U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the quarterly period ended March 31, 2000
-------------------------------
[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from ____________ to _____________
Commission File Number
0-19627
-------
BIOLASE TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 87-0442441
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
981 Calle Amanecer, San Clemente, CA 92673
(Address of Principal Executive Offices)
(949) 361-1200
(Registrant's Telephone Number, Including Area Code)
Indicate by check whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Common Stock, $.001 par value 19,972,502
- ----------------------------- ----------------------------
Title Class Number of Shares Outstanding
at May 12, 2000
BIOLASE TECHNOLOGY, INC.
Page Number
-----------
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Consolidated Condensed Balance Sheets 3
Consolidated Condensed Statements
of Operations 4
Consolidated Condensed Statement
of Stockholders' Equity 5
Consolidated Condensed Statements
of Cash Flows 6
Notes to Consolidated Condensed
Financial Statements 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
ITEM 3. Quantitative and Qualitative
Disclosures about Market Risk 12
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 13
ITEM 2. Changes in Securities 13
ITEM 3. Defaults Upon Senior Securities 14
ITEM 4. Submission of Matters to a Vote of Security
Holders 14
ITEM 5. Other Information 14
ITEM 6. Exhibits and Reports on Form 8-K 14
SIGNATURE PAGE 15
Page 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
- -----------------------------
BIOLASE TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
March 31, 2000 December 31, 1999
(Unaudited)
------------------ -----------------
Assets:
Current assets:
Cash and cash equivalents $ 4,180,067 $ 1,180,982
Accounts receivable, less allowance of $117,745 in 2000 and 1999 712,302 330,840
Inventories, net of reserves of $353,466 in 2000 and $309,420 in 1999 798,936 658,462
Prepaid expenses and other current assets 104,348 110,062
------------------ -----------------
Total current assets 5,795,653 2,280,346
Property and equipment, net 190,042 203,529
Patents, trademarks and licenses, less accumulated
amortization of $156,977 in 2000 and $151,278 in 1999 121,258 126,958
Other assets 62,230 61,480
------------------ -----------------
Total assets $ 6,169,183 $ 2,672,313
================== =================
Liabilities and Stockholders' Equity (Deficit):
Current liabilities:
Line of credit $ 1,341,925 $ 1,341,925
Note payable 428,000 -
Accounts payable 977,150 792,073
Accrued expenses 999,062 997,287
Accrued expenses related to the reacquisition of foreign distribution rights 36,912 480,300
------------------ -----------------
Total current liabilities 3,783,049 3,611,585
------------------ -----------------
Stockholders' equity (deficit):
Preferred stock, par value $.001, 1,000,000 shares authorized:
Series no shares issued and outstanding in 1999 or 1998 - -
Common stock, par value, $.001, 50,000,000 shares
authorized, issued 19,458,972 in 2000 and 17,583,305 in 1999 19,459 17,583
(after deducting 182,880 of escrow shares in 2000 and 1999)
Additional paid-in capital 46,165,316 41,809,690
Accumulated deficit (43,798,641) (42,766,545)
------------------ -----------------
Net stockholders' equity (deficit) 2,386,134 (939,272)
------------------ -----------------
Total liabilities and stockholders' equity (deficit) $ 6,169,183 $ 2,672,313
================== =================
See accompanying notes to consolidated condensed financial statements.
Page 3
Item 1. Financial Statements (continued).
- -----------------------------------------
BIOLASE TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
----------------------------------
2000 1999
---- ----
Sales $ 1,527,026 $ 1,785,983
Cost of sales 990,764 988,842
-------------- -----------------
Gross profit 536,262 797,141
-------------- -----------------
Operating expenses:
Sales and marketing 638,026 534,320
General and administrative 400,878 435,695
Engineering and development 513,439 471,515
-------------- -----------------
Total operating expenses 1,552,343 1,441,530
-------------- -----------------
Loss from operations (1,016,081) (644,389)
Interest income 7,246 3,515
Interest expense (23,261) (28,982)
-------------- -----------------
Net loss $ (1,032,096) $ (669,856)
============== =================
Loss per share - basic and diluted $ (0.06) $ (0.04)
============== =================
Weighted average shares outstanding 18,015,127 16,316,157
============== =================
See accompanying notes to consolidated condensed financial statements.
Page 4
Item 1. Financial Statements (continued).
