-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S6S24KbV3Mcj0AMm84P/91NtKi+D5ThRA36CVyThvBsyivVR9aDz3F0PYpMzSVTj 1EhzFhTfnLCNaiBrEh5QvA== 0000892569-97-001419.txt : 19970520 0000892569-97-001419.hdr.sgml : 19970520 ACCESSION NUMBER: 0000892569-97-001419 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOLASE TECHNOLOGY INC CENTRAL INDEX KEY: 0000811240 STANDARD INDUSTRIAL CLASSIFICATION: DENTAL EQUIPMENT & SUPPLIES [3843] IRS NUMBER: 870442441 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19627 FILM NUMBER: 97607626 BUSINESS ADDRESS: STREET 1: 981 CALLE AMANECER CITY: SAN CLEMENTE STATE: CA ZIP: 92673 BUSINESS PHONE: 7143611200 MAIL ADDRESS: STREET 1: 981 CALLE AMANECER CITY: SAN CLEMENTE STATE: CA ZIP: 92673 10-Q 1 QUARTERLY REPORT FOR THE PERIOD ENDED 3/31/97 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Conformed Copy 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, 1997 -------------- [ ] 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) (714) 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 13,400,449 - ----------------------------- ---------------------------- Title Class Number of Shares Outstanding at April 30, 1997 2 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 13 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 13 ITEM 2. Changes in Securities 13 ITEM 3. Defaults Upon Senior Securities 13 ITEM 4. Submission of Matters to a Vote of Security Holders 13 ITEM 5. Other Information 14 ITEM 6. Exhibits and Reports on Form 8-K 14 SIGNATURE PAGE 16
Page 2 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. BIOLASE TECHNOLOGY, INC. CONSOLIDATED CONDENSED BALANCE SHEETS
March 31,1997 December 31, 1996 (Unaudited) ------------- ----------------- Assets: Current assets: Cash and cash equivalents $ 460,836 $ 349,457 Marketable securities 3,250,000 3,500,000 Accounts receivable, less allowance of $22,930 in 1997 and $21,957 in 1996 150,933 145,463 Inventories, net of reserves of $485,154 in 1997 and 1996 518,027 376,479 Prepaid expenses and other current assets 90,460 73,723 ------------ ------------ Total current assets 4,470,256 4,445,122 Property, plant and equipment, less accumulated depreciation of $1,066,111 in 1997 and $1,035,648 in 1996 223,901 194,078 Patents, licenses and trademarks, less accumulated amortization of $327,614 in 1997 and 1996 71,167 31,215 Other assets 22,482 18,929 ------------ ------------ Total assets $ 4,787,806 $ 4,689,344 ============ ============ Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 163,124 $ 109,582 Accrued expenses 636,728 615,635 Accrued costs related to dissolution of foreign subsidiary 43,074 46,167 Other current liabilities -- 3,980 ------------ ------------ Total current liabilities 842,926 775,364 ------------ ------------ Stockholders' equity: Preferred stock, par value $.001, 1,000,000 shares authorized: Series A 6% Redeemable Cumulative Convertible Preferred Stock, 1 share issued and outstanding at March 31, 1997 and December 31, 1996 -- -- Common stock, par value, $.001, 50,000,000 shares authorized, issued 13,392,449 in 1997 and 13,129,949 in 1996 13,392 13,130 Additional paid-in capital 29,498,651 28,700,279 Accumulated deficit (25,567,163) (24,799,429) ------------ ------------ Net stockholders' equity 3,944,880 3,913,980 ------------ ------------ Total liabilities and stockholders' equity $ 4,787,806 $ 4,689,344 ============ ============
See accompanying notes to consolidated financial statements. Page 3 4 Item 1. Financial Statements (continued). BIOLASE TECHNOLOGY, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, --------------------------------- 1997 1996 ------------ ------------ Sales $ 134,405 $ 143,615 Cost of sales 112,870 135,823 ------------ ------------ Gross profit 21,535 7,792 ------------ ------------ Operating expenses: Sales and marketing 273,803 180,141 General and administrative 235,987 152,175 Engineering and development 277,440 180,517 Litigation and settlement costs 5,255 1,434 ------------ ------------ Total operating expenses 792,485 514,267 ------------ ------------ Loss from operations (770,950) (506,475) Other income Interest income, net 3,216 9,757 ------------ ------------ Net loss $ (767,734) $ (496,718) ============ ============ Loss per share of common stock $ (0.06) $ (0.04) ============ ============ Weighted average shares outstanding 13,237,060 11,253,818 ============ ============
See accompanying notes to consolidated financial statements. Page 4 5 Item 1. Financial Statements (continued). BIOLASE TECHNOLOGY, INC. CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
Additional Net Preferred Stock Common Stock Paid-in Accumulated Stockholders' Shares Amount Shares Amount Capital Deficit Equity ------ ------ ------ ------ ------- ------- ------ Balance at December 31, 1996 1 $ - 13,129,949 $13,130 $28,700,279 ($24,799,429) $3,913,980 Exercise of stock options 62,500 62 78,687 - 78,749 Private placement of common stock 200,000 200 719,685 - 719,885 Net loss - - - (767,734) (767,734) ------------------------------------------------------------------------------------- Balance at March 31, 1997 1 $ - 13,392,449 $13,392 $29,498,651 ($25,567,163) $3,944,880 =====================================================================================
