Accessibility StatementSkip Navigation FOOTHILL RANCH, Calif., Sept. 10, 2025 /PRNewswire/ -- BIOLASE, the global leader in dental laser technology, proudly announces a new chapter in its history following its acquisition by MegaGen Implant. This strategic transition signals BIOLASE's revitalization and renewed commitment to innovation, quality, and customer service under the leadership of its new CEO, Dr. Kwang Bum Park. Dr. Park, founder of MegaGen Implant and a world-renowned implantologist, brings decad ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading symbol(s) Name of each exchange on which registered N/A N/A N/A FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ 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: 001-36385 BIOLASE, INC. (Exact name of registr ...

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$30,641 thousand**, liabilities slightly decreased, and stockholders' deficit widened to **$(4,329) thousand** | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2024 | $30,641 | | December 31, 2023 | $35,101 | | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2024 | $32,767 | | December 31, 2023 | $33,145 | | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2024 | $(4,329) | | December 31, 2023 | $(247) | - Current liabilities increased significantly from **$19.663 million** at December 31, 2023, to **$31.176 million** at June 30, 2024, primarily due to the reclassification of term loans to the current portion[6](index=6&type=chunk)[86](index=86&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net revenue decreased, while net loss attributable to common stockholders improved for both three and six months ended June 30, 2024 Net Revenue (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $11,555 | $14,286 | $(2,731) (-19.1%) | | Six Months Ended June 30 | $21,687 | $24,753 | $(3,066) (-12.4%) | Gross Profit (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $4,609 | $6,118 | $(1,509) (-24.7%) | | Six Months Ended June 30 | $7,946 | $9,454 | $(1,508) (-16.0%) | Net Loss Attributable to Common Stockholders (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(2,798) | $(14,245) | $11,447 (Improved) | | Six Months Ended June 30 | $(9,283) | $(20,094) | $10,811 (Improved) | Basic and Diluted Net Loss Per Share | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three Months Ended June 30 | $(0.08) | $(26.14) | | Six Months Ended June 30 | $(0.36) | $(45.98) | [Condensed Consolidated Statements of Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Redeemable%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) Total stockholders' deficit widened to **$(4,329) thousand** by June 30, 2024, driven by net losses and currency adjustments Total Stockholders' Equity (Deficit) (in thousands) | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2024 | $(4,329) | | December 31, 2023 | $(247) | - Common Stock Shares Outstanding increased from **3,416 thousand** at December 31, 2023, to **33,406 thousand** at June 30, 2024[10](index=10&type=chunk) - Additional Paid-in Capital increased from **$317.103 million** to **$322.380 million**[10](index=10&type=chunk) - Accumulated Deficit increased from **$(316.800) million** to **$(326.083) million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash and cash equivalents decreased by **$1,294 thousand** for H1 2024, mainly from operating activities, partially offset by financing Net Cash Flows Used in Operating Activities (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(6,672) | $(9,220) | $2,548 (Improved) | Net Cash Flows Provided by (Used in) Investing Activities (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $257 | $(944) | $1,201 (Improved) | Net Cash Flows Provided by Financing Activities (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $5,219 | $12,793 | $(7,574) (Decreased) | Net Change in Cash and Cash Equivalents (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $(1,294) | $2,749 | $(4,043) (Decreased) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain financial statements, covering business, accounting policies, revenue, equity, debt, leases, segments, and taxes [NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION](index=10&type=section&id=NOTE%201%E2%80%94DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) BIOLASE faces substantial doubt about its going concern ability due to recurring losses, cash usage, and Nasdaq delisting - BIOLASE is a leading provider of advanced laser systems for the dental industry, developing, manufacturing, marketing, and selling proprietary systems for minimally invasive dental procedures[13](index=13&type=chunk) - The company incurred losses from operations and used cash in operating activities for the three and six months ended June 30, 2024, and for the years ended December 31, 2023 and 2022[19](index=19&type=chunk) - The company's recurring losses, cash usage, and difficulty raising additional capital (exacerbated by Nasdaq delisting) raise substantial doubt about its ability to continue as a going concern[19](index=19&type=chunk) - As of June 30, 2024, the company had a working capital deficit of approximately **$9.1 million**, with **$5.3 million** in cash and cash equivalents[20](index=20&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the company's significant accounting policies, fair value measurements, and the impact of a new income tax disclosure standard - Significant estimates in financial statements include allowances on accounts receivable, inventory, deferred taxes, warranty expenses, goodwill, revenue deferrals, stock-based compensation, warrants, and contingent liabilities[22](index=22&type=chunk) - No significant changes in critical accounting policies during the six months ended June 30, 2024, from those disclosed in the 2023 Form 10-K[23](index=23&type=chunk) - The company's financial instruments (cash, accounts receivable, accounts payable, accrued liabilities, warrants, and SWK Loan) approximate fair value due to short maturity and market interest rates[25](index=25&type=chunk) - ASU No. 2023-09, effective for the company in 2025, requires enhanced income tax disclosures but is not expected to materially impact the company's consolidated financial position and results of operations[29](index=29&type=chunk) [NOTE 3—REVENUE RECOGNITION](index=14&type=section&id=NOTE%203%E2%80%94REVENUE%20RECOGNITION) Revenue is primarily recognized at a single point in time upon product shipment, with a smaller portion recognized over time for services Revenue Recognition Timing (in thousands) | Period | Revenue recognized over time (2024) | Revenue recognized at a point in time (2024) | Revenue recognized over time (2023) | Revenue recognized at a point in time (2023) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1,713 (14.8%) | $9,842 (85.2%) | $1,415 (9.9%) | $12,871 (90.1%) | | Six Months Ended June 30 | $3,201 (14.8%) | $18,486 (85.2%) | $2,584 (10.4%) | $22,169 (89.6%) | Revenue by Geographic Area (in thousands) | Period | United States (2024) | International (2024) | United States (2023) | International (2023) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $8,240 (71.3%) | $3,315 (28.7%) | $10,741 (75.2%) | $3,545 (24.8%) | | Six Months Ended June 30 | $14,930 (68.8%) | $6,757 (31.2%) | $17,499 (70.7%) | $7,254 (29.3%) | - Total deferred revenue was **$2.318 million** as of June 30, 2024, down from **$2.708 million** as of December 31, 2023[38](index=38&type=chunk) [NOTE 4—CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)](index=17&type=section&id=NOTE%204%E2%80%94CONVERTIBLE%20REDEEMABLE%20PREFERRED%20STOCK%20AND%20STOCKHOLDERS'%20EQUITY%20(DEFICIT)) This note details preferred and common stock activities, including issuances, conversions, warrant exercises, and stock-based compensation - As of June 30, 2024, **17,136 shares** of Series J Convertible Preferred Stock were outstanding, with **70,965 shares** converted to approximately **2.2 million** common shares[49](index=49&type=chunk) - As of June 30, 2024, **6,923 shares** of Series H Convertible Preferred Stock were outstanding, with **190,000 shares** converted to approximately **0.7 million** common shares[55](index=55&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three Months Ended June 30 | $(46) (gain) | $84 (expense) | | Six Months Ended June 30 | $67 (expense) | $775 (expense) | Warrants Outstanding (Share Equivalent, in thousands) | Date | Shares | Weighted Average Exercise Price | | :--- | :--- | :--- | | December 31, 2023 | 4,323 | $11.88 | | Granted or Issued (6 months to June 30, 2024) | 42,427 | $0.57 | | Exercised (6 months to June 30, 2024) | (22,874) | $— | | June 30, 2024 | 23,876 | $2.52 | - The February 2024 Public Offering issued **7,795,000 units** (common stock + Class A & B warrants) and **8,205,000 pre-funded units** (pre-funded warrants + Class A & B warrants), generating gross proceeds of approximately **$7.0 million**[61](index=61&type=chunk) [NOTE 5—INVENTORY](index=29&type=section&id=NOTE%205%E2%80%94INVENTORY) Total inventory decreased to **$10,904 thousand** at June 30, 2024, with estimates for excess and obsolete amounts reducing inventory by **$2.3 million** Inventory Composition (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Raw materials | $5,528 | $6,168 | | Work-in-process | $1,514 | $1,299 | | Finished goods | $3,862 | $3,966 | | **Total Inventory** | **$10,904** | **$11,433** | - Inventory was reduced by estimates for excess and obsolete amounts totaling **$2.3 million** as of June 30, 2024, and **$2.5 million** as of December 31, 2023[77](index=77&type=chunk) [NOTE 6—PROPERTY, PLANT, AND EQUIPMENT](index=29&type=section&id=NOTE%206%E2%80%94PROPERTY,%20PLANT,%20AND%20EQUIPMENT) Net property, plant, and equipment decreased to **$4,263 thousand** at June 30, 2024, with depreciation expense of **$1.3 million** for H1 2024 Property, Plant, and Equipment, Net (in thousands) | Date | Amount | | :--- | :--- | | June 30, 2024 | $4,263 | | December 31, 2023 | $5,525 | Depreciation Expense (in thousands) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three Months Ended June 30 | $700 | $1,400 | | Six Months Ended June 30 | $1,300 | $1,600 | [NOTE 7—INTANGIBLE ASSETS AND GOODWILL](index=31&type=section&id=NOTE%207%E2%80%94INTANGIBLE%20ASSETS%20AND%20GOODWILL) Goodwill remained at **$2.9 million** with no impairment, and no amortization expense was recognized as all intangible assets are fully amortized - Goodwill (indefinite life) was **$2.9 million** as of June 30, 2024, and December 31, 2023[81](index=81&type=chunk) - No impairment was identified in the annual impairment test as of September 30, 2023, or in a quantitative assessment during Q4 2023[80](index=80&type=chunk) - No amortization expense was recognized for intangible assets during the three and six months ended June 30, 2024 and 2023, as all such assets are fully amortized[81](index=81&type=chunk) [NOTE 8—ACCRUED LIABILITIES](index=31&type=section&id=NOTE%208%E2%80%94ACCRUED%20LIABILITIES) Accrued liabilities increased slightly to **$7,662 thousand** at June 30, 2024, primarily due to higher payroll and professional services Accrued Liabilities (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Payroll and benefits | $3,640 | $3,343 | | Warranty accrual, current portion | $1,000 | $1,321 | | Operating lease liability | $904 | $888 | | Accrued professional services | $994 | $422 | | Taxes | $349 | $452 | | Accrued insurance premium | $161 | $473 | | Other | $614 | $619 | | **Total Accrued Liabilities** | **$7,662** | **$7,518** | Warranty Accrual Balance (in thousands) | Period | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Balance, beginning of period (6 months) | $1,914 | $1,653 | | Provision for estimated warranty cost (6 months) | $1,487 | $1,960 | | Warranty expenditures (6 months) | $(1,558) | $(1,841) | | Balance, end of period | $1,843 | $1,772 | [NOTE 9—DEBT](index=33&type=section&id=NOTE%209%E2%80%94DEBT) Total debt, net of discount, was **$13,425 thousand** at June 30, 2024, with the SWK Loan reclassified to current liabilities due to its May 2025 maturity Debt Details (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | SWK Loan (principal) | $13,695 | $14,560 | | EIDL Loan (principal) | $150 | $150 | | Discount and debt issuance costs | $(420) | $(663) | | **Total Debt** | **$13,425** | **$14,047** | Current vs. Non-Current Term Loans (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current term loans | $13,275 | $2,265 | | Non-current term loans, net of discount | $150 | $11,782 | Interest Expense, Net (in thousands) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three Months Ended June 30 | $586 | $583 | | Six Months Ended June 30 | $1,208 | $1,160 | - The weighted-average interest rate as of June 30, 2024, was **14.59%**[85](index=85&type=chunk) - The SWK Loan's remaining long-term balances were reclassified to current liabilities due to its May 31, 2025, maturity date[86](index=86&type=chunk) [NOTE 10—LEASES](index=35&type=section&id=NOTE%2010%E2%80%94LEASES) Right-of-use assets were **$1.1 million** and total lease liabilities were **$1.2 million** as of June 30, 2024, with most obligations due in 2024 and 2025 Right-of-Use Assets and Lease Liabilities (in thousands) | Date | Right-of-Use Assets | Total Lease Liabilities | | :--- | :--- | :--- | | June 30, 2024 | $1,101 | $1,219 | Maturities of Lease Liabilities (in thousands) | Year | Amount | | :--- | :--- | | Remainder of 2024 | $919 | | 2025 | $410 | | 2026 | $1 | | **Total future minimum lease obligations** | **$1,330** | - The weighted-average remaining lease term was **1.4 years** as of June 30, 2024[90](index=90&type=chunk) - The weighted-average discount rate was **12.3%** as of June 30, 2024[90](index=90&type=chunk) [NOTE 11—SEGMENT INFORMATION](index=36&type=section&id=NOTE%2011%E2%80%94SEGMENT%20INFORMATION) The company operates in a single business segment, with 69% of H1 2024 net revenue from the United States and 31% from international sales - The company operates in a single business segment[93](index=93&type=chunk) Net Revenue by Geographic Location (in thousands) | Period | United States (2024) | International (2024) | United States (2023) | International (2023) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $8,240 (71%) | $3,315 (29%) | $10,741 (75%) | $3,545 (25%) | | Six Months Ended June 30 | $14,930 (69%) | $6,757 (31%) | $17,499 (71%) | $7,254 (29%) | Property, Plant, and Equipment by Geographic Location (in thousands) | Date | United States | International | Total | | :--- | :--- | :--- | :--- | | June 30, 2024 | $4,035 | $228 | $4,263 | | December 31, 2023 | $5,283 | $242 | $5,525 | [NOTE 12—CONCENTRATIONS](index=38&type=section&id=NOTE%2012%E2%80%94CONCENTRATIONS) Revenue is primarily from laser systems (52% for Q2 2024) and consumables (33%), with no single customer exceeding 10% of revenue Revenue by Product Category (in thousands) | Category | Q2 2024 | % of Total | Q2 2023 | % of Total | H1 2024 | % of Total | H1 2023 | % of Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Laser systems | $6,007 | 52.0% | $8,754 | 61.3% | $11,182 | 51.6% | $15,019 | 60.7% | | Consumables and other | $3,835 | 33.2% | $4,117 | 28.8% | $7,304 | 33.6% | $7,150 | 28.9% | | Services | $1,713 | 14.8% | $1,415 | 9.9% | $3,201 | 14.8% | $2,584 | 10.4% | | **Net Revenue** | **$11,555** | **100.0%** | **$14,286** | **100.0%** | **$21,687** | **100.0%** | **$24,753** | **100.0%** | - No individual customer represented more than **10%** of the company's revenue for the three and six months ended June 30, 2024 or 2023[97](index=97&type=chunk) - The company purchases certain key components from single suppliers, posing a risk of manufacturing delays and sales loss if suppliers change[98](index=98&type=chunk) [NOTE 13—INCOME TAXES](index=38&type=section&id=NOTE%2013%E2%80%94INCOME%20TAXES) The company maintains a full valuation allowance against its net deferred tax assets, resulting in effective tax rates significantly lower than the statutory rate - The company has a full valuation allowance against its net deferred tax assets due to net losses in prior years[99](index=99&type=chunk) Income Tax Provision (in thousands) | Period | 2024 | 2023 | Effective Tax Rate (2024) | Effective Tax Rate (2023) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $20 | $31 | 0.7% | 0.6% | | Six Months Ended June 30 | $40 | $31 | 0.4% | 0.3% | - The effective tax rate differs from the statutory rate of **21%** primarily due to the valuation allowance and current liabilities from estimated state and foreign tax liabilities[101](index=101&type=chunk) [NOTE 14—SUBSEQUENT EVENTS](index=40&type=section&id=NOTE%2014%E2%80%94SUBSEQUENT%20EVENTS) On July 16, 2024, the company issued **3,190,476 common shares** in exchange for Series J Preferred Stock and Warrants under a Section 3(a)(9) exemption - On July 16, 2024, the company issued **3,190,476 common shares** in exchange for **2,546 Series J Preferred Stock** and **8,000 Series J Preferred Warrants**[102](index=102&type=chunk) - The exchange was exempt from registration requirements under Section 3(a)(9) of the Securities Act of 1933, as amended, and involved no proceeds or commissions[103](index=103&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=41&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition, operational results, liquidity, and capital resources [Overview](index=42&type=section&id=Overview) BIOLASE, Inc. is a leading provider of advanced dental laser systems, holding approximately **241 active patents** and having sold over **47,700 systems** globally - BIOLASE is a leading provider of advanced laser systems for the dental industry, specializing in minimally invasive dental procedures[108](index=108&type=chunk) - The company offers Waterlase (all-tissue) and diode (soft-tissue) laser systems, with Waterlase cleared for over **80 clinical indications**[109](index=109&type=chunk) - As of December 31, 2023, BIOLASE maintained approximately **241 active U.S. and international patents**[109](index=109&type=chunk) - Over **47,700 laser systems** have been sold in more than **80 countries** since 1998[109](index=109&type=chunk) [Business and Outlook](index=44&type=section&id=Business%20and%20Outlook) The company's strategy focuses on increasing demand for its dental laser systems and consumables, with a forecast for fiscal year 2024 revenue to exceed 2023 - The company's strategy is to increase awareness and demand for its products among dental practitioners and patients, emphasizing clinical benefits[114](index=114&type=chunk) - A key goal is to increase consumables revenue by selling more single-use accessories[114](index=114&type=chunk) - Plans include expanding product lines and clinical applications through enhancements and transformational innovations, exploring adjacent medical applications (e.g., ophthalmology, orthopedics)[115](index=115&type=chunk) - Revenue declined by **19%** for Q2 2024 and **12%** for H1 2024 compared to the same periods in 2023, primarily due to decreased laser system sales from macro-economic factors like increased interest rates[116](index=116&type=chunk)[130](index=130&type=chunk)[137](index=137&type=chunk) - The company forecasts revenue for fiscal year 2024 to be above fiscal year 2023[116](index=116&type=chunk) [Recent Developments](index=44&type=section&id=Recent%20Developments) BIOLASE's common stock was delisted from Nasdaq on June 20, 2024, and now trades on the OTC Markets (OTCQB) following a **$7.0 million** public offering in February 2024 - Nasdaq delisted the company's common stock, with trading suspended on June 20, 2024, due to non-compliance with bid price and equity requirements[116](index=116&type=chunk)[117](index=117&type=chunk) - The company's common stock now trades on the OTC Markets (OTCQB) under the symbol "BIOL"[117](index=117&type=chunk) - A February 2024 public offering issued **7,795,000 units** and **8,205,000 pre-funded units**, generating approximately **$7.0 million** in gross proceeds[118](index=118&type=chunk) - The February 2024 offering triggered anti-dilution provisions, reducing the exercise price of December 2023 Warrants to **$0.2256 per share**[120](index=120&type=chunk) [Critical Accounting Estimates](index=45&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting policies, involving significant estimates and judgments, remain unchanged from those disclosed in the 2023 Form 10-K - No significant changes in critical accounting policies during the six months ended June 30, 2024, from those disclosed in the 2023 Form 10-K[121](index=121&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Net revenue decreased, gross profit declined, and operating expenses decreased, while net loss improved significantly due to non-operating income Net Revenue (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $11,555 | $14,286 | $(2,731) (-19.1%) | | Six Months Ended June 30 | $21,687 | $24,753 | $(3,066) (-12.4%) | Gross Profit (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $4,609 (39.9% of revenue) | $6,118 (42.8% of revenue) | $(1,509) (-24.7%) | | Six Months Ended June 30 | $7,946 (36.6% of revenue) | $9,454 (38.2% of revenue) | $(1,508) (-16.0%) | Total Operating Expenses (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $7,829 (67.8% of revenue) | $9,990 (69.9% of revenue) | $(2,161) (-21.6%) | | Six Months Ended June 30 | $15,691 (72.4% of revenue) | $18,618 (75.3% of revenue) | $(2,927) (-15.7%) | Net Loss (in thousands) | Period | 2024 (in thousands) | 2023 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(2,798) | $(4,868) | $2,070 (Improved) | | Six Months Ended June 30 | $(9,283) | $(10,717) | $1,434 (Improved) | [Non-GAAP Disclosure](index=47&type=section&id=Non-GAAP%20Disclosure) The company provides non-GAAP financial measures, specifically Adjusted EBITDA, to offer investors greater transparency and facilitate period-to-period comparisons of core operating results - Non-GAAP financial measures, like Adjusted EBITDA, are provided to assist investors in comparing period-to-period operating results and understanding ongoing core performance[123](index=123&type=chunk) - Adjusted EBITDA is defined as net loss before interest, taxes, depreciation, stock-based and other non-cash compensation, severance expense, change in allowance for doubtful accounts, increase in inventory reserves, stock warrant issuance costs, and loss on warrants[125](index=125&type=chunk) - Non-GAAP measures have limitations and should be considered in addition to, not as a substitute for, GAAP measures[124](index=124&type=chunk) [Adjusted EBITDA](index=47&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2024 was **$(2.545) million**, a slight decrease, while H1 2024 Adjusted EBITDA was **$(6.074) million**, an improvement from 2023 Adjusted EBITDA (in thousands) | Period | 2024 | 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(2,545) | $(2,311) | $(234) (Decreased) | | Six Months Ended June 30 | $(6,074) | $(6,760) | $686 (Improved) | - GAAP net loss attributable to common stockholders for the three months ended June 30, 2024, was **$(2,798) thousand**, compared to **$(14,245) thousand** in 2023[127](index=127&type=chunk) - GAAP net loss attributable to common stockholders for the six months ended June 30, 2024, was **$(9,283) thousand**, compared to **$(20,094) thousand** in 2023[127](index=127&type=chunk) [Comparison of Results of Operations](index=49&type=section&id=Comparison%20of%20Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three and six months ended June 30, 2024, versus the same periods in 2023 [Three Months Ended June 30, 2024 Compared with Three Months Ended June 30, 2023](index=49&type=section&id=Three%20Months%20Ended%20June%2030,%202024%20Compared%20with%20Three%20Months%20Ended%20June%2030,%202023) Net revenue decreased by **19%** to **$11.6 million**, gross profit declined by **24.7%**, and total operating expenses decreased by **21.6%** - Net revenue decreased by **$2.7 million (19%)** to **$11.6 million**, primarily due to decreased laser systems sales from macro-economic environment and increased interest rates[128](index=128&type=chunk)[130](index=130&type=chunk) - Gross profit decreased by **$1.5 million (24.7%)** to **$4.6 million**. Gross profit margin decreased by **3%** to **39.9%**, mainly due to higher warranty/freight expenses and unfavorable fixed expense absorption[130](index=130&type=chunk) - Sales and marketing expense decreased by **$2.5 million (40%)** to **$3.7 million**, driven by **$1.1 million** lower compensation costs, **$0.9 million** decrease in depreciation, and **$0.4 million** decrease in other expenses[131](index=131&type=chunk) - General and administrative expense increased by **$0.7 million (30%)** to **$3.1 million**, primarily due to **$0.5 million** higher legal, audit, and consulting expenses and **$0.2 million** increase in accruals for a new performance award program[132](index=132&type=chunk) - Engineering and development expense decreased by **$0.4 million (26%)** to **$1.1 million**, due to **$0.2 million** lower compensation costs and **$0.2 million** decrease in legal/consulting fees from fewer engineering projects[132](index=132&type=chunk) [Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023](index=53&type=section&id=Six%20Months%20Ended%20June%2030,%202024%20Compared%20with%20Six%20Months%20Ended%20June%2030,%202023) Net revenue decreased by **12%** to **$21.7 million**, gross profit declined by **16%**, and total operating expenses decreased by **15.7%** - Net revenue decreased by **$3.1 million (12%)** to **$21.7 million**, primarily due to decreased laser systems sales, partially offset by increased consumables and other revenue[135](index=135&type=chunk)[137](index=137&type=chunk) - Gross profit decreased by **$1.5 million (16%)** to **$7.9 million**. Gross profit margin decreased by **1%** to **36.6%**, mainly due to higher warranty/freight expenses and unfavorable fixed expense absorption[137](index=137&type=chunk)[138](index=138&type=chunk) - Sales and marketing expense decreased by **$3.7 million (34%)** to **$7.1 million**, due to **$1.8 million** lower compensation, **$0.8 million** decrease in depreciation, and **$0.8 million** decrease in other expenses[139](index=139&type=chunk) - General and administrative expense increased by **$1.4 million (30%)** to **$6.3 million**, primarily due to **$0.9 million** higher legal, audit, and consulting expenses and **$0.5 million** increase in accruals for a new performance award program[140](index=140&type=chunk) - Engineering and development expense decreased by **$0.6 million (21%)** to **$2.4 million**, due to **$0.2 million** lower compensation costs and **$0.4 million** decrease in legal/consulting fees from fewer engineering projects[140](index=140&type=chunk) [Non-Operating Income (Loss)](index=55&type=section&id=Non-Operating%20Income%20(Loss)) Q2 2024 saw **$1.1 million** in other income, mainly from warrant revaluation, while H1 2024 had **$0.1 million** in other expense, including warrant issuance costs - Other Income (Expense), Net (Three Months): **$1.1 million** income in Q2 2024, primarily from **$1.0 million** gains on revaluation of liability-classified stock warrants and **$0.1 million** gains on fixed asset disposal[134](index=134&type=chunk) - Other Income (Expense), Net (Six Months): **$(0.1) million** expense in H1 2024, including **$0.8 million** issuance costs for February 2024 public offering warrants, partially offset by **$0.5 million** gains on warrant revaluation and **$0.2 million** gains on fixed asset disposal[142](index=142&type=chunk) Loss on Foreign Currency Transactions (in thousands) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three Months Ended June 30 | $(112) | $(235) | | Six Months Ended June 30 | $(208) | $(215) | Interest Expense, Net (in thousands) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three Months Ended June 30 | $(586) | $(583) | | Six Months Ended June 30 | $(1,208) | $(1,160) | [Net Loss](index=56&type=section&id=Net%20Loss) The net loss for Q2 2024 was **$2.8 million**, an improvement from **$4.9 million** in the prior year, with H1 2024 net loss also improving to **$9.3 million** Net Loss (in thousands) | Period | 2024 | 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $(2,798) | $(4,868) | $2,070 (Improved) | | Six Months Ended June 30 | $(9,283) | $(10,717) | $1,434 (Improved) | [Liquidity and Capital Resources - Going Concern](index=56&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Going%20Concern) The company had **$5.3 million** in cash and a **$9.1 million** working capital deficit as of June 30, 2024, raising substantial doubt about its ability to continue as a going concern - Cash and Cash Equivalents: **$5.3 million** as of June 30, 2024, down from **$6.6 million** at December 31, 2023[144](index=144&type=chunk) - Working Capital Deficit: Approximately **$9.1 million** as of June 30, 2024[149](index=149&type=chunk) Net Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Operating Activities | $(6,672) | $(9,220) | | Investing Activities | $257 | $(944) | | Financing Activities | $5,219 | $12,793 | | **Net Change in Cash** | **$(1,294)** | **$2,749** | - Recurring losses, cash usage, and challenges in raising capital (exacerbated by Nasdaq delisting) raise substantial doubt about the company's ability to continue as a going concern[151](index=151&type=chunk) - The company needs to raise additional capital or significantly increase sales and reduce expenses to continue operations beyond the next 12 months[151](index=151&type=chunk) [Term Loan](index=58&type=section&id=Term%20Loan) This section incorporates by reference the details of the SWK Loan from Note 9, including its principal outstanding, maturity date, and compliance with debt covenants - Refers to Note 9 for details on the SWK Loan, including its **$13.3 million** principal outstanding as of June 30, 2024, and May 2025 maturity[86](index=86&type=chunk)[152](index=152&type=chunk) - The company was in compliance with debt covenants as of June 30, 2024[87](index=87&type=chunk) [EIDL Loan](index=58&type=section&id=EIDL%20Loan) This section incorporates by reference the details of the EIDL Loan from Note 9, including its principal amount, interest rate, and payment schedule - Refers to Note 9 for details on the EIDL Loan, including its **$150,000** principal amount, **3.75%** interest rate, and monthly payments through July 2050[88](index=88&type=chunk)[152](index=152&type=chunk) [February 2024 Public Offering](index=58&type=section&id=February%202024%20Public%20Offering) This section reiterates the details of the February 2024 public offering, which generated approximately **$7.0 million** in gross proceeds from the issuance of units and pre-funded units - Reiterates the February 2024 public offering, which generated approximately **$7.0 million** in gross proceeds from the issuance of **7,795,000 units** and **8,205,000 pre-funded units**[152](index=152&type=chunk) [Recent Accounting Pronouncements](index=58&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for a description of recently issued and adopted accounting pronouncements, their adoption dates, and expected effects on the company's financial results - Refers to Note 2 for details on recent accounting pronouncements, their adoption dates, and expected effects on financial results[153](index=153&type=chunk) [Additional Information](index=58&type=section&id=Additional%20Information) This section lists various registered trademarks and trademarks owned by BIOLASE, Inc - Lists several registered trademarks and trademarks owned by BIOLASE, Inc., including Waterlase®, Epic®, and WCLI®[154](index=154&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=60&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company states that quantitative and qualitative disclosures about market risk are "Not applicable" - The company states that quantitative and qualitative disclosures about market risk are "Not applicable"[154](index=154&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=60&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were effective as of June 30, 2024, despite a prior material weakness in net loss per share calculations - Management concluded that disclosure controls and procedures were effective as of June 30, 2024[155](index=155&type=chunk) - A material weakness was identified in internal control over financial reporting regarding the proper presentation of net loss per share attributable to common stockholders for unique and complex transactions in prior periods[156](index=156&type=chunk) - Remediation efforts include implementing additional controls to ensure sufficient investigation and documentation of complex transactions and engaging technical experts[158](index=158&type=chunk) PART II. OTHER INFORMATION This section provides other information, including legal proceedings, risk factors, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=61&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in a patent infringement lawsuit filed by PIPStek, LLC, alleging infringement of its Waterlase dental laser product, with trial set for May 12, 2025 - BIOLASE is a defendant in a patent infringement lawsuit filed by PIPStek, LLC, concerning its Waterlase dental laser product[159](index=159&type=chunk) - The lawsuit alleges infringement of two (later three) PIPStek patents and seeks unspecified damages and injunctive relief[159](index=159&type=chunk) - BIOLASE denies allegations, asserts patent invalidity, and intends to vigorously defend itself; trial is scheduled for May 12, 2025[159](index=159&type=chunk) [ITEM 1A. RISK FACTORS](index=61&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces substantial doubt about its ability to continue as a going concern due to recurring losses, negative cash flow, and challenges in raising capital, exacerbated by its Nasdaq delisting - Substantial doubt exists about the company's ability to continue as a going concern due to recurring losses, negative cash flow, and the need for additional capital[160](index=160&type=chunk)[161](index=161&type=chunk) - The delisting from Nasdaq makes it harder to attract investors and limits financing types, as the common stock is no longer a "covered security" and is subject to state regulation[161](index=161&type=chunk)[162](index=162&type=chunk) - Nasdaq delisting could lead to limited market quotations, reduced liquidity, "penny stock" designation (requiring more stringent broker rules), limited news coverage, and decreased ability to raise future financing[164](index=164&type=chunk) - The common stock is subject to "penny stock" rules (market price less than **$5.00 per share**), which can make transactions cumbersome and reduce investment value[164](index=164&type=chunk)[165](index=165&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds to report[168](index=168&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=63&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report - No defaults upon senior securities to report[168](index=168&type=chunk) [ITEM 4. Mine Safety Disclosures](index=63&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The company states that mine safety disclosures are "Not applicable" - The company states that mine safety disclosures are "Not applicable"[168](index=168&type=chunk) [ITEM 5. Other Information](index=63&type=section&id=ITEM%205.