<PAGE>
As filed with the Securities and Exchange Commission on April 28, 1999
Registration No. 333-58329
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
____________________
BIOLASE TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
Delaware 3845 87-0442441
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
981 Calle Amanecer, San Clemente, California 92673
(949) 361-1200
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Principal Executive Offices)
Federico Pignatelli
Chairman of the Board
BioLase Technology, Inc.
981 Calle Amanecer
San Clemente, California 92673
(949) 361-1200
(Name, Address and Telephone Number of Agent for Service)
Copies of Communications to:
Cathryn S. Gawne, Esq.
Kelly Lytton Mintz & Vann LLP
1900 Avenue of the Stars, Suite 1450
Los Angeles, California 90067
(650) 529-1991
Telecopier No.: (650) 529-1992
APPROXIMATE DATE OF COMMENCEMENT
OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration
Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box: [X]
<PAGE>
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
Title of each class of Amount Proposed maximum Proposed maximum
securities to be to be offering price aggregate offering Amount of
registered registered per unit price registration fee
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 1,406,600 shares $3.125 (1) $ 4,395,625 (1) $1,296.70 (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 75,000 shares $5.00 (2) $ 375,000 (2) $ 110.63 (2)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 25,000 shares $4.00 (2) $ 100,000 (2) $ 29.50 (2)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 724,000 shares $3.75 (2) $ 2,715,000 (2) $ 800.93 (2)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 1,134,300 shares $2.375(1) $ 2,693,963 (1) $ 748.92 (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 550,000 shares $3.50 (2) $ 1,925,000 (2) $ 535.15 (2)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 99,000 shares $2.75 (2) $ 272,250 (2) $ 75.69 (2)
- -----------------------------------------------------------------------------------------------------------------------------------
Total 4,013,900 shares $12,476,838 $3,597.52 (3)
===================================================================================================================================
</TABLE>
(1) Calculated in accordance with Rule 457(c).
(2) Calculated in accordance with Rule 457(g).
(3) $2,422.13 of said amount has previously been paid.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
PROSPECTUS
4,013,900 Shares
BIOLASE TECHNOLOGY, INC.
Common Stock
_______________
This Prospectus relates to an aggregate of 4,013,900 shares of common
stock, $.001 par value ("Common Stock") of BioLase Technology, Inc., a Delaware
corporation ("BioLase" and, together with its consolidated subsidiary, the
"Company"), heretofore issued to the persons listed herein (the "Selling
Stockholders"), or issuable to the Selling Stockholders pursuant to, among other
things, the exercise of the Company's Common Stock Purchase Warrants (the
"Warrants"). Such shares of Common Stock are being offered for the respective
accounts of the Selling Stockholders on The Nasdaq SmallCap Market at the then-
prevailing prices, or in negotiated transactions. The Common Stock is traded on
The Nasdaq SmallCap Market under the symbol "BLTI". On April 21, 1999, the
last sale price of the Common Stock as reported on The Nasdaq SmallCap Market
was $2.375 per share. The Company will receive no proceeds from the sale of such
shares of Common Stock by the Selling Stockholders; however, it will receive
proceeds from the exercise of the Warrants. See "Use of Proceeds". The expenses
of preparing and filing the Registration Statement, of which this Prospectus
forms a part (estimated at $30,000), are being paid by the Company.
_______________
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________
The shares offered hereby were or will be acquired by the Selling
Stockholders from the Company in private placements or upon the exercise of the
Warrants and are "restricted securities" under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus has been prepared for the
purpose of registering the shares under the Securities Act to allow for future
sales by the Selling Stockholders to the public without restriction. To the
knowledge of the Company, the Selling Stockholders have made no arrangement with
any brokerage firm for the sale of the shares. The Selling Stockholders may be
deemed "underwriters" within the meaning of the Securities Act. Any commissions
received by a broker or dealer in connection with resales of the shares may be
deemed underwriting commissions or discounts under the Securities Act. See "Plan
of Distribution".
The date of this Prospectus is May __, 1999.
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
annual and quarterly reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company can be inspected at the
Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the Commission's regional offices at 7
World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp Center,
500 West Madison Street, Room 1400, Chicago, Illinois 60661-2511. Copies of such
material can also be obtained at prescribed rates at the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, the Commission maintains a World Wide Web site on the Internet at
http:\\www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus or
incorporated herein by reference. The factors discussed below under "Risk
Factors - Forward Looking Statements" and elsewhere in this Prospectus,
including documents incorporated herein by reference, are among certain risks,
uncertainties and other factors that in some cases have affected BioLase's
historic results and could cause actual results in the future to differ
significantly from the results anticipated in forward looking statements made in
this Prospectus, including documents incorporated herein by reference, in future
filings by BioLase with the Commission, in BioLase's press releases and in oral
statements made by authorized officers of BioLase. When used in this
Prospectus, including documents incorporated herein by reference, the words
"estimate", "project", "anticipate", "expect", "intend", "believe", "hope",
"may" and similar expressions, as well as "will", "shall" and other indications
of future tense, are intended to identify forward looking statements.
THE COMPANY
BioLase Technology, Inc., a Delaware corporation ("BioLase" and, together
with its consolidated subsidiary, the "Company"), designs, develops,
manufactures and markets laser-based systems for use in dental and medical
applications. The current generation of the Company's laser-based systems
incorporates its proprietary technology ("HydroKinetic(TM)") into its surgical
tissue cutting system ("Millennium(TM)"), which utilizes electromagnetic energy
laser pulses from an erbium, chromium: yttrium scandium gallium garnet ("Er,Cr:
YSGG") laser and a proprietary air-water spray. In a configuration utilizing
higher power settings, the laser pulses act to rapidly energize and transform
atomized water droplets from the air-water spray into smaller, energized water
molecules that can precisely remove both dental hard and soft tissues, and the
Millennium(TM) system, when operating in this manner, is intended for use
primarily in hard tissue applications. In a configuration utilizing lower power
settings, the Er,Cr: YSGG laser incorporated into the Millennium(TM) system acts
as a conventional laser, with the air-water spray serving as a cooling agent.
When operating in this manner, the Millennium(TM) system is intended for use in
soft tissue applications. The Millennium(TM) system is currently marketed in the
United States and Europe for hard and soft tissue dental applications. See "Risk
Factors -- Need to Establish Marketing Arrangements for Millennium(TM)".
The Company also has clearance from the United States Food and Drug
Administration (the "FDA") to market a laser-based surgical tissue cutting
system in the United States for a broad range of dermatological and general
surgical soft tissue applications. In response to this clearance, the Company
intends to introduce a laser-based system in a configuration that is designed
for aesthetic and dermatologic applications in late 1999 or early 2000.
