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 7, 2013

Biolase, 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 2.02 Results of Operations and Financial Condition.

On May 7, 2013, Biolase, Inc. (the "Company") issued a press release announcing its financial results for the first quarter ended March 31, 2013. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

On May 7, 2013, the Company issued press releases announcing the amendment of its credit facility agreements with Comerica Bank, the consummation of an affiliation agreement with Sun Dental Laboratories, LLC, and the U.S. Patent and Trademark's rejection of all patent claims in the reexamination of the patent related to an infringement lawsuit brought by CAO Group, Inc. against the Company.

Copies of the Company's press releases are filed as Exhibits 99.2, 99.3, and 99.4 to this Current Report on Form 8-K, and are incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

d) Exhibits.

99.1 Press Release of Biolase, Inc., dated May 7, 2013.
99.2 Press Release of Biolase, Inc., dated May 7, 2013.
99.3 Press Release of Biolase, Inc., dated May 7, 2013.
99.4 Press Release of Biolase, Inc., dated May 7, 2013.

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, Inc.
May 7, 2013	By:	Federico Pignatelli
		Name: Federico Pignatelli
		Title: Chairman and Chief Executive Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release, dated May 7, 2013, of Biolase, Inc.
99.2	Press Release, dated May 7, 2013, of Biolase, Inc.
99.3	Press Release, dated May 7, 2013, of Biolase, Inc.
99.4	Press Release, dated May 7, 2013, of Biolase, Inc.

EX-99.1

NEWS RELEASE

BIOLASE REPORTS 2013 FIRST QUARTER RESULTS

Net Revenue Increases 19% to $14.6 Million, Quarter over Quarter
Laser System Revenue Increases 9%, Quarter over Quarter
Imaging Revenue Increases 619%, Quarter over Quarter
2013 Annual Revenue Guidance Reiterated at $68 Million to $72 Million
Expects to Generate Cash from Operations for 2013 Overall
Gross Profit of 40% in Q1; Projected to Return to Normalized Levels of 44% to 46%

IRVINE, CA (May 7, 2013) — BIOLASE, Inc. (NASDAQ:BIOL), the world’s leading dental laser manufacturer and distributor, today reported unaudited financial results for the first quarter ended March 31, 2013.

Financial Highlights of the 2013 First Quarter:

• Net revenue of $14.6 million for Q1 2013, a 19% increase over $12.3 million for Q1 2012, and above the midpoint of the Company’s guidance of $14.0 million to $15.0 million.

• Non-GAAP net loss of $1.9 million, or a loss of $0.06 per share, as compared to a non-GAAP net loss of $873,000, or a loss of $0.03 per share, for Q1 2012.

• Revenues from the sale of laser systems increased $814,000, or 9%, as compared to Q1 2012 levels.

• Revenues from the sale of digital imaging and CAD/CAM systems increased $885,000, or 619%, as compared to Q1 2012 levels.

Operating Highlights of the 2013 First Quarter:

• Appointed Samir Chowdhury, Ph.D., as General Manager and Colleen Boswell as Vice President, Regulatory Affairs.

• Declared a one-half percent stock dividend payable on March 29, 2013, to stockholders of record as of March 15, 2013.

• Launched a website to showcase BIOLASE’s wholly-owned subsidiary OCCULASE and to expand the multiple applications of its proprietary WaterLase® technology into ophthalmology.

• Awarded “Best AEEDC Dubai Booth Activities” at the UAE International Dental Conference & Arab Dental Exhibition (“AEEDC Dubai”) held from February 5-7, 2013, in Dubai, United Arab Emirates. Organizers estimate that this year’s exhibition had over 1,000 dental equipment suppliers from 70 countries and over 28,000 attendees.

• Joined the Organization for Safety, Asepsis and Prevention (“OSAP”) as a member of its prestigious Super Sponsor partnership as advocates for safe and infection-free dentistry.

• Attended the 35th IDS International Dental Show in Cologne, Germany, from March 10-14, 2013, which had over 100,000 in attendance, where we also held our annual international distributor meeting.