%20Other%20Information) No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during Q2 2024 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during Q2 2024[168](index=168&type=chunk) [ITEM 6. Exhibits](index=64&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, certificates of incorporation amendments, and warrant forms - Lists various exhibits, including Placement Agency Agreement, Restated Certificate of Incorporation amendments, Certificates of Designation for preferred stock, and forms of warrants[169](index=169&type=chunk)[170](index=170&type=chunk) - Includes XBRL Instance Document, Schema Document, and Cover Page Interactive Data File[170](index=170&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) BIOLASE reported strong Q2 2024 consumable revenue, improved gross margin, and positive market reception for its new Waterlase iPlus Premier laser system [Q2 2024 Highlights](index=1&type=section&id=Q2%202024%20Highlights) BIOLASE achieved record consumable revenue with over **600 subscriptions** and improved **gross margin to 40%** through cost reductions - Achieved second-highest consumable revenue ever and over **600 recurring subscriptions**, projecting over **$2 million** in scheduled shipments over the next twelve months[3](index=3&type=chunk) - Gross margin increased to **40%** in Q2 2024, up from **33%** in Q1 2024, driven by cost reduction efforts[3](index=3&type=chunk) - The U.S. launch of the Waterlase iPlus Premier laser system received a positive response, highlighting strong interest in industry-leading products[3](index=3&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO John Beaver highlighted strong consumable revenue and improved gross margin, positioning the company for future growth despite market challenges - Consumable revenue was strong, marking the second-highest ever, with over **600 recurring subscriptions**[3](index=3&type=chunk) - Gross margin improved to **40%** from **33%** in Q1 2024, attributed to earlier cost reduction efforts[3](index=3&type=chunk) - Despite revenue challenges from higher interest rates, the company believes it is well-positioned for future growth when market conditions improve[3](index=3&type=chunk) [Second Quarter 2024 Financial Results](index=1&type=section&id=Second%20Quarter%20Financial%20Results) This section details BIOLASE's Q2 2024 financial performance across revenue, gross margin, operating expenses, net loss, and Adjusted EBITDA [Revenue Performance](index=1&type=section&id=Revenue%20Performance) Net revenue for Q2 2024 decreased to $11.6 million, primarily due to declines in U.S. laser revenue and international consumables Revenue Performance | Revenue Category | Q2 2024 (Millions) | Q2 2023 (Millions) | YoY Change (Millions) | Percentage Change | | :------------------------- | :----------------- | :----------------- | :-------------------- | :---------------- | | Net Revenue | $11.6 | $14.3 | -$2.7 | -18.9% | | U.S. Laser Revenue | $3.6 | $6.3 | -$2.7 | -42.9% | | U.S. Consumables & Other | N/A | N/A | N/A | -5% | | International Laser Revenue| $2.4 | $2.5 | -$0.1 | -4.0% | | International Consumables | N/A | N/A | N/A | -12% | [Gross Margin and Operating Expenses](index=1&type=section&id=Gross%20Margin%20and%20Operating%20Expenses) Gross margin decreased to 40% in Q2 2024, while total operating expenses significantly reduced, improving the operating loss Gross Margin and Operating Expenses | Metric | Q2 2024 | Q2 2023 | YoY Change | Percentage Change | | :--------------------- | :----------- | :----------- | :----------- | :---------------- | | Gross Margin | 40% | 43% | -3 pp | -6.98% | | Total Operating Expenses | $7.8 million | $10.0 million| -$2.2 million| -22% | | Operating Loss | $3.2 million | $3.9 million | -$0.7 million| -17.9% (Improvement)| - Cash and cash equivalents stood at approximately **$5.3 million** as of June 30, 2024[5](index=5&type=chunk) [Net Loss and Adjusted EBITDA](index=1&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) Net loss attributable to common stockholders improved significantly, while Adjusted EBITDA loss slightly increased year-over-year Net Loss and Adjusted EBITDA | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | YoY Change (Millions) | | :---------------------------------------- | :----------------- | :----------------- | :-------------------- | | Net Loss Attributable to Common Stockholders | -$2.8 | -$14.2 | +$11.4 (Improvement) | | Net Loss Per Share | -$0.08 | -$26.14 | +$26.06 (Improvement) | | Adjusted EBITDA Loss | -$2.5 | -$2.3 | -$0.2 (Worsening) | | Adjusted EBITDA Per Share | -$0.08 | -$4.24 | +$4.16 (Improvement) | [Full Year 2024 Financial Guidance](index=1&type=section&id=Full%20Year%202024%20Financial%20Guidance) This section provides BIOLASE's updated financial outlook for full-year 2024, including revenue and Adjusted EBITDA expectations [Revenue Outlook](index=1&type=section&id=Revenue%20Outlook) BIOLASE updated its full-year 2024 revenue guidance to 2023 levels, reflecting H1 headwinds and a lower H2 capital equipment forecast - Updated 2024 full-year revenue guidance to be similar to 2023, reflecting H1 headwinds and a lower H2 capital equipment revenue forecast[6](index=6&type=chunk) [Adjusted EBITDA Outlook](index=2&type=section&id=Adjusted%20EBITDA%20Outlook) The company expects a full-year 2024 Adjusted EBITDA loss between $6 million and $8 million, an improvement from 2023 Adjusted EBITDA Outlook | Metric | FY 2024 Guidance (Millions) | FY 2023 Actual (Millions) | Improvement (Millions) | | :--------------------- | :-------------------------- | :------------------------ | :--------------------- | | Adjusted EBITDA Loss | $6 - $8 | $12.8 | $4.8 - $6.8 | [Company Overview](index=2&type=section&id=Company%20Overview) This section provides background on BIOLASE, a medical device company specializing in dental and medical laser systems [About BIOLASE](index=2&type=section&id=About%20BIOLASE) BIOLASE is a medical device company focused on developing and selling laser systems for dentistry and medicine globally - BIOLASE is a medical device company focused on dental and medical laser systems[8](index=8&type=chunk) - As of December 31, 2023, the company had approximately **241 active patents** and **21 patent-pending technologies**[8](index=8&type=chunk) - Since 1998, BIOLASE has sold over **47,700 laser systems** in more than **80 countries** globally[8](index=8&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents BIOLASE's condensed consolidated statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) Net revenue for Q2 2024 was **$11.555 million**, with net loss attributable to common stockholders improving to **$(2.798) million** Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net revenue | $11,555 | $14,286 | $21,687 | $24,753 | | Gross profit | $4,609 | $6,118 | $7,946 | $9,454 | | Total operating expenses | $7,829 | $9,990 | $15,691 | $18,618 | | Loss from operations | $(3,220) | $(3,872) | $(7,745) | $(9,164) | | Net loss | $(2,798) | $(4,868) | $(9,283) | $(10,717) | | Net loss attributable to common stockholders | $(2,798) | $(14,245) | $(9,283) | $(20,094) | | Net loss per share (Basic and Diluted) | $(0.08) | $(26.14) | $(0.36) | $(45.98) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to **$30.641 million** as of June 30, 2024, while stockholders' equity (deficit) worsened to **$(4.329) million** Condensed Consolidated Balance Sheets | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------------------------- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $5,272 | $6,566 | | Total current assets | $22,094 | $24,863 | | Total assets | $30,641 | $35,101 | | Total current liabilities | $31,176 | $19,663 | | Total liabilities | $32,767 | $33,145 | | Total stockholders' equity (deficit) | $(4,329) | $(247) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities improved to **$(6.672) million** for the six months ended June 30, 2024 Condensed Consolidated Statements of Cash Flows | Cash Flow Category | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash and cash equivalents used in operating activities | $(6,672) | $(9,220) | | Net cash and cash equivalents provided by (used in) investing activities | $257 | $(944) | | Net cash and cash equivalents provided by financing activities | $5,219 | $12,793 | | (Decrease) increase in cash and cash equivalents | $(1,294) | $2,749 | | Cash and cash equivalents, end of period | $5,272 | $6,930 | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, primarily Adjusted EBITDA, to their GAAP equivalents [Definition and Rationale](index=7&type=section&id=Definition%20and%20Rationale) This section defines Adjusted EBITDA and explains management's rationale for using non-GAAP measures to assess core operating performance - Adjusted EBITDA is defined as net loss before interest, taxes, depreciation, stock-based and other non-cash compensation, severance expense, change in allowance for doubtful accounts, increase in inventory reserves, stock warrant issuance costs, and loss on warrants[15](index=15&type=chunk) - Management uses non-GAAP financial measures to assist investors in comparing period-to-period operating results and believes they are more indicative of the Company's ongoing core operating performance[14](index=14&type=chunk)[15](index=15&type=chunk) [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=7&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) This section provides a detailed reconciliation of GAAP net loss to Adjusted EBITDA for both quarterly and year-to-date periods Reconciliation of GAAP Net Loss to Adjusted EBITDA | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | GAAP net loss attributable to common stockholders | $(2,798) | $(14,245) | $(9,283) | $(20,094) | | GAAP net loss | $(2,798) | $(4,868) | $(9,283) | $(10,717) | | Adjustments (Total) | $253 | $2,557 | $3,209 | $3,957 | | Adjusted EBITDA | $(2,545) | $(2,311) | $(6,074) | $(6,760) | | Adjusted EBITDA per share | $(0.08) | $(4.24) | $(0.24) | $(15.47) | [Cautionary Statement Regarding Forward-Looking Statements](index=2&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - Forward-looking statements in the press release involve significant risks and uncertainties, including those concerning expected revenue and revenue growth[10](index=10&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially due to factors such as general economic and market conditions, competitive pressures, customer acceptance of new products, and risks associated with managing business growth[10](index=10&type=chunk) - The company explicitly states that it does not undertake any responsibility to revise or update any forward-looking statements, except as required by law[11](index=11&type=chunk)

Financial Data and Key Metrics Changes - The adjusted EBITDA loss was reduced by 21% year-over-year, from $4.4 million to $3.5 million, indicating improved operational efficiency [5][63]. - Total operating expenses decreased by 9% to $7.9 million, down from $8.6 million in the same quarter last year, primarily due to cost-saving initiatives [8][62]. - Cash and cash equivalents at the end of the first quarter stood at $6.4 million, providing sufficient liquidity for near-term growth strategies [28]. Business Line Data and Key Metrics Changes - Consumable sales increased by 14% year-over-year, marking the third highest consumable sales quarter in company history, driven by increased utilization of laser systems and over 600 consumable memberships [7][45]. - Approximately 67% of U.S. Waterlase sales in the first quarter came from new customers, with 42% of these sales attributed to dental specialists, reflecting growing market penetration [3][25]. Market Data and Key Metrics Changes - The company holds approximately 60% market share globally under the Waterlase brand, with significant growth opportunities remaining as over 90% of dentists have yet to adopt all-tissue laser technology [22][57]. - The economic environment, including elevated interest rates, continues to impact sales, although the company has increased awareness of laser dentistry through education and training initiatives [25][64]. Company Strategy and Development Direction - The company aims to enhance market adoption of its lasers through education and training programs, with over 100 events held in the first quarter [4][58]. - The focus remains on operational efficiency and cost reduction, with expectations to achieve positive adjusted EBITDA for the full year 2024 [29][61]. Management's Comments on Operating Environment and Future Outlook - Management noted that while the economic outlook remains challenging, there is a belief that the demand for laser dentistry will increase as more dentists recognize the benefits [50][68]. - The company is optimistic about achieving a gross margin of around 50% by the end of the year, driven by cost savings from in-house manufacturing and price increases [36][61]. Other Important Information - The company expects to generate approximately $5 million to $6 million in annualized cost savings from workforce reductions implemented in June 2023 [8][62]. - The company reiterated its full-year 2024 revenue guidance, expecting growth between 6% and 8%, translating to revenue between $52 million and $53 million [10][29]. Q&A Session Summary Question: Has the positive radiographic data from the McGuire study helped with dental service organizations? - Management indicated that while the study has facilitated ongoing discussions, it has not yet led to significant purchases of laser systems [31]. Question: Have there been significant changes in the economic outlook from dental customers? - Management noted that dentists are generally less concerned about the economy compared to previous quarters, with many not expecting conditions to worsen [68]. Question: How has the decision-making time for purchasing Waterlase systems changed? - Management observed that the decision-making time has remained consistent, with no significant delays noted in recent quarters [52].

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section provides key administrative details regarding the company's quarterly report filing on Form 10-Q for the period ended March 31, 2024 - Filing is a Quarterly Report on Form 10-Q for the period ended **March 31, 2024**[3](index=3&type=chunk) - BIOLASE, INC. is registered in Delaware with Commission File Number **001-36385**[4](index=4&type=chunk)[40](index=40&type=chunk) - The registrant is a **Non-accelerated filer** and a **Smaller reporting company**, and is not a shell company[10](index=10&type=chunk) - As of May 6, 2024, there were **33,394,979 shares of common stock outstanding**[10](index=10&type=chunk) [INDEX](index=2&type=section&id=INDEX) This section outlines the overall structure of the report, dividing it into financial and other information parts - The report is structured into **Part I (Financial Information)** and **Part II (Other Information)**[6](index=6&type=chunk) - Part I includes **Financial Statements**, **Management's Discussion and Analysis**, **Market Risk Disclosures**, and **Controls and Procedures**[6](index=6&type=chunk) - Part II covers **Legal Proceedings**, **Risk Factors**, **Sales of Equity Securities**, **Defaults**, **Mine Safety**, **Other Information**, and **Exhibits**[6](index=6&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for BIOLASE, INC., including the balance sheets, statements of operations and comprehensive loss, statements of convertible redeemable preferred stock and stockholders' equity (deficit), and statements of cash flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :----- | :------------- | :---------------- | | Cash and cash equivalents | $6,393 | $6,566 | | Accounts receivable, net | $5,687 | $5,483 | | Inventory | $11,273 | $11,433 | | Total current assets | $25,005 | $24,863 | | Total assets | $34,353 | $35,101 | | Total current liabilities | $21,427 | $19,663 | | Total liabilities | $34,084 | $33,145 | | Total stockholders' equity (deficit) | $(1,934) | $(247) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----- | :-------------------------------- | :-------------------------------- | | Net revenue | $10,131 | $10,467 | | Cost of revenue | $6,795 | $7,130 | | Gross profit | $3,336 | $3,337 | | Total operating expenses | $7,862 | $8,628 | | Loss from operations | $(4,526) | $(5,291) | | Net loss | $(6,485) | $(5,849) | | Basic and Diluted Net loss per share | $(0.36) | $(17.83) | [Condensed Consolidated Statements of Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Redeemable%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) This section tracks changes in the company's preferred stock and equity accounts over time - Total mezzanine equity remained at **$2,203 thousand** as of March 31, 2024, consistent with December 31, 2023[42](index=42&type=chunk) - Total stockholders' equity (deficit) decreased from **$(247) thousand** as of December 31, 2023, to **$(1,934) thousand** as of March 31, 2024, primarily due to a net loss of **$6,485 thousand**[42](index=42&type=chunk)[45](index=45&type=chunk) - Additional paid-in capital increased by **$4,854 thousand**, driven by the sale of common stock units and prefunded units (**$2,776 thousand**), exercise of Class A Warrants (**$1,976 thousand**), and stock-based compensation (**$102 thousand**)[45](index=45&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company's operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------- | :-------------------------------- | :-------------------------------- | | Operating Activities | $(5,938) | $(5,658) | | Investing Activities | $197 | $(587) | | Financing Activities | $5,647 | $8,517 | | Effect of exchange rate changes | $(79) | $79 | | Net change in cash and cash equivalents | $(173) | $2,351 | | Cash and cash equivalents, end of period | $6,393 | $6,532 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering business description, accounting policies, revenue recognition, equity, inventory, property, goodwill, liabilities, debt, leases, segment information, concentrations, income taxes, and subsequent events [Note 1: Description of Business and Basis of Presentation](index=9&type=section&id=NOTE%201%E2%80%94DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's business and the foundational principles used in preparing the financial statements - BIOLASE, Inc. is a leading provider of advanced laser systems for the dental industry, offering minimally invasive procedures with benefits for both patients and practitioners[22](index=22&type=chunk) - The Company's recurring losses and cash usage in operations raise **substantial doubt about its ability to continue as a going concern**, and the financial statements do not include adjustments for this uncertainty[26](index=26&type=chunk)[52](index=52&type=chunk) - All common stock share numbers and prices have been retroactively adjusted to reflect the **2023 Reverse Stock Split**[25](index=25&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and estimates applied in the financial reporting - The preparation of financial statements requires significant estimates, including allowances for receivables, inventory, deferred taxes, warranty expenses, goodwill, and revenue deferrals[28](index=28&type=chunk) - No significant changes in critical accounting policies were reported for the three months ended **March 31, 2024**, compared to the 2023 Form 10-K[29](index=29&type=chunk) - The Company intends to adopt **ASU No. 2023-09 (Improvements to Income Tax Disclosures)** prospectively in 2025, with no material impact expected on financial position or results[33](index=33&type=chunk) [Note 3: Revenue Recognition](index=12&type=section&id=NOTE%203%E2%80%94REVENUE%20RECOGNITION) This note details how and when the company recognizes revenue from its various products and services - Revenue from products and services transferred at a single point in time accounted for **85% of net revenue for Q1 2024** (vs. 89% in Q1 2023), primarily from laser systems and consumables[35](index=35&type=chunk) - Revenue recognized over time (product training and extended warranties) increased to **15% of net revenue for Q1 2024** (vs. 11% in Q1 2023)[90](index=90&type=chunk) Net Revenue by Geographic Region (in thousands) | Geographic Region | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------- | :-------------------------------- | :-------------------------------- | | United States | $6,690 | $6,758 | | International | $3,441 | $3,709 | | **Total Net Revenue** | **$10,131** | **$10,467** | [Note 4: Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit)](index=15&type=section&id=NOTE%204%E2%80%94CONVERTIBLE%20REDEEMABLE%20PREFERRED%20STOCK%20AND%20STOCKHOLDERS'%20EQUITY%20(DEFICIT)) This note provides details on the company's preferred stock, equity, and related transactions, including warrants - The Company has **Series H and Series J Convertible Redeemable Preferred Stock** classified as mezzanine equity, with mandatory redemption dates in **May 2025** and **September 2024**, respectively[70](index=70&type=chunk)[101](index=101&type=chunk)[97](index=97&type=chunk)[102](index=102&type=chunk) - Stock-based compensation