S-1: BIOLASE Files for Unit Offering to Bolster Working Capital

Sentiment:

S-1 Filing 19 January 2024 6:09 AM

BIOLASE, Inc. announces a proposed best efforts offering of units and pre-funded units to raise capital for working capital and general corporate purposes.

Capital raiseThe company is offering units and pre-funded units in a best efforts offering.The company intends to use the net proceeds for working capital and general corporate purposes.

Worse than expectedThe company has a history of net losses and negative cash flow from operations.There is substantial doubt about the company's ability to continue as a going concern.The company received a deficiency letter from NASDAQ due to non-compliance with minimum stockholders equity requirement.

Summary

BIOLASE, Inc., a dental laser systems provider, has filed a registration statement for a proposed offering.
The offering includes units, each consisting of one share of common stock and one warrant, and pre-funded units, each consisting of one pre-funded warrant and one warrant.
The pre-funded warrants have an exercise price of $0.001 per share.
The warrants are immediately exercisable and expire five years from the issuance date.
The offering is on a best efforts basis, with Lake Street Capital Markets and Maxim Group LLC acting as placement agents.
The company intends to use the net proceeds for working capital and general corporate purposes.
BIOLASE has experienced net losses and has substantial doubt about its ability to continue as a going concern.
The company's common stock is listed on the Nasdaq Capital Market under the symbol BIOL.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are positive aspects such as the potential for growth in the dental laser market and the company's efforts to expand its product line, the significant risks and uncertainties, including the company's history of losses and going concern doubts, weigh heavily on the overall sentiment.

Positives

The offering aims to provide BIOLASE with additional working capital.
BIOLASE has a significant patent portfolio related to its Waterlase technology.
BIOLASE has sold over 47,700 laser systems in over 80 countries since 1998.

Negatives

BIOLASE has a history of net losses and negative cash flow from operations.
There is substantial doubt about BIOLASE's ability to continue as a going concern.
The offering is on a best efforts basis, and there is no guarantee that the company will raise the desired amount of capital.
There is no established trading market for the warrants or pre-funded warrants.
BIOLASE received a deficiency letter from NASDAQ due to non-compliance with minimum stockholders equity requirement.

Risks

The company's management has broad discretion over the use of proceeds.
Investors may experience immediate and substantial dilution.
The company may need to raise additional capital in the future, which may not be available.
The company's success depends on relationships with third-party distributors.
The company faces risks associated with operating internationally.
The company's stock price has been and could continue to be volatile.
The COVID-19 pandemic has adversely affected, and may continue to adversely affect, the company's business, results of operations and financial condition.
Failure to meet covenants in the credit agreements with our debt agreements could result in acceleration of our payment obligations thereunder, and we may not be able to find alternative financing.

Future Outlook

The company is forecasting revenue for fiscal year 2023 to be above fiscal year 2022, as the Companys strategy continues to generate sales to new customers and additional consumable sales to existing customers.

Management Comments

Management believes that the presentation of this non-GAAP financial information provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments, and amortization methods, which provides a more complete understanding of our financial performance, competitive position, and prospects for the future.

Industry Context

The global dental equipment market is estimated to be $10.6 billion in 2022 and is projected to grow at a compound annual rate of 6.2% through 2030, with dental laser equipment expected to be the fastest-growing segment.

Comparison to Industry Standards

The document does not provide specific comparisons to industry standards or benchmarks.
It mentions the global dental equipment market size and projected growth, but does not compare BIOLASE's performance against specific competitors or industry averages.
The document states that all-tissue laser systems have penetrated only 7-8% of U.S. dental practices and less than 2% worldwide, and we estimate a market opportunity in excess of $50 billion.

Legal Proceedings

The company is involved in a patent infringement lawsuit filed by PIPStek, LLC.

Stakeholder Impact

Shareholders may experience dilution as a result of the offering.
The company's ability to continue as a going concern is uncertain, which could impact stakeholders.
The company's success depends on its ability to attract and retain qualified personnel.

Next Steps

The company will offer the securities on a best efforts basis through placement agents.
The company will enter into securities purchase agreements with investors.
The company will use the net proceeds for working capital and general corporate purposes.
The company intends to resubmit a revised plan to NASDAQ to regain compliance with listing requirements.

Key Dates

Date	Description
November 9, 2018	Date of original Credit Agreement with SWK Funding LLC
December 2019	Novel coronavirus was reported
May 22, 2020	Company executed the standard loan documents required for securing a loan from the United States Small Business Administration under its Economic Injury Disaster Loan (the EIDL Loan) assistance program
July 23, 2020	Company consummated the sale of an aggregate of 18,000 shares of Series F Preferred Stock, par value $0.001 per share (Series F Preferred Stock), and 45,000,000 warrants (the July 2020 Warrants), exercisable to 1,800,000 shares of BIOLASE common stock, through a registered rights offering the Company completed on July 22, 2020 (the Rights Offering).
April 28, 2022	Reverse stock split (1 for 25) became effective
June 27, 2022	BIOLASE entered into a Securities Purchase Agreement with certain accredited institutional investors, pursuant to which BIOLASE agreed to issue, (i) in a registered direct offering, 678,745 shares of BIOLASE common stock, par value $0.001 per share, and pre-funded warrants to purchase 726,660 shares of BIOLASE common stock with an exercise price of $0.001 per share, and (ii) in a concurrent private placement, warrants to purchase 1,405,405 shares of BIOLASE common stock.
September 22, 2022	The Company entered into a Membership Interest Purchase Agreement (the Purchase Agreement) with Med-Fiber LLC (Med-Fiber) and Alexei Tchapyjnikov, pursuant to which the Company acquired all of the issued and outstanding membership interests of Med-Fiber
January 9, 2023	Company completed a public offering and issued an aggregate of 171,678 shares of BIOLASE common stock at a price of $35.00 per share and pre-funded warrants to purchase 114,035 shares of our common stock with an exercise price of $1.00 per share at a price of $34.00 per share.
May 26, 2023	Company completed a public offering and issued, 175,000 units, with each unit consisting of (A) one share of the Companys Series H Convertible Redeemable Preferred Stock, par value $0.001 per share, and (B) one warrant to purchase one-half of one (0.50) share of Series H Convertible Preferred Stock, at a price to the public of $26.00 per unit, less underwriting discounts and commissions.
July 27, 2023	Reverse stock split (1 for 100) became effective
September 13, 2023	Company entered into an underwriting agreement pursuant to which we agreed to sell to the underwriters in a firm commitment underwritten public offering 75,000 units, with each unit consisting of (A) one share of our Series J Convertible Preferred Stock, and (B) one Series J Warrant to purchase one-half of one (0.50) share of Series J Convertible Preferred Stock, at a price to the public of $60.00 per unit, less underwriting discounts and commissions.
December 8, 2023	Company issued pursuant to the terms of a Securities Purchase Agreement that we entered into on December 6, 2023 with a single institutional investor, the following securities: (i) in a registered direct offering, 331,000 shares of our common stock and pre-funded warrants to purchase 779,940 shares of our common stock with an exercise price of $0.001 per share, and (ii) in a concurrent private placement, warrants to purchase an aggregate of 2,221,880 shares of common stock with an exercise price of $1.23.
March 31, 2024	Latest possible date for the termination of the offering

Keywords

BIOLASE, offering, units, warrants, pre-funded, dental lasers, capital, stock, preferred stock, NASDAQ

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