• Hosted the World Clinical Laser Institute^® (the “WCLI^®”) Super Symposium in Huntington Beach, California, from March 21-24, 2013.

Clinical highlights of the 2013 First Quarter include:

• Received U.S. Food and Drug Administration (“FDA”) clearance for the Diolase 10™ diode soft-tissue laser, and subsequently the EPIC™ 10S, for a broad spectrum of medical procedures; includes clearance for over 80 procedures in 19 additional medical markets.

• Launched the EPIC V-Series veterinary soft-tissue diode laser.

• Issued broad new patent for treating eye conditions, including Presbyopia, Cataracts, and Glaucoma; provides additional support for ophthalmic applications.

• Collected 24 new articles regarding our WaterLase^® technology published in the English language during the 2013 first quarter.

Federico Pignatelli, Chairman and CEO, said, “While our overall revenue growth was slightly above the midpoint of our guidance, it is to be noted that certain domestic product revenues generated from our WCLI Super Symposium held March 21-24 were not recognized until after the close of the first quarter. The 2013 first quarter was also heavily geared toward international revenues as a result of the AEEDC Dubai held in February and the bi-annual International Dental Show held in early March. Our international revenues have grown as a result of these efforts andBIOLASE^® now has distributors in 71 countries around the world. We are confident that these efforts will continue to increase our international business throughout 2013 and beyond.”

“Domestically we focused on expanding our efforts as the premier total technology provider in dentistry by intensifying our efforts in selling digital imaging and CAD/CAM intra oral scanners, which is evidenced by the 619% growth for our imaging revenues quarter over quarter. Our Total Technology Solution^® is a key component in our strategy to push forward the adoption of lasers as high-tech dentistry and lasers become the standard of care in dentistry versus traditional conventional methods, along with leveraging our significant installed base of diode lasers. We believe that BIOLASE is the only company in North America that currently provides a full line of high-tech products, which includes a full range of all-tissue lasers and diode soft-tissue laser products; CBCT digital imaging products; and CAD/CAM intraoral scanners. We are pleased with the level of laser sales so far this year and we expect the aggressive marketing efforts we undertook in the first quarter to begin to pay off further as we move forward in the second quarter and the rest of 2013.” continued Pignatelli.

First Quarter Financial Results
Net revenue for the 2013 first quarter totaled $14.6 million, compared with $12.3 million in the 2012 first quarter. The increase of $2.3 million, or 19%, was driven by increased sales of the Company’s core laser systems and imaging products.

Laser system net revenue increased by approximately $814,000, or 9% in the 2013 first quarter as compared to the prior year quarter.

Fred Furry, CFO and COO said, “We are very pleased that the Company obtained FDA clearance for the EPIC soft-tissue diode laser platform for over 80 indications in 19 additional medical markets in April 2013. We expect that the EPIC 10 platform will continue to be a strong contributor to revenue in the second quarter and beyond. It is gratifying to have obtained this clearance so quickly.”

Imaging revenues, which included both cone beam and CAD/CAM, totaled approximately $1.0 million, or 7% of net revenue, during the 2013 first quarter as compared to $143,000, or 1% of net revenue, for the prior year quarter.

Pignatelli commented, “We added cone beam digital imaging to our product offerings in late 2011, and further expanded our imaging product offerings with the addition of CAD/CAM intra-oral scanning in late 2012. It is promising to see these product lines continue to grow and we expect this positive trend to continue throughout the year as we gain traction in the market and increase our imaging product offerings. We believe that digital imaging is a tremendous market opportunity and is an excellent complement to our core internally developed laser products.”

Gross profit as a percentage of net revenue was 40% as compared to 47% for the prior year quarter. This quarter-over-quarter decrease was primarily due to higher sales of WaterLase and diode systems internationally, which generally carry a lower margin than our direct sales in North America, and the increase in sales of our licensed imaging systems as a proportion of revenue, which also carries lower margins than our laser products.