- -----------------------------------------
BIOLASE TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
Preferred Stock Common Stock
Shares Amount Shares Amount
------ ------ ------ ------
Balance at January 1, 2000 - $ - 17,583,305 $17,583
Private placement of common stock - - 1,250,000 1,250
Exercise of warrants - - 491,500 492
Exercise of stock options - - 134,166 134
Issuance of shares for fractional interest on reverse split - - 1 -
Net loss - - - -
-------------------------------------------------
Balance at March 31, 2000 - $ - 19,458,972 $19,459
Additional
Paid-in Accumulated
Capital Deficit Total
------- ------- -----
Balance at January 1, 2000 $41,809,690 $(42,766,545) $ (939,272)
Private placement of common stock 2,449,266 - 2,450,516
Exercise of warrants 1,687,381 - 1,687,873
Exercise of stock options 218,979 - 219,113
Issuance of shares for fractional interest on reverse split - - -
Net loss - (1,032,096) (1,032,096)
---------------------------------------------------
Balance at March 31, 2000 $46,165,316 $(43,798,641) $2,386,134
===================================================
See accompanying notes to consolidated condensed financial statements.
Page 5
Item 1. Financial Statements (continued).
- -----------------------------------------
BIOLASE TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
--------------------------------------
2000 1999
------ ------
Cash flows from operating activities:
Net loss $ (1,032,096) $ (669,856)
Adjustments to reconcile net loss to net cash used by
operating activities:
Issuance of common stock for earned services - 52,594
Depreciation and amortization 26,012 24,685
Provision for bad debts - 496
Provision for inventory excess and obsolescence 44,046 -
Changes in operating assets and liabilities:
Accounts receivable (381,462) 83,069
Inventories (184,520) 261,101
Prepaid expenses and other assets 4,964 (43,198)
Accounts payable 185,077 106,523
Accrued expenses 1,775 189,001
Accrued costs related to reaquisition of foreign distribution rights (15,388) -
-------------- ---------------
Net cash provided (used) by operating activities (1,351,592) 4,415
-------------- ---------------
Cash flows from investing activities:
Sale of marketable securities - 150,000
Additions to property and equipment (6,825) (25,869)
Additions to patents, trademarks and licenses - (4,904)
-------------- ---------------
Net cash provided (used) by investing activities (6,825) 119,227
-------------- ---------------
Cash flows from financing activities:
Borrowings under line of credit, net - 184,000
Proceeds from issuance of common stock, net 2,450,516 2,748,000
Proceeds from exercise of stock options and warrants 1,906,986 -
-------------- ---------------
Net cash provided by financing activities 4,357,502 2,932,000
-------------- ---------------
Increase in cash and cash equivalents 2,999,085 3,055,642
Cash and cash equivalents at beginning of period 1,180,982 424,539
-------------- ---------------
Cash and cash equivalents at end of period $ 4,180,067 $ 3,480,181
============== ===============
Supplemental cash flow disclosure:
Cash paid during the period for interest $ 23,326 $ 28,100
============== ===============
Noncash financing activities:
Conversion of accrued expense to note payable $ 428,000 $ -
============== ===============
See accompanying notes to consolidated condensed financial statements.
Page 6
BIOLASE TECHNOLOGY, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 31, 2000
Note 1
- ------
The accompanying consolidated condensed financial statements of BioLase
Technology, Inc. (the "Company") have been prepared by the Company without audit
and do not include all disclosures required by generally accepted accounting
principles for complete financial statements. The consolidated condensed
balance sheet at December 31, 1999 was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, the consolidated condensed
financial statements include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the financial condition of the
Company as of March 31, 2000 and the results of operations for the three-month
period then ended.
The Company's consolidated condensed financial statements have been
presented on the basis that the Company will continue as a going-concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company reported net losses of $4,797,137,
$10,346,069 and $2,823,910 for the years ended December 31, 1999, 1998 and 1997,
respectively, and a net loss of $1,032,096 for the three-month period ended
March 31, 2000, and has an accumulated deficit of $43,798,641 at March 31, 2000.
These recurring losses and the need for continued funding, discussed below,
raise substantial doubt about the Company's ability to continue as a going-
concern.
The Company remains dependent upon its ability to obtain outside financing
either through the issuance of additional shares of its common or preferred
stock or through borrowings until it achieves sustained profitability through
increased sales and improved product margins. The Company's business continues
to focus on the manufacturing and marketing of its laser-based technologies
incorporated in its newly introduced products, the Millennium II and the
Twilite(TM) laser systems.