expense was **$0.1 million** for Q1 2024, down from $0.7 million in Q1 2023, with **$0.2 million** unrecognized compensation expense remaining[80](index=80&type=chunk)[106](index=106&type=chunk) Warrant Activity (in thousands, except exercise price) | Metric | Shares | Weighted Average Exercise Price | | :----- | :----- | :------------------------------ | | Warrants outstanding as of Dec 31, 2023 | 4,323 | $11.88 | | Granted or Issued | 42,427 | $0.57 | | Exercised | (22,736) | $— | | Warrants outstanding as of Mar 31, 2024 | 24,014 | $2.68 | [Note 5: Inventory](index=26&type=section&id=NOTE%205%E2%80%94INVENTORY) This note breaks down the company's inventory into raw materials, work-in-process, and finished goods Inventory Breakdown (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :------- | :------------- | :---------------- | | Raw materials | $6,139 | $6,168 | | Work-in-process | $1,466 | $1,299 | | Finished goods | $3,668 | $3,966 | | **Total Inventory** | **$11,273** | **$11,433** | [Note 6: Property, Plant, and Equipment](index=26&type=section&id=NOTE%206%E2%80%94PROPERTY,%20PLANT,%20AND%20EQUIPMENT) This note details the company's tangible long-term assets, including depreciation Property, Plant, and Equipment, Net (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :------- | :------------- | :---------------- | | Total property, plant, and equipment | $16,653 | $16,695 | | Less: Accumulated depreciation | $(11,963) | $(11,330) | | Total property, plant, and equipment, net | $4,690 | $5,365 | | Land | $156 | $160 | | **Property, plant, and equipment, net** | **$4,846** | **$5,525** | [Note 7: Intangible Assets and Goodwill](index=26&type=section&id=NOTE%207%E2%80%94INTANGIBLE%20ASSETS%20AND%20GOODWILL) This note provides information on the company's intangible assets and goodwill, including impairment assessments - Goodwill remained at **$2.9 million** as of March 31, 2024, with no impairment identified in the annual test as of September 30, 2023, or subsequent quantitative assessment in Q4 2023[120](index=120&type=chunk)[121](index=121&type=chunk)[168](index=168&type=chunk) - All intangible assets subject to amortization have been fully amortized, resulting in **no amortization expense** for Q1 2024 and Q1 2023[168](index=168&type=chunk) [Note 8: Accrued Liabilities](index=28&type=section&id=NOTE%208%E2%80%94ACCRUED%20LIABILITIES) This note itemizes the company's accrued expenses, such as payroll, warranty, and professional services Accrued Liabilities Breakdown (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :------- | :------------- | :---------------- | | Payroll and benefits | $3,282 | $3,343 | | Warranty accrual, current portion | $1,293 | $1,321 | | Operating lease liability | $904 | $888 | | Accrued professional services | $731 | $422 | | **Total Accrued Liabilities** | **$7,589** | **$7,518** | [Note 9: Debt](index=29&type=section&id=NOTE%209%E2%80%94DEBT) This note details the company's various debt obligations, including term loans and related costs Debt Details (in thousands) | Debt Type | March 31, 2024 | December 31, 2023 | | :-------- | :------------- | :---------------- | | SWK Loan | $14,395 | $14,560 | | EIDL Loan | $150 | $150 | | Discount and debt issuance costs | $(538) | $(663) | | **Total Debt** | **$14,007** | **$14,047** | | Current term loans | $2,800 | $2,265 | | Non-current term loans, net of discount | $11,207 | $11,782 | [Note 10: Leases](index=31&type=section&id=NOTE%2010%E2%80%94LEASES) This note outlines the company's lease arrangements, including right-of-use assets and lease liabilities - As of March 31, 2024, right-of-use assets were **$1.3 million** and total lease liabilities were **$1.4 million**[153](index=153&type=chunk)[178](index=178&type=chunk) - The weighted-average remaining lease term is **1.6 years**, with a weighted-average discount rate of **12.3%**[177](index=177&type=chunk) - Rent expense totaled **$0.3 million** for both Q1 2024 and Q1 2023[179](index=179&type=chunk) [Note 11: Segment Information](index=33&type=section&id=NOTE%2011%E2%80%94SEGMENT%20INFORMATION) This note clarifies that the company operates as a single business segment and provides revenue by geographic location - The Company operates in a **single business segment** and does not segregate its business for internal reporting[181](index=181&type=chunk) Net Revenue by Geographic Location (in thousands) | Geographic Location | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------ | :-------------------------------- | :-------------------------------- | | United States | $6,690 (66%) | $6,758 (65%) | | International | $3,441 (34%) | $3,709 (35%) | | **Total Net Revenue** | **$10,131 (100%)** | **$10,467 (100%)** | [Note 12: Concentrations](index=33&type=section&id=NOTE%2012%E2%80%94CONCENTRATIONS) This note identifies significant concentrations of risk related to cash, customers, and suppliers - The Company maintains cash and cash equivalents in money market accounts with commercial banks, which periodically exceed federally insured limits[184](index=184&type=chunk) - No individual customer represented more than **10% of revenue** for Q1 2024 or Q1 2023, and no individual customer represented more than **10% of accounts receivable** as of March 31, 2024[155](index=155&type=chunk)[156](index=156&type=chunk) - The Company relies on single suppliers for certain key components, but believes alternative suppliers are available, though a change could cause manufacturing delays[185](index=185&type=chunk) [Note 13: Income Taxes](index=35&type=section&id=NOTE%2013%E2%80%94INCOME%20TAXES) This note details the company's income tax provision, effective tax rate, and deferred tax assets - The Company recorded an income tax provision of **$19 thousand** for Q1 2024 (**0.3% effective tax rate**) and **$1 thousand** for Q1 2023 (**0.0% effective tax rate**)[187](index=187&type=chunk) - The effective tax rate differs from the statutory rate of **21%** primarily due to valuation allowances against net deferred tax assets and current liabilities from estimated state and foreign income tax liabilities[187](index=187&type=chunk) - No liability for unrecognized tax benefits was recorded for Q1 2024 or Q1 2023, and no material changes are expected in the next 12 months[158](index=158&type=chunk) [Note 14: Subsequent Events](index=35&type=section&id=NOTE%2014%E2%80%94SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the balance sheet date, including Nasdaq compliance issues - On **April 15, 2024**, the Company received a Nasdaq staff determination letter regarding non-compliance with the **$1.00 minimum bid price requirement**, superseding a previous erroneous letter[159](index=159&type=chunk)[160](index=160&type=chunk)[215](index=215&type=chunk)[256](index=256&type=chunk) - The Company requested a hearing with the Nasdaq Hearings Panel in **June 2024**, which automatically stayed any delisting action, and the Panel has authority to grant an extension until **October 14, 2024**[159](index=159&type=chunk)[279](index=279&type=chunk) - Stockholders did not approve a proposal to increase shares available under the **2018 Stock Incentive Plan by 7.5 million shares** at the **May 2, 2024 Annual Meeting**[161](index=161&type=chunk)[189](index=189&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on BIOLASE's financial condition and results of operations for the three months ended March 31, 2024, discussing business overview, financial performance, liquidity, and future outlook, including non-GAAP measures [Overview](index=39&type=section&id=Overview) This section provides a general description of BIOLASE's business, products, and strategic objectives - BIOLASE is a leading provider of advanced laser systems for the dental industry, offering **Waterlase (all-tissue)** and **diode (soft-tissue) systems** for minimally invasive procedures[192](index=192&type=chunk)[194](index=194&type=chunk) - The company holds approximately **241 active and 21 pending U.S. and international patents**, primarily related to Waterlase technology, and has sold over **47,700 laser systems globally since 1998**[218](index=218&type=chunk) - The company aims to increase awareness and demand for its products, grow consumables revenue, and achieve operating excellence through lean initiatives, sales strategy, cash flow management, and innovation[195](index=195&type=chunk) [Recent Developments](index=41&type=section&id=Recent%20Developments) This section highlights significant events and transactions that occurred recently, impacting the company's financial position - On **February 15, 2024**, the Company completed a public offering, issuing units of common stock and Class A/B warrants, and pre-funded units with pre-funded warrants and Class A/B warrants, raising approximately **$7.0 million in gross proceeds**[132](index=132&type=chunk)[223](index=223&type=chunk) - The February 2024 offering triggered anti-dilution provisions, reducing the exercise price of December 2023 Warrants to **$0.2256 per share**[224](index=224&type=chunk) [Critical Accounting Policies](index=43&type=section&id=Critical%20Accounting%20Policies) This section discusses the accounting policies that require significant judgment and estimates in financial reporting - The financial statements are prepared using **GAAP**, requiring estimates and assumptions that affect reported amounts[225](index=225&type=chunk) - No significant changes in critical accounting policies occurred during the three months ended **March 31, 2024**, from those disclosed in the 2023 Form 10-K[225](index=225&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) This section analyzes the Company's operating results for the three months ended March 31, 2024, compared to the same period in 2023, covering net revenue, cost of revenue, gross profit, operating expenses, non-operating income/loss, and net loss [Net Revenue](index=45&type=section&id=Net%20Revenue) This section analyzes the company's revenue performance by product and service categories Net Revenue by Category (in thousands) | Category | Q1 2024 | % of Total | Q1 2023 | % of Total | Change | % Change | | :------- | :------ | :--------- | :------ | :--------- | :----- | :------- | | Laser systems | $5,175 | 51.1% | $6,265 | 59.8% | $(1,090) | (17.4)% | | Consumables and other | $3,469 | 34.2% | $3,033 | 29.0% | $436 | 14.4% | | Services | $1,487 | 14.7% | $1,169 | 11.2% | $318 | 27.2% | | **Total Net Revenue** | **$10,131** | **100.0%** | **$10,467** | **100.0%** | **$(336)** | **(3.2)%** | [Cost of Revenue and Gross Profit](index=47&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Profit) This section examines the costs directly associated with revenue generation and the resulting gross profit margin Cost of Revenue and Gross Profit (in thousands) | Metric | Q1 2024 | % of Net Revenue | Q1 2023 | % of Net Revenue | Change | % Change | | :----- | :------ | :--------------- | :------ | :--------------- | :----- | :------- | | Cost of revenue | $6,795 | 67.1% | $7,130 | 68.1% | $(335) | (4.7)% | | Gross profit | $3,336 | 32.9% | $3,337 | 31.9% | $(1) | (0.0)% | [Operating Expenses](index=47&type=section&id=Operating%20Expenses) This section details the company's sales and marketing, general and administrative, and engineering and development expenses Operating Expenses (in thousands) | Expense Category | Q1 2024 | % of Net Revenue | Q1 2023 | % of Net Revenue | Change | % Change | | :--------------- | :------ | :--------------- | :------ | :--------------- | :----- | :------- | | Sales and marketing | $3,383 | 33.4% | $4,622 | 44.2% | $(1,239) | (26.8)% | | General and administrative | $3,196 | 31.5% | $2,459 | 23.4% | $737 | 30.0% | | Engineering and development | $1,283 | 12.7% | $1,547 | 14.8% | $(264) | (17.1)% | | **Total Operating Expenses** | **$7,862** | **77.6%** | **$8,628** | **82.4%** | **$(766)** | **(8.9)%** | [Non-Operating Income (Loss)](index=47&type=section&id=Non-Operating%20Income%20(Loss)) This section covers income and expenses not directly related to core operations, such as foreign currency and warrant revaluation - The Company incurred a **$96 thousand loss on foreign currency transactions** in Q1 2024, compared to a $20 thousand gain in Q1 2023, primarily due to U.S. dollar and Euro exchange rate fluctuations[209](index=209&type=chunk) - Other expense for Q1 2024 was **$1.2 million**, including **$0.8 million in issuance costs for warrants** and **$0.6 million in losses from warrant revaluation**, partially offset by **$0.2 million in gains from asset disposal**[233](index=233&type=chunk) - Interest expense remained consistent at **$0.6 million** for both Q1 2024 and Q1 2023[262](index=262&type=chunk) [Net Loss and Income Tax Provision](index=49&type=section&id=Net%20Loss) This section reports the company's overall net loss and the provision for income taxes for the period - Net loss increased to **$6.5 million** for Q1 2024, compared to $5.8 million for Q1 2023[263](index=263&type=chunk) - Income tax provision was consistent at **$19 thousand** for Q1 2024 and **$1 thousand** for Q1 2023, calculated using the discrete year-to-date method[210](index=210&type=chunk) [Liquidity and Capital Resources - Going Concern](index=49&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Going%20Concern) This section addresses the Company's liquidity position, cash flow activities, and the substantial doubt about its ability to continue as a going concern, highlighting the need for additional capital or increased sales and expense control [Cash and Cash Equivalents](index=49&type=section&id=Cash%20and%20Cash%20Equivalents) This section analyzes the changes in the company's cash and cash equivalents over the reporting period - Cash and cash equivalents decreased from **$6.6 million** as of December 31, 2023, to **$6.4 million** as of March 31, 2024[211](index=211&type=chunk) - The decrease was primarily due to a **$6.5 million net loss** and **$0.2 million in term loan principal payments**, partially offset by **$5.8 million net proceeds** from the February 2024 public offering and **$0.2 million from asset disposal**[211](index=211&type=chunk) [Operating Activities](index=49&type=section&id=Operating%20Activities) This section details the cash flows generated or used by the company's primary business operations - Net cash used in operating activities totaled **$5.9 million** for Q1 2024, primarily driven by the **$6.5 million net loss**[264](index=264&type=chunk) [Investing Activities](index=49&type=section&id=Investing%20Activities) This section reports cash flows related to the acquisition and disposal of long-term assets - Net cash provided by investing activities was **$0.2 million** for Q1 2024, solely from the proceeds of property, plant, and equipment disposal[212](index=212&type=chunk) [Financing Activities](index=49&type=section&id=Financing%20Activities) This section outlines cash flows from debt, equity, and other financing transactions - Net cash provided by financing activities was **$5.6 million** for Q1 2024, primarily from the net proceeds of the February 2024 public offering[236](index=236&type=chunk) - The effect of exchange rate changes resulted in a **$79 thousand loss on cash** for Q1 2024, mainly due to Euro fluctuations[265](index=265&type=chunk) [Future Liquidity Needs](index=49&type=section&id=Future%20Liquidity%20Needs) This section discusses the company's anticipated capital requirements and plans to address going concern issues - **Substantial doubt exists about the Company's ability to continue as a going concern** due to recurring losses and cash usage, necessitating additional capital or increased sales and expense control[267](index=267&type=chunk)[238](index=238&type=chunk) - The Company expects to need to raise capital through equity or debt offerings, but there is no assurance such financing will be available on acceptable terms or without dilution[266](index=266&type=chunk) - Management plans to improve financial condition by expanding product offerings, strengthening sales and distributor relationships, forming strategic arrangements, educating patients, and reducing expenses[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the Company for the reporting period - This section is **not applicable** to the Company[245](index=245&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of the Company's disclosure controls and procedures and reports on the remediation of a previously identified material weakness in internal control over financial reporting [Disclosure Controls and Procedures](index=52&type=section&id=Disclosure%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's controls designed to ensure timely and accurate financial disclosures - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were **effective as of March 31, 2024**[269](index=269&type=chunk) [Changes in Internal Controls over Financial Reporting](index=52&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) This section discusses any material changes or remediation efforts related to the company's internal controls over financial reporting - A **material weakness in internal control over financial reporting**, related to the proper presentation of net loss per share for complex transactions, was identified in prior periods[247](index=247&type=chunk)[270](index=270&type=chunk) - Management implemented additional controls, including thorough investigation and documentation of unique transactions and engagement of technical experts, to **remediate the material weakness**[271](index=271&type=chunk) - No other changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control during the period[249](index=249&type=chunk) [PART II. OTHER INFORMATION](index=53&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Item 1. Legal Proceedings](index=53&type=section&id=ITEM%201.%20Legal%20Proceedings) This section discloses a patent infringement lawsuit filed against BIOLASE by PIPStek, LLC, concerning its Waterlase dental laser product - PIPStek, LLC filed a lawsuit against BIOLASE on **January 4, 2023**, alleging patent infringement by the **Waterlase dental laser product**[272](index=272&type=chunk) - The lawsuit seeks unspecified damages and injunctive relief, with BIOLASE denying allegations and asserting patent invalidity and non-infringement[272](index=272&type=chunk) - The trial for this matter is currently scheduled for **May 12, 2025**[272](index=272&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=ITEM%201A.