See accompanying notes to consolidated financial statements. Page 5 6 Item 1. Financial Statements (continued). BIOLASE TECHNOLOGY, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31 ------------------------------ 1997 1996 ---- ---- Cash flows from operating activities: Net loss $(767,734) $(496,718) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 30,463 39,111 Changes in operating assets and liabilities: Accounts receivable (5,470) 32,790 Inventories (141,548) (94,586) Prepaid expenses and other current assets (20,290) 60,651 Accounts payable 53,542 (9,099) Accrued expenses 21,093 13,567 Accrued costs related to dissolution of foreign subsidiary (3,093) (6,700) Other current liabilities (3,980) (23,000) --------- ---------- Net cash used by operating activities (837,017) (483,984) --------- ---------- Cash flows from investing activities: Sale of marketable securities 250,000 - Additions to property, plant and equipment (60,286) (23,967) Additions to patents, licenses and trademarks (39,952) (6,163) --------- ---------- Net cash provided (used) by investing activities 149,762 (30,130) --------- ---------- Cash flows from financing activities: Payments of long-term debt - (5,557) Proceeds from issuance of common stock, net 719,885 - Proceeds from exercise of stock options 78,749 33,742 --------- ---------- Net cash provided by financing activities 798,634 28,185 --------- ---------- Increase (decrease) in cash and cash equivalents 111,379 (485,929) Cash and cash equivalents at beginning of period 349,457 1,565,655 --------- ---------- Cash and cash equivalents at end of period $ 460,836 $1,079,726 ========= ========== Supplemental cash flow disclosure: Cash paid during the period for interest $ 913 $ 1,625 ========= =========
See accompanying notes to consolidated financial statements. Page 6 7 BIOLASE TECHNOLOGY, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARCH 31, 1997 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, 1996 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 at and the results of operations for the period ended March 31, 1997. 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 $2,463,259, $2,023,822 and $3,050,333 for the years ended December 31, 1996, 1995, and 1994, respectively, and a net loss of $767,734 for the quarter ended March 31, 1997 and has an accumulated deficit of $25,567,163 at March 31, 1997. 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 stocks or through borrowings until it achieves sustained profitability through increased sales, continued efforts of engineering redesign, and cost curtailment. The Company's focus has been realigned to emphasize the marketing of its laser-based hydro-kinetic tissue cutting system (the Millennium(TM) series), LaserBrush(TM) and other laser and endodontic products, and the continued development of biomaterial products and cost-effective laser technologies for medical and dental surgical applications. Based on the Company's current business plan, working capital should be sufficient to enable the Company to meet its obligations through early 1999, at which point, the Company would be dependent upon either the successful marketing of its Millennium(TM) and its soon to be released LaserBrush(TM) products or additional financing. There are no assurances that the Company will be successful in either marketing its new products or obtaining financing required to sustain its operations. If unsuccessful, the Company's ability to meet its obligations and to continue operations could be impaired. 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. Financing the development of laser-based medical and dental devices and instruments and the operations of the Company has been achieved principally through private placements of preferred and common stocks and the exercises of stock options and warrants. During the three years ended December 31, 1996, the Company has raised approximately $7,747,000 of equity funds. The Company obtained additional equity funding through the issuance of 200,000 shares of its common stock in a private placement resulting in net proceeds of approximately $720,000 during the three-month period ending March 31, 1997. Management believes that significant additional capital resources will be required to complete the process seeking FDA clearance to market the Company's hydro-kinetic and laser-based technologies for hard-tissue and dermatological applications in the United States and to fund the Company's working capital Page 7 8 needs in the event the marketing of its new products does not generate sufficient profitability and cash flow by the end of 1998. The Company expects to generate the necessary capital resources through the revenue generated by its new products, the issuance of equity securities in either public offerings or private placements, or debt financing. No assurances can be given, however, that the Company will be able to obtain such capital resources Operating results for the three-month period ended March 31, 1997 are not necessarily indicative of the results to be expected for the year ending December 31, 1997. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Form 10-KSB for the year ended December 31, 1996. Note 2
