UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

~~March~~June 3130, 2024


☐	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 registrant as specified in its charter)

    Delaware

    87-0442441

    (State or other jurisdiction
of incorporation or organization)

    (I.R.S. Employer
Identification No.)

27042 Towne Centre Drive, Suite 270

Lake Forest, California 92610

(Address of principal executive offices) (Zip Code)

(949) 361-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Tradingsymbol(s)		Name of each exchange on which registered
Common stock, par value $0.001 per share		BIOL		The NASDAQ Stock Market LLC(NASDAQ Capital Market)

    Title of each class

    Trading
symbol(s)

    Name of each exchange on which registered

    N/A

    N/A

    N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of ~~May~~August 61, 2024, the registrant had 3336,~~394~~597,~~979~~056 shares of common stock, $0.001 par value per share, outstanding.

BIOLASE, INC.

INDEX

			Page
PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited):	2
		Condensed Consolidated Balance Sheets	2
		Condensed Consolidated Balance Sheets - June 30, 2024 and December 31, 2023	2
		Condensed Consolidated Statements of Operations and Comprehensive Loss	3
		Condensed Consolidated Statements of Operations and Comprehensive Loss - Three and Six Months Ended June 30, 2024 and 2023	3
		Condensed Consolidated Statements of Convertible Redeemable Preferred Stock and Stockholders’ Equity (Deficit)	4
		Condensed Consolidated Statements of Convertible Redeemable Preferred Stock and Stockholders’ Equity (Deficit) - Three and Six Months Ended June 30, 2024 and 2023	4
		Condensed Consolidated Statements of Cash Flows	6
		Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2024 and 2023	6
		Notes to Condensed Consolidated Financial Statements	7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	3335
Item 4.		Controls and Procedures	3335
PART II		OTHER INFORMATION
Item 1.		Legal Proceedings	3436
Item 1A.		Risk Factors	3436
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	3638
Item 3.		Defaults Upon Senior Securities	3638
Item 4.		Mine Safety Disclosures	3638
Item 5.		Other Information	3638
Item 6.		Exhibits	3739
	Signatures		3941

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIOLASE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	March 31,			December 31,
	June 30,			December 31,
	2024			2023
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	65,~~393~~272		$	6,566
Accounts receivable, less allowance of $216 and $244 as of March 31, 2024 and December 31, 2023, respectively		5,687			5,483
Accounts receivable, less allowance of $329 and $244 as of June 30, 2024 and December 31, 2023, respectively		4,842			5,483
Inventory		1110,~~273~~904			11,433
Prepaid expenses and other current assets		1,~~652~~076			1,381
Total current assets		2522,~~005~~094			24,863
Property, plant, and equipment, net		4,~~846~~263			5,525
Goodwill		2,926			2,926
Right-of-use assets, leases		1,~~313~~101			1,519
Other assets		~~263~~257			268
Total assets	$	3430,~~353~~641		$	35,101
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	45,~~915~~491		$	6,065
Accrued liabilities		7,~~589~~662			7,518
Stock warrant liability		32,~~780~~616			1,363
Deferred revenue, current portion		2,~~343~~132			2,452
Current portion of term loans		2,800			2,265
Current portion of term loans, net of discount		13,275			2,265
Total current liabilities		2131,~~427~~176			19,663
Deferred revenue		~~223~~186			256
Warranty accrual		~~598~~843			593
Non-current term loans, net of discount		11,207			11,782
Non-current term loans		150			11,782
Non-current operating lease liability		~~542~~315			772
Other liabilities		8797			79
Total liabilities		3432,~~084~~767			33,145
Mezzanine Equity:
Series H Convertible Redeemable Preferred stock, par value $0.001 per share; 370 shares authorized, 5 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		346			346
Series H Convertible Redeemable Preferred stock, par value $0.001 per share; 370 shares authorized, 7 and 5 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		346			346
Series J Convertible Redeemable Preferred stock, par value $0.001 per share; 160 shares authorized, 16 and 15 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		1,857			1,857
Series J Convertible Redeemable Preferred stock, par value $0.001 per share; 160 shares authorized, 17 and 15 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		1,857			1,857
Total mezzanine equity		2,203			2,203
Stockholders' equity (deficit):
Common stock, par value $0.001 per share; 180,000 shares authorized, 33,257 and 3,416 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		33			3
Common stock, par value $0.001 per share; 180,000 shares authorized, 33,406 and 3,416 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		33			3
Additional paid-in capital		~~321~~322,~~957~~380			317,103
Accumulated other comprehensive loss		(~~639~~659	)		(553	)
Accumulated deficit		(~~323~~326,~~285~~083	)		(316,800	)
Total stockholders' equity (deficit)		(14,~~934~~329	)		(247	)
Total liabilities, convertible redeemable preferred stock and stockholders' equity (deficit)	$	3430,~~353~~641		$	35,101

See accompanying notes to condensed consolidated financial statements.

BIOLASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2024			2023			2024			2023
Net revenue	$	1011,~~131~~555		$	1014,~~467~~286		$	21,687		$	24,753
Cost of revenue		6,~~795~~946			78,~~130~~168			13,741			15,299
Gross profit		34,~~336~~609			36,~~337~~118			7,946			9,454
Operating expenses:
Sales and marketing		3,~~383~~694			46,~~622~~189			7,077			10,812
General and administrative		3,~~196~~064			2,~~459~~357			6,260			4,815
Engineering and development		1,~~283~~071			1,~~547~~444			2,354			2,991
Total operating expenses		7,~~862~~829			89,~~628~~990			15,691			18,618
Loss from operations		(43,~~526~~220	)		(53,~~291~~872	)		(7,745	)		(9,164	)
Gain (loss) on foreign currency transactions		(96	)		20
Loss on foreign currency transactions		(112	)		(235	)		(208	)		(215	)
Interest expense, net		(~~622~~586	)		(~~577~~583	)		(1,208	)		(1,160	)
Other income (loss), net		(1,~~222~~140	)		—(147	)		(82	)		(147	)
Non-operating loss, net		(1,940	)		(557	)
Non-operating income (loss), net		442			(965	)		(1,498	)		(1,522	)
Loss before income tax provision		(62,~~466~~778	)		(54,~~848~~837	)		(9,243	)		(10,686	)
Income tax provision		(1920	)		(131	)		(40	)		(31	)
Net loss		(62,~~485~~798	)		(54,~~849~~868	)		(9,283	)		(10,717	)
Other comprehensive loss items:
Foreign currency translation adjustments		(8620	)		8039			(106	)		119
Comprehensive loss	$	(62,~~571~~818	)	$	(54,~~769~~829	)	$	(9,389	)	$	(10,598	)
Net loss	$	(62,~~485~~798	)	$	(54,~~849~~868	)	$	(9,283	)	$	(10,717	)
Deemed dividend on convertible preferred stock		—			—(9,377	)		—			(9,377	)
Net loss attributable to common stockholders	$	(62,~~485~~798	)	$	(514,~~849~~245	)	$	(9,283	)	$	(20,094	)
Net loss per share attributable to common stockholders:
Basic and Diluted - Note 1	$	(0.3608	)	$	(1726.8314	)	$	(0.36	)	$	(45.98	)
Shares used in the calculation of net loss per share:
Basic and Diluted - Note 1		1733,~~842~~391			~~328~~545			25,616			437

See accompanying notes to condensed consolidated financial statements.

BIOLASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited, In thousands)

(Unaudited)


	Mezzanine Equity										Stockholders' Equity (Deficit)
	Series H Convertible Redeemable Preferred Stock				Series J Convertible Redeemable Preferred Stock						Common Stock				Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Loss			Deficit			Equity (Deficit)
Balance, March 31, 2024		5	$	346		16		$	1,857			33,257	$	33	$	321,957		$	(639	)	$	(323,285	)	$	(1,934	)
Sale of common stock units and pre-funded units, net of fees		—		—		—			—			—		—		2			—			—			2
Paid-in-kind dividend on Series H Convertible Redeemable Preferred Stock		2		—		—			—			—		—		—			—			—			—
Conversion of Series J Convertible Redeemable Preferred Stock		—		—		(5	)		(528	)		138		—		528			—			—			528
Paid-in-kind dividend on Series J Convertible Redeemable Preferred Stock		—		—		1			—			—		—		—			—			—			—
Exercise of Series J Convertible Redeemable Preferred Stock Warrants		—		—		5			528			—		—		(164	)		—			—			(164	)
Issuance of stock from RSUs, net		—		—		—			—			11		—		—			—			—			—
Stock-based compensation		—		—		—			—			—		—		57			—			—			57
Net loss		—		—		—			—			—		—		—			—			(2,798	)		(2,798	)
Foreign currency translation adjustment		—		—		—			—			—		—		—			(20	)		—			(20	)
Balance, June 30, 2024		7	$	346		17		$	1,857			33,406	$	33	$	322,380		$	(659	)	$	(326,083	)	$	(4,329	)

Balances, December 31, 2023		5	$	346		15		$	1,857			3,416	$	3	$	317,103		$	(553	)	$	(316,800	)	$	(247	)
Sale of common stock units and pre-funded units, net of fees		—		—		—			—			7,795		8		2,778			—			—			2,786
Exercise of Class A Warrants		—		—		—			—			13,063		13		1,976			—			—			1,989
Paid-in-kind dividend on Series H Convertible Redeemable Preferred Stock		2		—		—			—			—		—		—			—			—			—
Conversion of Series J Convertible Redeemable Preferred Stock		—		—		(5	)		(528	)		138		—		528			—			—			528
Paid-in-kind dividend on Series J Convertible Redeemable Preferred Stock		—		—		2			—			—		—		—			—			—			—
Exercise of Series J Convertible Redeemable Preferred Stock Warrants		—		—		5			528			—		—		(164	)		—			—			(164	)
Issuance of stock from RSUs, net		—		—		—			—			15		—		—			—			—			—
Stock-based compensation		—		—		—			—			—		—		159			—			—			159
Exercise of common stock warrants		—		—		—			—			8,979		9		—			—			—			9
Net loss		—		—		—			—			—		—		—			—			(9,283	)		(9,283	)
Foreign currency translation adjustment		—		—		—			—			—		—		—			(106	)		—			(106	)
Balance, June 30, 2024		7	$	346		17		$	1,857			33,406	$	33	$	322,380		$	(659	)	$	(326,083	)	$	(4,329	)

	Mezzanine Equity								Stockholders' Equity (Deficit)
	Series HConvertible RedeemablePreferred Stock				Series JConvertible RedeemablePreferred Stock				Common Stock				Additional Paid-in		AccumulatedOtherComprehensive			Accumulated			TotalStockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Equity (Deficit)
Balance, December 31, 2023		5	$	346		15	$	1,857		3,416	$	3	$	317,103	$	(553	)	$	(316,800	)	$	(247	)
Sale of common stock units and pre-funded units, net of fees		—		—		—		—		7,795		8		2,776		—			—			2,784
Exercise of Class A Warrants		—		—		—		—		13,063		13		1,976		—			—			1,989
Paid-in-kind dividend on Series J Convertible Redeemable Preferred Stock		—		—		1		—		—		—		—		—			—			—
Issuance of stock from RSUs, net		—		—		—		—		4		—		—		—			—			—
Stock-based compensation		—		—		—		—		—		—		102		—			—			102
Exercise of common stock warrants		—		—		—		—		8,979		9		—		—			—			9
Net loss		—		—		—		—		—		—		—		—			(6,485	)		(6,485	)
Foreign currency translation adjustment		—		—		—		—		—		—		—		(86	)		—			(86	)
Balance, March 31, 2024		5	$	346		16	$	1,857		33,257	$	33	$	321,957	$	(639	)	$	(323,285	)	$	(1,934	)

See accompanying notes to condensed consolidated financial statements.

BIOLASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

(In thousands)

(Unaudited)

	Stockholders' Equity (Deficit)
		MezzanineEquity															Stockholders' Equity (Deficit)
	Common Stock								Additional Paid-inCapital			AccumulatedOtherComprehensive			Accumulated				TotalStockholders'
		Series HConvertible RedeemablePreferred Stock								Series IRedeemablePreferred Stock							Common Stock						Additional Paid-inCapital			AccumulatedOtherComprehensive			Accumulated			TotalStockholders'
	~~Shares~~	Shares			~~Amount~~	Amount			~~Amount~~	Shares		~~Loss~~	Amount		~~Deficit~~		Shares		~~Equity (Deficit)~~		Amount		Amount			Loss			Deficit			Equity (Deficit)
Balance, December 31, 2022		77			$	—			$	301,790		$	(733	)	$	(296,168	)		$	4,889
Balance, March 31, 2023			—			$	—				—		$	—				263			$	—	$	310,828		$	(653	)	$	(302,017	)	$	8,158
Sale of common stock and pre-funded warrants, net of fees		172				—				8,503			—			—				8,503
Issuance of Series H Convertible Preferred Stock, net of fees			175				10,500				—			—				—				—		(7,762	)		—			—			(7,762	)
Issuance of stock from RSUs, net		—				—				—			—			—				—
Exercise of Series H Convertible Preferred Stock Warrants			20				1,200				—			—				—				—		(430	)		—			—			(430	)
Stock-based compensation		—				—				521			—			—				521
Conversion of Series H Convertible Preferred Stock			(183	)			(10,980	)			—			—				655				1		10,979			—			—			10,980
Exercise of common stock warrants		14				—				14			—			—				14
Issuance of Series I Redeemable Preferred Stock			—				—				85			—				—				—		—			—			—			—
Net loss		—				—				—			—			(5,849	)			(5,849	)
Issuance of stock from RSUs, net			—				—				—			—				1				—		—			—			—			—
Foreign currency translation adjustment		—				—				—			80			—				80
Stock-based compensation			—				—				—			—				—				—		404			—			—			404
Balance, March 31, 2023		263			$	—			$	310,828		$	(653	)	$	(302,017	)		$	8,158
Exercise of common stock warrants			—				—				—			—				100				—		100			—			—			100
Net loss			—				—				—			—				—				—		—			—			(4,868	)		(4,868	)
Foreign currency translation adjustment			—				—				—			—				—				—		—			39			—			39
Balance, June 30, 2023			12			$	720				85		$	—				1,019			$	1	$	314,119		$	(614	)	$	(306,885	)	$	6,621
Balances, December 31, 2022			—			$	—				—		$	—				77			$	—	$	301,790		$	(733	)	$	(296,168	)	$	4,889
Sale of common stock and pre-funded warrants, net of fees			—				—				—			—				172				—		8,503			—			—			8,503
Issuance of Series H Convertible Preferred Stock, net of fees			175				10,500				—			—				—				—		(7,762	)		—			—			(7,762	)
Exercise of Series H Convertible Preferred Stock Warrants			20				1,200				—			—				—				—		(430	)		—			—			(430	)
Conversion of Series H Convertible Preferred Stock			(183	)			(10,980	)			—			—				655				1		10,979			—			—			10,980
Issuance of Series I Redeemable Preferred Stock			—				—				85			—				—				—		—			—			—			—
Issuance of stock from RSUs, net			—				—				—			—				1				—		—			—			—			—
Stock-based compensation			—				—				—			—				—				—		925			—			—			925
Exercise of common stock warrants			—				—				—			—				114				—		114			—			—			114
Net loss			—				—				—			—				—				—		—			—			(10,717	)		(10,717	)
Foreign currency translation adjustment			—				—				—			—				—				—		—			119			—			119
Balance, June 30, 2023			12			$	720				85		$	—				1,019			$	1	$	314,119		$	(614	)	$	(306,885	)	$	6,621

See accompanying notes to condensed consolidated financial statements.

BIOLASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended
	Six Months Ended
	March 31,
	June 30,
	2024			2023
Cash Flows from Operating Activities:
Net loss	$	(69,~~485~~283	)	$	(510,~~849~~717	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation		~~660~~1,310			~~149~~1,573
Recoveries of bad debts		(27	)		(17	)
Provision for bad debts		86			42
Amortization of debt issuance costs		125			107
Provision for inventory excess and obsolescence		76			—
Change in fair value of warrants		556			—
Amortization of debt issuance costs		242			214
Issuance costs for common stock warrants		830			—
Change in fair value of warrants		(514	)		(78	)
Stock-based compensation		113			691
Issuance costs for common stock warrants		830			224
Gain on disposal of fixed assets		(156	)		—
Stock-based compensation		67			775
Gain on disposal of fixed assets		(232	)		—
Changes in operating assets and liabilities:
Accounts receivable		~~(177~~555	)		~~700~~82
Inventory		~~133~~374			(~~1,890~~163	)
Prepaid expenses and other current assets		~~(59~~734	)		~~240~~713
Accounts payable and accrued liabilities		(~~1,308~~527	)		~~303~~(1,903	)
Deferred revenue		(~~143~~390	)		~~(92~~18	)
Net cash and cash equivalents used in operating activities		(56,~~938~~672	)		(59,~~658~~220	)
Cash Flows from Investing Activities:
Purchases of property, plant, and equipment		—(27	)		(~~587~~944	)
Proceeds from disposal of property, plant, and equipment		~~197~~284			—
Net cash and cash equivalents provided by (used in) investing activities		~~197~~257			(~~587~~944	)
Cash Flows from Financing Activities:
Proceeds from the sale of common stock and pre-funded warrants, net of fees		2,~~784~~786			8,~~503~~502
Proceeds from the sale of warrants, net of fees		3,020			—
Proceeds from the sale of Series H Convertible Preferred Stock, net of fees		—			2,738
Principal payment on loan		(165	)		—
Proceeds from the sale of warrants, net of fees		3,020			918
Proceeds from the exercise of common stock warrants		8			14
Principal payment on loan		(865	)		—
Net cash and cash equivalents provided by financing activities		5,647			8,517
Proceeds from the exercise of common stock warrants		8			115
Effect of exchange rate changes		(79	)		79
Proceeds from the exercise of preferred share warrants		270			520
(Decrease) increase in cash and cash equivalents		(173	)		2,351
Net cash and cash equivalents provided by financing activities		5,219			12,793
Effect of exchange rate changes		(98	)		120
(Decrease) increase in cash and cash equivalents		(1,294	)		2,749
Cash and cash equivalents, beginning of period		6,566			4,181
Cash and cash equivalents, end of period	$	65,~~393~~272		$	6,~~532~~930
Supplemental cash flow disclosure:
Cash paid for interest	$	~~494~~968		$	~~470~~930
Cash received for interest	$	23		$	25
Cash paid (received) for income taxes	$	8		$	(14	)
Cash paid for income taxes	$	42		$	12
Cash paid for operating leases	$	77157		$	68159
Non-cash property, plant and equipment additions acquired under inventory	$	2778		$	—
Common stock issued upon cashless warrant exercise	$	1,989		$	—
Non-cash right-of-use assets obtained in exchange for lease obligation	$	—		$	464
Common stock issued upon exercise of preferred stock	$	528		$	10,980
Non-cash right-of-use assets obtained in exchange for lease obligation	$	—		$	483

See accompanying notes to condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

The Company

BIOLASE, Inc. (“BIOLASE” and, together with its consolidated subsidiaries, the “Company”) is a leading provider of advanced laser systems for the dental industry. The Company develops, manufactures, markets, and sells laser systems that provide significant benefits for dental practitioners and their patients. The Company’s proprietary systems allow dentists, periodontists, endodontists, pediatric dentists, oral surgeons, and other dental specialists to perform a broad range of minimally invasive dental procedures, including cosmetic, restorative, and complex surgical applications. The Company’s laser systems are designed to provide clinically superior results for many types of dental procedures compared to those achieved with drills, scalpels, and other conventional instruments. Potential patient benefits include less pain, fewer shots, faster healing, decreased fear and anxiety, and fewer appointments. Potential practitioner benefits include improved patient care and the ability to perform a higher volume and wider variety of procedures and generate more patient referrals.

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of BIOLASE and its wholly-owned subsidiaries and have been prepared on a basis consistent with the December 31, 2023 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments and the elimination of all material intercompany transactions and balances, necessary to fairly present the information set forth therein. The unaudited condensed consolidated financial statements do not include all the footnotes, presentations, and disclosures normally required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements.

The unaudited condensed consolidated results of operations for the three and six months ended ~~March~~June 3130, 2024 are not necessarily indicative of the results for the full year. The December 31, 2023 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in included in BIOLASE’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2024 (the “2023 Form 10-K”).

Reverse Stock Split

At the annual meeting of stockholders held on May 2, 2024 (the "2024 Annual Meeting"), BIOLASE stockholders approved an amendment to BIOLASE’s Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), to effect a reverse stock split of BIOLASE common stock, par value $0.001 per share (the “common stock”), at a ratio between one-for-two (1:2) and one-for-fifty (1:50) with the ratio to be determined at the discretion of the Board. No official action has been taken to put this reverse stock into effect.