%20Risk%20Factors) This section updates and reiterates significant risks faced by BIOLASE, including substantial doubt about its ability to continue as a going concern, recurring financial losses, and ongoing challenges with Nasdaq listing compliance [Going Concern and Financial Performance](index=53&type=section&id=Going%20Concern%20and%20Financial%20Performance) This section highlights the financial risks associated with the company's ability to continue operations and achieve profitability - **Substantial doubt exists about the Company's ability to continue as a going concern** due to recurring losses and negative cash flow from operations[251](index=251&type=chunk)[274](index=274&type=chunk) - The Company reported an accumulated deficit of **$323.3 million** as of March 31, 2024, and net losses of **$6.5 million** for Q1 2024, following losses in prior years[275](index=275&type=chunk) - Achieving profitability requires increasing net revenue and controlling costs; failure to do so could adversely affect the business and stock price[275](index=275&type=chunk) [Nasdaq Listing Compliance](index=53&type=section&id=Nasdaq%20Listing%20Compliance) This section details the risks related to the company's ability to maintain its listing on the Nasdaq stock exchange - The Company received a Nasdaq staff determination letter on **April 15, 2024**, for failing to meet the **$1.00 minimum bid price requirement**, and is not eligible for an automatic compliance period due to a prior mandatory panel monitor[159](index=159&type=chunk)[256](index=256&type=chunk)[287](index=287&type=chunk) - The Company has requested a hearing with the Nasdaq Hearings Panel in **June 2024**, which has the authority to grant an extension until **October 14, 2024**[159](index=159&type=chunk)[279](index=279&type=chunk) - The Company also anticipates another deficiency letter for non-compliance with the **minimum stockholders' equity requirement ($2.5 million)**, as its Q1 2024 report does not evidence compliance[288](index=288&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[289](index=289&type=chunk) [Item 3. Defaults Upon Senior Securities](index=57&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[289](index=289&type=chunk) [Item 4. Mine Safety Disclosures](index=57&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are **not applicable**[289](index=289&type=chunk) [Item 5. Other Information](index=57&type=section&id=ITEM%205.%20Other%20Information) This section states that there is no other information to report for the period - No other information was reported[289](index=289&type=chunk) [Item 6. Exhibits](index=58&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q, including various agreements, certificates of incorporation, warrants, and certifications - Key exhibits include the **Placement Agency Agreement**, **Restated Certificate of Incorporation amendments**, **Certificates of Designation for Preferred Stock**, various warrant forms, and certifications by the CEO and CFO[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) [SIGNATURES](index=61&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers, certifying the report - The report is signed by **John R. Beaver, President and Chief Executive Officer**, and **Jennifer Bright, Chief Financial Officer**, on **May 13, 2024**[293](index=293&type=chunk)

[First Quarter 2024 Results and Full-Year Guidance](index=1&type=section&id=First%20Quarter%202024%20Results%20and%20Full-Year%20Guidance) BIOLASE reports Q1 2024 results and reiterates full-year guidance, emphasizing increased laser adoption, improved margins, and reduced EBITDA loss [Q1 2024 Performance Highlights](index=1&type=section&id=Q1%202024%20Performance%20Highlights) BIOLASE's Q1 2024 highlights include increased Waterlase adoption, strong consumable sales, improved gross margin, and a significant reduction in Adjusted EBITDA loss - Approximately **67% of U.S. Waterlase sales** came from new customers, and **42% from dental specialists**, indicating increased adoption[4](index=4&type=chunk) - Consumable sales increased **14% year over year**, marking the third strongest consumable sales quarter in company history, driven by over **600 subscriptions**[4](index=4&type=chunk) - Adjusted EBITDA loss significantly lowered by **21%** compared to the prior year's quarter due to successful cost reduction initiatives[4](index=4&type=chunk) [Full Year 2024 Financial Guidance](index=1&type=section&id=Full%20Year%202024%20Financial%20Guidance) The company reiterates its full-year 2024 financial guidance, projecting revenue growth and positive Adjusted EBITDA Full Year 2024 Financial Guidance | Metric | Guidance | | :----------------- | :---------------------------------------- | | Net Revenue Growth | 6% to 8% year over year | | Net Revenue Amount | $52 million to $53 million | | Adjusted EBITDA | Positive results for the full year of 2024 | - Guidance reflects continued adoption of lasers and consumables by the dental community, including general dentists, specialists, hygienists, and DSOs, despite a challenging business environment[20](index=20&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO John Beaver notes Q1 revenue dip but highlights increased laser adoption, improved operational efficiency, and a strengthened balance sheet for long-term success - Increased adoption of award-winning lasers is an encouraging sign and a leading indicator for longer-term success[21](index=21&type=chunk) - Gross margin expanded by **700 basis points sequentially**, and the expense structure saw a **9% reduction year over year**[21](index=21&type=chunk) - Balance sheet strengthened to provide resources for maximizing growth opportunities and enhancing shareholder value[21](index=21&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) This section provides an overview of BIOLASE's business, products, patent portfolio, global sales, and investor relations information [About BIOLASE](index=2&type=section&id=About%20BIOLASE) BIOLASE is a medical device company specializing in dental and medical laser systems, holding 241 active patents and selling over 47,700 systems globally - BIOLASE develops, manufactures, markets, and sells laser systems for dentistry and medicine[8](index=8&type=chunk) - As of December 31, 2023, BIOLASE's proprietary laser products incorporate approximately **241 active patents** and **21 patent-pending technologies**[8](index=8&type=chunk) - From 1998 through December 31, 2023, BIOLASE has sold over **47,700 laser systems** in over **80 countries**[8](index=8&type=chunk) [Investor Relations & Contact Information](index=2&type=section&id=Investor%20Relations%20%26%20Contact%20Information) BIOLASE provides details for accessing its conference call webcast and replay, along with contact information for investor inquiries - A live and archived conference call webcast is accessible on the BIOLASE Investor Relations page[7](index=7&type=chunk) - Phone replay for the conference call is available for one week after the call[7](index=7&type=chunk) - Investor inquiries can be directed to Michael Polyviou or Todd Kehrli at EVC Group LLC[27](index=27&type=chunk) [Detailed Financial Performance (Q1 2024)](index=1&type=section&id=Detailed%20Financial%20Performance%20(Q1%202024)) A detailed analysis of BIOLASE's Q1 2024 financial performance, covering net revenue, gross margin, operating expenses, net loss, and Adjusted EBITDA [Net Revenue Analysis](index=1&type=section&id=Net%20Revenue%20Analysis) BIOLASE's Q1 2024 net revenue decreased **3% year-over-year** to **$10.1 million**, with U.S. and International laser revenue declines offset by consumable sales growth Q1 2024 Net Revenue Breakdown (in thousands) | Category | Q1 2024 ($) | Q1 2023 ($) | YoY Change (%) | | :----------------------------- | :---------- | :---------- | :------------- | | Net Revenue (Total) | 10,131 | 10,467 | -3% | | U.S. Laser Revenue | 2,700 | 3,500 | -22% | | U.S. Consumables & Other | N/A | N/A | +17% | | International Laser Revenue | 2,500 | 2,800 | -12% | | International Consumables & Other | N/A | N/A | +8% | [Gross Margin and Operating Expenses](index=1&type=section&id=Gross%20Margin%20and%20Operating%20Expenses) Gross margin improved to **33%** in Q1 2024, while total operating expenses decreased by **9%**, leading to a **15%** improvement in operating loss Q1 2024 Gross Margin and Operating Expenses (in thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | YoY Change (%) | | :---------------------- | :---------- | :---------- | :------------- | | Gross Margin | 33% | 32% | +1 pp | | Total Operating Expenses | 7,862 | 8,628 | -9% | | Operating Loss | (4,526) | (5,291) | +15% | - Gross margin improved by **1% year over year**, benefiting from **100% in-house supply** of trunk fiber requirements[4](index=4&type=chunk) - Gross margin improved by **7%** compared to the prior quarter due to inventory adjustments and reserve charges[4](index=4&type=chunk) [Net Loss and Adjusted EBITDA](index=2&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) BIOLASE reported a Q1 2024 net loss of **$6.5 million**, but Adjusted EBITDA loss significantly improved by **21% year-over-year** to **$3.5 million** Q1 2024 Net Loss and Adjusted EBITDA (in thousands, except per share) | Metric | Q1 2024 ($) | Q1 2023 ($) | YoY Change (%) | | :-------------------------------------- | :---------- | :---------- | :------------- | | Net Loss Attributable to Common Stockholders | (6,485) | (5,849) | +11% | | Net Loss Per Share (Basic & Diluted) | (0.36) | (17.83) | -98% | | Adjusted EBITDA Loss | (3,530) | (4,448) | +21% | | Adjusted EBITDA Per Share | (0.20) | (13.56) | -98.5% | [Cash and Cash Equivalents](index=2&type=section&id=Cash%20and%20Cash%20Equivalents) As of March 31, 2024, BIOLASE held approximately **$6.4 million** in cash and cash equivalents Cash and Cash Equivalents | Metric | Amount (in thousands) | | :------------------------- | :-------------------- | | Cash and Cash Equivalents (March 31, 2024) | $6,393 | [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents BIOLASE's condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statement details Q1 2024 net revenue of **$10.1 million** and a net loss of **$6.5 million**, compared to **$10.5 million** revenue and **$5.8 million** net loss in Q1 2023 Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------------------------- | :----------------- | :----------------- | | Net revenue | 10,131 | 10,467 | | Cost of revenue | 6,795 | 7,130 | | Gross profit | 3,336 | 3,337 | | Total operating expenses | 7,862 | 8,628 | | Loss from operations | (4,526) | (5,291) | | Net loss | (6,485) | (5,849) | | Comprehensive loss | (6,571) | (5,769) | | Net loss per share (Basic and Diluted) | (0.36) | (17.83) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of **$34.4 million** and total liabilities of **$34.1 million** as of March 31, 2024, with a stockholders' equity deficit Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2024 ($) | December 31, 2023 ($) | | :-------------------------------------- | :----------------- | :-------------------- | | Total current assets | 25,005 | 24,863 | | Total assets | 34,353 | 35,101 | | Total current liabilities | 21,427 | 19,663 | | Total liabilities | 34,084 | 33,145 | | Total mezzanine equity | 2,203 | 2,203 | | Total stockholders' equity (deficit) | (1,934) | (247) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2024 saw **$5.9 million** net cash used in operating activities, with **$5.6 million** provided by financing activities, primarily from stock and warrant sales Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------------------------- | :----------------- | :----------------- | | Net cash used in operating activities | (5,938) | (5,658) | | Net cash provided by (used in) investing activities | 197 | (587) | | Net cash provided by financing activities | 5,647 | 8,517 | | (Decrease) increase in cash and cash equivalents | (173) | 2,351 | | Cash and cash equivalents, end of period | 6,393 | 6,532 | - Proceeds from the sale of common stock and pre-funded warrants, net of fees, were **$2.8 million** in Q1 2024[16](index=16&type=chunk) - Proceeds from the sale of warrants, net of fees, were **$3.0 million** in Q1 2024[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section defines Adjusted EBITDA, a non-GAAP measure, and provides its reconciliation to GAAP net loss, highlighting its use for evaluating core operating performance [Definition and Rationale of Adjusted EBITDA](index=7&type=section&id=Definition%20and%20Rationale%20of%20Adjusted%20EBITDA) BIOLASE defines Adjusted EBITDA as net loss adjusted for specific non-cash and non-recurring items, used to evaluate core operating results and trends - Adjusted EBITDA is a non-GAAP financial measure used by management to evaluate core results of operations and trends[17](index=17&type=chunk)[34](index=34&type=chunk) - Adjusted EBITDA is defined as net loss before interest, taxes, depreciation, stock-based and other non-cash compensation, severance expense, change in allowance for doubtful accounts, increase in inventory reserves, stock warrant issuance costs, and loss on warrants[17](index=17&type=chunk) - Non-GAAP measures are presented as supplementary information and not as a substitute for GAAP measures[17](index=17&type=chunk) [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=7&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) The reconciliation details adjustments from GAAP net loss to Adjusted EBITDA, showing a significant improvement in the Adjusted EBITDA loss for Q1 2024 Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands, except per share) | Metric | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------------------------- | :----------------- | :----------------- | | GAAP net loss | (6,485) | (5,849) | | Adjustments: | | | | Interest expense, net | 622 | 577 | | Income tax provision | 19 | 1 | | Depreciation | 660 | 149 | | Severance expense | 182 | — | | Change in allowance for doubtful accounts | (27) | (17) | | Stock-based and other non-cash compensation | 113 | 691 | | Stock warrant issuance costs | 830 | — | | Loss on warrants | 556 | — | | Adjusted EBITDA | (3,530) | (4,448) | | GAAP net loss per share | (0.36) | (17.83) | | Adjusted EBITDA per share | (0.20) | (13.56) | [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This statement warns that forward-looking statements involve risks and uncertainties, and actual results may differ materially due to various factors, with no obligation to update - The press release contains forward-looking statements regarding expected revenue, revenue growth, and positive Adjusted EBITDA for 2024[12](index=12&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially due to various factors[12](index=12&type=chunk) - Factors influencing actual results include adverse economic conditions, competitive pressures, customer acceptance of new products, and risks associated with business growth[12](index=12&type=chunk)

Financial Data and Key Metrics Changes - The company reported net revenue of $49.2 million for the full year 2023, a modest increase from $48.5 million in 2022 [32] - GAAP net loss for 2023 was $20.6 million, compared to a net loss of $28.6 million for 2022, indicating improved financial performance [23] - Adjusted EBITDA loss for 2023 was $12.8 million, down from $20.1 million in 2022, reflecting operational improvements [23] Business Line Data and Key Metrics Changes - Consumable sales increased by 20% year-over-year, indicating growing utilization of laser systems among existing customers [20][22] - 71% of US Waterlase sales came from new customers, with 40% from dental specialists, highlighting successful market penetration [22] - The Waterlase Trial Program had a sales conversion rate of 45% for the full year, demonstrating effective customer engagement [22] Market Data and Key Metrics Changes - The company holds approximately 60% market share globally under the Waterlase brand, with significant untapped potential as over 90% of dentists have yet to adopt all-tissue laser technology [30] - Each 1% increase in adoption of all-tissue laser technology in the US could equate to approximately $50 million in additional revenue for the company [30] Company Strategy and Development Direction - The company aims to grow market adoption of lasers through enhanced education and training programs, including the Waterlase Trials Program and the BIOLASE Education Center [20][30] - A new modular product, Waterlase iPlus Premier, was introduced to cater to specific dental needs, allowing for targeted sales strategies [26] - The company is focused on operational efficiencies and cost reduction initiatives to improve gross margins and achieve profitability [34][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving positive adjusted EBITDA for the full year 2024, despite ongoing economic challenges [34] - The company anticipates a 6% to 8% revenue increase for 2024 compared to 2023, driven by growth initiatives and improved operational efficiencies [34] - Management noted that the macroeconomic environment has extended the sales cycle but remains committed to converting marketing qualified leads into sales [38] Other Important Information - The company has sufficient liquidity, finishing the fourth quarter with cash and cash equivalents of $6.6 million, bolstered by a $7 million equity raise [42] - Cost-saving initiatives, including a 20% reduction in the US workforce, are expected to generate annualized savings of $5 million to $6 million [33] Q&A Session Summary Question: What percentage of dentists who adopt your lasers continue to use them? - Management indicated that about 90% of new doctors use the lasers at least weekly, with a significant portion using them daily, supported by a 20% increase in consumables [1] Question: What major education programs and events are planned for this year? - The company has over 500 planned events, including regional/national Waterlase Trial Programs and international training events in Prague and Dubai [2][3] Question: How much impact do macro headwinds have on pricing? - Management stated that price increases have not faced much pushback, as doctors are willing to invest in laser technology despite economic conditions [7] Question: What percentage of sales are financed versus paid in cash? - International sales are paid in cash, while US sales are typically financed through credit unions or third-party financing over seven to eight years [8] Question: Do you have additional manufacturing capacity? - The company has excess manufacturing capacity and can add shifts to meet increased demand [12]