The Company also has (i) an automated system used in endodontic procedures
for locating and shaping root canals, known as the Canal Finder System(TM),
along with a full range of other proprietary and non-proprietary endodontic
products, and (ii) an air-water spray laser accessory, LaserSpray(TM), designed
to cool the tissue receiving laser energy and the surrounding tissue, that is
incorporated into the Company's laser-based systems and can be employed with
fiber-coupled laser systems manufactured by others. The Company has developed a
home consumer product called LazerSmile(TM), a toothbrush that utilizes a light
source and a proprietary gel for whitening teeth. The Company has under
development a fluid conditioning system known as FlavorFlow(TM), for which it
has been granted a patent, that sanitizes, flavors and administers fluids and
enhances the scent of air present during dental and medical procedures, and a
line of biomaterials for dental and medical applications.
2
<PAGE>
The Company's principal executive offices are located at 981 Calle
Amanecer, San Clemente, California 92673, and its telephone number at that
location is (949) 361-1200.
Recent Developments
- -------------------
On January 26, 1999, the Company entered into a distribution agreement with
Henry Schein, Inc. ("Schein"), a publicly-held distributor of healthcare
products and services to office-based dental and medical practitioners. The
distribution agreement grants to Schein the non-exclusive right to sell the
Company's Millennium(TM) HydroKinetic(TM) dental laser systems in the United
States. A purchase order for the first 20 systems has been issued by Schein, and
the Company is continuing to ship laser systems against that purchase order.
In January 1999, the Company retained Keith G. Bateman to serve as its Vice
President of Global Sales. Mr. Bateman held key executive positions with HGM
Medical Laser's international and domestic divisions from 1994 through 1998, and
previously spent several years in sales, marketing and management in the
computer industry. The Company entered into an employment agreement with Mr.
Bateman providing for a base salary of $100,000 per year plus commission and an
annual bonus based on sales. Mr. Bateman also received options to purchase
50,000 shares of the Company's Common Stock, and is entitled to receive options
to purchase an additional 50,000 shares upon meeting a certain sales quota. The
employment agreement is terminable at will by either party; provided, however,
that if the Company is acquired or merged, the survivor may offer Mr. Bateman a
one-year contract with the same or better compensation, or pay Mr. Bateman
severance pay for nine months in an amount equal to his aggregate compensation
for the prior nine months. The Company also added three additional salespersons
in January 1999 to focus on sales of its dental laser products.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered hereby....................... 4,013,900 shares
Common Stock to be outstanding
after this Offering.............................. 19,130,387 shares(1)
Use of proceeds................................... The Company will not receive
any portion of the proceeds
from the Common Stock to be
sold in this Offering;
however, it will receive
proceeds from the exercise
of Warrants, which proceeds
will be used for working
capital and general
corporate purposes. See "Use
of Proceeds".
</TABLE>
_______________
(1) Based on the number of shares outstanding at April 13, 1999. Assumes
exercise of the Warrants; excludes (i) 2,851,036 shares of Common Stock,
not being registered hereunder, reserved for issuance upon exercise of
other warrants and options outstanding at April 13, 1999; and (ii)
725,899 shares of Common Stock otherwise reserved for possible issuance
under the Company's 1990, 1992, 1993 and 1998 Stock Option Plans and 1990
and 1993 Stock Compensation Plans.
RISK FACTORS
THIS OFFERING INVOLVES SUBSTANTIAL INVESTMENT RISK, AND THE SHARES SHOULD
BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
IN EVALUATING AN INVESTMENT IN SHARES OF THE COMPANY, PROSPECTIVE INVESTORS
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, AMONG OTHERS, AS WELL AS
ALL OTHER INFORMATION SET FORTH HEREIN, INCLUDING THE EXHIBITS HERETO. THE
FOLLOWING DISCUSSION OF RISK FACTORS IS NOT COMPREHENSIVE, AND EACH PROSPECTIVE
INVESTOR IS ADVISED TO MAKE ITS OWN ANALYSIS OF THE RISKS ASSOCIATED WITH AN
INVESTMENT IN THE SHARES.
1. History of Net Losses; Future Profitability Uncertain. The Company
-----------------------------------------------------
reported net losses of $7,549,262, $3,050,333, $2,023,822, $2,463,259,
$2,823,910 and $10,346,069 for the years ended December 31, 1993, 1994, 1995,
1996, 1997 and 1998, respectively. The Company had an accumulated deficit of
$37,969,408 at December 31, 1998. During the past five years, the Company has
not generated sufficient revenue to permit it to operate on a profitable basis.
The Company's ability to achieve profitable operations in the future will depend
in large part upon obtaining regulatory approvals for the marketing of various
products for certain applications and then successfully bringing its products to
market and generating sufficient revenue to produce a net profit. The likelihood
of long-term success of the Company must be considered in light of the expenses,
difficulties and delays frequently encountered in the development and
commercialization of new products and competitive factors in the marketplace, as
well as the burdensome regulatory environment in which the Company operates.
There can be no assurance that the Company will ever achieve significant
revenues or profitable operations.
2. Viability as Going Concern; Need for Additional Funding. The Company has
-------------------------------------------------------
suffered recurring losses from operations and shows a need for continued funding
that raises substantial doubt about its ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon its
ability to obtain outside financing through the issuance of either additional
shares of its Common or Preferred Stock or debt securities and, ultimately, upon
a movement to profitability through increased sales, product improvement through
engineering and cost containment. The Company's capital requirements depend on
numerous factors, including the progress of its research and development
programs, the progress of pre-clinical and clinical testing, the time and cost
involved in obtaining regulatory approvals, the cost of filing, prosecuting,
defending and enforcing patent claims and other intellectual property rights,
competing technological and market developments, demand for its products, and
payment terms it is able to negotiate with its suppliers and customers.
3
<PAGE>
The Company has available a $2,500,000 credit facility to finance inventory
and accounts receivable, which expires June 1, 1999, but which the Company has
the right, subject to certain conditions which the Company expects to be able to
satisfy, to extend the credit facility through December 1, 1999. The Company
remains dependent upon its ability to obtain outside financing either through
the issuance of additional shares of its common or preferred stock or through
borrowings until it achieves sustained profitability through increased sales and
cost containment. In March 1999, the Company raised approximately $2,758,000 of
net proceeds through a private placement of equity securities. Management
believes that the Company will require significant resources in 1999,
principally to fund the Company's working capital needs to support the
production and marketing of the Company's laser-based products for various
dental and medical applications, efforts directed towards further extensions and
refinements of existing products, and continuing research and development
activities. The Company expects to generate the necessary resources for its 1999
business plan through a combination of the contribution from the sales of its
products, the sale of equity securities in a private placement, and debt
financing. No assurances can be given, however, that the Company will be able to
obtain such additional resources. If the Company is unsuccessful in generating
anticipated resources from one or more of the anticipated sources and is unable
to replace any shortfall with resources from another source, the Company may be
able to extend the period for which available resources would be adequate by
deferring the creation or satisfaction of various commitments, deferring the
introduction of various products or entry into various markets, and otherwise
scaling back operations. If the Company were unable to generate the required
resources, its ability to meet its obligations and to continue its operations
would be adversely affected. The Company's consolidated financial statements do
not include any adjustments that might result from the outcome of the
uncertainty about the Company's ability to continue as a going concern. The
Company's financial statements for the year ended December 31, 1998 were audited
by the Company's independent accountants, whose report includes an explanatory
paragraph stating that the financial statements have been prepared assuming the
Company will continue as a going concern and that the Company has recurring
losses and shows a need for continued funding that raise substantial doubt about
its ability to continue as a going concern.