At a special meeting of BIOLASE stockholders held on July 20, 2023 (the "special meeting"), BIOLASE stockholders approved an amendment to BIOLASE’s Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), to effect a reverse stock split of BIOLASE common stock, par value $0.001 per share (the “common stock”), at a ratio between one-for-two (1:2) and one-for-one hundred (1:100). Immediately after the special meeting, BIOLASE's board of directors (the "Board") approved a one-for-one hundred (1:100) reverse stock split of the outstanding shares of the common stock (the “2023 Reverse Stock Split”). On July 26, 2023, BIOLASE filed an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the 2023 Reverse Stock Split, which became effective on July 27, 2023. The amendment did not change the number of authorized shares of the common stock.

Except as the context otherwise requires, all common stock share numbers, share price amounts (including exercise prices, conversion prices, and closing market prices), shares issued upon the conversion of preferred shares, and shares issued upon the exercise of warrants contained in the unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted to reflect the 2023 Reverse Stock Split.

Liquidity and Management’s Plans - Going Concern

The Company incurred losses from operations and used cash in operating activities for the three and six months ended ~~March~~June 3130, 2024 and for the years ended December 31, 2023, ~~2022,~~ and ~~2021~~2022. The Company’s recurring losses, level of cash used in operations, and potential need for additional capital, along with uncertainties surrounding the Company’s ability to raise additional capital, ~~raise~~especially ~~substantial~~in ~~doubt~~light ~~about~~of the ~~Company’s~~fact ~~ability~~that toour ~~continue~~common asstock ais ~~going~~no ~~concern.~~longer ~~The~~traded ~~financial~~on ~~statements~~the doNasdaq, ~~not~~which ~~include~~makes ~~any~~it ~~adjustments~~harder ~~that~~to ~~might~~attract beinvestors ~~necessary~~and iflimits the ~~Company is unable to continue as a going concern.~~

As of March 31, 2024, the Company had working capital of approximately $3.6 million. The Company’s principal sources of liquidity as of March 31, 2024 consisted of approximately $6.4 million in cash and cash equivalents and $5.7 million of net accounts receivable. As of December 31, 2023, the Company had working capital of approximately $5.2 million, $6.6 million in cash and cash equivalents and $5.5 million of net accounts receivable. The decrease in cash and cash equivalents since December 31, 2023 was

~~primarily~~types ~~due to a net loss~~ of ~~$6.5~~financings ~~million~~that ~~and~~can ~~principal~~be ~~payments~~conducted, onraise ~~our~~substantial ~~term~~doubt ~~loan~~about ofthe ~~$0.2~~Company’s ~~million,~~ability ~~partially~~to ~~offset~~continue byas ~~net~~a ~~proceeds~~going ~~of $5~~concern.8 ~~million~~The ~~from~~financial ~~the~~statements ~~February~~do ~~2024~~not ~~public~~include ~~offering~~any ~~and~~adjustments ~~$0.2~~that ~~million~~might inbe ~~proceeds~~necessary ~~from~~if the ~~disposal~~Company ofis ~~property,~~unable ~~plant,~~to ~~and~~continue ~~equipment.~~as a going concern.

As of June 30, 2024, the Company had working capital deficit of approximately $9.1 million with the deficit primarily due to the SWK Loan that is set to mature in May 2025. The Company’s principal sources of liquidity as of June 30, 2024 consisted of approximately $5.3 million in cash and cash equivalents and $4.8 million of net accounts receivable. As of December 31, 2023, the Company had working capital of approximately $5.2 million, $6.6 million in cash and cash equivalents and $5.5 million of net accounts receivable. The decrease in cash and cash equivalents since December 31, 2023 was primarily due to a net loss of $9.3 million and principal payments on the Company's term loan of $0.9 million, partially offset by net proceeds of $5.8 million from the February 2024 public offering and $0.3 million in proceeds from the disposal of property, plant, and equipment.

Additional capital requirements may depend on many factors, including, among other things, the rate at which the Company’s business grows, demands for working capital, manufacturing capacity, and any acquisitions that the Company may pursue. The Company expects that it will be required to raise capital through either equity or debt offerings. The Company cannot provide assurance that it will be able to successfully enter into any such equity or debt financings in the future or that the required capital would be available on acceptable terms, if at all, or that any such financing activity would not be dilutive to its stockholders.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. Significant estimates in these condensed consolidated financial statements include allowances on accounts receivable, inventory, and deferred taxes, as well as estimates for accrued warranty expenses, goodwill and the ability of goodwill to be realized, revenue deferrals, effects of stock-based compensation and warrants, contingent liabilities, the provision or benefit for income taxes, and preferred stock. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ materially from those estimates.

Critical Accounting Policies

Information with respect to the Company’s critical accounting policies, which management believes could have the most significant effect on the Company’s reported results and require subjective or complex judgments by management, is discussed in the Company’s 2023 audited financial statements included in the 2023 Form 10-K. Management believes that there have been no significant changes during the ~~three~~six months ended ~~March~~June 3130, 2024 in the Company’s critical accounting policies from those disclosed in the Company’s 2023 audited financial statements included in the 2023 Form 10-K.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market (or, if none exists, the most advantageous market) for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value is based on assumptions that market participants would use, including a consideration of non-performance risk. Under the accounting guidance for fair value hierarchy, there are three levels of measurement inputs. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable, either directly or indirectly. Level 3 inputs are unobservable due to little or no corroborating market data.

The Company’s financial instruments, consisting of cash, cash equivalents, accounts receivable, accounts payable, accrued liabilities, warrants, and the SWK Loan (as defined below) as discussed in Note 9 – Debt, approximate fair value because of the relative short maturity of these items and the market interest rates the Company could obtain.

Concentration of Credit Risk, Interest Rate Risk and Foreign Currency Exchange Rate

Financial instruments which potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents, and trade accounts receivable. The Company maintains its cash and cash equivalents with established commercial banks. At times, balances may exceed federally insured limits. To minimize the risk associated with trade accounts receivable, management performs ongoing credit evaluations of customers’ financial condition and maintains relationships with the Company’s customers that allow management to monitor current changes in business operations so the Company can respond as needed. The Company does not, generally, require customers to provide collateral before it sells them its products. However, the Company has required certain distributors to make prepayments for significant purchases of its products.

Substantially all of the Company’s revenue is denominated in U.S. dollars, including sales to international distributors. Only a small portion of its revenue and expenses is denominated in foreign currencies, principally the Euro and Indian Rupee. The Company’s foreign currency expenditures primarily consist of the cost of maintaining offices, consulting services, and employee-related costs. During the three months ended March 31, 2024 and 2023, respectively, the Company did not enter into any hedging contracts. Future fluctuations in the value of the U.S. dollar may affect the price competitiveness of the Company’s products outside the U.S.

Substantially all of the Company’s revenue is denominated in U.S. dollars, including sales to international distributors. Only a small portion of its revenue and expenses is denominated in foreign currencies, principally the Euro and Indian Rupee. The Company’s foreign currency expenditures primarily consist of the cost of maintaining offices, consulting services, and employee-related costs. During the three and six months ended June 30, 2024 and 2023, respectively, the Company did not enter into any hedging contracts. Future fluctuations in the value of the U.S. dollar may affect the price competitiveness of the Company’s products outside the U.S.

Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”).

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, to require enhanced income tax disclosures to provide information to assess how an entity’s operations and related tax risks, tax planning, and operational opportunities affect its tax rate and prospects for future cash flows. The amendments in this update provide that a business entity disclose (1) a tabular income tax rate reconciliation, using both percentages and amounts, (2) separate disclosure of any individual reconciling items that are equal to or greater than 5% of the amount computed by multiplying the income (loss) from continuing operations before income taxes by the applicable statutory income tax rate, and disaggregation of certain items that are significant and (3) amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions, including separate disclosure of any individual jurisdictions greater than 5% of total income taxes paid. These amendments are effective for the Company for annual periods in 2025, applied prospectively, with early adoption and retrospective application permitted. The Company intends to adopt the amendments in this update prospectively in 2025. The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations, since the amendments require only enhancement of existing income tax disclosures in the footnotes to the Company’s consolidated financial statements.

NOTE 3—REVENUE RECOGNITION

Contracts with Customers

Revenue for sales of products and services is derived from contracts with customers. The products and services promised in customer contracts include delivery of laser systems, imaging systems, and consumables as well as certain ancillary services such as training and extended warranties. Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service. Payment terms are stated in the contract and vary according to the arrangement. Because the customer typically agrees to a stated rate and price in the contract that does not vary over the life of the contract, the Company’s contracts do not contain variable consideration. The Company establishes a provision for estimated warranty expenses.

Performance Obligations

At contract inception, the Company assesses the products and services promised in its contracts with customers. The Company then identifies performance obligations to transfer distinct products or services to the customers. In order to identify performance obligations, the Company considers all of the products or services promised in contracts regardless of whether they are explicitly stated or are implied by customary business practices.

Revenue from products and services transferred to customers at a single point in time accounted for 85% of net revenue for the three and six months ended ~~March~~June 3130, 2024 and 8990% for the three and six months ended ~~March~~June 3130, 2023. The majority of the Company’s revenue recognized at a point in time is for the sale of laser systems and consumables. Revenue from these contracts is recognized when the customer is able to direct the use of and obtain substantially all of the benefits from the product which generally coincides with title transfer during the shipping process.

Revenue from services transferred to customers over time accounted for 15% of net revenue for the three and six months ended ~~March~~June 3130, 2024 and 1110% for the three and six months ended ~~March~~June 3130, 2023. The majority of the Company’s revenue that is recognized over time relates to product training and extended warranties. Deferred revenue attributable to undelivered elements, which primarily consists of product training, totaled approximately $0.4 million as of ~~March~~June 3130, 2024 and December 31, 2023.

Transaction Price Allocation

The transaction price for a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in a contract. The primary method used to estimate standalone selling price is the observable price when the good or service is sold separately in similar circumstances and to similar customers.

Significant Judgments

Revenue is recorded for extended warranties over time as the customer benefits from the warranty coverage. This revenue will be recognized equally throughout the contract period as the customer receives benefits from the Company's promise to provide such services. Revenue is recorded for product training when the customer attends a training program or upon the expiration of the obligation, which is generally after six months.

The Company also has contracts that include both the product sales and product training as performance obligations. In those cases, the Company records revenue for product sales at the point in time when the product has been shipped. The customer obtains control of the product when it is shipped, as all shipments are made FOB shipping point, and after the customer selects its shipping method and pays all shipping costs and insurance. The Company has concluded that control is transferred to the customer upon shipment.

Accounts Receivable

Accounts receivable are stated at estimated net realizable value. The allowance for doubtful accounts is based on an analysis of customer accounts and the Company’s historical experience with accounts receivable write-offs.

Contract Liabilities

The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. The Company, however, recognizes a contract liability when a customer prepays for goods and/or services, and the Company has not transferred control of the goods and/or services. The opening and closing balances of the Company’s contract liabilities are as follows (in thousands):

	March 31,			December 31,
	June 30,			December 31,
	2024			2023
Undelivered elements (training and installation)	$	~~406~~407		$	449
Extended warranty contracts		21,~~160~~911			2,259
Total deferred revenue		2,~~566~~318			2,708
Less: long-term portion of deferred revenue		(~~223~~186	)		(256	)
Deferred revenue — current	$	2,~~343~~132		$	2,452

The balance of contract assets was immaterial as the Company did not have a significant amount of uninvoiced receivables at ~~March~~June 3130, 2024 and December 31, 2023.

The amount of revenue recognized during the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023 that was included in the opening contract liability balance related to undelivered elements was $0.34 million and $0.23 million, respectively. The amounts related to extended warranty contracts was $0.9 million and $01.71 million for the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023, respectively.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred. The Company determined that disaggregating revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors.

The Company’s revenues related to the following geographic areas were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
United States	$	6,690	$	6,758
International		3,441		3,709
Net revenue	$	10,131	$	10,467

The Company’s revenues related to the following geographic areas were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
United States	$	8,240	$	10,741	$	14,930	$	17,499
International		3,315		3,545		6,757		7,254
Net revenue	$	11,555	$	14,286	$	21,687	$	24,753

Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in thousands):

	Three Months Ended				Six Months Ended
	March 31,
	June 30,				June 30,
	2024		2023		2024		2023
Revenue recognized over time	$	1,~~487~~713	$	1,~~169~~415	$	3,201	$	2,584
Revenue recognized at a point in time		89,~~644~~842		912,~~298~~871		18,486		22,169
Net revenue	$	1011,~~131~~555	$	1014,~~467~~286	$	21,687	$	24,753

The Company’s sales by end market were as follows (in thousands):

	Three Months Ended				Six Months Ended
	March 31,
	June 30,				June 30,
	2024		2023		2024		2023
End-customer	$	68,~~690~~240	$	610,~~758~~741	$	14,930	$	17,499
Distributors		3,~~441~~315		3,~~709~~545		6,757		7,254
Net revenue	$	1011,~~131~~555	$	1014,~~467~~286	$	21,687	$	24,753

Shipping and Handling Costs and Revenues

Shipping and freight costs are treated as fulfillment costs. For shipments to end-customers, the customer bears the shipping and freight costs and has control of the product upon shipment. For shipments to distributors, the distributor bears the shipping and freight costs, including insurance, tariffs and other import/export costs.

NOTE 4—CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

The Board, without further stockholder authorization, may authorize the issuance from time to time of up to 1,000,000 shares of the Company’s preferred stock. Of the 1,000,000 shares of preferred stock, as of ~~March~~June 3130, 2024, 370,000 shares were designated as Series H, par value $0.001 per share, 160,000 shares were designated as Series J, par value $0.001 per share, and 125,000 shares were designated as Series I, par value $0.001 per share.

Preferred Stock

Series J Preferred Stock

On September 13, 2023, the Company consummated the sale of 75,000 Units (the "Units") with each Unit consisting of (A) one share of BIOLASE Series J Convertible Redeemable Preferred Stock, par value $0.001 per share and a stated value equal to $100.00 (the “Series J Convertible Preferred Stock”), and (B) one warrant (the “Series J Warrants”) to purchase one-half of one (0.50) share of Series J Convertible Preferred Stock, at a price to the public of $60.00 per Unit, less underwriting discounts and commissions. The public offering price of $60.00 per Unit reflects the issuance of the Series J Convertible Preferred Stock with an original issue discount of 40%. The Company filed a registration statement on Form S-1 in September 2023, which registered the Units, the Series J Convertible Preferred Stock, the Series J Warrants and the shares of Series J Convertible Preferred Stock and common stock underlying such securities and additional shares of Series J Convertible Preferred Stock that will be issued, if and when the Board declares such dividends, as paid in-kind dividends (“PIK dividends”) at a rate of 20% per annum and the shares of Common Stock issuable upon conversion of the Series J Convertible Preferred Stock issued as PIK dividends. The registration statement was declared effective on September 13, 2023 and the offering closed on September 18, 2023. Each Warrant has an exercise price of $30.00 per share, is exercisable for one-half of one (0.5) share of Series J Convertible Preferred Stock, is immediately exercisable and will expire one (1) year from the date of issuance.

Each share of Series J Convertible Preferred Stock is convertible at the option of the holder at any time into the number of shares of common stock determined by dividing the $100.00 stated value per share by a conversion price of $3.26. Each outstanding share of Series J Convertible Preferred Stock is mandatorily redeemable by the Company in cash on September 13, 2024 (the "Series J Maturity Date").

Gross proceeds from the offering were $4.5 million before broker fees and related expenses of approximately $1.0 million. In accordance with applicable accounting standards, the $4.5 million gross proceeds were allocated to the Series J Convertible Preferred Stock and the Series J Warrants in the amount of $3.5 million and $1.0 million, respectively. The allocation was based on the fair value of the Series J Warrants of $1.0 million as of the commitment date, with the residual proceeds of $3.5 million allocated to the

Each share of Series J Convertible Preferred Stock. ~~Net~~is ~~proceeds~~convertible ~~allocated~~at tothe option of the holder at any time into the number of shares of common stock determined by dividing the $100.00 stated value per share by a conversion price of $3.26. Each outstanding share of Series J Convertible Preferred Stock ~~and~~is ~~Series~~mandatorily Jredeemable ~~warrants~~by ~~was~~the ~~$2.7~~Company ~~million~~in ~~and~~cash ~~$0.8~~on ~~million~~September ~~respectively.~~13, 2024 (the "Series J Maturity Date").

~~The~~Gross ~~Series~~proceeds Jfrom ~~Convertible~~the ~~Preferred~~offering ~~stock~~were ~~was~~$4.5 ~~classified~~million asbefore ~~mezzanine~~broker ~~equity~~fees onand ~~the~~related ~~consolidated~~expenses ~~balance~~of ~~sheet~~approximately as$1.0 ~~they~~million. ~~are~~In ~~contingently~~accordance ~~redeemable~~with ~~prior~~applicable accounting standards, the $4.5 million gross proceeds were allocated to the Series J ~~Maturity~~Convertible ~~Date~~Preferred Stock and the ~~conversion~~Series ~~from~~J ~~preferred~~Warrants ~~shares~~in tothe ~~shares~~amount of ~~common~~$3.5 ~~stock~~million isand at$1.0 ~~the~~million, ~~option~~respectively. ofThe ~~the~~allocation ~~holder~~was atbased ~~any~~on ~~time before~~ the ~~Series~~fair Jvalue ~~Maturity~~of ~~Date.~~the ~~The~~ Series J ~~warrants~~Warrants ~~were~~of ~~classified~~$1.0 million as ~~accrued~~of ~~liabilities~~the oncommitment ~~the~~date, ~~consolidated~~with ~~balance~~the ~~sheet~~residual asproceeds ~~the~~of ~~warrants~~$3.5 ~~are~~million ~~convertible~~allocated ~~into~~to ~~preferred~~the ~~shares,~~Series ~~which~~J ~~are~~Convertible ~~mandatorily~~Preferred ~~redeemable~~Stock. inNet ~~cash~~proceeds ~~upon~~allocated to the Series J ~~Maturity~~Convertible ~~Date~~Preferred ifStock ~~they~~and ~~are~~Series ~~not~~J ~~converted~~Warrants towas ~~shares~~$2.7 ofmillion ~~common~~and ~~stock~~$0.8 ~~before~~million ~~such date~~respectively.

The Series J Convertible Preferred ~~Stock~~stock was ~~issued~~classified atas amezzanine ~~discount~~equity ~~with~~on the ~~total~~consolidated ~~redemption~~balance ~~value~~sheet ofas ~~the~~they ~~Series~~are Jcontingently ~~Convertible~~redeemable ~~Preferred~~prior ~~Shares and PIK Dividends of $10.3 million. The redemption value in excess of the net proceeds received allocated~~ to the Series J ~~Convertible~~Maturity ~~Preferred~~Date ~~Shares~~and ~~was~~the ~~$7.6~~conversion ~~million~~from ~~and~~preferred ~~was~~shares ~~recognized~~to asshares aof ~~decrease~~common instock ~~additional~~is ~~paid-in-capital~~ at the ~~commitment~~option ~~date.~~of ~~Upon~~the ~~conversion~~holder ofat ~~Series~~any Jtime ~~warrants~~before tothe Series J ~~Convertible~~Maturity ~~Preferred~~Date. ~~shares,~~The ~~the value of the~~ Series J ~~Convertible~~Warrants ~~Preferred~~were ~~shares~~classified ~~issued~~as isaccrued ~~the~~liabilities ~~stated~~on ~~value per share plus~~ the ~~PIK~~consolidated ~~dividend.~~balance ~~The~~sheet ~~redemption~~as ~~value~~the inwarrants ~~excess~~are ofconvertible ~~the~~into ~~net~~preferred ~~proceeds~~shares, ~~received~~which ~~from~~are ~~the~~mandatorily ~~exercise~~redeemable ofin ~~warrants~~cash ~~and~~upon the ~~fair~~Series ~~value~~J ofMaturity ~~such~~Date ~~warrants~~if isthey ~~recognized~~are asnot aconverted ~~decrease~~to inshares ~~additional~~of ~~paid-in-capital~~common atstock ~~the~~before ~~conversion~~such date.

AsThe ofSeries ~~March~~J ~~31,~~Convertible ~~2024,~~Preferred ~~5,960~~Stock ofwas ~~the~~issued ~~Series~~at Ja ~~warrants~~discount ~~have~~with ~~been~~the ~~exercised~~total toredemption ~~2,980~~value of the Series J Convertible Preferred ~~shares,~~Shares ~~4,306~~and PIK Dividends of $10.3 million. The redemption value in excess of the net proceeds received allocated to the Series J Convertible Preferred ~~shares~~Shares ~~have~~was ~~been~~$7.6 ~~issued~~million and was recognized as ~~part~~a decrease in additional paid-in-capital at the commitment date. Upon conversion of ~~PIK~~Series ~~dividends,~~J ~~and~~Warrants ~~66,465~~to Series J Convertible Preferred shares, ~~were~~the ~~converted~~value toof ~~approximately~~the ~~2.0~~Series ~~million~~J ~~shares~~Convertible ofPreferred ~~common~~Stock ~~stock~~issued is the stated value per share plus the PIK dividend. ~~There~~The ~~have~~redemption ~~been~~value noin ~~exercises~~excess of ~~Series~~the Jnet proceeds received from the exercise of warrants orand ~~conversions~~the fair value of ~~Series~~such Jwarrants ~~Convertible~~is ~~Preferred~~recognized ~~shares~~as ~~during~~a ~~the~~decrease ~~three~~in ~~months~~additional ~~ended~~paid-in-capital ~~March~~at ~~31,~~the ~~2024~~conversion date.