Inventories, net of reserves, March 31, 1997 consist of the following: (unaudited) December 31, 1996 ----------- ----------------- Raw materials $134,036 $ 96,823 Work-in-process 148,000 - Finished goods 235,991 279,656 -------- -------- $518,027 $376,479 ======== ========
Note 3
Property, plant and equipment, March 31, 1997 at cost, consist of the following: (unaudited) December 31, 1996 ----------- ----------------- Leasehold improvements $ 149,282 $ 149,282 Equipment and computers 737,320 725,882 Furniture and fixtures 156,056 107,208 Demonstration units 247,354 247,354 ----------- ----------- Total cost 1,290,012 1,229,726 Less, accumulated depreciation and amortization (1,066,111) (1,035,648) ----------- ----------- $ 223,901 $ 194,078 =========== ===========
Note 4
Accrued expenses consist of the following: March 31, 1997 (unaudited) December 31, 1996 ----------- ----------------- Accrued professional fees $127,101 $158,416 Accrued legal and litigation costs 149,791 88,292 Accrued private placement costs 71,272 72,984 Sales tax payable 48,643 46,514 Accrued rent 30,054 32,253 Accrued warranty 15,000 15,000 Accrued vacation 53,901 48,354 Other 140,966 153,822 -------- -------- $636,728 $615,635 ======== ========
Page 8 9 Note 5 Loss per share is based on the weighted average number of common shares outstanding. Common stock equivalents, which consist of stock options, have been excluded from per share calculations, as the effect of the assumed exercise of these common stock equivalents is anti-dilutive at March 31, 1997 and 1996. In February, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share". SFAS No. 128 requires companies to adopt its provisions for fiscal years beginning after December 15, 1997 and requires restatement of all prior period earnings per share ("EPS") data presented. Earlier application is not permitted. SFAS No. 128 specifies the computation, presentation and disclosure requirements for EPS. The implementation of SFAS No. 128 is not expected to have a material effect on the EPS data presented by the Company. Note 6 As of December 31, 1996, the Company had net operating loss carryforwards for federal and state purposes of approximately $23 million and $12.5 million, respectively. The net operating loss carryforwards begin expiring in 2002 and 1997, respectively. The utilization of net operating loss carryforwards may be limited under the provisions of Internal Revenue Code Section 382 and similar state provisions. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated condensed financial statements and notes thereto. RESULTS OF OPERATIONS - THREE-MONTH PERIOD ENDED MARCH 31, 1997 AS COMPARED WITH THE THREE-MONTH PERIOD ENDED MARCH 31, 1996:
Operating summary ($ in thousands, except per-share amounts) Three months ended March 31, 1997 1996 (unaudited) (unaudited) ----------- ----------- Sales $ 134 $ 144 Gross profit $ 22 $ 8 Percentage of sales 16 % 6 % Operating expenses $ 792 $ 514 Percentage of sales 591 % 357 % Operating loss $ (771) $ (506) Other income $ 3 $ 10 Percentage of sales 2 % 7 % Net loss $ (777) $ (497) Loss per share of common stock $(0.06) $(0.04)
Sales decreased $10,000 for the first quarter of 1997 as compared to the same period of 1996. The Company's laser division had sales of $15,000 for the first quarter of 1997, a decrease of $26,000 from the $41,000 reported for the same period in 1996. The reduction is attributable principally to the Company's decision to cease marketing of its historic laser products in anticipation of launching its new hydro-kinetic tissue cutting system, the Millennium(TM), within the German market, scheduled for the second quarter of 1997. (The Page 9 10 preceding sentence constitutes a forward looking statement [hereinafter identified as "FLS"]. Each of the forward looking statements in this Quarterly Report on Form 10-Q is subject to various factors that could cause actual results to differ materially from the results anticipated in such forward looking statement, as more fully discussed in this Item 2 under "Forward Looking Statements".) Domestically, the Company anticipates the introduction of its laser-based tooth brush, the LaserBrush(TM), in the third quarter of 1997. (FLS) The Company does not expect significant sales based upon its hydro-kinetic technology in the domestic market unless and until it receives regulatory clearance to market its Millennium(TM) for certain hard-tissue applications within the dental field and other applications within the dermatological field. (FLS) Sales for the Company's endodontic division were $127,000 for the first quarter of 1997 compared to $106,000 for the same period in 1996, an increase of $21,000 due principally to increased marketing by the Company at trade shows and conferences during the first quarter of 1997 compared to the same period in 1996. Gross profit increased to $22,000 during the first quarter of 1997, up $14,000 from the $8,000 reported for