Financing the development of laser-based medical and dental devices and
instruments and the operations of the Company has been achieved principally
through the private placements of preferred and common stock and the exercise of
stock options and warrants. During the three years ended December 31, 1999, the
Company raised approximately $7,061,000 of net equity funds in this manner.
During the first quarter of 2000, the Company raised an aggregate $4,357,502 of
net equity funds in this manner.
Based upon the expected increase in sales and the additional funds already
received, the Company believes that it should have sufficient capital resources
to sustain it during the year in relation to its fiscal year 2000 business plan.
Should the Company require further capital resources in fiscal year 2000, it
would most likely address such requirement through a combination of sales of its
products, sales of equity securities through private placements, and/or debt
financings. If circumstances changed, and additional capital was needed, no
assurances can be given that the Company would be able to obtain such additional
capital resources.
If unexpected events occur requiring the Company to obtain additional
capital and it is unable to do so, it then might attempt to preserve its
available resources by deferring the creation or satisfaction of various
commitments, deferring the introduction of various products
Page 7
or entry into various markets, or otherwise scaling back its operations. If the
Company were unable to raise such additional capital or defer certain costs as
described above, such inability would have an adverse effect on the financial
position, results of operations, cash flows and prospects of the Company and
ultimately on its ability to continue as a going-concern. The consolidated
condensed financial statements do not give effect to any adjustments that might
be necessary if the Company were unable to meet its obligations or continue
operations.
Operating results for the three-month period ended March 31, 2000 are not
necessarily indicative of the results to be expected for the year ending
December 31, 2000. These statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the
Company's Form 10-K for the year ended December 31, 1999.
Note 2
- ------
Inventories, net of reserves, March 31, 2000 December 31, 1999
consist of the following: (unaudited)
-------------- ---------------
Raw materials $ 223,762 $ 434,315
Work-in-process and subassemblies 187,724 151,203
Finished goods 387,450 72,944
----------- -----------
$ 798,936 $ 658,462
=========== ===========
Note 3
- ------
Property and equipment, March 31, 2000 December 31, 1999
at cost, consist of the following: (unaudited)
-------------- ----------------
Leasehold improvements $ 171,445 $ 171,445
Equipment and lialibied and computers 891,666 884,841
Furniture and fixtures 200,806 200,806
Demonstration units 247,354 247,354
----------- -----------
Total cost 1,511,271 1,504,446
Less, accumulated depreciation and amortization (1,321,229) (1,300,917)
----------- -----------
$ 190,042 $ 203,529
=========== ===========
Page 8
Note 4
- ------
Accrued expenses consist
of the following: March 31, 2000 December 31, 1999
(unaudited)
-------------- -----------------
Accrued payroll and benefits $320,982 $245,930
Accrued professional fees 69,332 100,742
Accrued legal costs 172,761 132,261
Accrued warranty 173,734 163,175
Other 262,253 355,179
-------- --------
$999,062 $997,287
======== ========
Note 5
- ------
Basic and diluted loss per share is based on the weighted average number
of common shares outstanding. Potential common stock, which consists of stock
options and warrants, has been excluded from per share calculations, as the
effect of the assumed exercise of this potential common stock is anti-dilutive
at March 31, 2000 and 1999.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations.
- --------------
Qualifying Statement With Respect To Forward-Looking Information:
The United States Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for certain forward-looking statements. Such forward-looking
statements are based upon the current expectations of the Company and speak only
as of the date made. These forward-looking statements involve risks,
uncertainties and other factors. The factors discussed below under "Forward-
Looking Statements" and elsewhere in this Quarterly Report on Form 10-Q are
among those factors that in some cases have affected the Company's historic
results and could cause actual results in the future to differ significantly
from the results anticipated in forward-looking statements made in this
Quarterly Report on Form 10-Q, in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases and in oral
statements made by authorized officers of the Company. When used in this
Quarterly Report on Form 10-Q, the words "estimate," "project," "anticipate,"
"expect," "intend," "believe," "hope," "may" and similar expressions, as well as
"will," "shall" and other indications of future tense, are intended to identify
forward-looking statements.
The following discussion should be read in conjunction with the
consolidated condensed financial statements and notes thereto.