As of June 30, 2024, 14,960 of the Series J Warrants have been exercised for 7,480 shares of Series J Convertible Preferred Stock, 5,621 shares of Series J Convertible Preferred Stock have been issued as part of PIK dividends, and 70,965 shares of Series J Convertible Preferred Stock were converted to approximately 2.2 million shares of common stock. During the six months ended June 30, 2024 9,000 of the Series J Warrants were exercised and 4,500 shares of the Series J Convertible Preferred Stock were converted. As of June 30, 2024, there are 17,136 Series J Convertible Preferred Stock outstanding.

The mezzanine classified Series J Convertible Preferred Stock are presented at their maximum redemption value that includes accretion related to the PIK dividends.

Series I Preferred Stock

On June 5, 2023, the Board declared a dividend of one one-thousandth of a share of Series I Preferred Stock, par value $0.001 per share ("Series I Preferred Stock"), for each share of common stock outstanding as of June 16, 2023 (as calculated on a pre 2023 Reverse Stock Split basis). The certificate of designation for the Series I Preferred Stock provided that all shares of Series I Preferred Stock not present in person or by proxy at any meeting of stockholders held to vote on the 2023 Reverse Stock Split immediately prior to the opening of the polls at such meeting would be automatically redeemed (the “Series I Initial Redemption”) and that any outstanding shares of Series I Preferred Stock that have not been redeemed pursuant to the Series I Initial Redemption would be redeemed in whole, but not in part, (i) if and when ordered by the Board or (ii) automatically upon the effectiveness of the amendment to the Certificate of Incorporation effecting the 2023 Reverse Stock Split that was subject to the vote (the "Series I Subsequent Redemption"). On July 20, 2023, the Series I Initial Redemption occurred, and on July 27, 2023, the Series I Subsequent Redemption occurred. As a result, no shares of Series I Preferred Stock remain outstanding as of July 27, 2023.

Series H Preferred Stock

On May 24, 2023, the Company consummated the sale of 175,000 Units (the "Units") with each Unit consisting of (A) one share of BIOLASE Series H Convertible Redeemable Preferred Stock, par value $0.001 per share and a stated value equal to $50.00 (the “Series H Convertible Preferred Stock”), and (B) one warrant (the “Series H Warrants”) to purchase one-half of one (0.50) share of Series H Convertible Preferred Stock, at a price to the public of $26.00 per Unit, less underwriting discounts and commissions. The public offering price of $26.00 per Unit reflects the issuance of the Series H Convertible Preferred Stock with an original issue discount of 48%. The Company filed a registration statement on Form S-1 in May 2023, which registered the Units, the Series H Convertible Preferred Stock, the Series H Warrants and the shares of Series H Convertible Preferred Stock and common stock underlying such securities and additional shares of Series H Convertible Preferred Stock that will be issued, if and when the Board declares such dividends, as paid in-kind dividends (“PIK dividends”) at a rate of 20% and the shares of Common Stock issuable upon conversion of the Series H Convertible Preferred Stock issued as PIK dividends. The registration statement was declared effective on May 24, 2023 and the offering closed on May 26, 2023. Each Warrant has an exercise price of $13.00 per share, is exercisable for one-half of one (0.5) share of Series H Convertible Preferred Stock, is immediately exercisable and will expire two (2) years from the date of issuance.

Each share of Series H Convertible Preferred Stock is convertible at the option of the holder at any time into the number of shares of common stock determined by dividing the $50.00 stated value per share by a conversion price of $13.98 (as adjusted for the 2023 Reverse Stock Split). Each outstanding share of Series H Convertible Preferred Stock is mandatorily redeemable by the Company in cash on May 24, 2025 (the "Series H Maturity Date").

~~Gross~~effective ~~proceeds~~on ~~from~~May ~~the~~24, ~~offering~~2023 ~~were $4.6 million before broker fees~~ and ~~related~~the ~~expenses~~offering ofclosed ~~approximately~~on ~~$0.9~~May ~~million. In accordance with applicable accounting standards~~26, ~~the $4~~2023.6 ~~million~~Each ~~gross proceeds were allocated to the~~ Series H ~~Convertible~~Warrant ~~Preferred~~has ~~Stock~~an ~~and~~exercise ~~the~~price ~~Series H Warrants in the amount~~ of $313.400 ~~million~~per ~~and $1.2 million~~share, ~~respectively.~~is ~~The~~exercisable ~~allocation~~for ~~was~~one-half ~~based on the fair value~~ of ~~the~~one ~~Series H Warrants of $1~~(0.25) ~~million~~share as of ~~the commitment date, with the residual proceeds of $3.4 million allocated to the~~ Series H Convertible Preferred Stock., ~~Net~~is ~~proceeds~~immediately ~~allocated~~exercisable ~~to the Series H Convertible Preferred Stock~~ and ~~Series~~will Hexpire ~~warrants~~two ~~was $~~(2.7) ~~million~~years ~~and~~from ~~$1.0~~the ~~million~~date ~~respectively~~of issuance.

~~The~~Each share of Series H Convertible Preferred Stock ~~was~~is ~~classified~~convertible asat ~~mezzanine equity on~~ the ~~consolidated~~option ~~balance~~of ~~sheet as they are contingently redeemable prior to~~ the ~~Series~~holder Hat ~~Maturity~~any ~~Date~~time ~~and~~into the ~~conversion~~number ~~from~~of ~~preferred~~ shares ~~to shares~~ of common stock isdetermined atby ~~the~~dividing ~~option of~~ the ~~holder~~$50.00 atstated ~~any~~value ~~time~~per ~~before~~share ~~the~~by ~~Series~~a Hconversion ~~Maturity~~price ~~Date~~of $13.98 ~~The~~(as ~~Series~~adjusted Hfor ~~warrants~~the ~~were~~2023 ~~classified~~Reverse asStock ~~accrued~~Split). ~~liabilities~~Each onoutstanding ~~the~~share ~~consolidated~~of ~~balance~~Series ~~sheet~~H asConvertible ~~the~~Preferred ~~warrants~~Stock ~~are~~is ~~convertible~~mandatorily ~~into~~redeemable ~~preferred~~by ~~shares,~~the ~~which~~Company ~~are~~in ~~mandatorily~~cash ~~redeemable~~on inMay ~~cash~~24, ~~upon~~2025 (the "Series H Maturity Date ~~if they are not converted to shares of common stock before such date~~").

~~The~~Gross ~~Series~~proceeds Hfrom ~~Convertible Preferred Stock was issued at a discount with~~ the ~~total~~offering ~~redemption~~were ~~value~~$4.6 ofmillion ~~the~~before ~~Series~~broker Hfees ~~Convertible Preferred Shares~~ and ~~PIK~~related ~~Dividends~~expenses of approximately $100.59 million. ~~The~~In ~~redemption~~accordance ~~value~~with inapplicable ~~excess~~accounting ofstandards, the ~~net~~$4.6 million gross proceeds ~~received~~were allocated to the Series H Convertible Preferred ~~Shares~~Stock ~~was $7.8 million~~ and ~~was~~the ~~recognized~~Series asH aWarrants ~~decrease~~ in ~~additional paid-in-capital at~~ the ~~commitment~~amount ~~date~~of $3.4 ~~Upon~~million ~~conversion~~and of$1.2 ~~Series~~million, Hrespectively. ~~warrants~~The toallocation ~~Series~~was Hbased ~~Convertible~~on ~~Preferred shares,~~ the fair value of the Series H ~~Convertible~~Warrants ~~Preferred~~of ~~shares~~$1.2 ~~issued~~million isas of the ~~stated~~commitment ~~value~~date, ~~per~~with ~~share~~the ~~plus~~residual ~~the~~proceeds ~~PIK~~of ~~dividend~~$3.4 ~~The~~million ~~redemption~~allocated ~~value~~to ~~in excess of~~ the ~~net~~Series ~~proceeds~~H ~~received~~Convertible ~~from~~Preferred ~~the~~Stock. ~~exercise~~Net ofproceeds ~~warrants~~allocated ~~and~~to the ~~fair~~Series ~~value~~H ofConvertible ~~such~~Preferred ~~warrants~~Stock isand ~~recognized~~Series asH aWarrants ~~decrease~~was in$2.7 ~~additional~~million ~~paid-in-capital~~and at$1.0 ~~the~~million, ~~conversion date~~respectively.

AsThe ofSeries ~~March~~H ~~31,~~Convertible ~~2024,~~Preferred ~~40,000~~Stock ofwas ~~the~~classified ~~Series~~as Hmezzanine ~~warrants~~equity ~~have~~on ~~been~~the ~~exercised~~consolidated tobalance ~~20,000~~sheet ~~Series~~as Hthey ~~Convertible~~are ~~Preferred~~contingently ~~shares,~~redeemable ~~and~~prior ~~190,000~~to the Series H ~~Convertible~~Maturity ~~Preferred~~Date ~~shares~~and ~~have~~the ~~been~~conversion ~~converted~~from topreferred ~~approximately~~shares ~~0.7~~to ~~million~~ shares of common stock. ~~There~~is ~~has~~at ~~been~~the nooption ~~exercises~~ of the holder at any time before the Series H ~~warrants~~Maturity orDate. ~~conversion~~The of Series H ~~Convertible~~Warrants ~~Preferred~~were ~~shares~~classified ~~during~~as accrued liabilities on the ~~three~~consolidated ~~months~~balance ~~ended~~sheet ~~March~~as 31the warrants are convertible into preferred shares, ~~2024~~which are mandatorily redeemable in cash upon the Series H Maturity Date if they are not converted to shares of common stock before such date.

The Series H Convertible Preferred Stock was issued at a discount with the total redemption value of the Series H Convertible Preferred Shares and PIK Dividends of $10.5 million. The redemption value in excess of the net proceeds received allocated to the Series H Convertible Preferred Stock was $7.8 million and was recognized as a decrease in additional paid-in-capital at the commitment date. Upon conversion of Series H Warrants to Series H Convertible Preferred Stock, the value of the Series H Convertible Preferred Stock issued is the stated value per share plus the PIK dividend. The redemption value in excess of the net proceeds received from the exercise of warrants and the fair value of such warrants is recognized as a decrease in additional paid-in-capital at the conversion date.

As of June 30, 2024, 40,000 of the Series H Warrants have been exercised for 20,000 shares of Series H Convertible Preferred Stock, 1,923 shares of Series H Convertible Preferred Stock have been issued as part of PIK dividends, and 190,000 shares of Series H Convertible Preferred Stock have been converted to approximately 0.7 million shares of common stock. There has been no exercises of Series H Warrants or conversion of Series H Convertible Preferred Stock during the six months ended June 30, 2024. As of June 30, 2024, there are 6,923 Series H Convertible Preferred Stock outstanding.

The mezzanine classified Series H Convertible Preferred Stock are presented at their maximum redemption value that includes accretion related to the PIK dividends.

Stock-Based Compensation

2002 Stock Incentive Plan

The 2002 Stock Incentive Plan (as amended effective as of May 26, 2004, November 15, 2005, May 16, 2007, May 5, 2011, June 6, 2013, October 30, 2014, April 27, 2015, and May 6, 2017, the “2002 Plan”) was replaced by the 2018 Plan (as defined below) with respect to future equity awards. Persons eligible to receive awards under the 2002 Plan included officers, employees, directors of the Company, and consultants to the Company. As of ~~March~~June 3130, 2024, a total of 1,244 shares have been authorized for issuance under the 2002 Plan, of which approximately 908 shares of common stock have been issued pursuant to options that were exercised and restricted stock units ("RSUs") that were vested, approximately 138 shares of common stock have been reserved for options that are outstanding, and no shares of common stock remain available for future grants.

2018 Stock Incentive Plan

At the 2018 annual meeting of stockholders, the Company’s stockholders approved the 2018 Long-Term Incentive Plan (as amended effective as of September 21, 2018, May 15, 2019, May 13, 2020, June 11, 2021, and April 27, 2023, the “2018 Plan”). The purposes of the 2018 Plan are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2018 Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining non-employee directors, officers, other employees, consultants, independent contractors, and agents; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.

Under the terms of the 2018 Plan, approximately 53,677 shares of common stock remain available for issuance as of March 31, 2024. As of March 31, 2024, a total of 112,268 shares of common stock have been authorized for issuance under the 2018 Plan, of which approximately 11,353 shares have already been issued and approximately 47,238 shares of the Company’s common stock have been reserved for issuance upon the exercise of outstanding options or stock appreciation rights ("SARs"), and/or settlement of unvested RSUs under the 2018 Plan.

The Company recognized stock-based compensation expense of $0.1 million for the three months ended March 31, 2024, and $0.7 million for the three months ended March 31, 2023. As of March 31, 2024 and 2023, the Company had approximately $0.2 million and $1.0 million, respectively, of total unrecognized compensation expense, net of estimated forfeitures, related to unvested

~~share-based~~Under ~~compensation~~the ~~arrangements~~terms of the 2018 Plan, approximately 58,815 shares of common stock remain available for issuance as of June 30, 2024. ~~The~~As of June 30, 2024, a total of 112,268 shares of common stock have been authorized for issuance under the 2018 Plan, of which approximately 22,954 shares have already been issued and approximately 30,499 shares of the Company’s ~~expects~~common ~~that~~stock ~~expense~~have tobeen bereserved ~~recognized~~for ~~over~~issuance aupon ~~weighted-average~~the ~~period~~exercise of ~~1.1~~outstanding ~~years.~~options or stock appreciation rights ("SARs"), and/or settlement of unvested RSUs under the 2018 Plan.

The Company recognized stock-based compensation gain of $0.1 million and expense of $0.1 million for the three and six months ended June 30, 2024, respectively, and $0.1 million and $0.8 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and 2023, the Company had approximately $0.1 million and $1.0 million, respectively, of total unrecognized compensation expense, net of estimated forfeitures, related to unvested share-based compensation arrangements. The Company expects that expense to be recognized over a weighted-average period of 1.3 years.

The following table summarizes the statement of operations classification of compensation expense associated with share-based payments (in thousands):

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2024			2023			2024			2023
Cost of revenue	$	—		$	185		$	—		$	23
Sales and marketing		2249			~~197~~105			71			302
General and administrative		92(95	)		~~429~~(25	)		(3	)		405
Engineering and development		(1—	)		47(1	)		(1	)		45
Total	$	~~113~~(46	)	$	~~691~~84		$	67		$	775

Stock Option Activity

There were no option grants or exercises during the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023.

Restricted Stock Units

A summary of unvested RSU activity for the ~~three~~six months ended ~~March~~June 3130, 2024 is as follows (in thousands, except per share amounts):

				Weighted
				Average Grant
	Shares			Date Fair Value
Unvested RSUs as of December 31, 2023		44		$	18.50
Vested		(327	)	$	3719.6080
Forfeited or cancelled		(16	)	$	9119.8451
Unvested RSUs as of March 31, 2024		40		$	15.46
Unvested RSUs as of June 30, 2024		11		$	34.68

Warrants

From time to time, the Company issues warrants to acquire shares of common stock as approved by the Board.

February 2024 Public Offering

On February 15, 2024, the Company completed a public offering (the "February 2024 Offering") and issued (i) 7,795,000 units (the "Units"), with each Unit consisting of (A) one share of the Company’s common stock, par value $0.001 per share, (B) one Class A warrant to purchase one share of common stock (the "Class A Common Warrants"), each exercisable from time to time for one share of Common Stock at an exercise price of $0.66 per share, and (C) one Class B warrant to purchase one share of common stock (the "Class B Common Warrants"), each exercisable from time to time for one share of Common Stock at an exercise price of $0.748 per share and (ii) 8,205,000 pre-funded units (the "Pre-Funded Units"), with each Pre-Funded Unit consisting of (A) one pre-funded warrant (the "Pre-Funded Warrants"), each such Pre-Funded Warrant being exercisable from time to time for one share of Common Stock at an exercise price of $0.001 per share, (B) one Class A Common Warrant, and (C) one Class B Common Warrant. The Units were sold at the public offering price of $0.44 per Unit and the Pre-Funded Units were sold at the public offering price of $0.439 per Pre-Funded Unit. The Company received gross proceeds of approximately $7.0 million, before deducting underwriting discounts and commissions, estimated offering expenses, and before the exercise of warrants.

Based on the terms and conditions of the February 2024 public offering, the Company determined that liability classification was appropriate for the Class A and Class B warrants and recognized the gross proceeds from the issuance allocated to the warrants in excess of par of $3.7 million in accrued liabilities and expensed issuance costs of $0.6 million allocated to the warrants. The Class A warrants were valued using either a long stock position plus a long call position or a Black-Scholes call option model which was deemed appropriate given the warrants can be exercised via the stated exercise price, or an alternative cashless exercise for 0.95 shares per warrant, with a fair value that approximates 95% of the current stock price. The unobservable inputs utilized in determining the fair value of the Class A warrants, which are categorized as a Level 3 instrument, is the volatility rate of 85%. The Class B warrants were valued using a Monte Carlo simulation. The unobservable inputs utilized in determining the fair value of the Class B warrants, which are categorized as a Level 3 instrument, is the volatility rate of 85% as well as the probability of a future financing event.

~~Pursuant~~Based toon ~~that~~the ~~certain~~terms ~~Securities~~and ~~Purchase~~conditions ~~Agreement,~~of ~~dated~~the ~~December~~February 6,2024 ~~2023~~Offering, ~~by and between~~ the Company ~~and~~determined ~~the~~that ~~investor~~liability ~~(the~~classification ~~“Investor”)~~was ~~named~~appropriate infor the ~~signature~~Class ~~page~~A ~~thereto~~Common ~~(the~~Warrants ~~“December~~and ~~2023~~Class ~~Purchase~~B ~~Agreement”),~~Common ~~the~~Warrants ~~Company~~and ~~agreed,~~recognized ~~among~~the ~~other~~gross ~~things,~~proceeds ~~pursuant~~from tothe ~~Section~~issuance ~~4.12~~allocated ~~thereof not~~ to ~~enter~~the ~~into~~warrants ain ~~Variable~~excess ~~Rate~~of ~~Transaction~~par ~~(as~~of ~~defined~~$3.7 million in ~~the~~accrued ~~December~~liabilities ~~2023~~and ~~Purchase~~expensed ~~Agreement)~~issuance ~~for~~costs ~~a period~~ of ~~one-hundred~~$0.6 ~~and~~million ~~eighty~~allocated ~~(180)~~to ~~days~~the ~~following~~warrants. ~~the~~The ~~closing~~Class ~~date~~A ofCommon ~~that~~Warrants ~~offering~~were ~~(or~~valued ~~June~~using 5,either ~~2024)~~a ~~(the~~long ~~“VRT~~stock ~~Prohibition”).~~position Inplus ~~order~~a tolong ~~induce~~call ~~the~~position ~~Investor~~or toa ~~agree~~Black-Scholes tocall ~~waive~~option ~~the~~model ~~VRT~~which ~~Prohibition~~was todeemed ~~enable~~appropriate given the ~~Company~~warrants tocan ~~effect~~be ~~the~~exercised ~~Offering,~~via the ~~Company~~stated ~~and~~exercise ~~the~~price, ~~Investor~~or ~~entered~~an ~~into~~alternative acashless ~~Consent~~exercise ~~and~~for ~~Waiver,~~0.95 ~~dated~~shares ~~February~~per 12warrant, ~~2024~~with ~~(the~~a ~~“Consent~~fair ~~and~~value ~~Waiver”),~~that ~~whereby~~approximates ~~the~~95% ~~Company~~of ~~agreed~~the tocurrent ~~issue~~stock toprice. ~~the~~The ~~Investor~~unobservable ainputs ~~new~~utilized ~~warrant~~in todetermining ~~purchase~~the upfair tovalue ~~2,221,880 shares~~ of ~~Common~~the ~~Stock~~Class ~~(the~~A ~~“Investor~~Common ~~Warrant”)~~Warrants, which ~~Investor~~are ~~Warrant~~categorized isas in a ~~form~~Level ~~substantially~~3 ~~identical~~instrument, tois the ~~Class~~volatility Brate ~~Warrants~~of ~~that is described above~~85%. The ~~Investor~~Class B Common Warrants ~~will~~were bevalued ~~exercisable~~using ~~commencing~~a onMonte ~~the~~Carlo ~~effective~~simulation. ~~date~~The ofunobservable ~~stockholder~~inputs ~~approval~~utilized ~~for~~in determining the ~~issuance~~fair value of the ~~shares~~Class ofB Common ~~Stock~~Warrants, ~~issuable~~which ~~upon~~are ~~exercise~~categorized ofas a Level 3 instrument, is the ~~Investor~~volatility ~~Warrants~~rate ~~and~~of ~~will~~85% ~~expire~~as onwell as the ~~fifth~~probability ~~anniversary~~ of ~~such~~a ~~stockholder~~future ~~approval~~financing ~~date~~event.

