we or our suppliers could be forced to delay the manufacture of our products until such problems are corrected to the FDA's satisfaction, which could have a material adverse effect on our business, financial condition and results of operations. For example, the FDA inspected our facilities in 2004, identified deficiencies on FDA Form 483 and issued us a warning letter. The FDA inspected our facilities again in 2006 and noted deficiencies on FDA Form 483. In 2007, we substantially modified our quality control systems and improved our infrastructure to address concerns raised by the FDA in 2004 and 2006. As a result, in November 2007, the FDA determined that all of the previously identified deficiencies were adequately addressed.

The FDA and state authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements or to take satisfactory corrective action in response to an adverse inspection by the FDA, could result in enforcement action by the FDA or state agencies, which may include any of the following sanctions:

Further, our products could be subject to recall if the FDA determines, for any reason, that our products are not safe or effective. Any recall could result in loss of net sales and potential operating restrictions imposed by the FDA, all of which could have a material adverse effect in our business, financial condition and results of operations. Since we implemented the new quality control systems and infrastructure changes discussed above, we have had three successive audits conducted by the Notified Body in the European Union which resulted in no observable deficiencies. We cannot assure you, however, that future inspections by the FDA, the Notified Body or other regulatory agencies will not result in the identification of new deficiencies or that the results of these inspections will not have a material adverse effect on our business.

From time to time, legislation is drafted and introduced in the U.S. Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of life science products in the United States. In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of our products. Delays in receipt of or failure to receive regulatory clearances

or approvals for our new products would have a material adverse effect on our business, financial condition and results of operations.

We could be negatively impacted by the application or enforcement of U.S. federal and state fraud and abuse laws, including anti-kickback laws and other U.S. federal and state self-referral prohibitions.

There are numerous U.S. federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws and physician self-referral laws. Violations of these laws are punishable by criminal and civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal and state healthcare programs, including the Medicare, Medicaid and Veterans Administration health programs. Although we and our customers are not currently subject to many of these laws, the far-reaching nature of these laws may require our customers to alter or discontinue their relationship with us to be in compliance with these laws, including, in the case of members of our Scientific Advisory Board and certain universities, ending their membership on our Scientific Advisory Board or their relationship with us, as applicable. Healthcare fraud and abuse regulations are complex, and even minor irregularities can potentially give rise to claims that a statute or prohibition has been violated. Further, the recently enacted Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, collectively referred to herein as the PPACA, among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the PPACA provides that the government may assert that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes. Any violations of these laws, or any action against us for violation of these laws, even if we successfully defend against it, could result in a material adverse effect on our business, financial condition and results of operations.

In addition, there has also been a recent trend of increased state regulation of payments made to physicians, which could include dental professionals, for marketing. For example, Massachusetts recently enacted legislation that requires companies that sell medical devices to report economic benefits and gifts given to industry professionals that purchase their products. Many of these requirements are new and uncertain, and the penalties for failure to comply are unclear. We have not always been in full compliance with certain applicable state regulatory requirements and we are working to ensure that we comply with all applicable state regulatory requirements which we believe may require the adoption and implementation of new policies and procedures. Although we are not aware of any fines or penalties assessed for non-compliance with these laws, we nevertheless could be subject to fines or other penalties, and could receive adverse publicity if found to be out of compliance with one or more of these laws. As a result of these and any future changes, we may have to alter or discontinue our business practices or our existing business practices could be challenged as unlawful, which could have a material adverse effect on our business, financial condition and results of operations.

We also market our products in international markets that require separate regulatory approvals and compliance with numerous and varying regulatory requirements and may require additional approvals in countries where we will seek to sell our products in the future. For example, we are waiting for regulatory clearance in several new markets, including Brazil and China, and will have to satisfy the regulatory requirements in each of those countries before we will be able to market our products there. In addition, while we have recently received regulatory approval in Japan to sell some of our products, we are waiting for additional regulatory approvals to sell other products in this market. The requirements vary among countries and may involve additional testing. Moreover, the time required to obtain approval may differ from that required to obtain FDA approval or clearance. Clearance or approval by the FDA does not ensure approval by regulatory authorities in other countries or

jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. The foreign regulatory approval process may include all of the risks associated with obtaining FDA clearance or approval. We may not obtain foreign regulatory approvals on a timely basis, if at all. We may not be able to file for regulatory approvals, may not receive necessary approvals to commercialize our products in any market or the approvals may be withdrawn.

Our products and operations are also often subject to the rules of industrial standards bodies, such as the International Organization for Standardization. If we fail to adequately comply with any of these standards requirements, our business will be harmed.

If we fail to obtain or maintain these regulatory approvals, our sales could suffer. We cannot guarantee that our existing products will maintain or that any new product we develop will receive required regulatory approvals from U.S. or foreign regulatory agencies.

Governmental regulation and limited sources of human tissue could restrict our procurement of biologics products from third-party suppliers.

In the United States, certain tissue-based products are regulated by the FDA as medical devices under the Food, Drug and Cosmetic Act while others are regulated by the FDA as human tissue-based products under the Public Health Service Act. This means that our suppliers will have to comply with applicable FDA regulations such as FDA's QSR and current good tissue practices regulations. Their failure to comply with FDA requirements could adversely affect our ability to obtain their products. In addition, the procurement and transplantation of human tissue in the United States is subject to federal law pursuant to the National Organ Transplant Act, or NOTA, which prohibits the purchase and sale of human organs used in human transplantation, including bone and related tissue, for "valuable consideration." NOTA permits reasonable payments associated with the removal, transportation, processing, preservation, quality control, implantation and storage of human tissue. While we do not harvest or process human tissue, nor do we contract with tissue banks to do so, some of the biologics products that we sell as a distributor for third parties include harvested human tissue, and therefore certain of our suppliers of biologics products must abide by the terms of NOTA. If NOTA is interpreted or enforced in a manner that prevents us from obtaining our biologics products containing human tissue, our business could be materially and adversely affected.

Our ability to obtain a sufficient quantity of our biologics products incorporating human tissue is subject to our third-party suppliers' ability to effectively manage their supply of human tissue, which is subject to risks associated with limited and single sources of human tissue, pricing and the seasonal changes in mortality rates and to effectively manage the labor intensive process of incorporating the human tissue into biologics products. Any interruption in our third-party suppliers' supply of human tissue or manufacturing process could have a material adverse effect on our business, financial condition and results of operations.

Legislative or regulatory healthcare reforms may make it more difficult and costly for us to obtain regulatory clearance or approval of our products and to produce, market and distribute our products after clearance or approval is obtained.

In March 2010, President Obama signed one of the most significant health care reform measures in decades. The PPACA includes provisions that will impose a 2.3% excise tax on the sale of most medical devices in the United States, including our dental implant products, starting in 2013. The medical devices excise tax will increase our cost of doing business, and could have a significant impact on our results of operations. If the cost of this tax is not offset by increased demand for our products, other cost reductions or price increases, we could experience lower margins and profitability and our business, financial condition and results of operations could be materially and adversely affected.

If we fail to protect our intellectual property rights adequately, our ability to compete effectively or to defend ourselves from litigation could be impaired, which could reduce our revenues and increase our costs.

We rely primarily on patent, trademark, copyright, trade secret and other intellectual property laws, as well as confidentiality, non-disclosure, license and other contractual agreements to protect our proprietary technologies and know-how. The failure of our intellectual property rights to adequately protect our products might make it easier for our competitors to offer the same or similar products.

As of May 31, 2010, we owned or licensed a total of 29 issued U.S. patents, one pending U.S. patent application, seven foreign patents and six pending foreign patent applications. We also owned or exclusively licensed nine issued U.S. trademarks and three foreign trademarks as of May 31, 2010. The rights granted to us under our patents or trademarks as well as the prospective rights sought in our pending patent applications, may not be meaningful or provide us with any commercial advantage. Our issued and licensed intellectual property rights, and those that may be issued or licensed in the future, may be challenged, opposed, contested, circumvented or designed around by our competitors or be declared invalid or unenforceable in judicial or administrative proceedings. Upon expiration or termination of our issued or licensed intellectual property, we may lose some or all of our rights to exclude others from making, using, selling or importing products that use the expired or terminated intellectual property. The U.S. and foreign patents that we own or license with respect to our proprietary Laser-Lok platform technology begin to expire in 2013. Although we have patent applications with respect to our proprietary Laser-Lok platform technology currently pending in certain foreign jurisdictions that, if issued, would expire in 2021, there can be no assurance that any such patents will ultimately issue, or if issued, that they will adequately protect this technology. In addition, many of the inventions claimed in our patents were developed at universities. Universities often claim ownership rights or other rights in inventions developed by university personnel or with the use of university materials or facilities even if the universities have no such rights in these inventions.

We also rely on unpatented proprietary technology. We cannot assure you that we can meaningfully protect all our rights in our unpatented proprietary technology, or that others will not independently develop substantially equivalent proprietary products or processes or otherwise gain access to our unpatented proprietary technology. We seek to protect our know-how and unpatented proprietary technology and information through contractual agreements with our employees, distributors and consultants. Such agreements may not be enforceable or may not adequately protect our proprietary technology or information in the event of unauthorized use or disclosure or other breach of such agreements, or in the event that our competitors discover or independently develop similar or identical proprietary technology or information. In addition, we rely on the use of registered trademarks to protect the brand names of some of our products. Loss of rights in any of our trademarks could have a material adverse effect on our business, financial condition and results of operations.

Patent protection outside the United States is generally not as comprehensive as in the United States and may not protect our inventions in some countries where our products are sold or may be sold in the future. Even if patents are granted outside the United States, effective enforcement in those countries may not be available. Since most of our issued patents and pending patent applications are for the United States only, we lack a corresponding scope of patent protection in other countries. In countries where we do not have significant patent protection, we may not be able to stop a competitor from marketing products in such countries that are the same as or similar to our products.

In the event a competitor infringes upon one of our patents or other intellectual property rights, enforcing those patents and rights may be difficult, expensive and time consuming and could divert

management's attention from managing our business. Moreover, we may not have sufficient resources or desire to defend our patents against challenges or to enforce our intellectual property rights.

The medical device industry is characterized by patent litigation and we could become subject to litigation that could be costly, result in the diversion of management's time and efforts, require us to pay damages and/or prevent us from marketing our existing or future products.

Our commercial success will depend in part on not infringing the patents or violating the other proprietary rights of third parties. The medical device industry is characterized by extensive efforts to protect and pursue intellectual property rights and positions, which has resulted in protracted and expensive litigation for many companies. Litigation can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. We expect to receive in the future, particularly as a public company, communications from various industry participants alleging our infringement of their patents, trade secrets or other intellectual property rights and/or offering licenses to such intellectual property. Any lawsuits resulting from such allegations could subject us to significant liability and invalidate our proprietary rights. Any potential intellectual property litigation also could force us to do one or more of the following:

We expect that companies in the medical device industry will increasingly be subject to infringement claims as the number of products and competitors in our industry grows.

Any litigation or claim against us, even those without merit, may cause us to incur substantial costs and could place a significant strain on our financial resources, divert the attention of management from our core business and harm our reputation. If the relevant patents were upheld as valid and enforceable and we were found to infringe, we could be required to pay substantial damages, including treble, or triple, damages if an infringement is found to be willful, and/or royalties. Additionally, we could be prevented from selling our products unless we could obtain a license or were able to redesign our products to avoid infringement. Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our products. If we fail to obtain any required licenses or make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our

products, all of which could have a material adverse effect on our business, financial condition and results of operations.

A complaint has been filed against us by Jack T. Krauser, in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, alleging breaches under a settlement agreement entered into by the corporate predecessors of one of our subsidiaries, BioLok International, Inc. The settlement agreement, pursuant to which we licensed certain intellectual property from Dr. Krauser, expired on or about February 11, 2007. In the suit, Dr. Krauser seeks a declaratory judgment that (1) we defaulted under the terms of the settlement agreement by, in part, failing to pay royalty amounts allegedly due to Dr. Krauser under the settlement agreement; (2) the license granted to us by Dr. Krauser under the settlement agreement is terminated; (3) Dr. Krauser is an owner of certain of our issued patents and our Tapered Internal Implants and corresponding 510(k) applications. Dr. Krauser also seeks an award of attorney's fees and costs.

The complaint was served on March 8, 2010 and removed to the U.S. District Court for the Southern District of Florida on April 1, 2010, where it remains pending. On May 6, 2010, we filed a motion to dismiss the complaint on multiple grounds, and on May 24, 2010 Dr. Krauser submitted a Memorandum of Law in opposition to our motion to dismiss. On June 14, 2010, we filed a Reply Memorandum which is currently under consideration by the court. While we believe that all royalty payments have been paid in full and we have otherwise complied with the settlement agreement, even if we are successful in defending this litigation, this litigation could be expensive and time consuming and could divert management's attention from managing our business. Additionally, under U.S. patent law, the failure properly to identify the inventors of a patented invention (which was alleged by Dr. Krauser in the case before he withdrew such allegation) can lead to a finding that the patent is invalid. There can be no assurance that we will successfully defend such litigation. See "Business — Legal Proceedings" below for a further description of this litigation.

We may be subject to damages resulting from claims that we, our employees or our independent distributors have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition agreements with our competitors.

Several of our employees were previously employed at other dental device companies, including our competitors or potential competitors. Many of our independent distributors sell, or in the past have sold, products of our competitors. We may be subject to claims that either these employees or independent distributors or we have inadvertently or otherwise used or disclosed the trade secrets or other proprietary information of these former employers or competitors. In addition, we may be subject to claims that we caused an employee to break the terms of his or her non-competition agreement. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize product candidates, which could have a material adverse effect on our business, financial condition and results of operations.

Any claims relating to our improper handling, storage or disposal of biological and hazardous materials could be time consuming and costly.

The manufacture of certain of our products involves the controlled use of biological and hazardous materials and waste. Our business and facilities and those of our suppliers are subject to foreign, federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials and waste products. Although we believe that our safety procedures for handling and disposing of these materials comply with legally prescribed standards, we

cannot completely eliminate the risk of accidental contamination or injury from these materials. In the event of an accident, we could be held liable for damages or penalized with fines. This liability could exceed our resources and any applicable insurance. In addition, under some environmental laws and regulations, we could also be held responsible for all of the costs relating to any contamination at our past or present facilities and at third-party waste disposal sites even if such contamination was not caused by us. We may incur significant expenses in the future relating to any failure to comply with environmental laws. Any such future expenses or liability could have a material adverse effect on our business, financial condition and results of operations.

Issues related to the quality and safety of our products, packaging or sterilization could cause a product recall resulting in harm to our reputation and negatively impact our operating results.

Issues related to quality and safety of products, packaging or sterilization could jeopardize our image and reputation. For example, a major competitor in the dental implant business has recently been the subject of concerns about implant sterility which may result in implant failure. Negative publicity related to these types of concerns, whether valid or not, might negatively impact demand for our products, or cause production and delivery disruptions. We may need to recall products if they become unfit for use. In addition, we could potentially be subject to litigation or government action, which could result in payment of fines or damages. Cost associated with these potential actions could have a material adverse effect on our business, financial condition and results of operations.

There has been no prior public market for our common stock and an active trading market may not develop.

Prior to this offering, there has been no public market for our common stock. We cannot predict when or whether investor interest in our common stock on The NASDAQ Global Market might lead to an increase in market price or the development of a more active trading market or how liquid that market might become. If an active market for our securities does not develop, it may be difficult to sell common stock you purchase in this offering without depressing the market price for our securities, or at all. An inactive market may also impair our ability to raise capital by selling our common stock and may impair our ability to acquire other companies, products or technologies by using our common stock as consideration.

We expect that the price of our common stock will fluctuate substantially and you may not be able to sell your shares at or above the initial public offering price.

The initial public offering price for the shares of our common stock sold in this offering was determined by negotiation between the representatives of the underwriters and us. This price may not reflect the market price of our common stock following this offering. In addition, the market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including:

In addition, The NASDAQ Global Market, the broader stock market, and in particular, the market for medical device companies have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Factors contributing to this volatility include FDA and international actions with respect to the government regulation of medical devices and third-party reimbursement matters, changes in U.S. or international healthcare policies and changes in the condition of the medical device industry generally. These broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company's securities, securities class action litigation has often been brought against that company. We may become involved in this type of litigation in the future. Litigation is often expensive and diverts management's attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

Securities analysts may not initiate coverage of our common stock or may issue negative reports, which may have a negative impact on the market price of our common stock.

Securities analysts may elect not to provide research coverage of our common stock after the completion of this offering. If securities analysts do not cover our common stock after the completion of this offering, the lack of research coverage may cause the market price of our common stock to decline. The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about our business. If one or more of the analysts who elects to cover us downgrades our stock, our stock price would likely decline substantially. If one or more of these analysts ceases coverage of us, we could lose visibility in the market, which in turn could cause our stock price to decline. In addition, rules mandated by the Sarbanes-Oxley Act and a global settlement reached in 2003 between the SEC, other regulatory agencies and a number of investment banks have led to a number of fundamental changes in how analysts are reviewed and compensated. In particular, many investment banking firms are required to contract with independent

financial analysts for their stock research. It may be difficult for companies such as ours, with smaller market capitalizations, to attract independent financial analysts that will cover our common stock. This could have a negative effect on the market price of our stock.

Our business is seasonal in nature, and we therefore expect our quarterly revenues and operating results to fluctuate. If we fail to meet the expectations of market analysts or investors, the market price of our common stock could decline substantially.

Historically, demand for our products has been the highest in the second and fourth quarters. We traditionally experience lower sales volumes in the third quarter when compared to the rest of the year. This is a result of dental professionals in North America and Europe taking time away from their practices during summer months and distributors and dental professionals generally purchasing larger numbers of our products near the end of the calendar year. In addition, our quarterly net sales and operating results have fluctuated in the past and may vary from quarter to quarter in the future. Accordingly, we believe that period-to-period comparisons of our results of operations may be misleading. You should not rely upon the results of one quarter as an indication of future performance. Our net sales and operating results may fall below the expectations of securities analysts or investors in some future quarter or quarters. Our failure to meet these expectations could cause the market price of our common stock to decline substantially.

Our directors, officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.

After this offering, our officers, directors and principal stockholders each holding more than 5% of our common stock collectively will control approximately % of our outstanding common stock, and our majority stockholder, HealthpointCapital, will own approximately % of our outstanding common stock. As a result, these stockholders, if they act together, will be able to control the management and affairs of our company and most matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock. This concentration of ownership may not be in the best interests of our other stockholders.

After this offering, we will be considered a "controlled company" within the meaning of the corporate governance standards of The NASDAQ Stock Market as a result of HealthpointCapital's beneficially owning common stock representing more than a majority of the voting power in the election of our directors. Under these rules, a "controlled company" may elect not to comply with certain corporate governance requirements, including the requirement that a majority of its board of directors consist of independent directors, the requirement that it have a nominating/corporate governance committee that is composed entirely of independent directors for the purposes of director nominations and the requirement that it have a compensation committee that is composed entirely of independent directors for the purposes of approving executive compensation. As a result, a majority of our directors may not be independent and our compensation and nominating and corporate governance committees may not consist entirely of independent directors. Accordingly, you may not have the same protection afforded to stockholders of companies that are subject to all of The NASDAQ Stock Market corporate governance requirements.

Certain members of our board of directors also serve as officers and directors of HealthpointCapital and its other portfolio companies.

Members of our board of directors also serve as officers and directors of, are advisors to or have direct or indirect financial interests in our largest stockholder, HealthpointCapital, or its related entities and of other companies in which HealthpointCapital invests, including companies with which we may

compete or do business now or in the future. Upon completion of this offering, HealthpointCapital will own approximately % of our outstanding common stock, or % if the underwriters' over-allotment option is exercised in full. HealthpointCapital is a private equity fund focused on the worldwide musculoskeletal industry, and may acquire interests in businesses that directly or indirectly compete with us or with which we do business.

As a result, such members of our board of directors, HealthpointCapital and its affiliates may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us.

Our management team may invest or spend the proceeds of this offering in ways in which you may not agree or in ways that may not yield a return, and the use of the proceeds of this offering will be subject to covenants contained in our debt financing agreements.

We will not receive any of the proceeds from this offering as a result of the sale of shares of common stock by the selling stockholders and certain of the shares to be sold by the selling stockholders may be issued as a result of obligations we have pursuant to the Conversion Transaction (see "Conversion Transaction" below) under our existing amended and restated certificate of incorporation. We expect to use the net proceeds from this offering that we receive to pay down and retire debt, to expand our distribution channel and for other general corporate purposes, including ongoing capital expenditures. Although we currently have no plans to do so, a portion of our net proceeds may also be used to acquire products, technologies or businesses that are complementary to our current and future business and product lines. Our management will have considerable discretion in the application of the remaining net proceeds of this offering. Stockholders may not agree with such uses and the remaining net proceeds may be used for corporate purposes that do not increase our operating results or market value. Until the net proceeds are used, they may be placed in investments that do not produce income or that lose value.

Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws, and Delaware law, contain provisions that could discourage a takeover.

Anti-takeover provisions of our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may have the effect of deterring or delaying attempts by our stockholders to remove or replace management, engage in proxy contests and effect changes in control. The provisions of our charter documents include:

In addition, as a Delaware corporation, we are subject to Delaware law, including Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder unless certain specific requirements are met as set forth in Section 203. These provisions, alone or together, could have the effect of deterring or delaying changes in incumbent management, proxy contests or changes in control.

Future sales of our common stock in the public market after this offering may depress our stock price and impair our ability to raise future capital through the sale of our equity securities.

Upon completion of the offering, our current stockholders will hold a substantial number of shares of our common stock that they will be able to sell in the public market in the near future. A significant portion of these shares will be held by a small number of stockholders. Sales by our current stockholders of a substantial number of shares after this offering could significantly reduce the market price of our common stock. Moreover, following the completion of this offering, the holders of approximately million shares of common stock will have rights, subject to some conditions, to require us to include their shares in registration statements that we may file for ourselves or other stockholders. The million shares represent approximately % of the total number of shares of our common stock to be outstanding immediately after this offering, assuming no exercise of the underwriters' over-allotment option. Please see "Description of Capital Stock — Registration Rights" for a description of the registration rights of these stockholders.

Following completion of this offering, we also intend to register all common stock that we may issue in the future under our equity incentive plans. In addition, shares of common stock issued under our existing 2007 Executive, Director and Consultant Stock Plan and 2010 Executive, Director and Consultant Stock Plan may be sold in the public market pursuant to Rule 701 under the Securities Act of 1933, as amended, or the Securities Act, 90 days after the date of the final prospectus related to this offering, subject to the lock-up agreements described in "Shares Eligible for Future Sale — Lock-Up Agreements" and "Underwriting" and the limitations described in "Shares Eligible for Future Sale — Rule 701." If any of these holders cause a large number of securities to be sold in the public market, the sales could reduce the trading price of our common stock. These sales also could impede our ability to raise future capital. Please see "Shares Eligible for Future Sale" for a description of sales that may occur in the future.

As a new investor, you will experience substantial dilution as a result of this offering and future equity issuances and, as a result, our stock price could decline.

The initial public offering price is substantially higher than the pro forma as adjusted net tangible book value per share of our outstanding common stock. As a result, investors purchasing common stock in this offering will incur immediate dilution of $ per share. This dilution is due in large part to earlier investors in our company having paid substantially less than the initial public offering price when they purchased their shares. Because we may require additional funds to develop new products and continue to expand our business, we may conduct substantial future offerings of equity securities. Future equity issuances, including future public offerings or future private placements of equity securities and any additional shares issued in connection with acquisitions, will result in further dilution to investors.

We will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may adversely affect our operating results, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could cause investors to lose confidence in our operating results and in the accuracy of our financial reports and could have a material adverse effect on our business and on the price of our common stock.

After the consummation of this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that require us to file, among other things, quarterly reports on Form 10-Q and annual reports on Form 10-K. Under Section 302 of the Sarbanes-Oxley Act, as a part of each of these reports, our chief executive officer and chief financial officer will be required to evaluate and report their conclusions regarding the effectiveness of our disclosure controls and procedures and to certify that they have done so. This requirement will apply to our first Form 10-Q for the quarter following effectiveness of the registration statement. In addition, under Section 404 of the Sarbanes-Oxley Act, we will be required to include a report of management on our internal control over financial reporting in our Form 10-K. In addition, the independent registered public accounting firm auditing our financial statements will be required to attest to and report on the effectiveness of our internal control over financial reporting. This requirement will first apply to our Form 10-K for our fiscal year ending December 31, 2011.

While we anticipate being able to fully implement the requirements relating to internal controls and all other aspects of Section 404 of the Sarbanes-Oxley Act, our independent registered public accounting firm has identified and communicated to us a material weakness in our internal control over financial reporting as of December 31, 2009. Management has evaluated this communication and has also concluded that a material weakness existed as of that date. A material weakness, as defined by the Public Company Accounting Oversight Board is a control deficiency, or a combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected. Our independent registered public accounting firm advised our board of directors and our management that our year-end financial statement close and reporting processes are inadequately designed and documented, and are not functioning in a manner that provides reasonable assurance that financial statements and related disclosures are appropriately summarized and reported in a timely manner. The primary causes of the deficiencies in our financial statement close and reporting processes noted by our independent registered public accounting firm was the inadequate staffing in our financial accounting and reporting functions and the lack of a well-defined and documented formal close process. Our independent registered public accounting firm also indicated that these deficiencies raise a question of whether we will be able to prevent or detect material misstatements in our interim and annual consolidated financial statements and report financial information in conformity with accounting principles generally accepted in the United States in a timely manner.

Management further believes that the root cause of many of the observed deficiencies result from our transition from a small, private company with immature processes and controls to one that is growing rapidly and must now meet the reporting and control standards applicable to public companies. We have begun to identify a number of actions to address the items noted by our independent public registered accounting firm, including the hiring a new chief financial officer with SEC reporting experience in June 2010. Although we have not yet finalized our plan to remediate all of the identified deficiencies, we expect that we will:

While we have begun to take actions to address the items identified, additional measures may be necessary to complete the remediation of our internal controls. We plan to continue to assess our internal controls and procedures and intend to take further action as necessary or appropriate to address any other matters we identify. However, the process of designing and implementing effective internal controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments. We cannot assure you that the steps we have taken, or may subsequently take, have been or will be sufficient to fully remediate the material weakness identified by our independent registered public accounting firm or ensure that our internal controls are effective.

Complying with these and other requirements applicable to public companies may place a strain on our personnel, information technology systems and resources and divert management's attention from other business concerns. We may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge as part of our remediation of our material weakness or otherwise, and we cannot assure you that we will be able to do so without incurring material costs. These and other requirements may also make it more difficult or more costly for us to obtain certain types of insurance, including directors' and officers' liability insurance. We, therefore, may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. Any one of these could have a material adverse effect on our business, financial condition and results of operations.

We do not intend to pay cash dividends and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We have never declared or paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business. In addition, the terms of our credit facility with Midcap Funding I, LLC, or Midcap, restricts our ability to pay dividends and any future credit facilities and loan agreements may further restrict our ability to pay dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of potential gain for the foreseeable future.

Some of the statements under "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and elsewhere in this prospectus constitute forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "could," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under "Risk Factors" and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. Any forward-looking statement in this prospectus reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Neither we nor any other person assumes responsibility for the accuracy or completeness of these statements and, except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

We estimate that our net proceeds from the sale of shares of common stock in this offering will be approximately $ million after deducting estimated underwriting discounts and commissions and estimated offering expenses and assuming an initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. We will not receive any of the proceeds of the sale of shares of common stock by the selling stockholders. Assuming an initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, the selling stockholders will receive $ million from their sale of our common stock in this offering, or $ if the underwriters exercise their option to purchase up to an additional shares of our common stock from the selling stockholders at the assumed initial public offering price, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discount.

We expect to use the net proceeds we receive from this offering primarily for the following purposes:

We expect to use a portion of the net proceeds we receive from this offering to repay the outstanding principal and accrued interest under our subordinated convertible note with HealthpointCapital and to repay the $5.0 million outstanding principal under our term note with MidCap as well as any accrued but unpaid interest and the associated $0.5 million exit fee payable to MidCap. As of March 31, 2010, the total outstanding principal and accrued interest under our subordinated convertible note with HealthpointCapital was $37.8 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources" for a further description of these financing arrangements.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Any increase or decrease in the net use of proceeds will not change our use of proceeds.

The amounts that we actually expend for these purposes may vary significantly depending on a number of factors, including future revenue growth, if any, the amount of cash that we generate from operations and the amount of our future operating expenses. As a result, management will retain broad discretion over the allocation of the net proceeds from this offering. A portion of the net proceeds may also be used to acquire products, technologies or businesses that are complementary to our current and future business and product lines. We have no current plans, agreements or commitments for acquisitions of any businesses, products or technologies. Pending use of the net proceeds of this offering, we intend to invest the net proceeds in U.S. government short-term, investment grade securities.

We have never paid or declared any cash dividends on our common stock and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. Our credit facility with MidCap contains provisions that restrict our ability to pay dividends during the term of that agreement. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in current or future financing instruments, provisions of applicable law and other factors our board of directors deems relevant.

		As of March 31, 2010

		Actual			Pro forma as adjusted
		(in thousands, except share data) (unaudited)
Cash		$	1,663

Long-term debt, including current maturities:
	Revolving line of credit and term note payable⁽¹⁾		12,842
	Subordinated convertible note payable⁽²⁾		37,635
	Capital leases		135

Total debt		$	50,612

Equity:
Preferred stock, $.0001 par value; $1,000 stated value: 300,000 shares authorized; 247,141 shares issued and outstanding (actual); none issued and outstanding (pro forma as adjusted)			—
Common stock, $0.0001 par value, 23,817,578 shares authorized; 21,874,326 shares issued and outstanding, (actual); shares issued and outstanding (pro forma as adjusted)			—
Additional paid-in capital⁽³⁾			148,304
Accumulated deficit			(59,566	)
Accumulated other comprehensive income			843

Total shareholders' equity⁽³⁾			89,581
Non-controlling interests			262

Total equity			89,843

Total capitalization⁽³⁾		$	140,455

You should read the preceding information together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes appearing elsewhere in this prospectus.

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock after this offering. We calculate net tangible book value per share by dividing the net tangible book value, tangible assets less total liabilities, by the number of outstanding shares of common stock.

Our pro forma net tangible book value at March 31, 2010 was $ million, or $ per share, based on shares of our common stock outstanding after giving effect to the Conversion Transaction in which we will redeem all of our preferred stock for, and convert all of our common stock into, an aggregate of shares of common stock upon the completion of this offering (see "Conversion Transaction" below) and the issuance of an aggregate of shares of common stock upon the completion of this offering in exchange for common stock of BIS that has been issued, or is issuable, upon the exercise of outstanding stock options to purchase BIS common stock. After giving effect to the sale of shares of common stock by us at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, less the estimated underwriting discounts and commissions and our estimated offering expenses, our pro forma as adjusted net tangible book value at March 31, 2010, would be $ million, or $ per share. This represents an immediate increase in the pro forma as adjusted net tangible book value of $ per share to existing stockholders and an immediate dilution of $ per share to new investors purchasing shares at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. The following table illustrates this per share dilution:

A $1.00 increase (decrease) in the assumed initial public offering price per share, the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted net tangible book value per share of common stock after this offering by $ per share and increase (decrease) the dilution in pro forma as adjusted net tangible book value per share of common stock to new investors in this offering by $ per share, in each case calculated as described above and assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

The following table shows on a pro forma as adjusted basis at March 31, 2010, after giving effect to the Conversion Transaction, the issuance of shares of our common stock in exchange for common stock of BIS and the sale of shares of common stock by us in this offering, the difference between the number of shares of common stock purchased from us, the total consideration paid to us

and the average price paid per share by existing stockholders and by new investors purchasing common stock in this offering:

Assuming the underwriters' over-allotment option is exercised in full, sales by us in this offering will reduce the percentage of shares held by existing stockholders to % and will increase the number of shares held by new investors to , or %.

This information is based on shares outstanding as of March 31, 2010. It excludes:

To the extent the outstanding warrant is exercised there will be further dilution to the new investors.

The selected statement of operations data for each of the years ended December 31, 2007, 2008 and 2009, and the selected balance sheet data as of December 31, 2007, 2008 and 2009, have been derived from our consolidated financial statements included elsewhere in this prospectus, which have been audited by Ernst & Young LLP, independent registered public accounting firm. The selected statement of operations data for the three months ended March 31, 2009 and 2010, and the selected balance sheet data as of March 31, 2010, have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The selected statement of operations data for the fiscal years ended June 30, 2005 and 2006 and for the period from July 1, 2006 to August 20, 2006, and the selected balance sheet data as of June 30, 2005 and 2006 also have been derived from our consolidated financial statements (not included elsewhere herein), which have been audited by Ernst & Young LLP. The transition period from July 1, 2006 to August 20, 2006 was the result of a change in basis of accounting upon the acquisition of BioHorizons Implant Systems, Inc. (Predecessor) by HealthpointCapital. The transition period from August 21, 2006 to December 31, 2006 was the result of the change of fiscal year end from June 30 to December 31 in 2006. The selected statement of operations data for the transition period from August 21, 2006 to December 31, 2006 were derived from our unaudited consolidated financial statements (not included elsewhere herein). Our historical results are not necessarily indicative of performance to be expected for any future period. The data presented below have been derived from financial statements that have been prepared in accordance with generally accepted accounting principles in the United States and should be read with our financial statements and the related notes and with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

	Predecessor									Successor

	Fiscal Year Ended June 30												Fiscal Year Ended December 31,									Three Months Ended March 31,
	Fiscal Year Ended June 30						July 1, 2006 to August 20, 2006			August 21, 2006 to December 31, 2006			Fiscal Year Ended December 31,									Three Months Ended March 31,
	2005			2006			July 1, 2006 to August 20, 2006			August 21, 2006 to December 31, 2006			2007			2008			2009			2009			2010
										(unaudited)												(unaudited)
	(in thousands, except per share data)
Consolidated Statement of Operations Data:
Net sales	$	23,728		$	31,869		$	3,985		$	15,249		$	56,432		$	68,644		$	69,038		$	16,455		$	18,972
Cost of goods sold, excluding depreciation and amortization which are included in operating costs and expenses below		9,095			10,218			1,374			5,961			21,163			22,611			22,487			5,112			5,769
Gross profit		14,633			21,651			2,611			9,288			35,269			46,033			46,551			11,343			13,203
Total operating costs and expenses		12,013			19,825			2,769			14,242			52,078			59,880			52,248			13,629			13,418
Loss from operations		2,620			1,826			(158	)		(4,954	)		(16,809	)		(13,847	)		(5,697	)		(2,286	)		(215	)
Total other expense, net		(354	)		(427	)		(823	)		(53	)		(1,480	)		(2,860	)		(3,030	)		(1,588	)		(672	)

Loss from continuing operations before income taxes		2,266			1,399			(981	)		(5,007	)		(18,289	)		(16,707	)		(8,727	)		(3,874	)		(887	)
Income tax benefit		685			(1,083	)		197			(121	)		6,619			5,465			2,685			1,157			299

Loss from continuing operations	$	2,951		$	316		$	(784	)	$	(5,128	)	$	(11,670	)	$	(11,242	)	$	(6,042	)	$	(2,717	)	$	(588	)

Net income (loss) from continuing operations per common share (basic and diluted)⁽¹⁾	$	0.43		$	0.04		$	(0.11	)	$	(0.43	)	$	(0.74	)	$	(0.55	)	$	(0.28	)	$	(0.13	)	$	(0.03	)

Weighted-average shares used in computing net income (loss) from continuing operations per common share (basic and diluted)⁽¹⁾		6,835			7,212			7,212			11,970			15,762			20,529			21,302			21,079			21,528

Cash dividends declared per common share		—			—			—			—			—			—			—			—			—

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read this discussion together with the financial statements, related notes and other financial information included elsewhere in this prospectus. The following discussion contains predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under "Risk Factors" and elsewhere in this prospectus. These risks could cause our actual results to differ materially from any future performance suggested below.

We are a medical technology company focused on developing, manufacturing and marketing a broad and comprehensive line of innovative and evidence-based dental implants, as well as biologics products for the replacement of missing teeth. Since 2005, we have sold over 900,000 implants and over 125,000 abutments. In order to become the leading dental implant company, we intend to build on our broad and clinically-proven product offerings, expand our global distribution network and increase and expand our education and training programs. In 2009, our net sales were $69.0 million and, according to iData Research Inc., we were the sixth largest dental implant company based on net sales in North America. From 2006 to 2009, our net sales grew at a CAGR of 16%.

Our research and development efforts include, among other things, new product development and post-market clinical studies designed to demonstrate the functional and aesthetic benefits of our products. The benefits of our broad product offering have been validated in over 50 peer-reviewed clinical studies. We are committed to continuing to develop and introduce enhancements to our product lines that will simplify the placement of our implants, reduce the procedure time and the duration of the treatment process and improve clinical and aesthetic outcomes. We have introduced or intend to introduce several new products in 2010, including our Mountless Packaged Tapered Implant, Laser-Lok 3.0 Implant and Laser-Lok Abutments.

We currently sell our products to dental professionals and dental laboratories, through a direct sales force of over 70 sales representatives in North America and five foreign countries. We also maintain a complementary network of over 50 third-party distributors outside of the United States. Through our direct sales force and our distribution network, we market our products in more than 80 countries worldwide. We offer extensive education and training programs and have affiliations with leading

private and public dental educational centers to educate and train dental professionals and dental students. We use these education and training programs to increase awareness of the benefits of dental implants and our comprehensive dental implant solutions.

Effective March 31, 2010, we spun-off our dental laboratory business, DTI Holdings, Inc., or DTI Holdings. The results of operations of DTI Holdings are reflected in the loss from discontinued operations, net of taxes, in our consolidated statements of operations for all periods from June 29, 2006, the date of formation of DTI Holdings, through March 31, 2010, and the assets and liabilities of DTI Holdings are classified as discontinued operations in our accompanying consolidated balance sheets as of December 31, 2008 and 2009.

General Economic Conditions. Demand for our products is sensitive to changes in the economic environment. For example, the global dental implant and biologics markets were negatively impacted in 2009 due to the worldwide economic slowdown in late 2008 and 2009. During this time, we took steps to reduce our overhead, including reducing our number of employees in the fourth quarter of 2008 and the second quarter of 2009, after rapid headcount increases throughout the first three quarters of 2008. The reductions returned our staffing to levels similar to those at the end of 2007. We believe that as economic conditions improve, demand for our products will increase due to, among other reasons, greater discretionary spending by potential dental implant patients.

Improvement in General Dental Health. Dental health is improving in both the United States and other countries in which we operate, such that generally fewer patients experience loss of their teeth. Because tooth replacement is a driver of demand for our products, the continued improvement in patients' dental health could result in lower demand for our products.