“Based on our projected revenues and expenditures, we expect that our gross margin will return to historical levels in the range of 44% to 46% for the second quarter and 2013 overall.” Furry continued.

Operating expenses totaled $8.6 million, or 59% of net revenues, as compared to $7.4 million, or 60% of net revenues, in the 2012 first quarter. The increase of $1.2 million was primarily driven by a substantial investment in our sales and marketing efforts during the 2013 first quarter and increased legal expenses related to enforcing and protecting our intellectual property (“IP”) portfolio.

Sales and marketing expenses totaled $5.3 million for the 2013 first quarter, an increase of $1.3 million, or 30%, as compared to $4.0 million for the prior year quarter. The increase was primarily due to significantly increased convention costs as well as continued development of the Company’s direct sales force and increased media and advertising costs.

“Although we expect sales and marketing expenses to decrease overall as a percentage of revenue for 2013 as compared to 2012, many of the dental industry’s largest and most important trade shows occur during the first quarter of the year,” said Pignatelli. “Attending these shows places an additional burden on BIOLASE because our first quarter is traditionally our slowest and these events require a substantial investment. In addition to our standard trade shows, we attended the International Dental Show in Cologne, Germany, March 10-14, which is the largest dental show in the world and occurs every other year, we attended the 85th Western Veterinary Conference, and we hosted the WCLI Super Symposium, which was held March 21-24. We believe that investing in these additional marketing activities will result in increased revenues throughout the remainder of the year.”

General and administrative expenses totaled $2.2 million during the 2013 first quarter, essentially in line with the prior year quarter, despite significantly increased legal expenses primarily related to the enforcement and defense of the Company’s IP portfolio.

Pignatelli concluded, “Our IP portfolio is the cornerstone of laser technology in dentistry and a valuable asset of BIOLASE. Several of our competitors currently license our IP in their own laser products. We will not hesitate to enforce and protect our valuable IP portfolio.”

Engineering and development totaled $1.0 million during the 2013 first quarter, essentially in line with the prior year quarter.

As a result, the net loss for the 2013 first quarter totaled $2.6 million, or a loss of $0.08 per share, compared to a net loss of $1.7 million, or a loss of $0.05 per share, for the 2012 first quarter.

After removing interest expense of $87,000, non-cash depreciation and amortization expenses of $145,000, and non-cash stock-based, other equity instruments, and other non-cash compensation expense of $494,000, the 2013 first quarter resulted in non-GAAP net loss of $1.9 million, or $0.06 per share, compared with a non-GAAP net loss of $873,000, or a loss of $0.03 per share, for the 2012 first quarter.

Liquidity and Capital Resources
As of March 31, 2013, BIOLASE had approximately $5.2 million in working capital. Cash and cash equivalents totaled approximately $1.2 million at March 31, 2013, compared to $2.5 million at December 31, 2012.

Accounts receivable totaled $10.6 million at March 31, 2013, compared to $11.7 million at December 31, 2012. At March 31, 2013, the Company had two revolving credit facilities totaling $8.0 million, with $4.7 million of available borrowings, in excess of the $3.3 million outstanding. In May 2013, the total of the revolving credit facilities was increased to $10 million.

Financial Outlook
For the year ending December 31, 2013, the Company is reiterating its revenue expectation of approximately $68 million to $72 million. The midpoint of $70 million represents a 22% increase over 2012 net revenue and would also represent record revenue for the Company. The Company also reiterates that it expects to generate cash from operations for the year ending December 31, 2013.

Conference Call
As previously announced, BIOLASE will hold a conference call to discuss these financial results as follows:

Date:
Time:
Dial-in numbers:
Live webcast: Tuesday, May 7, 2013
4:30pm EDT
1-877-407-4019 (toll-free/U.S. & Canada)
1-201-689-8337 (toll/international)
www.biolase.com, under ‘Investors’

The archived webcast will be available for 90 days on the Company’s website, www.biolase.com, in the ‘Investors’ section under ‘Audio Archive.’