Pursuant to that certain Securities Purchase Agreement, dated December 6, 2023, by and between the Company and the investor (the “Investor”) named in the signature page thereto (the “December 2023 Purchase Agreement”), the Company agreed, among other things, pursuant to Section 4.12 thereof not to enter into a Variable Rate Transaction (as defined in the December 2023 Purchase Agreement) for a period of one-hundred and eighty (180) days following the closing date of that offering (or June 5, 2024) (the “VRT Prohibition”). In order to induce the Investor to agree to waive the VRT Prohibition to enable the Company to effect the Offering, the Company and the Investor entered into a Consent and Waiver, dated February 12, 2024 (the “Consent and Waiver”), whereby the Company agreed to issue to the Investor a new warrant to purchase up to 2,221,880 shares of Common Stock (the “Investor Warrant”), which Investor Warrant is in a form substantially identical to the Class B Common Warrants that is described above. The Investor Warrants will be exercisable commencing on the effective date of stockholder approval for the issuance of the shares of Common Stock issuable upon exercise of the Investor Warrants and will expire on the fifth anniversary of such stockholder approval date.

Based on the terms and conditions of the Investor Warrant, the Company determined that liability classification was appropriate for the warrants and recognized a liability of $0.2 million in accrued liabilities at the date of issuance and expensed as issuance costs.

December 2023 Registered Direct Offering

On December 6, 2023, the Company entered into a Securities Purchase Agreement ~~Purchase Agreement~~ with a single institutional investor Purchaser, pursuant to which the Company issued in a registered direct offering, 331,000 shares of the Company’s common stock, and pre-funded warrants to purchase 779,940 shares of Common Stock with an exercise price of $0.001 per share, and in a concurrent private placement, warrants to purchase an aggregate of 2,221,880 shares of Common Stock with an initial exercise price of $1.23. The combined purchase price for one Share and two Common Warrants was $1.23, and the combined purchase price for one Pre-Funded Warrant and two Common Warrants was $1.229. The Company received gross proceeds of approximately $1.4 million, before deducting underwriting discounts and commissions, estimated offering expenses, and before the exercise of warrants. In connection with the closing of the February 2024 Offering, the exercise price of these warrants was reduced to $0.2256 per share due to certain anti-dilution provisions in these warrants.

Based on the terms and conditions of the December 2023 public offering, the Company determined that equity classification was appropriate for the pre-funded warrants and warrants, and recognized the net proceeds from the issuance of common stock, pre-funded warrants, and warrants in excess of par of $1.0 million in additional paid-in capital

September 2023 Offering

On September 18, 2023, the Company completed a public offering and issued, 75,000 units, with each Unit consisting of (A) one share of the Company’s Series J Convertible Redeemable Preferred Stock, par value $0.001 per share, and (B) one warrant to purchase one-half of one (0.50) share of Series J Convertible Preferred Stock, at a price to the public of $60.00 per Unit, less underwriting discounts and commissions. Each Warrant has an exercise price of $30.00 per share, is exercisable for one-half of one (0.5) share of Series J Convertible Preferred Stock, is immediately exercisable and will expire one (1) year from the date of issuance. The Company received gross proceeds of approximately $4.5 million, before deducting underwriting discounts and commissions, estimated offering expenses, and before the exercise of warrants.

Based on the terms and conditions of the September 2023 public offering, the Company determined that liability classification was appropriate for the warrants and recognized the gross proceeds from the issuance allocated to the warrants in excess of par of $1.0 million in accrued liabilities and expensed issuance costs of $0.2 million allocated to the warrants.

May 2023 Offering

On May 26, 2023, the Company completed a public offering and issued, 175,000 units, with each Unit consisting of (A) one share of the Company’s Series H Convertible Redeemable Preferred Stock, par value $0.001 per share, and (B) one warrant to purchase one-half of one (0.50) share of Series H Convertible Preferred Stock, at a price to the public of $26.00 per Unit, less underwriting discounts and commissions. Each Warrant has an exercise price of $13.00 per share, is exercisable for one-half of one (0.5) share of Series H Convertible Preferred Stock, is immediately exercisable and will expire two (2) years from the date of issuance. The Company received gross proceeds of approximately $4.6 million, before deducting underwriting discounts and commissions, estimated offering expenses, and before the exercise of warrants.

Based on the terms and conditions of the May 2023 public offering, the Company determined that liability classification was appropriate for the warrants and recognized the gross proceeds from the issuance allocated to the warrants in excess of par of $1.2 million in accrued liabilities and expensed issuance costs of $0.2 million allocated to the warrants.

purchase one-half of one (0.50) share of Series H Convertible Preferred Stock, at a price to the public of $26.00 per Unit, less underwriting discounts and commissions. Each Warrant has an exercise price of $13.00 per share, is exercisable for one-half of one (0.5) share of Series H Convertible Preferred Stock, is immediately exercisable and will expire two (2) years from the date of issuance. The Company received gross proceeds of approximately $4.6 million, before deducting underwriting discounts and commissions, estimated offering expenses, and before the exercise of warrants.

January 2023 Offering

On January 9, 2023, the Company completed a public offering, pursuant to which the Company agreed to issue, in a registered direct offering, 171,678 shares of common stock, par value $0.001 per share, and pre-funded warrants to purchase 114,035 shares of common stock with an exercise price of $1.00 per share. The purchase price for one share of common stock was determined to be $35.00, and the purchase price for one January 2023 Pre-Funded Warrant was determined to be $34.00. The Company received aggregate gross proceeds from the transactions of approximately $9.9 million, before deducting underwriting discounts and commissions and other transaction expenses paid by the Company.

Based on the terms and conditions of the January 2023 public offering, the Company determined that equity classification was appropriate for the pre-funded warrants and recognized the net proceeds from the issuance of common stock and pre-funded warrants in excess of par of $8.5 million in additional paid-in capital.

A summary of the share equivalent of warrant activity for the ~~three~~six months ended ~~March~~June 3130, 2024 is as follows (in thousands, except exercise price amounts):

				Weighted
				Average
	Shares			ExercisePrice
Warrants outstanding as of December 31, 2023		4,323		$	11.88
Granted or Issued		42,427		$	0.57
Exercised		(22,~~736~~874	)	$	—
Warrants outstanding as of March 31, 2024		24,014		$	2.68
Warrants outstanding as of June 30, 2024		23,876		$	2.52
Warrants exercisable as of March 31, 2024		3,570		$	14.04
Warrants exercisable as of June 30, 2024		23,876		$	2.52
Vested warrants expired during the period ended March 31, 2024		—		$	—
Vested warrants expired during the period ended June 30, 2024		—		$	—

The following tables summarize ~~our~~the Company's stock warrants measured at fair value (level 3) on a recurring basis:

	December 31,							Fair Value			~~March~~June 3130,
	2023		Additions		Exercises			Adjustment			2024
Series H Warrants	$	620	$	—	$	—		$	2356		$	~~643~~676
Series J Warrants		743		—		—(95	)		(1516	)		~~728~~632
Class A Warrants		—		2,280		(1,960	)		85(106	)		~~405~~214
Class B Warrants		—		1,379		—			~~381~~(419	)		~~1,760~~960
Investor Warrants		—		192		—			52(58	)		~~244~~134
Total Level 3	$	1,363	$	3,851	$	(12,~~960~~055	)	$	~~526~~(543	)	$	32,~~780~~616

Phantom Awards and Stock Appreciation Rights

In 2021, 2022 and 2023 the Company granted phantom RSUs which were granted in lieu of stock-settled RSUs historically granted for leadership bonuses and non-employee director service. The phantom RSUs had either time-based or performance-based vesting conditions and a cash settlement date in 2024 with the Company's option to settle the award in common stock at the sole discretion of the Board. At inception, these phantom RSUs were included as a component of long-term liability on the consolidated balance sheet and were not considered stock-based compensation due to the cash-settlement feature of the award and the then current limitation on the number of remaining shares authorized for issuance. In 2022, as a result of the Reverse Stock Split, the phantom awards were reclassed to equity and included as a component of additional paid-in-capital in the amount of $0.1 million, with a portion remaining as a component of long-term liability on the consolidated balance sheet due to certain guaranteed minimums, and the expense subsequent to the remeasurement date considered stock-based compensation. ~~The expense recognized during the three months ended March 31, 2024 and 2023 was $0.1 million for each period.~~ As of December 31, 2023, approximately 2,113 of these phantom RSUs were cancelled due to non-achievement of performance metrics, and during the three months ended March 31, 2023 an additional 828 units were cancelled due to non-achievement. As of March 31, 2023, the Board approved settlement of the remaining 291 phantom RSUs with time-based vesting conditions in quarterly cash installments through April 2025 in the aggregate amount of $0.6 million. As of March 31, 2023, $0.6 million was included in accrued liabilities on the consolidated balance sheet. As of December 31, 2023 $0.5 million was included in accrued liabilities and $0.2 million was included in additional paid-in-capital on the consolidated balance sheet

As2,113 of ~~March~~these ~~31,~~phantom ~~2023~~RSUs were cancelled due to non-achievement of performance metrics, ~~there~~and ~~are~~during ~~approximately~~the ~~236~~three ~~outstanding~~months ~~SARs~~ended ~~granted~~March in31, ~~2021~~2024 inan ~~lieu~~additional of828 ~~stock-settled~~units ~~RSUs~~were ~~historically~~cancelled ~~granted~~due ~~for~~to non-~~employee~~achievement. ~~director~~As ~~service.~~of ~~Upon~~March ~~exercise~~31, 2024, the ~~SARs~~Board ~~could~~approved besettlement ~~settled~~of inthe ~~cash~~remaining ~~with~~291 ~~the~~phantom ~~Company's~~RSUs ~~option~~with totime-based ~~settle~~vesting conditions in ~~common~~quarterly ~~stock~~cash atinstallments through April 2025 in the ~~sole~~aggregate ~~discretion~~amount of ~~the~~$0.6 ~~Board~~million. ~~These~~As ~~SARs~~of ~~were~~June ~~fully~~30, ~~vested~~2024, ~~in 2022~~$0.5 Nomillion ~~expense~~ was ~~recognized~~included ~~during~~in accrued liabilities on the ~~three~~consolidated ~~months~~balance ~~ended~~sheet. ~~March~~As of December 31, ~~2024 and~~ 2023, ~~respectively~~$0.5 million was included in accrued liabilities and $0.2 million was included in additional paid-in-capital on the consolidated balance sheet

As of June 30, 2024, there are approximately 236 outstanding SARs granted in 2021 in lieu of stock-settled RSUs historically granted for non-employee director service. Upon exercise, the SARs could be settled in cash with the Company's option to settle in common stock at the sole discretion of the Board. These SARs were fully vested in 2022. No expense was recognized during the six months ended June 30, 2024 and 2023, respectively.

Net Loss Per Share – Basic and Diluted

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of BIOLASE common stock outstanding for the period. In computing diluted net loss per share, the weighted average number of shares of common stock outstanding is adjusted to reflect the effect of potentially dilutive securities. Net loss is adjusted for any deemed dividends to preferred stockholders to compute net income attributable to common stockholders. The February 2024 Pre-Funded Warrants were included in the calculation of basic and diluted loss per share for the ~~three~~six months ended ~~March~~June 3130, 2024 as the underlying warrant shares are issuable for little or no cash consideration. The January 2023 Pre-Funded Warrants were included in the calculation of basic and diluted loss per share for the ~~period~~three ~~ended~~and ~~three~~six months ended ~~March~~June 3130, 2023 as the underlying warrant shares are issuable for little or no cash consideration.

Outstanding stock options, restricted stock units, preferred shares, and warrants to purchase approximately 24,~~564~~456,~~370~~808 and 26366,~~693~~154 shares were not included in the calculation of diluted net loss per share amounts for the periods ended ~~March~~June 3130, 2024 and ~~March~~June 3130, 2023, respectively, as their effect would have been anti-dilutive.

NOTE 5—INVENTORY

Inventory is valued at the lower of cost or net realizable value and is comprised of the following (in thousands):

	March 31,		December 31,
	June 30,		December 31,
	2024		2023
Raw materials	$	65,~~139~~528	$	6,168
Work-in-process		1,~~466~~514		1,299
Finished goods		3,~~668~~862		3,966
Inventory	$	1110,~~273~~904	$	11,433

Inventory has been reduced by estimates for excess and obsolete amounts totaling $2.53 million as of ~~March~~June 3130, 2024 and $2.5 million as of December 31, 2023.

NOTE 6—PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment, net is comprised of the following (in thousands):

	March 31,			December 31,
	June 30,			December 31,
	2024			2023
Building	$	~~201~~199		$	205
Leasehold improvements		1,251			1,251
Equipment and computers		14,~~682~~467			14,628
Furniture and fixtures		519			519
Construction in progress		—			92
Total property, plant, and equipment before depreciation and land		16,~~653~~436			16,695
Less: Accumulated depreciation		(1112,~~963~~328	)		(11,330	)
Total property, plant, and equipment, net before land		4,~~690~~108			5,365
Land		~~156~~155			160
Property, plant, and equipment, net	$	4,~~846~~263		$	5,525

Depreciation expense related to property, plant, and equipment totaled $0.7 million for the three months ended March 31, 2024 and $0.1 million for the three months ended March 31, 2023.

NOTE 7—INTANGIBLE ASSETS AND GOODWILL

~~For~~Depreciation ~~intangible~~expense ~~assets~~related ~~subject~~ to ~~amortization~~property, ~~the Company performs its impairment test when indicators~~plant, ~~such~~and asequipment ~~reductions~~totaled in$0.7 ~~demand~~million orand ~~significant economic slowdowns, are present~~$1.3 ~~During~~million ~~the~~for ~~fourth quarter ended December 31, 2023, due to~~ the ~~sustained~~three ~~decrease~~and insix ~~the~~months ~~stock~~ended ~~price~~June ~~of the common stock decreasing the implied fair value of the business~~30, ~~the~~2024 ~~Company performed a quantitative assessment of impairment over goodwill~~ and ~~determined that there was no impairment to our goodwill~~$1.4 ~~Goodwill~~million ~~was valued using an equally weighted income approach~~ and ~~market approach~~$1.6 ~~The~~million ~~unobservable~~for ~~inputs utilized in determining~~ the ~~fair~~three ~~value~~and ofsix ~~the~~months ~~goodwill,~~ended ~~which~~June ~~is categorized as a Level 3 instrument~~30, ~~are the discount rate of 19~~2023.1% ~~and various revenue growth rates utilized in the financial forecast of future cash flows.~~

AsDuring ofthe ~~March~~three ~~31,~~months ~~2024~~ended ~~and~~June ~~December 31~~30, 2023, the Company ~~had~~revised ~~goodwill~~its ~~(indefinite~~accounting ~~life)~~for oflaser ~~$2.9~~equipment ~~million.~~transferred Asas part of ~~March~~its ~~31,~~marketing ~~2024~~efforts to potential customers and ~~December~~other ~~31,~~sales ~~2023,~~representatives ~~all~~without ~~intangible~~any ~~assets~~payment. ~~subject~~As toa ~~amortization~~result, ~~have~~a ~~been~~cumulative ~~fully~~adjustment ~~amortized~~of ~~and~~$0.8 ~~there~~million was norecorded ~~amortization~~to depreciation expense ~~recognized~~in ~~during~~ the three and six months ended ~~March~~June 3130, ~~2024 and~~ 2023.

NOTE 7—INTANGIBLE ASSETS AND GOODWILL

The Company conducted its annual impairment test of goodwill as of September 30, 2023 and determined that there was no impairment. The Company also tests its intangible assets and goodwill between the annual impairment tests if events occur or circumstances change that would more likely than not reduce the fair value of the Company or its assets below their carrying amounts. For intangible assets subject to amortization, the Company performs its impairment test when indicators, such as reductions in demand or significant economic slowdowns, are present. During the fourth quarter ended December 31, 2023, due to the sustained decrease in the stock price of the common stock decreasing the implied fair value of the business, the Company performed a quantitative assessment of impairment over goodwill and determined that there was no impairment to the Company's goodwill. Goodwill was valued using an equally weighted income approach and market approach. The unobservable inputs utilized in determining the fair value of the goodwill, which is categorized as a Level 3 instrument, are the discount rate of 19.1% and various revenue growth rates utilized in the financial forecast of future cash flows.

As of June 30, 2024 and December 31, 2023, the Company had goodwill (indefinite life) of $2.9 million. As of June 30, 2024 and December 31, 2023, all intangible assets subject to amortization have been fully amortized and there was no amortization expense recognized during the three and six months ended June 30, 2024 and 2023.

NOTE 8—ACCRUED LIABILITIES

Accrued liabilities are comprised of the following (in thousands):

	March 31,		December 31,
	June 30,		December 31,
	2024		2023
Payroll and benefits	$	3,~~282~~640	$	3,343
Warranty accrual, current portion		1,~~293~~000		1,321
Operating lease liability		904		888
Accrued professional services		~~731~~994		422
Taxes		~~383~~349		452
Accrued insurance premium		~~319~~161		473
Other		~~677~~614		619
Accrued liabilities	$	7,~~589~~662	$	7,518

Changes in the initial product warranty accrual and the expenses incurred under the Company’s initial and extended warranties are included within accrued liabilities and were as follows (in thousands):

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2024			2023			2024			2023
Balance, beginning of period	$	1,~~914~~891		$	1,~~653~~855		$	1,914		$	1,653
Provision for estimated warranty cost		~~679~~808			~~1,158~~802			1,487			1,960
Warranty expenditures		(~~702~~856	)		(~~956~~885	)		(1,558	)		(1,841	)
Balance, end of period		1,~~891~~843			1,~~855~~772			1,843			1,772
Less: long-term portion of warranty accrual		~~598~~843			~~426~~397			843			397
Current portion of warranty accrual	$	1,~~293~~000		$	1,~~429~~375		$	1,000		$	1,375

The Company's Waterlase laser systems sold domestically are covered by a warranty against defects in material and workmanship for a period of up to one year from the date of sale to the end-user by the Company or a distributor. The Company's diode systems sold domestically are covered by a warranty against defects in material and workmanship for a period of up to two years from the date of sale to the end-user by the Company or a distributor. Waterlase systems and diode systems sold internationally are covered by a warranty against defects in material and workmanship for a period of up to 24 months from date of sale to the international distributor. The Company's laser systems warranty covers parts and service for sales in its North American territories and parts only for international distributor sales.

In North America and select international locations, the Company sells extended warranty contracts to its laser systems end-users that cover the period after the expiration of the Company's standard warranty coverage for its laser systems. Extended warranty coverage provided under the Company's service contracts varies by the type of system and the level of service desired by the customer. Products or accessories remanufactured, refurbished, or sold by unauthorized parties, voids all warranties in place for such products and exempts the Company from liability issues relating to the use of such products.

NOTE 9—DEBT

The following table presents the details of the principal outstanding and unamortized discount (in thousands):

	March 31,			December 31,
	June 30,			December 31,
	2024			2023
SWK Loan	$	1413,~~395~~695		$	14,560
EIDL Loan		150			150
Discount and debt issuance costs on SWK Loan		(~~538~~420	)		(663	)
Total		1413,~~007~~425			14,047
Current term loans		213,~~800~~275			2,265
Non current term loans, net of discount	$	~~11,207~~150		$	11,782

The Company recognized approximately $0.6 million and $1.2 million in interest expense for the three and six months ended ~~March~~June 3130, 2024, respectively, and ~~2022~~$0.6 million and $1.2 million for the three and six months ended June 30, 2023, respectively. The weighted-average interest rate as of ~~March~~June 3130, 2024 was 14.8259%.

