sc13g07738der_03012010.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13G
(Rule 13d-102)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-1(b), (c), AND (d) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(b)
(Amendment No.  )1
 

Derma Sciences, Inc.
 (Name of Issuer)
 
Common Stock, par value $0.01 per share
 (Title of Class of Securities)
 
249827502
 (CUSIP Number)
 
February 17, 2010
 (Date of Event Which Requires Filing of this Statement)
 
 

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:
 
   o  Rule 13d-1(b)
 
   x  Rule 13d-1(c)
 
   o  Rule 13d-1(d)
 
 

_______________
1  The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.
 
      The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Raging Capital Fund, LP
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) o
  (b) o
3
SEC USE ONLY
 
4
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
5
SOLE VOTING POWER
 
- 0 -
6
SHARED VOTING POWER
 
282,241 (1)
7
SOLE DISPOSITIVE POWER
 
- 0 -
8
SHARED DISPOSITIVE POWER
 
282,241 (1)
9
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
282,241 (1)
10
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
 
¨
11
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
4.5%
12
TYPE OF REPORTING PERSON
 
PN

(1) Includes 70,766 shares of Common Stock currently issuable upon the exercise of warrants.

2
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Raging Capital Fund (QP), LP
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) o
  (b) o
3
SEC USE ONLY
 
4
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
5
SOLE VOTING POWER
 
- 0 -
6
SHARED VOTING POWER
 
230,925 (1)
7
SOLE DISPOSITIVE POWER
 
- 0 -
8
SHARED DISPOSITIVE POWER
 
230,925 (1)
9
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
230,925 (1)
10
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
 
¨
11
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
3.7%
12
TYPE OF REPORTING PERSON
 
PN

(1) Includes 57,900 shares of Common Stock currently issuable upon the exercise of warrants.

3
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Raging Capital Management, LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) o
  (b) o
3
SEC USE ONLY
 
4
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
5
SOLE VOTING POWER
 
- 0 -
6
SHARED VOTING POWER
 
513,166 (1)
7
SOLE DISPOSITIVE POWER
 
- 0 -
8
SHARED DISPOSITIVE POWER
 
513,166 (1)
9
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
513,166 (1)
10
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
 
¨
11
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
8.3%
12
TYPE OF REPORTING PERSON
 
OO

(1) Includes 128,666 shares of Common Stock currently issuable upon the exercise of warrants.

4
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
William C. Martin
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) o
  (b) o
3
SEC USE ONLY
 
4
CITIZENSHIP OR PLACE OF ORGANIZATION
 
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
5
SOLE VOTING POWER
 
- 0 -
6
SHARED VOTING POWER
 
513,166 (1)
7
SOLE DISPOSITIVE POWER
 
- 0 -
8
SHARED DISPOSITIVE POWER
 
513,166 (1)
9
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
513,166 (1)
10
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
 
¨
11
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
 
8.3%
12
TYPE OF REPORTING PERSON
 
IN

(1) Includes 128,666 shares of Common Stock currently issuable upon the exercise of warrants.

5
CUSIP NO. 249827502
 
Item 1(a).
Name of Issuer:
 
Derma Sciences, Inc.
 
Item 1(b).
Address of Issuer’s Principal Executive Offices:
 
214 Carnegie Center, Suite 300, Princeton, New Jersey 08540
 
Item 2(a).
Name of Person Filing:
 
This statement is filed by Raging Capital Fund, LP, a Delaware limited partnership (“Raging Capital Fund”), Raging Capital Fund (QP), LP, a Delaware limited partnership (“Raging Capital Fund QP” and together with Raging Capital Fund, the “Raging Funds”), Raging Capital Management, LLC, a Delaware limited liability company (“Raging Capital”), and William C. Martin (“Mr. Martin”).  Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.”
 
Raging Capital is the general partner of each of the Raging Funds.  Mr. Martin is the managing member of Raging Capital.  By virtue of these relationships, each of Raging Capital and Mr. Martin may be deemed to beneficially own the Issuer’s Common Stock, par value $0.01 per share, owned directly by the Raging Funds.
 
Item 2(b).
Address of Principal Business Office or, if none, Residence:
 
The principal business address of each of the Reporting Persons is 254 Witherspoon Street, Princeton, New Jersey 08542.
 
Item 2(c).
Citizenship:
 
The Raging Funds and Raging Capital are organized under the laws of the State of Delaware.  Mr. Martin is a citizen of the United States of America.
 
Item 2(d).
Title of Class of Securities:
 
Common Stock, par value $0.01 per share (the “Shares”).
 
Item 2(e).
CUSIP Number:
 
249827502
 
Item 3.
If this statement is filed pursuant to Section 240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:
 
 
 
/X/
Not Applicable
 
 
(a)
/  /
Broker or dealer registered under Section 15 of the Act (15 U.S.C. 78o).
 
 
(b)
/  /
Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c).
 
 
(c)
/  /
Insurance company as defined in Section 3(a)(19) of the Act (15 U.S.C. 78c).
 
6
CUSIP NO. 249827502
 
 
(d)
/  /
Investment company registered under Section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8).
 
 
(e)
/  /
Investment adviser in accordance with Section 240.13d-1(b)(1)(ii)(E).
 
 
(f)
/  /
Employee benefit plan or endowment fund in accordance with Section 240.13d-1(b)(1)(ii)(F).
 
 
(g)
/  /
Parent holding company or control person in accordance with Section 240.13d-1(b)(1)(ii)(G).
 
 
(h)
/  /
Savings association as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813).
 
 
(i)
/  /
Church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act (15 U.S.C. 80a-3).
 
 
(j)
/  /
Non-U.S. institution in accordance with Section 240.13d-1(b)(1)(ii)(J).
 