About BIOLASE, Inc.
BIOLASE, Inc. is a biomedical company that develops, manufactures, and markets lasers in dentistry and medicine and also markets and distributes dental imaging equipment; products that are focused on technologies that advance the practice of dentistry and medicine. The Company’s laser products incorporate over 340 patented and patent-pending technologies designed to provide biologically clinically superior performance with less pain and faster recovery times. Its imaging products provide cutting-edge technology at competitive prices to deliver the best results for dentists and patients. BIOLASE’s principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications, and a full line of dental imaging equipment. BIOLASE has sold more than 22,500 lasers.

Other products under development address ophthalmology and other medical and consumer markets.

For updates and information on WaterLase and laser dentistry, find BIOLASE online at www.biolase.com, Facebook at www.facebook.com/biolaseinc, Twitter at www.twitter.com/biolaseinc, Pinterest at www.pinterest.com/biolase, Linkedin at www.linkedin.com/company/biolase, Instagram at www.instagram.com/biolaseinc and YouTube at www.youtube.com/biolasevideos.

BIOLASE^®, WaterLase^®, iPlus^®, EPIC™, Diolase 10™, World Clinical Laser Institute^®, and WCLI^® are all registered trademarks or trademarks of BIOLASE, Inc.

NewTom is a trademark of QR S.r.l., a wholly-owned subsidiary of Cefla Capital Services, S.p.A., and Trios is a trademark of 3Shape A/S.

Non-GAAP Financial Measures
The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with generally accepted accounting principles (“GAAP”). The non-GAAP financial measures presented exclude the items summarized in the table on page 7 of this press release. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results and that these items are not indicative of the Company’s on-going core operating performance.

Management uses non-GAAP net income (loss) and non-GAAP net income (loss) per basic and diluted share in its evaluation of the Company’s core after-tax results of operations and trends between fiscal periods and believes that these measures are important components of its internal performance measurement process. Management believes that providing these non-GAAP financial measures allows investors to view the Company’s financial results in the way that management views the financial results.

The non-GAAP financial measures presented herein have certain limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements contained in this press release that refer to BIOLASE’s estimated or anticipated future results or other non-historical facts are forward-looking statements, as are any statements in this press release concerning prospects related to BIOLASE’s strategic initiatives, product introductions and anticipated financial performance. Forward-looking statements can also 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. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect BIOLASE’s current perspective of existing trends and information and speak only as of the date of this release. Actual results may differ materially from BIOLASE’s current expectations depending upon a number of factors affecting BIOLASE’s business. These factors include, among others, adverse changes in general economic and market conditions, competitive factors including but not limited to pricing pressures and new product introductions, uncertainty of customer acceptance of new product offerings and market changes, risks associated with managing the growth of the business, and those other risks and uncertainties that may be detailed, from time-to-time, in BIOLASE’s reports filed with the SEC. BIOLASE does not undertake any responsibility to revise or update any forward-looking statements contained herein.

For further information, please contact:
Michael Porter
Porter, LeVay & Rose, Inc.
212-564-4700

(financial tables follow)

BIOLASE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)

	Three Months Ended
	March 31,
	2013			2012
Products and services revenue	$	14,489		$	12,312
License fees and royalty revenue		108			8
Net revenue		14,597			12,320
Cost of revenue		8,803			6,513
Gross profit		5,794			5,807
Operating expenses:
Sales and marketing		5,252			4,028
General and administrative		2,247			2,211
Engineering and development		1,005			1,190
Excise tax		107			—
Total operating expenses		8,611			7,429
Loss from operations		(2,817	)		(1,622	)
Loss on foreign currency transactions		(99	)		(17	)
Interest expense		(87	)		(4	)
Non-operating loss, net		(186	)		(21	)
Loss before income tax (benefit) provision		(3,003	)		(1,643	)
Income tax (benefit) provision		(372	)		29
Net income (loss)	$	(2,631	)	$	(1,672	)
Net income (loss) per share:
Basic	$	(0.08	)	$	(0.05	)
Diluted	$	(0.08	)	$	(0.05	)
Shares used in the calculation of net income (loss) per share:
Basic		31,473			31,358
Diluted		31,473			31,358

• Shares used in calculation of net loss per share reflect the impact of stock dividends.