The future minimum principal and interest payments as of ~~March~~June 3130, 2024 are as follows (in thousands):

	Principal		Interest (1)
Remainder of 2024	$	21,~~100~~400	$	~~1,373~~896
2025		12,295		842
2026		—		9
2027		3		6
2028 and thereafter		147		83
Total future payments	$	1413,~~545~~845	$	21,~~313~~836
(1) Estimated using London Interbank Bank Offered Rate (“LIBOR”) as of March 31, 2024
(1) Estimated using London Interbank Bank Offered Rate (“LIBOR”) as of June 30, 2024

Term Loan

On November 9, 2018, the Company entered into a five-year secured Credit Agreement (as amended, restated, and supplemented from time to time, the “Credit Agreement”) with SWK Funding LLC (“SWK”), pursuant to which the Company has outstanding principal of $13.3 million (“SWK Loan”) as of ~~March~~June 3130, 2024. In addition, pursuant to the Credit Agreement, the Company is required to pay certain exit fees totaling $1.4 million upon loan termination which are recorded as a debt premium. The Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets. Under the terms of the Credit Agreement and subsequent amendments as discussed in the Company’s 2023 Form 10-K, repayment of the SWK Loan is interest-only for the first two years, paid quarterly with the option to extend the interest-only period. Principal repayments were to begin in the first quarter of 2021. On June 30, 2022 the Company entered into the ninth amendment to the Credit Agreement (the "Ninth Amendment"), which extended the interest-only period by two quarters from May 2023 to November 2023. On December 30, 2022, the Company entered into the tenth amendment to the Credit Agreement, which lowered the required minimum consolidated unencumbered liquid assets from $3 million to $2.5 million and removed the conditional minimum last twelve months aggregate revenue and EBITDA as of the end of the twelve-month period ended December 31, 2022. On November 15, 2023, the Company entered into the Eleventh Amendment to Credit Agreement, which reduced the principal amortization payments due on November 15, 2023 and February 15, 2024 to $165,000, reduced the required minimum consolidated unencumbered liquid assets to $1.5 million through and including December 30, 2023 and to $2.5 million thereafter, and reduced the required minimum consolidated unencumbered liquid assets to $3.5 million as of the last day of any fiscal quarter beginning with the period ending March 31, 2024. In connection with the Ninth Amendment, the Company prepaid $1.0 million of the outstanding loan balance. Principal repayments began in November 2023 and are $0.7 million quarterly after February 2024 until the SWK Loan matures in May 2025. The loan bears interest of 9% plus LIBOR with a floor of 1.25%, or another index that approximates LIBOR as close as possible if and when LIBOR no longer exists.

AsDuring ofthe ~~March~~three 31months ended June 30, 2024, all remaining long-term balances related to the ~~Company~~SWK ~~was~~Loan inwere ~~compliance~~reclassified ~~with~~to current liabilities due to the ~~debt~~loan ~~covenants~~maturity date of ~~the~~May ~~Credit~~31, ~~Agreement~~2025.

EIDL Loan

~~principal~~As ~~and~~of ~~interest,~~June ~~are due monthly beginning in July 2021 and are payable through July 2050. In April 2021~~30, ~~the SBA announced that it was extending the first payment due date for all loans until 2022~~2024, ~~or 24 months from~~ the ~~loan~~Company ~~execution date. In March 2022, the SBA announced that it~~ was ~~extending~~in ~~the~~compliance ~~first~~with ~~payment due date for all loans an additional six months, or 30 months from~~ the ~~loan~~debt ~~execution~~covenants ~~date.~~of ~~The Company began making payments on~~ the ~~EIDL~~Credit ~~Loan starting in November 2022~~Agreement. ~~Fixed payments are first applied to any accrued interest.~~

EIDL Loan

On May 22, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the Small Business Administration (the "SBA") under its Economic Injury Disaster Loan assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is $150,000, with the proceeds to be used for working capital purposes. Interest on the EIDL Loan accrues at the rate of 3.75% per annum, and installment payments, including principal and interest, are due monthly beginning in July 2021 and are payable through July 2050. In April 2021, the SBA announced that it was extending the first payment due date for all loans until 2022, or 24 months from the loan execution date. In March 2022, the SBA announced that it was extending the first payment due date for all loans an additional six months, or 30 months from the loan execution date. The Company began making payments on the EIDL Loan starting in November 2022. Fixed payments are first applied to any accrued interest.

NOTE 10—LEASES

The Company enters into operating leases primarily for real estate, office equipment, and fleet vehicles. Lease terms generally range from one to five years, and often include options to renew for one year. The Company leases its corporate headquarters pursuant to a lease that expires on December 31, 2025 and leases a manufacturing facility located in Corona, California, which expires on June 30, 2025. The Company also leases additional office space and certain office equipment under various operating lease arrangements.

On January 22, 2020, the Company entered into a five-year real property lease agreement for an approximately 11,000 square foot facility in Corona, California for its manufacturing operations. The lease commenced on July 1, 2020. On December 10, 2021, the Company entered into a lease for an additional 15,000 square feet at its facility. This additional lease commenced on February 1, 2022 and expires on June 30, 2025.

On February 4, 2020, the Company also entered into a 66-month real property lease agreement for office space of approximately 12,000 square feet of office space in Lake Forest, California. The lease commenced on July 1, 2020. On May 26, 2022, the Company entered into an additional lease at this location to expand the leased space by an additional 8,000 square feet for an additional training facility and model dental office. The lease commenced on March 8, 2023 and expires December 31, 2025.

Information related to the Company’s right-of-use assets and related liabilities were as follows (in thousands):

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2024			2023			2024			2023
Cash paid for operating lease liabilities	$	7780		$	6892		$	157		$	159
Right-of-use assets obtained in exchange for new operating lease obligations	$	—		$	~~464~~19		$	—		$	483
Weighted-average remaining lease term	1.64 years			2.53 years			1.4 years			2.3 years
Weighted-average discount rate		12.3	%		12.3	%		12.3	%		12.3	%

Lease expense consists of payments for real property, office copiers, and IT equipment. The Company recognizes payments for non-lease components such as common area maintenance in the period incurred. As of ~~March~~June 3130, 2024, the Company had no significant leases that had not commenced.

The Company allocates lease cost amongst lease and non-lease components. The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets.

Maturities of lease liabilities as of March 31, 2024 for leases that have commenced are as follows (in thousands):

	March 31,
2024	$	982
2025		613
2026		2
2027		—
2028 and thereafter		—
Total future minimum lease obligations		1,597
Less imputed interest		(151	)
Total lease liabilities	$	1,446
Current operating lease liabilities, included in accrued liabilities	$	904
Non current lease liabilities		542
Total lease liabilities	$	1,446

As of March 31, 2024, right-of-use assets were $1.3 million and lease liabilities were $1.4 million.

~~Rent~~Maturities ~~expense~~of ~~totaled~~lease ~~$0.3~~liabilities ~~million~~as of June 30, 2024 for ~~the~~leases ~~three~~that ~~months~~have ~~ended~~commenced ~~March~~are ~~31,~~as ~~2024~~follows ~~and~~(in ~~2023.~~thousands):

Future minimum rental commitments under lease agreements, as of March 31, 2024, with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands):


	June 30,
2024	$	919
2025		410
2026		1
2027		—
2028 and thereafter		—
Total future minimum lease obligations		1,330
Less imputed interest		(111	)
Total lease liabilities	$	1,219

Current operating lease liabilities, included in accrued liabilities	$	904
Non current lease liabilities		315
Total lease liabilities	$	1,219

	Year Ended
	December 31,
Remainder of 2024	$	778
2025		816
2026		3
2027		—
2028 and thereafter		—
Total future minimum lease obligations		1,597
Less imputed interest		(151	)
Total lease liabilities	$	1,446

As of June 30, 2024, right-of-use assets were $1.1 million and lease liabilities were $1.2 million.

Rent expense totaled $0.3 million and $0.6 million for the three and six months ended June 30, 2024 and $0.3 million and $0.6 million for the three and six months ended June 30, 2023.

Future minimum rental commitments under lease agreements, as of June 30, 2024, with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands):


	Year Ended
	December 31,
Remainder of 2024	$	510
2025		817
2026		3
2027		—
2028 and thereafter		—
Total future minimum lease obligations		1,330
Less imputed interest		(111	)
Total lease liabilities	$	1,219

NOTE 11—SEGMENT INFORMATION

The Company currently operates in a single business segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. For the three and six months ended ~~March~~June 3130, 2024, sales to customers in the United States accounted for approximately 6671% and 69% of net revenue and international sales accounted for approximately 3429% and 31% of net revenue, respectively. For the three and six months ended ~~March~~June 3130, 2023, sales to customers in the United States accounted for approximately 6575% and 71% of net revenue and international sales accounted for approximately 3525% and 29% of net revenue, respectively. No individual country, other than the United States, represented more than 10% of total net revenue during the three and six months ended ~~March~~June 3130, 2024 or 2023.

Net revenue by geographic location based on the location of customers was as follows (in thousands):

	Three Months Ended				Six Months Ended
	March 31,
	June 30,				June 30,
	2024		2023		2024		2023
United States	$	68,~~690~~240	$	610,~~758~~741	$	14,930	$	17,499
International		3,~~441~~315		3,~~709~~545		6,757		7,254
Net revenue	$	1011,~~131~~555	$	1014,~~467~~286	$	21,687	$	24,753

Property, plant, and equipment by geographic location was as follows (in thousands):

	March 31,		December 31,
	June 30,		December 31,
	2024		2023
United States	$	4,~~613~~035	$	5,283
International		~~233~~228		242
Total	$	4,~~846~~263	$	5,525

NOTE 12—CONCENTRATIONS

Revenue from the Company’s products are as follows (dollars in thousands):

	Three Months Ended								Six Months Ended
	March 31,
	June 30,								June 30,
	2024				2023				2024				2023
Laser systems	$	56,~~175~~007	5152.10	%	$	68,~~265~~754	5961.83	%	$	11,182	51.6	%	$	15,019	60.7	%
Consumables and other		3,~~469~~835	3433.2	%		34,~~033~~117	2928.08	%		7,304	33.6	%		7,150	28.9	%
Services		1,~~487~~713	14.78	%		1,~~169~~415	119.29	%		3,201	14.8	%		2,584	10.4	%
Net revenue	$	1011,~~131~~555	100.0	%	$	1014,~~467~~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 ~~March~~June 3130, 2024 or 2023.

The Company maintains its cash and cash equivalents in money market investment accounts with established commercial banks. Such cash deposits periodically exceed the Federal Deposit Insurance Corporation insured limit.

21As of June 30, 2024, accounts receivable from one customer totaled approximately 12% of total gross accounts receivable with the entire balance being current. As of December 31, 2023 accounts receivable from one customer totaled approximately 11% of total gross accounts receivable which has been partially received in 2024 and partially reserved for uncollectibility as of June 30, 2024.

No individual customer represented more than 10% of the Company’s accounts receivable as of March 31, 2024. As of December 31, 2023 accounts receivable from one customer totaled approximately 11% of total gross accounts receivable which has been partially received on in 2024.

The Company currently purchases certain key components of its products from single suppliers. Although there are a limited number of manufacturers of these key components, management believes that other suppliers could provide similar key components on comparable terms. A change in suppliers, however, could cause delays in manufacturing and a possible loss of sales, which could adversely affect the Company’s business, results of operations and financial condition.

NOTE 13—INCOME TAXES

The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Management evaluates the need to establish a valuation allowance for deferred tax assets based upon the amount of existing temporary differences, the period in which they are expected to be recovered, and expected levels of taxable income. A valuation allowance to reduce deferred tax assets is established when it is “more likely than not” that some or all of the deferred tax assets will not be realized. Based on the Company’s net losses in prior years, management has determined that a full valuation allowance against the Company’s net deferred tax assets is appropriate.

Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has elected to classify interest and penalties as a component of its income tax provision. With respect to the liability for unrecognized tax benefits, including related estimates of penalties and interest, the Company did not record a liability for unrecognized tax benefits for the three and six months ended ~~March~~June 3130, 2024 and 2023. The Company does not expect any changes to its unrecognized tax benefit for the next 12 months that would materially impact its consolidated financial statements.

During the three and six months ended ~~March~~June 3130, 2024, the Company recorded an income tax provision of $1920,000 and $40,000 resulting in an effective tax rate of 0.37% and 0.4%, respectively. During the three and six months ended ~~March~~June 3130, 2023, the Company recorded an income tax provision of $131,000, resulting in an effective tax rate of 0.6% and 0.3%, respectively. The income tax provisions for the three and six months ended ~~March~~June 3130, 2024 and 2023 were calculated using the discrete year-to-date method. The effective tax rate differs from the statutory tax rate of 21% primarily due to the existence of valuation allowances against net deferred tax assets and current liabilities resulting from the estimated state income tax liabilities and foreign tax liability.

NOTE 14—SUBSEQUENT EVENTS

Nasdaq Deficiency

On April 15, 2024, the Company received a staff determination letter (the “Staff Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC notifying the Company that, unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the “Panel”), its securities could be subject to suspension from trading on The Nasdaq Capital Market for failure to meet the $1.00 minimum closing bid price requirement for the 30 consecutive business days from January 19 through March 1, 2024, as required by Listing Rule 5550(a)(2), and that the Company is not eligible for an automatic compliance period because the Panel decision relating to the Company, dated August 14, 2023, subjected the Company to a Mandatory Panel Monitor for a period of one year pursuant to Listing Rule 5815(d)(4)(B). Based on the foregoing, the Company timely requested a hearing before the Panel and was granted a hearing date in June 2024. The hearing request automatically stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing. In that regard, pursuant to the Listing Rules, the Panel has the authority to grant the Company a further extension not to exceed October 14, 2024.

The Staff Letter further noted that pursuant to Listing Rule 5810(c)(3)(A)(iv) no further automatic compliance period would be provided to the Company because over the prior two-year period the Company has effected reverse stock splits with a cumulative ratio of 250 shares or more to one.

The Staff Letter advised that this determination supersedes the previous letter, dated March 4, 2024, received by the Company from the Staff regarding the Company’s failure to meet the $1.00 minimum closing bid price requirement for the 30 consecutive business

~~days~~effective tax rate differs from ~~January~~the 19statutory ~~through~~tax ~~March~~rate 1,of ~~2024,~~21% asprimarily ~~required~~due byto ~~Listing~~the ~~Rule~~existence ~~5550(a)(2).~~of ~~The~~valuation ~~March~~allowances 4,against ~~2024,~~net ~~letter~~deferred ~~was~~tax ~~issued~~assets byand current liabilities resulting from the ~~Staff~~estimated instate ~~error~~income tax liabilities and foreign tax liability.

~~Annual~~NOTE ~~Meeting~~14—SUBSEQUENT ~~of Stockholders~~EVENTS

OnThe ~~May 2, 2024, the~~ Company ~~held~~has ~~its~~evaluated ~~2024~~all ~~Annual~~events ~~Meeting~~or oftransactions ~~Stockholders.~~that ~~Ten~~occurred ~~proposals~~after ~~were~~June ~~submitted~~30, to2024 ~~stockholders~~through ~~for~~August a8, ~~vote~~2024, ~~whereby~~which ~~only~~is ~~proposal number 7 was not approved. Proposal number 7 would have amended~~ the ~~2018~~date ~~Plan~~that ~~to increase~~ the ~~number~~condensed ofconsolidated ~~shares~~financial ofstatements ~~the~~were ~~Company's common stock~~ available ~~for~~to ~~issuance~~be ~~under the 2018 Plan by an additional 7~~issued.5 ~~million~~During ~~shares.~~this ~~As of March 31~~period, ~~2024,~~there ~~under~~were ~~the~~no ~~terms~~material ofsubsequent ~~the~~events ~~2018~~requiring ~~Plan,~~recognition aor ~~total of 112~~disclosure,~~268~~ ~~shares~~other ofthan ~~common~~those ~~stock~~described ~~have been authorized for issuance, of which approximately 53,677 shares of common stock remain available for issuance~~below.

On July 16, 2024, the Company issued an aggregate of 3,190,476 shares of its common stock, par value $0.001 per share, in exchange for (i) 2,546 shares of the Company’s Series J Convertible Redeemable Preferred Stock, par value $0.001 per share (the "Series J Preferred Stock"), and (ii) 8,000 Series J Preferred Warrants to purchase 4,000 shares of Series J Preferred Stock, pursuant to the terms of that certain Exchange Agreement entered into on July 16, 2024 by the Company and the investor named therein.

The Company issued common stock to the Investor in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Section 3(a)(9) thereof. The shares of Common Stock issued upon exchange of the Series J Preferred Stock and Series J Preferred Warrants have not been registered under the Securities Act and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements. No proceeds have been or will be received and no commissions have been or will be paid by the Company in connection with the exchange described herein.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”) and our audited consolidated financial statements and related notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2024 (the “2023 Form 10-K”).

In addition to historical information, this discussion and analysis contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that involve risks, uncertainties, and assumptions, which could cause actual results to differ materially from management's expectations. Such forward-looking statements include statements, predictions, or expectations regarding expected investment activities, future liquidity, potential collaborations, market opportunities, plans with respect to products and services, future demand for improved dental care and dental laser equipment, seasonality and the reasons therefor, operating and other expenses, anticipated cash needs, our strategy and any other statement that is not historical fact. Forward-looking statements are identified by the use of words such as “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “continue,” “expect,” “believe,” “anticipate,” “estimate,” “predict,” “outlook,” “potential,” “plan,” “seek,” “forecast,” and similar expressions and variations or the negatives of these terms or other comparable terminology.

The forward-looking statements contained in this Form 10-Q are based on the expectations, estimates, projections, beliefs, and assumptions of our management based on information available to management as of the date on which this Form 10-Q was filed with the SEC, or as of the date on which the information incorporated by reference was filed with the SEC, as applicable, all of which are subject to change. Forward-looking statements are subject to risks, uncertainties, and other factors that are difficult to predict and could cause actual results to differ materially from those stated or implied by our forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to:

•

substantial doubt about our ability to continue as a going concern;

•

losses that we have experienced for each of the past ~~three~~several years;

•

our inability to meet our redemption obligations under the existing convertible redeemable preferred stock;

•

our failure to ~~comply~~relist our common stock on a national exchange or ~~regain~~maintain compliance with the ~~continued listing~~ requirements of the ~~Nasdaq Capital Market~~OTCQB;

•

global economic uncertainty and volatility in financial markets;

•

inability to raise additional capital on terms acceptable to us;

•

our relationships with, and the efforts of, third-party distributors;

•

failure in our efforts to train dental practitioners or to overcome the hesitation of dentists and patients to adopt laser technologies;

•

inconsistencies between future data and our clinical results;

•

competition from other companies, including those with greater resources;

•

our inability to successfully develop and commercialize enhanced or new products that remain competitive with products or alternative technologies developed by others;

•

the inability of our customers to obtain third-party reimbursement for their use of our products;

•

limitations on our ability to use net operating loss carryforwards;

•

problems in manufacturing our products;

•

warranty obligations if our products are defective;

•

adverse publicity regarding our technology or products;

•

adverse events to our patients during the use of our products, regardless of whether caused by our products;

•

issues with our suppliers, including the failure of our suppliers to supply us with a sufficient amount or adequate quality of materials;

•

rapidly changing standards and competing technologies;

•

our inability to effectively manage and implement our growth strategies;

•

risks associated with operating in international markets, including potential liabilities under the Foreign Corrupt Practices Act;

•

breaches of our information technology systems;

•

seasonality;

•

litigation, including the failure of our insurance policies to cover certain expenses relating to litigation and our inability to reach a final settlement related to certain litigation;

•

disruptions to our operations at our primary manufacturing facility;

•

loss of our key management personnel or our inability to attract or retain qualified personnel;

•

risks and uncertainties relating to acquisitions, including difficulties integrating acquired businesses successfully into our existing operations and risks of discovering previously undisclosed liabilities;

•

failure to meet covenants in the Credit Agreement, dated as of November 9, 2018 (as amended from time to time, the “Credit Agreement”), by and between BIOLASE and SWK Funding LLC and related risks of foreclosure triggered by an event of default under the Credit Agreement;

•

interest rate risk, which could result in higher expense in the event of interest rate increases;

•

obligations to make debt payments under the Credit Agreement;

•

risks of foreclosure triggered by an event of default under the Credit Agreement;

•

failure to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act of 2002, as amended or maintain adequate internal control over financial reporting;

•

climate change initiatives;

•

failure of our intellectual property rights to adequately protect our technologies and potential third-party claims that our products infringe their intellectual property rights;

•

changes in government regulation or the inability to obtain or maintain necessary governmental approvals;

•

our failure to comply with existing or new laws and regulations, including fraud and abuse and health information privacy and securities laws;

•

changes in the regulatory requirements of the Food and Drug Administration (“FDA”) applicable to laser products, dental devices, or both;

•

recall or other regulatory action concerning our products after receiving FDA clearance or approval; and

•

risks relating to ownership of our common stock, including high volatility and dilution.

Further information about factors that could materially affect the Company, including our results of operations and financial condition, is contained under “Risk Factors” in Item 1A in the 2023 Form 10-K and Item 1A of Part II of this Form 10-Q. Except as required by law, we undertake no obligation to revise or update any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise.

Overview

BIOLASE, Inc. (“BIOLASE” and, together with its consolidated subsidiaries, the “Company,” “we,” “our” or “us”) is a leading provider of advanced laser systems for the dental industry. We develop, manufacture, market, and sell laser systems that provide significant benefits for dental practitioners and their patients. Our proprietary systems allow dentists, periodontists, endodontists, pediatric dentists, oral surgeons, and other dental specialists to perform a broad range of minimally invasive dental procedures, including cosmetic, restorative, and complex surgical applications. Our laser systems are designed to provide clinically superior results for many types of dental procedures compared to those achieved with drills, scalpels, and other conventional instruments. Potential patient benefits include less pain, fewer shots, faster healing, decreased fear and anxiety, and fewer appointments. Potential practitioner benefits include improved patient care and the ability to perform a higher volume, and wider variety of procedures.