the comparable period in 1996. As a result of a reduction in fixed manufacturing costs offset by reduced sales, the Company's laser division experienced comparable losses of approximately $48,000 at the gross profit line in the quarters ended March 31, 1997 and 1996. The Company's endodontic division reported a gross profit of $70,000 for the first quarter of 1997 compared to a gross profit of $54,000 for the comparable period in 1996, reflecting increased sales. Operating expenses increased $278,000, or 54%, to $792,000 during the first quarter of 1997 from the $514,000 reported during the first quarter of 1996. Sales and marketing expenses were $274,000 during the first quarter of 1997 compared to $180,000 reported for the same period in 1996, an increase of $94,000 due principally to greater participation by the Company at dermatological and dental trade shows. General and administrative expenses increased $84,000 from the $152,000 reported during the first quarter of 1996 to $236,000 for the same period in 1997. The increase was due principally to higher legal, patent and insurance expenses incurred in the first quarter of 1997 as compared to the first quarter of 1996. Engineering and development expenses were $277,000 for the first quarter of 1997, an increase of $96,000 from the $181,000 reported during the same period in 1996. The increase was due principally to 1997 costs related to the completion of engineering prototypes of Millennium(TM), design of a new delivery system handpiece for Millennium(TM), continued costs related to the refinement of LaserBrush(TM) and various on-going clinical studies. The net loss for the first quarter of 1997 increased $271,000, or 55%, from the $497,000 reported for the same period in 1996, due principally to the increase in operating expenses previously discussed. The loss per share increased from $0.04 per share reported during the first quarter of 1996 to $0.06 per share from the first quarter of 1997. The increase in loss per share is attributable primarily to an increase in net loss. Page 10 11 LIQUIDITY AND CAPITAL RESOURCES
($ in thousands) March 31, 1997 December 31, 1996 (unaudited) -------------- ----------------- Cash and cash equivalents $ 461 $ 349 Marketable securities $3,250 $3,500 Working capital $3,627 $3,670
For The Three Months Ended March 31, 1997 1996 (unaudited) (unaudited) ----------- ----------- Net cash used by operating activities $(837) $(484) Net cash provided (used) by investing activities $ 150 $ (30) Net cash provided by financing activities $ 799 $ 28
The Company's liquidity at March 31, 1997 was comparable to that of December 31, 1996. Cash and cash equivalents increased $112,000 due to cash proceeds received from the issuance of the Company's common stock through a private placement and the exercise of employee stock options, aggregating $799,000 and the liquidation of $250,000 in marketable securities, largely offset by cash used by operations of $837,000 and expenditures related to capital equipment and patent and trademark applications, aggregating $100,000. Working capital declined $43,000 to $3,627,000 at March 31, 1997, compared to the $3,670,000 reported at December 31, 1996. Cash used by operations increased $353,000 from the $484,000 reported during the first quarter of 1996 to $837,000 for the first quarter of 1997. This increase was due principally to the increased net loss experienced in the first quarter of 1997 and a rise in inventory partially offset by an increase in accounts payable associated with the ramp-up of manufacturing the Millennium(TM). The Company expects to record revenue from its first shipments of Millennium(TM) during the second quarter of 1997. These revenues are expected to be reflected as an account receivable in the Company's consolidated condensed balance sheet at June 30, 1997, with collection of such account receivable anticipated during the third quarter of 1997. (FLS) The Company's inventory and accounts payable levels should increase during the second quarter of 1997 to reflect an anticipated increase in Millennium(TM) production and inventory build-up in anticipation of commencement of LaserBrush(TM) production. (FLS) The Company is presently analyzing various computer software and hardware to meet its operational needs and anticipates capital expenditures to increase significantly during the second quarter of 1997. (FLS) Presently, no other significant capital expenditure projects are under consideration. The Company remains dependent upon its ability to obtain outside financing either through the issuance of additional shares of its common or preferred stocks or through borrowings until it achieves sustained profitability through increased sales, continued efforts of engineering redesign, and cost curtailment. (FLS) The Company's focus has been realigned to emphasize the marketing of its laser-based hydro-kinetic tissue cutting system (the Millennium(TM) series), LaserBrush(TM) and other laser and endodontic products, and the continued development of biomaterial products and cost-effective laser technologies for medical and dental surgical applications. Based