3. Product Development; Risk of Defects. The development of new technology
------------------------------------
is a lengthy and capital intensive process and is subject to unforeseen risks,
delays, problems, and costs. The Company's success will in part depend upon its
ability to design, develop and introduce new products and enhancements on a
timely basis to meet changing customer needs, technological developments and
evolving industry standards. There can be no assurance that the Company will be
able successfully to develop any additional products, including products
currently under development, or enhance existing products. Unanticipated
technical or other problems may occur which could delay the Company's
development programs. Failure to complete development of key products could
result in the complete loss of the funds committed by the Company to such
products, which could be substantial. In addition, products as complex as the
Company's laser-based systems may contain latent defects which could from time
to time become apparent during commercial use. Remedying such defects could
require significant modifications at substantial costs to the Company.
4. Concentration of Sales in Foreign Distributors; Need to Establish
-----------------------------------------------------------------
Marketing Arrangements for Millennium(TM). During 1998, two
-----------------------------------------
distributors, Sweden & Martina, the Company's Italian distributor, and Ash
Temple, the Company's Canadian distributor, accounted for approximately 20% and
11%, respectively, of the Company's sales. During 1997, Orbis Hi-Tech Dental
GmbH, the Company's German distributor, accounted for approximately 67% of the
Company's sales.
During 1998, the Company made no sales of Millennium(TM) systems to Orbis
Hi-Tech, while the Company was engaged in the redesign of the handpiece for the
Millennium(TM) system. During the fourth quarter of 1998, the Company received
FDA clearance to market the Millennium(TM) system in the United States for
certain hard tissue dental applications. Now that clearance has been obtained to
market the Millennium(TM) system in the United States, the Company is attempting
to establish effective marketing arrangements to generate revenue from the
Millennium(TM) system in a number of markets, including the United States. No
assurances can be given that the Company will be successful in establishing
effective marketing arrangements for Millennium(TM) in the United States or in
other markets or that the Company will generate significant revenue from the
sale of Millennium(TM) systems.
5. Uncertainty of Product and Market Acceptance. The Company is only in the
--------------------------------------------
initial phases of the marketing of its HydroKinetic(TM) tissue cutting system,
the Millennium(TM) system. Initial sales to a German distributor commenced
during the second quarter of 1997, and domestic sales commenced in November 1998
following dental hard tissue clearance from the FDA. In July 1997, the Company
received FDA clearance to market a laser system incorporating a variation of the
technology utilized in the Millennium(TM) for a broad range of dermatological
and general surgical soft tissue applications. In this variation, the
utilization of lower power laser pulses does not result in the transformation of
water droplets into energized water molecules capable of removing dental hard
and soft tissues, but rather the air-water spray acts as a cooling agent. There
can be no assurance that the Millennium(TM) system, including the dermatological
and general soft tissue configuration, will receive market acceptance. Lasers
have not been widely used in certain medical and dental applications, and their
effective use requires training and experience. The acceptance of lasers may be
adversely affected by their high cost, concerns by patients and practitioners
about their safety and efficacy, and the substantial market acceptance and
penetration of conventional dental and medical tools. Current economic pressure
may make dental and medical practitioners reluctant to purchase substantial
capital equipment or invest in new technology. The failure of dental and medical
lasers to achieve broad market acceptance would have a material adverse effect
on the Company's business, financial condition and results of operations.
While the Company believes that the technology incorporated in its
Millennium(TM) surgical tissue cutting system should be effective in a broad
range of medical and dental applications, this belief (except with respect to
dental hard tissue and certain dermatological applications, for which clinical
research has been conducted) is based largely on preliminary in vitro and in
vivo research and extrapolation of observations in such clinical research. No
assurances can be given that the technology incorporated in its Millennium(TM)
surgical tissue cutting system will prove to be applicable to, or will find
market acceptance in, any medical or dental fields or that the Company will
receive clearance from the FDA or other regulatory agencies to market the
Millennium(TM) or any other laser-based system or other products embodying its
HydroKinetic(TM) technology in any additional jurisdictions or for any
additional applications. No assurances can be given that any other technologies
or products that the Company is developing will prove effective or will find
market acceptance.
In August 1998, the Company introduced its first consumer product, the
LazerSmile(TM) Tooth Whitening System, which utilizes a monochromatic optical
energy light source embedded within a toothbrush in conjunction with a clear,
non-abrasive tooth whitening gel. During 1999, the Company intends to focus its
marketing strategy for LazerSmile(TM) on utilization of experienced consumer
marketing groups that specialize in the distribution of home consumer health
products through such channels as television shopping networks, specialty
catalogs and traditional distribution channels. While the Company has currently
retained the services of certain representatives to position and market its
LazerSmile(TM) on a television shopping network and in various mail order
catalogs, there can be no assurance that the Company will be successful in
establishing these alliances, or that the LazerSmile(TM) will receive market
acceptance.
In 1998, the Company added a diode and an argon laser system to its product
line. Both lasers are manufactured by unaffiliated third parties and are soft
tissue and composite curing lasers, respectively, intended for use within the
dental market. There can be no assurance that these systems will receive market
acceptance or that significant revenues will be realized in the future.
In the future, the Company may introduce additional products. There can be
no assurance that any of these products will receive market acceptance or
generate significant revenues.
4
<PAGE>
6. International Sales. In the years ended December 31, 1993, 1994, 1995,
-------------------
1996, 1997 and 1998, approximately 30%, 57%, 70%, 47%, 73% and 41%,
respectively, of the Company's sales were export sales, of which approximately
100%, 85%, 72%, 80%, 93% and 66%, respectively, were sales to Europe. To the
extent that international sales continue to make a substantial contribution to
Company revenues, currency fluctuations could make the Company's products less
competitive in foreign markets, contribute to fluctuations in the Company's
operating results and, if the Company makes sales denominated in foreign
currencies or maintains significant net assets or liabilities denominated in
foreign currencies, expose the Company to currency exchange valuation risks.