We offer two categories of laser system products: Waterlase (all-tissue) systems and diode (soft-tissue) systems. Our flagship brand, the Waterlase, uses a patented combination of water and laser energy and is FDA cleared for over 80 clinical indications to perform most procedures currently performed using drills, scalpels, and other traditional dental instruments for cutting soft and hard tissue. For example, Waterlase safely debrides implants without damaging or significantly affecting surface temperature and is an

effective, safe solution for preserving sick implants. In addition, Waterlase disinfects root canals more efficiently than some traditional chemical methods. We offer our diode laser systems to perform soft tissue, pain therapy, and cosmetic procedures, including teeth whitening. As of December 31, 2023, we maintained approximately 241 active and 21 pending United States and international patents, with the majority relating to our Waterlase technology. Our patent portfolio is regularly evaluated, and we strategically prioritize our core patents to ensure optimal intellectual property coverage while minimizing annual maintenance fees. From 1998 through December 31, 2023, we have sold over 47,700 laser systems in over 80 countries around the world, and we believe that Waterlase iPlus is the world’s best-selling all-tissue dental laser. Since 1998, we have been the global leading innovator, manufacturer, and marketer of dental laser systems.

We also manufacture and sell consumable products and accessories for our laser systems. Our Waterlase and diode systems use disposable laser tips of differing sizes and shapes depending on the procedure being performed. We also market flexible fibers and hand pieces that dental practitioners replace at some point after initially purchasing laser systems. For our Epic line of diode laser systems, we sell teeth whitening gel kits. During the quarter ended ~~March~~June 3130, 2024, the sale of lasers accounted for approximately 5152% of our total sales, and consumables, accessories, and services accounted for approximately 4948% of our total sales.

We currently operate in a single reportable business segment. We had net revenues of $1011.16 million and $1021.57 million for the three and six months ended ~~March~~June 3130, 2024, respectively and net revenues of $14.3 million and $24.8 million for the three and six months ended June 30, 2023, respectively,. ~~and~~We we had net losses of $62.58 million and $59.83 million for the ~~same~~three ~~periods~~and six months ended June 30, 2024, respectively and $4.9 million and $10.7 million for the three and six months ended June 30, 2023. We had total assets of $3430.46 million as of ~~March~~June 3130, 2024 and $35.1 million as of December 31, 2023.

Business and Outlook

Our Waterlase systems precisely cut hard tissue, bone, and soft tissue with minimal or no damage to surrounding tissue and dental structures. Our diode systems, which include the Epic system, are designed to complement our Waterlase systems, and are used only in soft tissue procedures, pain therapy, hygiene, and cosmetic applications, including teeth whitening. The diode systems, together with our Waterlase systems, offer practitioners a broad product line with a range of features and price points.

Due to the limitations associated with traditional and alternative dental instruments, we believe there is a large market opportunity for all-tissue dental laser systems that provide superior clinical outcomes, reduce the need to use anesthesia, help reduce trauma, pain, and discomfort associated with dental procedures, and increase patient acceptance for treatment protocols.

Our strategy is to increase awareness and demand for (i) our products among dental practitioners by educating dental practitioners and patients about the clinical benefits of our product suite and (ii) our laser systems among patients by educating patients about the clinical benefits of the Waterlase and diode systems. An important goal of ours is to increase consumables revenue by selling more single-use accessories used by dental practitioners when performing procedures using our dental laser systems. In the short term, we are striving for operating excellence through lean enterprise initiatives, with a specific focus on our sales strategy and cash flow management, coupled with optimizing our engineering capabilities to develop innovative new products.

We also seek to create value through innovation and leveraging existing technologies into adjacent medical applications. We plan to expand our product line and clinical applications by developing enhancements and transformational innovations, including new clinical solutions for dental applications and for other adjacent medical applications. In particular, we believe that our existing technologies can provide significant improvements over existing standards of care in fields including ophthalmology, otolaryngology, orthopedics, podiatry, pain management, aesthetics/dermatology, veterinary, and consumer products. We plan to continue to explore potential collaborations to apply our proprietary laser technologies with expanded FDA-cleared indications to other medical applications in the future.

The Company experienced revenue decline of 319% and 12% for the three and six months ended ~~March~~June 3130, 2024, respectively, compared to the same period in 2023. The Company is currently forecasting revenue for fiscal year 2024 to be above fiscal year 2023, as the Company's strategy described above continues to generate sales to new customers and additional consumable sales to existing customers.

Recent Developments

Nasdaq delisting

On June 17, 2024, Nasdaq notified the Company that the Nasdaq Hearings Panel determined to delist the Company’s common stock and that trading of the Company’s securities would be suspended at the open of trading on June 20, 2024. Nasdaq completed the delisting by filing a Form 25 Notification of Delisting with the U.S. Securities and Exchange Commission.

As previously reported, the Nasdaq Listing Qualifications Staff notified the Company that it was in violation of the bid price requirement of Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) and the equity requirement in Listing Rule 5550(b)(1) (the “Equity Rule”) or any of the alternative requirements in Listing Rule 5550(b). The Company appeared before the Panel on June 4, 2024 and at the hearing, the Company’s senior management and outside advisors outlined the Company’s compliance plan for the Panel, which included the Company’s plans to regain compliance with the Bid Price Rule (i.e., meet the minimum closing bid price requirement of $1.00) and the Equity Rule (i.e., maintain a stockholders’ equity of at least $2.5 million).

The Company began trading under its current trading symbol "BIOL" on the OTC Markets (OTCQB) with the open of the markets on June 20, 2024. The Company plans to continue to file its required periodic reports and other filings with the SEC.

February 2024 Public Offering

On February 15, 2024, the Company completed a public offering (the "Offering") and issued (i) 7,795,000 units (the "Units"), with each Unit consisting of (A) one share of the Company’s common stock, par value $0.001 per share (the "Common Stock"), (B) one Class A warrant to purchase one share of Common Stock (the "Class A Common Warrants"), each exercisable from time to time for one share of Common Stock at an exercise price of $0.66 per share, and (C) one Class B warrant to purchase one share of Common Stock (the "Class B Common Warrants"), each exercisable from time to time for one share of Common Stock at an exercise price of $0.748 per share and (ii) 8,205,000 pre-funded units (the "Pre-Funded Units"), with each Pre-Funded Unit consisting of (A) one pre-funded warrant (the "Pre-Funded Warrants"), each such Pre-Funded Warrant being exercisable from time to time for one share of Common Stock at an exercise price of $0.001 per share, (B) one Class A Common Warrant, and (C) one Class B Common Warrant. The Units were sold at the public offering price of $0.44 per Unit and the Pre-Funded Units were sold at the public offering price of $0.439 per Pre-Funded Unit. The Company received gross proceeds of approximately $7.0 million, before deducting placement agent fees, estimated offering expenses, and before the exercise of warrants.

Pursuant to that certain Securities Purchase Agreement, dated December 6, 2023, by and between the Company and the investor (the “Investor”) named in the signature page thereto (the “December 2023 Purchase Agreement”), the Company agreed, among other things, pursuant to Section 4.12 thereof not to enter into a Variable Rate Transaction (as defined in the December 2023 Purchase Agreement) for a period of one-hundred and eighty (180) days following the closing date of that offering (or June 5, 2024) (the “VRT Prohibition”). In order to induce the Investor to agree to waive the VRT Prohibition to enable the Company to effect the Offering, the Company and the Investor entered into a Consent and Waiver, dated February 12, 2024 (the “Consent and Waiver”), whereby the Company agreed to issue to the Investor a new warrant to purchase up to 2,221,880 shares of Common Stock (the “Investor Warrant”), which Investor Warrant is in a form substantially identical to the Class B Common Warrants that is described above. The Investor Warrants became exercisable commencing on the effective date of stockholder approval on May 2, 2024 for the issuance of the shares of Common Stock issuable upon exercise of the Investor Warrants and will expire on the fifth anniversary of such stockholder approval date.

In addition, on December 8, 2023, pursuant to the December 2023 Purchase Agreement, the Investor was issued a warrant to purchase up to 2,221,880 shares of Common Stock (the “December 2023 Warrants”) that provide for adjustment of the exercise price, if the Company or any of its subsidiaries, as applicable, sell or grant any right to reprice, or otherwise dispose of or issue any shares of its Common Stock or common stock equivalents, at an effective price per share that is less than the exercise price then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”). The Offering is a Dilutive Issuance, therefore, the exercise price of the December 2023 Warrants were reduced to equal the Base Share Price, which is equal to $0.2256 per share. The December 2023 Warrants were issued in a private placement pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder; however, the Company is obligated to register these warrants on a resale registration statement, which registration statement was declared effective on April 2, 2024. The December 2023 Warrants became exercisable commencing on the effective date of stockholder approval on May 2, 2024 for the issuance of the shares of Common Stock issuable upon exercise of the December 2023 Warrants.

Critical Accounting ~~Policies~~Estimates

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses reported during the period. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the 2023 Form 10-K. There have been no significant changes during the three months ended March 31, 2024 in our critical accounting policies from those disclosed in Item 7 of the 2023 Form 10-K.

reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses reported during the period. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the 2023 Form 10-K. There have been no significant changes during the six months ended June 30, 2024 in our critical accounting policies from those disclosed in Item 7 of the 2023 Form 10-K.

Results of Operations

The following table sets forth certain data from our unaudited operating results, expressed in thousands and as percentages of net revenue:

	Three Months Ended								Six Months Ended
	March 31,
	June 30,								June 30,
	2024				2023				2024				2023
Net revenue	$	1011,~~131~~555	100.0	%	$	1014,~~467~~286	100.0	%	$	21,687	100.0	%	$	24,753	100.0	%
Cost of revenue		6,~~795~~946	6760.1	%		78,~~130~~168	6857.12	%		13,741	63.4	%		15,299	61.8	%
Gross profit		34,~~336~~609	3239.9	%		36,~~337~~118	3142.98	%		7,946	36.6	%		9,454	38.2	%
Operating expenses:
Sales and marketing		3,~~383~~694	3332.40	%		46,~~622~~189	4443.13	%		7,077	32.6	%		10,812	43.7	%
General and administrative		3,~~196~~064	3126.5	%		2,~~459~~357	2316.5	%		6,260	28.9	%		4,815	19.5	%
Engineering and development		1,~~283~~071	129.73	%		1,~~547~~444	1410.81	%		2,354	10.9	%		2,991	12.1	%
Total operating expenses		7,~~862~~829	7767.68	%		89,~~628~~990	8269.49	%		15,691	72.4	%		18,618	75.3	%
Loss from operations		(43,~~526~~220)	(4427.79)	%		(53,~~291~~872)	(5027.51)	%		(7,745)	(35.8)	%		(9,164)	(37.1)	%
Non-operating loss, net		(1,940)	(19.1)	%		(557)	(5.4)	%
Non-operating income (loss), net		442	3.9	%		(965)	(6.8)	%		(1,498)	(6.8)	%		(1,522)	(6.1)	%
Loss before income tax provision		(62,~~466~~778)	(6324.80)	%		(54,~~848~~837)	(5533.9)	%		(9,243)	(42.6)	%		(10,686)	(43.2)	%
Income tax provision		(1920)	(0.2)	%		(131)	(0.02)	%		(40)	(0.2)	%		(31)	(0.1)	%
Net loss	$	(62,~~485~~798)	(6424.02)	%	$	(54,~~849~~868)	(5534.91)	%	$	(9,283)	(42.8)	%	$	(10,717)	(43.3)	%

Non-GAAP Disclosure

In addition to the financial information prepared in conformity with GAAP, we provide certain historical non-GAAP financial information. Management believes that these non-GAAP financial measures assist investors in making comparisons of period-to-period operating results and that, in some respects, are indicative of our ongoing core performance.

Management believes that the presentation of this non-GAAP financial information provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments, and amortization methods, which provides a more complete understanding of our financial performance, competitive position, and prospects for the future. However, the non-GAAP financial measures presented in this Form 10-Q have certain limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Further, the non-GAAP financial measures presented by us may be different from similarly named non-GAAP financial measures used by other companies.

Adjusted EBITDA

Management uses Adjusted EBITDA in its evaluation of our core results of operations and trends between fiscal periods and believes that these measures are important components of its internal performance measurement process. 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. Management uses Adjusted EBITDA in its evaluation of our core results of operations and trends between fiscal periods and believes that these measures are important components of its internal performance measurement process. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Further, the non-GAAP financial measures presented by us may be different from similarly named non-GAAP financial measures used by other companies.

The following table contains a reconciliation of non-GAAP Adjusted EBITDA to GAAP net loss attributable to common stockholders (in thousands):

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2024			2023			2024			2023
GAAP net loss attributable to common stockholders	$	(62,~~485~~798	)	$	(514,~~849~~245	)	$	(9,283	)	$	(20,094	)
Deemed dividend on convertible preferred stock		—			—9,377			—			9,377
GAAP net loss	$	(62,~~485~~798	)	$	(54,~~849~~868	)	$	(9,283	)	$	(10,717	)
Adjustments:
Interest expense, net		~~622~~586			~~577~~583			1,208			1,160
Income tax provision		1920			131			40			31
Depreciation		~~660~~650			~~149~~1,424			1,310			1,573
Severance expense		~~182~~—			—229			182			229
Change in allowance for doubtful accounts		~~(27~~113	)		~~(17~~59	)		86			42
Stock-based and other non-cash compensation		~~113~~(46	)		~~691~~84			67			775
Stock warrant issuance costs		~~830~~—			—224			830			224
Loss on warrants		556			—
Gain on warrants		(1,070	)		(77	)		(514	)		(77	)
Adjusted EBITDA	$	(32,~~530~~545	)	$	(42,~~448~~311	)	$	(6,074	)	$	(6,760	)

Comparison of Results of Operations

Three Months Ended ~~March~~June 3130, 2024 Compared with Three Months Ended ~~March~~June 3130, 2023

Net Revenue: The following table summarizes our unaudited net revenue by category, including each category’s percentage of our total revenue, for the three months ended ~~March~~June 3130, 2024 and 2023, as well as the amount of change and percentage of change in each revenue category (dollars in thousands):

	Three Months Ended
	March 31,								Amount			Percent
	June 30,								Amount			Percent
	2024				2023				Change			Change
Laser systems	$	56,~~175~~007	5152.10	%	$	68,~~265~~754	5961.83	%	$	(12,~~090~~747	)		(1731.4	)%
Consumables and other		3,~~469~~835	3433.2	%		34,~~033~~117	2928.08	%		~~436~~(282	)		14(6.48	)%
Services		1,~~487~~713	14.78	%		1,~~169~~415	119.29	%		~~318~~298			2721.21	%
Net revenue	$	1011,~~131~~555	100.0	%	$	1014,~~467~~286	100.0	%	$	(~~336~~2,731	)		(319.21	)%

The following table summarizes our unaudited net revenue by geographic location based on the location of customers for the three months ended ~~March~~June 3130, 2024 and 2023, as well as the amount of change and percentage of change in each geographic revenue category (dollars in thousands):

	Three Months Ended
	March 31,								Amount			Percent
	June 30,								Amount			Percent
	2024				2023				Change			Change
United States	$	68,~~690~~240	6671.03	%	$	610,~~758~~741	6475.62	%	$	(682,501	)		(123.03	)%
International		3,~~441~~315	3428.07	%		3,~~709~~545	3524.48	%		(~~268~~230	)		(76.25	)%
Net revenue	$	1011,~~131~~555	100.0	%	$	1014,~~467~~286	100.0	%	$	(~~336~~2,731	)		(319.21	)%

Typically, we experience fluctuations in revenue from quarter to quarter due to seasonality. Revenue in the first quarter typically is lower than average, and revenue in the fourth quarter typically is higher than average, due to the buying patterns of dental practitioners. We believe that this trend exists because a significant number of dentists purchase their capital equipment towards the end of the calendar year in order to maximize their practice earnings while seeking to minimize their taxes. They often use certain tax incentives, such as accelerated depreciation methods for purchasing capital equipment, as part of their year-end tax planning. In addition, revenue in the third quarter may be affected by vacation patterns which can cause revenue to be flat or lower than in the second quarter of the year. Our historical seasonal fluctuations may also be impacted by sales promotions used by large dental distributors that encourage end-of-quarter and end-of-year buying in our industry.

Net revenue decreased by $0.3 million, or 3%, during the three months ended March 31, 2024 as compared to the same period in 2023 primarily due to a decrease in Waterlase sales from the impact of the current macro-economic environment causing extended sales cycles, which includes increased interest rates, partially offset by an increase in consumables and other revenue from improved utilization of installed laser systems. Net revenue was $10.1 million during the three months ended March 31, 2024 compared to $10.5 million for the same period in 2023.

~~Cost~~Net ofrevenue ~~Revenue~~decreased ~~and~~by ~~Gross~~$2.7 ~~Profit:~~million, ~~The~~or ~~following~~19%, ~~table~~during ~~summarizes~~the ~~our~~three ~~unaudited~~months ~~cost~~ended ofJune ~~revenue~~30, ~~and~~2024 ~~gross~~as ~~profit~~compared ~~for~~to the ~~three~~same ~~months~~period ~~ended~~in ~~March~~2023 ~~31,~~primarily ~~2024~~due ~~and~~to ~~2023,~~a asdecrease ~~well~~in aslaser systems sales from the ~~amount~~impact of ~~change~~the ~~and~~current ~~percentage~~macro-economic ofenvironment ~~change~~causing ~~(dollars~~extended insales ~~thousands):~~cycles, which includes increased interest rates. Net revenue was $11.6 million during the three months ended June 30, 2024 compared to $14.3 million for the same period in 2023.

	Three Months Ended
	March 31,								Amount			Percent
	2024				2023				Change			Change
Net revenue	$	10,131	100.0	%	$	10,467	100.0	%	$	(336	)		(3.2	)%
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	)%

Cost of Revenue and Gross Profit: The following table summarizes our unaudited cost of revenue and gross profit for the three months ended June 30, 2024 and 2023, as well as the amount of change and percentage of change (dollars in thousands):

Gross profit as a percentage of net revenue typically fluctuates with product and regional mix, selling prices, product costs and revenue levels. Gross profit for the three months ended March 31, 2024, was $3.3 million, or 33% of net revenue, which was consistent with a gross profit of $3.3 million, or 32% of net revenue, for the same period in 2023. The 1% increase in gross profit as a percentage of revenue is primarily due to lower warranty expenses for the three months ended March 31, 2024, partially offset by severance expenses that did not occur in the three months ended March 31, 2023.


	Three Months Ended
	June 30,								Amount			Percent
	2024				2023				Change			Change
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	(2,731	)		(19.1	)%
Cost of revenue		6,946	60.1	%		8,168	57.2	%		(1,222	)		(15.0	)%
Gross profit	$	4,609	39.9	%	$	6,118	42.8	%	$	(1,509	)		(24.7	)%

~~Operating~~Gross ~~Expenses:~~profit ~~The~~as ~~following~~a ~~table~~percentage ~~summarizes~~of ~~our~~net ~~unaudited~~revenue ~~operating~~typically ~~expenses~~fluctuates ~~(including~~with asproduct aand ~~percentage~~regional ofmix, ~~net~~selling prices, product costs and revenue) levels. Gross profit for the three months ended ~~March~~June 3130, 2024, ~~and~~was $4.6 million, or 40% of net revenue, which was lower than a gross profit of $6.1 million, or 43% of net revenue, for the same period in 2023. The 3% decrease in gross profit as a percentage of revenue is primarily due to higher warranty and freight expenses, as well as ~~the~~unfavorable ~~amount~~absorption of ~~change~~fixed expenses, partially offset by lower material costs and ~~percentage~~favorable mix of ~~change~~products ~~(dollars~~sold infor ~~thousands):~~the three months ended June 30, 2024.

	Three Months Ended
	March 31,								Amount			Percent
	2024				2023				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	)%

Operating Expenses: The following table summarizes our unaudited operating expenses (including as a percentage of net revenue) for the three months ended June 30, 2024 and 2023, as well as the amount of change and percentage of change (dollars in thousands):

Sales and Marketing Expense. Sales and marketing expenses during the three months ended March 31, 2024 decreased by $1.2 million, or 27%, as compared to the same period in 2023. This decrease is primarily due to $0.7 million decrease in compensation costs from the impact of our cost savings initiatives implemented over the last year, a $0.5 million decrease in travel and tradeshow related expenses, and a $0.2 million decrease in advertising costs, partially offset by $0.2 million increase in depreciation expenses.