Shifting Product Mix. We expect sales of our implants to increase as a percentage of our overall sales. As gross profit on sales of our implants tends to be higher than for our biologics and other products, we believe a shift in our sales towards implants will result in an improvement in our gross profit as a percentage of net sales.

Increased Sales and Marketing Efforts. We intend to increase our direct sales capabilities through the hiring of additional sales representatives across a number of geographic markets. In addition, we expect to add distributors in many areas of the world including Scandinavia and Asia Pacific over the next few years. We are waiting for regulatory clearance in several new markets, including Brazil and China, before we can actively sell our products in these markets. While we have recently received regulatory approval in Japan to sell some of our products, we are waiting for additional regulatory approvals to sell other products in this market. We also plan to continue our marketing, education and training efforts in order to promote clinical data supporting our proprietary Laser-Lok platform technology and to educate and train dental professionals on the clinically-proven functionality and aesthetic benefits of our implant products. Additionally, we intend to increase marketing, education and training in international markets to assist our distributors. As a result of these increased sales and marketing efforts, we expect that our sales and marketing expenditures, as well as our expenses related to obtaining regulatory clearances, will increase and that we will pay additional commissions related to higher net sales.

Increase in Support for Expanded Distribution Channels. As we seek to expand our distribution channels, we also expect that we will hire additional staff in the areas of sales support, customer care and regulatory compliance, as well as other areas that support our sales efforts. As a result of this increase in support for our expanded distribution channels, we expect that our general and

administrative expenses will increase, though we expect such expenses to decrease as a percentage of net sales.

Increased Costs Related to Being a Public Company. Upon completion of the offering, we will begin incurring additional expenses related to being a public company, including increased audit and legal professional fees, costs of compliance with securities and other regulations, investor relations expenses and higher insurance premiums. As a result, we expect that our general and administrative costs will increase for the foreseeable future.

The following is a description of the primary components of our net sales and expenses:

Net Sales. We derive our net sales from the sale of implant and biologics products to dental professionals and dental laboratories in over 80 countries worldwide via a combination of a direct sales force and a third-party distributor network. We recognize net sales when products are shipped.

Gross Profit. In determining gross profit, we reduce net sales by our cost of goods sold, which consist primarily of third-party manufacturing costs, direct labor, raw materials, shipping and handling costs associated with sales of our products, royalties based on sales of certain products and other direct and indirect manufacturing overhead costs. We recognize cost of goods sold when we recognize revenue for the transaction. Our gross profit has been, and will be, affected by many factors, including the demand for our products, the selling price of our products, our cost of goods sold, the introduction of new products by us and our competitors and our ability to expand our sales force and distribution channels in North America and around the world.

Sales and Marketing. Sales and marketing expenses primarily consist of salaries and commissions paid to our direct sales force, advertising and marketing literature costs for our global distribution system, the cost of providing inventory to our third-party distributors, the cost of products provided free through certain sales promotions and support of continuing education and training events and industry meetings, including speaker honorariums.

General and Administrative. General and administrative expenses primarily consist of facilities, supplies and employment costs and professional fees relating to accounting, finance, legal, information technology and human resources services.

Research and Development. Research and development expenses consist primarily of costs associated with the design, development, testing, deployment and enhancement of our dental implant products. It also includes costs associated with the design and execution of clinical studies, grants of academic support to graduate schools of dentistry, which includes the funding of clinical studies and consulting expenses associated with our scientific advisors.

Depreciation and Amortization. Depreciation and amortization primarily consists of fixed asset depreciation, amortization of intangibles considered to have finite lives and amortization of property and equipment capitalized under capital lease obligations.

Other Income (Expense). Other income (expense) primarily consists of items unrelated to operations, such as interest income and expense, merger-related expenses, debt modification and extinguishment costs, and gains or losses on the sale of fixed assets.

Income Tax Benefit. Income tax benefit consists of federal, state, local and foreign taxes based on income. The relative amount of any state, local and foreign income tax expense have historically been offset by the future benefit of deferred tax assets related to our net operating loss carryforward amounts.

The following table sets forth, for the periods indicated, our results of operations (in thousands), and the changes between the specified periods expressed as percentage increases or decreases:

																					For the Three Months Ended

			For the Year Ended December 31,									For the Year Ended December 31,									For the Three Months Ended
			For the Year Ended December 31,						Percent Change			For the Year Ended December 31,						Percent Change			March 31, 2009			March 31, 2010			Percent Change
			2007			2008			Percent Change			2008			2009			Percent Change			March 31, 2009			March 31, 2010			Percent Change
																					(unaudited)
Net sales			$	56,432		$	68,644			22	%	$	68,644		$	69,038			1	%	$	16,455		$	18,972			15	%
Cost of goods sold, excluding depreciation and amortization stated separately below				21,163			22,611			7	%		22,611			22,487			(1	)%		5,112			5,769			13	%

Gross profit				35,269			46,033			31	%		46,033			46,551			1	%		11,343			13,203			16	%
Operating costs and expenses:
	Sales and marketing			26,291			34,460			31	%		34,460			28,557			(17	)%		7,623			7,342			(4	)%
	General and administrative			14,803			15,579			5	%		15,579			14,356			(8	)%		3,663			3,601			(2	)%
	Research and development			3,073			1,591			(48	)%		1,591			1,238			(22	)%		264			494			87	%
	Depreciation and amortization			7,911			8,250			4	%		8,250			8,097			(2	)%		2,079			1,981			(5	)%

Total operating costs and expenses				52,078			59,880			15	%		59,880			52,248			(13	)%		13,629			13,418			(2	)%

Loss from operations				(16,809	)		(13,847	)		18	%		(13,847	)		(5,697	)		59	%		(2,286	)		(215	)		91	%
Other income (expense):
		Interest income		55			12			(78	)%		12			3			(75	)%		2			2			*
		Interest expense		(692	)		(2,101	)		(204	)%		(2,101	)		(2,193	)		(4	)%		(896	)		(472	)		47	%
Loss on debt modification and extinguishment				—			—			—			—			(709	)		**			(709	)		(95	)		87	%
Other income (expense), net				(843	)		(771	)		9	%		(771	)		(131	)		(83	)%		15			(107	)		**

Loss from continuing operations before income taxes				(18,289	)		(16,707	)		9	%		(16,707	)		(8,727	)		48	%		(3,874	)		(887	)		77	%
Income tax benefit				6,619			5,465			(17	)%		5,465			2,685			(51	)%		1,157			299			(74	)%

Loss from continuing operations				(11,670	)		(11,242	)		4	%		(11,242	)		(6,042	)		46	%		(2,717	)		(588	)		78	%
Discontinued operations:
		Loss from operations of discontinued business		(10,969	)		(11,847	)		(8	)%		(11,847	)		(12,418	)		(5	)%		(1,686	)		(3,826	)		(127	)%
		Income tax benefit		4,662			4,448			(5	)%		4,448			3,987			(10	)%		542			1,354			150	%

Loss on discontinued operations				(6,307	)		(7,399	)		(17	)%		(7,399	)		(8,431	)		(14	)%		(1,144	)		(2,472	)		(116	)%

Net loss			$	(17,977	)	$	(18,641	)		(4	)%	$	(18,641	)	$	(14,473	)		22	%	$	(3,861	)	$	(3,060	)		21	%

The following table sets forth, for the periods indicated, our net sales by geography (in thousands) and the changes in net sales between the specified periods expressed as percentage increases or decreases:

															For the Three Months Ended

	For the Year Ended December 31,							For the Year Ended December 31,							For the Three Months Ended
	For the Year Ended December 31,				Percent Change			For the Year Ended December 31,				Percent Change			March 31, 2009		March 31, 2010		Percent Change
Net Sales by Geography	2007		2008		Percent Change			2008		2009		Percent Change			March 31, 2009		March 31, 2010		Percent Change
															(unaudited)
North America	$	34,788	$	41,924		21	%	$	41,924	$	44,102		5	%	$	10,574	$	11,449		8	%
Europe		10,371		13,642		32	%		13,642		11,366		(17	)%		3,080		3,486		13	%
Asia Pacific		4,355		4,063		(7	)%		4,063		4,090		1	%		763		1,140		49	%
Rest of world		6,918		9,015		30	%		9,015		9,480		5	%		2,038		2,897		42	%

Total	$	56,432	$	68,644		22	%	$	68,644	$	69,038		1	%	$	16,455	$	18,972		15	%

Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

Net Sales. Net sales increased $2.5 million, or 15%, to $19.0 million for the three months ended March 31, 2010, from $16.5 million for the same period in 2009, primarily as a result of increased sales through our third-party distributors and growth in our foreign sales offices.

Net Sales by Geography. Net sales in North America increased $0.9 million, or 8%, to $11.4 million for the three months ended March 31, 2010, from $10.6 million for the same period in 2009. Net sales in Europe increased $0.4 million, or 13%, to $3.5 million for the three months ended March 31, 2010, from $3.1 million for the same period in 2009. Net sales in Asia Pacific increased $0.4 million, or 49%, to $1.1 million for the three months ended March 31, 2010, from $0.8 million for the same period in 2009. Net sales in the rest of the world increased $0.9 million, or 42%, to $2.9 million for the three months ended March 31, 2010, from $2.0 million for the same period in 2009. International net sales as a percentage of company-wide sales increased 4%, to 40% for the three months ended March 31, 2010, from 36% for the same period in 2009. International net sales for the three months ended March 31, 2010 included a favorable currency impact of approximately $0.7 million, primarily as a result of an increase in the value of the Canadian dollar against the U.S. dollar during the quarter.

Gross Profit. Gross profit as a percent of net sales increased by 1%, to 70% for the three months ended March 31, 2010, from 69% for the same period in 2009, primarily as a result of implant sales increasing as an overall percentage of our net sales in 2009 as compared to 2008.

Sales and Marketing. Sales and marketing expenses decreased $0.3 million to $7.3 million for the three months ended March 31, 2010, from $7.6 million for the same period in 2009, primarily as a result of less discretionary spending on industry meetings. As a percentage of net sales, sales and marketing expenses decreased to 39% for the three months ended March 31, 2010, from 46% for the same period in 2009.

General and Administrative. General and administrative expenses decreased $0.1 million to $3.6 million for the three months ended March 31, 2010, from $3.7 million for the same period in 2009, primarily as a result of cost-cutting measures enacted in the second quarter of 2009. As a percentage of net sales, general and administrative expenses decreased to 19% for the three months ended March 31, 2010, from 22% for the same period in 2009.

Research and Development. Research and development expenses increased $0.2 million, to $0.5 million for the three months ended March 31, 2010, from $0.3 million for the same period in 2009, primarily as a result of increased new product development activities in 2010 compared to 2009.

Depreciation and Amortization. Depreciation and amortization decreased $0.1 million to $2.0 million for the three months ended March 31, 2010, from $2.1 million for the same period in 2009, primarily as a result of intangible assets related to key employment contracts becoming fully amortized in the third quarter of 2009.

Other Income (Expense). Other expense decreased $0.9 million to $0.7 million of expense for the three months ended March 31, 2010, from $1.6 million for the same period in 2009, primarily as a result of lower interest expense in 2010 as well as lower debt extinguishment and modification charges associated with the credit facilities at both March 31, 2010 and 2009, which amounted to $0.1 million for the debt modification in 2010 and $0.7 million for the extinguishment of debt in 2009.

Income Tax Benefit. Due to our accumulated losses, we are not currently incurring federal income tax expense in the United States. Aggregate income taxes in international and state jurisdictions decreased to $17,000 for the three months ended March 31, 2010, from $38,000 for the same period in 2009. Our effective tax rate increased 3.8% to 33.7% for the three months ended March 31, 2010, from 29.9% for the same period in 2009 primarily due to the effects of state taxes, non-deductible meals and entertainment and foreign income tax rate differentials.

Net Sales. Net sales increased $0.4 million, or 1.0%, to $69.0 million for the year ended December 31, 2009, from $68.6 million in 2008, primarily as a result of new product introductions and increasing sales of our products incorporating our proprietary Laser-Lok platform technology during 2009.

Net Sales by Geography. Net sales in North America increased $2.2 million, or 5%, to $44.1 million for the year ended December 31, 2009, from $41.9 million in 2008. Net sales in Europe decreased $2.3 million, or 17%, to $11.4 million for the year ended December 31, 2009, from $13.6 million in 2008. Net sales in Asia Pacific remained constant at $4.1 million for the years ended December 31, 2009 and 2008. Net sales in the rest of the world increased $0.5 million, or 5%, to $9.5 million for the year ended December 31, 2009, from $9.0 million in 2008. International net sales as a percentage of company-wide sales decreased 3% to 36% for the year ended December 31, 2009, from 39% in 2008. International net sales for the year ended December 31, 2009 included an unfavorable currency impact of approximately $1.4 million primarily as a result of a decrease in the value of the Canadian dollar, the Euro and the British pound against the U.S. dollar during the year.

Gross Profit. Gross profit as a percentage of net sales, for the year ended December 31, 2009, was 67%, unchanged from 2008.

Sales and Marketing. Sales and marketing expenses decreased $5.9 million to $28.6 million for the year ended December 31, 2009, from $34.5 million in 2008, primarily as a result of a restructuring of our sales management team and less discretionary spending on industry meetings. As a percentage of net sales, sales and marketing expenses decreased to 41% for the year ended December 31, 2009, from 50% in 2008.

General and Administrative. General and administrative expenses decreased $1.2 million to $14.4 million for the year ended December 31, 2009, from $15.6 million in 2008, primarily as a result of cost-cutting measures that we took due to general economic conditions in late 2008 and early 2009, as well as the consolidation of all our operations into one facility, which took place in mid to late 2008. As a percentage of net sales, general and administrative expenses decreased to 21% for the year ended December 31, 2009, from 23% in 2008.

Research and Development. Research and development expenses decreased $0.4 million to $1.2 million for the year ended December 31, 2009, from $1.6 million in 2008, primarily as a result of limiting support of clinical studies.

Depreciation and Amortization. Depreciation and amortization decreased $0.2 million to $8.1 million for the year ended December 31, 2009, from $8.3 million in 2008, primarily as a result of certain equipment reaching the end of its depreciable life during 2009.

Other Income (Expense). Other expense increased $0.1 million to $3.0 million for the year ended December 31, 2009, from $2.9 million in 2008, primarily as a result of the higher interest expense. Other expense consisted primarily of interest expense and debt extinguishment costs in 2009 and of interest expense and merger-related expenses in 2008.

Income Tax Benefit. Due to our accumulated losses, we are not currently paying federal income tax expense in the United States. Aggregate income taxes in state and international jurisdictions decreased to less than $0.1 million for the year ended December 31, 2009, from $0.1 million in 2008. Our effective tax rate decreased 1.9% to 30.8% for the year ended December 31, 2009, from 32.7% in 2008 primarily due to an increase in the valuation allowance for federal and state net operating losses in the year ended December 31, 2009.

Net Sales. Net sales increased $12.2 million, or 22%, to $68.6 million for the year ended December 31, 2008, from $56.4 million in 2007, primarily as a result of the introduction of our Tapered Internal Implants in the fourth quarter of 2007, which accounted for approximately 16% of our net sales in 2008.

Net Sales by Geography. Net sales in North America increased $7.1 million, or 21%, to $41.9 million for the year ended December 31, 2008, from $34.8 million in 2007. Net sales in Europe increased $3.3 million, or 32%, to $13.6 million for the year ended December 31, 2008, from $10.4 million in 2007. Net sales in Asia Pacific decreased $0.3 million, or 7%, to $4.1 million for the year ended December 31, 2008, from $4.4 million in 2007. Net sales in the rest of the world increased $2.1 million, or 30%, to $9.0 million for the year ended December 31, 2008, from $6.9 million in 2007. International net sales as a percentage of company-wide sales increased 1% to 39% for the year ended December 31, 2008, from 38% in 2007. International net sales for the year ended December 31, 2008 included a favorable currency impact of approximately $0.3 million, primarily as a result of an increase in the value of the Euro against the U.S. dollar during the year.

Gross Profit. Gross profit as a percentage of net sales increased 5% to 67% for the year ended December 31, 2008, from 62% in 2007, primarily as a result of decreased implant packaging costs.

Sales and Marketing. Sales and marketing expenses increased $8.2 million to $34.5 million for the year ended December 31, 2008, from $26.3 million in 2007, primarily as a result of the worldwide marketing campaign promoting our Tapered Internal Implants, first introduced in the fourth quarter of 2007, and an expansion of our direct sales force during 2008. As a percentage of net sales, sales and marketing expenses increased to 50% for the year ended December 31, 2008, from 47% in 2007.

General and Administrative. General and administrative expenses increased $0.8 million to $15.6 million for the year ended December 31, 2008, from $14.8 million for the year ended December 31, 2007, primarily as a result of headcount increases in our finance, human resources and information technology staff that were necessary to support the expanding distribution channels. These cost increases were partially offset by savings from closing a leased facility in June 2008. As a percentage of net sales, general and administrative expenses decreased to 23% for the year ended December 31, 2008, from 26% in 2007.

Research and Development. Research and development expenses decreased $1.5 million to $1.6 million for the year ended December 31, 2008, from $3.1 million in 2007, primarily as a result of the elimination of a duplicative research and development organization that was part of a 2006 acquisition.

Depreciation and Amortization. Depreciation and amortization increased $0.3 million to $8.3 million for the year ended December 31, 2008, from $7.9 million in 2007 primarily as a result of leasehold improvements and other equipment acquired during the relocation of our corporate headquarters during 2007.

Other Income (Expense). Other expense increased $1.4 million, to $2.9 million, for the year ended December 31, 2008, from $1.5 million in 2007, primarily as a result of increased interest expense on revolving debt and subordinated convertible notes as outstanding balances increased.

Income Tax Benefit. Due to our accumulated losses, we are not currently incurring federal income tax expense in the United States. Aggregate income taxes in state and international jurisdictions increased to $0.1 million, for the year ended December 31, 2008, from less than $0.1 million in 2007. Our effective tax rate decreased 3.5% to 32.7% for the year ended December 31, 2008, from 36.2% in 2007 primarily due to non-deductible transaction costs in the year ended December 31, 2008.

Our principal sources of cash have included the issuance of bank borrowings, subordinated convertible notes and equity as well as cash generated from operations. Principal uses of cash have included acquisitions, expansion of our direct sales force and distribution channels, capital expenditures, working capital and debt service. We expect that our principal uses of cash in the future will continue to be for expansion of our distribution channels, capital expenditures to expand our manufacturing capabilities, working capital, debt service and potential acquisitions. As of March 31, 2010, we had an accumulated deficit of $59.6 million and we have incurred net losses of $18.0 million, $18.6 million, $14.5 million and $3.1 million for the years ended December 31, 2007, 2008 and 2009 and for the quarter ended March 31, 2010, respectively. We expect that, as our net sales grow, our sales and marketing, general and administrative and research and development expenses will continue to grow and, as a result, we will need to generate significant net sales to achieve profitability. We believe that our current cash, net sales from our operations and our ability to draw down on our revolving line of credit will be sufficient to fund our projected operating requirements for at least the next 12 months. In addition, if we believe it is in our interest to raise additional funds, we may seek to sell additional equity or debt securities or borrow additional money. There can be no assurance, however, that we will be able to do so on acceptable terms, or at all. The sale of additional equity or convertible debt securities could result in further dilution to our stockholders. If additional funds are raised through the issuance of equity or debt securities, these securities could have rights senior to those associated with our common stock and could contain covenants that would restrict our operations.

The following table sets forth, for the periods indicated, a summary of operating, investing and financing activities of continuing operations (in thousands):


	For the Year Ended December 31,		For the Three Months Ended March 31, 2010
Cash flow summary	2007		2008		2009
							(unaudited)
(Used for) from operating activities	$	(10,449	)	$	(9,641	)	$	9,910		$	(41	)
(Used for) investing activities	$	(1,072	)	$	(31,353	)	$	(8,617	)	$	(1,249	)
From (used for) financing activities	$	9,259		$	41,857		$	1,463		$	(2,050	)

Operating Activities. Cash used for operating activities during the three months ended March 31, 2010 was less than $0.1 million, primarily reflecting the payment of annual incentive compensation for calendar year 2009. Cash from operating activities was $9.9 million in 2009, compared to cash used for operating activities of $9.6 million in 2008 and $10.4 million in 2007. Cash from operating activities in 2009 primarily consisted of decreased inventories held for sale and increased current liabilities. Cash used for operating activities in 2007 and 2008 primarily consisted of the loss from operations and increased inventories held for sale.

Investing Activities. Cash used for investing activities during the three months ended March 31, 2010 was $1.2 million, primarily reflecting purchases of property and equipment. Cash used for investing activities was $8.6 million in 2009, compared to $31.4 million in 2008 and $1.1 million in 2007. Cash used for investing activities primarily consisted of loans to discontinued operations and the acquisition of a software subsidiary in 2009 and 2008, and purchases of property and equipment in 2007.

Financing Activities. Cash used for financing activities during the three months ended March 31, 2010 was $2.1 million, primarily reflecting payments on our revolving line of credit and payments of debt modification and financing costs. Net cash from financing activities was $1.5 million in 2009, compared to net cash from financing activities of $41.9 million in 2008 and $9.3 million in 2007. Cash from financing activities in 2009 primarily consisted of the issuance of an additional $5 million subordinated convertible note net of payments on the revolving line of credit. Cash from financing activities in 2007 and 2008 primarily consisted of the issuance of stock to fund an acquisition in addition to net borrowing on a revolving line of credit and a subordinated convertible note payable.

Current Financing Arrangements. On March 31, 2010, we entered into a secured revolving line of credit, with MidCap for borrowings on a revolving basis through March 31, 2012. Borrowings under the line of credit are limited to the sum of our eligible accounts receivable and domestic inventory, up to a maximum of $12.5 million. Through the exercise of a LIBOR option, the line of credit bears interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly. Interest is charged on a minimum of 80% of the amount available under the line of credit or the outstanding balance, whichever is greater. Upon an early termination of the line of credit, a prepayment fee of $0.6 million is due if the termination takes place prior to March 31, 2011, and a prepayment fee of $0.4 million is due if the termination takes place prior to March 31, 2012. As of March 31, 2010, the outstanding balance on the line of credit was $7.8 million and $2.8 million was available to draw down. Borrowings under the line of credit are secured by a pledge of all of our assets, other than our intellectual property and equipment that is subject to purchase money security interests or capital lease financings, including any proceeds relating to or arising from our intellectual property. We anticipate that the outstanding balance of the line of credit will remain outstanding after this offering.

On March 31, 2010, we issued a $5.0 million term note, or the term note, payable to MidCap and secured by a pledge of all of our assets, other than our intellectual property and equipment that is subject to purchase money security interests or capital lease financings, including any proceeds relating to or arising from our intellectual property. Interest on borrowings under the term note is payable monthly in cash at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly, during the first six months after the initial issuance of the term note. Beginning in October 2010, interest on borrowings under the term note will increase an additional 300 basis points. During the term of the term note, we are required to maintain a certain fixed charge coverage ratio, which is defined as the ratio of our operating cash flow to our fixed charges for the applicable measurement period. The term note will mature upon the earlier of our initial public offering or June 30, 2011. A non-refundable exit fee of $0.5 million is payable upon maturity of the note. We anticipate that the note will be repaid in connection with this offering.

On January 1, 2010, we amended the terms of our outstanding loan obligations to our majority stockholder, HealthpointCapital, and entered into a $36.9 million subordinated convertible note. The subordinated convertible note bears interest at 10% per year, which is accrued and payable at maturity of the note. The principal and accrued interest are due and payable on the earlier to occur of (1) our initial public offering, (2) a merger, consolidation or similar transaction resulting in a change of control, a sale of all or substantially all of our assets, a sale of a majority of our capital stock, or any other change of control, in each case occurring in one transaction or a series of related transactions, or (3) upon demand by HealthpointCapital at any time after July 1, 2011. At any time prior to the full repayment of the subordinated convertible note, HealthpointCapital may, at its sole discretion, convert all or part of the then outstanding principal amount of the subordinated convertible note into that number of units consisting of shares of our common stock and preferred stock (or equivalent securities), as would be issuable valuing our currently outstanding shares of common and preferred stock (on a fully diluted and fully converted basis) at $500 million. The subordinated convertible note is subordinate to and subject to the payment in full of all our obligations for borrowed money to any financial institutions, whether such obligation was entered into prior to or subsequent to our entering into the subordinated convertible note. We anticipate that the subordinated convertible note will be repaid in connection with this offering.

We are committed to making future cash payments on debt obligations, capital leases, operating leases and other contractual commitments. We have not guaranteed the debt of any other party. The following table summarizes our contractual obligations as of March 31, 2010 (in thousands):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Revolving line of credit	$	7,842	$		$	7,842	$		$
Term note payable⁽¹⁾		5,000				5,000
Subordinated convertible note payable⁽¹⁾		36,870				36,870
Interest payments on debt⁽²⁾		8,078		1,228		6,850
Capital lease obligations		135		43		92
Operating lease obligations		3,399		836		1,428		1,135
Minimum royalties		825		100		200		200		325

Total	$	62,149	$	2,207	$	58,282	$	1,335	$	325

We do not currently have, nor have we ever had, any relationships with unconsolidated entities or financial partnerships, such as entities referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

For a description of our related party transactions, see "Certain Relationships and Related Party Transactions."

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses. On an on-going basis, we evaluate our estimates, including those related to inventories, bad debts and intangibles. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 1 to our consolidated financial statements included elsewhere in this prospectus, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition. We recognize revenue when products are shipped. At that time, the title and risk of loss transfer to the customer and the ability to collect is reasonably assured. For our software product, the value of maintenance bundled with software is deferred using the residual method and recognized over the maintenance and support period. We generally do not require collateral when making a sale. Shipping and handling costs are included in cost of goods sold. Taxes collected from customers and remitted to governmental authorities are excluded from revenue. Our implant and abutment products carry a lifetime warranty, which covers any failure of product, and our implant tools, speciality instruments and software carry limited warranties. Customer may also return any product within sixty days of purchase for full credit. A reserve for product returns has been established based on the Company's historical product return experience. We have not established any reserves for potential warranty claims because historically we have experienced few warranty claims and costs associated with warranty claims have been immaterial.

Allowance for Doubtful Accounts. We make judgments as to our ability to collect outstanding receivables and provide allowance for a portion of receivables when collection becomes doubtful. We establish an allowance for doubtful accounts based upon a review of specific outstanding invoices and

the overall quality and age of those invoices not reviewed. In determining the provision for invoices not specifically reviewed, we analyze historical collection experience and current economic trends. If the historical data used to calculate the allowance provided for doubtful accounts does not reflect our future ability to collect the outstanding receivables or if the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, an increase in the provision for doubtful accounts may be required.

Inventories. We record inventories at the lower of cost or market under the first-in first-out method of accounting. Inventories include implants, dental tools and instruments, biologics, educational videos and abutments held for sale. We review the components of inventory on a periodic basis for excess, obsolete and impaired inventory, and record a reserve for the identified items. We calculate an inventory reserve for estimated obsolescence or excess inventory based upon historical turnover and assumptions about future demand for our products and market conditions. Our biologics products have a two-year shelf life and are subject to demand fluctuations based on product performance and market conditions. Our estimates and assumptions for excess and obsolete inventory are subject to uncertainty. The estimates we use for demand are also used for near-term capacity planning and inventory purchasing. Future product introductions and related inventories may require additional reserves based upon changes in market demand or introduction of competing products. Increases in the reserve for excess and obsolete inventory would result in a corresponding increase to cost of goods sold and would adversely affect our gross margins.

Valuation of Goodwill and Other Intangible Assets. Goodwill represents the excess of the net acquisition cost over the estimated fair value of net assets acquired from purchased companies. Under the Financial Accounting Standards Board's Accounting Standards Codification (ASC), ASC 350, Intangibles — Goodwill and Other, intangible assets considered to have indefinite lives, such as goodwill, are not amortized to expense but are periodically evaluated for impairment at the reporting unit level. Intangible assets with finite lives are amortized to expense over their estimated useful lives. Our identified intangible assets consist of international distributor agreements, developed product technology and patents, trade names, customer base and non-compete agreements.

Under ASC 350, goodwill and other intangible assets with indefinite lives are subject to an annual impairment test, as well as an interim test if an event occurs or circumstances change between annual tests indicating that the asset might be impaired. The goodwill impairment test is a two-step process. First, the fair value of each of our reporting units is compared to the carrying value of the reporting unit's assets less liabilities. If the fair value is less than the carrying value, a second step is performed. In the second step, an implied goodwill value is determined by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit. If the implied fair value of the goodwill, as calculated, is less than the carrying amount of the goodwill, an impairment charge is recorded for the difference. For purposes of estimating the fair value of a reporting unit, we use a weighted average of the income approach and the market valuation approach. We test the goodwill of each reporting unit annually and more frequently if impairment indicators exist. Due to the numerous variables associated with our judgments and assumptions relating to the carrying value of our goodwill and intangible assets and the effects of changes in circumstances affecting these valuations, both the precision and reliability of the resulting estimates are subject to uncertainty, and as additional information becomes known, we may change our estimate, in which case, the likelihood of a material change in our reported results would increase. Our continuing operations are comprised of a single reporting unit, which includes all of our dental implant business. Based on our latest annual impairment test, the estimated fair value of the reporting unit exceeded the carrying value by a significant margin.

Distributorship agreements represent contracts providing significant distribution resources across a broad geographic market. The distributorship agreements are being amortized over seven to ten years.

Developed and licensed product technology and patents represent proprietary technology that is technologically feasible and includes all fully functioning products. The Company has developed and licensed developed product technology and patents for numerous dental implant devices and methods. The developed product technology and patents are being amortized over a weighted average useful life of eight to ten years, which in some cases is less than the remaining patent or license rights, due to the potential for economic or technological obsolescence.

The BioHorizons trade names are being amortized over a useful life of fifteen years and the BioLok International, Inc. trade names are amortized over a useful life of eight years. Customer base intangible assets are amortized over useful lives of eight to ten years. We determined the useful life of intangible assets based on the expected future cash flows associated with the respective asset.

Non-compete agreements are being amortized over the periods covered by the related agreements, which range from two to four years.

Stock-based Compensation. The grant date fair value per share is being recognized as compensation expense over the applicable vesting period. The fair value of restricted stock awards was determined annually at the beginning of each fiscal year with assistance from unrelated valuation specialists, using the probability-weighted expected return method described in Chapter 10 of the AICPA Audit and Accounting Practice Aid, "Valuation of Privately-Held-Company Equity Securities as Compensation." Based on an assumed initial public offering price of $ , the midpoint of the range set forth on the cover page of this prospectus, the intrinsic value of the restricted shares of Class A common stock outstanding at March 31, 2010 was $ , of which $ related to vested shares and $ related to unvested shares. The intrinsic value of the restricted shares of Class B common stock outstanding at March 31, 2010 was $ , of which $ related to vested shares and $ related to unvested shares and the intrinsic value of the restricted shares of Class C common stock outstanding at March 31, 2010 was $ , of which $ related to vested shares and $ related to unvested shares.

Determining the fair value of stock requires making complex and subjective judgments. The Company's approach to valuation is based on a discounted future cash flow approach that uses the Company's estimates of revenue, driven by assumed market growth rates, and estimated costs as well as appropriate discount rates. These estimates are consistent with the plans and estimates the Company uses to manage the business. There is inherent uncertainty in making these estimates.

Although it is reasonable to expect that the completion of our initial public offering will add value to the shares because they will have increased liquidity and marketability, the amount of the additional value can be measured with neither precision nor certainty.

costs were expensed at the time of the acquisition. ASC 805 also requires changes in deferred tax asset valuation allowances and acquired income tax uncertainties that are recognized after the measurement period be recognized in income tax expense; previously such changes were considered to be subsequent changes in consideration and were recorded as decreases in goodwill. ASC 805 requires contingent consideration be recorded at fair value as an element of the purchase price with subsequent adjustments recognized in operations, previously contingent consideration was accounted for as a subsequent adjustment of the purchase price. ASC 805 will affect the accounting for business combinations consummated after December 31, 2008.

Our business is seasonal in nature. Historically, demand for our products has been the highest in the second and fourth quarters. We traditionally experience lower sales volumes in the third quarter than throughout the rest of the year as a result of clinicians in North America and Europe taking time away from their practices during summer months.

We are exposed to various market risks, which are potential losses arising from adverse changes in market rates and prices, such as interest rates and foreign exchange fluctuations. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Interest Rate Risk. Borrowings under our secured revolving line of credit and our term note with MidCap are each subject to adjustable interest rates and therefore expose us to market risk related to changes in interest rates. Borrowings under the revolving credit facility bear interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly. Borrowings under our term note bear interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly, during the first six months of the term of the note. Beginning in October 2010, interest on borrowings under the note are charged at the same rate plus 300 basis points. If applicable interest rates were to increase above the LIBOR floor of 2.75% by 100 basis points, then for every $1.0 million outstanding on our revolving credit facility and our term note, our income before income taxes would be reduced or our loss before income taxes would increase, as applicable, by approximately $10,000 per year.

Foreign Currency Exchange Rate Risk. While a majority of our business is denominated in U.S. dollars, we maintain operations in foreign countries, primarily Canada and countries located in Europe, that operate in their local currencies. For the years ended December 31, 2007, 2008 and 2009, the U.S. dollar equivalent of our revenues denominated in foreign currencies were $14.0 million, $18.1 million and $20.0 million, respectively. For the three months ended March 31, 2010, our revenues denominated in foreign currencies were $5.7 million. A majority of such revenues were denominated in Canadian Dollars and the Euro. Payments received from customers for goods sold in these countries are typically in the local currency. Consequently, fluctuations in the rate of exchange between the U.S. dollar and local currencies may affect our results of operations and period-to-period comparisons of our operating results. For example, if the value of the U.S dollar were to increase relative to the Canadian Dollar, then our reported net sales would decrease when we convert the lower valued foreign currency into U.S. dollars. We do not currently engage in hedging or similar transactions to reduce these risks, however, we may do so in the future. The operational expenses of our foreign subsidiaries reduce the currency exposure we have because our foreign currency net sales are offset in part by operating expenses payable in foreign currencies. As such, we do not believe we have a material exposure to foreign currency rate fluctuations at this time.

Inflation Risk. We do not believe that inflation has had a material impact on our business or operating results during the periods presented in this prospectus.

We are a medical technology company focused on developing, manufacturing and marketing a broad and comprehensive line of innovative and evidence-based dental implants, as well as biologics products for the replacement of missing teeth. We have designed our dental implant product portfolio to address substantially all of the clinical requirements in implant dentistry. Since 2005, we have sold over 900,000 implants and over 125,000 abutments. In order to become the leading dental implant company, we intend to build on our broad and clinically-proven product offerings, expand our global distribution network and increase and expand our education and training programs.

According to iData Research Inc., or iData, the worldwide dental implant market, including implants, final abutments and biologics, was $3.7 billion in 2009 and is expected to grow to $7.9 billion by 2015, which represents a compounded annual growth rate, or CAGR, of 13%. Additionally, iData has reported that the North American dental implant market was $1.0 billion in 2009 and is expected to grow to $2.1 billion by 2015, which represents a CAGR of 13%. In 2009, our net sales were $69.0 million and, according to iData, we were the sixth largest dental implant company based on net sales in North America. From 2006 to 2009, our net sales grew at a CAGR of 16%.

Our implant products feature our proprietary Laser-Lok platform technology, which addresses the critical issues of bone and soft tissue loss around the implant. Bone and soft tissue loss after placement of conventional dental implants remain common problems that can lead to long-term complications and inferior aesthetic outcomes. As a result, general dentists, oral surgeons, periodontists and prosthodontists, whom we refer to as dental professionals, are seeking new surface technologies and implant designs that reduce or eliminate bone and soft tissue loss following implant placement. We believe that our proprietary Laser-Lok platform technology is the only technology on the market today for which there is clinical data that supports reduced bone and soft tissue loss, which are frequent complications associated with conventional dental implant procedures. The technological characteristics of our Laser-Lok platform technology cleared by the FDA were described as having a tissue connection that: (1) is functionally oriented, (2) inhibits epithelial cell downgrowth and (3) enables crestal bone adjacent to the implant to attach and be retained. As a result, we believe that our proprietary Laser-Lok platform technology is unique in the dental implant industry and makes our implant and abutment offerings more attractive to dental professionals and their patients as they become increasingly concerned with aesthetic outcomes of implant dentistry.

Our research and development efforts include, among other things, new product development and post-market clinical studies designed to demonstrate the functional and aesthetic benefits of our products. The benefits of our broad product offering have been validated in over 50 peer-reviewed clinical studies. We are committed to continuing to develop and introduce enhancements to our product lines that will simplify the placement of our implants, reduce the procedure time and the duration of the treatment process and improve clinical and aesthetic outcomes. We have introduced or intend to introduce several products in 2010, including our Mountless Packaged Tapered Implant, Laser-Lok 3.0 Implant and Laser-Lok Abutments.

We currently sell our products to dental professionals through a direct sales force of over 70 sales representatives in North America and five foreign countries. We also maintain a complementary

network of over 50 third-party distributors outside of the United States. Through our direct sales force and our distribution network, we market our products in more than 80 countries worldwide. We offer extensive education and training programs and have affiliations with leading private and public dental educational centers to educate and train dental professionals and dental students. We use these education and training programs to increase awareness of the benefits of dental implants and our comprehensive dental implant solutions.

We participate in the worldwide dental implant market to treat and replace missing teeth, which was approximately $3.7 billion in 2009. The entire dental implant market consists of implants, abutments, tools and biologics that are primarily sold to dental professionals for the treatment and replacement of missing teeth. According to the World Health Organization, dental diseases are the most prevalent chronic diseases worldwide. Tooth loss generally results from tooth decay, periodontal disease, genetic defects, severe malnutrition and trauma. We believe tooth loss can have a considerable impact on a person's quality of life and can negatively impact a person's eating ability, nutrition, appearance, speech, self-esteem and overall general health.

Tooth loss is highly correlated with increase in age and is primarily due to tooth decay and periodontal disease. Full dentition is defined as having 28 natural teeth. According to the U.S. National Institute of Dental and Craniofacial Research, a person between the ages of 20 and 34 has an average of 27 teeth, a person between the ages of 35 and 49 has an average of 25 teeth and a person over 65 years of age has an average of 19 teeth. According to the American Dental Association, or ADA, approximately 45 million teeth are removed annually in the United States while only approximately 2 million dental implants are placed annually.

The treatments for replacing missing teeth are dentures, bridgework and dental implants.

Dentures are removable prosthetic devices constructed to replace missing teeth and are supported by the surrounding soft and hard tissues in the mouth. Dentures are a common treatment for edentulous, or toothless, patients, have a short treatment cycle and are relatively low in cost. However, dentures can negatively impact a patient's quality of life as he or she cannot eat many foods and may have speech impediments resulting from the dentures. In addition, the lack of teeth underlying the denture results in the deterioration of the underlying jaw bone resulting in undesirable facial aesthetic changes. In addition, dentures must periodically be realigned and replaced and the patient must purchase daily consumables, such as cleaners and adhesives, both of which increase the long-term cost of dentures. The illustrations below provide a computer generated rendition of facial changes over time due to dentures.