Political instability, longer receivable collection periods and difficulty in
collecting accounts receivable also pose risks to international sales. Moreover,
the laws of certain countries, or the enforcement thereof, may not protect the
Company's products, intellectual property rights or contractual rights to the
same extent as the laws of the United States. There can be no assurance that
these factors will not have a material adverse effect on the Company's business
and financial condition and results of operations.
7. Product Liability Risk; Limited Insurance Coverage. The manufacture and
--------------------------------------------------
sale of the Company's laser-based systems entail significant risk of product
liability claims in the event that the use of such systems is alleged to have
caused adverse effects on a patient. Although the Company has taken and will
continue to take what it believes are appropriate precautions, including
maintaining general liability and commercial liability insurance policies which
include coverage for product liability claims, there can be no assurance that
the Company's insurance coverage limits are or will be adequate to protect the
Company from any liabilities it might incur in connection with the sale of its
products. The Company currently maintains product liability insurance in the
amount of $6,000,000 for any single event or $7,000,000 in the aggregate
domestically. In the future, product liability insurance or such increased
coverage as the Company may desire may not be available on acceptable terms or
on any basis whatsoever. A product liability claim or series of claims
successfully asserted against the Company in excess of its insurance coverage
could have a material adverse effect on the Company's business and financial
condition and results of operations. Additionally, it is possible that adverse
product liability actions could negatively affect the Company's ability to
obtain and maintain regulatory approval for its products, as well as damage the
Company's reputation in any or all markets in which it participates.
8. Competition; Possible Technological Obsolescence. Development by others
------------------------------------------------
of new or improved products, processes, or technologies may make the Company's
products obsolete or less competitive. In the past, technological change has not
had a material impact on the Company. The ability of the Company to compete is
dependent on the Company's ability regularly to enhance and improve its products
and successfully develop and market new products. Many of the Company's
competitors have greater, and in some cases much greater, financial, managerial,
marketing, and technical resources than the Company. There can be no assurance
that the Company will successfully differentiate itself from its competitors,
that the market will consider the Company's products to be superior to its
competitors' products, that the Company's competitors will not develop new or
enhanced products that are more effective than the products which have been or
may be developed by the Company, or that the Company will be able to adapt to
evolving markets and technologies, develop new products, or achieve and, if
achieved, maintain technological advantages.
9. Patents and Proprietary Rights; Proprietary Technology. The Company
------------------------------------------------------
relies, to a significant extent, on patents, trade secrets and confidentiality
agreements to protect its proprietary technology. There can be no assurance as
to the breadth or degree of protection which existing or future patents, if any,
may afford the Company, that such patents will not be circumvented or
invalidated, or that the Company's products do not and will not infringe on
patents or violate proprietary rights of others. If a patent infringement claim
is asserted against the Company, or if the Company is required to enforce its
rights under an issued patent, the cost of such actions may be very high,
whether or not the Company is successful. While the Company is unable to predict
what such costs would be if it is obligated to pursue patent litigation, its
ability to fund its operations and to pursue its business goals may be adversely
affected.
10. Government Regulation. The Company's products are subject to
---------------------
significant government regulation in the United States and other countries. To
clinically test, manufacture, and market products for human diagnostic and
therapeutic use, the Company must comply with mandatory regulations and safety
standards established by the FDA and comparable state and foreign regulatory
agencies. Typically, products must meet regulatory standards as safe and
effective for their intended use prior to being marketed for human applications.
The clearance process is expensive and time-consuming, and no assurance can be
given that any agency will grant additional clearance for the sale of the
Company's products for routine clinical applications, that the length of time
the process will require will not be extensive, or that the cost of the process
will not be substantial.
The FDA also imposes requirements on manufacturers and sellers of products
under its jurisdiction, such as those relating to labeling, manufacturing
practices, record keeping, and reporting. The FDA also may require post-
marketing practices, record keeping and reporting requirements.
The following table sets forth the status of FDA clearance of the Company's
principal products:
<TABLE>
<CAPTION>
Product Market Date Cleared Status
- ------- ------ ------------ ------
<S> <C> <C> <C>
Millennium(TM) Dental 10/8/98 Cleared to market
DermaLase(TM) Dermatology, General Surgery 7/18/97 Cleared to market
LazerSmile(TM) Tooth Whitening N/A Clearance not required
CanalFinder(TM) Endodontic Instrumentation N/A Clearance not required
FlavorFlow(TM) Dental Fluid Conditioning N/A Not yet submitted
</TABLE>
There can be no assurance that additional approvals from the FDA will be
granted, that the process to obtain such approvals will not be expensive or
lengthy, or that the Company will have sufficient funds to pursue such
approvals. The failure to receive requisite approvals for the Company's products
or processes, when and if developed, or significant delays in obtaining such
additional approvals, could prevent the Company from commercializing its
products as anticipated, and could have a material adverse effect on the
financial condition, results of operations, cash flows and prospects of the
Company.
The Company is also subject to regulation under the Radiation Control for
Safety and Health Act of 1968 (the "Safety Act") administered by the Center for
Devices and Radiological Health ("CDRH") of the FDA. The CDRH controls energy
emissions of light and sound and electronic waves from electronic products.
These regulations require a laser manufacturer to file new product and annual
reports, to maintain quality control, product testing and sales records, to
distribute appropriate operation manuals, to incorporate certain design and
operating features in lasers sold to end-users and to certify and label each
laser sold to end-users as belonging to one of four classes of lasers (based on
the level of
5
<PAGE>
radiation from the laser). In addition, various warning labels must be affixed
to the product and certain protective devices must be installed, depending on
the class of product. Under the Safety Act, the Company is also required to
register with the FDA as a medical device manufacturer and is subject to
inspection on a routine basis by the FDA for compliance with Good Manufacturing
Practice ("GMP") regulations. The GMP regulations impose certain procedural and
documentation requirements upon the Company relevant to its manufacturing,
testing and quality control activities. The CDRH is empowered to seek remedies
for violations of these regulatory requirements under the Federal Food, Drug and
Cosmetic Act.
Various state dental boards are considering the adoption of restrictions on
the use of lasers by dental hygienists. In addition, dental boards in a number
of states are considering educational requirements regarding use of dental
lasers. While the scope of these restrictions and educational requirements is
not now known, they could have an adverse effect on sales of the Company's
laser-based products.
The Company has not filed applications for regulatory approval with the
Japanese Ministry of Health and Welfare for any of its products, but is
gathering clinical data in preparation for said application for the
Millennium(TM) system.
The FDA and other governmental agencies, both in the United States and in
foreign countries, may adopt additional rules and regulations that may affect
the Company's ability to develop and market its products.