on the Company's current business plan, working capital should be sufficient to enable the Company to meet its obligations through early 1999, at which point, the Company would be dependent upon either the successful marketing of its Millennium(TM) and its soon to be released LaserBrush(TM) products or additional financing. (FLS) There are no assurances that the Company will be Page 11 12 successful in either marketing its new products or obtaining financing required to sustain its operations. (FLS) If unsuccessful, the Company's ability to meet its obligations and to continue operations could be impaired. (FLS) The consolidated 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. Financing the development of laser-based medical and dental devices and instruments and the operations of the Company has been achieved principally through private placements or preferred and common stocks and the exercises of stock options and warrants. During the three years ended December 31, 1996, the Company has raised approximately $7,747,000 of equity funds. The Company obtained additional equity funding through the issuance of 200,000 shares of its common stock in a private placement resulting in net proceeds of approximately $720,000 during the three-month period ending March 31, 1997. Management believes that significant additional capital resources will be required to complete the FDA clearance to market the Company's hydro-kinetic and laser-based technologies for hard-tissue and dermatological applications in the United States and to fund the Company's working capital needs in the event the marketing of its new products does not generate sufficient profitability and cash flow by the end of 1998. (FLS) The Company expects to generate the necessary capital resources through the revenue generated by its new products, the issuance of equity securities in either public offerings or private placements, or debt financing. (FLS) No assurance can be given, however, that the Company will be able to obtain such capital resources. FORWARD LOOKING STATEMENTS The forward looking statements contained in this Quarterly Report on Form 10-Q are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such forward looking statements. Included among the important risks, uncertainties and other factors are those hereinafter discussed. Few of the forward looking statements in this Quarterly Report on Form 10-Q deal with matters that are within the unilateral control of the Company. There is substantial regulation of the manufacture and sale of medical products, including many of the Company's products, by governmental agencies in the United States and foreign countries. These governmental agencies often have considerable discretion in determining whether and when to approve the marketing of the Company's products that have not yet received such approval. The availability of equity and debt financing to the Company is affected by, among other things, domestic and world economic conditions and the competition for funds. Rising interest rates might affect the feasibility of debt financing that is offered. Potential investors and lenders will be influenced by their evaluations of the Company and its products and comparisons with alternative investment opportunities. The Company's products do not provide the exclusive means for accomplishing an objective, and customers may choose alternative means. Many of the Company's competitors have much greater financial resources and technical capabilities than does the Company, which may enable such competitors to design and produce superior products or to market their products in a manner that achieves commercial success even in the face of technical superiority on the part of the Company's products. The Company's patents may not offer effective protection against competitors. Competitors may be able to design around the Company's patents or employ technologies not covered by such patents. In addition, the Company's patents may be challenged, and even if such patents are upheld, the diversion of financial and human resources associated with patent litigation could adversely affect the Company. The Company may be found to be violating the patents of others and forced to obtain a license under such patents or modify the design of its products. Page 12 13 Rapid technological developments are expected to continue in the industries in which the Company competes. The Company may not be able to develop, manufacture and market products which meet changing user requirements or which successfully anticipate or respond to technological changes on a cost-effective and timely manner. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Yet Effective PART II - OTHER INFORMATION ITEM 1. 