Bridgework, also known as a fixed partial denture or a bridge, fills a gap created by a missing tooth or teeth by joining a series of crowns to the two teeth adjacent to the missing tooth or teeth. A crown is a replacement tooth or cap that is placed over a tooth to restore its shape and size or used to fill in the space created by a lost tooth or teeth. In a typical bridge procedure, a single missing tooth is replaced by grinding the two adjacent teeth and placing a 3-unit bridge over the teeth thereby covering the space created by the missing tooth. Bridgework has moderate upfront costs and positive aesthetic outcomes. Bridgework, however, is not a viable treatment option for edentulous patients, is more expensive than dentures, does not prevent bone loss and permanently damages otherwise healthy teeth. In addition, this makes teeth more prone to tooth decay and periodontal disease, which can diminish support for the bridgework and may also result in increased complications over time.

Dental implants are artificial teeth usually consisting of three main components: the implant, the abutment and the crown. Generally, dental implant companies, such as BioHorizons, manufacture and sell implants and abutments, while dental laboratories custom manufacture and sell crowns.

Dental implants can be used to replace individual or multiple teeth and are highly effective in restoring function for the patient. The dental professional may apply a tissue regeneration substitute, or biologic, before or during the dental implant procedure to maintain bone and soft tissue growth around the implant. iData estimates that in 2009 approximately 47% of dental implant procedures in North America were performed using biologics. The complete placement of conventional dental implants can take up to six months and multiple visits with a dental professional. Newer implant technologies, however, allow for immediate load, or same-day, procedures, enabling the patient to receive a full replacement tooth at the time of the initial surgical procedure. Dental implants can enhance clinical outcomes compared to dentures and bridgework, and do not damage the adjacent healthy teeth. Bone and soft tissue loss after placement of conventional dental implants, however, remain common problems that can lead to long-term complications and inferior aesthetic outcomes. As a result, although we believe conventional dental implants can provide long-term therapy for patients, there is an opportunity for new, innovative implant technologies. According to the American Association of Oral and Maxillofacial Surgeons, dentures and bridgework usually need to be replaced every 15 years, while dental implants can last a lifetime.

In the United States, general dentists typically recommend whether or not their patients are treated with dental implants and in many cases suggest the brand of dental implant to use, but generally do not perform the entire implant procedure. In the majority of dental implant cases in the United States, the general dentist refers the patient to an oral surgeon, periodontist or prosthodontist, whom we refer

to as dental specialists, for the surgical placement of the implant into the jaw bone, and the general dentist performs only the restorative phase of implant therapy. During the restorative phase, the tooth replacement process is completed by attaching the abutment to the surgically placed implant and securing the crown to the abutment. We estimate that there are over 7,000 oral surgeons and over 5,000 periodontists in the United States, who place implants. The vast majority of the approximately 4,000 prosthodontists in the United States are placing and/or restoring dental implants. According to the ADA, there are over 150,000 general dentists in the United States, of whom we believe only a small percentage are placing implants. Outside of the United States, we believe general dentists tend to perform a greater percentage of the dental implant procedures.

Worldwide, dental implant therapies are predominantly elective procedures for which the patient pays most or the entire cost. We believe a private pay model has less exposure to the increased downward pressure on costs as seen in reimbursement models. There is no indication that insurance coverage for dental implants will become widespread in the near term.

According to iData, many of our targeted geographies, including North America, are underpenetrated. For example, in the United States there are only 61 implants placed per 10,000 people as compared to Sweden which has 260 implants placed per 10,000 people. This implies that the penetration of dental implants in Sweden is four times the penetration of dental implants in the United States. The chart below shows the number of implants sold per 10,000 inhabitants in certain leading dental implant markets.

Therefore, we believe a large opportunity exists in the U.S. and worldwide dental implant markets where we sell our products and that the demand for dental implants and penetration rates will increase as a result of:

Our mission is to improve the quality of life for patients with missing teeth by providing dental professionals with innovative, evidence-based dental implants and biologics products. To achieve our mission and become the leading dental implant company, we intend to build on our broad and clinically-proven product offerings, expand our global distribution network and increase our education and training programs. We believe we can increase the demand for our products, increase our net sales and generate stockholder value by pursuing the following strategies:

Our comprehensive product solutions consist of a broad line of innovative, evidence-based dental implants, as well as biologics products for the replacement of missing teeth. Our dental implant product portfolio is designed to address substantially all of the clinical requirements in implant dentistry. We provide an extensive line of implants that can be used in immediate loading procedures. We also offer a complete line of abutments, biologics, implant tools and specialty instruments, as well as VIP computer-guided surgical software and surgical guides to assist in reconstruction procedures.

Laser-Lok microchannels are a series of precision-engineered micron sized grooves on the collar of the implant and the bottom portion of the abutment. We believe that our proprietary Laser-Lok platform technology is the only technology on the market today for which there is clinical data that supports reduced bone and soft tissue loss. Post-market clinical studies and published clinical data have shown that Laser-Lok implants are more effective than conventional implant designs in reducing bone loss. In addition, we believe that we are the only dental implant company whose FDA 510(k) clearance summary recognized the tissue connection properties of its implants.

Laser-Lok microchannels are the result of over 15 years of research and documented in-vitro, animal and human clinical studies conducted to (1) understand how bone and soft tissue cells react to various types of surface geometries and (2) evaluate how specific surface microgeometries affect crestal bone and the biologic width around implants. We believe that the properties of our proprietary Laser-Lok

platform technology are unique to the dental implant industry because (1) the tissue connection to our Laser-Lok surface is functionally oriented, (2) it inhibits epithelial cell downgrowth and (3) it enables crestal bone adjacent to the implant to attach and be retained. Consequently, we believe that our proprietary Laser-Lok platform technology addresses the complications associated with conventional dental implants and makes our implant and abutment offerings more attractive to dental professionals and their patients as they become increasingly concerned with the aesthetic outcomes of implant dentistry. Our Internal, Tapered Internal and Single Stage Implants and Simple Solutions Abutments are available with our proprietary Laser-Lok microchanneled surface.

Our comprehensive line of implants and abutments is designed to address substantially all of the clinical requirements in implant dentistry. We offer both traditional two-piece implant designs as well as one-piece designs and offer bone and tissue level implants, tapered and straight-walled implants and internal or external connection implants. A broad line of our implants may be used in immediate loading procedures. Several of the implant lines we offer are shown below:


	Tapered Internal		Our Tapered Internal Implants feature reverse buttress threads on anatomically tapered implant body with an internal hex connection. This implant is offered in a range of diameters and lengths. We believe this implant design results in higher primary stability for enhanced immediate loading results as compared to conventional dental implant designs.
	Internal		Our Internal Implants combine a modified square thread design with an internal hex connection. This thread design has increased surface area, providing higher implant-to-bone contact and reverse torque values when compared to competitive designs. We believe this thread design also promotes superior advantageous compressive load transfer to peri-implant bone as compared to traditional implant designs.
	Single Stage		Our Single Stage Implants feature a modified square thread design and is placed at the level of the tissue rather than the bone. This internal hex connection implant is offered in three different diameter platforms, each of which has two options for implant body diameter to maximize the use of available bone.
	External		Our External Implants feature a modified square thread design with an external hex connection for superior stability and strength.
	Laser-Lok 3.0		Our Laser-Lok 3.0 is a small-diameter (3.0 mm thread diameter) implant launched in May 2010 featuring a modified square thread design with an internal hex connection that is used to treat missing maxillary laterals and mandibular incisors.

Abutments. We offer a complete line of abutments to address virtually any clinical prosthetic situation. These include single, multi-unit, cement-retained, screw-retained, overdentures and fixed-removable. We also provide prosthetic solutions for custom abutment fabrication, as well as one-stage restorations.

Through distribution arrangements with third parties, we market and sell a portfolio of products which are used in soft and hard oral tissue regeneration procedures. These products offer options that support implant procedures and help to rescue teeth in the treatment of periodontal disease.

AlloDerm® Tissue Matrix is an accellular dermal matrix soft tissue graft used to, among other things, treat gum recession around natural teeth and dental implants. The efficacy of AlloDerm® Tissue Matrix is demonstrated through a number of peer-reviewed studies that prove equivalence of AlloDerm® Tissue Matrix autogenous connective tissue grafts.

Grafton DBM is an osteoinductive demineralized bone matrix, or DBM, bone graft used to regenerate bone for periodontal, extraction site, sinus and lateral ridge augmentation grafting procedures. Grafton DBM is proven to regenerate bone and periodontal tissues in bony defects.

MinerOss is a bone graft derived from human bone and is used for dental implant site augmentation procedures. MinerOss is a blend of mineralized allograft cancellous and cortical chips that has been proven effective for dental implant site development.

Mem-Lok is a Type 1 collagen matrix primarily used for guided bone regeneration procedures in conjunction with a bone graft, such as Grafton DBM and MinerOss. Mem-Lok protects the bone graft from epithelial migration and prevents connective tissue cell migration.

Tools and Instruments. We offer a comprehensive line of distributed and manufactured surgical tools used in the placement of our implants, as well as specialty instruments for tissue regeneration procedures. Our tools and instruments have been specifically selected to support our core implant and biologics products.

Software and Surgical Guides. Our VIP computer-guided surgical software and surgical guides provide uniformity and simplify the placement of dental implants. Our VIP computer-guided surgical software is able to interface with standard CT scan machine software to allow the dental professional to virtually place dental implants based on available bone and the desired occlusal scheme. Furthermore, we generate surgical guides to simplify the dental implant process and increase the accuracy of dental implant placement. Our VIP computer-guided surgical software is an open platform that can be used with any dental implant.

We support many of our product initiatives with post-market clinical studies and other published clinical data. We are actively conducting post-market clinical studies regarding the performance of our products. Several of the most significant post-market clinical studies and other published clinical data regarding our products that have been published, or are pending publication, in peer-reviewed industry journals are described below.

Our proprietary Laser-Lok platform technology is the result of over 15 years of research and documented studies at universities in the United States and numerous other countries. As part of that research, numerous in vitro, animal and human studies were conducted to (1) understand how bone and soft tissue cells react to various types of surface geometries and (2) evaluate how specific surface microgeometries affect crestal bone and the biologic width around implants. These studies have shown that our implants and abutments incorporating the innovative laser surface created by our proprietary Laser-Lok platform technology reduce crestal bone loss, allow tissue attachment to the implant and help to retain both hard and soft tissue.

Our implants feature a biomechanically-designed thread to achieve proper load transfer to the surrounding bone. These thread designs have been shown to achieve favorable results in numerous post-market clinical studies involving immediate, or same day, loading.

Below are selected post-market clinical studies that relate to implants and abutments incorporating our proprietary Laser-Lok platform technology and our innovative thread designs:

Publication	Title	Study Summary	Results

Pending The International Journal of Oral and Maxillofacial Implants	A Tissue-engineered Modification of the Collar Implant Enhances Hard and Soft Tissue Stability	Human study; laser microtextured and machined collar implants placed to compare crestal bone height	Laser-Lok implants showed significantly smaller probing depths and reduced bone loss compared to competitive implants
2010 The International Journal of Periodontics & Restorative Dentistry	Histologic Evidence of a Connective Tissue Attachment to Laser Microgrooved Abutments: A Canine Study	Canine study; prospective study using abutments with laser-ablated microgrooves to evaluate bone and soft tissue healing attachment	Abutments with laser-ablated microgrooves showed improvement in peri-implant hard and soft tissue healing compared to traditional machined abutment surfaces
2010 The International Journal of Periodontics and Restorative Dentistry	Radiographic Analysis of Crestal Bone Levels Around the Laser-Lok Collar Dental Implants	Human study; retrospective of 49 Laser-Lok implants to evaluate the biologic seal of connective tissue fibers	All bone loss was contained within the height of the implant collar, with no bone loss evident to the level of the implant threads
2009 Clinical Implant Dentistry and Related Research	Comparative Analysis of Immediate Functional Loading and Immediate Non-functional Loading to Traditional Healing Periods: A 5-year Follow-up of 550 Dental Implants	Human study; 550 square thread implants placed in 155 subjects to compare an immediate loading protocol with a two staged-loading protocol	Immediately loaded implants had an overall 98.8% five-year survival rate, with all failures occurring in posterior mandibular sites of the same patient
2008 The International Journal of Periodontics & Restorative Dentistry	Human Histologic Evidence of a Connective Tissue Attachment to a Dental Implant	Human study; Laser-Lok implants harvested at six months for histologic observation	Laser-Lok implants were found to be osseointegrated, with histologic evidence of direct bone contact and no signs of inflammation
2008 Implant Dentistry	A Prospective Multi-center Clinical Investigation of a Bone Quality-based Dental Implant System	Human study; multi-center, prospective study; five year results of 495 implants placed in 151 cases	Cumulative 99.5% success rate and a mean bone loss of 0.06 mm at one year and bone gain of 0.04 mm at two years following prosthesis loading
2008 The International Journal of Oral and Maxillofacial Implants	Initial Clinical Efficacy of 3-mm Implants Immediately Placed into Function in Conditions of Limited Spacing	Human study; 31 implants placed in 17 subjects to determine function and aesthetic changes	Cumulative success rate of 96.7% and a mean bone loss of 0.58 mm at six months and an additional mean bone loss of 0.12 mm at one year
2005 Journal of Periodontology	Histologic and Histo-morphometric Findings from Retrieved, Immediately Occlusally Loaded Implants in Humans	Human study; 29 implants (BioHorizons — 6) retrieved with varying implant designs and surfaces to evaluate immediate load	A bone-to-implant percentage of 66.8% was found in retrieved implants (BioHorizons — 80.6%), with some marginal bone resorption observed in the crestal part of the implants
2003 Journal of Periodontology	Immediate Functional and Non-functional Loading of Dental Implants: A 2- to 60-month Follow-up Study of 646 Titanium Implants	Human study; 646 implants (BioHorizons — 242) placed in 152 subjects to observe immediate functional loading and immediate non-functional loading	Successful osseointegration and satisfactory functionality found in 98.6% (BioHorizons — 100%) of immediate functional loading implants and 99.1% (BioHorizons — 100%) of immediate non-functional loading implants

Our portfolio of biologic products are used in oral tissue regeneration and offer treatment options that support implant procedures or help to rescue teeth in the treatment of periodontal disease. Below are selected post-market clinical studies that relate to the efficacy of our biologics products:

Publication	Title	Study Summary	Results

2006 Journal of Periodontology	Postoperative Complications Following Gingival Augmentation Procedures	Human study; 228 enrolled to compare post-operative complications between connective tissue and acellular dermal matrix	Application of acellular dermal matrix as donor tissue instead of autogenous tissue significantly reduced the probability of swelling or bleeding following gingival augmentation procedures
2006 The International Journal of Periodontics & Restorative Dentistry	Histologic and Clinical Evaluation of an Allogenic Bone Matrix for the Treatment of Periodontal Osseous Defects	Human study; four subjects with chronic periodontitis evaluated for periodontal regeneration	After six months, two of the three teeth treated demonstrated regeneration of new bone, cementum and periodontal ligament
2005 Journal of Periodontology	Histologic Evaluation of Autogenous Connective Tissue and Acellular Dermal Matrix Grafts in Humans	Human study; four subjects randomly selected to receive connective tissue or acellular dermal matrix in order to compare histological results	Both the autogenous connective tissue and acellular dermal matrix grafts were well incorporated within the recipient tissues, with no effect on the keratinization or connective tissue organization of the overlying alveolar muscosa evident in either graft
2001 Journal of Periodontology	Clinical Evaluation of Acellular Allograft Dermis for the Treatment of Human Gingival Recession	Human study; evaluate acellular dermal matrix as an alternative for connective tissue	No significant differences between treatments were observed for any parameter, but global assessments by clinicians and patients suggested a more aesthetic favorable result with acellular dermal matrix

We sell our products to dental professionals and dental laboratories through a direct sales force of over 70 sales representatives in North America and through our sales offices in Australia, Chile, Germany, Spain and the United Kingdom. We also maintain a complementary network of over 50 third-party distributors outside of the United States, substantially all of which market our products on an exclusive basis. Through our direct sales force and our distribution network, we market our products in more than 80 countries worldwide. We intend to double our global direct sales force over the next four years through new hires and to expand our network of distributors in several key areas of the world where we currently do not sell our products. We expect to add distributors in many areas of the world including Scandinavia and Asia Pacific over the next few years. We are also waiting for regulatory clearance in several new markets, including Brazil and China, before we can actively sell our products in these markets. In addition, while we have recently received regulatory approval in Japan to sell some of our products, we are waiting for additional regulatory approvals to sell other products in this market.

Our sales representatives and distributors focus their marketing efforts on reaching a broad range of key dental professionals and dental institutions. Dental professionals include general dentists, who in the United States generally determine the type of treatment their patients receive and in the case of dental implants, perform only restorative work, and dental specialists, who in the United States generally place most implants.

We maintain a direct sales force to sell our products in the United States and Canada. As of May 31, 2010, our U.S. direct sales force consisted of 46 sales representatives and three regional sales directors and our Canadian sales force consisted of eight sales representatives. Our U.S. sales force is maturing, with more than 70% of our representatives having in excess of two years of experience with us. The three regional sales directors have a combined 27 years experience in the dental industry.

We sell our products in Europe through a combination of our sales offices located in Spain, the United Kingdom and Germany, which together have an aggregate of 20 direct sales representatives, and a network of four third-party distributors.

We sell our products in Asia through a network of third-party distributors, with Taiwan and South Korea being our top markets.

We sell our products throughout the rest of the world, including Eastern Europe, the Middle East and Latin America, through a combination of our sales offices located in Australia and Chile and a network of third-party distributors.

We have internal marketing capabilities that we leverage to create a unified brand that highlights the innovation of our products across all markets in which we sell our products. Our marketing efforts are coordinated through our corporate headquarters in Birmingham, Alabama and are based on input received from our direct sales representatives and distributors. We market our products through sponsorship of education and training programs targeted at the dental professionals, attendance at industry trade shows, articles in industry trade publications and print and web site advertisements. These marketing efforts are designed to increase the exposure of our products to dental professionals as well as to increase the awareness of dental professionals and the general public of the benefits of dental implants and our other products over alternative treatment options. We also participate in education and training programs to dental students so that they are educated on the benefits of dental implants and our products when they become dental professionals.

Our education and training programs leverage our affiliations with leading private and public dental educational centers. For example, we have affiliations with the Misch Institute, the Pikos Implant Institute, the Center for Advanced Dental Education, Implant Educators and several major universities. Through these and other affiliations, we offer education and training programs to dental professionals and dental students worldwide. For example, we participate in study clubs, which typically include one or more of our sales representatives or one of our distributors and a dental specialist and his or her referring general dentists. Our education and training programs promote the benefits of dental implants and our other products generally, educate people on the further benefits of our products over those of our competitors and train dental professionals and dental students on the use of our products. In 2009, we participated in over 525 domestic education and training events and expect to participate in over 550 domestic events in 2010. We also intend to increase marketing, education and training in international markets to assist our distributors.

In addition to our affiliation with the Misch Institute, Dr. Carl E. Misch provides a variety of consulting services to us and is engaged as our Chief Dental Director. Dr. Misch is a leader in the field of implant dentistry and the founder of the Misch Institute. He is one of our founders, a former member of our board of directors and a stockholder. Pursuant to our agreement with Dr. Misch, he receives an annual fee from us which is subject to increase annually.

We believe that our ongoing research and development efforts are essential to our success. We currently employ four engineers in our research and development department, and two members of our management team have advanced engineering degrees and assist our engineers in the design of our products. We also consult regularly with our Scientific Advisory Board, which is comprised of six highly respected individuals in the dental industry. In addition to our extensive internal testing capabilities, we also work closely with the clinical research group at a leading university's school of dentistry to review and test new technologies and product designs that we develop.

Our implants incorporate innovative technologies we developed or acquired, including our proprietary Laser-Lok platform technology and our enhanced biomechanically-engineered threads, which are designed to increase bone and tissue growth around the implant to improve clinical outcomes. We also have innovative designs in our prosthetic lines and surgical instrumentation to allow for safer and more efficient clinical procedures. Our research and development efforts focus primarily on continuing to refine our existing technologies and develop new, innovative technologies to expand our product portfolio.

We utilize third-party vendors to manufacture our products to minimize our capital investment, control costs and take advantage of the expertise of these third parties in the large scale production of dental implant devices. All of our key manufacturers and suppliers have experience working with medical devices, generally, and dental implants, specifically, and are subject to regular audits by us. Our key manufacturers and suppliers have a demonstrated record of compliance with U.S. and international regulatory requirements. All of our suppliers must comply with our internal requirements to be on our approved supplier list.

Prior to 2009, all the elements of our dental implant devices were manufactured by outside vendors according to our proprietary specifications. Beginning in 2009, we established limited manufacturing operations in our facility in Birmingham, Alabama. We believe internalizing a portion of our manufacturing needs will lead to more efficient research and development, improved margins and reduced lead times. Our facility has the capability to make most of our implant designs and related prosthetics. As of May 31, 2010, we had seven employees in our manufacturing operations and 4,200 square feet of our manufacturing facility was dedicated as an ISO 13485 certified manufacturing area. We purchase raw materials and other components of the products we manufacture at our facility from external suppliers. We expect to increase the manufacturing capabilities of this facility in 2010 and 2011 through equipment upgrades, the hiring of additional manufacturing personnel and the addition of a second production shift beginning in 2010.

We have a thorough system of quality control measures in place to ensure that our products are of the highest quality and fully comply with all FDA and foreign regulatory requirements. We inspect all raw materials and components before they are introduced into our manufacturing process.

In some instances, we purchase our products, components, materials and final assemblies of our products from single sources to maintain high quality and improved costs or to comply with regulatory requirements.

We rely on a combination of patent, trademark, copyright, trade secret and other intellectual property laws, as well as confidentiality, nondisclosure, license and other contractual agreements to protect our intellectual property rights. We believe that in order to have a competitive advantage, we must develop and maintain the proprietary aspects of our technologies.

As of May 31, 2010, we owned or licensed a total of 29 issued U.S. patents, one pending U.S. patent application, seven foreign patents, six pending foreign patent applications. We also owned or exclusively licensed nine issued U.S. trademarks and three foreign trademarks as of May 31, 2010. The subject matter of the issued patents and pending patent applications generally relate to, among other things, various aspects of implants, dental implants and methods, implant tools and bone and biologics. The U.S. and foreign patents that we own or license with respect to our Laser-Lok platform technology begin to expire in 2013. Although we have patent applications with respect to our Laser-Lok platform technology currently pending in certain foreign jurisdictions that, if issued, would expire in 2021, there can be no assurance that any such patents will ultimately issue, or if issued, that they will adequately protect our Laser-Lok platform technology.

We have exclusively licensed from the Hospital for Joint Diseases Orthopedic Institute, or HJD, at the New York University Langone Medical Center, certain patents and patent applications related to our proprietary Laser-Lok platform technology. The HJD license agreement is an exclusive license, with the right to sub-license, and is non-transferable, except upon the written consent of HJD. Under the HJD license agreement, we are required to pay a continuing royalty on dental and medical products and services covered by the agreement. The license agreement also requires us to pay certain minimum annual royalties on such products. The term of the license agreement extends on a country-by-country basis until 15 years from the date of first commercial sale in such country or until the expiration date of the last to expire of the patents which come under the agreement, whichever is later. HJD can terminate the license for cause, which includes our material breach or default in the performance or observance of any provisions of the agreement that has not been cured within 60 days after receipt of notification, our failure to make the minimum royalty payments required under the license agreement that has not been cured within 30 days after receipt of notification, or our becoming insolvent.

We have also exclusively licensed from UAB Research Foundation, or UABRF, certain patents and patent applications related to, among other things, methods of designing dental implants and resulting dental implant designs. The UABRF license agreement is an exclusive license, with right to sub-license, and is non-transferable, except upon the written consent of UABRF or in connection with the sale of all or substantially all of the business to which the UABRF license agreement relates. Under the UABRF license agreement, we are required to pay a continuing royalty on certain of our products, as well as certain minimum annual royalties on such products. The term of the license agreement extends until the expiration date of the last to expire patent of the patent rights coming under the agreement, or the abandonment of the last patent application that does not have a patent issued thereon. UABRF can terminate the license if we fail to perform any material term or covenant of the license that has not been cured within 90 days after receipt of notification.

We also expect to rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our intellectual property position. However, trade secrets are difficult to protect. We seek to protect the trade secrets in our proprietary technology and

processes, in part, by entering into confidentiality agreements with commercial partners, collaborators, employees, consultants, scientific advisors and other contractors and into invention assignment agreements with our employees and some of our commercial partners and consultants. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of the technologies that are developed.

We own or exclusively license nine U.S. trademark registrations corresponding to the following marks: Autotac, Bio-cera, BIOHORIZONS, BIOHORIZONS (with design), Laser-Lok, Lok-Screw, Mem-Lok, MinerOss and Osseo-Lok. We also own three foreign trademark registrations corresponding to the BioHorizons mark.

Our currently marketed products are, and any future products we commercialize will be, subject to intense competition. A small group of large diversified companies account for a significant portion of the dental implant market. These companies and many of our other competitors and potential competitors have substantially greater financial, technical and marketing resources than we do, and they may succeed in developing products that would render our products obsolete or noncompetitive. In addition, many of these competitors have significantly longer operating histories and established reputations than we do in their respective fields. In addition, due to the relatively low costs and regulatory barriers of entering our markets, there are an increasing number of smaller companies that sell only a limited number of dental implant products. Therefore, the size and number of our competitors vary by type of product and from one sales region to another. Our ability to compete successfully will depend on our ability to make available to our customers competitively priced, proprietary products that reach the market in a timely manner that address clinical and aesthetic needs better than competing products in the dental implant industry. Because of the size and growth characteristics of our markets, we anticipate that companies will continue to dedicate significant resources to developing competing products. In addition, we need to continue to educate dental professionals, dental students and the general public on the benefits of dental implants over alternative

treatments in order to increase the penetration rate of dental implants into the tooth replacement market.

Our sale of dental implant technologies, which includes our line of implants, abutments and associated tools, primarily competes with the products offered by Nobel Biocare Holding AG, Straumann Holding AG, Biomet 3i (a subsidiary of Biomet, Inc.), Astra Tech AB (a subsidiary of AstraZeneca Group), Zimmer Holdings, Inc. and DENTSPLY International Inc. These companies all offer a wide range of dental implant solutions and all of them have larger sales channels and financial resources than we do.

Our sale of regenerative solutions, which includes our AlloDerm® Tissue Matrix products and regenerative specialty instruments, primarily competes with the products offered by Straumann Holding AG, Zimmer Holdings, Inc., Osteohealth Company (a division of Luitpold Pharmaceuticals, Inc., which is a group company of Daiichi Sankyo Co., Ltd.) and DENTSPLY International Inc. These companies all offer a wide range of regenerative solutions and some of them have larger sales channels and financial resources than we do.

Governmental authorities in the United States, at the federal, state and local levels, and other countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution, marketing and export and import of products such as those we are developing. Failure to obtain approval to market our products under development and to meet the ongoing requirements of these regulatory authorities could prevent us from marketing and continuing to market our products.

In the United States, before a new medical device can be marketed, its manufacturer must either obtain marketing clearance through a premarket notification under Section 510(k) of the Federal Food, Drug and Cosmetic Act or marketing approval of a premarket approval application, or PMA. User fees, which increase each year and which are specific for the type of submission that is made, must be paid to the FDA at the time that the 510(k) or PMA is submitted. The information that must be submitted to the FDA in order to obtain clearance or approval to market a new medical device varies depending on how the medical device is classified by the FDA. Medical devices are classified into one of three classes on the basis of the controls deemed by the FDA to be necessary to reasonably ensure their safety and effectiveness. Class I devices are subject to general controls, including labeling, premarket notification and adherence to the quality systems regulation, or QSR, which sets forth device-specific good manufacturing practices. Class II devices are subject to general controls and special controls, including performance standards and post-market surveillance. Class III devices are subject to most of the previously identified requirements as well as to premarket approval.

A 510(k) premarket notification must demonstrate that the device in question is substantially equivalent to another legally marketed device, or predicate device, that does not require premarket approval. In evaluating the 510(k), the FDA must determine that (1) the device has the same intended use as the predicate device and (2) has the same technological characteristics as the predicate device, or (a) has different technological characteristics, (b) the data submitted establishes that the device is substantially equivalent and contains information, including clinical data if deemed necessary by the FDA, that demonstrates that the device is as safe and as effective as a legally marketed device and (c) the device does not raise different questions of safety and effectiveness than the predicate device. Most 510(k)s do not require clinical data for clearance, but a minority do require clinical data support. The FDA is supposed to issue a decision letter within 90 days if it has no additional questions

or send a first action letter requesting additional information within 75 days; however, the FDA does not always meet the applicable performance goal review time. In addition, requests for additional data, including clinical data, will increase the time necessary to review the notice. Most Class I devices and many Class II devices are exempt from the 510(k) requirement. If the FDA does not agree that the new device is substantially equivalent to the predicate device, the new device will be classified in Class III, and the manufacturer must submit a PMA or may, depending on the nature of the device, petition the FDA to make a risk-based determination of the new device and reclassify the new device in Class I or II. Modifications to a 510(k)-cleared medical device may require the submission of another 510(k) or a PMA if the changes could significantly affect the safety or effectiveness or constitute a major change in the intended use of the device.

Modifications to a 510(k)-cleared device frequently require the submission of a traditional 510(k), but modifications meeting certain conditions may be candidates for FDA review under a Special 510(k). If a device modification requires the submission of a 510(k), but the modification does not affect the intended use of the device or alter the fundamental scientific technology of the device, then summary information that results from the design control process associated with the cleared device can serve as the basis for clearing the application. A Special 510(k) allows a manufacturer to declare conformance to design controls without providing new data. When the modification involves a change in material, the nature of the "new" material will determine whether a traditional or Special 510(k) is necessary. However, if the "new" material is a type that has been used in other legally marketed devices within the same classification for the same intended use, a Special 510(k) is appropriate. Special 510(k)s are typically processed within 30 days of receipt.

The PMA process is more complex, costly and time consuming than the 510(k) clearance procedure. A PMA must be supported by more detailed scientific evidence than a 510(k) notice, including clinical data to demonstrate the safety and efficacy of the device. If the device is determined to present a "significant risk," the manufacturer may not begin a clinical trial until it submits an investigational device exemption, or IDE, to the FDA and obtains approval from the FDA. Such clinical trials are also subject to the review, approval and oversight of an institutional review board, or IRB, at each institution at which the clinical trial will be performed. The clinical trials must be conducted in accordance with applicable regulations, including but not limited to the FDA's IDE regulations. Upon completion of the clinical trials, and assuming that the results indicate that the product is safe and effective for its intended use, the manufacturer will then submit a PMA. The FDA has 45 days after a PMA is submitted to determine whether it is sufficiently complete to permit a substantive review. If the PMA is complete, the FDA will file the PMA. The FDA is subject to performance goal review times for PMAs and may issue a decision letter as a first action on a PMA within 180 days of filing, but if it has questions, it will likely issue a first major deficiency letter within 150 days. It may also refer the PMA to an FDA advisory committee for additional review, and will conduct a preapproval inspection of the manufacturing facility to ensure compliance with the QSR, either of which could extend the 180 day target for a response. The FDA may also inspect the investigational sites to ensure compliance with the IDE and other applicable regulations governing the conduct of the trial. While the FDA's ability to meet its performance goals has generally improved during the past few years, it may not meet these goals in the future. A PMA can take several years to complete and there is no assurance that any submitted PMA will ever be approved. Even when approved, the FDA may limit the indication for which the medical device may be marketed or to whom it may be sold. In addition, the FDA may request additional information or request the performance of additional clinical studies as a condition of approval or after the PMA is approved. Changes to the device or its manufacturing process may require the prior approval of a supplemental PMA.

After a device is placed on the market, numerous regulatory requirements apply. These include:

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled or unannounced inspections by the FDA, and these inspections may include the manufacturing facilities of our subcontractors.

International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA approval, and the requirements may differ.

Canada. In Canada, medical devices must be approved and issued a device license by Health Canada-Santé Canada, or HC, prior to importation and commercial sale in Canada. In addition, the medical device manufacturer must have a CAN/CSA-ISO 13485:03 quality management system registration with an HC-approved registrar. HC evaluates device license applications for compliance with safety and efficacy requirements under Canadian regulations, which are generally in line with those in the United States and the European Union and similarly based upon classifications according to risk (Class I being the lowest risk, Class IV the highest). Review periods for device license applications are also generally in line with those in the United States, but also as in the United States registration time can be considerably extended in certain circumstances. We typically apply for a new device license in Canada subsequent to obtaining 501(k) clearance from the FDA in order to respond to and resolve any FDA review delays. This is in anticipation of related delays that would likely be raised during the HC review because of the similarities in the regulatory schemes in Canada and the United States.

The EU Notified Body used by us, Intertek-AMTAC, is also an HC-approved registrar for CAN/CSA-ISO 13485:03 quality management system registration and so serves in that capacity for us in Canada. Intertek-AMTAC conducts an annual on-site audit of our quality management system concurrent with the annual audit for EU registration compliance discussed below.

Europe. In the European Economic Area, or EEA, which is composed of the 27 Member States of the European Union, or E.U., plus Liechtenstein, Norway and Iceland, our medical devices must comply with the essential requirements of the E.U. Medical Devices Directive, or MDD, which sets out the basic regulatory framework applicable to medical devices in the EEA. In addition, the E.U. has adopted other directives and standards regulating the design, manufacture, clinical trials, labeling and adverse event reporting for medical devices. There are national bodies known as Competent Authorities in each member state that oversee the implementation of the MDD and other relevant directives within their jurisdiction.

A device that complies with the requirements of a relevant directive will be entitled to a certificate of Conformité Européenne, or CE mark, indicating that the device conforms to the essential requirements of the applicable directives and, accordingly, can be commercially distributed throughout the EEA, although actual implementation of these directives may vary on a country-by-country basis. The method for satisfying the requirements for a CE mark vary according to the nature of the device, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a "Notified Body." Devices are classified in accordance with their perceived risks, similarly to the U.S. system. The class of a product determines the requirements to be fulfilled before a CE mark can be placed on a product. Conformity assessments for our products are carried out as required by the MDD. Each member state can appoint Notified Bodies within its jurisdiction. If a Notified Body of one member state has issued a Certificat de Conformite, the device can be sold throughout the EEA without further conformance tests being required in other member states. We use the EU Notified Body Intertek-AMTAC, to assess our products.

Other International Regulation. International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA approval, and the requirements may differ. For example, the primary regulatory authority with respect to medical devices in Europe is that of the European Union. Other countries, such as Switzerland, have voluntarily adopted laws and regulations that mirror those of the European Union with respect to medical devices. The European Union has adopted numerous directives and standards regulating the design, manufacture, clinical trials, labeling and adverse event reporting for medical devices. Devices that comply with the requirements of a relevant directive will be entitled to bear CE conformity marking, indicating that the device conforms to the essential requirements of the applicable directives and,

accordingly, can be commercially distributed throughout the European Union, although actual implementation of these directives may vary on a country-by-country basis. The method of assessing conformity varies depending on the class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a "Notified Body." This third-party assessment may consist of an audit of the manufacturer's quality system and specific testing of the manufacturer's product. An assessment by a Notified Body in one country within the European Union is required in order for a manufacturer to distribute the product commercially throughout the European Union.

In the United States, some of our biologics products, including Grafton DBM and Mem-Lok, are regulated by the FDA as medical devices while other tissue-based products are regulated by the FDA as human tissue-based products under section 361 of the Public Health Service Act. Tissue banking activities and tissue-based and other products are regulated in virtually all countries in which we operate. The regulatory schemes and specific requirements for tissue-based products and tissue banking activities vary from country to country. There are no common or harmonized regulatory approvals or programs for these products and activities.

In addition, suppliers and processors of allograft bone tissue, which is used in some of the biologics products that we sell as a distributor for third parties must comply with GTPs, which govern the methods used in and the facilities and controls used for the recovery and processing of human cell tissue and cellular and tissue-based products, record-keeping and the establishment of a quality program.

In the United States, the procurement and transplantation of human tissue is subject to federal law pursuant to NOTA, which prohibits the purchase and sale of human organs used in human transplantation, including bone and related tissue, for "valuable consideration." NOTA permits reasonable payments associated with the removal, transportation, processing, preservation, quality control, implantation and storage of human tissue. The procurement of human tissue is also subject to state anatomical gift acts and some states have statutes similar to NOTA. In addition, some states require that tissue processors be licensed by that state. While we do not harvest or process human tissue, nor do we contract with tissue banks to do so, some of the biologics products that we sell as a distributor for third parties include harvested human tissue, and therefore certain of our suppliers of biologics products must abide by the terms of NOTA and provide by the rules and licensing requirements of certain states.

Health Insurance Portability and Accountability Act of 1996 and other Privacy Laws

The Health Insurance Portability and Accountability Act of 1996, or HIPAA, establishes privacy and security standards for the protection of health information that is used and disclosed by certain healthcare organizations, or "Covered Entities." Covered Entities are health plans, health care clearing houses and health care providers who conduct certain health care transactions electronically. On February 17, 2009, Congress enacted Subtitle D of the Health Information Technology for Economic and Clinical Health Act, or HITECH, provisions of the American Recovery and Reinvestment Act of 2009. HITECH amends HIPAA and, among other things, expands and strengthens HIPAA enforcement, imposes new penalties for noncompliance and establishes new breach notification requirements for Covered Entities and their "business associates." "Business associates" are third parties that require protected health information, or PHI, in order to provide services to Covered Entities. Under HITECH, business associates are responsible for compliance with all of HIPAA's security standards and portions of the HIPAA privacy rule.

Many states have patient confidentiality and data breach laws that are more restrictive than HIPAA and that could impose additional obligations on our customers and also on our company with regard to the use and disclosure of patient information and personal data.

We may, from time to time, receive PHI or personal data in the course of operating our business. Accordingly, we have made, and will continue to make, a good faith effort to ensure that we comply with applicable law, and that we operate in such a way that permits our customers to comply with law. There can be no assurance that we will be able to conform all of our operations to such requirements in a timely manner, or at all. The failure to do so could subject us to penalties and damages, as well as civil liability and criminal sanctions. We also face significant reputational harm in the event that we are responsible for a breach of PHI or personal data that is publicly reported under the law. In addition, any failure to deliver services in a way that permits HIPAA or state privacy law compliance for our current and prospective customers could put us at a significant disadvantage in the marketplace. Accordingly, our business could be materially harmed by our failure to operate in a manner that facilitates compliance with any applicable HIPAA and state privacy law provisions.