Results of Operations - Three-month period ended March 31, 2000 as compared to
the three-month period ended March 31, 1999:
Sales for the three months ended March 31, 2000 were $1,527,026 compared to
$1,785,983 for the same period in 1999, a decrease of $258,957 or 14%. The
decrease was due principally to the Company transitioning from an earlier
version of its Millennium(R)
Page 9
HydroKinetic(TM) (water laser) to its latest smaller and lighter version, the
Millennium II. The average selling price per unit was reduced to motivate sales
of the older version during this transition, which adversely impacted sales for
the quarter. During the latter part of the first quarter of 2000, the Company
commenced shipment of its new semiconductor diode laser system, the Twilite(TM),
which incorporates the latest state-of-the-art technology for use in a broad
range of dental cosmetic and soft tissue procedures. While sales of the
discounted older version Millennium(R) are expected to continue into the second
quarter of 2000, sales of the new Millennium II and Twilite(TM) laser systems
are expected to increase significantly beyond those reported in the first
quarter of 2000.
Gross profit for the first quarter of 2000 was $536,262, or 35% of sales,
compared to $797,141, or 45% of sales, for the first quarter of 1999, a decrease
of $260,879. The decrease was due principally to the decrease in the average
unit selling price experienced from the product transition of the Millennium(R)
to the new Millennium II.
Operating expenses were $1,552,343 for the first quarter of 2000 compared
to $1,441,530 for the same period in 1999, a modest increase of $110,813. Sales
and marketing expenses for the first quarter of 2000 increased to $638,026 from
$534,320 for the same period in 1999, an increase of $103,706, or 19%. The
increase was due principally to the new product launches of the Millennium II
and the Twilite(TM) laser systems requiring expanded advertising and aggressive
participation at industry trade shows. The Company anticipates favorable results
from these efforts through increased sales during the second quarter of 2000.
Engineering and development expenses were $513,439 for the first quarter of 2000
compared to $471,515 for the first quarter of 1999, an increase of 41,924, or
9%. The increase was due primarily to efforts associated with the final designs
of the Millennium II and Twilite(TM) laser systems. General and administrative
expenses reflected a modest decrease of $34,817, or 8%, to $400,878 for the
first quarter of 2000 compared to $435,695 for the same period in 1999.
The Company's net loss was $1,032,096, or $0.06 per share, for the first
quarter of 2000 compared to $669,856, or $0.04 per share, for the same period in
1999. The increase in the net loss was due principally to the reduction in
sales as a result of a reduced average unit selling price of its Millennium(R),
which also contributed to the significant reduction in gross profits.
Financial Condition
Cash and cash equivalents increased from $1,180,982 at December 31, 1999 to
$4,180,067 at March 31, 2000 principally as a result of a private placement of
Company common stock and stock purchase warrants reflecting net proceeds of
$2,450,516, and the exercise of certain stock options and stock purchase
warrants providing $1,906,986 in cash proceeds during the first quarter of 2000.
The increase in cash and cash equivalents was offset by cash used by operating
activities aggregating $1,351,592.
Accounts receivable increased $381,462 from the $330,840 reported at
December 31, 1999 to $712,302 at March 31, 2000. The increase is due
principally to orders shipped at the end of March 2000 for which payments will
be received in the second quarter of 2000.
Inventories at March 31, 2000 were $798,936 compared to $658,462 at
December 31, 1999, an increase of $140,474. The increase was due principally to
the Company's decision to maintain certain levels of its earlier version of
Millennium(R) for sale while completing the design of its new Millennium II,
which entered production in the latter part of first quarter of 2000. The
Company believes that its business does not presently operate in a normalized
cycle in which
Page 10
information regarding inventory turns would be meaningful but that such
information will become meaningful once productions and deliveries of its newly
introduced products are normalized.
Prepaid expenses and other current assets at March 31, 2000 were comparable
to those reported at December 31, 1999.
Current liabilities increased $171,464 from December 31, 1999 to March 31,
2000, due principally to an increase in accounts payable of $185,077 reflecting
a modest increase in inventory related to new product introductions. In March
2000, the Company converted $428,000 of the $480,300 accrued expenses related to
the reacquisition of foreign distribution rights reported in the financial
statements at December 31, 1999 to a 6-month, 6% note payable, due September 30,
2000.