	Three Months Ended
	June 30,								Amount			Percent
	2024				2023				Change			Change
Sales and marketing	$	3,694	32.0	%	$	6,189	43.3	%	$	(2,495	)		(40.3	)%
General and administrative		3,064	26.5	%		2,357	16.5	%		707			30.0	%
Engineering and development		1,071	9.3	%		1,444	10.1	%		(373	)		(25.8	)%
Total operating expenses	$	7,829	67.8	%	$	9,990	69.9	%	$	(2,161	)		(21.6	)%

~~General~~Sales and ~~Administrative~~Marketing Expense. ~~General~~Sales and ~~administrative~~marketing expenses during the three months ended ~~March~~June 3130, 2024 ~~increased~~decreased by $02.75 million, or 3040%, as compared to the same period in 2023. This ~~increase~~decrease is primarily due to $1.1 million in lower compensation costs from the impact of our cost savings initiatives implemented during the first quarter of 2024, and from lower commissions and bonus incentives for achieving lower sales targets, a $0.39 million ~~increase~~decrease in ~~legal,~~depreciation ~~audit~~expense recognized for equipment used in sales and ~~consulting~~marketing ~~fees~~for demos, training and aeducational purposes, of which $0.38 million ~~increase~~was non-recurring in ~~accruals~~the ~~for~~three months ended June 30, 2023, a ~~new~~$0.4 ~~annual~~million ~~performance~~decrease ~~award~~in ~~program~~other expenses including travel and tradeshow related costs, and $0.1 million in severance expenses that ~~was~~did ~~implemented~~not occur in the three months ended ~~March~~June 3130, 2024.

~~Engineering~~General and ~~Development~~Administrative Expense. ~~Engineering~~General and ~~development~~administrative expenses during the three months ended ~~March~~June 3130, 2024 ~~decreased~~increased by $0.37 million, or 1730%, compared to the same period in 2023. This ~~decrease~~increase is primarily due to ~~fewer~~$0.5 ~~engineering~~million ~~projects~~in ~~for~~higher ~~2024~~legal, asaudit ~~compared~~and toconsulting ~~2023,~~expenses ~~resulting~~and in a $0.12 million ~~decrease~~increase in ~~legal~~accruals ~~and~~for ~~consulting~~a ~~fees~~new ~~and~~annual ~~$0.2~~performance ~~million~~award ~~decrease~~program that was implemented in ~~miscellaneous~~the ~~other~~first ~~costs~~quarter of 2024.

Engineering and Development Expense. Engineering and development expenses during the three months ended June 30, 2024 decreased by $0.4 million, or 26%, compared to the same period in 2023. This decrease is primarily due to $0.2 million in lower compensation costs from the impact of our cost savings initiatives implemented during the first quarter of 2024, and fewer engineering projects for 2024, as compared to 2023, resulting in a $0.2 million decrease in legal, consulting fees, and other miscellaneous costs.

Non-Operating Income (Loss)

Loss on Foreign Currency Transactions. We realized an approximately $96112 thousand loss on foreign currency transactions during the three months ended ~~March~~June 3130, 2024 compared to an approximately $20235 thousand ~~gain~~loss on foreign currency transactions during the three months ended ~~March~~June 3130, 2023, primarily due to exchange rate fluctuations between the U.S. dollar and Euro, as well as other foreign currencies.

Interest Expense, Net. Interest expense was $0.6 million during the three months ended ~~March~~June 3130, 2024 which was consistent with the three months ended ~~March~~June 3130, 2023.

Other Income (Expense), Net. Other Expense for the three months ended March 31, 2024 was $1.2 million and relates to $0.8 million of issuance costs from the February 2024 public offering that were allocated to the Class A Common Warrants, Class B Common Warrants, and Investor warrants and immediately expensed due to the liability classification of the warrants, as well as $0.6 million of losses on the revaluation of these stock warrants as well as the Series J and H warrants during the period. These losses were partially offset by $0.2 million of gains recorded upon the sale of property, plant, and equipment.

Other Income ~~Tax~~(Expense), ~~Provision~~Net. WeOther ~~use~~Income afor ~~discrete~~the ~~year-to-date~~three ~~method~~months inended ~~calculating~~June ~~quarterly~~30, ~~provision~~2024 ~~for~~was ~~income taxes~~$1.1 ~~Our~~million ~~provision~~and ~~for~~relates ~~income~~to ~~taxes~~$1.0 ~~for~~million ~~the~~of ~~three~~gains ~~months~~recorded ~~ended~~on ~~March~~the ~~31,~~revaluation ~~2024~~of ~~was~~liability ~~consistent~~classified ~~with~~stock ~~the~~warrants ~~same~~and ~~period~~$0.1 inmillion ~~2023.~~of ~~For~~gains ~~additional~~recorded ~~information~~upon ~~regarding~~the ~~income~~sale ~~taxes~~of property, ~~see~~plant, ~~Part~~and I,equipment ~~Item~~during I,the ~~Note~~three 13months –ended ~~Income~~June ~~Taxes~~30, 2024.

~~Net~~Income ~~Loss~~Tax Provision. ~~For~~We ~~the~~use ~~reasons~~a ~~stated~~discrete ~~above,~~year-to-date ~~our~~method ~~net~~in ~~loss~~calculating ~~totaled~~quarterly ~~approximately~~provision $6for income taxes.5 ~~million~~Our provision for income taxes for the three months ended ~~March~~June 3130, 2024 ~~compared~~was toconsistent awith ~~net~~the ~~loss~~same ofperiod $5in 2023.8 ~~million~~For ~~for~~additional ~~the~~information ~~three~~regarding ~~months~~income ~~ended~~taxes, ~~March~~see 31Part I, ~~2023.~~Item I, Note 13 – Income Taxes.

Net Loss. For the reasons stated above, our net loss totaled approximately $2.8 million for the three months ended June 30, 2024 compared to a net loss of $4.9 million for the three months ended June 30, 2023.

Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023

Net Revenue: The following table summarizes our unaudited net revenue by category, including each category’s percentage of our total revenue, for the six months ended June 30, 2024 and 2023, as well as the amount of change and percentage of change in each revenue category (dollars in thousands):


	Six Months Ended
	June 30,											Percent
	2024				2023							Change
Laser systems	$	11,182	51.6	%	$	15,019	60.7	%	$	(3,837	)		(25.5	)%
Consumables and other		7,304	33.6	%		7,150	28.9	%		154			2.2	%
Services		3,201	14.8	%		2,584	10.4	%		617			23.9	%
Net revenue	$	21,687	100.0	%	$	24,753	100.0	%	$	(3,066	)		(12.4	)%

The following table summarizes our unaudited net revenue by geographic location based on the location of customers for the six months ended June 30, 2024 and 2023, as well as the amount of change and percentage of change in each geographic revenue category (dollars in thousands):


	Six Months Ended
	June 30,											Percent
	2024				2023							Change
United States	$	14,930	68.8	%	$	17,499	70.7	%	$	(2,569	)		(14.7	)%
International		6,757	31.2	%		7,254	29.3	%		(497	)		(6.9	)%
Net revenue	$	21,687	100.0	%	$	24,753	100.0	%	$	(3,066	)		(12.4	)%

Net revenue decreased by $3.1 million, or 12%, during the six months ended June 30, 2024, as compared to the same period in 2023 primarily due to a decrease in laser systems sales from the impact of the current macro-economic environment causing extended sales cycles, which includes increased interest rates, partially offset by an increase in consumables and other revenue from improved utilization of installed laser systems. Net revenue was $21.7 million during the six months ended June 30, 2024 compared to $24.8 million for the same period in 2023.

Cost of Revenue and Gross Profit: The following table summarizes our unaudited cost of revenue and gross profit for the six months ended June 30, 2024 and 2023, as well as the amount of change and percentage of change (dollars in thousands):


	Six Months Ended
	June 30,											Percent
	2024				2023							Change
Net revenue	$	21,687	100.0	%	$	24,753	100.0	%	$	(3,066	)		(12.4	)%
Cost of revenue		13,741	63.4	%		15,299	61.8	%		(1,558	)		(10.2	)%
Gross profit	$	7,946	36.6	%	$	9,454	38.2	%	$	(1,508	)		(16.0	)%

Gross profit as a percentage of net revenue typically fluctuates with product and regional mix, selling prices, product costs and revenue levels. Gross profit for the six months ended June 30, 2024, was $7.9 million, or 37% of net revenue, which was lower than a gross profit of $9.5 million, or 38% of net revenue, for the same period in 2023. The 1% decrease in gross profit as a percentage of revenue is primarily due to higher warranty and freight expenses, as well as unfavorable absorption of fixed expenses for the six months ended June 30, 2024, and severance expenses that did not occur in the six months ended June 30, 2024, partially offset by lower material costs and favorable mix of products sold for the six months ended June 30, 2024.

Operating Expenses: The following table summarizes our unaudited operating expenses (including as a percentage of net revenue) for the six months ended June 30, 2024 and 2023, as well as the amount of change and percentage of change (dollars in thousands):


	Six Months Ended
	June 30,											Percent
	2024				2023							Change
Sales and marketing	$	7,077	32.6	%	$	10,812	43.6	%	$	(3,735	)		(34.5	)%
General and administrative		6,260	28.9	%		4,815	19.5	%		1,445			30.0	%
Engineering and development		2,354	10.9	%		2,991	12.1	%		(637	)		(21.3	)%
Total operating expenses	$	15,691	72.4	%	$	18,618	75.2	%	$	(2,927	)		(15.7	)%

Sales and Marketing Expense. Sales and marketing expenses during the six months ended June 30, 2024 decreased by $3.7 million, or 34%, as compared to the same period in 2023. This decrease is primarily due to $1.8 million in lower compensation costs from the impact of our cost savings initiatives implemented over the last year and from lower commissions and bonus incentives for achieving lower sales targets, a $0.8 million decrease in depreciation expense recognized for equipment used in sales and marketing for demos, training and educational purposes, which was non-recurring in the six months ended June 30, 2024, a $0.8 million decrease in other expenses including travel and tradeshow related costs, a $0.2 million decrease in advertising costs, and $0.1 million in severance expenses that did not occur in the six months ended June 30, 2024.

General and Administrative Expense. General and administrative expenses during the six months ended June 30, 2024 increased by $1.4 million, or 30%, compared to the same period in 2023. This increase is primarily due to $0.9 million in higher legal, audit and consulting expenses and a $0.5 million increase in accruals for a new annual performance award program that was implemented in the six months ended June 30, 2024.

Engineering and Development Expense. Engineering and development expenses during the six months ended June 30, 2024 decreased by $0.6 million, or 21%, compared to the same period in 2023. This decrease is primarily due to $0.2 million in lower compensation costs from the impact of our cost savings initiatives implemented over the last year, and fewer engineering projects for 2024, as compared to 2023, resulting in a $0.4 million decrease in legal, consulting fees, and other miscellaneous costs.

Non-Operating Income (Loss)

Loss on Foreign Currency Transactions. We realized an approximately $208 thousand loss on foreign currency transactions during the six months ended June 30, 2024 compared to an approximately $215 thousand gain on foreign currency transactions during the six months ended June 30, 2024, primarily due to exchange rate fluctuations between the U.S. dollar and Euro, as well as other foreign currencies.

Interest Expense, Net. Interest expense was $1.2 million during the six months ended June 30, 2024 which was consistent with the six months ended June 30, 2023.

Other Income (Expense), Net. Other Expense for the six months ended June 30, 2024 was $0.1 million and relates to $0.8 million of issuance costs from the February 2024 public offering that were allocated to the Class A Common Warrants, Class B Common Warrants, and Investor warrants and immediately expensed due to the liability classification of the warrants. This loss was partially offset by $0.5 million of gains on the revaluation of these stock warrants, as well as the Series J and H warrants, and $0.2 million of gains recorded upon the sale of property, plant, and equipment during the six months ended June 30, 2024.

Income Tax Provision. We use a discrete year-to-date method in calculating quarterly provision for income taxes. Our provision for income taxes for the six months ended June 30, 2024 was consistent with the same period in 2023. For additional information regarding income taxes, see Part I, Item I, Note 13 – Income Taxes.

Net Loss. For the reasons stated above, our net loss totaled approximately $9.3 million for the six months ended June 30, 2024 compared to a net loss of $10.7 million for the six months ended June 30, 2023.

Liquidity and Capital Resources - Going Concern

As of ~~March~~June 3130, 2024, we had approximately $65.43 million in cash and cash equivalents compared to $6.6 million as of December 31, 2023. Management defines cash and cash equivalents as highly liquid deposits with original maturities of 90 days or less when purchased. The decrease in cash and cash equivalents from December 31, 2023 was primarily due to acash ~~net~~used ~~loss~~in operating activities of $6.57 million and principal payments on our term loan of $0.29 million, partially offset by net proceeds of $5.8 million from the February 2024 public offering, ~~and~~ $0.23 million in proceeds from the disposal of property, plant, and equipment, and proceeds of $0.3 million from the exercise of preferred share warrants.

The following table summarizes our change in cash, cash equivalents and restricted cash (in thousands):

	Three Months Ended
	Six Months Ended
	March 31,
	June 30,
	2024			2023
Net cash flows used in operating activities	$	(56,~~938~~672	)	$	(59,~~658~~220	)
Net cash flows provided by (used in) investing activities		~~197~~257			(~~587~~944	)
Net cash flows provided by financing activities		5,~~647~~219			812,~~517~~793
Effect of exchange rate changes		(7998	)		79120
Net change in cash and cash equivalents	$	(~~173~~1,294	)	$	2,~~351~~749

Operating Activities

Net cash used in operating activities consists of our net loss, adjusted for our non-cash charges, plus or minus working capital changes. Cash used in operating activities for the ~~three~~six months ended ~~March~~June 3130, 2024 totaled $56.97 million and was primarily comprised of our net loss of $69.53 million.

Investing Activities

Cash provided by investing activities for the ~~three~~six months ended ~~March~~June 3130, 2024 totaled $0.23 million and was comprised of the proceeds from the disposal of property, plant, and equipment.

Financing Activities

Net cash provided by financing activities for the ~~three~~six months ended ~~March~~June 3130, 2024 totaled $5.62 million and was derived from ~~the~~$5.8 million in net proceeds from the February 2024 public offering, and $0.3 million from the exercise of preferred share warrants, partially offset by $0.9 million principal payments on our term loan.

Effect of Exchange Rate

The $7998 thousand effect of exchange rate on cash for the ~~three~~six months ended ~~March~~June 3130, 2024 was due to recognized loss on foreign currency transactions, primarily driven by changes in the Euro during the period.

Future Liquidity Needs

As of ~~March~~June 3130, 2024, we had a working capital deficit of approximately $39.61 million. Our principal sources of liquidity as of ~~March~~June 3130, 2024 consisted of approximately $65.43 million in cash and cash equivalents and $54.78 million of net accounts receivable.

The Company will need to raise additional capital in the future. Additional capital requirements may depend on many factors, including, among other things, the rate at which the Company’s business grows, demands for working capital, manufacturing capacity, and any acquisitions that the Company may pursue. The Company expects that it will be required to raise capital through either equity or debt offerings. The Company cannot provide assurance that it will be able to successfully enter into any such equity or debt financings in the future or that the required capital will be available on acceptable terms, if at all, or that any such financing activity ~~will not be dilutive to its stockholders.~~

3133

will not be dilutive to its stockholders especially in light of the fact that our common stock is no longer traded on the Nasdaq, which makes it harder to attract investors and limits the types of financings that can be conducted.

The Company has historically experienced losses from operations and has used cash and cash equivalents in operating activities. To be able to discharge our liabilities and commitments in the normal course of business, we must increase sales of our products, control or potentially reduce expenses, and establish profitable operations in order to generate cash from operations or obtain additional funds when needed.

The Company’s recurring losses, level of cash used in operations, and potential need for additional capital, along with uncertainties surrounding the Company’s ability to raise additional capital, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Despite the February 2024 public offering, in order for the Company to continue operations beyond the next 12 months and be able to discharge its liabilities and commitments in the normal course of business, it must either raise additional capital or increase sales of our products, control or potentially reduce expenses, and establish profitable operations in order to generate cash from operations or obtain additional funds when needed.

We will endeavor to improve our financial condition and ultimately improve our financial results by increasing revenues through expansion of our product offerings, continuing to expand and develop our field sales force and distributor relationships both domestically and internationally, forming strategic arrangements within the dental and medical industries, educating dental and medical patients as to the benefits of our advanced medical technologies, and reducing expenses; however, there is no assurance that will be able to improve our financial condition.

Term Loan

The information set forth in Part I, Item 1, Note 9 – Debt – Term Loan is hereby incorporated herein by reference.

EIDL Loan

The information set forth in Part I, Item 1, Note 9 – Debt – EIDL Loan is hereby incorporated herein by reference.

February 2024 Public Offering

On February 15, 2024, the Company completed a public offering and issued (i) 7,795,000 units, with each Unit consisting of (A) one share of the Company’s Common Stock, (B) one Class A Common Warrant to purchase one share of Common Stock, each exercisable from time to time for one share of Common Stock at an exercise price of $0.66 per share, and (C) one Class B Common Warrant to purchase one share of Common Stock, each exercisable from time to time for one share of Common Stock at an exercise price of $0.748 per share and (ii) 8,205,000 pre-funded units, with each Pre-Funded Unit consisting of (A) one pre-funded warrant, each such Pre-Funded Warrant being exercisable from time to time for one share of Common Stock at an exercise price of $0.001 per share, (B) one Class A Common Warrant, and (C) one Class B Common Warrant. The Units were sold at the public offering price of $0.44 per Unit and the Pre-Funded Units were sold at the public offering price of $0.439 per Pre-Funded Unit. The Company received gross proceeds of approximately $7.0 million, before deducting placement agent fees, estimated offering expenses, and before the exercise of warrants.

Recent Accounting Pronouncements

For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, please refer to Part I, Item 1, Note 2 – Summary of Significant Accounting Policies, which is incorporated herein by this reference.

Additional Information

BIOLASE®, ZipTip®, ezlase®, eztips®, ComfortPulse®, Waterlase®, Waterlase Dentistry®, Waterlase Express®, iLase®, iPlus®, Epic®, Epic Pro®, WCLI®, World Clinical Laser Institute®, Waterlase MD®, Waterlase Dentistry®, and EZLase® are registered trademarks of BIOLASE, and Pedolase™ is a trademark of BIOLASE. All other product and company names are registered trademarks or trademarks of their respective owners.

3234

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management has evaluated, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our President and Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

As discussed in our Annual Report on Form 10-K, we identified a material weakness in our internal control over financial reporting as we have determined that our controls were not operating effectively to assess the proper presentation of net loss per share attributable to common stockholders for the three and six months ended June 30, 2023 and the three and nine months ended September 30, 2023. This material weakness was the result of insufficient accounting assessment for unique and complex transactions outside of the business's normal operations.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles for the period ended December 31, 2023 and management believes that the financial statements included in the Annual Report on Form 10-K present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.

Changes in Internal Controls over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except for the remediation of the material weakness identified in prior period as discussed blow.

To remediate the aforementioned material weakness, management has implemented additional controls to ensure that financial statement presentation, specifically in relation to net loss per share attributable to common stockholders, for unique and complex transactions are sufficiently investigated and documented at the time of inception, and technical experts are engaged for advisement.

3335

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in legal proceedings and regulatory proceedings arising out of our operations. We establish reserves for specific liabilities in connection with legal actions that we deem to be probable and estimable. The ability to predict the ultimate outcome of such matters involves judgments, estimates, and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates.

On January 4, 2023, Plaintiff PIPStek, LLC (a wholly-owned subsidiary of Sonendo, Inc.) filed a lawsuit against BIOLASE, Inc. in the Federal District Court for the District of Delaware, alleging that BIOLASE’s Waterlase dental laser product infringes two PIPStek patents. A third patent was subsequently added to the case. The Complaint seeks unspecified damages and injunctive relief, as well as costs and attorneys’ fees against BIOLASE. BIOLASE has answered denying all of PIPStek’s allegations and also asserting that the asserted patents are invalid and not infringed. BIOLASE intends to continue to vigorously and fully defend itself against PIPStek’s claims. The parties have exchanged preliminary contentions. Trial in this matter is currently set for May 12, 2025.

ITEM 1A. RISK FACTORS

Except as set forth below, there have been no material changes to our risk factors from those disclosed under “Risk Factors” in Part I, Item 1A of the 2023 Form 10-K. The risks and uncertainties described in the 2023 Form 10-K and set forth below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also materially adversely affect our business, financial condition, or results of operations.

Due to our accumulated deficit, recurring and negative cash flow from operations for the year ended December 31, 2023 and ~~quarter~~the three and six months ended ~~March~~June 3130, 2024 there is substantial doubt about our ability to continue as a going concern.

Our audited consolidated financial statements for the year ended December 31, 2023 were prepared on a going concern basis in accordance with generally accepted accounting principles in the United States. The going concern basis assumes that we will continue in operation for the next 12 months and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Thus, our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Our recurring losses, negative cash flow, need for additional capital, and the uncertainties surrounding our ability to raise such capital raise substantial doubt about our ability to continue as a going concern. For us to continue operations beyond the next 12 months and be able to discharge our liabilities and commitments in the normal course of business, we must sell our products directly to end-users and through distributors, establish profitable operations through increased sales, decrease expenses, generate cash from operations or raise additional funds when needed. Our goal is to improve our financial condition and ultimately improve our financial results by increasing revenues through expanding awareness of the benefits of our dental lasers among dental specialists and general practitioners and reducing expenses. However, if we are unable to do so on a timely basis, we will be required to seek additional capital. In that event, we would seek additional funds through various financing sources, including the sale of our equity and debt securities, however, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all especially in light of the fact that our common stock is no longer traded on the Nasdaq, which makes it harder to attract investors and limits the types of financings that can be conducted. If we are unable to raise additional capital, increase sales or reduce expenses, we will be unable to continue to fund our operations, develop our products, realize value from our assets, and discharge our liabilities in the normal course of business. If we become unable to continue as a going concern, we could have to liquidate our assets, and potentially realize significantly less than the values at which they are carried on our financial statements, and stockholders could lose all or part of their investment in our common stock. The Report of Independent Registered Public Accounting Firm from Macias Gini & O’Connell LLP contains an explanatory paragraph regarding our ability to continue as a going concern. In addition, the notes to our financial statements included in this Quarterly Report on Form 10-Q states that our recurring losses, level of cash used in operations, and potential need for additional capital, along with uncertainties surrounding our ability to raise additional capital, raise substantial doubt about our ability to continue as a going concern.