We are subject to state and federal laws, rules and regulations pertaining to health care fraud and abuse, including prohibitions on giving and receiving kickbacks. Violations of these laws are punishable by criminal and civil sanctions, including fines and imprisonment, and violation of the federal Anti-Kickback Statute can result in exclusion from any federal health care program in which we participate, such as the Veterans Administration's health benefits program. We review our practices in an effort to ensure that they comply with these laws, rules and regulations, but these authorities are both broad and vague, and it is often difficult or impossible to determine precisely how they apply. Accordingly, there can be no assurance that we would be determined by a particular state agency or court to be in full compliance with such laws. Further, because of the far-reaching nature and wide discretion in enforcement of these laws, there can be no assurance that we would not be required to alter one or more of our practices to be deemed to be in compliance with these laws. There also can be no assurance that the occurrence of one or more violations of these laws, rules, or regulations would not result in a material adverse effect on our business, financial condition or results of operations.

Anti-Kickback Statute. The federal Anti-Kickback Statute prohibits persons from knowingly, willfully soliciting, receiving, offering or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, recommending or arranging for a good or service, for which payment may be made under a federal health care program, such as Medicare, Medicaid and the Veterans Administration's health benefits program. The definition of "remuneration" has been broadly interpreted to include anything of value, including such items as gifts, discounts, waiver of payments and providing anything at less than its fair market value.

The Anti-Kickback Statue is broad and prohibits many arrangements and practices that are lawful in businesses outside of the health care industry. Because the Anti-Kickback Statute is so broadly written and can be read to encompass well-accepted and beneficial business practices in the health care industry, Congress directed the Secretary of Health and Human Services to promulgate safe harbor regulations specifying those payment practices that will be immune from enforcement activities. These safe harbors set forth certain provisions that, if fully met, provide immunity from prosecution under the Anti-Kickback Statute. The failure of a transaction or arrangement to fit within a specific safe harbor does not necessarily mean that the transaction or arrangement is illegal or that prosecution under the Anti-Kickback Statute will be pursued. However, conduct and business arrangements that do not fully comply with at least one safe harbor may result in increased scrutiny by government

enforcement authorities such as the Office of Inspector General for the Department of Health and Human Services.

In addition to the Federal Anti-Kickback Statute, many states have their own kickback laws. Often, these laws closely follow the language of the federal law, although they do not always have the same scope, exceptions or safe harbors. In some states, these anti-kickback laws apply not only to payment made by a federal health care program but also with respect to other payers, including commercial insurance companies.

False Claims Laws. The federal False Claims Act prohibits any person from knowingly presenting, or causing to be presented, a false claim or knowingly making, or causing to made, a false statement to obtain payment from the federal government. When an entity is determined to have violated the False Claims Act, it must pay three times the actual damages sustained by the government, plus mandatory civil penalties of between $5,000 and $10,000 for each separate false claim and/or exclusion from participation in Medicare, Medicaid and other government health programs. Actions filed under the False Claims Act can be brought by any individual on behalf of the government, a "qui tam" action, and such individual, known as a "relator" or, more commonly, as a "whistleblower," may share in any amounts paid by the entity to the government in fines or settlement.

In addition, certain states have enacted laws modeled after the federal False Claims Act. Many of these state laws apply where a claim is submitted to any third-party payor and not merely a federal health care program. Actions filed under such state laws typically can be brought by any individual on behalf of the government, and such an individual usually may share in any amounts paid by the entity to the government in fines or settlement. Violations of such state laws can result in the imposition of substantial financial penalties.

HIPAA created two new federal crimes: health care fraud and false statements relating to health care matters. The health care fraud statute prohibits knowingly and willfully executing a scheme to defraud any health care benefit program, including private third-party payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government sponsored programs. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. A violation of this statute is a felony and may result in fines or imprisonment.

State Self-Referral Bans. Many states impose a ban on self-referrals by physicians, which may include dental professionals. These laws, which vary from state to state, generally prohibit a physician from making a referral to a health care provider or supplier in which the physician or an immediate family member has an investment or other financial interest, although, in some states, physicians may avoid a violation by disclosing the investment or other financial interest to patients prior to ordering the items or services. Violation can result in disciplinary action against the physician, up to including revocation of licensure, as well as fines and imprisonment for both the physician and the health care provider or supplier. We review our practices to ensure compliance with applicable state self-referral bans, but these laws are both broad and vague, and it is often difficult or impossible to determine precisely how these laws will be enforced, or even if they apply to the health care provider or supplier that receives the referral. Accordingly, there can be no assurance that we would be determined by a particular state agency or court to be in full compliance with such laws.

State Reporting Laws. In recent years, several states have enacted legislation requiring pharmaceutical and medical device companies to establish marketing compliance programs with respect to interactions with health care providers and/or make reports to a designated state agency or otherwise publicly

disclose information related to, among other things, transfers of value to health care providers. Many of these requirements are new and uncertain, and the penalties for failure to comply are unclear.

Because we do not submit claims for our products to third-party payors in the United States, our U.S. operations are typically not affected by third-party coverage and reimbursement.

In international markets, reimbursement and healthcare payment systems vary significantly by country. There can be no assurance that our products will be considered cost-effective by third-party payors, that reimbursement will continue to be available or, if available, that the third-party payors' reimbursement policies will not adversely affect our ability to sell our products profitably.

As of May 31, 2010, we had approximately 244 full-time employees employed by BIS. We believe that our relations with our employees are good.

We lease approximately 44,000 square feet of manufacturing, laboratory and office space in Birmingham, Alabama. This lease expires in November 2014.

From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. Except as described below, no legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business or financial condition.

There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to us.

In October 2009, a complaint was filed against us by Jack T. Krauser in the Circuit Court of the 15th Judicial Circuit for Palm Beach County, Florida. In April 2010, the complaint was removed to the U.S. Federal District Court for the Southern District of Florida, where it remains pending. In the complaint, Dr. Krauser alleges that we are in default under a settlement agreement entered into by our Bio-Lok subsidiary and Dr. Krauser for, among other things, failing to make certain royalty payments due to Dr. Krauser under the settlement agreement. The settlement agreement expired on February 11, 2007. Dr. Krauser is seeking a declaratory judgment that, among other things, we are in default under the settlement agreement and that Dr. Krauser is an owner of certain of our patents and our tapered internal implants and corresponding 510(k) applications. On May 6, 2010, we filed a motion to dismiss the complaint on multiple grounds and on May 24, 2010 Dr. Krauser submitted a Memorandum of Law in opposition to our motion to dismiss. On June 14, 2010, we filed a Reply Memorandum which is currently under consideration by the court. We believe that the allegations contained in the complaint are false, and we plan to vigorously defend ourselves in this action.

The following table sets forth certain information concerning our executive officers and directors of BioHorizons, Inc. as of June 15, 2010:


Name	Age	Position
Executive Officers
R. Steven Boggan	46	President, Chief Executive Officer and Director
David A. Wall	52	Executive Vice President and Chief Financial Officer
Kendyl D. Lowe	38	Executive Vice President and Chief Accounting Officer
J. Todd Strong	42	Executive Vice President and Chief Operating Officer
Clark M. Barousse	45	Senior Vice President, Global Marketing
David P. Dutil	42	Senior Vice President and General Counsel
Non-Employee Directors
Mortimer Berkowitz III	56	Chairman of the Board
John J. Chopack, Jr.	35	Director
Tom C. Davis	62	Director
John H. Foster	68	Director
David J. Hogan	70	Director
Siri S. Marshall	61	Director

The biographies of each of the directors below contain information regarding each person's service as a director, business experience, public company director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the board of directors to conclude that the person should serve as a director of BioHorizons, Inc. as of the date of this prospectus.

R. Steven Boggan joined BIS in 1995 as an engineer and was promoted to the position of President in 1997 and President and Chief Executive Officer in 1999. He has been the President, Chief Executive Officer and has served on the board of directors of BioHorizons, Inc. since August 2006 and the board of directors of BIS since 1999. Mr. Boggan was employed in the Research and Development Department of Dow Corning Wright and Wright Medical Technology from 1989 until 1995. Mr. Boggan received a B.S. in Biological Engineering from Mississippi State University, an M.S. in Biomedical Engineering from the University of Alabama at Birmingham and an M.B.A. from the University of Memphis in 1995. Mr. Boggan was named one of the 100 most notable people in the medical device industry by Medical Device & Diagnostic Industry magazine in 2008.

Our board of directors concluded that Mr. Boggan should serve as a director of BioHorizons, Inc. as of the date of this prospectus because of his experience in the medical technology industry and his leadership experience, skill and familiarity with our business gained from 15 years of service with us. In addition to his experience leading our company, and Mr. Boggan brings an in-depth knowledge of the issues facing our company and our industry as a result of his experience and engineering background.

David A. Wall has been the Executive Vice President and Chief Financial Officer of BioHorizons, Inc. and BIS since June 2010. From January 2009 to December 2009, Mr. Wall was interim Chief Financial Officer for Harlan Laboratories, Inc., a provider of pre-clinical products and services in the life sciences industry. From October 2008 to January 2009, he served as interim Chief Financial Officer of Voice Construction Ltd., a civil construction company. From January 2005 to December 2007, Mr. Wall was the Chief Financial Officer and Vice President, Finance of Altra Holdings, an international manufacturer of power transmission products. Voice Construction Ltd., Harlan Laboratories, Inc. and Altra Holdings are current or former portfolio companies of Genstar Capital L.P. From 2000 to 2004, Mr. Wall was the Chief Financial Officer of Berman Industries, a manufacturer and distributor of portable lighting products. From 1994 to 2000, Mr. Wall was the Chief Financial Officer of DoALL Company, a manufacturer and distributor of machine tools and industrial supplies. Mr. Wall is a Certified Public Accountant and holds a B.S. in Accounting from the University of Illinois and an M.B.A. in Finance from the University of Chicago.

Kendyl D. Lowe has been the Executive Vice President and Chief Accounting Officer of BioHorizons, Inc. and BIS since June 2010. Prior to that, she served as Chief Financial Officer and Executive Vice President of Finance of BioHorizons, Inc. and BIS since March 2009, Vice President of Finance and Accounting of BIS from March 2008 to March 2009 and Controller of BIS from November 2004 to March 2008. Her experience includes financial software implementations and conversions for acquired entities, corporate cash and debt management, and centralizing foreign subsidiary accounting functions while optimizing internal controls. Before joining us, Ms. Lowe served in controller and other financial management positions of increasing responsibility with Southern Biotechnology Associates, NCP Solutions and HealthPartners Southeast. She began her career at Coopers & Lybrand (now PriceWaterhouseCoopers), spending three years in both staff and senior audit roles. Ms. Lowe received her B.S. in Accounting from Samford University and an M.B.A. in Accountancy from the University of Alabama. She is a Certified Public Accountant (inactive).

J. Todd Strong has been the Executive Vice President and Chief Operating Officer of BIS since September 2006 and has been the Chief Operating Officer of BioHorizons, Inc. since August 2006. Prior to that, Mr. Strong was the Executive Vice President of BIS from August 2005 to September 2006, the Vice President, Research and Development of BIS from August 2002 to August 2005, the Director, Research and Development of BIS from March 2000 to August 2002 and the Director, Engineering of BIS from January 1997 to March 2000. He has 17 years experience in the dental implant industry. Mr. Strong has led us in our original design efforts and continues to be a vital contributor to our research and development team with his years of experience. He is responsible for nine of the key patents that are currently owned by or licensed to us. He currently runs our worldwide operations along with manufacturing, information technology and customer care. Mr. Strong received his B.S. in Mechanical Engineering from Auburn University, and an M.S. in Biomedical Engineering from the University of Alabama at Birmingham.

Clark M. Barousse joined BIS in June 2008 as the Senior Vice President, Global Marketing and was named Senior Vice President of Global Sales and Marketing of BIS in December 2009. From June 2006 to June 2008, Mr. Barousse served as Vice President of Global Marketing at Smith & Nephew, an orthopedics company, and from June 2002 to June 2006, he served in a number of roles, including as Vice President of Research & Development, at Johnson & Johnson. Mr. Barousse's 20 plus years of experience brought him from a career in the banking and financial services industry to sales with American Express, then sales, marketing and product development in the medical device industry with Deknatel Snowden Pencer, Genzyme, Johnson & Johnson and Smith & Nephew. His industry experience includes biotechnology, biologics and medical device (dental, cardiovascular, thoracic, plastic, general, neuro, and orthopedic surgeries). His concentration in sales and sales management domestically and internationally in marketing and business development lends a record of accelerated

sales and profit growth, market and product development, licensing, acquisitions, divestitures and business integration as well as branding and product positioning, M&A, market segmentation, strategy development and execution and distributor network development. Mr. Barousse received his B. A. from Hampden-Sydney College with a double major in economics and Spanish and an M.B.A. from Georgia State University.

David P. Dutil has been the Senior Vice President and General Counsel of BIS since February 2010. From February 2005 to February 2010, Mr. Dutil was Of Counsel and then a Member in the Corporate Department in the Washington, D.C. office of the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. While at Mintz Levin, Mr. Dutil provided counsel to a variety of private equity investors and companies. Mr. Dutil is admitted to practice law in the State of New York and the District of Columbia. Mr. Dutil received a B.A. from the University of Vermont and a J.D. from Fordham University School of Law where he was an Associate Editor of the Law Review.

Mortimer Berkowitz III has served as Chairman of the board of directors of BioHorizons, Inc. since March 2010, and also served as Chairman from August 2006 to June 2007. He has been a director of BioHorizons, Inc. since 2006. Mr. Berkowitz has served as a director of BIS since August 2006. Mr. Berkowitz is a founder of HealthpointCapital and is currently a managing member of HGP, LLC and HGP II, LLC, which are the general partners of HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P., respectively, and President, a member of the Board of Managers and a managing director of HealthpointCapital, LLC. He has held the positions with HGP, LLC since its formation in August 2002 and with HGP II, LLC since its formation in October 2005. Mr. Berkowitz has held the positions of managing director and member of the Board of Managers of HealthpointCapital, LLC since its formation in July 2002 and the position of President of HealthpointCapital, LLC since February 2005. Prior to joining HealthpointCapital, LLC, Mr. Berkowitz was managing director and co-founder of BPI Capital Partners, LLC, a private equity firm founded in 1990. Prior to 1990, Mr. Berkowitz spent 11 years in the investment banking industry with Goldman, Sachs & Co., Lehman Brothers Incorporated and Merrill Lynch & Co. He has been Chairman of the board of directors of Alphatec Holdings, Inc. since 2007, a Director of DTI, Inc. and on the Leadership Council of the Harvard School of Public Health. He received a B.A. from Harvard College and an M.B.A. from the Columbia Graduate School of Business.

Our board of directors concluded that Mr. Berkowitz should serve as a director of BioHorizons, Inc. and be Chairman of the board of directors of BioHorizons, Inc. as of the date of this prospectus because his investment and financial expertise, his experience as a director of both public and private companies and his experience in the medical device industry contribute to the breadth of knowledge of our board.

John J. Chopack, Jr. has served on the board of directors of BioHorizons, Inc. and BIS since February 2008. Mr. Chopack is currently a managing member of HGP, LLC and HGP II, LLC, which are the general partners of HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P., respectively, and a managing director of HealthpointCapital, LLC. He has held the positions with HGP, LLC since April 2005 and HGP II, LLC since its formation in October 2005. Mr. Chopack has held various positions with HealthpointCapital, LLC since its formation in July 2002. Mr. Chopack is an experienced professional in the orthopedic device industry. In addition to his private equity investment experience at HealthpointCapital, his direct orthopedic industry experience includes being a Sales Associate in orthopedic products for an independent distributor representing Wright Medical Group and Encore Medical. Prior to joining HealthpointCapital, Mr. Chopack worked on Wall Street as an associate medical device analyst focused on the orthopedic sector. Mr. Chopack was a primary team member of HealthpointCapital's Nexa Orthopedics Inc. investment. He is a member of the board

of directors of our wholly-owned indirect subsidiary Orthogen LLC. Mr. Chopack received a B.A. from Lafayette College and an M.B.A. from Fordham University.

Our board of directors concluded that Mr. Chopack should serve as a director of BioHorizons, Inc. as of the date of this prospectus because he has substantial financial expertise in the orthopedic device industry and experience as a director of other private company boards. Our board of directors values Mr. Chopack's financial and orthopedic industry experience.

Tom C. Davis has served on the board of directors of BioHorizons, Inc. and BIS since February 2008. Mr. Davis has served as Co-Managing Partner for Crescent Special Situations Fund since July 2005. He also serves as Chief Executive Officer of The Concorde Group, a private investment firm, and has done so since March 2001. In that capacity, Mr. Davis has made equity investments in a variety of small and mid-cap companies. Mr. Davis was previously the Managing Partner and head of Credit Suisse First Boston's (formerly Donaldson, Lufkin & Jenrette) investment banking and corporate finance activities in the Southwest from March 1984 to February 2001. Mr. Davis was responsible for the merger and acquisition activity as well as the equity and leverage finance activity which the firm undertook in the Southwest. In this capacity, Mr. Davis worked with several large private equity firms as clients, in addition to a variety of public and private companies in the Southwest. Mr. Davis serves as a director of the following companies, each of which is publicly traded: Deans Foods Company, Westwood Holdings Group, Inc. and Affirmative Insurance Holdings, Inc. Mr. Davis received a B.A.E. in Aerospace Engineering from Georgia Institute of Technology and an M.B.A. from Harvard Business School.

Our board of directors concluded that Mr. Davis should serve as a director of BioHorizons, Inc. as of the date of this prospectus because of his expertise within the financial services industry as well as his experience with public and private company oversight through his other directorships. Our board of directors believes his experience brings invaluable strategic insight into the area of finance.

John H. Foster has served on the board of directors of BioHorizons, Inc. and BIS since August 2006. Mr. Foster is currently a managing member of HGP, LLC and HGP II, LLC, which are the general partners of HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P., respectively, and Chairman, a member of the Board of Managers and a managing director of HealthpointCapital, LLC. He has held the positions with HGP, LLC since its formation in August 2002 and HGP II, LLC since its formation in October 2005. Mr. Foster has held the positions of Chairman, managing director and member of the Board of Managers of HealthpointCapital, LLC since its formation in July 2002. Mr. Foster is a 35 year veteran of private equity investing. As a successful entrepreneur and executive, Mr. Foster founded two private equity firms: Foster Management Company in 1972 and HealthpointCapital in 2002. From 1980 to 1997, he served as Chairman and chief executive officer of Novacare, Inc. of Foster Medical Corporation. He is currently a member of the board of directors of Alphatec Holdings, Inc. and Chairman of the Board of DTI, Inc. Mr. Foster is on the Dean's Council at the Harvard School of Public Health, a Trustee of the Burke Rehabilitation Hospital and formerly a board member of Avon, Inc. and Corning Incorporated. Mr. Foster received a B.A. from Williams College and an M.B.A. from Amos Tuck School at Dartmouth.

Our board of directors concluded that Mr. Foster should serve as a director of BioHorizons, Inc. as of the date of this prospectus because of his investment and financial expertise, as well as his entrepreneurial experience of founding and building successful businesses. His role as the chief executive of a successful healthcare company also demonstrated Mr. Foster's leadership and business acumen.

David J. Hogan has served on the board of directors of BioHorizons, Inc. and BIS since August 2007. Mr. Hogan is the Senior Managing Director at Mannheim LLC, and has served as such since September 2001. Previously, he was employed at Bluestone Capital Partners from 1996 to 2001, The Gefinor Group from 1992 to 1996, Saudi International Bank, an affiliate of JP Morgan, from 1983 to 1992, and Citigroup from 1976 to 1983. Mr. Hogan has over 30 years experience as a principal and as an advisor in the financial markets, including private equity, mergers and acquisitions, and leveraged buyouts. He is a member of the board of directors of Alger Associates, Inc. and a member of the Board of Managers of Springer Publishing LLC and Demos Medical Publishing LLC. Mr. Hogan is a member of the Limited Partners Advisory Committee at HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P. He is also a member of the Limited Partners Committee of Telegraph Hill Partners. Mr. Hogan is a member of the board of directors of the Friends of the Heidelberg University Center for American Studies and is a member of the Board of Trustees of Juniata College where he chairs the Investment Committee. He holds a B.A. degree in Economics from Juniata College.

Our board of directors concluded that Mr. Hogan should serve as a director of BioHorizons, Inc. as of the date of this prospectus because he has over 30 years of experience in the financial services industry as well as experience as a director of other private company boards. Our board of directors values Mr. Hogan's extensive financial expertise.

Siri S. Marshall has served on the board of directors of BioHorizons, Inc. and BIS since April 2010. Ms. Marshall is the former Senior Vice President, General Counsel and Secretary and Chief Governance and Compliance Officer at General Mills, Inc., having retired from those positions in January 2008. Prior to joining General Mills in 1994, Ms. Marshall was Senior Vice President, General Counsel and Secretary of Avon Products, Inc. In the past five years, Ms. Marshall has served as a director of the following companies, each of which is publicly traded: Alphatec Holdings, Inc., Ameriprise Financial, Inc. (Presiding Director) and Equifax, Inc. Ms. Marshall is also a director of the Yale Center for the Study of Corporate Law, a Distinguished Advisor to the Strauss Institute for Dispute Resolution and a Trustee of the Minneapolis Institute of Arts. She has also served as a member of The New York Stock Exchange Legal Advisory Committee. Ms. Marshall received her B.A. from Harvard College and her J.D. from Yale University.

Our board of directors concluded that Ms. Marshall should serve as a director of BioHorizons, Inc. as of the date of this prospectus because her experiences as a senior executive, General Counsel and director of publicly traded companies, and her regulatory and governance expertise bring valued insight to our board's strategic decisions and governance. In addition, as a new member of our board of directors, Ms. Marshall brings a fresh perspective regarding our company.

Our restated certificate of incorporation and restated bylaws, each of which will become effective completion of this offering, provide that the authorized number of directors may be changed only by resolution of the board of directors. We currently have seven directors.

Upon completion of this offering, HealthpointCapital will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a "controlled company" under The NASDAQ Stock Market corporate governance standards. As a controlled company, we do not have to

comply with certain corporate governance requirements of The NASDAQ Stock Market, including the requirements:

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of The NASDAQ Stock Market. In the event that we cease to be a controlled company, we will be required to comply with these provisions within the transition periods specified in the applicable rules and regulations of The NASDAQ Stock Market.

As a controlled company, however, we will not be exempt from the independence requirements for our audit committee, and we intend to comply with the applicable requirements of the Sarbanes-Oxley Act and The NASDAQ Stock Market rules with respect to our audit committee within the applicable time frame.

Upon completion of this offering, our board of directors will have an audit committee, a compensation committee and a nominating and governance committee. The composition and function of each of these committees are described below.

Audit Committee. Upon the completion of this offering, our audit committee will be comprised of (chairman), and . is not independent as defined in Rule 10A-3(b)(1) under the Exchange Act. Our board of directors has determined that is an audit committee financial expert, as defined by the rules of the SEC. Our audit committee is authorized to:

The applicable rules and regulations of the SEC and The NASDAQ Stock Market require us to have one independent audit committee member upon the listing of our common stock on The NASDAQ Global Market, a majority of independent directors within 90 days of the date of the completion of this offering and all independent audit committee members within one year of the date of the completion of this offering.

Compensation Committee. Upon completion of this offering, our compensation committee will be comprised of (chairman) and . Our compensation committee is authorized to:

Nominating and Governance Committee. Upon completion of this offering, our nominating and governance committee will be comprised of (chairman), and . Our nominating and governance committee is authorized to:

No member of our compensation committee has at any time been an employee of ours. None of our executive officers serves as a member of our board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

During the fiscal year ended December 31, 2009, our compensation committee consisted of Edward Austin, Mortimer Berkowitz III and John H. Foster. During the same period, we entered into certain transactions with HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P., two of our principal stockholders, which are identified below under the section titled "Certain Relationships and Related Party Transactions." Messrs. Berkowitz and Foster are managing members of HGP, LLC and HGP II, LLC, which are the general partners of HealthpointCapital Partners, L.P. and HealthpointCapital Partners II, L.P., respectively. Mr. Berkowitz is the President, a member of the Board of Managers and a managing director of HealthpointCapital, LLC, which has an ownership interest in HGP, LLC and HGP II, LLC. Mr. Foster is also a member of the Board of Managers and a managing director of HealthpointCapital, LLC.

Prior to the completion of the offering, we will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics will be available on our web site at www.biohorizons.com. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our web site.

The Delaware General Corporation Law authorizes corporations to limit or eliminate, subject to specified conditions, the personal liability of directors to corporations and their stockholders for monetary damages for breach of their fiduciary duties. Our existing certificate of incorporation and the restated certificate of incorporation to be effective upon the completion of this offering limits the liability of our directors to the fullest extent permitted by Delaware law.

We have obtained director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to us. Our restated certificate of incorporation and restated bylaws to be effective upon the completion of this offering also provide that we will indemnify and advance expenses to any of our directors and officers who, by reason of the fact that he or she is one of our officers or directors, is involved in a legal proceeding of any nature. We will repay certain expenses incurred by a director or officer in connection with any civil, criminal, administrative or investigative action or proceeding, including actions by us or in our name. Such indemnifiable expenses include, to the maximum extent permitted by law, attorney's fees, judgments, fines, settlement amounts and other expenses reasonably incurred in connection with legal proceedings. A director or officer will not receive indemnification if he or she is found not to have acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interest.

We intend to enter into agreements to indemnify our non-employee directors. These agreements will provide that we will, among other things, indemnify and advance expenses to our directors and officers for certain expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by us arising out of such person's services as our director or officer, or any other company or enterprise to which the person provides services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and officers.

Such limitation of liability and indemnification does not affect the availability of equitable remedies. In addition, we have been advised that in the opinion of the SEC, indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act and is therefore unenforceable.

There is no pending litigation or proceeding involving any of our directors, officers, employees or agents in which indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding that may result in a claim for such indemnification.

The following discussion and analysis of compensation arrangements of our named executive officers identified below for fiscal year ended December 31, 2009 should be read together with the compensation tables and related disclosures set forth below.

The primary objectives of the compensation committee of our board of directors with respect to its recommendations to our board of directors regarding executive compensation and our board of directors' review and approval of the compensation committee's recommendations are to:

Our focus is to tie short term cash and long-term equity incentives to the achievement of measurable corporate and individual performance goals and to align executives' incentives with stockholder value creation. To achieve these objectives, the compensation committee has developed and maintains a compensation plan that ties a substantial portion of our executives' overall compensation to financial and operational performance.

We seek to foster a performance-oriented culture, where individual performance is aligned with corporate objectives. Thus, company performance is the primary measure of success upon which we structure our compensation programs. We evaluate and reward our executive officers based on their contribution to the achievement of short and longer-term corporate goals. Individual and departmental performance is factored into compensation decisions as well for all of our named executive officers other than our Chief Executive Officer, Mr. Boggan.

Our compensation committee does not have formal policies for allocating compensation among salary, bonus, long-term incentives and other benefits. However, the compensation of our executive officers is based in part on the terms of employment agreements and offer letters we entered into with each of our executive officers, which set forth the initial base salaries and initial equity grants for our executive officers.

Compensation for our named executive officers is reviewed at least annually at the beginning of each fiscal year, and adjustments are made to reflect performance-based factors. The discussion below includes a review of compensation decisions for the year ended December 31, 2009 and through the date of this prospectus. During fiscal 2009, our named executive officers were Messrs. Boggan, Strong, Ross, Barousse and Mme. Lowe. All of these employees, with the exception of Mr. Ross, remained employed by us as executive officers at the end of fiscal 2009.

Our board of directors, based on the input and recommendations of the compensation committee:

Our compensation committee is appointed by our board of directors. The purpose of our compensation committee is to review our compensation practices and make recommendations to our board of directors with respect to compensation related decisions. The members of the compensation committee during 2009 were Edward Austin, Mortimer Berkowitz III and John H. Foster.

The compensation committee considers recommendations from Mr. Boggan, our Chief Executive Officer, in determining executive compensation for all of our executive officers. Mr. Boggan meets with the compensation committee and presents his recommendations for compensation changes. While Mr. Boggan's recommendations are given significant weight, the compensation committee makes the final determination as to what will be presented to the full board of directors for their review and approval. Mr. Boggan does not participate in determining his own compensation. In making his recommendations, Mr. Boggan receives input from our Human Resources Department and has access to third-party compensation surveys and compensation data of publicly-traded companies obtained from SEC filings. This information is also available to our compensation committee. However, because of the uniqueness of certain aspects of our business and management team, we do not benchmark against other companies, but certain public company data was used as one resource in determining executive compensation for 2009 and not as a standalone tool. None of our other executive officers participate in the compensation committee's discussions regarding executive compensation.

Our compensation committee has taken the following steps to ensure our approach to executive compensation and benefits and its recommendations to the board of directors are consistent with both our compensation philosophy and corporate governance guidelines:

In the future, our compensation committee may engage a compensation consulting firm to provide executive compensation advisory services. The committee would actively work with such firm to perform a peer group analysis, reviewing executive compensation arrangements primarily of publicly-traded medical device companies that are similarly situated, and produce a report and recommendations for the compensation committee's consideration.

Our board of directors makes final determinations with respect to compensation related matters based upon the input and recommendation of the compensation committee.

We chose to build our executive compensation approach around these elements because we believe they have been and will continue to be effective in achieving our overall objective of motivating and rewarding our key executives. It is our belief that in addition to base salaries and bonuses, equity-based awards are the primary compensation-related motivators in attracting and retaining qualified employees.

Base salary. Base salary is typically used to recognize the experience, skills, knowledge and responsibilities required of each executive officer, as well as competitive market conditions. When hiring executives, we consider the base salary of the individual at his or her prior employment and any unique personal circumstances that motivated the executive to leave that prior position and join our company. In addition, we consider the competitive market for corresponding positions within comparable geographic areas and industries.

The base salaries of our named executives are reviewed on an annual basis and adjustments are made to reflect performance-based factors, as well as competitive conditions.

Annual Cash Bonuses. Our Annual Cash Bonus Plan, or Bonus Plan, is designed to motivate and reward eligible employees for their contributions by making a portion of their cash compensation dependent upon performance. The Bonus Plan establishes the terms under which annual cash bonus compensation will be paid to our eligible employees, including all our named executive officers other than our Chief Executive Officer, Mr. Boggan. Cash bonuses effectively link individual contributions to overall business performance and encourage executives to increase stockholder value in both the short-term and long-term. The amount of cash incentive bonus payments to be awarded to all employees, including our named executive officers other than Mr. Boggan, depends upon the achievement of corporate and individual performance objectives. Our bonus plan is reviewed and approved by the board of directors based upon the recommendation of the compensation committee annually. It is designed to reward employees at a level commensurate with their ability to impact set targets.

Mr. Boggan's compensation is based upon his employment agreement which was signed in 2006, prior to the adoption of our current bonus plan. With the exception of his salary, the terms of that agreement have not changed. It has been our practice not to pay him more than 100% of his base salary in accordance with the terms of his employment agreement.

Equity-Based Incentives. Salaries and bonuses are intended to compensate our executive officers for short-term performance. In addition, we have adopted an equity-based incentive approach intended to reward longer-term performance and to help align the interests of our executive officers with those of

our stockholders. We believe that our corporate long-term performance is supported by the use of stock-based awards. Our equity compensation goals for our executive officers are based upon the following principles:

We believe long-term performance is achieved through an ownership culture that rewards performance by our executive officers through the use of equity incentives. Our equity incentive plans have been established to provide our employees, including our executive officers, with incentives to help align those employees' interests with the interests of our stockholders. Our equity incentive plans have provided the principal method for our executive officers to acquire equity interests in our Company.

Since 2007, we have only granted restricted stock and not options to our employees. Generally, grants of stock to all of our newly hired employees, including named executive officers, vest over a three-year period with one-third (¹/3) vesting on each anniversary of the grant date. The size and initial stock grant made to each executive officer upon joining us is primarily based on competitive conditions applicable to the executive officer's specific position and is set forth in the executive officer's employment agreement or offer letter from us. In addition, the compensation committee considers the number of shares owned by other executives in comparable positions within our company when making its recommendations to the board of directors.

Severance and Termination Benefits. Our board of directors, based on the recommendation of the compensation committee, agreed to severance packages for our named executive officers as part of the negotiations with each of these executive officers to secure his or her services. Our compensation committee recommended and the board of directors approved the severance packages based on their experience serving on boards of directors and compensation committees of companies of a similar size and stage of development to us and their familiarity with severance packages offered to executive officers of such companies. Based on this knowledge, experience and information, we believe that the respective severance periods and provision of medical and similar benefit programs during such severance periods are both reasonable and generally in line with severance packages negotiated with executive officers of similarly situated companies. In addition, pursuant to our restricted stock agreements with our executive officers, including our named executive officers, in the event of a change in control, as defined in our 2007 Executive, Director and Consultant Stock Plan, the vesting of outstanding restricted stock grants will accelerate in connection with a change in control, without regard to whether the executive officer terminates employment in connection with or following the change in control.

Other Benefits. We have a 401(k) plan in which substantially all of our employees are entitled to participate. Employees contribute their own funds, as salary deductions, on a pre-tax basis. Contributions may be made up to plan limits, subject to government limitations. The plan permits us to make matching contributions if we choose. Given the difficult economic conditions in 2009, in February 2009 we discontinued our 401(k) matching contribution at 100% of up to three percent of a participant's salary and at 50% of up to the next two percent of a participant's salary. In January 2010, we reinstated our matching contribution at 100% of up to three percent of a participant's salary.

We provide medical, dental, vision and life insurance, employee assistance plans and both short- and long-term disability, accidental death and dismemberment benefits to all full-time employees, including our executive officers. These benefits are available to all employees, subject to applicable laws. We believe these benefits are consistent with companies with which we compete for employees.

Salary. Base salaries for 2009 did not change from 2008, given the downturn in the economy, with the exception of Ms. Lowe. Upon her appointment to chief financial officer in March 2009, Ms. Lowe received a base salary increase from $130,000 to $190,000. Beginning April 1, 2009, employees, including named executive officers, received a salary reduction for the final three quarters of 2009. The salary reduction for each named executive officer was in excess of ten percent (10%) of base salary. Earnback of the salary reduction was based upon the company achieving significant improvements to earnings before interest, taxes, depreciation and amortization, or EBITDA, in an amount sufficient to generate positive cash flow which was calculated as cash flow from operations less capital expenditures (free cash flow). As we achieved these metrics in 2009, during the first quarter of 2010 our compensation committee recommended and our board of directors approved restoring the salary of each employee, including our named executive officers, to pre-reduction levels. In addition, the compensation committee recommended and our board of directors approved a payment to each of our employees, including our named executive officers, of the previously withheld salary reduction amount to make each employee whole for 2009.

Bonus Plan. Under the Bonus Plan, our named executive officers, other than Mr. Boggan and Mr. Ross, were eligible to receive an annual cash bonus for 2009 based on our achievement of certain financial targets established by our board of directors based upon the recommendation of our compensation committee as well as individual goals set by management. Individual goals for Ms. Lowe, Mr. Strong and Mr. Barousse were established by our chief executive officer, Mr. Boggan, and agreed upon by each of them.

The target bonus percentages under the Bonus Plan for Ms. Lowe, Mr. Strong and Mr. Barousse for 2009 were:

In 2009, 75% of the cash bonus target amount was tied to our corporate objectives. Twenty-five percent was tied to individual performance metrics which are job specific. There were five potential ratings for job performance and each had a corresponding percentage ranging from 0 to 125.

An employee who receives an Exceptional rating (5) exceeds all objectives and is extremely capable and versatile in adjusting priorities to current needs. An employee who receives a Distinguished rating (4) consistently meets and often exceeds objectives with performance well above the competent level. An employee who receives a Successful rating (3) consistently meets and occasionally exceeds

objectives. An employee who receives a Needs Improvement (2) usually meets objectives and has significant areas for improvement noted in his or her appraisal. An employee who receives an Unacceptable rating (1) does not meet the objectives and falls short of required performance.

For 2009, our corporate objective was to create significant improvements in EBITDA in an amount sufficient to generate positive free cash flow. The Company met 100% of the corporate objective.

For 2009, the individual goals for our named executive officers were as follows:

R. Steven Boggan — As written in Mr. Boggan's employment agreement, during each year of his employment he is eligible to be paid a cash bonus in an amount up to 100% of his annual base salary based upon achievement of performance objectives approved from time to time by the board of directors. In 2009, Mr. Boggan's performance objectives were solely tied to the corporate performance objective cited above. As such, 100% of his bonus was based upon the corporate objective under our Bonus Plan, which objective was achieved for 2009.

Kendyl D. Lowe — Ms. Lowe's individual performance goals included the management for all our accounting and finance functions including financial policies and procedures for the accurate and consistent recording and reporting of all financial matters including budgeting, external financial reporting, internal financial reporting, restricted grant analysis, project cost accounting, project and operational performance analysis and providing periodic reports to our board of directors. Significant achievements for Ms. Lowe's departments were the successful reduction of receivables by distributors, improvement of cash flow to record levels, reducing the close of month end books from 30 to 10 days and the restructuring of the accounting and finance department which included creating a financial planning and analysis group. Ms. Lowe's performance received a rating of four and she received 115% of the individual portion of her bonus.

J. Todd Strong — Mr. Strong's individual performance goals included management of research and development including identification of new products, timely product development, oversight of research activities and inventory management. Additionally, Mr. Strong was responsible for the management of the information technology, customer care and operations functions as well as the effective integration of our acquisitions. Significant achievements in Mr. Strong's departments included the establishment of an on-site manufacturing department, inventory reduction of over $3 million, supply chain optimization, and product development of innovative technology. Mr. Strong's performance received a rating of four and he received 115% of the individual portion of his bonus opportunity.

Clark M. Barousse — Mr. Barousse's individual performance goals included management of the marketing function including product positioning, brand awareness, customer analysis and segmenting, domestic and international pricing, competitive assessment and execution of overall marketing strategy. Additionally, he was responsible for the management of domestic and international sales including channel development, sales training, development of sales management, customer interaction and sales tools. Significant achievements for Mr. Barousse's departments included achieving sales goals, driving growth in a down market, increasing Laser-Lok market penetration and successfully restructuring our domestic sales team with minimal turnover. Mr. Barousse's performance received a rating of four and he received 115% of the individual portion of his bonus opportunity.

William Ross — Mr. Ross was not eligible to participate in the Bonus Plan as he left the company in February 2009.

In 2009, Ms. Lowe was granted 20,000 shares of Class B common stock in connection with her appointment to chief financial officer.

In establishing our 2010 base salaries for our named executive officers, our compensation committee took a number of factors into account, including the executive's seniority, position and functional role and level of responsibility. On January 1, 2010, compensation for our named executive officers was adjusted as follows:

R. Steven Boggan — Mr. Boggan did not receive an increase in his base salary in 2010.

Kendyl D. Lowe — Ms. Lowe received an 8% increase from $190,000 to $205,000.