Stockholders' equity/deficit increased $3,325,406 to $2,386,134 at March
31, 2000 from a deficit position of $939,272 at December 31, 1999 due to (i) net
proceeds of $2,450,516 received from a private placement in March 2000, and (ii)
proceeds of $1,906,986 received from the exercise of certain stock options and
stock purchase warrants, both of which were offset by the first quarter net loss
of $1,032,096. The Company executed an agreement with the former shareholders of
Laser Skin Toner, Inc. ("LSTI") whereby 525,000 of the 1,417,120 shares of the
Company's common stock issued as consideration for the assets of LSTI in July
1998 are to be returned to the Company for subsequent cancellation in July 2000.
The agreement also calls for the cancellation of the 182,880 shares of the
Company's common stock held in escrow for issuance to LSTI based on future
performance of the technology purchased from LSTI.
Liquidity and Capital Resources
The Company remains dependent upon its ability to obtain outside financing
either through the issuance of additional shares of its common or preferred
stock or through borrowings until it achieves sustained profitability through
increased sales and improved product margins. The Company's business continues
to focus on the manufacturing and marketing of its laser-based technologies
incorporated in its newly introduced products, the Millennium II and the
Twilite(TM) laser systems.
Financing the development of laser-based medical and dental devices and
instruments and the operations of the Company has been achieved principally
through the private placements of preferred and common stock and the exercise of
stock options and warrants. During the three years ended December 31, 1999, the
Company raised approximately $7,061,000 of net equity funds in this manner.
During the first quarter of 2000, the Company raised an aggregate $4,357,502 of
net equity funds in this manner as well.
Based upon the expected increase in sales and the additional funds already
received, the Company believes that it should have sufficient capital resources
to sustain it during the year in relation to its fiscal year 2000 business plan.
Should the Company require further capital resources in fiscal year 2000, it
would most likely address such requirement through a combination of sales of its
products, sales of equity securities through private placements, and/or debt
financings. If circumstances changed, and additional capital was needed, no
assurances can be given that the Company would be able to obtain such additional
capital resources.
Page 11
If unexpected events occur requiring the Company to obtain additional
capital and it is unable to do so, it then might attempt to preserve its
available resources by deferring the creation or satisfaction of various
commitments, deferring the introduction of various products or entry into
various markets, or otherwise scaling back its operations. If the Company were
unable to raise such additional capital or defer certain costs as described
above, such inability would have an adverse effect on the financial position,
results of operations, cash flows and prospects of the Company and ultimately on
its ability to continue as a going-concern.
At March 31, 2000, the Company had $1,341,925 outstanding under a revolving
credit agreement with a bank. The revolving credit agreement provides for
borrowings of up to $2,500,000 for the financing of inventory and is
collateralized by substantially all of the Company's accounts receivable and
inventories. The interest rate is fixed throughout the term of the credit
agreement and is computed based upon LIBOR plus 0.5% at the time of any
borrowings. At March 31, 2000, the weighted average interest rate on the
outstanding balance was 6.68%. The Company is required to reduce the
outstanding loan balance by an amount equal to the cost of goods sold associated
with sales of inventory upon collection of sales proceeds. The current
revolving credit agreement expires on December 1, 2000 at which point the
Company will be required to either pay any remaining balance of the credit
facility or refinance the credit facility. No assurances can be given that the
Company will be able to refinance the line of credit or that the terms on which
it may be able to refinance the line of credit will be as favorable as the terms
of the existing line. If the Company is unable to refinance and is therefore
required to repay the line of credit, the diversion of resources to that purpose
may adversely affect the Company's operations and financial condition.
The Company's lease on its manufacturing facility expires in September
2000. The lessor has notified the Company that it does not intend to renew the
lease with the Company as the building has been listed for sale by the lessor.
The Company has researched similar leasing rates in close proximity to its
present location and determined that competitive lease rates on a similar
building in structure and size are dramatically higher than the Company's
current rate. In addition, the cost of relocation to the Company would be
substantial and could include, but not be limited to, business interruption,
actual moving costs and large up-front deposits required on new lease
potentials. Accordingly, the Company has entered into negotiations with the
lessor to purchase its manufacturing facility. The negotiations are currently
ongoing. The Company can give no assurances as to the final outcome.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
- --------------------------------------------------------------------
Not Applicable
Page 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
- ---------------------------
See Item 3 "Legal Proceedings" included within the Company's Annual Report
on Form 10-K for fiscal year ended December 31, 1999 for information regarding
certain pending legal proceedings.
From time to time, the Company is involved in legal proceedings incidental
to its business. It is management's opinion that pending actions, individually
and in the aggregate, will not have a material adverse effect on the Company's
financial condition, and that adequate provision has been made for the
resolution of such actions and proceedings.