[Business Overview](index=3&type=section&id=Item%201.%20Business) BIOLASE provides advanced dental laser systems for minimally invasive procedures, operating in a competitive, regulated global market [Company Profile and Market Position](index=7&type=section&id=1.1%20Overview) BIOLASE leads in dental laser systems, with 61% of sales from lasers and a $50 billion market opportunity - BIOLASE is a leading provider of advanced laser systems for the dental industry, offering Waterlase (all-tissue) and diode (soft-tissue) systems for minimally invasive dental procedures[233](index=233&type=chunk)[260](index=260&type=chunk)[522](index=522&type=chunk) Revenue Breakdown by Category (2023) | Category | % of Total Sales | | :------------------------ | :--------------- | | Lasers | 61% | | Consumables, Accessories, Services | 39% | - The global dental equipment market is estimated at **$10.6 billion** (2022) and projected to grow at a **CAGR of 6.2%** through 2030, with dental laser equipment as the fastest-growing segment. BIOLASE estimates a market opportunity over **$50 billion**[249](index=249&type=chunk) Key Financial Highlights (2021-2023) | Metric | 2023 ($M) | 2022 ($M) | 2021 ($M) | | :------------ | :-------- | :-------- | :-------- | | Net Revenues | 49.2 | 48.5 | 39.2 | | Net Losses | (20.6) | (28.6) | (16.2) | | Total Assets | 35.1 | 38.2 | N/A | [Industry Background and Market Opportunity](index=8&type=section&id=1.2%20Industry%20Background%20and%20Market%20Opportunity) The dental industry faces challenges with patient anxiety and traditional instruments, creating a significant market for all-tissue dental laser systems - An estimated one-third of the worldwide population avoids dentists due to 'dental anxiety or fear,' leading to under-diagnosed and under-treated conditions[262](index=262&type=chunk) - Traditional dental instruments (high-speed drills, scalpels, electrosurge systems) are associated with pain, bleeding, post-operative swelling, and discomfort, often requiring anesthesia and longer recovery times[250](index=250&type=chunk)[251](index=251&type=chunk)[292](index=292&type=chunk) - There is a large market opportunity for all-tissue dental laser systems that offer superior clinical outcomes, reduce the need for anesthesia, and minimize trauma and discomfort[268](index=268&type=chunk) [Products and Solutions](index=10&type=section&id=1.3%20Products%20and%20Solutions) BIOLASE offers Waterlase all-tissue and diode soft-tissue laser systems, OEM products, and related consumables for minimally invasive dental and medical applications - Waterlase all-tissue laser systems (iPlus, Express, MDX) use a patented combination of water and laser energy, are FDA cleared for over 80 clinical indications, and can perform procedures with reduced heat, vibration, bleeding, or pressure, often eliminating the need for anesthesia[260](index=260&type=chunk)[265](index=265&type=chunk)[294](index=294&type=chunk) - Diode soft-tissue laser systems (Epic X, Epic Hygiene, Epic Q, Epic 10) perform soft tissue, hygiene, cosmetic procedures (including teeth whitening), and provide temporary pain relief. The Epic Hygiene is FDA 510(k) cleared for Laser Bacterial Reduction[239](index=239&type=chunk)[253](index=253&type=chunk) - BIOLASE has an exclusive OEM agreement for the EdgePro, a microfluidic irrigation device for root canals, developed in partnership with EdgeEndo[266](index=266&type=chunk) - The company also manufactures and sells consumable products and accessories, including disposable laser tips, flexible fibers, hand pieces, teeth whitening gel kits, and a new fractional handpiece accessory for skin resurfacing[247](index=247&type=chunk)[267](index=267&type=chunk)[295](index=295&type=chunk) [Benefits of Laser Solutions](index=12&type=section&id=1.4%20Benefits%20of%20Laser%20Solutions) BIOLASE's laser systems offer improved clinical outcomes, expanded procedures, and reduced aerosols for professionals, while patients experience less pain, faster healing, and decreased anxiety - Benefits for dental professionals include improved clinical outcomes, expanded range of procedures (e.g., surgical and cosmetic), greater case acceptance, and **98% less aerosols** compared to traditional handpieces[240](index=240&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) - Patient benefits include less pain, fewer shots, faster healing, decreased fear and anxiety, and fewer appointments, often without the need for anesthesia, leading to reduced trauma and quicker recovery[233](index=233&type=chunk)[273](index=273&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[522](index=522&type=chunk) [Business Strategy](index=13&type=section&id=1.5%20Business%20Strategy) BIOLASE's strategy focuses on increasing awareness, strengthening education, improving product quality, expanding sales, innovating, and protecting intellectual property - Key strategic elements include increasing awareness and education in laser dentistry (**20 webinars, 147 seminars, 41 tradeshows in 2023**), strengthening customer training and clinical education (new training facility, Laser Smiles dental office), and improving product quality[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk)[304](index=304&type=chunk) - The company plans to strengthen sales and distribution capabilities by expanding its field sales force and distributor network, targeting group practices, GPOs, and government channels[306](index=306&type=chunk) - Innovation and leveraging existing technologies into adjacent medical applications (ophthalmology, otolaryngology, orthopedics, podiatry, pain management, aesthetics/dermatology, veterinary, consumer products) and generating revenue through OEM partnerships are also key strategies[278](index=278&type=chunk)[309](index=309&type=chunk)[353](index=353&type=chunk) - Protecting intellectual property rights by expanding its patent portfolio and strategically enforcing them worldwide is a core focus[307](index=307&type=chunk) [Manufacturing and Supply Chain](index=15&type=section&id=1.6%20Manufacturing%20and%20Supply%20Chain) BIOLASE manufactures laser systems in-house but relies on single-source suppliers for key components, posing risks to production and costs - All laser systems are manufactured, assembled, and tested in-house at a 26,000 square foot facility in Corona, California, which is ISO 13485 certified and FDA-registered[311](index=311&type=chunk) - The company relies on third-party suppliers for components, with three key Waterlase components (power suppliers, laser crystals, fiber components) sourced from separate single-source suppliers[280](index=280&type=chunk) - Dependence on single-source suppliers creates risks of manufacturing delays, re-engineering, significant costs, and sales disruptions if an interruption occurs, though the company actively seeks alternate suppliers[280](index=280&type=chunk) [Marketing and Sales Operations](index=16&type=section&id=1.7%20Marketing%20and%20Sales%20Operations) BIOLASE markets globally through education and digital media, with direct sales in the U.S. and distributors internationally, experiencing typical quarterly revenue fluctuations - Marketing efforts focus on driving brand awareness and educating dental practitioners and patients about the clinical benefits of laser solutions, including participation in WCLI and specialized academies[313](index=313&type=chunk)[346](index=346&type=chunk) - U.S. sales are primarily direct through a field and in-house sales force, while international sales are conducted through distributors, with direct sales in Germany and India[286](index=286&type=chunk)[318](index=318&type=chunk) Net Revenue by Geographic Location (2021-2023) | Geographic Location | 2023 ($M) | 2022 ($M) | 2021 ($M) | | :------------------ | :-------- | :-------- | :-------- | | United States | 33.883 | 33.876 | 25.384 | | International | 15.281 | 14.586 | 13.804 | | **Net Revenue** | **49.164**| **48.462**| **39.188**| - International revenue accounted for approximately **31%** of net revenue in 2023, **30%** in 2022, and **35%** in 2021[285](index=285&type=chunk)[433](index=433&type=chunk) - Revenue typically fluctuates quarterly, with lower first-quarter revenue and stronger fourth-quarter revenue due to dental practitioners' year-end buying patterns and tax incentives[2](index=2&type=chunk)[287](index=287&type=chunk)[460](index=460&type=chunk) [Engineering and Product Development](index=19&type=section&id=1.8%20Engineering%20and%20Product%20Development) BIOLASE's engineering team focuses on new product platforms, existing product enhancements, and expansion into adjacent medical applications Engineering and Product Development Expenses (2021-2023) | Year | Expense ($M) | | :--- | :----------- | | 2023 | 6.0 | | 2022 | 7.3 | | 2021 | 6.0 | - Activities focus on developing new product platforms, improving existing products (e.g., faster cutting speed, ease of use, less anesthesia), and extending into adjacent medical applications like ophthalmology, otolaryngology, and aesthetics[321](index=321&type=chunk)[353](index=353&type=chunk) [Intellectual Property and Competition](index=19&type=section&id=1.9%20Intellectual%20Property%20and%20Competition) BIOLASE protects its Waterlase technology with 241 active patents in a competitive market where product performance, pricing, and IP are key factors - As of December 31, 2023, BIOLASE maintained approximately **241 active** and **21 pending** U.S. and international patents, predominantly related to Waterlase technology, with existing patents expiring between 2025 and 2042[260](index=260&type=chunk)[354](index=354&type=chunk) - The market is competitive, with factors like product performance, pricing, IP protection, customer education, and distribution being key. Competitors include other laser companies and traditional tool manufacturers[323](index=323&type=chunk)[355](index=355&type=chunk) - Traditional tools are generally less expensive, and competitors may develop superior or cheaper products, potentially leading to price reductions, reduced margins, or product obsolescence[325](index=325&type=chunk)[356](index=356&type=chunk) [Government Regulations](index=20&type=section&id=1.10%20Government%20Regulations) BIOLASE's products are subject to extensive U.S. and international regulations, including FDA clearance, cGMP, post-market surveillance, and healthcare fraud laws, with non-compliance posing significant risks - Medical devices are subject to FDA regulation, requiring 510(k) premarket clearance or PMA approval, adherence to cGMP/QSR, and post-market surveillance, including adverse event reporting[329](index=329&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk)[360](index=360&type=chunk) - Products sold internationally must comply with local regulations, such as the CE Mark in the European Union, indicating conformance with EU laws and regulations[11](index=11&type=chunk)[332](index=332&type=chunk)[367](index=367&type=chunk) - The company is subject to various U.S. healthcare fraud and abuse laws (Anti-Kickback Statute, Stark Law, False Claims Act, Physician Payments Sunshine Act) and the Foreign Corrupt Practices Act (FCPA), which prohibit improper payments and require accurate record-keeping[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk)[371](index=371&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk) - Compliance with health information privacy and security laws, including HIPAA and HITECH, is required, especially when acting as a business associate to healthcare providers. Breaches can lead to significant penalties and reputational damage[343](index=343&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk) - Third-party reimbursement policies for dental and medical treatments vary, and changes in these policies or measures to reduce healthcare costs (e.g., Affordable Care Act, Medicare payment reductions) could adversely impact product utilization and demand[13](index=13&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk)[411](index=411&type=chunk)[473](index=473&type=chunk)[501](index=501&type=chunk) [Human Capital Resources](index=30&type=section&id=1.11%20Human%20Capital%20Resources) BIOLASE employs 157 individuals globally, prioritizing diversity, an inclusive culture, and performance-based compensation, with key executive officers overseeing operations - As of December 31, 2023, BIOLASE employed **157 full-time employees** in five countries, with **142** in the United States[381](index=381&type=chunk) - The company emphasizes diversity, an inclusive culture, and employee development, with compensation tied to performance and market data. Employee retention data is reviewed monthly by leaders and quarterly by the Board[382](index=382&type=chunk) Executive Officers as of March 21, 2024 | Name | Age | Position | | :-------------- | :-- | :------------------------------ | | John R. Beaver | 62 | President and Chief Executive Officer | | Jennifer Bright | 52 | Chief Financial Officer | | Steven Sandor | 43 | Chief Operating Officer | [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks across operations, technology, regulatory compliance, and stock market volatility [Risks Related to Business and Operations](index=33&type=section&id=1A.1%20Risks%20Related%20to%20Business%20and%20Operations) BIOLASE faces substantial doubt about its going concern ability due to recurring losses, requiring additional capital, and is vulnerable to market acceptance, supply chain, and debt covenant risks - Substantial doubt exists about the company's ability to continue as a going concern due to recurring net losses (**$20.6M in 2023, $28.6M in 2022, $16.2M in 2021**) and negative cash flow from operations[33](index=33&type=chunk)[391](index=391&type=chunk)[420](index=420&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) - The company is vulnerable to global economic uncertainty and volatility, which could adversely affect its business and financial condition[392](index=392&type=chunk)[421](index=421&type=chunk) - There is a need to raise additional capital, and failure to secure funds on acceptable terms could hinder business plan execution and lead to curtailment of capital expenditures[35](index=35&type=chunk)[422](index=422&type=chunk)[423](index=423&type=chunk)[445](index=445&type=chunk) - Slow adoption of laser technologies by dentists and patients, coupled with challenges in training practitioners, could limit market acceptance and market share[35](index=35&type=chunk)[395](index=395&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk)[447](index=447&type=chunk) - Reliance on third-party distributors for a significant portion of sales (**31% in 2023**) poses risks if they do not commit necessary resources or if agreements are terminated[35](index=35&type=chunk)[394](index=394&type=chunk)[446](index=446&type=chunk) - Risks include inconsistent clinical results, limitations on the ability to use net operating loss carryforwards (**$110M federal, $80M state as of Dec 31, 2023**), manufacturing problems, and costly product liability claims[37](index=37&type=chunk)[38](index=38&type=chunk)[397](index=397&type=chunk)[426](index=426&type=chunk)[427](index=427&type=chunk)[428](index=428&type=chunk)[429](index=429&type=chunk)[430](index=430&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk)[451](index=451&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) - Dependence on single-source or limited suppliers for key components (e.g., crystal, fiber, hand pieces for Waterlase) could lead to manufacturing delays and sales disruptions[40](index=40&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk)[455](index=455&type=chunk)[456](index=456&type=chunk) - International operations (**31% of net revenue in 2023**) are subject to political, economic, health, and currency fluctuation risks[40](index=40&type=chunk)[230](index=230&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk)[457](index=457&type=chunk)[459](index=459&type=chunk) - Revenue and operating results fluctuate due to seasonality, making quarter-to-quarter comparisons unreliable[2](index=2&type=chunk)[437](index=437&type=chunk)[460](index=460&type=chunk) - Consolidated manufacturing operations in one facility (Corona, CA) are vulnerable to disruptions from natural disasters, labor disputes, or equipment failures[43](index=43&type=chunk)[438](index=438&type=chunk)[490](index=490&type=chunk) - Litigation can be costly and divert management attention[3](index=3&type=chunk)[461](index=461&type=chunk) - Loss of key management personnel or inability to attract/retain qualified staff could harm growth strategy[4](index=4&type=chunk)[462](index=462&type=chunk) - Failure to meet debt covenants in the Credit Agreement with SWK could accelerate payment obligations, limit operating flexibility, and risk foreclosure on assets[6](index=6&type=chunk)[439](index=439&type=chunk)[440](index=440&type=chunk)[441](index=441&type=chunk)[463](index=463&type=chunk)[464](index=464&type=chunk)[465](index=465&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk)[493](index=493&type=chunk) [Risks Related to Information Technology and Intellectual Property](index=42&type=section&id=1A.2%20Risks%20Related%20to%20Information%20Technology%20and%20Intellectual%20Property) Security breaches, inadequate IP protection, and non-compliance with SEC reporting or internal controls pose significant financial, legal, and reputational risks - Security breaches of IT systems (e.g., malware, hacking) could lead to data theft, operational delays, cyber extortion, liability for personal information breaches, and reputational damage[1](index=1&type=chunk)[42](index=42&type=chunk)[436](index=436&type=chunk)[488](index=488&type=chunk) - Failure to adequately protect patents and other intellectual property rights could result in loss of market share to competitors or inability to operate profitably[8](index=8&type=chunk)[45](index=45&type=chunk)[496](index=496&type=chunk) - Claims of infringement by third parties could lead to costly litigation, significant liabilities, product redesigns, or the inability to sell certain products[9](index=9&type=chunk)[45](index=45&type=chunk)[468](index=468&type=chunk) - Failure to comply with Exchange Act reporting obligations and Section 404 of the Sarbanes-Oxley Act, or to maintain adequate internal control over financial reporting, could adversely affect business, financial condition, and investor confidence[7](index=7&type=chunk)[45](index=45&type=chunk)[232](index=232&type=chunk)[466](index=466&type=chunk)[495](index=495&type=chunk) [Risks Related to Regulatory Environment](index=46&type=section&id=1A.3%20Risks%20Related%20to%20Regulatory%20Environment) Extensive government regulations, including FDA clearances, off-label promotion restrictions, product recalls, and healthcare reimbursement changes, pose substantial risks to BIOLASE's business - Changes in government regulation, failure to comply, or inability to obtain/maintain necessary approvals (FDA, international) could materially adversely affect business, financial condition, and results of operations[10](index=10&type=chunk)[46](index=46&type=chunk)[498](index=498&type=chunk) - New products or significant modifications require additional FDA clearances (510(k) or PMA), which can be costly, time-consuming, and delay commercialization[15](index=15&type=chunk)[16](index=16&type=chunk)[49](index=49&type=chunk)[470](index=470&type=chunk)[475](index=475&type=chunk)[503](index=503&type=chunk) - Promoting products