11. Dependence on Suppliers. The Company has identified alternate suppliers
-----------------------
for most of the components of its laser-based products. There are certain key
components for which there are single suppliers. The Company is diligently
searching for alternative sources for these suppliers. A change in the suppliers
of certain system components, however, would require new regulatory approvals
and, in particular, could require an amendment to the "CE" mark granted to the
Company pursuant to the European Community's Medical Device Directive, which
would hamper the Company's ability to distribute its systems in the European
countries requiring such an approval.
12. Possible Volatility of Common Stock Price; Limited Public Market;
-----------------------------------------------------------------
Compliance With Nasdaq Listing Requirements. The Company's Common Stock has been
- -------------------------------------------
listed on The Nasdaq SmallCap Market since November 12, 1992, and the Company
has no present plans to apply to list the Common Stock on any other domestic
securities exchange. In April 1997, the Company's Common Stock was also listed
on the Berlin Stock Exchange under the symbol BLA.
The market prices for securities of emerging companies, including the
Company, have historically been highly volatile. Significant volatility in the
market price of shares of Common Stock may arise due to factors such as the
Company's developing business, historic losses and relatively low price per
share. In addition, future announcements concerning the Company or its
competitors may have a significant impact on the market price of the Common
Stock. Such announcements might include financial results, the results of
testing, technological innovations, new commercial products, changes to
government regulations, government decisions on commercialization of products,
developments concerning proprietary rights, litigation or public concern as to
safety of the Company's products. As long as there is only a limited public
market for the Common Stock, the sale of a significant number of shares of
Common Stock at any particular time could be difficult to achieve at the market
prices prevailing immediately before such shares are offered, and the offering
of a significant number of shares of Common Stock at one time could cause a
severe decline in the price of the Common Stock.
For continued inclusion on The Nasdaq SmallCap Market, an issuer must
maintain (i) net tangible assets (total assets less the sum of total liabilities
and goodwill) of at least $2,000,000, (ii) net income of no less than $500,000
in the most recent fiscal year or in two of the three most recent fiscal years,
or (iii) market capitalization of at least $35,000,000, in addition to a minimum
bid price of $1 per share, a market value of the public float of at least
$1,000,000, a public float of at least 500,000 shares, at least two market
makers, and a minimum of 300 holders of 100 or more shares. At March 31, 1999,
the Company met all of the above criteria except for the alternative net income
criterion. If the Company continues to suffer significant losses from operations
without additional equity financing, it may not be able to meet the requirements
for the continued listing of Common Stock on The Nasdaq SmallCap Market, in
which case the Common Stock may be delisted from trading on The Nasdaq SmallCap
Market.
If the Common Stock were excluded from quotation and trading on The Nasdaq
SmallCap Market, it would likely trade on the over-the-counter market, in what
is commonly referred to as the "Electronic Bulletin Board" or "pink sheets".
Should that occur, holders of Common Stock may find it more difficult to dispose
of, or to obtain accurate quotations for the market price of, Common Stock. In
addition, if the Common Stock is not quoted on The Nasdaq SmallCap Market, it
may be subject to a rule that imposes restrictive sales practice requirements on
broker-dealers selling such securities to persons other than established
customers and accredited investors. For transactions covered by this rule, the
broker-dealer must, among other requirements, make a special suitability
determination regarding the purchaser and must receive the purchaser's written
consent to the transaction prior to any purchase. Consequently, the rule may
restrict the ability of broker-dealers to sell or limit the interest of broker-
dealers in selling Common Stock and may adversely affect the ability of holders
of Common Stock to sell shares. The exclusion of a security from continued
quotation on The Nasdaq SmallCap Market may also cause a decline in share price,
a diminution of news coverage of the Company, and greater difficulty in
arranging future financing.
13. Reliance Upon Key Employees; Additional Personnel. The success of the
-------------------------------------------------
Company is substantially dependent on the efforts of certain key personnel of
the Company: Jeffrey W. Jones, Keith G. Bateman, Ioana Riziou and Andrew Kimmel.
The Company does not presently have employment contracts with any of its key
6
<PAGE>
personnel, other than Mssrs. Jones and Bateman. The loss of such key personnel
could adversely affect the Company's business and prospects. In such event,
there can be no assurance that the Company would be able to employ qualified
replacements on terms favorable to the Company.
The Company presently employs approximately 61 people. If and when the
scale of the Company's operations increases, the Company will be required to
increase the number of employees, including the number of management personnel.
No assurance can be given that the Company will be able to attract and retain
additional personnel, and particularly management personnel, having the
capabilities that the Company will seek.
In seeking qualified personnel, the Company will be required to compete
with companies having greater financial and other resources than the Company
has. As some of its products are developed, the Company will have to attract
additional marketing, manufacturing, technical, scientific and administrative
personnel. Since the future success of the Company is, to a significant degree,
dependent upon its ability to attract and retain qualified personnel, the
Company's inability or failure to attract and retain such personnel could have a
materially adverse impact on the business of the Company.
14. No Dividends on Common Stock. The Company has not paid any cash
----------------------------
dividends on its Common Stock since its incorporation, and the Board of
Directors does not anticipate declaring any cash dividends on Common Stock in
the foreseeable future. The Company currently intends to utilize any earnings it
may achieve for reinvestment in its business. Future dividend policy will also
depend on the Company's earnings, capital requirements, financial condition,
debt covenants, and other factors considered relevant by the Company's Board of
Directors. It is unlikely that any dividends on Common Stock will be declared by
the Company in the foreseeable future.
15. Possible Issuance of Additional Shares. The Company is authorized to
--------------------------------------
issue 50,000,000 shares of Common Stock, of which 17,657,387 shares were issued
and outstanding as of April 13, 1999. As of that date, 4,324,036 shares of
Common Stock had been reserved for future issuance upon exercise of outstanding
options and warrants, and an additional 725,899 shares have been reserved for
possible issuance pursuant to the Company's stock option and stock compensation
plans. Further, the Company has authorized 1,000,000 shares of preferred stock,
$.001 par value per share (the "Preferred Stock"), of which 100 shares had been
designated and issued as Series A 6% Redeemable Cumulative Convertible Preferred
Stock and 500,000 shares has been designated as Series B Junior Participating
Cumulative Preferred Stock, none of which is currently outstanding. The
Company's Board of Directors has authority to issue Preferred Stock in one or
more series and to fix the rights, privileges, restrictions and preferences
thereof. Accordingly, the Company may issue one or more series of Preferred
Stock in the future that will have preference over the Common Stock with respect
to the payment of dividends and upon its liquidation, dissolution, or winding up
or have voting or conversion rights which could adversely effect the voting
power and percentage ownership of the holders of the Common Stock. Although it
has no present commitments to do so (except as noted above), the Company may
seek significant additional capital resources and may issue additional shares of
Common Stock, additional shares of Preferred Stock and other securities in the
future. Such issuances could have anti-takeover and dilutive effects.