MORE-MORE-MORE
BIOLASE, INC.

CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except per share data)

	March 31, 2013			December 31,2012
ASSETS
Current assets:
Cash and cash equivalents	$	1,229		$	2,543
Accounts receivable, less allowance of $289 in 2013 and $304 in 2012		10,644			11,680
Inventory, net		11,921			11,142
Prepaid expenses and other current assets		1,637			1,552
Total current assets		25,431			26,917
Property, plant and equipment, net		1,616			1,509
Intangible assets, net		254			300
Goodwill		2,926			2,926
Deferred tax asset		15			16
Other assets		282			305
Total assets	$	30,524		$	31,973
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Lines of credit	$	3,261		$	1,637
Accounts payable		8,708			7,663
Accrued liabilities		4,879			6,267
Customer deposits		278			582
Deferred revenue, current portion		3,131			3,226
Total current liabilities		20,257			19,375
Deferred tax liabilities		556			663
Other liabilities, long-term		34			141
Total liabilities		20,847			20,179
Commitments and contingencies
Stockholders’ equity (deficit):
Preferred stock, par value $0.001		—			—
Common stock, par value $0.001		34			34
Additional paid-in capital		141,317			140,747
Accumulated other comprehensive loss		(376	)		(320	)
Accumulated deficit		(114,899	)		(112,268	)
		26,076			28,193
Treasury stock (cost of 1,964 shares repurchased)		(16,399	)		(16,399	)
Total stockholders’ equity		9,677			11,794
Total liabilities and stockholders’ equity	$	30,524		$	31,973

MORE-MORE-MORE

BIOLASE, INC.
Reconciliation of GAAP Financial Results to Non-GAAP Financial Measures
(unaudited, in thousands, except per share data)

	Three months ended
	March 31,
	2013			2012
GAAP net loss	$	(2,631	)	$	(1,672	)
Adjustments:
Interest expense		87			4
Depreciation and amortization expense		145			125
Stock-based, other equity instruments, and other non-cash compensation expense		494			670
Non-GAAP net loss	$	(1,905	)	$	(873	)
GAAP net loss per share:
Basic and diluted	$	(0.08	)	$	(0.05	)
Adjustments:
Interest expense		0.00			0.00
Depreciation and amortization expense		0.00			0.00
Stock-based, other equity instruments, and other non-cash compensation expense		0.02			0.02
Non-GAAP net loss per share:
Basic and Diluted	$	(0.06	)	$	(0.03	)

# # # #

NEWS RELEASE

COMERICA INCREASES AVAILABLE BORROWINGS
UNDER AMENDED CREDIT FACILITIES

Includes Reduction of Interest Rates; Establishment of Certain Financial and Non-financial
Covenants; and $1 Million of Additional Mid-Quarter Borrowing Capacity

IRVINE, CA (May 7, 2013) — BIOLASE, Inc. (NASDAQ:BIOL), the world’s leading manufacturer and distributor of dental lasers, announced today that Comerica Bank has increased BIOLASE’s^® credit facility agreements (the “Credit Agreements”) from $8 million to $10 million, decreased both the domestic and Ex-Im interest rates, established financial and non-financial covenants for the year ending December 31, 2013, and added $1 million of additional mid-quarter borrowing flexibility.

Fred Furry, Chief Operating Officer and Chief Financial Officer said, “We are very pleased with the terms established for the second year of our credit facility and thankful for the relationship we have developed with Comerica Bank. Management has worked diligently throughout the turnaround and the amendment to our Credit Agreements highlights Comerica Bank’s confidence in the changes we have made and illustrates their belief in BIOLASE’s future potential.”