 
(k)
/  /
Group, in accordance with Section 240.13d-1(b)(1)(ii)(J).
 
Item 4.
Ownership.
 
All ownership information reported in this Item 4 is as of the close of business on February 26, 2010.
 
Raging Capital Fund
 
 
(a)
Amount beneficially owned:
 
282,241 Shares, including 70,766 Shares issuable upon the exercise of warrants.
 
 
(b)
Percent of class:
 
4.5% (based upon 6,157,268 Shares outstanding, which is the total number of Shares outstanding based on the Issuer’s Prospectus filed with the Securities and Exchange Commission on February 18, 2010).
 
 
(c)
Number of shares as to which such person has:
 
 
(i)
Sole power to vote or to direct the vote
 
0 Shares
 
 
(ii)
Shared power to vote or to direct the vote
 
282,241 Shares, including 70,766 Shares issuable upon the exercise of warrants.
 
 
(iii)
Sole power to dispose or to direct the disposition of
 
0 Shares
 
7
CUSIP NO. 249827502
 
 
(iv)
Shared power to dispose or to direct the disposition of
 
282,241 Shares, including 70,766 Shares issuable upon the exercise of warrants.
 
Raging Capital Fund QP
 
 
(a)
Amount beneficially owned:
 
230,925 Shares, including 57,900 Shares issuable upon the exercise of warrants.
 
 
(b)
Percent of class:
 
3.7% (based upon 6,157,268 Shares outstanding, which is the total number of Shares outstanding based on the Issuer’s Prospectus filed with the Securities and Exchange Commission on February 18, 2010).
 
 
(c)
Number of shares as to which such person has:
 
 
(i)
Sole power to vote or to direct the vote
 
0 Shares
 
 
(ii)
Shared power to vote or to direct the vote
 
230,925 Shares, including 57,900 Shares issuable upon the exercise of warrants.
 
 
(iii)
Sole power to dispose or to direct the disposition of
 
0 Shares
 
 
(iv)
Shared power to dispose or to direct the disposition of
 
230,925 Shares, including 57,900 Shares issuable upon the exercise of warrants.
 
Raging Capital
 
 
(a)
Amount beneficially owned:
 
513,166 Shares, including 128,666 Shares issuable upon the exercise of warrants.*
 
 
(b)
Percent of class:
 
8.3% (based upon 6,157,268 Shares outstanding, which is the total number of Shares outstanding based on the Issuer’s Prospectus filed with the Securities and Exchange Commission on February 18, 2010).
 
 
(c)
Number of shares as to which such person has:
 
 
(i)
Sole power to vote or to direct the vote
 
0 Shares
 
8
CUSIP NO. 249827502
 
 
(ii)
Shared power to vote or to direct the vote
 
513,166 Shares, including 128,666 Shares issuable upon the exercise of warrants.*
 
 
(iii)
Sole power to dispose or to direct the disposition of
 
0 Shares
 
 
(iv)
Shared power to dispose or to direct the disposition of
 
513,166 Shares, including 128,666 Shares issuable upon the exercise of warrants.*
 
 
____________________
 
* Consists of the Shares owned directly and the Shares underlying warrants owned directly by the Raging Funds.
 
Mr. Martin
 
 
(a)
Amount beneficially owned:
 
513,166 Shares, including 128,666 Shares issuable upon the exercise of warrants.*
 
 
(b)
Percent of class:
 
8.3% (based upon 6,157,268 Shares outstanding, which is the total number of Shares outstanding based on the Issuer’s Prospectus filed with the Securities and Exchange Commission on February 18, 2010).
 
 
(c)
Number of shares as to which such person has:
 
 
(i)
Sole power to vote or to direct the vote
 
0 Shares
 
 
(ii)
Shared power to vote or to direct the vote
 
513,166 Shares, including 128,666 Shares issuable upon the exercise of warrants.*
 
 
(iii)
Sole power to dispose or to direct the disposition of
 
0 Shares
 
 
(iv)
Shared power to dispose or to direct the disposition of
 
513,166 Shares, including 128,666 Shares issuable upon the exercise of warrants.*
 
 
____________________
 
* Consists of the Shares owned directly and the Shares underlying warrants owned directly by the Raging Funds.
 
9
CUSIP NO. 249827502
 
As the general partner of each of the Raging Funds, Raging Capital may be deemed to be the beneficial owner of the Shares owned directly and the Shares underlying warrants owned directly by the Raging Funds.  As the managing member of Raging Capital, Mr. Martin may be deemed to be the beneficial owner of the Shares owned directly and the Shares underlying warrants owned directly by the Raging Funds.
 
The filing of this Schedule 13G shall not be construed as an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any of the Shares reported herein.  Each of the Reporting Persons specifically disclaims beneficial ownership of the Shares reported herein that are not directly owned by such Reporting Person.
 
Item 5.
Ownership of Five Percent or Less of a Class.
 
If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following [   ].
 
Item 6.
Ownership of More than Five Percent on Behalf of Another Person.
 
Not Applicable.
 
Item 7.
Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company or Control Person.
 
Not Applicable.
 
Item 8.
Identification and Classification of Members of the Group.
 
See Exhibit 99.1
 
Item 9.
Notice of Dissolution of Group.
 
Not Applicable.
 
Item 10.
Certifications.
 
By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.
 
10
CUSIP NO. 249827502
 
SIGNATURES
 
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
 
Dated: March 1, 2010
  
   
 
Raging Capital Fund, LP
   
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
Raging Capital Fund (QP), LP
     
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
Raging Capital Management, LLC
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
/s/ William C. Martin
 
William C. Martin
 

 
11
CUSIP NO. 249827502