16. Broad Discretion in Use of Proceeds. As set forth in "Use of
-----------------------------------
Proceeds", the net proceeds from the exercise of Warrants have not been
allocated to specific purposes, but rather will be applied to general working
capital, the refinement and improvement of existing products, and the
development of products currently under development and products the Company may
develop in the future. Management will have considerable discretion in applying
such proceeds.
17. Stockholder Rights Plan. The Company recently adopted a Stockholder
-----------------------
Rights Plan. The Plan provides that in the event any person becomes the
beneficial owner of 15% or more of the outstanding shares of the Company's
Common Stock, each right (a "Right") (other than a Right held by the 15%
stockholder and its associates) will be exercisable, on and after the close of
business on the tenth business day following such event, to purchase the
Company's Common Stock having a market value equal to two times the then current
exercise price of the Rights (initially $30.00). The Plan further provides that
if, on or after the occurrence of such event, the Company is merged into any
other corporation or 50% or more of the Company's assets or earning power are
sold, each Right (other than a Right held by the 15% stockholder and its
associates) will be exercisable to purchase common shares of the acquiring
corporation having a market value equal to two times the then current exercise
price of the Rights. The Rights expire on December 31, 2008 (unless previously
triggered) and are subject to redemption by the Board of Directors at $.001 per
right at any time prior to the first date upon which they become exercisable to
purchase shares of Common Stock. The Plan could make it more difficult for a
third party to acquire, or discourage a third party from acquiring, control of
the Company, and could also limit the price that some investors might be willing
to pay in the future for shares of the Company's Common Stock.
18. Year 2000 Issues. The Company is presently continuing its analysis of
----------------
its computer software and hardware requirements with respect to Year 2000
issues, and is attempting to gain additional information regarding the Year 2000
compliance status of its principal suppliers of goods and services and of its
principal customers. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the 1998 10-K. The failure of the
Company or any of its principal suppliers and customers to become Year 2000
compliant in a timely manner and the failure to establish alternate
communications channels could have a material adverse effect on the Company's
business, financial condition, results of operations and cash flow.
19. Forward-Looking Statements. The forward looking statements contained
--------------------------
in this Prospectus are subject to various risks, uncertainties and other factors
that could cause actual results to differ materially from the results
anticipated in such forward looking statements. Included among the important
risks, uncertainties and other factors are those hereinafter discussed.
Few of the forward looking statements in this Prospectus deal with matters
that are within the unilateral control of the Company. There is substantial
government regulation of the manufacture and sale of medical products, including
many of the Company's products, by governmental agencies in both the United
States and foreign countries. These governmental agencies often have
considerable discretion in determining whether and when to approve the marketing
of the Company's products that have not yet received such approval.
The availability of equity and debt financing to the Company is affected
by, among other things, domestic and world economic conditions and the
competition for funds. Rising interest rates might affect the feasibility of
debt financing that is offered. Potential investors and lenders will be
influenced by their evaluations of the Company and its products and comparisons
with alternative investment opportunities.
The Company's products do not provide the exclusive means for accomplishing
an objective, and customers may choose alternative means. Many of the Company's
competitors have much greater financial resources and technical capabilities
than does the
7
<PAGE>
Company, which may enable such competitors to design and produce superior
products or to market their products in a manner that achieves commercial
success even in the face of technical superiority on the part of the Company's
products.
The Company's patents may not offer effective protection against
competitors. Competitors may be able to design around the Company's patents or
employ technologies not covered by such patents. In addition, the Company's
patents may be challenged, and even if such patents are upheld, the diversion of
financial and human resources associated with patent litigation could adversely
affect the Company. The Company may be found to be violating the patents of
others and forced to obtain a license under such patents or modify the design of
its products.
Rapid technological developments are expected to continue in the industries
in which the Company competes. The Company may not be able to develop,
manufacture and market products which meet changing user requirements or which
successfully anticipate or respond to technological changes on a cost-effective
and timely manner.
While the Company believes that its technology incorporated into its
Millennium(TM) surgical tissue cutting system should be effective in a broad
range of medical and dental applications, this belief (except with respect to
dental hard tissue and certain dermatological applications, for which clinical
research has been and is being conducted) is based largely on preliminary in
vitro and in vivo research and extrapolation of observations in such clinical
research. No assurances can be given that the Company's Millennium(TM)
technology will prove to be applicable to, or will find market acceptance in,
any medical or dental fields or that the Company will receive clearance from the
FDA or other regulatory agencies to market the Millennium(TM) system or other
products embodying its HydroKinetic(TM) technology or variations thereof for any
additional applications or in any additional jurisdictions. See "Business - The
Millennium(TM) System."
USE OF PROCEEDS
The Company will not receive any portion of the proceeds from the sale of
Common Stock to be sold in this Offering. The Company may receive net proceeds
of up to $5,387,250 from the exercise of the Warrants; management currently
anticipates that any such proceeds will be utilized for working capital and for
other general corporate purposes.
8
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock of the Company as of April 13, 1999
(assuming exercise of the Warrants), and as adjusted to reflect the sale of the
4,013,900 shares of Common Stock offered hereby, (i) by all persons known by the
Company to beneficially own more than 5% of the outstanding shares, (ii) by each
director of the Company, (iii) by the Named Executive Officer; (iv) by all
executive officers and directors of the Company as a group, and (v) by the
Selling Stockholders. Unless otherwise indicated, the persons listed below have
sole voting and investment power with respect to the shares listed across from
their names in the table below.
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares to be Sold Shares Beneficially Owned
Name of Beneficial Owner Before Offering(1) in This Offering After Offering(1)
- ------------------------------------------------------- ------------------------- ----------------- -------------------------
Number Percent Number Number Percent
------------- --------- ----------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Federico Pignatelli(2) 433,750 2.4 - 433,750 2.4
Jeffrey W. Jones(3) 66,000 * - 66,000 *
403,076 2.2 - 403,076 2.2
George V. d'Arbeloff(4) 81,517 * - 81,517 *
William A. Owens(5) 22,500 * - 22,500 *
All executive officers and directors
as a group (9 persons)(6) 1,146,687 6.2 - 1,146,687 6.2
Advisor's Capital Investments Inc.