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. On February 28, 1997, the Company completed a private placement in which it issued and sold 200,000 shares of its common stock to an accredited investor (the "Investor"). Gross proceeds from the private placement were $725,000 before direct expenses of approximately $5,000. The shares of common stock issued in connection with the private placement are "restricted securities" as defined in Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act"). Accordingly, such shares may be resold only pursuant to a registration statement under the Act or in accordance with an exemption from such registration requirement. The Company is obligated to file a registration statement covering the resale of such shares. The offer and sale of common stock were exempt from the registration requirements of the Act under sections 4(2) and 4(6) as (i) a transaction by an issuer not involving a public offering, and (ii) a transaction involving offers or sales by an issuer solely to accredited investors that meet certain requirements under the Act. The Investor represented to and agreed with the Company that, among other things, (I) the Investor is an accredited investor, (ii) the Investor was acquiring the shares of common stock for its own account, for investment, and not for resale, distribution or disposition, and (iii) the Investor will offer or sell the shares of common stock only if registered under the Act or pursuant to an exemption from the registration requirements of the Act. The certificates representing the securities so issued have restrictive legends endorsed thereon reflecting the restrictions on transferability arising out of the forgoing matters, and the Company has issued "stop transfer" instructions to its transfer agent. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None Page 13 14 ITEM 5. OTHER INFORMATION. None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (A) EXHIBITS The following exhibits are being filed with this Quarterly Report on Form 10-Q or are incorporated by reference therein in accordance with the designated footnote references. 3. Articles of Incorporation and Bylaws 3.1 Restated Certificate of Incorporation, as amended.(2) 3.2 Amended and Restated Bylaws. (4) 4. Instruments Defining the Rights of Holders, including Indentures 4.3 Certificate of Designations, Preferences and Rights of Series A 6% Redeemable Cumulative Convertible Preferred Stock of BioLase Technology, Inc. (7) 4.4 Form of Participant Stock Purchase Warrant Certificate. (8) 4.5 Form of Agent Stock Purchase Warrant Certificate. (8) 10. Material Contracts 10.1 Premises Lease for 981 Calle Amanecer, San Clemente, California. (1) 10.9 1992 Stock Option Plan. (1) 10.18 Amended and Restated 1993 Stock Option Plan. (2) 10.18a First Amendment to Amended and Restated 1993 Stock Option Plan. (6) 10.19 Amended and Restated 1993 Stock Compensation Plan. (3) 10.20 Form of 1993 Stock Option Agreement under the 1993 Stock Option Plan. (2) 10.21 Termination Agreement between the Company, Guy Levy and Francois Levy dated February 23, 1994. (2) 10.22 Placement Agent Agreement between the Company and EuroCapital, Ltd. dated July 22, 1994. (3) 10.23 Form of Subscription Agreement, non-U.S. sales. (3) 10.24 Placement Agent Agreement between the Company and EuroCapital, Ltd. dated May 23, 1995. (4) 10.25 Amended and Restated 1993 Stock Option Plan. (4) 10.26* Distribution Agreement between the Company and Orbis High Tech Dental GmbH. (8) 16.4 Letter dated December 7, 1995 from KPMG Peat Marwick LLP, Certified Public Accountants. (5) 27. Financial Data Schedule (electronic filing only) - ------------------- * Portions of this Agreement have been omitted pursuant to a confidentiality request filed with the Securities and Exchange Commission. Page 14 15 (1) Filed with the Company's Registration Statement on Form S-1 dated October 9, 1992 and incorporated by reference. (2) Filed with the Company's 1993 Annual Report on Form 10-K dated April 14, 1994 and incorporated by reference. (3) Filed with Company's 1994 Third Quarter Report on Form 10-Q dated November 17, 1994 and incorporated by reference. (4) Filed with Company's 1995 Second Quarter Report on Form 10-QSB dated September 15, 1995 and incorporated by reference. (5) Filed with the Company's Current Report on Form 8-K dated December 7, 1995 and incorporated by reference. (6) Filed with the Company's 1995 Annual Report on Form 10-KSB dated May 6, 1996 and incorporated by reference. (7) Filed with the Company's 1996 Third Quarter Report on Form 10-QSB dated November 19, 1996 and incorporated by reference. (8) Filed with the Company's 1996 Annual Report on Form 10-KSB dated April 11, 1997 and incorporated by reference. (B) REPORTS ON FORM 8-K None Page 15 16 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 15, 1997 /s/ Donald A. La Point ---------------------------- Donald A. La Point President & Chief Executive Officer Date: May 15, 1997 /s/ Stephen R. Tartamella ---------------------------- Stephen R. Tartamella Vice President & Chief Financial Officer Page 16 EX-27.1 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 1997. 0000811240 BIOLASE TECHNOLOGY, INC. U.S. DOLLARS 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 1 460,836 3,250,000 173,863 (22,930) 518,027 4,470,256 1,290,012 (1,066,111) 4,787,806 842,926 0 0 0 13,392 3,931,488 4,787,806 134,405 134,405 112,870 112,870 277,440 0 0 (767,734) 0 (767,734) 0 0 0 (767,734) (0.06) (0.06)
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