We have experienced net losses for each of the quarter ended ~~March~~June 3130, 2024 and the past three years, and we could experience additional losses and have difficulty achieving profitability in the future.

We had an accumulated deficit of $~~323~~326.31 million as of ~~March~~June 3130, 2024 and an accumulated deficit of $316.8 million as of December 31, 2023. We recorded net losses of $20.6 million and $28.6 million for the years ended December 31, 2023 and 2022, respectively, and net losses of $69.53 million and $510.87 million for the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023, respectively. In order to achieve profitability, we must increase net revenue through new sales and control our costs. Failure to increase our net revenue and decrease our costs could cause our stock price to decline and could have a material adverse effect on our business, financial condition, and results of operations.

Failure to meet Nasdaq’s continued listing requirements could result in the delisting of our common stock, negatively impact the price of our common stock and negatively impact our ability to raise additional capital. 36

34The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Stock is not listed on the Nasdaq Capital Market, our Common Stock is not a covered security and therefore we are subject to regulation in each state in which we offer our securities. Accordingly, the types of financings that we may engage in are limited.

OnBecause ~~January~~of ~~11,~~the ~~2023,~~trading wevolatility ~~received~~often aassociated ~~deficiency~~with ~~letter~~low-priced ~~from~~stocks ~~the~~not ~~Listing~~listed ~~Qualifications~~on ~~Department~~a ~~(the~~national ~~“Staff”)~~securities ofexchange, ~~the~~many ~~Nasdaq~~brokerage ~~Stock~~houses ~~Market~~and ~~(“Nasdaq”)~~institutional ~~notifying~~investors ushave ~~that,~~internal ~~for~~policies ~~the~~and ~~last~~practices 30that ~~consecutive~~either ~~business~~prohibit ~~days,~~them ~~ending~~from oninvesting ~~January~~in ~~10,~~low-priced ~~2023,~~stocks ~~the~~or ~~bid~~tend ~~price~~to ~~for~~discourage ~~our~~individual ~~common~~brokers ~~stock~~from ~~had~~recommending ~~closed~~low-priced ~~below~~stocks ~~the~~to ~~minimum~~their $1customers.00 ~~per~~Some ~~share~~of ~~requirement~~those ~~for~~policies ~~continued~~and ~~inclusion~~practices onmay make the ~~Nasdaq~~processing ~~Capital~~of ~~Market~~trades ~~pursuant~~in low-priced stocks economically unattractive to ~~Nasdaq~~brokers. ~~Listing~~Additionally, ~~Rule~~because ~~5550(~~brokers’ commissions on low-priced stocks generally represent a~~)(2)~~ ~~(the~~higher ~~“Bid~~percentage ~~Price~~of ~~Rule”).~~the Instock ~~accordance~~price ~~with~~than ~~Nasdaq~~commissions ~~rules~~on higher-priced stocks, wea ~~were~~low ~~provided~~average anprice ~~initial~~per ~~period~~share of ~~180~~common ~~calendar~~stock ~~days,~~can orresult ~~until~~in ~~July~~individual ~~10,~~stockholders ~~2023,~~paying totransaction ~~regain~~costs ~~compliance~~representing ~~with~~a higher percentage of their total share value than would be the ~~Bid~~case ~~Price~~if ~~Rule~~the share price were higher.

OnAs ~~June~~a 8,result ~~2023, we were notified by the Staff~~ of Nasdaq ~~that~~delisting weour ~~did not meet the minimum closing bid price requirement of $1.00 for continued listing, as set forth in the Bid Price Rule, as the Staff had determined that as of June 8, 2023, the Company’s~~ securities ~~had a closing bid price of $0.10 or less for ten consecutive trading days,~~ from ~~May 24, 2023 through June 7, 2023. As such, the Staff had determined to delist the Company’s common stock from the Nasdaq Capital Market and to suspend~~ trading ~~of the common stock at the opening of business~~ on ~~June~~its 20exchange, ~~2023,~~we ~~and~~could ~~file~~face asignificant ~~Form~~material ~~25-NSE~~adverse ~~with the SEC. We timely requested a hearing to appeal this determination~~consequences, ~~which stayed the suspension of our common stock pending the decision from a Nasdaq Hearings Panel (the “Panel”).~~including:

•

~~We subsequently requested the Panel grant us~~ a ~~temporary~~limited ~~exception~~availability to regain compliance with the Bid Price Rule. On July 5, 2023, the Panel granted us an exception until August 11, 2023 to demonstrate bid price compliance subject to us taking the following actions: (i) on July 20, 2023, we obtain stockholder approval for a reverse stock split at a ratio that is sufficient to regain and maintain long term compliance with the Bid Price Rule; (ii) on or before July 31, 2023, we effect a reverse stock split and, thereafter, maintain a $1.00 closing bid price for a minimum of ~~ten~~market ~~consecutive~~quotations ~~business days; and (iii) on August 11, 2023, we demonstrated compliance with the Bid Price Rule, by evidencing a closing bid price of $1.00 or more per share~~ for aour ~~minimum of ten consecutive trading sessions.~~securities:

•

Onreduced ~~July~~liquidity ~~20,~~with ~~2023,~~respect ~~we held a special meeting of our stockholders where the stockholders approved an amendment~~ to our Certificate of Incorporation to effect a reverse stock split of our common stock, at a ratio between one-for-two (1:2) and one-for-one hundred (1:100). Immediately after the special meeting, our Board approved the 2023 Reverse Stock Split. On July 26, 2023, we filed an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the 2023 Reverse Stock Split, which became effective on July 27, 2023.securities;

•

Ona ~~August~~determination ~~14,~~that ~~2023,~~our wecommon ~~received~~stock is a ~~letter~~"penny ~~from~~stock" ~~the~~which ~~Nasdaq~~will ~~Office~~require ofbrokers ~~General~~trading ~~Counsel~~in ~~confirming~~our ~~the~~common ~~decision~~stock ofto ~~the~~adhere ~~Panel~~to ~~that~~more westringent ~~demonstrated~~rules, ~~compliance~~possibly ~~with~~resulting ~~the~~in ~~requirements~~a ~~for~~reduced ~~continued~~level ~~listing~~of ontrading actvity in the ~~Nasdaq~~secondary ~~Capital~~trading ~~Market.~~market for our common stock;

•

~~On March 4, 2024, we received~~ a ~~deficiency~~limited ~~letter~~amount ~~from the Staff~~ of ~~Nasdaq~~news ~~(the~~and ~~“March~~analyst ~~2024~~coverage ~~Deficiency Letter”) notifying us that,~~ for ~~the last 30 consecutive business days, ending on March 1, 2024, the bid price for~~ our common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to the Bid Price Rule. The March 2024 Deficiency Letter stated that, in accordance with Nasdaq rules, we were provided an initial period of 180 calendar days, or until September 3, 2024 (the “Compliance Date”), to regain compliance with the Bid Price Rule. Compliance is generally achieved if, at any time before the Compliance Date, the bid price for the Company’s common stock closes at $1.00 or more for a minimum of 10 consecutive business days. However, the Staff may, in its discretion, require a company; to satisfy the applicable bid price requirement for a period in excess of 10 consecutive business days, but generally no more than 20 consecutive business days, before determining that it has demonstrated an ability to maintain long-term compliance. The March 2024 Deficiency Letter continued to state that if we do not regain compliance with the Bid Price Rule by the Compliance Date, we may be eligible for an additional 180 calendar day compliance period. To qualify, we would need to provide written notice of our intention to cure the deficiency during the additional compliance period, by effecting a reverse stock split, if necessary, provided that we meet the continued listing requirement for the market value of publicly held shares and ~~all other initial listing standards, with the exception of the bid price requirement.~~

•

~~On April 15, 2024, we received~~ a ~~letter~~decreased ~~from~~ability ~~the~~to ~~Staff~~issue ofadditional ~~the~~securities ~~Nasdaq~~or ~~(the~~obtain ~~“April~~additional ~~2024~~financing ~~Determination~~in ~~Letter”) notifying us that such April 2024 Determination Letter superseded~~ the ~~March 2024 Deficiency Letter~~future. ~~The March 2024 Deficiency Letter was issued by the Staff in error.~~

~~The~~Our ~~April~~common ~~2024~~stock ~~Determination~~is ~~Letter~~subject ~~reiterated that we failed~~ to ~~meet~~ the ~~$1.00~~“penny ~~minimum~~stock” ~~closing~~rules ~~bid~~of ~~price~~the ~~requirement~~SEC ~~for~~and 30the ~~consecutive~~trading ~~business~~market ~~days~~in ~~from~~the ~~January~~securities 19is ~~through March 1~~limited, ~~2024,~~which asmakes ~~required~~transactions byin ~~Listing~~the ~~Rule~~stock ~~5550(a)(2),~~cumbersome and ~~that~~may wereduce ~~are~~the ~~not~~value ~~eligible~~of ~~for~~ an ~~automatic~~investment ~~compliance~~in ~~period because~~ the ~~Panel decision relating to us, dated August 14, 2023, subjected us to a Mandatory Panel Monitor for a period of one year pursuant to Listing Rule 5815(d)(4)(B)~~stock.

~~Based~~Rule on15g-9 under the ~~foregoing~~Exchange Act, weestablishes ~~timely requested a hearing before~~ the ~~Panel~~definition ~~and~~of ~~were granted~~ a ~~hearing~~“penny ~~date~~stock,” infor ~~June~~the ~~2024.~~purposes ~~The~~relevant ~~hearing~~to ~~request~~us, ~~automatically~~as ~~stayed~~ any ~~suspension~~equity orsecurity ~~delisting~~that ~~action~~has ~~pending~~a ~~the~~market ~~hearing~~price ~~and~~of ~~the~~less ~~expiration~~than of$5.00 ~~any~~per ~~additional~~share ~~extension~~or ~~period~~with ~~granted~~an byexercise ~~the~~price ~~Panel~~of ~~following~~less ~~the~~than ~~hearing~~$5.00 ~~The~~per ~~April~~share, ~~2024~~subject ~~Determination~~to ~~Letter~~certain ~~stated~~exceptions. ~~that~~For ~~the~~any ~~Company~~transaction ~~would~~involving ~~be asked to provide~~ a ~~plan~~penny tostock, ~~the~~unless ~~Panel to regain compliance. Accordingly~~exempt, the ~~Company~~rules isrequire: ~~currently preparing to present~~ (a) ~~plan to the Panel~~ that ~~includes~~ a ~~discussion~~broker ofor ~~the~~dealer ~~events~~approve ~~that~~a itperson’s ~~believes~~account ~~will~~for ~~enable~~transactions itin topenny ~~regain~~stocks; ~~compliance~~and in(b) the ~~allotted~~broker ~~time~~or ~~frame,~~dealer ~~which~~receive ~~would~~from ~~include~~the investor a ~~commitment~~written agreement to ~~effect~~the ~~a reverse stock split~~transaction, ifsetting ~~necessary.~~forth ~~Pursuant to~~ the ~~Listing~~identity ~~Rules,~~and ~~the~~quantity ~~Panel~~of ~~has~~ the ~~authority~~penny stock to be purchased.

35In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

~~grant~~The usbroker aor ~~further~~dealer ~~extension~~must ~~not~~also deliver, prior to ~~exceed~~any ~~October~~transaction ~~14,~~in ~~2024[EPJ1]~~a .penny ~~The~~stock, ~~April~~a ~~2024~~disclosure ~~Determination~~schedule ~~Letter~~prescribed ~~further~~by ~~stated~~the ~~that~~SEC ~~pursuant~~relating to ~~Listing~~the ~~Rule~~penny ~~5810~~stock market, which, in highlight form: (ca) sets forth the basis on which the broker or dealer made the suitability determination; and (3b)~~(A)(iv)~~ noconfirms ~~further~~that ~~automatic~~the ~~compliance~~broker ~~period~~or ~~would~~dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be ~~provided~~less willing to usexecute ~~because~~transactions ~~over~~in securities subject to the ~~prior~~“penny ~~two-year~~stock” ~~period~~rules. weThis ~~had~~may ~~effected~~make ~~reverse~~it more difficult for investors to dispose of our common stock ~~splits~~and ~~with~~cause a ~~cumulative~~decline ~~ratio~~in ofthe ~~250~~market ~~shares~~value orof ~~more~~our tocommon ~~one~~stock.

InDisclosure ~~addition,~~also onhas ~~November~~to ~~14,~~be ~~2023,~~made weabout ~~received a deficiency letter from~~ the ~~Staff~~risks ~~notifying us that, based on our stockholders’ equity~~ of ~~$332,000~~investing asin ofpenny ~~September~~stocks ~~30, 2023, as reported~~ in ~~the~~both ~~our~~public ~~Quarterly~~offerings ~~Report~~and ~~on Form 10-Q for the quarterly period ended September 30, 2023, we were no longer~~ in ~~compliance~~secondary ~~with~~trading ~~the~~and ~~minimum~~about ~~stockholders’ equity requirement for continued listing on~~ the ~~Nasdaq~~commissions ~~Capital~~payable ~~Market under Nasdaq Listing Rule 5550(b)(1), which requires listed companies~~ to ~~maintain~~both ~~stockholders’~~the ~~equity~~broker ofor atdealer ~~least $2.5 million. We were provided until December 29, 2023 to provide Nasdaq with a specific plan to achieve~~ and ~~sustain compliance with~~ the ~~foregoing~~registered ~~listing requirement~~representative, ~~which~~current ~~plan~~quotations ~~was~~for ~~provided to Nasdaq on December 22, 2023. Nasdaq subsequently requested that we submit a plan with greater detail, which we submitted to Nasdaq on January 22, 2024. On February 13, 2024,~~ the ~~Staff~~securities ~~provided~~and ~~notice to us that it had granted~~ the ~~Company~~rights ~~an extension to regain compliance with Nasdaq Listing Rule 5550(b)(1), conditioned upon us undertaking~~ and ~~closing~~remedies noavailable ~~later~~to ~~than~~an ~~March~~investor ~~31,~~in ~~2024~~cases ~~the February 2024 Offering, which we subsequently consummated on February 15, 2024, and publicly disclose evidence~~ of ~~compliance~~fraud ~~with~~in ~~the~~penny ~~minimum~~stock ~~stockholders’ equity requirement~~transactions. InFinally, ~~the~~monthly ~~event~~statements wehave ~~fail~~ to ~~evidence~~be ~~compliance~~sent ~~with~~disclosing ~~the~~recent ~~stockholders’~~price ~~equity~~information ~~rule upon the filing of our Form 10-Q~~ for the ~~period~~penny ~~ending~~stock ~~March~~held ~~31,~~in ~~2024 with~~ the ~~SEC~~account and ~~Nasdaq,~~information ~~we may be subject to delisting. Inasmuch as this Quarterly Report~~ on ~~Form 10-Q does not evidence compliance with~~ the ~~Nasdaq~~limited ~~Listing~~market ~~Rule~~in ~~5550(b)(1),~~penny ~~we anticipate receiving another deficiency letter from the Staff upon the filing of this Quarterly Report on Form 10-Q~~stocks.stating that our securities will be delisted. At that time, we may appeal the Staff’s determination to a Hearings Panel; however, we have already requested and been granted a hearing before the Panel that is currently scheduled for June 2024.

We intend to attempt to take actions to restore our compliance with Nasdaq’s listing requirements and intend to present a plan for compliance at the Panel hearing that is scheduled for June 2024; however, we can provide no assurance that we will be to achieve compliance or that Nasdaq will grant us any additional time to restore compliance especially in light of the fact that we were under review of a Monitor and have several current and prior noncompliance issues. Any perception that we may not regain compliance or a delisting of our common stock by Nasdaq could adversely affect our ability to attract new investors, decrease the liquidity of the outstanding shares of our common stock, reduce the price at which such shares trade and increase the transaction costs inherent in trading such shares with overall negative effects for our stockholder. In addition, delisting of our common stock from Nasdaq could deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, and might deter certain institutions and persons from investing in our common stock.37

In the event of a delisting, we would take actions to restore our compliance with the Nasdaq listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq listing requirements.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

~~None~~During the three months ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “nonRule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

3638

ITEM 6. EXHIBITS

     
    Incorporated by Reference

    Exhibit

    Description

    Filed
Herewith

    Form

    Period
Ending/Date
of Report

    Exhibit

    Filing
Date

    1.1

    Placement Agency Agreement, dated February 13, 2024, by and among BIOLASE, Inc., Lake Street Capital Markets, LLC and Maxim Group LLC

    8-K

    02/12/2024

    1.1

    02/15/2024

    3.1.1

    Restated Certificate of Incorporation, including, (i) Certificate of Designations, Preferences and Rights of 6% Redeemable Cumulative Convertible Preferred Stock of the Registrant; (ii) Certificate of Designations, Preferences and Rights of Series A 6% Redeemable Cumulative Convertible Preferred Stock of the Registrant; (iii) Certificate of Correction Filed to Correct a Certain Error in the Certificate of Designation of the Registrant; and (iv) Certificate of Designations of Series B Junior Participating Cumulative Preferred Stock of the Registrant.

    S-1,
Amendment
No. 1

    12/23/2005

    3.1

    12/23/2005

    3.1.2

    Amendment to Restated Certificate of Incorporation

    8-K

    05/10/2012

    3.1

    05/16/2012

    3.1.3

    Second Amendment to Restated Certificate of Incorporation

    8-A/A

    11/04/2014

    3.1.3

    11/04/2014

    3.1.4

    Third Amendment to Restated Certificate of Incorporation

    S-3

    07/21/2017

    3.4

    07/21/2017

    3.1.5

    Fourth Amendment to Restated Certificate of Incorporation

    8-K

    05/10/2018

    3.1

    05/11/2018

    3.1.6

    Fifth Amendment to Restated Certificate of Incorporation

    8-K

    05/28/2020

    3.1

    06/01/2020

    3.1.7

    Sixth Amendment to Restated Certificate of Incorporation

    8-K

    04/28/2022

    3.1

    05/02/2022

    3.1.8

    Seventh Amendment to Restated Certificate of Incorporation

    8-K

    07/20/2023

    3.1

    07/26/2023

    3.1.9

    Certificate of Designation of Series H Convertible Redeemable Preferred Stock

    8-K

    05/24/2023

    3.1

    05/26/2023

    3.1.10

    Certificate of Designation of Series I Preferred Stock

    8-K

    06/05/2023

    3.1

    06/06/2023

    3.1.11

    Certificate of Designation of Series J Convertible Redeemable Preferred Stock

    8-K

    09/13/2023

    3.1

    09/18/2023

    3.2

    Eighth Amended and Restated Bylaws of the Registrant adopted on March 1, 2022

    8-K

    03/01/2022

    3.1

    03/03/2022

    4.1

    Form of Pre-Funded Warrant to Purchase Common Stock

    8-K

    02/12/2024

    4.1

    02/15/2024

    4.2

    Form of Class A Warrant to Purchase Common Stock

    8-K

    02/12/2024

    4.2

    02/15/2024

3739

4.3

Form of Class B Warrant to Purchase Common Stock

8-K

02/12/2024

4.3

02/15/2024

4.4

Warrant Agency Agreement, dated February 15, 2024, by and among BIOLASE, Inc., Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., a federal trust company

8-K

02/12/2024

4.4

02/15/2024

4.5

Form of Warrant issued to Investor

8-K

02/12/2024

4.5

02/15/2024

10.1

Form of Securities Purchase Agreement, dated as of February 13, 2024, by and among BIOLASE, Inc. and the investor parties thereto

8-K

02/12/2024

10.1

02/15/2024

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

10.2

Consent and Waiver, dated February 12, 2024, by and between BIOLASE, Inc. and the Investor named therein

8-K

02/12/2024

10.2

02/15/2024

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BIOLASE, INC.
		(Registrant)
May 13, 2024	By:	/s/ JOHN R. BEAVER
August 8, 2024	By:	/s/ JOHN R. BEAVER
Date		John R. Beaver
		President and Chief Executive Officer
			(Principal Executive Officer)
May 13, 2024	By:	/s/ JENNIFER BRIGHT
August 8, 2024	By:	/s/ JENNIFER BRIGHT
Date		Jennifer Bright
		Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

3941

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