| Item 1.01. | Entry into a Material Definitive Agreement. |
On May 24, 2023, BIOLASE, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as representative of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters, in a firm commitment underwritten public offering, 175,000 units (each a “Unit” and collectively, the “Units”), with each Unit consisting of (A) one share of the Company’s Series H Convertible Redeemable Preferred Stock, par value $0.001 per share (the “Series H Convertible Preferred Stock”), and (B) one warrant (each, a “Warrant” and collectively, the “Warrants”) to purchase one-half of one (0.50) share of Series H Convertible Preferred Stock, at a price to the public of $26.00 per Unit, less underwriting discounts and commissions. The public offering price of $26.00 per Unit reflects the issuance of the Series H Convertible Preferred Stock with an original issue discount (“OID”) of 48%. The Company is also registering under the Registration Statement (as defined below) an additional 80,769 shares of Series H Convertible Preferred Stock (“PIK Dividend Shares”) that will be issued, if and when the Company’s Board of Directors declares such dividends, as paid in-kind dividends (“PIK dividends”) and the shares of Common Stock issuable upon conversion of the Series H Convertible Preferred Stock issued as PIK dividends (the “PIK Conversion Shares”).
The Units, the shares of Series H Convertible Preferred Stock, the Warrants, the PIK Dividend Shares, the PIK Conversion Shares as well as the shares of Series H Convertible Preferred Stock issuable upon exercise of the Warrants and the shares of the Company’s common stock, par value $0.001 per share (the Common Stock”), issuable upon conversion of the Series H Convertible Preferred Stock, are being offered and sold (the “Offering”) by the Company pursuant to an effective registration statement on Form S-1, as amended (File No. 333-271660) (the “Registration Statement”), which was initially filed with the Securities Exchange Commission (“SEC”) on May 4, 2023, as amended on May 18, 2023, May 22, 2023 and May 24, 2023, and declared effective by the SEC on May 24, 2023. A final prospectus relating to the Offering was filed with the SEC on May 25, 2023. The closing of the Offering contemplated by the Underwriting Agreement occurred on May 26, 2023.
The Underwriting Agreement contains customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. Lake Street Capital Markets, LLC and Maxim Group LLC acted as joint bookrunners for this Offering.
The foregoing description of the material terms of the Underwriting Agreement is qualified in its entirety by reference to the full text thereof, a copy of which is attached to this Current Report on Form 8-K as Exhibit 1.1 and is incorporated by reference herein.
The Warrants are being issued pursuant to the terms of that certain warrant agency agreement (the “Warrant Agency Agreement”) to be entered into by and among the Company, Computershare Inc., a Delaware corporation (“Computershare”), and its affiliate Computershare Trust Company, N.A., a federally chartered trust company (together with Computershare, the “Warrant Agent”). A copy of the Warrant Agency Agreement and the form of Warrant are attached to this Current Report on Form 8-K as Exhibits 4.1 and 4.2, respectively, and are incorporated by reference herein.
Each Warrant has an exercise price of $13.00 per share, is exercisable for one-half of one (0.5) share of Series H Convertible Preferred Stock, is immediately exercisable and will expire two (2) years from the date of issuance.
There is no established trading market for the Series H Convertible Preferred Stock or the Warrants and we do not expect a market to develop. In addition, we do not intend to list the Series H Convertible Preferred Stock or the Warrants on The Nasdaq Capital Market or any other national securities exchange or any other nationally recognized trading system.
The gross proceeds to the Company from this Offering are expected to be approximately $4.5 million, assuming no exercise of the Warrants and before deducting underwriting discounts and commissions and Offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for working capital and for general corporate purposes.
| Item 3.03. | Material Modification to Rights of Security Holders. |
On May 25, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Redeemable Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware designating 370,000 shares of the Company’s authorized preferred stock as Series H Convertible Preferred Stock, with a liquidation preference of $50.00 per share plus any accrued and unpaid dividends, and further establishing the number of shares of Series H Convertible Preferred Stock, and to fix the designation, powers, preferences and rights of the shares of Series H Convertible Preferred Stock and the qualifications, limitations or restrictions thereof.
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