The amended Credit Agreement increased the borrowings against certain domestic accounts receivable and inventory (the “Domestic Revolver”) from $4 million to $6 million, for a combined aggregate commitment of borrowings up to $10 million. The interest rates on the outstanding principal balance of the Credit Agreements will bear interest at annual percentage rates equal to Comerica Bank’s prime rate, plus 2.00% for the Domestic Revolver and 1.50% for the Ex-Im Revolver, a reduction of 1.00% and 0.50% in the interest rates of the Domestic and Ex-Im Revolvers, respectively. In addition, the amended Credit Agreement will provide for $1 million of additional borrowings against inventory for 30 days during the middle of a quarter.

The lines of credit mature on May 1, 2014, at which date any remaining borrowings and accrued interest under the lines of credit become due and payable. As of March 31, 2013, the Company had outstanding borrowings totaling approximately $3.3 million, which included $1.8 million under the Domestic Revolver and $1.5 million under the Ex-Im Revolver.

About BIOLASE, Inc.
BIOLASE, Inc. is a biomedical company that develops, manufactures, and markets lasers in dentistry and medicine and also markets and distributes dental imaging equipment; products that are focused on technologies that advance the practice of dentistry and medicine. The Company’s laser products incorporate over 340 patented and patent-pending technologies designed to provide biologically clinically superior performance with less pain and faster recovery times. Its imaging products provide cutting-edge technology at competitive prices to deliver the best results for dentists and patients. BIOLASE’s principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications, and a full line of dental imaging equipment. BIOLASE has sold more than 22,500 lasers.

Other products under development address ophthalmology and other medical and consumer markets.

For updates and information on WaterLase^® and laser dentistry, find BIOLASE online at www.biolase.com, Facebook at www.facebook.com/biolaseinc, Twitter at www.twitter.com/biolaseinc, Pinterest at www.pinterest.com/biolase, Linkedin at www.linkedin.com/company/biolase, Instagram at www.instagram.com/biolaseinc and YouTube at www.youtube.com/biolasevideos.

BIOLASE^® and WaterLase^® are registered trademarks of BIOLASE, Inc.

For further information, please contact:
Michael Porter
Porter, LeVay & Rose, Inc.
212-564-4700

NEWS RELEASE

BIOLASE ENTERS AFFILIATION AGREEMENT WITH
SUN DENTAL LABORATORIES, LLC

Strategic Partnership to Leverage Sun Dental Labs’ Significant Customer Base
as Market for BIOLASE to Sell Trios Intraoral Scanners

IRVINE, CA – (May 7, 2013) — BIOLASE, Inc. (NASDAQ:BIOL), the world’s leading dental laser manufacturer and distributor, announced today that BIOLASE has entered into an Affiliation Agreement (the Arrangement) with Sun Dental Laboratories, LLC (“Sun Dental Labs”) to form a strategic partnership to sell the Trios^® family of intraoral scanners (“IOS”) manufactured by Copenhagen-based 3Shape A/S. BIOLASE^® is currently a non-exclusive distributor for the Trios IOS in the United States and Canada, and in negotiations for additional distribution internationally.

Federico Pignatelli, Chairman and Chief Executive Officer of BIOLASE, stated, “We are extremely pleased with the opportunity to partner with Sun Dental Labs, which currently has thousands of doctors utilizing their digital dental laboratory network in the United States alone. Their significant customer base represents nearly a 5% market share of the dental offices in North America. This is a tremendously valuable network and Sun Dental Labs has already provided our sales force with several qualified referrals.”

Under the Agreement, BIOLASE will provide the primary inside and outside sales teams, installation and training services, and after-sales support. Sun Dental Labs will provide access to its expansive customer base of dentists and dental laboratory associates, provide marketing material, schedule appointments for BIOLASE sales representatives, and provide a rebate to BIOLASE Trios owners who utilize its services. All IOS sold under this Arrangement will be pre-programmed with Sun Dentals Labs’ direct connect as the preferred laboratory provider.