J. Todd Strong — Mr. Strong received a 2.7% increase from $275,000 to $282,500.

Clark M. Barousse — Mr. Barousse received a 2.7% increase from $275,000 to $282,500.

In February 2010, Mr. Dutil was hired as our Senior Vice President and General Counsel with a base salary of $240,000 and a target bonus of 35%. Pursuant to the terms of a severance agreement entered into with Mr. Dutil, dated March 18, 2010, in the event we terminate his employment without cause or within six months prior to or after a change in control, Mr. Dutil will receive severance in the amount equal to his base salary then in effect in the form of salary continuation for six months. Pursuant to the terms of his severance agreement, Mr. Dutil has agreed not to compete with us during his employment and for a period of one year after the termination of his employment. In addition, Mr. Dutil has agreed that during his employment and for a period of one year after the termination of his employment, he will not solicit our employees to terminate their employment with us and will not solicit the business or patronage of any of our current or prospective clients or customers. Mr. Dutil also has agreed to refrain from disclosing any of our proprietary information received during the course of employment.

In June 2010, Mr. Wall was hired as our Executive Vice President and Chief Financial Officer.

The following table sets forth the compensation paid or accrued during the fiscal year ended December 31, 2009 to (1) our chief executive officer, (2) our former chief financial officers and (3) our two additional executive officers who were employed by us on December 31, 2009. We refer to these officers as our named executive officers.

Name and Principal Position			Salary ($)		Stock Awards ($)⁽¹⁾		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)⁽²⁾			Total ($)

R. Steven Boggan,		2009	$	349,865	$	—	$	350,000	$	1,680		$	701,545
	President and Chief
	Executive Officer
Kendyl D. Lowe,		2009	$	178,750	$	10,000	$	98,563	$	509		$	287,822
	Executive Vice President and
	Chief Accounting Officer⁽³⁾
William H. Ross,		2009	$	54,590	$	—	$	—	$	113,285	⁽⁵⁾	$	167,875
	former Chief
	Financial Officer⁽⁴⁾
J. Todd Strong,		2009	$	275,000	$	—	$	142,656	$	1,639		$	419,295
	Executive Vice
	President and Chief
	Operating Officer
Clark M. Barousse,		2009	$	275,000	$	—	$	142,656	$	20,941	⁽⁶⁾	$	438,597
	Senior Vice President,
	Global Sales &
	Marketing

⁽¹⁾: Amounts listed reflect the aggregate grant date fair values of the stock awards granted to our named executive officers in 2009 computed in accordance with FASB ASC Topic 718. The methodology used to determine the grant date fair value are described in Note 9 to our consolidated financial statements appearing elsewhere in this prospectus.
⁽²⁾: Includes matching contributions made under our 401(k) plan for salary and non-equity incentive plan compensation earned in 2009 and imputed income from the payment of life insurance benefits to our named executive officers.
⁽³⁾: Ms. Lowe is currently our Executive Vice President and Chief Accounting Officer and served as our Chief Financial Officer and Executive Vice President of Finance from March 2009 to June 2010. The stock vests in equal one-third installments on each of the first, second and third anniversaries of March 1, 2009 and shall become fully vested upon a change in control of the Company.
⁽⁴⁾: Mr. Ross resigned as our Chief Financial Officer on February 28, 2009.
⁽⁵⁾: Includes the payment of $106,440 in separation pay and $6,085 in COBRA payments.
⁽⁶⁾: Includes $12,500 for a housing allowance and $7,200 for a car allowance.

The following table presents information concerning grants of plan-based awards to our named executive officers during 2009.

Name			Estimated Future Payouts Under Non-Equity Incentive Plan Awards Target ($)⁽²⁾				Grant Date Fair Value of Stock Awards⁽¹⁾

R. Steven Boggan,		—	$	350,000	—			—
	President and Chief
	Executive Officer
Kendyl D. Lowe,		02/04/09	$	95,000	20,000 Class B	⁽³⁾	$	10,000
	Executive Vice President and
	Chief Accounting Officer
William H. Ross,		—		—	—			—
	former Chief
	Financial Officer
J. Todd Strong,		—	$	137,500	—			—
	Executive Vice
	President and
	Chief Operating Officer
Clark M. Barousse,		—	$	137,500	—			—
	Senior Vice President,
	Global Sales &
	Marketing

R. Steven Boggan. We entered into an employment agreement with Mr. Boggan on June 23, 2006 for a three-year term. The agreement automatically renews each year for an additional 12 months unless the Company or Mr. Boggan delivers notice at least 60 days prior to the anniversary date of its non-renewal. Mr. Boggan's annual base salary was increased in 2007 from $275,000 to $300,000, and was further increased in 2008 from $300,000 to $350,000. Pursuant to the agreement, Mr. Boggan has the opportunity to earn an annual performance bonus of up to 100% of his annual base salary, based on the achievement of performance objectives approved by our board of directors.

Pursuant to the agreement, Mr. Boggan has agreed not to compete with us during his employment and for a period of one year after the termination of his employment. In addition, Mr. Boggan has agreed that during his employment and for a period of 12 months after the termination of his employment, not to solicit our employees to terminate their employment with us and not to solicit the business or

patronage of any of our current or prospective clients or customers. Mr. Boggan also has agreed to refrain from disclosing any of our proprietary information received during the course of employment.

Mr. Boggan is entitled to certain benefits in connection with a termination of his employment or a change of control discussed below under "— Severance Benefits and Change of Control Arrangements."

Kendyl D. Lowe. We entered into an employment agreement with Ms. Lowe on June 26, 2009 for a three-year term expiring on March 1, 2012 in connection with her becoming employed as our Chief Financial Officer and Executive Vice President of Finance on March 1, 2009. Ms. Lowe served as our Chief Financial Officer and Executive Vice President of Finance until June 2010, and currently serves as our Executive Vice President and Chief Accounting Officer. The agreement automatically renews each year for an additional 12 months unless the Company or Ms. Lowe delivers notice at least 30 days prior to the anniversary date of its non-renewal. Pursuant to the terms of the agreement, Ms. Lowe's annual base salary is $190,000. In connection with her appointment to Chief Financial Officer, Ms. Lowe was granted 20,000 restricted shares of our Class B common stock. The stock vests in equal one-third installments on each of the first, second and third anniversaries of March 1, 2009 and shall become fully vested upon a change in control of the Company.

Pursuant to the agreement, Ms. Lowe has agreed not to compete with us during her employment and for a period of six months after the termination of her employment. In addition, Ms. Lowe has agreed that during her employment and for a period of six months after the termination of her employment, not to solicit our employees to terminate their employment with us and not to solicit the business or patronage of any of our current or prospective clients or customers. Ms. Lowe also has agreed to refrain from disclosing any of our proprietary information received during the course of employment.

Ms. Lowe is entitled to certain benefits in connection with a termination of her employment or a change of control discussed below under "— Severance Benefits and Change of Control Arrangements."

William H. Ross. We entered into an employment agreement with Mr. Ross on December 3, 1996. Mr. Ross resigned as our Chief Financial Officer on February 28, 2009. Pursuant to the agreement, Mr. Ross has agreed not to compete with us for a period of three years after the termination of his employment. Mr. Ross also has agreed to refrain from disclosing any of our proprietary information received during the course of employment.

Mr. Ross received certain benefits in connection with a termination of his employment discussed below under "— Severance Benefits and Change of Control Arrangements."

J. Todd Strong. We entered into an employment agreement with Mr. Strong on June 24, 1994, and an additional agreement on November 20, 2002, amended on August 20, 2006. Pursuant to the 2006 agreement, Mr. Strong has agreed not to compete with us during his employment and for a period of one year after the termination of his employment. In addition, Mr. Strong has agreed that during his employment and for a period of one year after the termination of his employment, not to solicit our employees to terminate their employment with us and not to solicit the business or patronage of any of our current or prospective clients or customers. Mr. Strong has agreed pursuant to his original 1994 agreement to refrain from disclosing any of our proprietary information received during the course of employment.

Mr. Strong is entitled to certain benefits in connection with a termination of his employment or a change of control discussed below under "— Severance Benefits and Change of Control Arrangements."

Clark M. Barousse. We entered into an offer letter with Mr. Barousse on May 16, 2008 and entered into an employment agreement with Mr. Barousse on July 29, 2008. Pursuant to the offer letter Mr. Barousse's annual base salary is $275,000 and he has the opportunity to earn an annual performance bonus of up to 50% of his salary. In connection with his commencement of employment he received a hiring bonus of $42,000. In addition, when Mr. Barousse joined us he received 25,000 restricted shares of our Class B common stock. All of the shares are vested as of June 2, 2010. He was also promised an additional 5,000 shares of Class B common stock upon the same terms and conditions upon his purchasing a house in the Birmingham, Alabama area which grant was made in April 2008. In addition the terms of the offer letter provide that Mr. Barousse will receive $600 per month as a car allowance. Mr. Barousse was also reimbursed for the reasonable cost of his relocation to the Birmingham area including the closing costs related to the sale of his existing home and purchase of a new home. Under the offer letter, we agreed to pay him $2,500 per month for 12 months to defray his housing costs.

Pursuant to his employment agreement, Mr. Barousse has agreed not to compete with us during his employment and for a period of two years after the termination of his employment. In addition, Mr. Barousse has agreed that during his employment and for a period of two years after the termination of his employment, not to solicit our employees to terminate their employment with us and not to solicit the business or patronage of any of our current or prospective clients or customers. Mr. Barousse also has agreed to refrain from disclosing any of our proprietary information received during the course of employment.

Mr. Barousse is entitled to certain benefits in connection with a termination of his employment or a change of control discussed below under "— Severance Benefits and Change of Control Arrangements."

All of our named executive officers, with the exception of Messrs. Boggan and Ross, were eligible to participate in our Bonus Plan for our 2009 fiscal year which pays bonuses to our employees upon the achievement of corporate financial targets and individual performance objectives. The target amount of the bonus is a target percentage of each executive's base salary but can be greater or less than the target percentage based upon overachievement or underachievement of the performance goals, as determined by our compensation committee and recommended to and approved by our board of directors for approval and discussed above under "Compensation Discussion and Analysis." The target bonus percentages for our named executive officers for 2009 were:

Pursuant to Mr. Boggan's employment agreement, he is eligible to be paid a cash bonus in an amount up to 100% of his base salary based upon achievement of performance objectives approved by the board of directors as further discussed above under "Compensation Discussion and Analysis."

We have a defined contribution retirement plan in which all employees are eligible to participate. Our plan is intended to qualify under Section 401(k) of the Internal Revenue Code so that contributions by employees and by us to our plan and income earned on plan contributions are not taxable to employees until withdrawn or distributed from the plan, and so that contributions, including employee salary deferral contributions, will be deductible by us when made. In February 2009 we discontinued our 401(k) matching contribution at 100% of up to three percent of a participant's compensation and at 50% of up to the next two percent of a participant's compensation. In January 2010, we reinstated our matching contribution at 100% of up to three percent of a participant's compensation. We also contribute to medical, disability and other standard insurance for our employees.

The following table presents the outstanding equity awards held by each of the named executive officers as of December 31, 2009.

		Option Awards							Stock Awards

Name		Number of Securities Underlying Unexercised Options (#) Exercisable			Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)⁽¹⁾
R. Steven Boggan,			—			—		—		—			—
	President and Chief
	Executive Officer
Kendyl D. Lowe,			5,000	⁽²⁾	$	2.25		12/15/2014		6,667 Class B	⁽⁴⁾	$	19,267
	Executive Vice		2,500	⁽³⁾	$	3.10		9/21/2015		20,000 Class B	⁽⁵⁾	$	57,800
	President and Chief
	Accounting Officer
William H. Ross,			—			—		—		—			—
	former Chief
	Financial Officer⁽⁷⁾
J. Todd Strong,			10,000	⁽⁶⁾	$	1.85		6/5/2010		50,000 Class B	⁽⁷⁾	$	144,500
	Executive Vice
	President and Chief
	Operating Officer
Clark M. Barousse,			—			—		—		8,333 Class B	⁽⁸⁾	$	24,083
	Senior Vice President,									1,667 Class B	⁽⁹⁾	$	4,817
	Global Sales &
	Marketing

⁽⁴⁾: Represents a restricted stock award granted on April 15, 2008 which vests annually in equal installments over a three-year period.
⁽⁵⁾: Represents a restricted stock award granted on February 4, 2009 which vests annually in equal installments over a three-year period.
⁽⁶⁾: This option is fully vested and is exercisable for shares of common stock of BIS. At any time after exercise of the option the shares of common stock of BIS are putable by the optionee or callable by us for cash or for 11,680 shares of our Rolling common stock at the election of the other party.
⁽⁷⁾: Represents a restricted stock award granted on April 15, 2008 which vests annually in equal installments over a three-year period.
⁽⁸⁾: Represents a restricted stock award granted on April 15, 2008 which vests annually in equal installments over a three-year period.
⁽⁹⁾: Represents a restricted stock award granted on July 29, 2008 which vests annually in equal installments over a three-year period.

The following table shows information regarding option exercises and the vesting of stock awards held by each named executive officer during the fiscal year ended December 31, 2009.

		Option Awards					Stock Awards

Name		Number of Shares Acquired on Exercise (#)			Value Realized on Exercise ($)⁽¹⁾		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting⁽²⁾ ($)
R. Steven Boggan,			—			—		160,000 Class A	$	475,200
	President and
	Chief Executive Officer
Kendyl D. Lowe,			—			—		3,333 Class A	$	9,899
	Executive Vice President and							3,333 Class B	$	1,667
	Chief Accounting Officer⁽¹⁾
William H. Ross,			6,000	⁽³⁾	$	76,079		33,333 Class A	$	98,999
	former Chief
	Financial Officer⁽²⁾
J. Todd Strong,			—			—		33,333 Class A	$	98,999
	Executive Vice President and Chief							25,000 Class B	$	12,500
	Operating Officer
Clark M. Barousse,			—			—		10,000 Class B	$	5,000
	Senior Vice
	President, Global Sales &
	Marketing

We do not have any non-qualified defined contribution plans or other deferred compensation plan.

We have agreed to provide severance benefits and change of control arrangements to our named executive officers, as described below.

R. Steven Boggan. Pursuant to the terms of Mr. Boggan's employment agreement, should we terminate Mr. Boggan's employment without cause, or if his employment is terminated within six months prior to or after a change in control, or if he resigns for good reason, Mr. Boggan will receive severance in the amount equal to 12 months of his base salary then in effect and the payment of accrued but untaken vacation days. Mr. Boggan also has the right to continuation of benefits then in effect for a period of 12 months following the triggering event and is eligible for bonuses for such 12-month period; provided, however, that in the event he is terminated by us without cause, or if his employment is terminated within six months after a change in control for good reason, his bonus will be paid upon termination and will be equal to 100% of this target bonus for such fiscal year, prorated by multiplying the target bonus by the number of full or partial weeks he was employed during such fiscal year divided by 52. Assuming that Mr. Boggan's employment was terminated at December 31, 2009, he would receive approximately $740,066 in severance benefits as follows: $350,000 in salary, $350,000 in bonus, $26,923 of accrued vacation and $13,610 in COBRA payments.

In the event Mr. Boggan's employment is terminated due to death or because of disability, we will pay to his estate or to Mr. Boggan, as the case may be, his annual base salary which would otherwise be payable to him through the end of the month in which such termination occurs, and payment for any accrued but untaken vacation days. Mr. Boggan or his estate is also eligible to receive any benefits which he or would be entitled to receive under our benefit plans for the six months following his death or disability. At December 31, 2009, assuming the death or determination of disability of Mr. Boggan, he or his estate would receive approximately $33,728 as follows: $26,923 of accrued vacation and $6,805 in COBRA payments.

In addition, under Mr. Boggan's restricted stock agreements all shares shall fully vest upon a change in control. However, under these agreements Mr. Boggan did not have any unvested equity at December 31, 2009.

Kendyl D. Lowe. Pursuant to the terms of Ms. Lowe's employment agreement, should we terminate Ms. Lowe's employment without cause, or if her employment is terminated within six months prior to or after a change in control, or if she resigns for good reason, Ms. Lowe will receive severance in the amount equal to her base salary then in effect in the form of salary continuation for six months, and the payment of accrued but untaken vacation days. Ms. Lowe also has the right to continuation of benefits then in effect for a period of six months following the triggering event. Assuming that Ms. Lowe's employment was terminated at December 31, 2009, she would receive approximately $115,614 in severance benefits as follows: $95,000 in salary, $13,666 of accrued vacation and $6,924 in COBRA payments.

In the event Ms. Lowe's employment is terminated due to death or because of disability, we will pay to her estate or to Ms. Lowe, as the case may be, her annual base salary which would otherwise be payable to her through the end of the month in which such termination occurs, and payment for any accrued but untaken vacation days. Ms. Lowe or her estate is also eligible to receive any benefits which she or it would be entitled to receive under our benefit plans for the six months following her death or disability. At December 31, 2009, assuming the death or determination of disability of Ms. Lowe, she or her estate would receive approximately $20,614 as follows: $13,666 of accrued vacation and $6,948 in COBRA payments.

All outstanding shares of unvested restricted stock held by Ms. Lowe shall fully vest upon a change in control. The value of Ms. Lowe's unvested shares of restricted Class B common stock at December 31, 2009 is approximately $77,067 based upon a fair market value of $2.89 as determined by our board of directors.

William H. Ross. Pursuant to the terms of Mr. Ross's severance agreement, Mr. Ross received $106,440 in separation pay in February 2009. The separation pay was paid in 12 equal bi-monthly installments of $8,870, less all applicable employment-related deductions. In addition, we made the first six months of COBRA payments of $6,085 on behalf of Mr. Ross. We also agreed to vest the remaining 33,333 shares of the 100,000 shares of Class A common stock held by Mr. Ross.

J. Todd Strong. Pursuant to the terms of Mr. Strong's employment agreement, in the event of termination upon a change in control within three months prior to or after the change in control, Mr. Strong will receive severance in the amount equal to six months of his base salary then in effect plus bonus payable within 30 days after the triggering event. Assuming that Mr. Strong was terminated at December 31, 2009, he would receive approximately $206,250 in severance benefits as follows: $137,500 in salary and $68,750 in bonus payments.

All outstanding shares of unvested restricted stock held by Mr. Strong shall fully vest upon a change in control. The value of Mr. Strong's unvested shares of restricted Class B common stock at December 31, 2009 is approximately $144,500 based upon a fair market value of $2.89 as determined by our board of directors.

Clark M. Barousse. Pursuant to the terms of Mr. Barousse's offer letter, in the event of employment termination upon a change in control, Mr. Barousse will receive severance in the amount equal to his base salary then in effect in the form of salary continuation for 12 months. Assuming that Mr. Barousse was terminated at December 31, 2009, he would receive approximately $275,000 in severance benefits.

All outstanding shares of unvested restricted stock held by Mr. Barousse shall fully vest upon a change in control. The value of Mr. Barousse's unvested shares of restricted Class B common stock at December 31, 2009 is approximately $28,900 based upon a fair market value of $2.89 as determined by our board of directors.

A "change in control" occurs for cash severance purposes if (1) any one person, entity or group acquires ownership of our capital stock that, together with our capital stock already held by such person, entity or group, constitutes more than 50% of either the total fair market value or total voting power of our capital stock; provided, however, if any one person, entity or group owns more than 50% of the total fair market value or total voting power of our capital stock, the acquisition of additional capital stock by the same person, entity or group shall not be deemed to be a change in control; (2) a majority of members of our board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of our board prior to the

date of the appointment or election; or (3) any one person, entity or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person, entity or group) assets from us that have a total gross fair market value at least equal to 80% of the total gross fair market value of all of our assets immediately prior to such acquisition; provided, however, a transfer of assets by us shall not be deemed to be a change in control if the assets are transferred to (A) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock in the Company, (B) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by us, (C) a person, entity or group that owns, directly or indirectly, 50% or more of the total value or voting power of all our outstanding capital stock, or (D) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person, entity or group described in subparagraph (C) above.

"Cause" is defined under the employment agreements with Mr. Boggan and Ms. Lowe as (a) a good faith finding by our board that the executive has engaged in dishonesty, gross negligence or gross misconduct which, if curable, has not been cured by the executive within 30 days after he or she shall have received written notice from us stating with reasonable specificity the nature of such conduct; (b) a good faith finding by our board that the executive has engaged in conduct that materially injures us, whether such harm is economic or non-economic, such as injury to our business or reputation; (c) the executive's conviction or plea of nolo contendere to any felony or crime involving moral turpitude, fraud or embezzlement; or (d) a good faith determination by our board that the executive has committed a material breach of his or her employment agreement, including but not limited to, a breach relating to proprietary information and noncompetition and nonsolicitation, which, if curable, has not been cured by the executive within 30 days after he or she shall have received written notice from us stating with reasonable specificity the nature of such breach.

"Good Reason" is defined under Mr. Boggan's and Ms. Lowe's employment agreements as at the election of the executive, if we have materially breached our obligations to the executive under the agreement (including, but not limited to, any material change in the duties and responsibilities of the executive specified under the agreement that is not expressly consented to by the executive) and such breach, if curable, has not been cured by us within 30 days after the executive shall have provided written notice to us stating with reasonable specificity the nature of such breach.

Under our 2007 Executive, Director and Consultant Stock Plan and restricted stock award agreements, restricted stock accelerates upon a "change in control" as follows: (1) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of our securities representing 50% or more of the total voting power represented by our then outstanding voting securities (excluding for this purpose any such voting securities held by us or our affiliates or by any employee benefit plan) pursuant to a transaction or a series of related transactions which our board does not approve; or (2) (A) a merger or consolidation of us whether or not approved by our board, other than a merger or consolidation which would result in our voting securities outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least 50% of the total voting power represented by our voting securities or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) our stockholders approve an agreement for the sale or disposition by us of all or substantially all of our assets.

The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2009 to each of our non-employee directors who served during the year.

We do not have a non-employee director compensation policy in place, nor have we paid any compensation to our non-employee directors for serving on our board of directors other than as set forth above or for reimbursement of reasonable out-of-pocket expenses incurred for attending meetings of our board of directors or any committees thereof.

Our non-employee directors do not receive pension, retirement or similar benefits from us.

Our 2007 Executive, Director and Consultant Stock Plan, or the 2007 Stock Plan, was approved by our board of directors in April 2007. The 2007 Stock Plan will expire in April 2017. Under this plan we may grant incentive stock options, if we seek stockholder approval of the plan, non-qualified stock options, restricted and unrestricted stock awards and other stock based awards. As of May 31, 2010, a total of 1,765,000 shares of common stock had been reserved for issuance under this plan. This number is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. Generally, shares that are forfeited or canceled from awards under the 2007 Stock Plan also will be available for future awards.

No shares have been issued pursuant to options granted under this plan, no shares are subject to outstanding options and 64,488 shares are available for future grant. As of May 31, 2010, 1,199,753 shares have been issued as Class A common stock, of which 35,209 shares have been cancelled or forfeited back to the Company and 11,189 shares are subject to a lapsing repurchase right. As of May 31, 2010, 612,720 shares have been issued as Class B common stock, of which 294,335 shares have been cancelled or forfeited and 100,583 shares are subject to a lapsing repurchase right.

Our board of directors may amend or discontinue the 2007 Stock Plan at any time and may amend or cancel any outstanding award for the purpose of satisfying changes in law or for any other lawful purpose. No such amendment may adversely affect the rights under any outstanding award without

the holder's consent. Following this offering, our board of directors does not intend to grant any further awards under the 2007 Stock Plan.

Upon completion of this offering, this plan will be administered by our compensation committee. The compensation committee will have full power and authority to determine the terms of awards granted pursuant to this plan, including:

In addition, our board of directors or any committee to which the board of directors delegates authority may, with the consent of the affected plan participants, reprice or otherwise amend outstanding awards consistent with the terms of our plan.

If we are acquired, the compensation committee will provide that outstanding options under this plan shall be: (1) assumed by the successor or acquiring company; (2) exercised within a specified number of days or the options will terminate; or (3) terminated in exchange for a cash payment equal to the value of the option at the time we are acquired. If the transaction constitutes a change in control, then all options outstanding on the date of the transaction will become immediately and fully vested. With respect to outstanding stock grants the compensation committee shall provide that outstanding awards shall be assumed or substituted by the successor corporation, become realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon the transaction.

In March 2010, our board of directors and our stockholders approved the 2010 Employee, Director and Consultant Stock Plan, or the 2010 Stock Plan. The 2010 Stock Plan will expire in March 2020. Under our 2010 Stock Plan, we may grant incentive stock options, non-qualified stock options, restricted and unrestricted stock awards and other stock based awards.

As of May 31, 2010, a total of 217,578 shares of common stock had been reserved for issuance under this plan, of which 217,557 have been issued as Class C common stock, of which 95 shares have been forfeited back to the Company and 20,548 shares are subject to a lapsing repurchase right. This number is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. Generally, shares that are forfeited or canceled from awards under the 2010 Stock Plan also will be available for future awards.

Our board of directors may amend or discontinue the 2010 Stock Plan at any time and may amend or cancel any outstanding award for the purpose of satisfying changes in law or for any other lawful purpose. No such amendment may adversely affect the rights under any outstanding award without the holder's consent.

The following table sets forth certain information regarding the beneficial ownership of our common stock and the shares beneficially owned by all selling stockholders as of April 30, 2010, and as adjusted to reflect the sale of our common stock offered by this prospectus by:

The number of shares beneficially owned gives effect to the Conversion Transaction in which we will redeem all of our preferred stock for, and convert all of our common stock into, an aggregate of shares of common stock upon the completion of this offering (see "Conversion Transaction" below). Percentage of ownership is based on shares of common stock outstanding on April 30, 2010, adjusted to reflect the shares issued in the Conversion Transaction, the BIS options which are exchangeable for shares of our Rolling common stock and the issuance of shares of common stock in this offering. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Shares of common stock that may be acquired by an individual or group within 60 days of April 30, 2010, pursuant to the exercise of options or warrants, are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table.

Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such stockholders.

	Shares Beneficially Owned Prior to this Offering					Shares Beneficially Owned After this Offering⁽¹⁾

Beneficial Owner	Number		Percent			Number		Percent
*Directors and Executive Officers*
R. Steven Boggan⁽²⁾					%					%
Kendyl D. Lowe⁽³⁾
J. Todd Strong⁽⁴⁾
Clark M. Barousse⁽⁵⁾
William H. Ross⁽⁶⁾
Mortimer Berkowitz III⁽⁷⁾
John J. Chopack, Jr.⁽⁸⁾
Tom C. Davis⁽⁹⁾
John H. Foster⁽¹⁰⁾
David J. Hogan⁽¹¹⁾
Siri S. Marshall		—		—			—		—
All current directors and executive officers as a group (12 persons)⁽¹²⁾					%					%
*Five Percent Stockholders*
Funds affiliated with HealthpointCapital, LLC⁽¹³⁾ 505 Park Avenue, 12^th Floor New York, New York 10022					%					%
*Selling Stockholders*

In connection with the consummation of this offering, we will complete the Conversion Transaction described under "Conversion Transaction" below. Our present and former directors, executive officers and security holders who beneficially own more than five percent of our voting securities that will receive common stock in the Conversion Transaction are as follows:

On March 31, 2007, in connection with our acquisition of BioLok International, Inc. from HealthpointCapital Partners II, L.P., one of our five percent stockholders, we issued 36,455 shares of our preferred stock and 3,496,122 shares of our Class A common stock to HealthpointCapital Partners II, L.P., representing an aggregate cash equivalent purchase price of approximately $36.5 million. We refer to this transaction as the "BioLok Acquisition."

On February 5, 2008, in connection with our acquisition of DTI Holdings, we issued 65,186 shares of our preferred stock and 4,717,290 shares of our Class B common stock to the stockholders of DTI Holdings, representing an aggregate cash equivalent purchase price of approximately $100.5 million. Of these amounts, HealthpointCapital Partners II, L.P. received all of the shares of preferred stock and 4,536,645 shares of Class B common stock. In connection with our acquisition of DTI Holdings, we also issued 45,000 shares of our preferred stock and 3,131,793 shares of our Class B common stock to HealthpointCapital Partners II, L.P. in full satisfaction of the repayment of $45 million in principal amount of convertible promissory notes issued by DTI Holdings to HealthpointCapital Partners II, L.P. that were initially convertible into preferred and common stock of DTI Holdings.

On April 11, 2008, in connection with our acquisition of Implant Logic Systems, Ltd., we paid $7 million in cash and issued 131,558 shares of Class B common stock to the stockholders of Implant Logic Systems, Ltd. We refer to this transaction as the "Implant Logic Systems Acquisition." We funded the cash payment through the issuance and sale of 7,000 shares of our preferred stock and 502,357 shares of our Class B common stock to HealthpointCapital Partners II, L.P. for $7 million.

On March 31, 2010, we distributed all 20 million of the issued and outstanding shares of common stock of our wholly-owned subsidiary, DTI Holdings, to all of the holders of our Rolling common stock, Class A common stock and Class B common stock. We refer to this transaction as the "Spin-Off." Recipients of the DTI Holdings shares included our directors, officers and holders of more than 5% of our common stock based on their ownership of our Rolling common stock, Class A common stock and Class B common stock at the time of the Spin-Off.

In connection with the Spin-Off, we also conducted an exchange offer with our employees and DTI Holdings conducted an exchange offer with its employees. Pursuant to our exchange offer, we offered our employees the right to exchange their right to receive DTI Holdings common stock in the Spin-Off for shares of our Class C common stock to be issued pursuant to our 2010 Stock Plan. We issued an aggregate of 217,557 shares of our Class C common stock as a result of this exchange offer. Pursuant to DTI Holdings' exchange offer with its employees, DTI Holdings offered its employees the right to exchange all of their shares of our Class B common stock that they had previously acquired by virtue of being our employees for Class B common stock of DTI Holdings to be issued pursuant to the DTI Holdings, Inc. 2010 Employee, Director and Consultant Stock Plan.

The following table sets forth the number of shares of DTI Holdings common stock and our Class C common stock issued in the Spin-Off and our subsequent exchange offer to our directors, executive officers and beneficial owners of more than 5% of our common stock:

Name

Executive Officers and Directors
R. Steven Boggan	—	91,253
Kendyl D. Lowe	—	7,604
J. Todd Strong	—	33,269
Clark M. Barousse	—	5,703
William H. Ross⁽¹⁾	152,794	—
Thomas C. Davis	4,492	—
David J. Hogan	4,492	—
Timothy Foster⁽²⁾	8,984	—
Michael Rawlings⁽²⁾	32,236	—
5% Holders:
HealthpointCapital Partners, L.P.	3,009,084	—
HealthpointCapital Partners II, L.P.⁽³⁾	14,069,831	—

On March 31, 2010, in connection with the Spin-Off, we issued a warrant to HealthpointCapital Partners II, L.P. The warrant expires on July 1, 2011. If HealthpointCapital Partners II, L.P exercises the warrant prior to this offering, then the warrant is exercisable for 126,059 shares of our common stock at an exercise price of $13.59 per share. Assuming an initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, if HealthpointCapital Partners II, L.P. exercises the warrant in connection with, or after, this offering, the warrant will be exercisable for shares of our common stock, which is calculated by dividing $1.7 million by the initial public offering price per share.

Subordinated Convertible Promissory Notes Issued to HealthpointCapital Partners II, L.P.

On November 28, 2007 and December 28, 2007, we issued subordinated convertible promissory notes with a principal amount of $1 million and $2 million, respectively, to HealthpointCapital Partners II, L.P. The interest rate on both of these convertible promissory notes was 8.0%. On April 16, 2008, HealthpointCapital Partners II, L.P. converted the outstanding balance of these subordinated convertible promissory notes into 3,000 shares of our preferred stock and 251,213 shares of our Class A common stock.

On September 22, 2008, we signed a forbearance agreement with our former lender as a result of an event of default under our restated credit agreement then in effect. Under the forbearance agreement, HealthpointCapital Partners II, L.P. purchased a 100% participation interest in our term loan with our former lender and, on September 23, 2008, we issued a subordinated convertible promissory note with a principal amount of $13.6 million and an interest rate of 8.0% to HealthpointCapital Partners II, L.P.

On July 11, 2008, we issued a subordinated convertible promissory note with a principal amount of $10 million to HealthpointCapital Partners II, L.P. On December 22, 2008, we issued a subordinated convertible promissory note with a principal amount of $5.0 million to HealthpointCapital Partners II, L.P. On March 4, 2009, we issued a subordinated convertible promissory note with a principal amount of $5 million to HealthpointCapital Partners II, L.P. The interest rate on each of these subordinated convertible promissory notes was 8.0%. These subordinated convertible promissory notes were convertible into units consisting of shares of our common stock and preferred stock as would be issuable by valuing our then outstanding shares of common stock and preferred stock on a fully diluted and fully converted basis at $600 million. On March 23, 2009, we combined all of our outstanding indebtedness to HealthpointCapital Partners II, L.P. into one subordinated convertible promissory note with an aggregate principal amount of $34.5 million and an interest rate of 8.0%. On June 12, 2009, this subordinated convertible note was amended and restated. This amended and restated subordinated convertible promissory note had a principal amount of $34.3 million and an interest rate of 10.0%. On January 1, 2010, this amended and restated subordinated convertible note was further amended and restated. This amended and restated subordinated convertible promissory note has a principal amount of $36.9 million, an interest rate of 10.0% and matures upon the earlier to occur of (1) our initial public offering, (2) a merger, consolidation or similar transaction resulting in a change of control, a sale of all or substantially all of our assets, a sale of a majority of our capital stock, or any other change of control, in each case occurring in one transaction or a series of related transactions, or (3) upon demand by HealthpointCapital Partners II, L.P. at any time after July 1, 2011. This amended and restated subordinated convertible promissory note is convertible into units consisting of shares of our common stock and preferred stock as would be issuable by valuing our then outstanding shares of common stock and preferred stock on a fully diluted and fully converted basis at $500 million. As of May 31, 2010, the principal amount outstanding on this amended and restated convertible promissory note was $36.9 million. We anticipate that this subordinated convertible promissory note will be repaid out of the net proceeds of this offering.

In March 2007, we paid $1 million to HealthpointCapital, LLC, an affiliate of HealthpointCapital, as compensation for financial advisory services rendered by HealthpointCapital, LLC in connection with the BioLok Acquisition. In connection with this transaction, we also reimbursed HealthpointCapital, LLC for services provided in connection with the transaction in the amount of $0.7 million.

In April 2008, we paid HealthpointCapital, LLC $500,000, as compensation for financial advisory services rendered by HealthpointCapital, LLC in connection with the Implant Logic Systems Acquisition. In connection with this transaction, we also reimbursed HealthpointCapital, LLC for services provided in connection with the transaction in the amount of $0.3 million.

We, HealthpointCapital Partners, L.P., HealthpointCapital Partners II, L.P. and other of our stockholders have entered into stockholders' agreements. The agreements grant the holders, or their permitted transferees, piggyback registration rights if at any time following this offering we propose to register our securities under the Securities Act. We are generally required to pay all expenses incurred in connection with registrations effected in connection with these piggyback registration rights, excluding underwriting discounts and commissions. See "Description of Capital Stock — Registration Rights." The agreements further provide for certain restrictions on transfer and tag-along and bring-along rights, all of which will terminate upon the completion of this offering.

We intend to enter into indemnification agreements with our non-employee directors. See "Management — Limitation of Directors' and Officers' Liability and Indemnification."

Prior to the completion of this offering, our board of directors will adopt a written statement of policy regarding transactions with related persons, which we refer to as our "related person policy." Our related person policy will require that a "related person" (as defined in paragraph (a) of Item 404 of Regulation S-K) must promptly disclose to our general counsel any "related person transaction" (defined as any transaction that it is anticipated would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The general counsel will then promptly communicate that information to our audit committee or another independent body of our board of directors. No related person transaction will be executed without the approval or ratification of our audit committee or another independent body of our board of directors. It will be our policy that directors interested in a related person transaction will recuse themselves from any vote of a related person transaction in which they have an interest. Our related person policy will not specify the standards to be applied by our audit committee or another independent body of our board of directors in determining whether or not to approve or ratify a related person transaction and we accordingly anticipate that these determinations will be made in accordance with principles of Delaware law generally applicable to directors of a Delaware corporation.

The following description of our capital stock and provisions of our existing certificate of incorporation and bylaws and our certificate of incorporation and bylaws that will become effective upon completion of this offering are summaries and are qualified by reference to our existing certificate of incorporation and bylaws and the certificate of incorporation and the bylaws that will become effective upon the completion of this offering. Copies of these documents have been filed with the SEC as exhibits to the registration statement of which this prospectus forms a part. The descriptions of the common stock and preferred stock reflect changes to our capital structure that will occur upon the completion of this offering.

Pursuant to our certificate of incorporation to be effective upon completion of this offering and after giving effect to the Conversion Transaction described below, we will be authorized to issue shares of common stock, $0.0001 par value per share, of which will be issued and outstanding held by stockholders of record, and shares of preferred stock, $0.0001 par value per share, none of which will be designated, issued or outstanding. Our board of directors may establish the rights and preferences of the preferred stock from time to time.

Upon completion of this offering, all of our issued and outstanding shares of Rolling common stock, Class A common stock, Class B common stock and Class C common stock will convert into an aggregate of shares of our common stock, based on an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. Accordingly, no shares of our Rolling common stock, Class A common stock, Class B common stock or Class C common stock will be issued or outstanding immediately following completion of this offering. See "Conversion Transaction" below.

Pursuant to our certificate of incorporation to be effective upon completion of this offering, holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, and do not have cumulative voting rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for dividend payments. The holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. In the event of any liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in our assets that are remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any.

As of May 31, 2010, we had issued and outstanding 247,141 shares of preferred stock, held by 4 stockholders of record. Upon completion of this offering all of our issued and outstanding preferred stock will be redeemed through the issuance of an aggregate of shares of our common stock, based on an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. Accordingly, no shares of our preferred stock will be issued or outstanding immediately following completion of this offering. See "Conversion Transaction" below.

Pursuant to our certificate of incorporation to be effective upon completion of this offering, our board of directors has the authority, without further stockholder authorization, to issue from time to time up to shares of preferred stock in one or more series and to fix the terms, limitations, voting rights, relative rights and preferences and variations of each series. Any preferred stock issued could have priority over common stock with respect to dividends and other distributions, including the distribution of assets upon liquidation. Although we have no present plans to issue any other shares of preferred stock, the issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could decrease the amount of earnings and assets available for distribution to the holders of common stock, could adversely affect the rights and powers, including voting rights, of the common stock and could have the effect of delaying, deterring or preventing a change of control of us or an unsolicited acquisition proposal.