dba Perspective Advisory Group(7) 1,512,894 7.9 675,000 837,894 4.4
Brynley B. Archer 15,000 * 15,000 - *
Barclay Investments, Inc. 22,250 * 22,250 - *
Banca del Gottardo 300,000 1.6 200,000 - *
Carol A. Bingle 15,000 * 15,000 - *
Robert P. Bingle 41,521 * 15,000 26,521 *
Kenneth & Sophie Brown 15,000 * 15,000 - *
BSI -- Banca della Svizzera Italiana 615,000 3.2 615,000 - *
CBG Compagnie Bancaire Geneve 75,000 * 75,000 - *
Eric Robert & Gail Coble 75,000 * 60,000 15,000 *
Corner Bank (Luxembourg) S.A. 465,000 2.4 465,000 - *
Credit Bancorp 15,000 * 15,000 - *
Jack & Carolyn DeSantis 15,000 * 15,000 - *
Eurocapital Limited 57,500 * 57,500 - *
Euromobiliare Asset Management SGR SPA 150,000 * 150,000 - *
Fidulex Management Inc. 60,000 * 60,000 - *
Lawrence K. Fleischman 43,182 * 15,000 28,182 *
Terry A. Fuller, Ph.D. 50,000 * 50,000 - *
Alex & Irene Gonik 15,000 * 15,000 - *
Gem Holdings 154,900 * 154,900 - *
Raymond Halliwell 15,000 * 15,000 - *
Kazimierz & Maria Ilnicki 27,799 * 15,000 12,799 *
Mary Lee Ingoldsby 45,000 * 45,000 - *
Interbanc Mortgage Services, Inc. 105,000 * 105,000 - *
Interbanc Mortgage Services, Inc., Profit Sharing Plan
and Trust 15,000 * 15,000 - *
Lemanik Sicav Active Growth 300,000 1.6 300,000 - *
J. Scott Liolos 46,000 * 45,000 1,000 *
Edmond O'Donnell 66,182 * 30,000 36,182 *
Pac Capital Strategies Limited Partnership 75,000 * 75,000 - *
PacVest Associates 91,615 * 15,250 76,365 *
Swiss Bank Corporation 423,750 2.2 210,000 213,750 1.1
Trixego SA 150,000 * 150,000 - *
Trout Trading Company, Inc. 15,000 * 15,000 - *
UT Radiology Inc. Discretionary Plan F.B.O. Charles H.
Mandell 150,000 * 150,000 - *
Union Bancaire Privee 90,000 * 90,000 - *
Wallington Investments Ltd. 525,000 2.7 525,000 - *
Jeffrey Warren Wessel 17,500 * 15,000 2,500 *
Roger E. Wood 15,000 * 15,000 - *
</TABLE>
______________
* Less than one percent.
9
<PAGE>
(1) The number of shares beneficially owned by each stockholder is determined
under rules promulgated by the Securities and Exchange Commission, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting or investment power
and also any shares which the individual has the right to acquire within 60
days after April 13, 1999. The inclusion herein of such shares, however,
does not constitute an admission that the named stockholder is a direct or
indirect beneficial owner of such shares. Unless otherwise indicated, each
person or entity named in the table has sole voting and investment power
(or shares such power with his or her spouse) with respect to all shares of
Common Stock listed as owned by such person or entity.
(2) Includes 251,250 shares of Common Stock issuable pursuant to options
exercisable on or within 60 days of April 13, 1999.
(3) Includes 66,000 shares of Common Stock issuable pursuant to options
exercisable on or within 60 days of April 13, 1999.
(4) Includes 63,335 shares of Common Stock issuable pursuant to options and
warrants exercisable on or within 60 days of April 13, 1999.
(5) Includes 22,500 shares of Common Stock issuable pursuant to options
exercisable on or within 60 days of April 13, 1999.
(6) Includes 944,605 shares of Common Stock issuable pursuant to options and
warrants exercisable on or within 60 days of April 13, 1999.
(7) The address of Advisor's Capital Investments, Inc. is 17 Tripp Road,
Woodstock, Connecticut 06281. Advisor's Capital Investments, Inc.
expressly disclaims beneficial ownership of the shares of Common Stock
attributed to it in the above table; it does not have sole or shared power
or ability to direct the vote of said shares, but does have shared power to
dispose or direct the disposition of said shares.
PLAN OF DISTRIBUTION
The shares of Common Stock subject to this Prospectus may be sold from time
to time by the Selling Stockholders or their successors, assigns or transferees
in private transactions for their own accounts. The Selling Stockholders may
offer and sell the shares from time to time in transactions on The Nasdaq
SmallCap Market on terms to be determined at the time of such sales. The Selling
Stockholders may also make private transfers directly or through a broker or
brokers. Alternatively, the Selling Stockholders may from time to time offer
shares of Common Stock offered hereby to or through underwriters, dealers or
agents, who may receive consideration in the form of discounts and commissions;
such compensation, which may be in excess of normal brokerage commissions, may
be paid by the Selling Stockholders and/or purchasers of the shares of Common
Stock offered hereby for whom such underwriters, dealers or agents may act. The
Selling Stockholders and any dealers or agents that participate in the
distribution of the shares of Common Stock offered hereby may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any discounts, commissions or concessions received and any profit realized by
them on the resale of shares as principals may be deemed underwriting
compensation under the Securities Act. The aggregate proceeds to the Selling
Stockholders from sales of the Common Stock offered hereby will be the purchase
price of the Common Stock less any brokers' commissions. The Common Stock
offered hereby may be sold from time to time in one or more transactions at a
fixed price, which may be changed, or at varying prices determined at the time
of such sale or at negotiated prices.
The Common Stock issuable upon exercise of the Warrants and offered hereby
will be issued by the Company in accordance with the respective terms thereof.
The Company is contractually obligated to keep this Prospectus current for
as long a period as any Warrants remain outstanding and for two years
thereafter. The Company may from time to time notify the Selling Stockholders
that this Prospectus is not current and that sales of the Common Stock may not
occur until the Prospectus is supplemented by sticker or amendment, as
appropriate. To the extent required, the specific shares of Common Stock to be
sold, the names of the Selling Stockholders, the respective purchase prices and
public offering prices, the names of any agent, dealer or underwriter and any
applicable commissions
10
<PAGE>
or discounts with respect to a particular offer will be set forth in an
accompanying Prospectus supplement, or, if appropriate, a post-effective
amendment to the Registration Statement of which this Prospectus forms a part.
The laws of certain states may require that sale of the shares of Common
Stock offered hereby be conducted solely through brokers or dealers registered
in those states. In addition, in certain states the shares of Common Stock
offered hereby may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption therefrom is available.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Common Stock offered hereby may not
simultaneously engage in market making activities with respect to the Common
Stock for a period of one business day prior to the commencement of such
distribution. In addition, without limiting the foregoing, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder including, without limitation, Regulation
M, which provisions may limit the timing of purchases and sales of Common Stock
by Selling Stockholders.
The Company will pay substantially all the expenses incurred by the Selling
Stockholders and the Company incident to this Offering and the sale of the
Common Stock offered hereby to the public, but excluding any underwriting
discounts, commissions or transfer taxes. The expenses are estimated to be
approximately $30,000.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Kelly Lytton Mintz & Vann, Los Angeles, California.