In consideration of this marketing alliance, BIOLASE’s Board of Directors granted Sun Dental Labs an initial warrant for 500,000 shares of common stock on April 26, 2013, at the market closing price of $5.90 per share. The warrant will vest based on performance at a rate of 1,000 per each Trios IOS sold in conjunction with the Agreement. For the purposes of this Agreement, a sale is defined as a Trios IOS that has been installed at the customer’s place of business and is fully operational, where the customer has been trained, and the Trios IOS has been paid for in full by the customer. Any unvested warrant shares will expire on April 24, 2014.

Fred Furry, Chief Operating Officer and Chief Financial Officer of BIOLASE said, “This presents a sound opportunity for BIOLASE. Not only will this generate incremental sales of Trios IOSs, but it will also create prospects for our core WaterLase^® and diode laser products, as well as our CBCT digital imaging equipment at hundreds of high-tech dental practices. This warrant is purely performance-based. By way of example only, if the Agreement ultimately results in 500 Trios IOS’s being sold over the next 12 months, then it would translate into approximately $16 million to $20 million in gross revenues and contribute significantly to the cash we generate from operations over the next 12 months.”

“Sun Dental Labs’ preference of the warrant over a conventional commission or discount also demonstrates the conviction that Sun Dental Labs has in BIOLASE and the potential value Sun Dental Labs sees in our stock. The warrant will also preserve BIOLASE’s full margin on the Trios IOS product line. The Agreement will also give us an entry into the high-tech dental practices currently serviced by Sun Dental Labs,” concluded Furry. 

Chuck Stapleton, Vice President of Global Operations of Sun Dental Labs stated, “We have leveraged 3Shape’s superior scanning and software solutions into our dental technology manufacturing to streamline productivity, decrease costs, and improve quality. We believe that with BIOLASE supporting the Trios IOS, it will be just as successful for the clinician in the dental office.”

The Trios digital solution, which includes a hand-held scanner, operator’s control cart, and intuitive software, provides faster impression taking, improved accuracy and clinical results, reduced need for retakes, and less adjustment and grinding. Trios’ unique features include spray-free scanning, high accuracy optimized for an extensive range of indications, clinical scan validation, online communication with the dental laboratory, intuitive Smart-Touch user interfacing. Color and laptop versions of the Trios were introduced in the 2013 first quarter.

About Sun Dental Laboratories, LLC
Sun Dental Laboratories, LLC is the leading provider of high-quality restorative dental products for doctors and labs around the world. Sun Dental Labs is a full-service dental lab using ADA Certified materials and the latest restorative options fabricated with state-of-the-art technology. Sun Dental Labs considers itself a leader in the dental technology space with its branded portfolio of products that includes Sunflex^® flexible partial dentures, Suntech^® Full Zirconia crowns and bridges, Sunstone^® Digital Models, and Suntech Custom Implant Abutments, to name a few.

To learn more about Sun Dental Labs’ products and services, please visit www.sundentallabs.com.

About BIOLASE, Inc.
BIOLASE, Inc. is a biomedical company that develops, manufactures, and markets lasers in dentistry and medicine and also markets and distributes dental imaging equipment; products that are focused on technologies that advance the practice of dentistry and medicine. The Company’s laser products incorporate over 340 patented and patent-pending technologies designed to provide biologically clinically superior performance with less pain and faster recovery times. Its imaging products provide cutting-edge technology at competitive prices to deliver the best results for dentists and patients. BIOLASE’s principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications, and a full line of dental imaging equipment. BIOLASE has sold more than 22,500 lasers.

Other products under development address ophthalmology and other medical and consumer markets.

For updates and information on WaterLase and laser dentistry, find BIOLASE online at www.biolase.com, Facebook at www.facebook.com/biolaseinc, Twitter at www.twitter.com/biolaseinc, Pinterest at www.pinterest.com/biolase, Linkedin at www.linkedin.com/company/biolase, Instagram at www.instagram.com/biolaseinc and YouTube at www.youtube.com/biolasevideos.

BIOLASE^® and WaterLase^® are trademarks of BIOLASE, Inc.