In connection with the consummation of this offering, we will make a series of liquidation and redemption payments to holders of our outstanding capital stock and the shares of our capital stock that remain outstanding will convert into shares of our common stock upon the consummation of the offering. We refer to these transactions as the "Conversion Transaction." Pursuant to our existing certificate of incorporation:

These transactions are referred to as the Conversion Transaction. In connection with the Conversion Transaction, we estimate, based on the assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, that upon the consummation of the offering we will:

As of May 31, 2010, we had one warrant issued to HealthpointCapital Partners II, L.P. outstanding for shares of our common stock. The warrant expires on July 1, 2011. The warrant entitles the holder to purchase shares of our common stock at the specified exercise price at any time prior to the expiration date. If this warrant is exercised prior to the completion of this offering, it will be exercisable for 126,059 shares of our common stock at an exercise price of $13.59 per share. Assuming an initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, if HealthpointCapital Partners II, L.P. exercises the warrant in connection with, or after, this offering, the warrant will be exercisable for shares of our common stock, which is calculated by dividing $1.7 million by the initial public offering price per share. The warrant also has net exercise provisions under which the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares of our common stock based on the fair market value of the underlying shares of our common stock at the time of exercise of the warrant, after deduction of the aggregate exercise price.

Upon consummation of this offering, the holders, or their permitted transferees, of an aggregate of shares of our common stock are entitled to certain registration rights with respect to these securities as set forth two stockholders' agreements between us and the holders of these securities. If at any time following this initial public offering we propose to register our securities under the Securities Act, whether for sale for our account or for the account of any holder of our securities, we are generally required to include in such registration all of the shares of common stock described in the previous sentence that are not then immediately distributable pursuant to Rule 144 or another exemption under the Securities Act. These registration rights are subject to certain conditions and

limitations, including the right of the underwriters of an offering to limit the number of shares of our common stock included in any such registration under certain circumstances. We are generally required to pay all expenses incurred in connection with registrations effected in connection with the following rights, excluding underwriting discounts and commissions. We have also agreed to indemnify holders whose shares are registered pursuant to such registration rights against liabilities under the Securities Act.

Anti-Takeover Provisions of Delaware Law, Our Restated Certificate of Incorporation and Our Restated Bylaws

Certain provisions of our certificate of incorporation and bylaws that will be effective upon the completion of this offering could discourage or make it more difficult to accomplish a proxy contest or other change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise consider to be in their best interests or in our best interests. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. Such provisions also may have the effect of preventing changes in our management.

Creation of New Directorships; Appointment of Directors to Fill Vacancies. Our certificate of incorporation and bylaws provide that, upon completion of this offering, our board of directors is authorized to create new directorships and to fill such positions so created. Our board of directors, or its remaining members, even if less than a quorum, will also be empowered to fill vacancies on our board of directors occurring for any reason for the remainder of the term of the directorship for which the vacancy occurred.

Authorization of Blank Check Preferred Stock. Our certificate of incorporation provides that, upon completion of this offering, our board of directors will be authorized to issue, without stockholder approval, blank check preferred stock. Blank check preferred stock can operate as a "poison pill" to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that is not approved by our board of directors.

Advance Notice Provisions for Stockholder Proposals and Stockholder Nominations of Directors. Our bylaws provide that, upon completion of this offering, for nominations to our board of directors or for other business to be properly brought by a stockholder before a meeting of stockholders, the stockholder must first have given timely notice of the proposal in writing to our Secretary. For an annual meeting, a stockholder's notice generally must be delivered not less than 45 days nor more than 75 days prior to the anniversary of the mailing date of the proxy statement for the previous year's annual meeting. For a special meeting, the notice must generally be delivered not earlier than the 90th day prior to the meeting and not later than the later of (1) the 60th day prior to the meeting or (2) the 10th day following the day on which public announcement of the meeting is first made. Detailed requirements as to the form of the notice and information required in the notice are specified in our bylaws. If it is determined that business was not properly brought before a meeting in accordance with our bylaw provisions, such business will not be conducted at the meeting.

Special Meetings of Stockholders. Our certificate of incorporation and bylaws provide that, upon completion of this offering, special meetings of our stockholders may be called only by our board of directors pursuant to a resolution adopted by a majority of the total number of directors.

No Stockholder Action by Written Consent. Our certificate of incorporation and bylaws provide that, upon the completion of this offering, our stockholders will not be permitted to act by written consent. As a result, any action to be effected by our stockholders must be effected at a duly called annual or special meeting of our stockholders.

We intend to apply for the listing of our common stock on The NASDAQ Global Market under the symbol "BHZN."

Prior to this offering, no public market existed for our common stock. Market sales of shares of our common stock after this offering and from time to time, and the availability of shares for future sale, may reduce the market price of our common stock. Sales of substantial amounts of our common stock, or the perception that these sales could occur, could adversely affect prevailing market prices for our common stock and could impair our future ability to obtain capital, especially through an offering of equity securities.

Based on the number of shares of common stock outstanding as of , 2010, upon completion of this offering, shares of common stock will be outstanding, assuming no exercise of the underwriters' over-allotment option and no exercise of the warrant prior to the completion of this offering. All of the shares sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, unless held by our affiliates as that term is defined under Rule 144 under the Securities Act. The remaining shares of common stock outstanding upon the closing of this offering are restricted securities as defined under Rule 144 of the Securities Act. Restricted securities may be sold in the U.S. public market only if registered or if they qualify for an exemption from registration, including by reason of Rule 144 or 701 under the Securities Act, which rules are summarized below. These remaining shares will generally become available for sale in the public market as follows:

All of the shares of common stock issuable upon exercise of the warrant outstanding as of , 2010, will be vested and may become eligible for sale beginning 180 days after the date of this prospectus.

In general, under Rule 144 under the Securities Act, as in effect on the date of this prospectus, beginning 90 days after the date of this prospectus, a person who is not one of our affiliates at any time during the three months preceding a sale, and who has beneficially owned shares of our common stock to be sold for at least six months, would be entitled to sell an unlimited number of shares of our common stock, provided current public information about us is available. In addition, under Rule 144, a person who is not one of our affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares of our common stock to be sold for at least one year, would be entitled to sell an unlimited number of shares immediately upon the closing of this offering without regard to whether current public information about us is available. Beginning 90 days after the date of this prospectus, our affiliates who have beneficially owned shares of our common stock for at least six

months are entitled to sell within any three-month period a number of shares that does not exceed the greater of:

Sales of restricted shares under Rule 144 by our affiliates are also subject to requirements regarding the manner of sale, notice and the availability of current public information about us. Rule 144 also provides that affiliates relying on Rule 144 to sell shares of our common stock that are not restricted shares must nonetheless comply with the same restrictions applicable to restricted shares, other than the holding period requirement.

Notwithstanding the availability of Rule 144, holders of of our restricted shares have entered into lock-up agreements as described below and under "Underwriting" and their restricted shares will become eligible for sale at the expiration of the restrictions set forth in those agreements, subject to any exceptions set forth in the lock-up agreement or waivers by the underwriters.

Rule 701 under the Securities Act, as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule 144 but without compliance with some of the restrictions of Rule 144, including the holding period requirement. Most of our employees, executive officers, directors or consultants who purchased shares under a written compensatory plan or contract, such as the shares issued under our 2007 Stock Plan and 2010 Stock Plan, may be entitled to rely on the resale provisions of Rule 701, but all holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares under Rule 701. However, all of the Rule 701 shares are subject to lock-up agreements as described below and under "Underwriting" and will become eligible for sale at the expiration of the restrictions set forth in those agreements.

Pursuant to certain "lock-up" agreements, we and each of our officers and directors, and substantially all of our stockholders have agreed, subject to certain limited exceptions, not to, for a period from the execution of such agreement through and including the 180th day after the date of this prospectus, without the prior written consent of Piper Jaffray & Co. and Jefferies & Company, Inc., offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock, or to enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership, or engage in any short selling of any shares of our common stock that transfers, in whole or in part, the economic consequences of ownership. The parties to the lock-up agreement also agree not to make any demand for or exercise any right with respect to filing of any registration statement under the Securities Act with respect to such securities. The 180-day restricted period will be automatically extended if (1) during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day restricted period, in either of which case

the restrictions described above will continue to apply until the expiration of the date that is 18 calendar days after the issuance of the earnings release or the material news or material event occurs, unless Piper Jaffray and Jefferies & Company, Inc. waive the extension in writing. These lock-up restrictions apply to shares of our common stock and to securities convertible into or exchangeable or exercisable for shares of our common stock, shares that may be deemed to be beneficially owned pursuant to the rules and regulations of the SEC and to shares owned now or acquired later by the person executing the agreement. The lock-up restrictions will not apply under certain circumstances to transactions relating to shares of common stock sold pursuant to the underwriting agreement, acquired in open market transactions following this offering or in connection with the sale of the Company. The lock-up restrictions also will not apply to certain transfers not involving a disposition for value, provided that the recipient agrees to be bound by these lock-up restrictions, certain transfers back to us to cover tax withholding obligations, the exercise or conversion of securities, including in connection with the Conversion Transaction, or the establishment of certain Rule10b5-1(c)(1)(i)(B) trading plans.

Upon completion of the offering and after giving effect to the Conversion Transaction (see "Conversion Transaction" above), the holders, or their transferees, of an aggregate of shares of our common stock, will be entitled to various rights with respect to the registration of these shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares held by affiliates. For additional information regarding these registration rights, see "Description of Capital Stock — Registration Rights."

As of May 31, 2010, BIS had outstanding options to purchase 185,681 shares of its common stock. These options are putable by the optionee or callable by us for 216,873 shares of our Rolling common stock. Upon consummation of this offering and the payment of the liquidation payment for the Rolling common stock and the conversion of the Rolling common stock into our common stock, these options after exercise into BIS common stock will be putable or callable for shares of our common stock. Following this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of common stock subject to awards issuable pursuant to our stock plans. Please see "Executive Compensation — Equity Incentive Plans" for additional information regarding these plans. Accordingly, shares of our common stock registered under that registration statement will be available for sale in the open market, subject to Rule 144 volume limitations applicable to affiliates, and subject to any vesting restrictions, immediately after the 180-day lock-up period expires.

The following is a general discussion of material U.S. federal income tax considerations relating to ownership and disposition of our common stock by a non-U.S. holder. For purposes of this discussion, the term "non-U.S. holder" means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:

An individual may be treated as a resident instead of a nonresident of the United States in any calendar year for U.S. federal income tax purposes if the individual was present in the United States for at least 31 days in that calendar year and for an aggregate of at least 183 days during the three-year period ending with the current calendar year. For purposes of this calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year are counted. Residents are taxed for U.S. federal income tax purposes as if they were U.S. citizens.

This discussion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, existing and proposed U.S. Treasury Regulations promulgated thereunder, current administrative rulings and judicial decisions, all as in effect as of the date of this prospectus and all of which are subject to change or to differing interpretation, possibly with retroactive effect. Any change could alter the tax consequences to non-U.S. holders described in this prospectus. In addition, the Internal Revenue Service, or the IRS, could challenge one or more of the tax consequences described in this prospectus.

We assume in this discussion that each non-U.S. holder purchased shares of our common stock in this offering and holds such shares as a capital asset (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S. holder's individual circumstances nor does it address any aspects of U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S. holders, such as:

In addition, this discussion does not address the tax treatment of partnerships or persons who hold their common stock through partnerships or other entities which are transparent for U.S. federal income tax purposes. A partner in a partnership or other transparent entity that will hold our common stock should consult his, her or its own tax advisor regarding the tax consequences of the ownership and disposition of our common stock through a partnership or other transparent entity, as applicable.

Prospective investors should consult their own tax advisors regarding the U.S. federal, state, local and non -U.S. income and other tax considerations of acquiring, holding and disposing of our common stock.

If we pay distributions on our common stock, those distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder's investment, up to such holder's tax basis in the common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below under the heading "Gain on Disposition of Common Stock."

Dividends paid to a non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. If we determine, at a time reasonably close to the date of payment of a distribution on our common stock, that the distribution (or portion thereof) will not constitute a dividend because we do not anticipate having sufficient current or accumulated earnings and profits, we intend not to withhold any U.S. federal income tax on the distribution (or portion thereof) as permitted by U.S. Treasury Regulations.

Dividends that are treated as effectively connected with a trade or business conducted by a non-U.S. holder within the United States, and, if an applicable income tax treaty so provides, that are attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder within the United States, are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements. However, such U.S. effectively connected income, net of specified deductions and credits and subject to the provisions of any applicable income tax treaty, is taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons (as defined in the Code). Any U.S. effectively connected income received by a non-U.S. holder that is a corporation may also, under certain circumstances, be subject to an additional "branch profits tax" at

a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence.

A non-U.S. holder of our common stock who claims the benefit of an applicable income tax treaty between the United States and such holder's country of residence generally will be required to provide a properly executed IRS Form W-8BEN (or successor form) and satisfy applicable certification and other requirements. Non-U.S holders are urged to consult their own tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

A non-U.S. holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim with the IRS.

A non-U.S. holder generally will not be subject to U.S. federal income tax on gain recognized on a disposition of our common stock unless:

We must report annually to the IRS and to each non-U.S. holder the gross amount of the distributions on our common stock paid to such holder and the tax withheld, if any, with respect to such distributions. Non-U.S. holders may have to comply with specific certification procedures to establish that the holder is not a U.S. person (as defined in the Code) in order to avoid backup withholding at the applicable rate, currently 28%, with respect to dividends on our common stock. Generally, a

holder will comply with such procedures if it provides a properly executed IRS Form W-8 or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. holder, or otherwise establishes an exemption.

Information reporting and backup withholding generally will apply to the proceeds of a disposition of our common stock by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder can be refunded or credited against the non-U.S. holder's U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.

Newly enacted legislation may impose withholding taxes on certain types of payments made to "foreign financial institutions" and certain other non-U.S. entities. Under this legislation, the failure to comply with additional certification, information reporting and other specified requirements could result in withholding tax being imposed on payments of dividends and sales proceeds to foreign intermediaries and certain non-U.S. holders. The legislation imposes a 30% withholding tax on dividends on, or gross proceeds from the sale or other disposition of, our common stock paid to a foreign financial institution or to a foreign non-financial entity, unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner. If the payee is a foreign financial institution, it must enter into an agreement with the United States Treasury requiring, among other things, that it undertake to identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. The legislation would apply to payments made after December 31, 2012. Prospective investors should consult their tax advisors regarding this legislation.

The underwriters named below have agreed to buy, subject to the terms of the purchase agreement, the number of shares listed opposite their names below. Piper Jaffray & Co. and Jefferies & Company, Inc. are acting as joint book running managers for this offering and representatives of the underwriters. The underwriters are committed to purchase and pay for all of the shares if any are purchased.

The underwriters have advised us that they propose to offer the shares to the public at $ per share. The underwriters propose to offer the shares to certain dealers at the same price less a concession of not more than $ per share. The underwriters may allow and the dealers may reallow a concession of not more than $ per share on sales to certain other brokers and dealers. After the offering, these figures may be changed by the underwriters.

We have granted the underwriters an option to purchase up to additional shares of common stock from us at the same price to the public, and with the same underwriting discount, as set forth in the table below. The underwriters may exercise this option at any time and from time to time during the 30-day period from the date of this prospectus to cover over-allotments, if any. To the extent any shares are purchased with this over-allotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above.

The following table shows the underwriting fees to be paid to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the over-allotment option.

We estimate that the total fees and expenses of the offering, excluding estimated underwriting discounts, will be approximately $ .

We have agreed to indemnify the underwriters against certain liabilities, including civil liabilities under the Securities Act, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.

The underwriters have informed us that they will not make sales of the common shares offered by this prospectus to accounts over which they exercise discretionary authority without the prior specific written approval of the customer.

We and each of our directors, executive officers and stockholders are subject to lock-up agreements that prohibit us and them from offering, pledging, announcing the intention to sell, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant to purchase, making any short sale or otherwise transferring or disposing of, directly or indirectly, any shares of our common stock or any securities convertible into, exercisable or exchangeable for or that represent the right to receive our common stock or entering into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, for a period of at least 180 days following the date of this prospectus without the prior written consent of Piper Jaffray & Co. and Jefferies & Company, Inc. The lock-up restrictions will not apply under certain circumstances to transactions relating to shares of common stock sold pursuant to the underwriting agreement, acquired in open market transactions following this offering or in connection with the sale of the Company. The lock-up restrictions also will not apply to certain transfers not involving a disposition for value, provided that the recipient agrees to be bound by these lock-up restrictions, certain transfers back to us to cover tax withholding obligations, the exercise or conversion of securities, including in connection with the Conversion Transaction, or the establishment of certain Rule10b5-1(c)(1)(i)(B) trading plans.

The 180-day lock-up period in all of the lock-up agreements is subject to extension if (1) during the last 17 days of the lock-up period we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of the lock-up period, we announce that we will release earnings results during the sixteen-day period beginning on the last day of the lock-up period, in which case the restrictions imposed in these lock-up agreements shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless Piper Jaffray & Co. and Jefferies & Company, Inc. waive the extension in writing.

We have applied to list the shares of our common stock to be sold in this offering on The NASDAQ Global Market. Prior to this offering, there has been no established trading market for our common stock. The initial public offering price for the shares of common stock offered by this prospectus was negotiated by us and the underwriters. The factors considered in determining the initial public offering price include the history of and the prospects for the industry in which we compete, our past and present operations, our historical results of operations, our prospects for future earnings, the recent market prices of securities of generally comparable companies and the general condition of the securities markets at the time of the offering and other relevant factors. There can be no assurance that the initial public offering price of our common stock will correspond to the price at which the common stock will trade in the public market subsequent to this offering or that an active public market for our common stock will develop and continue after this offering.

To facilitate the offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock during and after the offering. Specifically, the underwriters may over-allot or otherwise create a short position in our common stock for their own account by selling more shares of common stock than we have sold to them. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. "Naked" short sales are sales in excess of this option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be

created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering.

In addition, the underwriters may stabilize or maintain the price of the common stock by bidding for or purchasing shares of common stock in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other broker-dealers participating in the offering are reclaimed if shares of common stock previously distributed in the offering are repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of our common stock at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of our common stock to the extent that it discourages resales of the common stock. The magnitude or effect of any stabilization or other transactions is uncertain. These transactions may be effected on The NASDAQ Global Market or otherwise and, if commenced, may be discontinued at any time.

Some underwriters may also engage in passive market making transactions in our common shares. Passive market making consists of displaying bids on The NASDAQ Global Market limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of the common shares at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

From time to time in the ordinary course of their respective businesses, the underwriters and certain of their respective affiliates may engage in commercial banking or investment banking transactions with us and our affiliates.

This prospectus may be made available on the web sites maintained by the underwriters and the underwriters may distribute prospectuses electronically.

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered by this prospectus. This prospectus, which is part of the registration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. For further information pertaining to us and our common stock, reference is made to the registration statement and the exhibits and schedules to the registration statement. Statements contained in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not necessarily complete, and in each instance where a copy of the document has been filed as an exhibit to the registration statement on Form S-1 of which this prospectus forms a part, reference is made to the exhibit for a more complete description of the matters involved. When we complete this offering, we will also be required to file annual, quarterly and current reports, proxy statements and other information with the SEC. We anticipate making these documents publicly available, free of charge, on our web site at www.biohorizons.com as soon as practicable after filing such documents with the SEC.

You may read and copy any document that we file at the public reference room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of the registration statement may be obtained from the SEC at prescribed rates from the public reference room at such address. You may obtain information regarding the operation of the public reference room by calling 1-800-SEC-0330. In addition, this registration statement and our future filings filed electronically with the SEC are publicly available through its web site at www.sec.gov.

The validity of the shares of common stock we are offering will be passed upon for us by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Latham & Watkins LLP, New York, New York, is counsel to the underwriters in connection with the offering.

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements at December 31, 2009 and 2008 and for each of the three years in the period ended December 31, 2009, except for the statements of operations, equity and cash flows of DTI Holdings Inc. for the year ended December 31, 2007, as set forth in their report appearing herein and elsewhere in the Registration Statement. The 2007 consolidated statements of operations, equity and cash flows of DTI Holdings Inc. (combined with those of the Company and not presented separately herein), have been audited by Deloitte & Touche LLP, as stated in their report included herein. Such financial statements of the Company and its consolidated subsidiaries are included herein in reliance upon the respective reports of such firms given upon their authority as experts in accounting and auditing. Each of the foregoing firms are independent registered public accounting firms.

We have audited the accompanying consolidated balance sheets of BioHorizons, Inc. (the Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the 2007 financial statements of DTI Holdings, Inc., a consolidated subsidiary, which statements reflect total revenues of $79,080,000 (presented in discontinued operations) for the year ended December 31, 2007. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for DTI Holdings, Inc., is based solely on the report of the other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

In our opinion based on our audits and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of BioHorizons, Inc. at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

To the Board of Directors and Shareholders of
DTI Holdings, Inc.
(formerly DTI Dental Technologies, Inc.)

We have audited the consolidated statements of operations, equity and cash flows of DTI Holdings, Inc. for the year ended December 31, 2007 (which are not included herein). These consolidated financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversights Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated results of operations of the company and its cash flows for the year ended December 31, 2007 in compliance with generally accepted accounting principles in the United States of America.

September 18, 2008 except for the effects of the restatements discussed in Note 3 to the consolidated financial statements of DTI Holdings, Inc. for which the date is May 28, 2010

		December 31

		2009			2008
Assets
Current assets:
	Cash	$	4,939		$	2,022
	Accounts receivable, net		13,110			12,046
	Inventories, net		10,509			14,728
	Prepaid expenses and other current assets		1,876			3,568
	Deferred tax assets		2,534			1,454
	Current assets — discontinued operations		12,191			14,038

Total current assets			45,159			47,856
Property and equipment, net			3,000			3,922
Goodwill			87,554			87,554
Other intangible assets, net			36,498			43,463
Other assets			638			455
Non-current assets — discontinued operations			112,292			114,589

Total assets		$	285,141		$	297,839

Liabilities and equity
Current liabilities:
	Accounts payable	$	6,219		$	7,217
	Accrued expenses		6,330			6,908
	Current portion of notes payable and capital leases		59			104
	Line of credit		13,976			16,096
	Current liabilities — discontinued operations		5,952			8,140

Total current liabilities			32,536			38,465
Non-current liabilities:
	Notes payable		—			13,301
	Subordinated convertible notes payable		36,870			15,000
	Capital leases		88			146
	Deferred income taxes		5,055			6,705
	Non-current liabilities — discontinued operations		3,681			7,182

Total liabilities			78,230			80,799
Equity:
	Preferred stock, $.0001 par value; $1,000 stated value; 300,000 shares authorized		—			—
	Rolling Common stock, $.0001 par value; 1,400,000 shares authorized		—			—
	Common stock Class A, $.0001 par value; 13,400,000 shares authorized		—			—
	Common stock Class B, $.0001 par value; 8,800,000 shares authorized		—			—
	Additional paid-in capital		263,748			263,409
	Accumulated other comprehensive loss		(593	)		(4,587	)
	Accumulated deficit		(56,506	)		(42,033	)

Total shareholders' equity			206,649			216,789
Non-controlling interests			262			251

Total equity			206,911			217,040

Total liabilities and equity		$	285,141		$	297,839

		Years Ended December 31

		2009			2008			2007
Net sales		$	69,038		$	68,644		$	56,432
Cost of goods sold (excluding depreciation and amortization stated separately below)			22,487			22,611			21,163

Gross profit			46,551			46,033			35,269
Operating costs and expenses:
	Sales and marketing		28,557			34,460			26,291
	General and administrative		14,356			15,579			14,803
	Research and development		1,238			1,591			3,073
	Depreciation and amortization		8,097			8,250			7,911

Total operating costs and expenses			52,248			59,880			52,078

Loss from operations			(5,697	)		(13,847	)		(16,809	)
Other income (expense):
	Interest income		3			12			55
	Interest expense		(2,193	)		(2,101	)		(692	)
	Loss on debt extinguishment		(709	)		—			—
	Other (expense), net		(131	)		(771	)		(843	)

Total other income (expense)			(3,030	)		(2,860	)		(1,480	)

Loss from continuing operations before income taxes			(8,727	)		(16,707	)		(18,289	)
Income tax benefit			2,685			5,465			6,619

Loss from continuing operations			(6,042	)		(11,242	)		(11,670	)
Discontinued operations (Note 12)
	Loss from operations of discontinued business		(12,418	)		(11,847	)		(10,969	)
	Income tax benefit		3,987			4,448			4,662

	Loss on discontinued operations		(8,431	)		(7,399	)		(6,307	)

Net loss		$	(14,473	)	$	(18,641	)	$	(17,977	)

Loss per share of common stock:
	Loss from continuing operations	$	(0.28	)	$	(0.55	)	$	(0.74	)
	Loss on discontinued operations — net of tax		(0.40	)		(0.36	)		(0.40	)

	Net loss	$	(0.68	)	$	(0.91	)	$	(1.14	)

Weighted-average shares used in computing loss per share			21,302			20,529			15,762

BIOHORIZONS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
Years Ended December 31, 2009, 2008 and 2007
(Dollars in thousands)

			Number of Shares

			Number of Shares																	Accumulated Other Comprehensive Income
			Preferred Stock		Rolling Common Stock		Class A Common Stock			Class B Common Stock		DTI Capital			Additional Paid-in Capital			Non- Controlling Interests		Accumulated Other Comprehensive Income			Accumulated Deficit			Total Equity
Balance at January 1, 2007				126,455		994,838		10,589,046				$	23,723		$	142,303		$	229	$	242		$	(5,128	)	$	161,369
	Issuance of restricted stock (net)							1,110,617																			—
	Issuance of stock												39,779														39,779
	Options of BIS exercised																		17								17
	Comprehensive loss:																										—
		Net loss											(6,307	)										(11,670	)		(17,977	)
		Foreign currency translation											1,253								623						1,876

	Total comprehensive loss																										(16,101	)
	Stock-based compensation expense															117											117

Balance at December 31, 2007				126,455		994,838		11,699,663			—		58,448			142,420			246		865			(16,798	)		185,181
	Effect of combination with DTI Holdings, Inc⁽¹⁾			65,186		—					4,711,608		(58,448	)		65,186					(143	)		(6,594	)		0
	Convertible notes converted to equity (DTI)			45,000							3,131,793					45,000											45,000
	Convertible notes converted to equity (BIS)			3,000				251,213								3,000											3,000
	HealthpointCapital interest on converted notes															79											79
	Shares issued			7,000							633,915					7,000											7,000
	Purchase of Mexico treasury shares															(5	)										(5	)
	Additional issuances of preferred and common stock			500							35,883					500											500
	Options of BIS exercised																		5								5
	Issuance of restricted stock (net)			—				77,661			163,924					—											—
	Comprehensive loss:
		Net loss																						(18,641	)		(18,641	)
		Foreign currency translation																			(5,309	)					(5,309	)

	Total comprehensive loss																										(23,950	)
	Stock-based compensation expense															229											229

Balance at December 31, 2008				247,141		994,838		12,028,537			8,677,123		—			263,409			251		(4,587	)		(42,033	)		217,040
	Issuance of restricted stock (net)							(23,734	)		196,766																—
	Options of BIS exercised																		11								11
	Comprehensive loss:
		Net loss																						(14,473	)		(14,473	)
		Foreign currency translation																			3,994						3,994

	Total comprehensive loss																										(10,479	)
	Stock-based compensation expense															339											339

Balance at December 31, 2009				247,141		994,838		12,004,803			8,873,889	$	—		$	263,748		$	262	$	(593	)	$	(56,506	)	$	206,911

		Years Ended December 31

		2009			2008			2007
Cash Flows — Operating Activities
Net loss		$	(14,473	)	$	(18,641	)	$	(17,977	)
Loss from discontinued operations			8,431			7,399			6,307
Adjustments to reconcile net loss to net cash from (used for) operating activities:
	Depreciation and amortization		8,097			8,250			7,911
	Provision for deferred taxes		(2,784	)		(5,557	)		(6,619	)
	Provision for (recoveries of) uncollectible accounts, net		939			(409	)		1,444
	Provision for obsolete inventories		993			754			1,135
	Stock compensation expense		325			229			117
	Loss on debt extinguishment		709			—			—
	Loss on disposal of assets		131			—			—
	Changes in operating assets and liabilities, net of effects of business acquisition		7,542			(1,666	)		(2,767	)

Cash from (used for) operating activities			9,910			(9,641	)		(10,449	)

Cash Flows — Investing Activities
Acquisitions, net of cash acquired			(1,500	)		(7,700	)		—
Purchases of property and equipment			(423	)		(1,584	)		(1,072	)
Investments in and advances to discontinued operations			(6,694	)		(22,069	)		—

Cash used for investing activities			(8,617	)		(31,353	)		(1,072	)

Cash Flows — Financing Activities
Principal payments on capital leases			(67	)		(218	)		(162	)
Proceeds from the exercise of options to acquire stock of subsidiary			11			5			17
Proceeds from the issuance of preferred and common stock			—			7,495			1
Net line of credit borrowings			10,733			6,751			7,292
Retirement of GE line of credit (including fees and penalties of $709)			(13,563	)		—			—
Debt modification and financing costs paid			(651	)		(521	)		(225	)
Proceeds from issuance of subordinated convertible notes payable			5,000			15,000			3,000
Net proceeds from (payments on) other debt			—			13,345			(664	)

Cash from financing activities			1,463			41,857			9,259

Increase (decrease) in cash — continuing operations			2,756			863			(2,262	)
Cash from (used for) operating activities — discontinued operations			(7,300	)		(5,609	)		1,411
Cash used for investing activities — discontinued operations			(214	)		(1,995	)		(39,984	)
Cash from (used for) financing activities — discontinued operations			6,984			(7,163	)		54,321

Cash from (used for) discontinued operations			(530	)		(14,767	)		15,748

Effect of exchange rate changes on cash			161			(162	)		(223	)

Increase (decrease) in cash			2,387			(14,066	)		13,263
Cash at beginning of year			3,551			17,617			4,354
Less cash of discontinued operations at end of year			(999	)		(1,529	)		(16,286	)

Cash of continuing operations at end of year		$	4,939		$	2,022		$	1,331

BioHorizons, Inc. (the Company) (formerly HealthpointCapital Dental Holdings, Inc., BioHorizons Holdings, Inc. and BH Holdings I, Inc.) was incorporated in the state of Delaware in May 2006 for the purpose of acquiring BioHorizons Implant Systems, Inc. (BIS), a company that develops, acquires, manufactures, markets, sells and distributes dental implants and related products. BIS is the Company's principal operating subsidiary and was incorporated in the state of Delaware in November 1995. The Company sells its products to dental professionals and dental laboratories located in the United States and in foreign countries.

Effective January 1, 2008, the Company acquired DTI Holdings, Inc. (DTI) (formerly DTI Dental Technologies, Inc.), a dental laboratory business based in Vancouver, British Columbia, in a merger of entities under common control. The merger of DTI with the Company was accounted for in a manner similar to the pooling of interests method. Accordingly, the Company's financial statements for the period from August 23, 2006 (date of acquisition of DTI's principal operations and date common control was established) to December 31, 2007 have been combined with DTI, and are consolidated with DTI since January 1, 2008. Effective March 31, 2010, DTI was spun-off from the Company (see Note 12). DTI is presented as discontinued operations for all periods reported herein.

The consolidated financial statements of the Company include the accounts of the Company and its subsidiaries, BIS, DTI (as discontinued operations — see Note 12), BioLok Acquisition Corporation and Implant Logic Systems, Ltd. (ILS). BIS' wholly-owned subsidiaries include BioHorizons Iberica S.R.L., BioHorizons GmbH, and BioHorizons Australia Pty Ltd. BioLok Acquisition Corporation owns BioLok International, Inc. (BioLok). BioLok's wholly- and majority-owned subsidiaries include Orthogen Corporation, BioHorizons Mexico S.A. de C.V., Bio-Lok Int'l Pty Inc. and BioHorizons Chile, S.A. (which is 51% owned).

Significant inter-company balances and transactions have been eliminated in consolidation.

The Financial Accounting Standards Board (FASB) has made the Accounting Standards Codification (ASC) effective for financial statements issued for interim and annual periods ending after September 15, 2009. The ASC combines all previously issued authoritative U.S. generally accepted accounting principles (GAAP) into one codified set of guidance organized by subject area. In these financial statements, references to previously issued accounting standards have been replaced with the relevant ASC references. Subsequent revisions to GAAP by the FASB will be incorporated into the ASC through issuance of Accounting Standards Updates (ASU).

The Company recognizes revenue when products are shipped. For the Company's software product, the value of maintenance bundled with software is deferred using the residual method and recognized over the maintenance and support period. The Company generally does not require collateral when

1. Description of the Business and Significant Accounting Policies (Continued)

making a sale. Shipping and handling costs are included in cost of goods sold. Taxes collected from customers and remitted to governmental authorities are excluded from revenue. The Company's implant and abutment products carry a lifetime warranty, which covers any failure of product, and the Company's implant tools, specialty instruments and software carry limited warranties. Customers may also return any product within sixty days of purchase for full credit. A reserve for product returns has been established based on the Company's implant and abutment historical product return experience. No warranty reserves are recorded because historical warranty claims have been immaterial.

Inventories are recorded at the lower of cost or market under the first-in first-out method of accounting. Included in the cost of inventory are purchased raw materials, third party processing costs, labor and manufacturing overhead. Inventories consist of implants, dental tools and instruments, biologics, educational videos and abutments held for sale.

The effect of noncash transactions are excluded from the consolidated statement of cash flows. During 2008 and 2007, approximately $105,000 and $158,000, respectively, of assets were obtained under capital leases. Noncash transactions also included the conversion of $48,000,000 of subordinated convertible notes into equity in 2008 (see Note 6). Interest paid totaled approximately $1,318,000, $1,963,000 and $648,000 for the years ended December 31, 2009, 2008 and 2007, respectively. Income taxes paid amounted to $70,000, $113,000 and $37,000 for the years ended December 31, 2009, 2008 and 2007, respectively.

Changes in operating assets and liabilities of continuing operations, net of effects of a business acquisition in 2008, were as follows for the years ended December 31 (in thousands):

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Amortization of property and equipment capitalized under capital lease obligations is recorded using a straight-line method over the useful life of the assets, and is included as depreciation and amortization in the consolidated statements of

1. Description of the Business and Significant Accounting Policies (Continued)

operations. Estimated useful lives are seven years for machinery and equipment, five to seven years for furniture and fixtures and 3 years for computer software.

The Company's primary functional and reporting currency is the U.S. dollar, while the functional currency of the Company's Australian, Chilean, Spanish, Canadian, Mexican, German and British subsidiaries is the Australian dollar, the Chilean peso, the Euro, the Canadian dollar, the Mexican peso, the Euro and the British pound, respectively. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Net sales and expenses are translated using the average exchange rate for the period. Translation gains and losses resulting from translation of subsidiaries' financial statements from the functional currency into U.S. dollars are included as a component of accumulated other comprehensive income or loss in the consolidated balance sheets. Transaction gains and losses on foreign currency transactions are recognized as incurred, and amounted to $57,000, ($72,000) and $52,000 in 2009, 2008 and 2007, respectively.

The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2009 or 2008.

The Company's stock-based compensation plans are accounted for under the recognition and measurement provisions of ASC 718, Compensation — Stock Compensation. ASC 718 requires the grant-date fair value of all share-based payment awards to be recognized as employee compensation expense over the requisite service period. Stock-based compensation expense for awards with graded vesting is recognized on a straight-line basis.

The Company accounts for income taxes under the provisions of ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are determined based upon differences between financial

1. Description of the Business and Significant Accounting Policies (Continued)

reporting and tax bases of assets and liabilities and are measured at the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recognized for deferred tax assets attributable to net operating loss carryforwards and other deductible temporary differences when it is determined that, based on available evidence, there is uncertainty whether some, or all, of the deferred tax assets will be realized.

Additionally, ASC 740 sets out a consistent framework for preparers to use to determine the appropriate level of tax reserves to maintain for uncertain tax positions. ASC 740 uses a two-step approach wherein a tax benefit is recognized if a position is more likely than not to be sustained. The amount of the benefit to be recognized is the largest amount that has a greater than 50 percent likelihood of being ultimately sustained. The Company adopted these provisions of ASC 740 effective January 1, 2009. There was no significant impact from adoption of the new rules for uncertain tax positions. (see Note 8). Penalties and interest related to the resolution of tax uncertainties are charged to income tax expense.

The Company reports trade receivables at net realizable value. Allowances for doubtful accounts are estimated based on historical write-off percentages and management's assessment of specific past due or delinquent customer accounts. The delinquency status of customers is determined by reference to contractual terms. Doubtful accounts are written off against the allowance for doubtful accounts after collection efforts have been exhausted and are recorded as recoveries of bad debts if subsequently collected. The allowance for doubtful accounts amounted to approximately $2,490,000 and $1,888,000 at December 31, 2009 and 2008, respectively. The Company had outstanding trade receivables due from international customers totaling approximately $10,750,000 and $10,547,000, at December 31, 2009 and 2008, respectively. These balances represented approximately 82% and 88% of the total outstanding trade receivable balance at December 31, 2009 and 2008, respectively. The Company does not require collateral or any other form of security from customers.

Changes in the allowance for doubtful accounts were as follows for the years ended December 31 (in thousands):

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an on-going basis, the Company evaluates its estimates, including those

1. Description of the Business and Significant Accounting Policies (Continued)

related to inventories, bad debts and intangibles. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Comprehensive income or loss includes net income or loss and all other changes in equity not attributable to transactions with owners. At December 31, 2009, 2008 and 2007, accumulated other comprehensive income (loss) consisted solely of cumulative translation adjustments attributable to foreign subsidiaries that use a foreign currency as their functional currency.

Goodwill represents the excess of the net acquisition cost over the estimated fair value of net assets acquired from purchased companies. Under ASC 350, Intangibles — Goodwill and Other, intangible assets considered to have indefinite lives, such as goodwill, are not amortized to expense but are periodically evaluated for impairment at the reporting unit level. Intangible assets with finite lives continue to be amortized to expense over their useful lives. The Company's identified intangible assets consist of distributor agreements, developed product technology and patents, trade names, customer base and non-compete agreements.

Under ASC 350, goodwill and other intangible assets with indefinite lives are subject to an annual impairment test, as well as an interim test if an event occurs or circumstances change between annual tests indicating that the asset might be impaired. The Company tests the goodwill of each of its reporting units, consisting of the implant business (continuing operations) and the discontinued laboratory business, annually as of December 31 and more frequently if impairment indicators exist. Beginning in fiscal year 2010, the Company intends to change the annual goodwill impairment testing date to the first day of the fourth quarter. The goodwill impairment test is a two-step process. First, the fair value of each of the Company's reporting units is compared to the carrying value of the reporting unit's assets less liabilities. If the fair value is less than the carrying value, a second step is performed. In the second step, an implied goodwill value is determined by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit. If the implied fair value of the goodwill, as calculated, is less than the carrying amount of the goodwill, an impairment charge is recorded for the difference. For purposes of estimating the fair value of a reporting unit, the Company uses a weighted average of the income approach and the market approach.