for unapproved or 'off-label' uses is prohibited and can lead to regulatory actions, fines, and reputational damage[49](index=49&type=chunk)[476](index=476&type=chunk)[503](index=503&type=chunk) - Products are subject to recalls and other regulatory actions after receiving FDA clearance, and failure to comply with FDA's QSR or medical device reporting regulations could result in enforcement actions, product recalls, and business disruption[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[50](index=50&type=chunk)[478](index=478&type=chunk)[504](index=504&type=chunk)[505](index=505&type=chunk) - Changes to reimbursement rates for procedures using products and measures to reduce healthcare costs may adversely impact business[13](index=13&type=chunk)[48](index=48&type=chunk)[473](index=473&type=chunk)[501](index=501&type=chunk) - Exposure to liabilities under the FCPA could have a material adverse effect on business, financial condition, and results of operations[14](index=14&type=chunk)[48](index=48&type=chunk)[502](index=502&type=chunk) - The Inflation Reduction Act's Excise Tax on stock redemptions may reduce cash available to shareholders[471](index=471&type=chunk) [Risks Related to Common Stock](index=50&type=section&id=1A.4%20Risks%20Related%20to%20Common%20Stock) The company's common stock faces risks of Nasdaq delisting, high volatility, substantial dilution from future equity sales, and lack of dividends - Failure to meet Nasdaq's continued listing requirements (e.g., minimum **$1.00** bid price, **$2.5M** stockholders' equity) could result in delisting, negatively impacting stock price and ability to raise capital[20](index=20&type=chunk)[22](index=22&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[507](index=507&type=chunk)[509](index=509&type=chunk)[510](index=510&type=chunk)[539](index=539&type=chunk) - The market price and trading volume of common stock have been and could continue to be highly volatile, influenced by operating results, market conditions, and company/competitor announcements[23](index=23&type=chunk)[52](index=52&type=chunk)[483](index=483&type=chunk)[511](index=511&type=chunk)[539](index=539&type=chunk) - Future sales of equity or convertible securities, exercises of outstanding warrants and options, or grants of equity-based awards could result in substantial dilution to stockholders[24](index=24&type=chunk)[54](index=54&type=chunk)[511](index=511&type=chunk)[540](index=540&type=chunk) - Lack of research or inaccurate/unfavorable research by securities analysts could cause share price and trading volume to decline[25](index=25&type=chunk)[55](index=55&type=chunk)[512](index=512&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future, meaning stockholders will benefit only if the stock appreciates in value[55](index=55&type=chunk)[541](index=541&type=chunk) [Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) As of the filing date, there are no unresolved comments from the SEC staff [Unresolved Staff Comments](index=36&type=section&id=1B.1%20Unresolved%20Staff%20Comments) As of the filing date, there are no unresolved comments from the SEC staff - There are no unresolved staff comments[55](index=55&type=chunk)[485](index=485&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) BIOLASE maintains a cyber risk management program, overseen by management and the Board, incorporating NIST standards [Cybersecurity Risk Management](index=36&type=section&id=1C.1%20Cybersecurity%20Risk%20Management) BIOLASE maintains a cyber risk management program, overseen by management and third-party providers, designed to identify, assess, manage, mitigate, and respond to cybersecurity threats - BIOLASE maintains a cyber risk management program to identify, assess, manage, mitigate, and respond to cybersecurity threats, leveraging third-party technology and expertise[26](index=26&type=chunk)[55](index=55&type=chunk)[513](index=513&type=chunk) - The program incorporates NIST Cybersecurity Framework (CSF) standards, including annual third-party risk assessments and development of risk mitigation plans[513](index=513&type=chunk) - Management, in conjunction with IT and cybersecurity service providers, oversees the program, and the Audit Committee and Board of Directors provide oversight of cybersecurity risks[513](index=513&type=chunk)[543](index=543&type=chunk) [Properties](index=37&type=section&id=Item%202.%20Properties) BIOLASE leases approximately 59,000 square feet globally, including corporate headquarters and a manufacturing facility [Leased Facilities](index=37&type=section&id=2.1%20Leased%20Facilities) As of December 31, 2023, BIOLASE owned or leased approximately 59,000 square feet globally, with its main facilities in Lake Forest and Corona, California - As of December 31, 2023, BIOLASE owned or leased approximately **59,000 square feet** of space worldwide[487](index=487&type=chunk) - Leased facilities include a **20,000 sq ft** corporate headquarters in Lake Forest, CA (lease expires Dec 31, 2025) and a **26,000 sq ft** manufacturing facility in Corona, CA (lease expires June 30, 2025)[487](index=487&type=chunk) - The company believes its current facilities are sufficient for operations and suitable additional space is available[544](index=544&type=chunk) [Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) BIOLASE is involved in various claims and litigation, including a pending patent infringement lawsuit for Waterlase [Patent Litigation](index=37&type=section&id=3.1%20Patent%20Litigation) BIOLASE is involved in various claims and litigation incidental to its business, including a patent infringement lawsuit filed by PIPStek, LLC - BIOLASE is involved in various claims, litigation matters, and regulatory proceedings incidental to its business[3](index=3&type=chunk)[515](index=515&type=chunk) - A patent infringement lawsuit was filed by PIPStek, LLC in January 2023, alleging BIOLASE's Waterlase dental laser infringes on three patents. BIOLASE denies the allegations and is vigorously defending the case, with trial set for May 12, 2025[55](index=55&type=chunk)[581](index=581&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety [Mine Safety Disclosures](index=37&type=section&id=4.1%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety - Not applicable[32](index=32&type=chunk)[545](index=545&type=chunk) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Information on common stock trading, dividend policy, equity compensation, and related stockholder matters is provided [Market Information](index=58&type=section&id=5.1%20Market%20Information) BIOLASE's common stock trades on Nasdaq under 'BIOL', with a closing price of $0.1348 per share as of March 14, 2024 - Common stock is traded on the Nasdaq Capital Market under the symbol 'BIOL'[58](index=58&type=chunk)[517](index=517&type=chunk) - As of March 14, 2024, the closing price was **$0.1348 per share**, with **11 stockholders of record**[57](index=57&type=chunk) [Dividend Policy](index=58&type=section&id=5.2%20Dividend%20Policy) BIOLASE does not anticipate paying cash dividends in the foreseeable future, intending to retain funds for growth, and is restricted by its Credit Agreement - BIOLASE does not anticipate paying any cash dividends in the foreseeable future, intending to retain available funds for future growth[31](index=31&type=chunk)[546](index=546&type=chunk) - The Credit Agreement with SWK prohibits declaring and paying cash dividends, and no cash dividends were paid or declared in 2021, 2022, or 2023[31](index=31&type=chunk)[809](index=809&type=chunk) [Recent Sales of Unregistered Securities](index=58&type=section&id=5.3%20Recent%20Sales%20of%20Unregistered%20Securities) There were no recent sales of unregistered securities - None[32](index=32&type=chunk)[58](index=58&type=chunk)[212](index=212&type=chunk) [Equity Compensation Plan Information](index=58&type=section&id=5.4%20Equity%20Compensation%20Plan%20Information) The company operates under the 2018 Long-Term Incentive Plan, with 55,000 units available for issuance at a weighted average exercise price of $1,490.37 as of December 31, 2023 - The 2018 Long-Term Incentive Plan (amended multiple times) replaced the 2002 Plan for future awards, aiming to align interests, attract/retain personnel, and motivate long-term success[33](index=33&type=chunk)[34](index=34&type=chunk)[518](index=518&type=chunk)[827](index=827&type=chunk) Equity Compensation Plan Summary (as of December 31, 2023) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options and Release of Restricted Stock Units | Weighted Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | | :-------------------------------- | :------------------------------------------------------------------------------------------------- | :------------------------------------- | :------------------------------------------------------------------------------------------- | | Equity Compensation Plan Approved by Stockholders | 55,000 | $1,490.37 | 49,000 | | Equity Compensation Plan Not Approved by Stockholders | — | — | — | | **Total** | **55,000** | **$1,490.37** | **49,000** | [Issuer Purchases of Equity Securities](index=58&type=section&id=5.5%20Issuer%20Purchases%20of%20Equity%20Securities) There were no issuer purchases of equity securities during the reported period - None[58](index=58&type=chunk)[547](index=547&type=chunk) [Reserved](index=39&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Reserved](index=39&type=section&id=6.1%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes BIOLASE's financial condition, operating results, liquidity, and capital resources [Overview](index=60&type=section&id=7.1%20Overview) This section provides an overview of BIOLASE as a leading provider of advanced laser systems for the dental industry, highlighting the benefits of its proprietary systems for both dental practitioners and patients - BIOLASE is a leading provider of advanced laser systems for the dental industry, developing, manufacturing, marketing, and selling laser systems that offer significant benefits for dental practitioners and patients[522](index=522&type=chunk) - The company's proprietary systems enable minimally invasive dental procedures, leading to clinically superior results, less pain, faster healing, and improved patient and practitioner satisfaction[522](index=522&type=chunk) [Recent Developments](index=60&type=section&id=7.2%20Recent%20Developments) BIOLASE has undertaken several financing activities and addressed Nasdaq listing compliance issues, including public offerings, debt amendments, and a reverse stock split - Completed a February 2024 public offering, raising approximately **$7.0 million** gross proceeds through units of common stock, Class A warrants, Class B warrants, and pre-funded units[523](index=523&type=chunk)[888](index=888&type=chunk) - Completed a December 2023 registered direct offering and concurrent private placement, issuing common stock, pre-funded warrants, and warrants, raising approximately **$1.4 million** gross proceeds[524](index=524&type=chunk)[836](index=836&type=chunk) - Entered into the Eleventh Amendment to the Credit Agreement in November 2023, reducing principal amortization payments and adjusting minimum consolidated unencumbered liquid assets requirements[525](index=525&type=chunk)[786](index=786&type=chunk) - Issued Series J Convertible Redeemable Preferred Stock and warrants in September 2023, raising **$4.5 million** gross proceeds, and Series H Convertible Redeemable Preferred Stock and warrants in May 2023, raising **$4.6 million** gross proceeds[528](index=528&type=chunk)[569](index=569&type=chunk)[587](index=587&type=chunk)[834](index=834&type=chunk)[835](index=835&type=chunk) - Effected a one-for-one hundred (**1:100**) reverse stock split in July 2023 to regain Nasdaq bid price compliance[21](index=21&type=chunk)[529](index=529&type=chunk)[655](index=655&type=chunk) - Received Nasdaq deficiency letters for minimum bid price (January 2023, March 2024) and stockholders' equity (November 2023). Compliance for stockholders' equity was regained in February 2024, but a new bid price deficiency was issued in March 2024[20](index=20&type=chunk)[22](index=22&type=chunk)[50](index=50&type=chunk)[509](index=509&type=chunk)[526](index=526&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[865](index=865&type=chunk)[889](index=889&type=chunk) [Critical Accounting Estimates](index=66&type=section&id=7.3%20Critical%20Accounting%20Estimates) Financial statement preparation requires significant estimates for revenue recognition, inventory, long-lived assets, goodwill, stock-based payments, and warranty costs - Key accounting estimates include allowances on accounts receivable, inventory, and deferred taxes, as well as estimates for accrued warranty expenses, goodwill, revenue deferrals, stock-based compensation, and contingent liabilities[532](index=532&type=chunk)[646](index=646&type=chunk) - Revenue from product sales (laser systems and consumables) is recognized at a single point in time (**89% of net revenue in 2023**), typically upon shipment, while service revenue (training and extended warranties) is recognized over time (**11% of net revenue in 2023**)[69](index=69&type=chunk)[533](index=533&type=chunk)[534](index=534&type=chunk)[695](index=695&type=chunk)[697](index=697&type=chunk)[720](index=720&type=chunk) - Inventory is valued at the lower of cost or net realizable value, with an allowance for excess and obsolete inventory. Write-downs for excess and obsolete inventory were **$0.7 million** in 2023, **$2.8 million** in 2022, and **$0.3 million** in 2021[71](index=71&type=chunk)[686](index=686&type=chunk)[713](index=713&type=chunk)[738](index=738&type=chunk) - Goodwill and other intangible assets with indefinite lives are evaluated for impairment annually. Long-lived assets are reviewed for impairment when indicators are present[49](index=49&type=chunk)[99](index=99&type=chunk)[658](index=658&type=chunk)[659](index=659&type=chunk)[689](index=689&type=chunk)[716](index=716&type=chunk)[717](index=717&type=chunk) - Stock-based compensation expense is estimated at the grant date using the Black-Scholes option pricing model and recognized over the service period. Total compensation cost was **$1.2 million** in 2023, **$2.3 million** in 2022, and **$1.7 million** in 2021[535](index=535&type=chunk)[729](index=729&type=chunk)[730](index=730&type=chunk) - Warranty costs are accrued as an estimated liability concurrent with revenue recognition, based on historical experience and future conditions. The warranty accrual balance was **$1.9 million** at the end of 2023[536](index=536&type=chunk)[704](index=704&type=chunk)[728](index=728&type=chunk) [Results of Operations](index=70&type=section&id=7.4%20Results%20of%20Operations) In 2023, net revenue increased by 1% to $49.2 million, gross profit improved to 34%, and net loss decreased to $20.6 million, while 2022 saw 24% revenue growth but a lower gross profit percentage and higher net loss Net Revenue by Category (2021-2023) | Category | 2023 ($M) | 2022 ($M) | 2021 ($M) | | :------------------------ | :-------- | :-------- | :-------- | | Laser systems | 30.043 | 31.443 | 25.023 | | Consumables and other | 13.596 | 11.322 | 9.456 | | Services | 5.525 | 5.697 | 4.709 | | **Total Net Revenue** | **49.164**| **48.462**| **39.188**| Key Financial Performance (2021-2023) | Metric | 2023 ($M) | 2022 ($M) | 2021 ($M) | | :------------------------ | :-------- | :-------- | :-------- | | Net Revenue | 49.164 | 48.462 | 39.188 | | Cost of Revenue | 32.440 | 32.551 | 22.659 | | Gross Profit | 16.724 | 15.911 | 16.529 | | Gross Profit % of Revenue | 34.0% | 32.8% | 42.2% | | Total Operating Expenses | 34.661 | 41.249 | 32.960 | | Loss from Operations | (17.937) | (25.338) | (16.431) |\ | Net Loss | (20.632) | (28.634) | (16.158) | - Net revenue increased by **1%** in 2023 (YoY), primarily due to a **20% increase** in consumables and other revenue, offsetting a **4% decrease** in laser system revenue[74](index=74&type=chunk)[75](index=75&type=chunk)[105](index=105&type=chunk) - Gross profit as a percentage of revenue slightly improved to **34%** in 2023 from **33%** in 2022, despite higher warranty expenses and material costs, due to lower inventory reserve charges[106](index=106&type=chunk) - Operating expenses decreased by **16%** in 2023 (YoY), driven by lower sales and marketing (**15% decrease**), general and administrative (**17% decrease**), and engineering and development (**17% decrease**) expenses[76](index=76&type=chunk)[77](index=77&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Net loss improved to **$20.6 million** in 2023 from **$28.6 million** in 2022[80](index=80&type=chunk)[118](index=118&type=chunk) - Net revenue increased by **24%** in 2022 (YoY), primarily from increased laser adoption, consumable sales, and OEM product launch[81](index=81&type=chunk)[82](index=82&type=chunk)[112](index=112&type=chunk) - Gross profit as a percentage of revenue decreased to **33%** in 2022 from **42%** in 2021, impacted by a **$2.7 million** inventory charge and lower margin OEM products[83](index=83&type=chunk)[113](index=113&type=chunk) - Operating expenses increased by **25%** in 2022 (YoY), mainly due to higher sales and marketing (**41% increase**) and engineering and development (**20% increase**) expenses[84](index=84&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) [Non-GAAP Disclosure](index=76&type=section&id=7.5%20Non-GAAP%20Disclosure) BIOLASE provides Adjusted EBITDA as a non-GAAP measure to enhance transparency and facilitate comparisons of operating results, excluding non-cash and non-recurring items - Management uses Adjusted EBITDA to evaluate core results of operations and trends, believing it provides greater transparency and a more complete understanding of financial performance[119](index=119&type=chunk)[120](index=120&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Adjusted EBITDA is defined as net loss before interest, taxes, depreciation, stock-based compensation, severance expense, change in allowance for doubtful accounts, increase in inventory reserves, and other (income) expense, net[120](index=120&type=chunk) Adjusted EBITDA (2021-2023) | Metric | 2023 ($M) | 2022 ($M) | 2021 ($M) | | :------------------------------------------ | :-------- | :-------- | :-------- | | GAAP net loss attributable to common stockholders | (37.619) | (28.851) | (16.704) | | Deemed dividend on convertible preferred stock | 16.987 | 217 | 546 | | GAAP net loss | (20.632) | (28.634) | (16.158) | | Adjustments: | | | | | Interest expense, net | 2.361 | 2.749 | 2.224 | | Income tax provision | 31 | 109 | 65 | | Depreciation | 2.798 | 497 | 400 | | Severance expense | 236 | — | — | | Change in allowance for doubtful accounts | 533 | 40 | (202) | | Loss on patent litigation settlement | — | — | 315 | | Stock-based and