Suntech^®, Sunflex^®, and Sunstone^® are trademarks of Sun Dental laboratories, LLC.

Trios^® is a trademark of 3Shape A/S.

For further information, please contact:
Michael Porter
Porter, LeVay & Rose, Inc.
212-564-4700

NEWS RELEASE

USPTO REJECTS ALL CLAIMS SUBJECT TO REEXAMINATION
IN THE CAO GROUP’S PATENT ACTION AGAINST BIOLASE

IRVINE, CA – (May 7, 2013) — BIOLASE, Inc. (NASDAQ:BIOL), the world’s leading dental laser manufacturer and distributor, announced today that the United States Patent and Trademark Office (“USPTO”) issued an office action in a reexamination proceeding rejecting all of the claims of Utah-based CAO Group, Inc.’s (the “CAO Group’s”) U.S. Patent No. 7,485,116 (the “116 Patent”) that were subject to reexamination.  This is the second office action in which the USPTO has rejected those same claims.  BIOLASE initiated the reexamination in response to the lawsuit the CAO Group filed against BIOLASE on April 24, 2012, for patent infringement of the 116 Patent in the United States District Court, District of Utah.

Federico Pignatelli, Chairman and Chief Executive Officer of BIOLASE, stated, “We are very pleased with the results of this latest office action issued by the USPTO, which rejected all 37 claims in the CAO Group’s patent that were subject to reexamination. This clearly supports our assertion that the allegations of patent infringement levied by CAO are totally without merit.”

The only claimed novelty of the single asserted patent pertains to how excessive fiber is stored, and does not relate to the actual advanced design, features and functions of the ezlase^® soft-tissue diode laser Because all of the pertinent patent claims being asserted by CAO against BIOLASE in the lawsuit have been reexamined by the USPTO, the District Court has stayed CAO’s lawsuit pending the final outcome of the reexamination.

Pignatelli continued, “BIOLASE’s intellectual property (“IP”) portfolio is the cornerstone of laser technology in dentistry and several of our competitors currently license our IP in their own laser products. Although we believe this lawsuit to be frivolous, BIOLASE will not hesitate to defend its rights and valuable IP portfolio.”

BIOLASE’s ezlase may be the most popular diode laser ever produced to date with more than 5,000 units sold. BIOLASE received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to initially market the ezlase in early 2007. BIOLASE received an additional FDA 510(k) clearance for tooth whitening in December 2008 and another FDA 510(k) clearance for pain relief and therapy with application in sports medicine, orthopedics, physical therapy, and chiropractic medicine in April 2009. The ezlase has been replaced by the new EPIC 10™ diode platform which was released in late 2012.

About BIOLASE, Inc.
BIOLASE, Inc. is a biomedical company that develops, manufactures, and markets lasers in dentistry and medicine and also markets and distributes dental imaging equipment; products that are focused on technologies that advance the practice of dentistry and medicine. The Company’s laser products incorporate over 340 patented and patent-pending technologies designed to provide biologically clinically superior performance with less pain and faster recovery times. Its imaging products provide cutting-edge technology at competitive prices to deliver the best results for dentists and patients. BIOLASE’s principal products are dental laser systems that perform a broad range of dental procedures, including cosmetic and complex surgical applications, and a full line of dental imaging equipment. BIOLASE has sold more than 22,500 lasers.

Other products under development address ophthalmology and other medical and consumer markets.

For updates and information on WaterLase and laser dentistry, find BIOLASE online at www.biolase.com, Facebook at www.facebook.com/biolaseinc, Twitter at www.twitter.com/biolaseinc, Pinterest at www.pinterest.com/biolase, Linkedin at www.linkedin.com/company/biolase, Instagram at www.instagram.com/biolaseinc and YouTube at www.youtube.com/biolasevideos.

BIOLASE^®, WaterLase^®, EPIC™, and ezlase^® are all registered trademarks or trademarks of BIOLASE, Inc.

For further information, please contact:
Michael Porter
Porter, LeVay & Rose, Inc.
212-564-4700