8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 27, 2010

Biolase Technology, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	000-19627	87-0442441
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
4 Cromwell, Irvine, California		92618
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 949-361-1200

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Biolase Technology, Inc. (the "Company"), entered into a term loan for funding of up to $5 million, as described below under Item 2.03. The description of the term loan and related transactions under Item 2.03 are incorporated into this item by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 27, 2010, Biolase Technology, Inc. (the "Company") entered into a Loan and Security Agreement (the "Loan Agreement") with MidCap Financial, LLC, a Delaware limited liability company, and Silicon Valley Bank, a California corporation (collectively, the "Lenders") for term loan funding of up to $5 million. In connection with the Loan Agreement, the Company issued two Secured Promissory Notes in favor of the Lenders (the "Notes") and two Warrant Agreements in favor of the Lenders (the "Warrants") to purchase up to an aggregate of 101,694 shares of the Company’s $0.001 par value per share Common Stock ("Common Stock") at a per share price of $1.77, for aggregate initial gross proceeds of $3 million. Proceeds from the term loan will be used to fund the Company’s ongoing working capital needs.

The agreements constituting the term loan include the Loan Agreement, the Notes, the Warrants, the Intellectual Property Security Agreement, and various ancillary documents, certificates, discl osure schedules, opinions and exhibits in support thereof, each dated May 27, 2010.

The following summary is not complete, and is qualified in its entirety by reference to the full text of the agreements or forms of the agreements, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2010. Readers should review those agreements or forms of agreements for a more complete understanding of the terms and conditions associated with this transaction.

Pursuant to the Loan Agreement, the Lenders agreed to initially loan the Company $3 million upon the satisfaction of certain closing conditions. The Loan Agreement includes an option, which expires on August 31, 2010, for the Company to receive an additional $2 million in funding upon the satisfaction of certain conditions, including generating cash from other financing sources.

The outstanding principal balance of the loan bears interest at an annual percentage rate equal to th e greater of the thirty (30) day LIBOR rate or three percent, plus nine and one quarter percent. The interest rate will be adjusted each month and interest will be paid monthly. Beginning in December 2010, the outstanding principal will be repaid in 30 equal monthly installments. The final payment of all unpaid principal and accrued interest is due on May 2, 2013 (the "Maturity Date"). The Company’s obligations are secured by substantially all of the Company’s assets now owned or hereinafter acquired, including its intellectual property, as well as those of its two wholly-owned subsidiaries, BL Acquisition Corp. and BL Acquisition II, Inc., each of whom have provided a security agreement and certain guarantees to the Lenders.

The Loan Agreement permits the Company to prepay the outstanding principal amount and all accrued but unpaid interest and fees, subject to a prepayment fee. The amount of the prepayment fee depends on when the prepayment is made. If prepayment is made on or p rior to the first anniversary of the date of the term loan, the prepayment fee is equal to six percent of the outstanding principal at the time of prepayment. If prepayment is made after the first anniversary of the term loan and on or prior to the second anniversary of the term loan, the prepayment fee is equal to four percent of the outstanding principal at the time of prepayment. If prepayment is made after the second anniversary of the term loan and prior to the Maturity Date, the prepayment fee is equal to two percent of the outstanding principal at the time of prepayment.

The Loan Agreement requires certain post-closing covenants and compliance with customary financial and performance covenants and provides for customary events of default. If a default occurs, the Lenders may declare the amounts outstanding under the Loan Agreement immediately due and payable.

Pursuant to the Loan Agreement, the Company is obligated to pay a commitment fee of one-half of one percent of the aggregate $5 million term loan amount, or $25,000.00, which was paid prior to the execution of the Loan Agreement. In addition, upon the Company’s repayment of the loan, the Company must pay a final payment fee equal to three percent of the total amount funded under the Loan Agreement.

In connection with the Loan Agreement, the Company issued to the Lenders five-year warrants (the "Warrants") to purchase an aggregate of 101,694 shares of Common Stock at a per share price of $1.77, which was the average price per share of the Company’s common stock for the 20 business days immediately prior to the issue date. The Warrants may be exercised on a cashless basis.

Item 8.01 Other Events.

On May 28, 2010, the Company issued a press release announcing the signing of the Loan Agreement disclosed in Item 2.03 above. A copy of that press release is filed as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits
99.1 Press Release of Biolase Technology, Inc., dated May 28, 2010.