Item 2. Changes in Securities.
- -------------------------------
In February 1999, the Company sold an aggregate 1,250,000 shares of its
Common Stock, par value $.001 per share ("Common Stock"), and 625,000 Redeemable
Stock Purchase Warrants ("Unit Warrants"). In addition, the Company issued to
Eurocapital Limited (the "Placement Agent") 62,500 redeamable stock purchase
warrants (the "Agent Warrants" and, collectively with the Common Stock and Unit
Warrants, the "Securities"). Each of the Unit Warrants and Agent Warrants
(collectively, the "Warrants") entitles the holder hereof to purchase one share
of Common Stock at an exercise price of $3.00 per share through March 31, 2002.
The Securities were sold to accredited investors exclusively.
The Securities were sold in units ("Units") consisting of 10,000 shares of
Common Stock and 5,000 Warrants at a price of $21,775 per Unit, or aggregate
consideration of $2,721,875 for all of the Securities sold. The aggregate
commissions and non-accountable expenses paid to the Placement Agent amounted to
$231,359.
The Warrants include certain call features whereby the Company may, by
written notice to the registered holders, call all of the then outstanding
Warrants for redemption, provided the average between the high and low prices at
which shares of Common Stock trade in the principal market in which they then
trade exceeds two hundred percent (200%) of the respective Warrant Exercise
Price for the twenty (20) consecutive trading days preceding the date of such
call. The notice shall specify a date (the "Warrant Redemption Date") no less
than thirty (30) days after the date of such notice on which all Warrants then
remaining unexercised and outstanding shall be redeemed by the Company. In
redemption for each Warrant, the Company shall pay to the holder thereof in cash
the sum (the "Warrant Redemption Price") of One Cent ($0.01). Effective upon
the Warrant Redemption Date, each Warrant being called for redemption shall be
deemed to be no longer outstanding and shall represent only the right to receive
from the Company the Warrant Redemption Price upon surrender to the Company of
the certificate representing such Warrant. Between the date of the notice and
the Warrant Redemption Date, holders may exercise their Warrants to purchase
Common Stock.
The issuance and sale of the Securities was exempt from the registration
requirements of the Securities Act pursuant to Sections 4(2) and 4(6) of the
Securities Act as transactions by an issuer not involving any public offering
and as transactions involving offers and sales by an issuer solely to accredited
investors in which the aggregate offering price did not exceed the amount
allowed under Section 3(b) of the Securities Act, there was no advertising or
public solicitation in connection with the transactions, and the issuer filed
the prescribed notice with the Securities and Exchange Commission. Each
purchaser of Securities represented, with
Page 13
supporting information, that such purchaser was an accredited investor; that
such purchaser was acquiring the Securities for such purchaser's own account and
not for the account or benefit of any other person; that the Securities were
being acquired for investment and not with a view to the distribution thereof;
and that such purchaser did not intend to sell or otherwise dispose of all or
any part of the Securities at the time of purchase or upon the occurrence or
nonoccurrence of any predetermined event. Each purchaser also agreed that such
purchaser would offer or resell Securities only if the Securities are registered
under the Securities Act or an exemption from such registration is available
(and confirmed by an opinion of counsel satisfactory to the Company). The
Company placed restrictive legends on the certificates representing the
Securities and placed "stop transfer" instructions with the transfer agent for
Common Stock. Since the Company is acting as transfer agent for the Warrants, it
will impose comparable procedures with respect to requests for the transfer of
Warrants. The Company is obligated to file a registration statement with the
Securities and Exchange Commission covering the resale of the Securities.
Item 3. Defaults Upon Senior Securities.
- -----------------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
None
Item 5. Other Information.
- ---------------------------
None
Item 6. Exhibits and Reports on Form 8-K.
- ------------------------------------------
(a) Exhibits
27. Financial Data Schedule (electronic filing only)
(b) Reports on Form 8-K
None
Page 14
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BIOLASE TECHNOLOGY, INC.
a Delaware Corporation
Date: May 22, 2000 /s/ Jeffrey W. Jones
---------------- ------------------------------------
Jeffrey W. Jones
President & Chief Executive Officer
Date: May 22, 2000 /s/ Stephen R. Tartamella
---------------- -----------------------------------
Stephen R. Tartamella
Vice President & Chief Financial Officer
Page 15