Distributor agreements represent contracts providing significant distribution resources across a broad geographic market. The distributor agreements are being amortized over seven to ten years.

Developed product technology and patents represent proprietary technology that is technologically feasible and includes all fully functioning products. The Company has developed or acquired developed

1. Description of the Business and Significant Accounting Policies (Continued)

product technology and patents for numerous dental implant devices. The developed product technology and patents are being amortized over a weighted average useful life of eight to ten years.

The BioHorizons trade names are being amortized over a useful life of fifteen years and the BioLok trade names are amortized over a useful life of eight years. Customer base intangible assets are amortized over useful lives of eight to ten years.

Non-compete agreements are being amortized over the periods covered by the related agreements, which range from two to four years.

The Company records costs related to obtaining renewal or extensions of recognized intangible assets as expenses in the period such costs are incurred.

The Company determines the fair value of financial instruments under the provisions of ASC 820, Fair Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. The fair value of cash, trade accounts receivable, accounts payable and notes payable approximate their carrying values in the balance sheet. The fair value of outstanding borrowings on the Company's line of credit also approximate the carrying amount reported in the balance sheet due to the length of the remaining term of the line and because interest is at floating market rates.

The Company concluded that it was not practical to estimate the fair value of the subordinated convertible notes payable to HealthpointCapital Partners II, L.P. (HealthpointCapital) because of the related party nature of the notes and the optional forms of settlement. Refer to Note 6 for information pertinent to estimating the fair value of the subordinated convertible notes.

Basic loss per share is calculated by dividing the net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents, if any, outstanding for the period. Common stock equivalents having an anti-dilutive impact and convertible debt securities that are anti-dilutive under the "if converted" method are not included in diluted loss per share.

1. Description of the Business and Significant Accounting Policies (Continued)

Loss per common share is calculated as follows (in thousands, except per share data):

	Year Ended December 31

	2009			2008			2007
Numerator:
Loss from continuing operations	$	(6,042	)	$	(11,242	)	$	(11,670	)
Loss on discontinued operations		(8,431	)		(7,399	)		(6,307	)

Net loss	$	(14,473	)	$	(18,641	)	$	(17,977	)

Denominator:
Weighted average common shares outstanding — basic and diluted		21,302			20,529			15,762

Loss per Share:
Loss from continuing operations per common share — basic and diluted	$	(0.28	)	$	(0.55	)	$	(0.74	)
Loss on discontinued operations per common share — basic and diluted		(0.40	)		(0.36	)		(0.40	)

Net loss per common share — basic and diluted	$	(0.68	)	$	(0.91	)	$	(1.14	)

1. Description of the Business and Significant Accounting Policies (Continued)

Anti-dilutive securities not included in diluted net loss per share were as follows (in thousands):

In May 2009, the FASB issued ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued. In February 2010, the FASB issued ASU No. 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. In accordance with ASU 2010-09, the Company evaluated all events and transactions that occurred after December 31, 2009, through the date these financial statements were issued and has disclosed certain events and transactions as required by ASC 855 (see Note 15).

Advertising costs are expensed as incurred and totaled approximately $882,000, $1,010,000 and $975,000 for the years ended December 31, 2009, 2008 and 2007, respectively.

ASC 805, Business Combinations, requires that, upon a business combination, the acquired assets, assumed liabilities, contractual contingencies and contingent liabilities be recognized and measured at their fair value at the acquisition date. ASC 805 also requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred; previously these costs were treated as costs of the acquisition. In addition, ASC 805 requires that acquired-in-process research and development be measured at fair value and capitalized as an indefinite-lived intangible asset, and it is therefore not subject to amortization until the project is completed or abandoned; previously these costs were expensed at the time of the acquisition. ASC 805 also requires changes in deferred tax asset valuation allowances and acquired income tax uncertainties that are recognized after the measurement period be recognized in income tax expense; previously such changes were considered to be subsequent changes in consideration and were recorded as decreases in goodwill. ASC 805 requires contingent consideration to be recorded at fair value as an element of the purchase price with subsequent adjustments recognized in operations; previously contingent consideration was accounted for as a

1. Description of the Business and Significant Accounting Policies (Continued)

subsequent adjustment of the purchase price. ASC 805 applies to business combinations consummated after December 31, 2008.

ASC 810, Consolidation, requires that non-controlling interests (previously referred to as minority interests) be clearly identified and presented as a component of equity, separate from the parent's equity. ASC 810 also requires that the amount of consolidated net income or loss attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of operations; that changes in ownership interest be accounted for as equity transactions; and that when a subsidiary is deconsolidated, any retained non-controlling equity investment in that subsidiary and the gain or loss on the deconsolidation of that subsidiary be measured at fair value. ASC 810 is to be applied prospectively, except for the presentation and disclosure requirements (which are to be applied retrospectively for all periods presented) and was effective for fiscal years beginning after December 15, 2008, which for the Company was calendar year 2009. The Company reclassified the non-controlling interests as a component of equity for all periods presented. However, since the non-controlling interests were inconsequential to the results of operations for all periods presented herein, these amounts have not been separately shown.

In October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements, which addresses how to determine whether a revenue arrangement involving multiple deliverables contains more than one unit of account and how the arrangement consideration should be allocated among the separate units of accounting. The FASB concurrently issued ASU No. 2009-14, Certain Revenue Arrangements That Include Software Elements, which addresses accounting for revenue arrangements that contain tangible products and software. The pronouncements are applicable to the Company's 2011 fiscal year, but may be applied retrospectively or prospectively for new or materially modified arrangements. Additionally, early adoption is permitted, but requires retrospective application to the beginning of the fiscal year in which adopted.

The Company has determined these pronouncements will not affect the current residual method of accounting, as applied to the Company's software sales. Software is sold either as a standalone product or as part of a bundled package with other non-software products, such as implants. Deferred revenue consists of the annual software upgrade fee, inclusive of support services, which is recognized pro rata over the year of service.

On April 15, 2008, the Company acquired ILS. ILS operates in the fields of software technology and medical devices and developed the Company's Virtual Implant Placement (VIP) computer-guided surgical software. The results of operations of ILS have been included in the consolidated financial statements of the Company for the period beginning April 15, 2008.

The consideration paid for and fair values allocated to the acquired assets and assumed liabilities are as follows (in thousands):

In connection with this transaction, the Company conducted a valuation of the acquired assets and assumed liabilities in order to allocate the purchase price. The fair value of the acquired tangible assets and assumed liabilities was determined to be equal to ILS' historical carrying value on April 15, 2008, the date of acquisition. The Company allocated the excess purchase price over the fair value of acquired net tangible and intangible assets to goodwill. The complementary nature of computer guided implant surgery to the Company's implant business and the opportunities to achieve synergies by bundling the Company's existing product lines with the acquired VIP computer-guided surgical software and surgical guides, were among the factors that contributed to a purchase price resulting in the recognition of goodwill. Goodwill and other intangibles recorded in the acquisition of ILS are not deductible for income tax purposes.

In order to fund this transaction, the Company issued 7,000 shares of preferred stock and 502,357 shares of Class B common stock to HealthpointCapital for aggregate cash proceeds of $7,000,000. The Company also issued 131,558 shares of Class B common stock to the stockholders of ILS in connection with the acquisition.

The following is a summary of the Company's goodwill activity for the years ended December 31 (in thousands):

As of December 31, 2009, other intangible assets consisted of the following (in thousands):

As of December 31, 2008, other intangible assets consisted of the following (in thousands):

Amortization expense for the years ended December 31, 2009, 2008 and 2007 was approximately $6,965,000, $7,244,000 and $7,187,000, respectively.

The following is a schedule of future amortization expense for other intangible assets for years ending after December 31, 2009 (in thousands):

Lines of credit and notes payable consist of the following at December 31 (in thousands):

During the year ended December 31, 2007, the Company entered into a secured revolving credit facility agreement with Merrill Lynch Capital that provided for borrowings on a revolving basis through the facility's scheduled maturity on April 18, 2010. The line had a maximum limit of $15,000,000, which was further limited to the sum of eligible accounts receivable and finished goods inventory plus a maximum of $3,000,000, and was secured by intellectual property of the Company. The agreement required certain usage levels and provided for commitment and prepayment fees. Interest on the line was variable at LIBOR plus 2.65%.

The Company entered into a restated credit agreement with Merrill Lynch Business Financial Services, Inc. dated February 7, 2008. The agreement provided for a term loan of $15,000,000 as well as a revolving loan with a maximum balance of $20,000,000. Interest on the outstanding balance of the line was computed at a rate equal to the one month LIBOR rate divided by the sum of one minus the daily average during the preceding month of the aggregate maximum reserve requirement then imposed under Regulation D of the Board of Governors of the Federal Reserve System for "Eurocurrency Liabilities" plus 2.90% for revolving loans and 4.0% for the term loan. There were numerous restrictive covenants in the agreement, which included certain required financial ratios and

limitations on the payment of dividends. Subsequent to the effective date of this agreement, Merrill Lynch Business Financial Services, Inc. was acquired by GE.

In August 2008, the Company reported an event of default as of the quarterly compliance reporting period ended June 30, 2008 to GE. The default was caused by failing to meet the financial covenant measurement of fixed charge coverage, due to the negative earnings of the Company in the applicable period.

On September 22, 2008, the Company signed a forbearance agreement with GE. Under the terms of this agreement, the interest rate on the term loan and revolving loans increased by 5 percentage points retroactive to the date of the default and the Company paid a $500,000 forbearance fee. HealthpointCapital purchased a 100% participation interest in the outstanding balance of the term loan of $13,301,000, the termination date of the restated credit agreement was changed to March 31, 2009 and GE agreed not to exercise its rights and remedies under the restated credit agreement as a result of the fixed charge coverage default.

The GE revolving loans and the term loan were paid off in March 2009 with the proceeds of a new secured revolving credit facility with MidCap Funding I, LLC (MidCap) and from additional financing provided by HealthpointCapital. The Company paid a penalty of $663,000 and incurred other costs of $46,000 upon extinguishment of the GE revolving credit line and term loan. The penalty is included in loss on debt extinguishment in the 2009 consolidated statement of operations.

The Company entered into a secured revolving credit facility with MidCap for borrowings on a revolving basis through maturity of the facility on March 23, 2012. The line has a maximum limit of $20,000,000, which is limited to the sum of eligible accounts receivable and domestic inventory. The agreement requires certain usage levels and provides for commitment and prepayment fees. The line bears interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly. The MidCap revolving credit line was supported by asset-based collateral, including both inventory and receivables, totaling $16,084,000 at December 31, 2009. The MidCap secured revolving credit facility requires the Company to maintain a lockbox control and custody account, and includes a subjective acceleration provision as an event of default. Accordingly, outstanding borrowings on the facility are classified as current in the consolidated balance sheet. The credit facility is secured by substantially all of the assets of the Company, including accounts receivable, inventories and property and equipment.

The term loan payable to GE provided for variable interest (as described above) through its original maturity in February 2013. However, pursuant to the forbearance agreement with GE, the maturity date was accelerated to March 31, 2009. As described above, the term loan was paid off in March 2009 in connection with obtaining a new revolving line of credit and additional financing from HealthpointCapital. Because the term loan was replaced with long-term financing from HealthpointCapital, the balance outstanding on the term loan at December 31, 2008, was classified as non-current in the balance sheet.

During 2008, the Company issued an aggregate principal amount of $15,000,000 in subordinated convertible notes payable to its majority stockholder, HealthpointCapital. Additionally, in March 2009, the Company issued a $5,000,000 subordinated convertible note to HealthpointCapital. These notes were combined with HealthpointCapital's "last out" 100% participation in the $13,301,000 GE term loan outstanding at December 31, 2008, and $250,000 of accrued and unpaid interest and GE fees funded by HealthpointCapital into a single subordinated convertible note on March 23, 2009, with a total principal amount (before accrued interest) of $33,551,000, and bearing interest at 8% per year. HealthpointCapital's loans to the Company totaling $33,551,000 plus accrued interest of $3,319,000 as of December 31, 2009 were amended again on January 1, 2010. The new note bears interest at 10% per year and is due and payable on the earlier to occur of (i) a merger, consolidation or similar transaction resulting in a change of control of the Company, a sale of all or substantially all of the Company's assets, a sale of a majority of the Company's capital stock, or any other change in control of the Company, in each case occurring in one transaction or a series of related transactions; or (ii) upon demand by HealthpointCapital at any time after July 1, 2011. At any time prior to the full repayment of the notes, HealthpointCapital may, at its sole discretion, convert all or part of the then outstanding principal amount of the notes into shares of stock of the Company (or equivalent securities), as would be issuable valuing the Company's currently outstanding shares of common and preferred stock (on a fully diluted and fully converted basis) at $500,000,000. Based on the conversion terms of the amended and restated note, the subordinated convertible notes would be convertible into 4,083,036 shares of Class B common stock at December 31, 2009.

On March 31, 2010, in connection with the Company's spin-off of DTI, the Company issued a warrant to HealthpointCapital, which as of March 31, 2010 was exercisable for 126,059 shares of the Company's common stock at an exercise price of $13.59 per share. Using a Black-Scholes option pricing formula, the warrant had a grant date fair value of $173,296. See Note 9 for a further description of the spin-off of DTI and the warrant.

In 2008, $45,000,000 convertible notes issued to HealthpointCapital in 2007 by DTI were converted to equity. Each $1,000 principal amount of notes was converted to one share of Series A preferred stock and .3 shares of common stock of DTI, resulting in the issuance of 45,000 shares of preferred stock and 13,500,000 shares of common stock of DTI. As a result of the merger, each share of preferred stock of DTI was converted into one share of preferred stock of the Company, and each share of common stock of DTI was converted into .231984679 shares of the Company's Class B common stock. Accordingly, the $45,000,000 DTI convertible notes were exchanged upon the merger for 45,000 shares of the Company's preferred stock and 3,131,793 shares of the Company's Class B common stock.

In 2008, a $3,000,000 subordinated convertible note issued by the Company in 2007 to HealthpointCapital was converted to equity. Each $1,000 in principal amount of the note was converted to one share of Series A preferred stock of the Company and 0.01194207 shares of Class A common stock of the Company, resulting in the issuance of 3,000 shares of preferred stock and 251,213 shares of Class A common stock of the Company.

Capital leases as of December 31, 2009 and 2008 include leases for manufacturing equipment and office furniture and equipment totaling $147,000 and $215,000, respectively. Property recorded under capital lease obligations with a net carrying value of $182,000 and $261,000 at December 31, 2009 and 2008, respectively, is included in property and equipment in the accompanying consolidated balance sheets. The capital leases mature as follows in the fiscal years ending December 31 (in thousands):

The loss from continuing operations before income taxes for the years ended December 31 consists of the following (in thousands):

The components of the income tax (benefit) provision for the years ended December 31 are as follows (in thousands):

The provisions for (benefits from) income taxes attributable to continuing operations differ from the amounts computed using the statutory federal income tax rate of 35% for the following reasons for the years ended December 31 (in thousands):

Significant components of the Company's deferred tax liabilities and assets are as follows at December 31 (in thousands):

		2009			2008

Deferred tax liabilities:
	Basis difference in intangibles	$	(13,886	)	$	(16,022	)
	Property and equipment		(444	)		(695	)
	Foreign currency		(55	)		—

Total deferred tax liabilities			(14,385	)		(16,717	)
Deferred tax assets:
	U.S. federal and state operating loss carryforwards		9,332			9,942
	Foreign net operating loss carryforwards		194			51
	Inventory reserves		706			287
	Accrued expenses		221			428
	Inventory capitalization		612			70
	Contribution carryover		25			22
	Allowance for doubtful accounts		1,027			717

Total deferred tax assets			12,117			11,517
Valuation allowance			(253	)		(51	)

Net deferred tax assets			11,864			11,466

Net deferred taxes		$	(2,521	)	$	(5,251	)

The components of net deferred income taxes are as follows at December 31 (in thousands):

Net federal, foreign and state operating loss carryforwards of approximately $24,400,000, $850,000 and $11,100,000, respectively, as of December 31, 2009, expire at various times through 2029. A valuation allowance of approximately $217,000 and $36,000 has been recorded against certain foreign and state net operating loss carryforwards as of December 31, 2009, but no valuation allowance has been provided for the deferred tax assets associated with the federal net operating loss carryforwards because the Company has sufficient taxable temporary differences that are scheduled to reverse prior to expiration of the carryforwards.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2006. The Internal Revenue Service (IRS) commenced an examination of the Company's U.S. income tax returns for 2007 through 2008 in the second quarter of 2009 that was completed in the first quarter of 2010. The IRS proposed certain adjustments which the Company agreed to make. The adjustments resulted in a reduction of the Company's net operating loss carryforward and are reflected in the accompanying consolidated financial statements. The Company has amended and re-filed the affected tax returns.

The Company has no reserves for uncertain tax positions and there are no unrecognized tax benefits attributable to continuing operations. No interest or penalties have been paid or incurred in 2007, 2008 or 2009.

As of December 31, 2009, the Company was authorized to issue (i) 25,000,000 shares of common stock, $0.0001 par value per share (the common stock), of which 13,400,000 shares were designated "Class A Common Stock" (the Class A common stock), 8,800,000 shares were designated "Class B Common Stock" (the Class B common stock), 1,400,000 shares were designated "Rolling Common Stock" (the Rolling common stock) and 1,400,000 shares were without designation; and (ii) 300,000 shares of preferred stock, $0.0001 par value per share, all of which are designated "Preferred Stock" (the preferred stock).

Effective March 31, 2010, the Company amended and restated its Certificate of Incorporation to, among other things, (i) increase the authorized number of shares of common stock to 28,000,000 shares, (ii) designate 217,578 shares of common stock as "Class C Common Stock" (the Class C common stock) and (iii) increase the number of shares of common stock without designation to 4,182,422 shares.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or an initial public offering (IPO) or deemed liquidation event, the holders of the following classes or series of stock of the Company are entitled to the following payments out of the assets available for distribution:

As of March 31, 2010, the aggregate amount of the forgoing liquidation preferences was approximately $304,300,000. If the assets of the Company that are available for such distribution are insufficient to pay the preferences in full, the Company will distribute the available assets in the order of priority set forth in the Certificate of Incorporation. After payment of the forgoing preference amounts, the holders of shares of undesignated common stock are entitled to be paid the remaining assets available for distribution. In an IPO, all or a portion of the foregoing preferences may be paid in undesignated common stock (valued at its fair market value per share determined in good faith by the Company's Board of Directors) with the consent of at least 51% of the outstanding preferred stock.

Dividends are payable on shares of preferred stock and common stock outstanding when and if declared by the Company's Board of Directors. No dividends have ever been declared. Each holder of shares of preferred stock is entitled to one vote for each share held. Unless required by law, all shares of common stock (including Class A common stock, Class B common stock, Class C common stock and Rolling common stock) are nonvoting.

Effective April 17, 2007, the Company adopted the 2007 Executive, Director and Consultant Stock Plan (the Plan). The Plan is intended to encourage ownership of shares by employees and directors of and certain consultants to the Company and its affiliates. The number of shares which may be issued pursuant to the Plan is 1,765,000, of which 64,804 remain available for future grants. Awards under the Plan normally vest over 36 months, however, some restricted stock awards vest over a shorter period.

The following table summarizes information about nonvested restricted stock awards (in thousands of shares) for the years ended December 31, 2009, 2008 and 2007:

		Class A common stock					Class B common stock

		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Nonvested awards at December 31, 2006			—					—
	Granted		1,114		$	0.51		—		$	—
	Forfeited		(3	)		0.51		—			—
	Vested		(333	)		0.51		—			—

Nonvested awards at December 31, 2007			778			0.51		—			—
	Converted upon DTI merger							175			0.04
	Granted		86			1.30		197			0.04
	Forfeited		(8	)		0.51		(33	)		0.04
	Vested		(435	)		0.63		(108	)		0.04

Nonvested awards at December 31, 2008			421			0.55		231			0.04
	Granted		—			—		240			0.50
	Forfeited		(24	)		0.59		(43	)		0.11
	Vested		(362	)		0.52		(102	)		0.17

Nonvested awards at December 31, 2009			35			0.78		326			0.33

The fair value of restricted stock that vested during 2009, 2008 and 2007 was $206,000, $278,000 and $170,000, respectively.

The grant date fair value per share is being recognized as compensation expense over the applicable vesting period. Stock-based compensation expense, together with the related tax benefits recognized were as follows for the years ended December 31 (in thousands):

Total unrecognized compensation expense of $107,000 at December 31, 2009, is expected to be recognized over the remaining vesting period, as follows: 2010 — $53,000; 2011 — $35,000; and 2012 — $19,000.

The fair value of the nonvested restricted stock was determined annually at the beginning of each fiscal year, with assistance of unrelated valuation specialists, using the probability-weighted expected return method described in Chapter 10 of the AICPA Audit and Accounting Practice Aid, "Valuation of Privately-Held-Company Equity Securities as Compensation."

The BIS 2000 Stock Grant and Option Plan (the 2000 Stock Plan) was adopted by the board of directors of BIS and approved by the BIS stockholders in 2000 and the BIS 2003 Long-Term Incentive Plan (the 2003 Plan) was adopted by the board of directors of BIS and approved by the BIS stockholders in 2003. In connection with the acquisition of BIS by the Company in August 2006 (the BIS merger), the Company discontinued granting equity under the 2000 Stock Plan and the 2003 Plan. Pursuant to the terms of the BIS merger, BIS option holders generally received cash consideration, however, some BIS option holders elected not to exercise their BIS options in the BIS merger and those BIS options remained outstanding under the 2000 Stock Plan and the 2003 Plan, as applicable. At the time of the BIS merger, the Company amended the terms of those BIS options to provide that at any time after the exercise of the BIS options for shares of BIS common stock, the shares of BIS common stock are putable by the optionee or callable by the Company for cash or for shares of the Company's Rolling common stock at the election of the other party. As of December 31, 2009, 145,000 shares of BIS common stock, which represents 2.0% of the total outstanding common stock of BIS, are outstanding as a result of the exercise of BIS options since the BIS merger. BIS received an aggregate of $262,000 from the exercise of these BIS options. These shares of BIS common stock represent the non-controlling interests reported on the accompanying consolidated balance sheets. The 145,000 shares of BIS common stock are putable or callable for 169,356 shares of Rolling common stock. In addition, as of December 31, 2009, 185,681 BIS options remain outstanding under the 2000 Stock Plan and the 2003 Plan which are putable or callable for 216,873 shares of Rolling common stock.

On March 31, 2010, the Company spun-off DTI through a tax-free dividend to the holders of the Company's Rolling common stock, Class A common stock and Class B common stock, 100% of the 20,418,775 outstanding shares of DTI common stock that were held by the Company (the Spin-Off). In connection with the Spin-Off, the Company also conducted an exchange offer with the Company's employees and DTI conducted an exchange offer with its employees. Pursuant to the Company's exchange offer, the Company offered its employees the right to exchange their right to receive DTI common stock in the Spin-Off for shares of the Company's Class C common stock to be issued pursuant to the Company's 2010 Employee, Director and Consultant Stock Plan. As a result of this exchange offer, the Company issued to its employees an aggregate of 217,557 shares of the Company's Class C common stock. Pursuant to DTI's exchange offer, DTI offered its employees the right to exchange all of their shares of the Company's Class B common stock that they had previously acquired by virtue of being employees of the Company for Class B common stock of DTI. As a result of the DTI exchange offer, 217,578 shares of the Company's Class B common stock (including nonvested shares) were exchanged by current DTI employees and are no longer outstanding.

On March 31, 2010, in connection with the Spin-Off, the Company issued a warrant to HealthpointCapital. The warrant expires on July 1, 2011. If the warrant is exercised prior to the Company's IPO, then the warrant is exercisable for 126,059 shares of the Company's Class B common stock at an exercise price of $13.59 per share. If the warrant is exercised in connection with or after the Company's IPO, the warrant will be exercisable for the number of shares of the Company's common stock equal to $1,700,000 divided by the price per share of the Company's common stock in its IPO. The warrant also has net exercise provisions under which the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares of the Company's common stock based on the fair market value of the underlying shares of the Company's common stock at the time of exercise of the warrant, after deduction of the aggregate exercise price.

The Company has an exclusive worldwide license agreement with a university research foundation to manufacture and sell products, processes or methods covered under a patent for dental implants and implant systems. Under the terms of the agreement, the Company is required to reimburse patent application expenses incurred by the university research foundation in protecting this technology, as well as future costs associated with patents and licensed technology in any country, and is required to make minimum royalty payments. For the years ended December 31, 2009, 2008 and 2007, the Company recorded $85,000, $87,000 and $66,000, respectively, as royalty expense.

Pursuant to a license agreement with the Hospital for Joint Diseases Orthopedic Institute (HJD), the Company is obligated to make royalty payments for the grant of a license for a certain laser technology applied to dental products manufactured by the Company. The Company is required to pay a percentage of sales of products using the licensed technology. Licensing and royalties incurred under the HJD agreement were $278,000, $182,000 and $25,000 in 2009, 2008 and 2007, respectively.

The Company leases office space in the United States, Canada and overseas under operating leases which will expire on various dates through 2014. Future minimum rental payments required under these leases are as follows for the years ending December 31 (in thousands):

Total rent expense for the years ended December 31, 2009, 2008 and 2007, was $859,000, $1,281,000 and $872,000, respectively.

In October 2009, a complaint was filed against the Company by Jack T. Krauser in the Circuit Court of the 15^th Judicial Circuit for Palm Beach County, Florida. In April 2010, the complaint was removed to the U.S. Federal District Court for Southern District of Florida, where it remains pending. In the complaint, Dr. Krauser alleges that the Company is in default under a settlement agreement entered into by a subsidiary and Dr. Krauser for, among other things, failing to make certain royalty payments due to Dr. Krauser under the settlement agreement. The settlement agreement expired on February 11, 2007. Dr. Krauser is seeking a declaratory judgment that, among other things, the subsidiary is in default under the settlement agreement and that Dr. Krauser is owner of certain patents including the Company's Tapered Internal Implant Systems and corresponding 510(k) applications. On May 6, 2010, the Company filed a motion to dismiss the complaint on multiple grounds, and on May 24, 2010 Dr. Krauser submitted a Memorandum of Law in opposition to the Company's motion to dismiss. On June 14, 2010, the Company filed a Reply Memorandum which is currently under consideration by the court. Management believes that the allegations contained in the complaint are false, and the Company plans to vigorously defend this action. The Company is unable to estimate a possible loss or range of loss related to this matter.

The Company has a qualified 401(k) plan, which covers substantially all employees. The total matching contributions to the 401(k) plan for the years ended December 31, 2009, 2008 and 2007, were $28,000, $392,000 and $242,000, respectively. Matching contributions were suspended on February 1, 2009.

On March 31, 2010, the Company completed the Spin-Off of DTI. The results of operations of DTI are reflected in the loss from discontinued operations, net of taxes, in the accompanying consolidated statements of operations and the assets and liabilities of DTI are classified as discontinued operations in the accompanying consolidated balance sheets in accordance with ASC subtopic 205-20 Presentation of Financial Statements — Discontinued Operations. Summarized financial information for discontinued operations of DTI is as follows for the years ended December 31 (in thousands):

The assets and liabilities of discontinued operations of DTI included in the accompanying consolidated balance sheets as of December 31 were as follows (in thousands):

		2009		2008

Current assets — discontinued operations:
	Cash	$	999	$	1,529
	Accounts receivable, net		7,237		7,815
	Inventories, net		1,827		1,779
	Prepaid expenses		968		1,585
	Deferred tax assets		1,160		1,330

Current assets — discontinued operations		$	12,191	$	14,038

Non-current assets — discontinued operations:
	Net property and equipment	$	4,509	$	5,350
	Goodwill		69,188		68,961
	Other intangible assets, net		37,971		39,629
	Other assets		624		649

Non-current assets — discontinued operations		$	112,292	$	114,589

Current liabilities — discontinued operations:
	Accounts payable and accrued expenses	$	5,816	$	8,044
	Other current liabilities		136		96

Current liabilities — discontinued operations		$	5,952	$	8,140

Non-current liabilities — discontinued operations:
	Deferred income taxes	$	2,408	$	6,209
	Other long term liabilities		1,273		973

Non-current liabilities — discontinued operations		$	3,681	$	7,182

For 2008 and 2009, the Company allocated interest expense to discontinued operations based on the ratio of net assets of DTI (less debt required to be repaid upon the Spin-Off) to the sum of total consolidated equity plus consolidated debt other than debt required to be repaid in connection with the Spin-Off in accordance with ASC 205-20-45-7. The amount of interest expense allocated to discontinued operations was $1,743,000 and $1,490,000 for the years ended December 31, 2009 and 2008, respectively. For 2007, interest expense of $5,251,000 in the loss on discontinued operations reflects the actual interest expense incurred by DTI prior to the merger with the Company. Accounting services will continue to be provided to DTI under a shared services agreement during the six months transition period following the March 31, 2010 spin-off date. There will be no other remaining commitments, contractual obligations or shared activities following the Spin-Off.

The Company had receivables from employees (included in other assets) of approximately $49,000 and $62,000 at December 31, 2009 and 2008 respectively.

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates in two reportable business segments: the implant segment, which encompasses all of the Company's continuing operations, and the dental laboratory segment (reported in discontinued operations).

During the years ended December 31, 2009 and 2008, the Company operated in four geographic locations: North America, Europe, Asia Pacific and the rest of the world.

Net sales attributed to the geographic location of the customer (and excluding discontinued operations) for the years ended December 31, were as follows (in thousands):

Long lived assets by region (excluding goodwill, intangible assets and discontinued operations) were as follows at December 31 (in thousands):

Net assets by region (excluding discontinued operations) were as follows (in thousands):

Effective March 31, 2010, the Company spun off the dental laboratory business of DTI. The accompanying financial statements present DTI as discontinued operations for all periods reported (see Note 12).

As a result of the Spin-Off, effective March 31, 2010, the Company modified the existing loan agreement with MidCap (see Note 6) to provide for a new $12,500,000 revolving line of credit and a $5,000,000 term loan. The transaction resulted in a $94,500 loss on debt modification, representing a portion of the unamortized loan costs associated with the former revolving credit facility, related to the refinancing. In connection with the refinancing, the Company paid a $600,000 termination fee and incurred other costs amounting to $303,875. These costs were capitalized as debt issuance costs and will be amortized over the terms of the new MidCap revolving line of credit and term loan.

The new credit facility provides for borrowings on a revolving basis through March 31, 2012, the maturity date of the revolver. Borrowings under the revolver are limited to the sum of the eligible accounts receivable and domestic inventory, up to a maximum of $12,500,000. The revolver bears interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly, and provides for commitment and prepayment fees. Interest is charged on a minimum of 80% of the amount available under the revolver or the outstanding balance, whichever is greater.

The new credit facility also provides for a $5,000,000 loan. Interest on the term loan is payable monthly at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly, during the first six months after the initial issuance of the note. In all remaining months under the term of the note, interest is charged at the same rate plus 300 basis points. The term loan will mature upon the earlier of an IPO or June 30, 2011. A non-refundable exit fee of $450,000 is payable upon maturity.

In addition, as described in Notes 6 and 12, in connection with the Spin-Off, the Company:

		March 31, 2010			December 31, 2009

Assets
Current assets:
	Cash	$	1,663		$	4,939
	Accounts receivable, net		13,383			13,110
	Inventories, net		11,079			10,509
	Prepaid expenses and other current assets		2,117			1,876
	Deferred income tax assets		3,155			2,534
	Current assets — discontinued operations		—			12,191

Total current assets			31,397			45,159
Property and equipment, net			2,766			3,000
Goodwill			87,554			87,554
Other intangible assets, net			34,760			36,498
Other assets			1,923			638
Non-current assets — discontinued operations			—			112,292

Total assets		$	158,400		$	285,141

Liabilities and Equity
Current liabilities:
	Accounts payable	$	7,305		$	6,219
	Accrued expenses		5,041			6,330
	Current portion of capital leases		43			59
	Line of credit		12,842			13,976
	Current liabilities — discontinued operations		—			5,952

Total current liabilities			25,231			32,536
Non-current liabilities:
	Subordinated convertible notes payable		37,635			36,870
	Capital leases		92			88
	Deferred income taxes		5,599			5,055
	Non-current liabilities — discontinued operations		—			3,681

Total liabilities			68,557			78,230
Equity:
	Preferred stock, $.0001 par value; $1,000 stated value: 300,000 shares authorized		—			—
	Rolling Common stock, $.0001 par value; 1,400,000 shares authorized		—			—
	Common stock Class A, $.0001 par value; 13,400,000 shares authorized		—			—
	Common stock Class B, $.0001 par value; 8,800,000 shares authorized		—			—
	Common stock Class C, $.0001 par value; 217,578 shares authorized		—			—
	Additional paid-in capital		148,304			263,748
	Accumulated other comprehensive income (loss)		843			(593	)
	Accumulated deficit		(59,566	)		(56,506	)

Total shareholders' equity			89,581			206,649
Non-controlling interests			262			262

Total equity			89,843			206,911

Total liabilities and equity		$	158,400		$	285,141

See accompanying notes to unaudited condensed consolidated financial statements.

		Three Months Ended March 31,

		2010			2009
Net sales		$	18,972		$	16,455
Cost of goods sold (excluding depreciation and amortization stated separately below)			5,769			5,112

Gross profit			13,203			11,343
Operating costs and expenses:
	Sales and marketing		7,342			7,623
	General and administrative		3,601			3,663
	Research and development		494			264
	Depreciation and amortization		1,981			2,079

Total operating costs and expenses			13,418			13,629

Loss from operations			(215	)		(2,286	)
Other income (expense):
	Interest income		2			2
	Interest expense		(472	)		(896	)
	Loss on debt modification and extinguishment		(95	)		(709	)
	Other income (expense), net		(107	)		15

Total other income (expense)			(672	)		(1,588	)

Loss from continuing operations before income taxes			(887	)		(3,874	)
Income tax benefit			299			1,157

Loss from continuing operations			(588	)		(2,717	)
Discontinued operations (Note 12):
	Loss from operations of discontinued business		(3,826	)		(1,686	)
	Income tax benefit		1,354			542

	Loss from discontinued operations		(2,472	)		(1,144	)

Net loss		$	(3,060	)	$	(3,861	)

Loss per share of common stock:
	Loss from continuing operations	$	(0.03	)	$	(0.13	)
	Loss from discontinued operations		(0.11	)		(0.05	)

	Net loss	$	(0.14	)	$	(0.18	)

Weighted-average shares used in computing loss per share			21,528			21,079

See accompanying notes to unaudited condensed consolidated financial statements.

BIOHORIZONS, INC.
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(UNAUDITED)
(Dollars in thousands)

		Number of Shares

		Preferred Stock		Rolling Common Stock		Class A Common Stock		Class B Common Stock			Class C Common Stock		Additional Paid-in Capital			Non-Controlling Interests		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Equity
Balance at December 31, 2009			247,141		994,838		12,004,803		8,873,889			—	$	263,748		$	262	$	(593	)	$	(56,506	)	$	206,911
Effect of spin-off of DTI Holdings, Inc.									(217,578	)		217,557		(115,634	)				1,476			—			(114,158	)
Issuance of restricted stock (net)									817																—
Comprehensive loss:																									—
	Net loss																					(3,060	)		(3,060	)
	Foreign currency translation																		(40	)					(40	)

Total comprehensive loss																									(3,100	)
Issuance of warrant														174											174
Stock-based compensation expense														16											16

Balance at March 31, 2010			247,141		994,838		12,004,803		8,657,128			217,557	$	148,304		$	262	$	843		$	(59,566	)	$	89,843

See accompanying notes to unaudited condensed consolidated financial statements.

		Three Months Ended March 31,

		2010			2009
Cash Flows — Operating Activities
Net loss			$(3,060	)		$(3,861	)
Loss from discontinued operations			2,472			1,144
Adjustments to reconcile net loss to net cash from (used for) operating activities:
	Depreciation and amortization and accretion		2,010			2,079
	Provision for deferred taxes		(299	)		(1,157	)
	Provision for uncollectible accounts, net		6			3
	Provision for obsolete inventory		11			9
	Stock compensation expense		16			85
	Loss on debt modification and extinguishment		95			709
	Loss on disposal of assets		107			—
	Changes in operating assets and liabilities		(1,399	)		1,609

Cash from (used for) operating activities			(41	)		620

Cash Flows — Investing Activities
Purchases of property and equipment			(72	)		(167	)
Proceeds from sale of property and equipment.			10			35
Investments and advances to discontinued operations			(1,187	)		(1,047	)

Cash used for investing activities			(1,249	)		(1,179	)

Cash Flows — Financing Activities
	Principal payments on capital leases		(12	)		(24	)
	Net (payment of) proceeds from line of credit		(1,134	)		10,516
	Retirement of GE line of credit (includes fees and penalties of $709)		—			(13,563	)
	Debt modification and financing costs paid		(904	)		(651	)
	Proceeds from other debt		—			4,994

Cash from (used for) financing activities			(2,050	)		1,272

Increase (decrease) in cash			(3,340	)		713
Cash used for operating activities — discontinued operations			(1,068	)		(1,856	)
Cash (used for) from investing activities — discontinued operations			(96	)		14
Cash from financing activities — discontinued operations			1,385			1,329

Cash from (used for) discontinued operations			221			(513	)

Effect of exchange rate changes on cash			64			(40	)

Increase (decrease) in cash			(3,055	)		160
Cash at beginning of period			5,938			3,551
Cash spun-off to discontinued operations			(1,220	)		—
Less cash of discontinued operations at end of period			—			(1,016	)

Cash of continuing operations at end of period			$1,663			$2,695

See accompanying notes to unaudited condensed consolidated financial statements.

BioHorizons, Inc. (the Company) was incorporated in the state of Delaware in May 2006 for the purpose of developing, acquiring, manufacturing, marketing, selling and distributing dental implants and related products. The Company sells its products to dental professionals and dental laboratories located in the United States and in foreign countries.

Effective January 1, 2008, the Company acquired DTI Holdings, Inc. (DTI), a dental laboratory business based in Vancouver, British Columbia, in a merger of entities under common control. Effective March 31, 2010, DTI was spun-off from the Company (see Note 10). DTI is presented as discontinued operations for all periods reported herein.

The condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries, BioHorizons Implant Systems, Inc. (BIS), DTI (as discontinued operations — See Note 10), BioLok Acquisition Corp. and Implant Logic Systems, Inc. (ILS). BIS' subsidiaries include BioHorizons Iberica S.R.L., BioHorizons GmbH and BioHorizons Australia Pty Ltd. BioLok Acquisition Corp. owns BioLok International, Inc. (BioLok). BioLok's wholly- and majority-owned subsidiaries include Orthogen Corporation, BioHorizons Mexico S.A. de C.V., Bio-Lok Int'l Pty Inc. and BioHorizons Chile, S.A. (which is 51% owned). The accompanying condensed consolidated balance sheet at December 31, 2009, has been derived from the Company's audited consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) related to financial information. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. Refer to the Company's annual consolidated financial statements and notes for additional information.