SIGNATURES

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 hereunto duly authorized.

	Biolase Technology, Inc.
June 3, 2010	By:	/s/ David M. Mulder
		Name: David M. Mulder
		Title: Chief Executive Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release of Biolase Technology, Inc., dated May 28, 2010

EX-99.1

NEWS RELEASE for May 28, 2010

BIOLASE SECURES $5 MILLION DEBT FACILITY
WITH MIDCAP FINANCIAL, LLC AND SILICON VALLEY BANK

IRVINE, CA (May 28, 2010) . . . BIOLASE Technology, Inc. (NASDAQ:BLTI), the world’s leading dental laser company, announced today that it has entered into a $5 million secured debt facility with MidCap Financial, LLC and Silicon Valley Bank.

BIOLASE received a first tranche of $3 million at closing, with a second tranche of $2 million, available upon completion of certain conditions. The financing will be used for ongoing working capital requirements.

“We are pleased to forge this new partnership with MidCap Financial and Silicon Valley Bank,” said BIOLASE Chief Executive Officer David M. Mulder. “This loan agreement fortifies our recently announced top line restructuring efforts, our expanding sales force, our new iLase™ product launch that is still in progress, our new consumer products planned for professional channels which were announced earlier this week, and supports the new products and enhancements currently in our research and development pipeline.”

“MidCap Financial is truly pleased to have BIOLASE as a portfolio company,” said Chris York, Managing Director, MidCap Financial, LLC. “By working closely with BIOLASE’s management team, we were able to develop a financing that helps the Company increase adoption of its dental laser systems in the U.S. and expand into new markets.”

About MidCap Financial, LLC
MidCap Financial is a commercial finance company focused on middle market lending in the healthcare and life sciences industries. MidCap specializes in $5 million to $200 million loans. The company is headquartered in Bethesda, MD, with offices in Chicago and Los Angeles, and focuses on investments in four areas:

• Life sciences loans, primarily to pharmaceutical, biotech and medical device companies;

• Working Capital loans collateralized by third-party accounts receivable and other assets;

• Real estate loans to senior housing, skilled nursing facilities and medical office buildings; and

• Leveraged loans to healthcare companies backed by private equity sponsors.

Additional information about MidCap Financial can be found at www.midcapfinancial.com.

About Silicon Valley Bank
Silicon Valley Bank is the premier commercial bank for companies in the technology, life science, venture capital, private equity and premium wine industries. SVB provides a comprehensive suite of financing solutions, treasury management, corporate investment and international banking services to its clients worldwide. Through its focus on specialized markets and extensive knowledge of the people and business issues driving them, Silicon Valley Bank provides a level of service and partnership that measurably impacts its clients’ success. Founded in 1983 and headquartered in Santa Clara, Calif., the company serves clients around the world through 26 U.S. offices and international operations in China, India, Israel and the United Kingdom. Silicon Valley Bank is a member of global financial services firm SVB Financial Group (Nasdaq: SIVB), with SVB Analytics, SVB Capital, SVB Global and SVB Private Client Services. More information on the company can be found at www.svb.com.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

About BIOLASE Technology, Inc.
BIOLASE Technology, Inc. (http://www.biolase.com), the world’s leading dental laser company, develops, manufactures and markets Waterlase technology and lasers and related products that advance the practice of dentistry and medicine.  The Company’s products incorporate patented and patent pending technologies designed to provide clinically superior performance with reduced pain and faster recovery times.  BIOLASE’s principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications.  Other products under development address ophthalmology, pain management and other medical and consumer markets.

This press release may contain forward-looking statements within the meaning of safe harbor provided by the Securities Reform Act of 1995 that are based on the current expectations and estimates by our management. These forward-looking statements can be identified through the use of words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” and variations of these words or similar expressions.  Forward-looking statements are based on management’s current, preliminary expectations and are subject to risks, uncertainties and other factors which may cause the Company’s actual results to differ materially from the statements contained herein, and are described in the Company’s reports it files with the Securities and Exchange Commission, including its annual and quarterly reports. No undue reliance should be placed on forward-looking statements. Such information is subject to change, and we undertake no obligation to update such statements.

For further information, please contact: Jill Bertotti (investors) or Len Hall (media), of Allen & Caron, +1-949-474-4300.

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