other non-cash compensation | 1.232 | 2.303 | 1.662 | | Increase in inventory reserve and disposals | 715 | 2.798 | — | | Gain on debt forgiveness | — | — | (3.014) | | Other income, net | (48) | — | — | | **Adjusted EBITDA** | **(12.774)**| **(20.138)**| **(14.708)**| [Liquidity and Capital Resources](index=77&type=section&id=7.6%20Liquidity%20and%20Capital%20Resources) BIOLASE faces substantial doubt about its going concern ability due to recurring losses and negative cash flows, necessitating additional capital or significant operational improvements - Recurring losses from operations (**$17.9M in 2023, $25.3M in 2022, $16.4M in 2021**) and negative cash flows from operations for the past three years raise substantial doubt about the company's ability to continue as a going concern[92](index=92&type=chunk)[142](index=142&type=chunk)[679](index=679&type=chunk)[680](index=680&type=chunk) - As of December 31, 2023, cash and cash equivalents were **$6.6 million** (up **$2.4 million** from 2022) and working capital was **$5.2 million**[93](index=93&type=chunk)[126](index=126&type=chunk)[650](index=650&type=chunk) - Cash provided by financing activities was **$17.4 million** in 2023, primarily from public offerings, partially offset by **$14.1 million** used in operating activities[93](index=93&type=chunk)[134](index=134&type=chunk)[650](index=650&type=chunk) - The company needs to raise additional capital or increase sales and reduce expenses to continue operations beyond the next 12 months[129](index=129&type=chunk)[143](index=143&type=chunk)[651](index=651&type=chunk)[681](index=681&type=chunk) Consolidated Cash Flows Summary (2021-2023) | Cash Flow Activity | 2023 ($M) | 2022 ($M) | 2021 ($M) | | :-------------------------------- | :-------- | :-------- | :-------- | | Operating activities | (14.091) | (26.761) | (16.710) | | Investing activities | (1.129) | (3.727) | (707) | | Financing activities | 17.434 | 4.603 | 29.954 | | Effect of exchange rates on cash | 171 | (109) | (238) | | Net change in cash and cash equivalents | 2.385 | (25.994) | 12.299 | [Contractual Obligations](index=82&type=section&id=7.7%20Contractual%20Obligations) BIOLASE's contractual obligations primarily include operating leases, a term loan with SWK, an EIDL Loan, and purchase commitments, totaling $32.08 million as of December 31, 2023 - Operating lease obligations for real property, office copiers, and IT equipment, with future minimum rent payments of approximately **$1.9 million** as of December 31, 2023[138](index=138&type=chunk)[155](index=155&type=chunk)[159](index=159&type=chunk)[616](index=616&type=chunk)[617](index=617&type=chunk)[618](index=618&type=chunk)[619](index=619&type=chunk) - The SWK Loan has an outstanding principal of **$13.1 million** (as of Nov 15, 2023) with a maturity date of May 31, 2025, and requires compliance with financial covenants, including maintaining minimum unencumbered liquid assets[156](index=156&type=chunk)[779](index=779&type=chunk)[784](index=784&type=chunk)[786](index=786&type=chunk) - The company has a **$150,000** EIDL Loan from the SBA, with payments starting in November 2022 and extending through July 2050[157](index=157&type=chunk)[753](index=753&type=chunk)[778](index=778&type=chunk) - Purchase commitments with suppliers totaled **$12.6 million** as of December 31, 2023, primarily expected to be completed within one year[158](index=158&type=chunk)[622](index=622&type=chunk) Expected Cash Requirements for Contractual Obligations (as of December 31, 2023, in thousands) | Obligation | 1 Year ($M) | 2-3 Years ($M) | 4-5 Years ($M) | >5 Years ($M) | Total ($M) | | :---------------------- | :---------- | :------------- | :------------- | :------------ | :--------- | | Operating lease obligations | 1.049 | 0.820 | — | — | 1.869 | | Purchase obligations | 12.615 | 0.004 | — | — | 12.619 | | Loan interest | 1.867 | 0.926 | 0.012 | 0.077 | 2.882 | | Loan principal | 2.265 | 12.295 | 0.006 | 0.144 | 14.710 | | **Total** | **17.796** | **14.045** | **0.018** | **0.221** | **32.080** | [Financial Statements and Supplementary Data](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements, including the independent auditor's report and detailed notes [Report of Independent Registered Public Accounting Firm](index=99&type=section&id=8.1%20Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Macias Gini & O'Connell LLP issued an unqualified opinion on BIOLASE's 2023 financial statements, noting going concern doubt and critical audit matters related to goodwill and preferred stock valuation - Macias Gini & O'Connell LLP issued an unqualified opinion on the 2023 financial statements but included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern[224](index=224&type=chunk)[225](index=225&type=chunk)[623](index=623&type=chunk)[625](index=625&type=chunk) - Critical audit matters for 2023 included the valuation of goodwill (due to significant estimation in determining fair value) and the fair value measurement of Series H & J Convertible Redeemable Preferred Stock and Warrants (due to complex accounting and limited observable market data)[626](index=626&type=chunk)[628](index=628&type=chunk)[630](index=630&type=chunk) - BDO USA, P.C. provided an unqualified opinion for the 2021 and 2022 consolidated financial statements, also noting substantial doubt about the company's going concern ability[609](index=609&type=chunk)[635](index=635&type=chunk) [Consolidated Financial Statements](index=104&type=section&id=8.2%20Consolidated%20Financial%20Statements) This section presents BIOLASE's audited consolidated Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit), and Statements of Cash Flows for 2021-2023 - Consolidated Balance Sheets as of December 31, 2023 and 2022 are presented[104](index=104&type=chunk)[613](index=613&type=chunk)[666](index=666&type=chunk) - Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023, 2022, and 2021 are presented[105](index=105&type=chunk)[639](index=639&type=chunk)[668](index=668&type=chunk) - Consolidated Statements of Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit) for the years ended December 31, 2023, 2022, and 2021 are presented[106](index=106&type=chunk)[615](index=615&type=chunk)[669](index=669&type=chunk) - Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021 are presented[109](index=109&type=chunk)[643](index=643&type=chunk)[671](index=671&type=chunk) [Notes to Consolidated Financial Statements](index=110&type=section&id=8.3%20Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies, liquidity, goodwill, income taxes, debt, preferred stock, and a revision of prior interim financial statements - The notes detail the basis of presentation, use of estimates, fair value of financial instruments, and concentration of credit risk, interest rate risk, and foreign currency exchange rate[645](index=645&type=chunk)[646](index=646&type=chunk)[647](index=647&type=chunk)[648](index=648&type=chunk)[649](index=649&type=chunk)[675](index=675&type=chunk)[676](index=676&type=chunk)[677](index=677&type=chunk) - Liquidity and management's plans highlight recurring losses and negative cash flows, raising substantial doubt about the company's ability to continue as a going concern, necessitating additional capital or increased sales/reduced expenses[650](index=650&type=chunk)[651](index=651&type=chunk)[679](index=679&type=chunk)[680](index=680&type=chunk)[681](index=681&type=chunk) - Details on goodwill and intangible assets, including annual impairment tests and the absence of amortization expense for fully amortized intangible assets[742](index=742&type=chunk)[743](index=743&type=chunk)[771](index=771&type=chunk) - Income tax information includes current and deferred provisions, a full valuation allowance against net deferred tax assets (**$35.8M as of Dec 31, 2023**), and net operating loss carryforwards (**$110M federal, $80M state**) subject to Section 382 limitations[745](index=745&type=chunk)[746](index=746&type=chunk)[747](index=747&type=chunk)[748](index=748&type=chunk)[772](index=772&type=chunk)[773](index=773&type=chunk)[774](index=774&type=chunk) - Debt details cover the SWK Loan (**$13.1M principal, maturity May 2025**) and EIDL Loan (**$150K**), including amendments, covenants, and interest expenses[752](index=752&type=chunk)[753](index=753&type=chunk)[777](index=777&type=chunk)[778](index=778&type=chunk)[779](index=779&type=chunk)[786](index=786&type=chunk)[806](index=806&type=chunk) - Extensive information on convertible redeemable preferred stock (Series J, Series H, Series I, Series G, Series F) and warrants, detailing issuances, conversions, redemptions, and accounting classifications[555](index=555&type=chunk)[568](index=568&type=chunk)[569](index=569&type=chunk)[570](index=570&type=chunk)[571](index=571&type=chunk)[572](index=572&type=chunk)[574](index=574&type=chunk)[575](index=575&type=chunk)[576](index=576&type=chunk)[577](index=577&type=chunk)[578](index=578&type=chunk)[586](index=586&type=chunk)[587](index=587&type=chunk)[588](index=588&type=chunk)[589](index=589&type=chunk)[590](index=590&type=chunk)[591](index=591&type=chunk)[592](index=592&type=chunk)[594](index=594&type=chunk)[595](index=595&type=chunk)[596](index=596&type=chunk)[600](index=600&type=chunk)[601](index=601&type=chunk)[660](index=660&type=chunk)[661](index=661&type=chunk)[690](index=690&type=chunk)[718](index=718&type=chunk)[809](index=809&type=chunk)[810](index=810&type=chunk)[811](index=811&type=chunk)[812](index=812&type=chunk)[813](index=813&type=chunk)[814](index=814&type=chunk)[815](index=815&type=chunk)[817](index=817&type=chunk)[818](index=818&type=chunk)[819](index=819&type=chunk)[821](index=821&type=chunk)[822](index=822&type=chunk)[823](index=823&type=chunk)[825](index=825&type=chunk)[834](index=834&type=chunk)[835](index=835&type=chunk)[836](index=836&type=chunk)[837](index=837&type=chunk)[838](index=838&type=chunk)[839](index=839&type=chunk)[840](index=840&type=chunk)[841](index=841&type=chunk)[842](index=842&type=chunk)[843](index=843&type=chunk)[844](index=844&type=chunk)[845](index=845&type=chunk) - Revision of previously issued unaudited interim financial statements for Q2 and Q3 2023 to correct the presentation of accretion of redeemable preferred stock as a deemed dividend, impacting net loss per share attributable to common stockholders[166](index=166&type=chunk)[858](index=858&type=chunk)[859](index=859&type=chunk)[860](index=860&type=chunk)[861](index=861&type=chunk)[862](index=862&type=chunk)[882](index=882&type=chunk)[884](index=884&type=chunk)[885](index=885&type=chunk)[886](index=886&type=chunk)[887](index=887&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=54&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) BIOLASE dismissed BDO USA, P.C. and appointed Macias Gini & O'Connell LLP as its new auditor [Dismissal and Appointment of Accountants](index=83&type=section&id=9.1%20Dismissal%20and%20Appointment%20of%20Accountants) BIOLASE dismissed BDO USA, P.C. and appointed Macias Gini & O'Connell LLP as its independent registered public accounting firm, with no disagreements on accounting principles or audit scope - On June 21, 2023, BDO USA, P.C. was dismissed as the independent registered public accounting firm[184](index=184&type=chunk) - Macias Gini & O'Connell LLP (MGO) was engaged as the new independent registered public accounting firm for the fiscal year ending December 31, 2023, effective immediately[163](index=163&type=chunk)[186](index=186&type=chunk) - There were no disagreements with BDO USA on accounting principles, financial statement disclosure, or auditing scope/procedure, nor any reportable events, except for the going concern explanatory paragraph in BDO USA's reports[161](index=161&type=chunk)[162](index=162&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, except for a material weakness in net loss per share calculation [Disclosure Controls and Internal Control Over Financial Reporting](index=84&type=section&id=9A.1%20Disclosure%20Controls%20and%20Internal%20Control%20Over%20Financial%20Reporting) As of December 31, 2023, BIOLASE's disclosure controls were effective, except for a material weakness in net loss per share calculation, which required interim financial statement revisions - As of December 31, 2023, disclosure controls and procedures were deemed effective, except for a material weakness related to the calculation of net loss per share attributable to common stockholders[141](index=141&type=chunk)[164](index=164&type=chunk)[187](index=187&type=chunk) - This material weakness stemmed from an error in presenting accretion of redeemable preferred stock as an adjustment to net loss attributable to common stockholders, requiring revision of previously furnished interim financial statements for Q2 and Q3 2023[141](index=141&type=chunk)[166](index=166&type=chunk)[188](index=188&type=chunk) - Remediation plans include enhancing processes, providing better access to accounting literature, and increasing communication among personnel and third-party professionals[167](index=167&type=chunk) - No other changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control during the quarter ended December 31, 2023[189](index=189&type=chunk) [Other Information](index=56&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 trading arrangements, and indemnification agreements were executed [Trading Arrangements and Indemnification Agreements](index=86&type=section&id=9B.1%20Trading%20Arrangements%20and%20Indemnification%20Agreements) No director or officer adopted or terminated Rule 10b5-1 trading arrangements during Q4 2023, and indemnification agreements were entered into with the CFO and COO - No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended December 31, 2023[191](index=191&type=chunk) - On March 21, 2024, indemnification agreements were entered into with Jennifer Bright (CFO) and Steven Sandor (COO)[192](index=192&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=56&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company [Foreign Jurisdictions Disclosure](index=86&type=section&id=9C.1%20Foreign%20Jurisdictions%20Disclosure) This item is not applicable to the company - Not applicable[193](index=193&type=chunk) [PART III](index=57&type=section&id=PART%20III) This part incorporates by reference information on directors, executive compensation, security ownership, and related matters [Directors, Executive Officers and Corporate Governance](index=87&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance, including the Code of Business Conduct and Ethics, is incorporated by reference from the definitive proxy statement for the 2024 annual meeting of stockholders - Information on executive officers is included in Part I, Item 1 of this Form 10-K[195](index=195&type=chunk) - Information on the election of directors is incorporated by reference from the 2024 Proxy Statement[173](index=173&type=chunk)[195](index=195&type=chunk) - The BIOLASE, Inc. Code of Business Conduct and Ethics applies to all employees, officers, and directors and is available on the investor relations website[170](index=170&type=chunk) [Executive Compensation](index=87&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation and director compensation is incorporated by reference from the definitive proxy statement for the 2024 annual meeting of stockholders - Information on Executive Compensation and 2023 Director Compensation is incorporated by reference from the Proxy Statement[171](index=171&type=chunk)[196](index=196&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=87&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information concerning security ownership of certain beneficial owners and management, as well as equity compensation plan information, is incorporated by reference from the definitive proxy statement for the 2024 annual meeting of stockholders and Item 5 of this Form 10-K, respectively - Information on Security Ownership of Certain Beneficial Owners and Management is incorporated by reference from the Proxy Statement[172](index=172&type=chunk)[196](index=196&type=chunk) - Information on Equity Compensation Plan Information is incorporated by reference from Item 5 of this Form 10-K[172](index=172&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=87&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the definitive proxy statement for the 2024 annual meeting of stockholders - Information on Certain Relationships and Related Transactions and Director Independence is incorporated by reference from the Proxy Statement[173](index=173&type=chunk)[196](index=196&type=chunk) [Principal Accountant Fees and Services](index=87&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the definitive proxy statement for the 2024 annual meeting of stockholders - Information on Principal Accountant Fees and Services is incorporated by reference from the Proxy Statement[174](index=174&type=chunk)[196](index=196&type=chunk) [PART IV](index=88&type=section&id=PART%20IV) This part includes exhibits, financial statement schedules, and a summary of the Form 10-K [Exhibits and Financial Statement Schedules](index=88&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of this Form 10-K, including auditor reports, consolidated financial statements, and a comprehensive exhibit index - The following financial statements are filed as part of this Form 10-K: Reports of Independent Registered Public Accounting Firms (Macias Gini & O'Connell, LLP and BDO USA, P.C.), Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statements of Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit), Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[176](index=176&type=chunk)[222](index=222&type=chunk) - Schedule II – Consolidated Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2023, 2022, and 2021 is included[176](index=176&type=chunk)[222](index=222&type=chunk)[891](index=891&type=chunk) - A comprehensive exhibit index lists various documents, including placement agency agreements, certificates of incorporation, bylaws, warrants, incentive plans, lease agreements, indemnification agreements, and certifications[198](index=198&type=chunk)[200](index=200&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) [Form 10-K Summary](index=89&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable and contains no information - None[212](index=212&type=chunk)

Loading...Loading...The most oversold stocks in the health care sector presents an opportunity to buy into undervalued companies.The RSI is a momentum indicator, which compares a stock's strength on days when prices go up to its strength on days when prices go down. When compared to a stock's price action, it can give traders a better sense of how a stock may perform in the short term. An asset is typically considered oversold when the RSI is below 30, according to Benzinga Pro.Here’s the latest list of maj ...