The accompanying condensed consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of operations for the period presented. All such adjustments are of a normal and recurring nature, unless otherwise disclosed in these notes. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements.

Operating results for the three months ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010, or any other future periods.

Significant inter-company balances and transactions have been eliminated in consolidation.

The Company's significant accounting policies are described in Note 1 to the 2009 audited consolidated financial statements. Differences between the accounting policies applied in the preparation of the Company's annual financial statements versus those applied in the accompanying condensed consolidated financial statements, and significant changes (if any) in the Company's accounting polices during the interim periods presented herein are summarized below.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. Description of the Business and Significant Accounting Policies (Continued)

In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2009-13, Multiple-Deliverable Revenue Arrangements, which addresses how to determine whether a revenue arrangement involving multiple deliverables contains more than one unit of account and how the arrangement consideration should be allocated among the separate units of accounting. The FASB concurrently issued ASU No. 2009-14, Certain Revenue Arrangements That Include Software Elements, which addresses accounting for revenue arrangements that contain tangible products and software. The pronouncements are applicable to the Company's 2011 fiscal year, but may be applied retrospectively or prospectively for new or materially modified arrangements. Additionally, early adoption is permitted, but requires retrospective application to the beginning of the fiscal year in which adopted.

Changes in operating assets and liabilities of continuing operations were as follows (in thousands):

The Company's stock-based compensation plans are accounted for under the recognition and measurement provisions of Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. ASC 718 requires the grant-date fair value of all stock-based payment awards to be recognized as employee compensation expense over the requisite service period. Stock-based compensation expense for awards with graded vesting is recognized on a straight-line basis.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. Description of the Business and Significant Accounting Policies (Continued)

The Company accounts for income taxes under the provisions of ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured at the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recognized for deferred tax assets attributable to net operating loss carryforwards and other deductible temporary differences when it is determined that, based on available evidence, there is uncertainty whether some, or all, of the deferred tax assets will be realized.

In interim periods, the tax expense or benefit is computed based on an estimate of the annual effective tax rate and the tax expense (or benefit) related to discreet items is separately computed and recognized when the items occur.

In accordance with ASC 855, Subsequent Events, as amended, the Company evaluated all events and transactions that occurred after March 31, 2010, through the date these financial statements were issued and has disclosed any events or transactions as required by ASC 855.

The Company had outstanding trade receivables due from international customers totaling approximately $11,494,000 and $10,750,000, at March 31, 2010 and December 31, 2009, respectively. These balances represented approximately 86% and 82% of the total outstanding trade receivable balance at March 31, 2010 and December 31, 2009, respectively.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Comprehensive income or loss includes net income or loss and all other changes in equity not attributable to transactions with owners. The following table sets forth the computation of comprehensive loss (in thousands):

In March 2009, the Company entered into a $20 million secured revolving line of credit with MidCap Financial, LLC (MidCap) and a subordinated convertible note with HealthpointCapital Partners II, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

(HealthpointCapital) to refinance its previously existing line of credit and term loan with GE Capital (GE). During the three months ended March 31, 2009, the Company recorded a loss on debt extinguishment of $709,000 for termination of the GE line of credit.

The $20 million secured revolving credit facility with MidCap provided borrowings on a revolving basis through maturity of the facility on March 23, 2012 up to $20,000,000, limited to the sum of eligible accounts receivable and domestic inventory. The agreement required certain usage levels and provided for commitment and prepayment fees. The line bore interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly.

Effective March 31, 2010, the Company spun-off DTI (See Note 10). In connection with the spin-off, the Company terminated the $20 million secured revolving credit facility with MidCap and entered into a new secured revolving credit facility and a term loan (see below) with MidCap. During the three months ended March 31, 2010, the Company recorded a $95,000 loss on debt modification, representing a portion of the unamortized loan costs associated with the terminated MidCap revolving line of credit. In connection with the refinancing, the Company paid a $600,000 termination fee and incurred other costs amounting to $754,000. These costs were capitalized as debt issuance costs, and will be amortized over the term of the new MidCap revolving line of credit and term loan.

The new credit facility provides for borrowings on a revolving basis through March 31, 2012, the maturity date of the revolver. Borrowings under the revolver are limited to the sum of the Company's eligible accounts receivable and domestic inventory, up to a maximum of $12.5 million. The revolver bears interest at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly, and provides for commitment and prepayment fees. Interest is charged on a minimum of 80% of the amount available under the revolver or the outstanding balance, whichever is greater.

The new credit facility also provides a $5 million term loan. Interest on the term loan is payable monthly at an annual rate of reserve-adjusted, 30-day LIBOR (subject to a 2.75% floor) plus 575 basis points, reset monthly, during the first six months after the initial issuance of the note. In all remaining months under the term of the note, interest is charged at the same rate plus 300 basis points. The term loan will mature upon the earlier of an initial public offering (IPO) or June 30, 2011. A non-refundable exit fee of $450,000 is payable upon maturity. The new MidCap credit facility requires the Company to maintain a lock-box control and custody account, and includes subjective acceleration provisions as events of default. Accordingly, all outstanding borrowings on the MidCap revolving lines of credit and the term loan are classified as current in the condensed consolidated balance sheets. The credit facility is secured by substantially all of the assets of the Company, including accounts receivable, inventories and property and equipment.

In March 2009, the Company consolidated all previously outstanding loans to its majority stockholder, HealthpointCapital, into a single subordinated convertible note to HealthpointCapital, which was

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

amended as of January 1, 2010. The outstanding balance of the subordinated convertible note at March 31, 2010, consists of the $36,870,000 principal note amount plus total accrued interest of $909,000 and has been reduced by an unamortized discount of $144,000 related to a warrant issued to HealthpointCapital on March 31, 2010 which is exercisable for 126,059 shares of the Company's Class B common stock (see Note 7). This note bore interest at 8% per year through December 31, 2009 and was amended on January 1, 2010 to bear interest of 10% per year thereafter The note is due and payable on the earlier to occur of (i) an IPO, (ii) a merger, consolidation or similar transaction resulting in a change of control, a sale of all or substantially all of the Company's assets, a sale of a majority of the Company's capital stock, or any other change of control of, in each case occurring in one transaction or a series of related transactions, or (iii) upon demand by HealthpointCapital at any time after July 1, 2011. At any time prior to the full repayment of the note, HealthpointCapital may, at its sole discretion, convert all or part of the then outstanding principal amount of the note into that number of units consisting of shares of common stock and preferred stock of the Company (or equivalent securities), as would be issuable valuing the Company's currently outstanding shares of common and preferred stock (on a fully diluted and fully converted basis) at $500 million. Based on the conversion terms of the amended and restated note, the subordinated convertible note was convertible into 4,183,713 shares of Class B common stock at March 31, 2010.

To calculate its interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate and applies that to its ordinary quarterly earnings or loss. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent and temporary differences between book and tax amounts and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes.

Income tax benefit from continuing operations for the three months ended March 31, 2010 and 2009, was $299,000 and $1,157,000, respectively. The effective tax rates for the three months ended March 31, 2010 and 2009 were 33.7% and 29.9%, respectively. The 3.8 percentage point increase was primarily due to the effects of state taxes, non-deductible meals and entertainment and foreign income tax rate differentials.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Common Stock" (the Class B common stock), 1,400,000 shares were designated "Rolling Common Stock" (the Rolling common stock) and 1,400,000 shares were without designation; and (ii) 300,000 shares of preferred stock, $0.0001 par value per share, all of which are designated "Preferred Stock" (the preferred stock).

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or an IPO or deemed liquidation event, the holders of the following classes or series of stock of the Company are entitled to the following payments out of the assets available for distribution:

As of March 31, 2010, the aggregate amount of the forgoing liquidation preferences was approximately $304.3 million. If the assets of the Company that are available for such distribution are insufficient to pay the preferences in full, the Company will distribute the available assets in the order of priority set forth in the Certificate of Incorporation. After payment of the forgoing preference amounts, the holders of shares of undesignated common stock are entitled to be paid the remaining assets available for distribution. In an IPO, all or a portion of the foregoing preferences may be paid in undesignated common stock (valued at its fair market value per share determined in good faith by the Company's Board of Directors) with the consent of at least 51% of the outstanding preferred stock holders.

Dividends are payable on shares of preferred stock and common stock outstanding when and if declared by the Company's Board of Directors. No dividends have ever been declared.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Each holder of shares of preferred stock is entitled to one vote for each share held. Unless required by law, all shares of common stock (including Class A common stock, Class B common stock, Class C common stock and Rolling common stock) are nonvoting.

Effective April 17, 2007, the Company adopted the 2007 Executive, Director and Consultant Stock Plan (the Plan). The Plan is intended to encourage ownership of shares by employees and directors of and certain consultants to the Company and its affiliates. The number of shares which may be issued pursuant to the Plan is 1,765,000, of which 63,988 remain available for future grants as of March 31, 2010. Awards under the Plan normally vest over 36 months; however, some restricted stock awards vest over a shorter period.

During each three-month period ended below, the Company granted nonvested restricted stock for par value with weighted average grant date fair values as follows:

The grant date fair value per share is being recognized as compensation expense over the applicable vesting period. For the three months ended March 31, 2010 and 2009, the Company recorded stock-based compensation expense related to vesting of restricted stock of $16,000 and $85,000, respectively. Total unrecognized compensation expense of $91,000 at March 31, 2010, is expected to be recognized over the remaining vesting period, as follows: remainder of 2010 — $36,000; 2011 — $35,000 ;and 2012 — $20,000.

The fair value of the nonvested restricted stock was determined annually at the beginning of each fiscal year with assistance of unrelated valuation specialists using the probability-weighted expected return method described in Chapter 10 of the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Practice Aid, "Valuation of Privately-Held-Company Equity Securities as Compensation".

The BIS 2000 Stock Grant and Option Plan (the 2000 Stock Plan) was adopted by the board of directors of BIS and approved by the BIS stockholders in 2000 and the BIS 2003 Long-Term Incentive

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Plan (the 2003 Plan) was adopted by the board of directors of BIS and approved by the BIS stockholders in 2003. In connection with the acquisition of BIS by the Company in August 2006 (the BIS merger), the Company discontinued granting equity under the 2000 Stock Plan and the 2003 Plan. Pursuant to the terms of the BIS merger, BIS option holders generally received cash consideration, however, some BIS option holders elected not to exercise their BIS options in the BIS merger and those BIS options remained outstanding under the 2000 Stock Plan and the 2003 Plan as applicable. At the time of the BIS merger, the Company amended the terms of those BIS options to provide that at any time after the exercise of the BIS options for shares of BIS common stock, the shares of BIS common stock are putable by the optionee or callable by the Company for cash or for shares of the Company's Rolling common stock at the election of the other party. As of March 31, 2010, 145,000 shares of BIS common stock, which represents 2.0% of the total outstanding common stock of BIS, are outstanding as a result of the exercise of BIS options since the BIS merger. BIS received an aggregate of $262,000 from the exercise of these BIS options. These shares of BIS common stock represent the non-controlling interests reported on the accompanying condensed consolidated balance sheets. The 145,000 shares of BIS common stock are putable or callable for 169,356 shares of Rolling common stock. In addition, as of March 31, 2010, 185,681 BIS options remain outstanding under the 2000 Stock Plan and the 2003 Plan which are putable or callable for 216,873 shares of Rolling common stock.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

of the exercise price in cash, surrender the warrant and receive a net amount of shares of the Company's common stock based on the fair market value of the underlying shares of the Company's common stock at the time of exercise of the warrant, after deduction of the aggregate exercise price.

Basic loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents, if any, outstanding for the period. Common stock equivalents having an anti-dilutive impact and convertible debt securities that are anti-dilutive under the "if converted" method are not included in diluted loss per share.

Loss per common share is calculated as follows (in thousands, except per share data):

	Three Months Ended March 31,

	2010			2009
Numerator:
Loss from continuing operations	$	(588	)	$	(2,717	)
Loss from discontinued operations		(2,472	)		(1,144	)

Net loss	$	(3,060	)	$	(3,861	)

Denominator:
Weighted average common shares outstanding — basic and diluted		21,528			21,079

Loss per share:
Loss from continuing operations per common share — basic and diluted	$	(0.03	)	$	(0.13	)
Loss from discontinued operations per common share — basic and diluted		(0.11	)		(0.05	)

Net loss per common share — basic and diluted	$	(0.14	)	$	(0.18	)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Anti-dilutive securities not included in diluted net loss per share were as follows (in thousands):

The Company has an exclusive worldwide license agreement with a university research foundation to manufacture and sell products, processes or methods covered under a patent for dental implants and implant systems. Under the terms of the agreement, the Company is required to reimburse patent application expenses incurred by the university research foundation in protecting this technology, as well as future costs associated with patents and licensed technology in any country, and is required to make minimum royalty payments. For the three months ended March 31, 2010 and 2009 the Company recognized expense of $30,000 and $24,000, respectively, as royalty expense.

Pursuant to a license agreement entered into with the Hospital for Joint Diseases Orthopedic Institute (HJD), the Company is obligated to make royalty payments for the grant of a license for a certain laser technology applied to dental products manufactured by the Company. The Company is required to pay a percentage of sales of products using the licensed technology. Licensing and royalties incurred under the HJD agreement were $92,000 and $44,000 for the three months ended March 31, 2010 and 2009, respectively.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Total rent expense for the three months ended March 31, 2010 and 2009 was $218,000 and $217,000, respectively.

In October 2009, a compliant was filed against the Company by Jack T. Krauser in the Circuit Court of the 15^th Judicial Circuit for Palm Beach County, Florida. In April 2010, the complaint was removed to the U.S. Federal District court for the Southern District of Florida, where it remains pending. In the compliant, Dr. Krauser alleges that the Company is default under a settlement agreement entered into by a subsidiary and Dr. Krauser for, among other things, failing to make certain royalty payments due Dr. Krauser under the settlement agreement. The settlement agreement expired on February 11, 2007. Dr Krauser is seeking a declaratory judgment that, among other things, the subsidiary is in default under the settlement agreement and Dr. Krauser is an inventor and owner of certain patents, including the Company's Tapered Internal Implant Systems and corresponding 510(k) applications. On or about May 6, 2010, the Company filed a motion to dismiss the complaint. Management believes the allegations contained in the complaint are false, and the Company plans to vigorously defend this action. The Company is unable to estimate a possible loss or range of loss related to this matter.

On March 31, 2010 the Company completed the Spin-Off of DTI. The results of operations of DTI are reflected in the loss from discontinued operations, net of taxes, in the accompanying condensed consolidated financial statements in accordance with ASC subtopic 205-20 Presentation of Financial

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Statements — Discontinued Operations. Summarized financial information for discontinued operations of DTI is as follows (in thousands):

On the effective date of the Spin-Off, the remaining net equity of DTI of $114,158,000 was charged to additional paid-in capital and accumulated other comprehensive income.

The Company allocated interest expense to discontinued operations based on the ratio of net assets of DTI (less debt required to be repaid upon the Spin-Off) to the sum of total consolidated equity plus consolidated debt other than debt required to be repaid in connection with the Spin-Off in accordance with ASC 205-20-45-7. The amount of interest expense allocated to discontinued operations was $680,000 and $412,000 for the three months ended March 31, 2010 and 2009, respectively.

The Company had receivables from employees (included in other assets) of approximately $50,000 and $56,000 at March 31, 2010 and 2009, respectively.

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Subsequent to the spin-off of the DTI laboratory business, which is reported as discontinued operations, the Company operates in one reportable business segment.

During the three months ended March 31, 2010 and 2009, the Company operated in four geographic locations: North America, Europe, Asia Pacific and the rest of the world.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Revenues attributed to the geographic location of the customer (and excluding discontinued operations) were as follows (in thousands):

Long-lived assets by region (excluding goodwill, intangible assets and discontinued operations) were as follows (in thousands):

Net assets by region (excluding discontinued operations) were as follows (in thousands):

Through and including , 2010 (25 days after the date of this prospectus), all dealers that effect transactions in shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

The following table indicates the expenses to be incurred in connection with the offering described in this registration statement, other than underwriting discounts and commissions, all of which will be paid by us. All of the amounts are estimated except the SEC registration fee, the FINRA filing fee and The NASDAQ Global Market listing fee.

Our restated certificate of incorporation and restated bylaws that will be effective upon completion of the offering provide that each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was one of our directors or officers or is or was serving at our request as a director, officer or trustee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by us to the fullest extent authorized by the Delaware General Corporation Law against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such.

Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any director or officer of the corporation against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer of the corporation, if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reason to believe his or her conduct was unlawful. In a derivative action (for example, one brought by or on behalf of the corporation), indemnification may be provided only for expenses actually and reasonably incurred by any director or officer in connection with the defense or settlement of such an action or suit if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be provided if such person shall have been adjudged to be liable to the

corporation, unless and only to the extent that the court in which the action or suit was brought shall determine that the defendant is fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.

Pursuant to Section 102(b)(7) of the Delaware General Corporation Law, Article NINTH of our restated certificate of incorporation eliminates the liability of a director to us or our stockholders for monetary damages for such a breach of fiduciary duty as a director, except for liabilities arising:

The foregoing discussion of our certificate of incorporation, bylaws, indemnification agreements and Delaware law is not intended to be exhaustive and is qualified in its entirety by such certificate of incorporation, bylaws, indemnification agreements or law.

Reference is made to Item 17 of our undertakings with respect to liabilities arising under the Securities Act. Reference is also made to the form of underwriting agreement filed as Exhibit 1.1 to this registration statement for the indemnification agreements between us and the underwriters.

Set forth below is information regarding shares of common stock and preferred stock issued, and restricted stock and warrants granted, by us within the past three years that were not registered under the Securities Act. Also included is the consideration, if any, received by us for such shares, options and warrants and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.

No underwriters were involved in the sales of securities described below. All purchasers of shares of convertible preferred stock, convertible notes and warrants described below represented to us in connection with their purchase that they were accredited investors and were acquiring the shares and notes for investment and not distribution, that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The purchasers received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration statement or an available exemption from such registration.

(i) Original Issuances of Preferred Stock, Common Stock, Convertible Promissory Notes and Warrants.

1. On March 31, 2007, in connection with the acquisition of BioLok International, Inc. by our wholly-owned subsidiary BioLok Acquisition Corp., we issued 36,455 shares of our preferred stock and 3,496,122 shares of our Class A common stock to HealthpointCapital Partners II, L.P.

2. On November 28, 2007 and December 28, 2007, we issued to HealthpointCapital Partners II, L.P. subordinated convertible promissory notes with a principal amount of $1,000,000 and $2,000,000,

respectively. On April 16, 2008, HealthpointCapital Partners II, L.P. converted this subordinated convertible promissory notes into 3,000 shares of preferred stock and 251,213 shares of Class A common stock.

3. On February 5, 2008, in connection with our merger with DTI Holdings, we issued an aggregate of 65,186 shares of preferred stock and 4,717,290 shares of Class B common stock to the stockholders of DTI Holdings. In connection with this transaction, we also issued 45,000 shares of preferred stock and 3,131,793 shares of Class B common stock as a result of the conversion of DTI Holdings convertible promissory notes issued to HealthpointCapital Partners II, L.P. with a principal amount of $45,000,000.

4. On April 11, 2008, in connection with our acquisition of all of the outstanding common stock of Implant Logic Systems, Ltd., we issued an aggregate of 131,558 shares of Class B common stock to 32 stockholders of Implant Logic Systems, Ltd. In connection with this transaction, HealthpointCapital Partners II, L.P. purchased and we issued 7,000 shares of preferred stock and 502,357 shares of Class B common stock for $7,000,000, which represented the cash payment we made as part of the acquisition consideration.

5. On July 11, 2008, September 23, 2008, December 22, 2008 and March 4, 2009, we issued to HealthpointCapital Partners II, L.P. subordinated convertible promissory notes with a principal amount of $10,000,000, $13,550,885, $5,000,000 and $5,000,000, respectively. The convertible promissory notes were convertible into units consisting of shares of our common stock and preferred stock as would be issuable by valuing our then outstanding shares of common stock and preferred stock outstanding on a fully diluted and fully converted basis at $600,000,000. On December 31, 2009, these subordinated convertible promissory notes were combined with other outstanding indebtedness as described below in Item 6.

6. On March 23, 2009, we combined all of our outstanding indebtedness to HealthpointCapital Partners II, L.P. into one subordinated convertible promissory note with an aggregate principal amount of $34,453,951. On June 12, 2009, this subordinated convertible note was amended and restated and had a principal amount of $34,266,838. On January 1, 2010, this amended and restated subordinated convertible note was further amended and restated and had a principal amount of $36,869,813. This subordinated convertible promissory note is convertible into units consisting of shares of our common stock and preferred stock as would be issuable by valuing our then outstanding shares of common stock and preferred stock outstanding on a fully diluted and fully converted basis at $500,000,000. We anticipate that this subordinated convertible promissory note will be repaid out of the net proceeds of this initial public offering.

7. On March 31, 2010, in connection with our spin-off of our wholly-owned subsidiary, DTI Holdings, Inc., we conducted an exchange offer with our employees whereby our employees elected to exchange their right to receive DTI common stock for shares of our newly-created Class C common stock. We issued an aggregate of 217,557 shares of restricted Class C common stock subject to our lapsing repurchase right, of which 95 shares have been forfeited back to the Company, pursuant to our 2010 Executive, Director and Consultant Stock Plan as a result of this exchange offer.

8. On March 31, 2010, in connection with the spin-off transaction described above in Item 7, we issued a warrant to HealthpointCapital Partners II, L.P. If this warrant is exercised prior to the completion of the initial public offering, it will be exercisable for 126,059 shares of our common stock at an exercise price of $13.59 per share. If the warrant is exercised in connection with, or after, the initial public offering, it will be exercisable for a certain amount of shares of our common stock

calculated by dividing $1,713,342 by the initial public offering price per share at an exercise price per share equal to the initial public offering price per share.

The securities described in this section (a)(i) of Item 15 were issued to a combination of foreign and U.S. investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act, Rule 701 promulgated thereunder or Rule 506 of Regulation D promulgated thereunder, relative to sales by an issuer not involving any public offering.

See the discussion of the conversion of convertible promissory notes in section (a)(i) of Item 15.

The securities described in this section (a)(ii) of Item 15 were issued to a United States investor in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 3(a)(9) under the Securities Act, relative to an exchange of securities by an issuer with its existing security holders where no commission or other remuneration is paid for soliciting the exchange.

Since April 1, 2007, we have issued 1,199,753 shares of restricted Class A common stock and 612,720 shares of restricted Class B common stock under our 2007 Executive, Director and Consultant Stock Plan to certain of our employees, directors and consultants. As of May 31, 2010, 35,209 shares of restricted Class A common stock and 76,751 shares of restricted Class B common had been forfeited back to us, and 1,164,544 shares of restricted Class A common stock remain outstanding and 318,315 shares of restricted Class B common remain outstanding.

The issuance of restricted stock as described in this section (b) of Item 15 was issued pursuant to written compensatory plans or arrangements with our employees, directors and consultants, in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act and Rule 701 promulgated thereunder. All recipients either received adequate information about us or had access, through employment or other relationships, to such information.

The foregoing securities are deemed restricted securities for purposes of the Securities Act. All certificates representing the issued shares of common stock described in this Item 15 included appropriate legends setting forth that the securities had not been registered and the applicable restrictions on transfer.

All schedules have been omitted because they are not required or are not applicable or the required information is shown in the financial statements or notes thereto.

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Birmingham, Alabama, on June 23, 2010.

We, the undersigned officers and directors of BioHorizons, Inc., hereby severally constitute and appoint R. Steven Boggan and David A. Wall, and both or any one of them, our true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution in each of them for him and in his name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Exhibit Number			Description of Exhibit

	1.1*		Form of Underwriting Agreement.
	3.1*		Restated Certificate of Incorporation of the Registrant.
	3.2*		Form of Restated Certificate of Incorporation of the Registrant to be filed upon completion of this offering.
	3.3		Bylaws of the Registrant.
	3.4*		Form of Restated Bylaws of the Registrant to be effective upon completion of this offering.
	4.1*		Form of Common Stock Certificate.
	4.2		Amended and Restated Stockholders' Agreement dated as of June 21, 2010 by and among the Registrant and the stockholders of the Registrant named therein.
	4.3		Stockholders' Agreement dated as of April 15, 2008 by and among the Registrant and the stockholders of the Registrant named therein.
	4.4		Warrant to Purchase Capital Stock issued to HealthpointCapital Partners II, L.P. dated as of March 31, 2010.
	5.1*		Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the Registrant, with respect to the legality of securities being registered.
	10.1		The Registrant's 2007 Executive, Director and Consultant Stock Plan.
	10.2		The Registrant's 2010 Executive, Director and Consultant Stock Plan.
	10.3		Form of Restricted Stock Agreement under the Registrant's 2007 Executive, Director and Consultant Stock Plan.
	10.4		Form of Restricted Stock Agreement under the Registrant's 2010 Executive, Director and Consultant Stock Plan.
	10.5*		Director Compensation Policy.
	10.6		Lease Agreement dated as of April 12, 2007 by and between BioHorizons Implant Systems, Inc. and Colonial Realty Limited Partnership.
	10.7		Credit and Security Agreement dated as of March 31, 2010 by and among the Registrant, BioLok Acquisition Corp., BioHorizons Implant Systems, Inc., BioLok International Inc., Orthogen Corporation and Midcap Funding I, LLC, including the Revolving Loan Note and Term Loan Note issued thereunder.
	10.8		Amended and Restated Subordinated Convertible Note of the Registrant dated as of January 1, 2010 issued to HealthpointCapital Partners II, L.P.
	10.9*		Amended and Restated Agreement dated as of January 1, 2005 by and among BioHorizons Implant Systems, Inc., Carl E. Misch, Carl E. Misch, D.D.S., PC and Misch Implant Institute, Inc., as amended March 31, 2006.
	10.10+		Distribution Agreement dated as of January 1, 2010 by and between BioHorizons Implant Systems, Inc. and Osteotech, Inc.
	10.11+		Agreement dated as of January 1, 2010 by and between BioHorizons Implant Systems, Inc. and Osteotech, Inc.

Exhibit Number			Description of Exhibit

	10.12+		License Agreement dated as of August 4, 1999 by and between Orthogen Corporation and Hospital for Joint Diseases Orthopaedic Institute.
	10.13+		License Agreement dated as of June 29, 1995 by and between BioHorizons Implant Systems, Inc. and the UAB Research Foundation, including Amendment to License Agreement dated as of March 12, 2007.
	10.14+		Service Contract dated April 7, 2004 by and between BioHorizons Implant Systems, Inc. and Quality Tech Services, Inc.
	10.15*		Amended and Restated Employment Agreement by and among the Registrant, BioHorizons Implant Systems, Inc. and R. Steven Boggan.
	10.16*		Employment Agreement by and among the Registrant, BioHorizons Implant Systems, Inc. and David A. Wall.
	10.17*		Amended and Restated Severance Agreement by and among the Registrant, BioHorizons Implant Systems, Inc. and David P. Dutil.
	10.18*		Severance Agreement by and among the Registrant, BioHorizons Implant Systems, Inc. and Kendyl D. Lowe.
	10.19*		Severance Agreement by and among the Registrant, BioHorizons Implant Systems, Inc. and J. Todd Strong.
	10.20*		Severance Agreement by and among the Registrant, BioHorizons Implant Systems, Inc. and Clark M. Barousse.
	10.21		Separation Letter Agreement dated as of February 27, 2009 by and between BioHorizons Implant Systems, Inc. and William H. Ross.
	10.22*		Form of Indemnification Agreement entered into with each of the Registrant's non-employee directors.
	21.1		List of Subsidiaries.
	23.1		Consent of Ernst & Young LLP.
	23.2		Consent of Deloitte & Touche LLP.
	23.3*		Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (see Exhibit 5.1).
	24.1		Powers of Attorney (see signature page).


With copies to:
Michael L. Fantozzi, Esq. Daniel T. Kajunski, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 (617) 542-6000	James M. McKnight, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Chrysler Center 666 Third Avenue New York, NY 10017 (212) 935-3000	David P. Dutil, Esq. BioHorizons, Inc. 2300 Riverchase Center Birmingham, AL 35244 (205) 986-7980	Marc D. Jaffe, Esq. Jason M. Licht, Esq. Latham & Watkins LLP 885 Third Avenue, Suite 1000 New York, NY 10022 (212) 906-1200


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price⁽¹⁾		Amount of Registration Fee⁽²⁾



Common Stock, $0.0001 par value per share	$	100,000,000	$	7,130

	Per Share	Total


Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to BioHorizons, Inc.	$	$
Proceeds, before expenses, to the selling stockholders	$	$

	As of March 31, 2010

	Actual		Pro Forma As Adjusted
	(in thousands, except share data)
Consolidated Balance Sheet Data:
Cash⁽¹⁾	$	1,663
Working capital⁽¹⁾		6,166
Total assets⁽¹⁾		158,400
Long-term debt, less current portion		92
Note payable to related party, less current portion		37,635


Delaware (State or other jurisdiction of incorporation or organization)		3842 (Primary Standard Industrial Classification Code Number)		20-5912502 (IRS Employer Identification Number)

		Page

Prospectus Summary			1
Risk Factors			8
Special Note Regarding Forward-Looking Statements			35
Use of Proceeds			36
Dividend Policy			36
Capitalization			37
Dilution			39
Selected Consolidated Summary Financial Data			41
Management's Discussion and Analysis of Financial Condition and Results of Operations			43
Business			57
Management			81
Executive Compensation			89
Principal and Selling Stockholders			108
Certain Relationships and Related Party Transactions			111
Description of Capital Stock			116
Shares Eligible for Future Sale			121
Material U.S. Federal Income Tax Considerations for Non-U.S. Holders			124
Underwriting			128
Where You Can Find More Information			131
Legal Matters			131
Experts			131
Index to Financial Statements			F-1


Assumed initial public offering price per share			$
	Pro forma net tangible book value per share as of March 31, 2010	$
	Increase per share attributable to new investors

Pro forma as adjusted net tangible book value per share after this offering

Dilution in pro forma as adjusted net tangible book value per share to new investors in this offering			$

		Shares Purchased				Total Consideration

		Shares Purchased				Total Consideration				Average Price Per Share
		Number	Percent			Amount	Percent			Average Price Per Share
Existing stockholders					%	$			%	$
New investors										$

	Total			100	%	$		100	%

	As of June 30,				As of December 31,

	As of June 30,				As of December 31,						As of March 31, 2010
	2005		2006		2007		2008		2009		As of March 31, 2010
											(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash	$	764	$	845	$	1,330	$	2,022	$	4,939	$	1,663
Working capital		4,698		8,126		16,196		9,391		12,623		6,166
Total assets		11,772		15,167		313,231		297,839		285,141		158,400
Long-term debt, less current portion		203		101		13,222		13,447		88		92
Note payable to related party, less current portion		—		—		48,000		15,000		36,870		37,635


Profile of Healthy Jaw	Profile of Facial Change Due to Dentures	Profile of Facial Change Due to Bone Loss Post-Dentures

Name		2009 Target Bonus

Kendyl D. Lowe		50% of Base Salary
J. Todd Strong		50% of Base Salary
Clark M. Barousse		50% of Base Salary

Rating		Percent

5 — Exceptional			125
4 — Distinguished			115
3 — Successful			100
2 — Needs Improvement			25
1 — Unacceptable			0

Name	Stock Awards ($)⁽¹⁾		Total ($)

Mortimer Berkowitz III		—		—
John J. Chopack, Jr.		—		—
Tom C. Davis⁽²⁾	$	2,500	$	2,500
John H. Foster		—		—
David J. Hogan⁽³⁾	$	2,500	$	2,500
Siri S. Marshall		—		—

		Shares of Common Stock

Executive Officers
R. Steven Boggan⁽¹⁾
Kendyl D. Lowe⁽²⁾
J. Todd Strong⁽³⁾
Clark M. Barousse⁽⁴⁾
William H. Ross⁽⁵⁾
Non-Employee Directors
Mortimer Berkowitz III⁽⁶⁾
John J. Chopack Jr.⁽⁷⁾
Tom C. Davis⁽⁸⁾
John H. Foster⁽⁷⁾
David J. Hogan⁽⁸⁾
Timothy Foster⁽⁹⁾
Michael Rawlings⁽⁹⁾
Five Percent Stockholders
HealthpointCapital Partners, L.P.⁽¹⁰⁾
HealthpointCapital Partners II, L.P.⁽¹¹⁾


BioHorizons, Inc.


Piper Jaffray		Jefferies & Company


Canaccord Genuity		Cowen and Company

Underwriters		Number of Shares

Piper Jaffray & Co.
Jefferies & Company, Inc.
Canaccord Genuity Inc.
Cowen and Company, LLC

Total


Report of Ernst & Young LLP, Independent Registered Public Accounting Firm		F-2
Report of Deloitte & Touche LLP, Independent Registered Chartered Accountants		F-3
Audited Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2009 and December 31, 2008		F-4
Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007		F-5
Consolidated Statements of Equity for the years ended December 31, 2009, 2008 and 2007		F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007		F-7
Notes to Consolidated Financial Statements		F-8
Unaudited Interim Financial Statements:
Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009		F-33
Condensed Consolidated Statements of Operations for the three-months ended March 31, 2010 and 2009		F-34
Condensed Consolidated Statement of Equity for the three-months ended March 31, 2010		F-35
Condensed Consolidated Statements of Cash Flows for the three-months ended March 31, 2010 and 2009		F-36
Notes to Condensed Consolidated Financial Statements		F-37

	2009			2008			2007

Accounts receivable	$	(2,003	)	$	(399	)	$	(4,312	)
Inventories		3,226			(2,791	)		(1,177	)
Prepaid expenses and other current assets		1,693			(1,755	)		(409	)
Other assets		432			417			(209	)
Accounts payable and accrued expenses		3,558			3,077			2,861
Other		636			(215	)		479

Total	$	7,542		$	(1,666	)	$	(2,767	)

	December 31

	2009			2008
Machinery and equipment	$	3,077		$	3,048
Furniture, fixtures and other		2,877			2,835
Computer software		969			887

		6,923			6,770
Less accumulated depreciation		(3,923	)		(2,848	)

Property and equipment, net	$	3,000		$	3,922

	2009			2008			2007

Balance at beginning of year	$	1,888		$	2,414		$	1,013
Exchange rate effect		63			(117	)		—
Provision (recoveries), net		939			(409	)		1,444
Write-offs		(400	)		—			(43	)

Balance at end of year	$	2,490		$	1,888		$	2,414


Cash consideration (including $1,500 paid April 2009)		$	7,000
Direct acquisition costs			2,205

Total purchase price		$	9,205

Purchase price allocation:
	Current assets (including cash of $5)	$	105
	Patents		124
	Goodwill		9,213
	Current liabilities		(237	)

		$	9,205

	2009			2008

Raw materials	$	18		$	23
Work-in-process		4,131			5,620
Finished goods		8,190			9,903
Less allowance for inventory obsolescence		(1,830	)		(818	)

	$	10,509		$	14,728

	2009		2008

Carrying value, beginning of year	$	87,554	$	78,341
Goodwill recognized on ILS acquisition		—		9,213

Carrying value, end of year	$	87,554	$	87,554

Asset	Cost		Accumulated Amortization		Net

Distributor agreements	$	22,800	$	9,421	$	13,379	5
Developed product technology and patents		20,228		7,115		13,113	6
Trade names		8,100		2,060		6,040	11
Customer base		5,200		1,733		3,467	7
Non-compete agreements		3,600		3,100		500	1

	$	59,928	$	23,430	$	36,498

Asset	Cost		Accumulated Amortization		Net

Distributor agreements	$	22,800	$	6,550	$	16,250	6
Developed product technology and patents		20,228		4,935		15,293	7
Trade names		8,100		1,433		6,667	12
Customer base		5,200		1,213		3,987	8
Non-compete agreements		3,600		2,334		1,266	2

	$	59,928	$	16,465	$	43,463


2010	$	6,698
2011		6,198
2012		6,198
2013		5,541
2014		4,064
Thereafter		7,799

	$	36,498

		2009			2008

Secured revolving credit lines:
	GE Capital (GE)	$	—		$	16,096
	MidCap Funding I, LLC		13,976			—
Term loan payable to GE Capital			—			13,301
Subordinated convertible notes payable to HealthpointCapital			36,870			15,000

			50,846			44,397
Less current portion			(13,976	)		(16,096	)

		$	36,870		$	28,301

	2009			2008			2007

United States	$	(7,938	)	$	(16,247	)	$	(18,133	)
Foreign		(789	)		(460	)		(156	)

Loss before income taxes	$	(8,727	)	$	(16,707	)	$	(18,289	)

		2009			2008			2007

Current:
	Federal	$	—		$	—		$	—
	Foreign		—			—			—
	State		99			92			(29	)

			99			92			(29	)
Deferred:
	Federal		(2,390	)		(4,724	)		(5,602	)
	Foreign		(53	)		—			—
	State		(341	)		(833	)		(988	)

			(2,784	)		(5,557	)		(6,590	)

		$	(2,685	)	$	(5,465	)	$	(6,619	)

		2009			2008			2007

Federal income tax at the statutory rate		$	(3,056	)	$	(5,847	)	$	(6,401	)
Tax effects of:
	State income taxes		(157	)		(482	)		(681	)
	Permanent differences		262			506			174
	Change in valuation allowance		202			51			—
	Foreign rate differential		85			—			—
	Other differences		(21	)		307			289

		$	(2,685	)	$	(5,465	)	$	(6,619	)

	2009			2008

Net current deferred income tax assets	$	2,534		$	1,454
Net non-current deferred income tax liabilities		(5,055	)		(6,705	)

	$	(2,521	)	$	(5,251	)

	2009			2008			2007

Revenues	$	67,588		$	80,299		$	79,080

Loss from discontinued operations before provision for income taxes	$	(12,418	)	$	(11,847	)	$	(10,969	)
Income tax benefit		3,987			4,448			4,662

Loss from discontinued operations, net of taxes	$	(8,431	)	$	(7,399	)	$	(6,307	)

	2009		2008

North America	$	3,443	$	4,169
Europe		185		201
Asia Pacific		10		7
Rest of the world		—		—

	$	3,638	$	4,377

	2009		2008

North America	$	83,765	$	95,825
Europe		5,379		5,550
Asia Pacific		1,169		1,213
Rest of the world		1,748		1,147

	$	92,061	$	103,735

	March 31, 2010			December 31, 2009

Accounts receivable	$	14,995		$	15,600
Allowance for doubtful accounts		(1,612	)		(2,490	)

Accounts receivable, net	$	13,383		$	13,110