EXPERTS
The consolidated balance sheets as of December 31, 1998 and 1997 and the
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1998, incorporated by
reference in this registration statement, have been incorporated herein in
reliance on the report, which includes an explanatory paragraph regarding the
Company's ability to continue as a going concern, of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of that firm as experts in
accounting and auditing.
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-19627) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998; and
(b) The section of the Company's Registration Statement on Form S-1,
declared effective by the Securities and Exchange Commission on August 6, 1997,
entitled "Description of Securities".
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this Offering shall also be deemed to be incorporated by
reference into this Prospectus, and to be a part hereof, from the dates of
filing of such documents. Any statement contained herein or in a document all
11
<PAGE>
or a portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, including any beneficial owner, upon the written or
oral request of any such person, a copy of any and all of the foregoing
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
in such documents). Written requests should be directed to BioLase Technology,
Inc., 981 Calle Amanecer, San Clemente, California 92673, Attention: Corporate
Secretary. Telephone requests should be directed to (949) 361-1200.
12
<PAGE>
ADDITIONAL INFORMATION
A registration statement on Form S-3 (the "Registration Statement")
relating to the securities offered hereby has been filed by the Company with the
Commission. This Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits thereto. Statements contained in
this Prospectus as to the contents of any contract or other document referred to
are not necessarily complete and in each instance reference is made to the copy
of such contract or other document filed as an Exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. For further information with respect to the Company and the Common
Stock being offered hereby, reference is made to the Registration Statement and
Exhibits. A copy of the Registration Statement may be inspected by anyone
without charge at the Commission's principal office located at 450 Fifth Street,
N.W., Washington, D.C. 20549, the Pacific Regional Office located at 5670
Wilshire Boulevard, 11th Floor, Los Angeles, California 90036-3648, the New York
Regional Office located at 7 World Trade Center, 13th Floor, New York, New York
10048, and the Chicago Regional Office located at Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661-2511, and copies of all or any
part thereof may be obtained from the Public Reference Branch of the Commission
upon the payment of certain fees prescribed by the Commission. The Commission
also maintains a World Wide Web site on the Internet at http:\\www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants, including the Company, that file electronically with the
Commission.
13
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus and,
if given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer of any securities other than those to
which it relates or an offer to sell, or a solicitation of an offer to buy, to
any person in any jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that the information
contained herein is correct as of any time subsequent to the date hereof.
-------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Page
----
Available Information..................................................... 2
Prospectus Summary........................................................ 2
The Company............................................................... 2
The Offering.............................................................. 3
Risk Factors.............................................................. 3
Use of Proceeds........................................................... 8
Principal and Selling Stockholders........................................ 9
Plan of Distribution...................................................... 10
Legal Matters............................................................. 11
Experts................................................................... 11
Incorporation by Reference................................................ 11
Additional Information.................................................... 13
</TABLE>
4,013,900 Shares
BIOLASE TECHNOLOGY, INC.
Common Stock
PROSPECTUS
May __, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
- ------- -------------------------------------------
Set forth below are the expenses estimated in connection with the issuance
and distribution of the Registrant's securities, other than underwriting
commissions and discounts. Except for the SEC registration fee, all expenses
are estimated.
<TABLE>
<S> <C>
SEC registration fee $ 3,597.52
Printing and engraving expenses 5,000.00
Accounting fees and expenses 7,000.00
Legal fees and expenses 12,000.00
Transfer Agent's fees and expenses 1,000.00
Miscellaneous expenses 1,402.48
----------
Total $30,000.00
==========
</TABLE>
Item 15. Indemnification of Directors and Officers.
- ------- -----------------------------------------
The Certificate of Incorporation and Bylaws of the Registrant indemnify its
officers and directors to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law and applicable law. Section 145 of the
Delaware General Corporation Law makes provision for the indemnification of
officers, directors and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursement of expenses incurred) arising under the Securities Act of 1933, as
amended (the "Securities Act").
Item 16. Exhibits and Financial Statement Schedules.
- ------- ------------------------------------------
(a) Exhibits
The following exhibits are being filed with this Registration Statement or
are incorporated by reference therein in accordance with the designated footnote
references.
Exhibit No. Exhibit
---------- -------
3. Articles of Incorporation and Bylaws
3.1 Restated Certificate of Incorporation, as Amended. (2)
3.2 Amended and Restated Bylaws. (3)
4. Instruments Defining the Rights of Holders, including Indentures
4.3 Certificate of Designations, Preferences and Rights of Series A
6% Redeemable Cumulative Convertible Preferred Stock of BioLase
Technology, Inc. (5)
4.4 Form of Participant Stock Purchase Warrant Certificate. (6)
4.5 Form of Agent Stock Purchase Warrant Certificate. (6)
4.6 Rights Agreement dated as of December 31, 1998 between the
Company and U.S. Stock Transfer Corporation. (7)
5. Opinions of Counsel
5.1 Opinion of Kelly Lytton Mintz & Vann LLP
10. Material Contracts
10.1 Premises Lease for 981 Calle Amanecer, San Clemente, California.
(1)
10.2 1990 Stock Option Plan. (1)
10.9 1992 Stock Option Plan. (1)
10.18 Amended and Restated 1993 Stock Option Plan. (3)
10.18a First Amendment to Amended and Restated 1993 Stock Option Plan.
(4)
10.19 Amended and Restated 1993 Stock Compensation Plan. (2)
10.20 Form of Stock Option Agreement under the 1993 Stock Option Plan.
(2)
10.26* Distribution Agreement between the Company and Orbis High Tech
Dental GmbH. (6)
10.27* Distribution Agreement, dated January 19, 1999, between the
Company and Henry Schein, Inc. (8)
10.28 Amended and Restated Employment Agreement, dated December 18,
1998, by and between the Company and Jeffrey W. Jones.**
10.29 Offer of Employment, dated January 8, 1999, from the Company to
Keith G. Bateman.**
10.30* Distribution Agreement between the Company and Sweden & Martina
SpA. (8)
21. Subsidiaries (1)
23.1 Consent of PricewaterhouseCoopers LLP
23.3 Consent of Kelly Lytton Mintz & Vann LLP (contained in
Exhibit 5.1)
- --------------
* Portions of this Agreement have been omitted pursuant to a
confidentiality request filed with the Securities and Exchange
Commission.
** Previously filed.
(1) Filed with the Company's Registration Statement on Form S-1 dated
October 9, 1992 and incorporated by reference.
(2) Filed with the Company's 1993 Annual Report on Form 10-K dated April
14, 1994 and incorporated by reference.
(3) Filed with the Company's 1995 Second Quarter Report on Form 10-QSB
dated September 15, 1995 and incorporated by reference.
(4) Filed with the Company's 1995 Annual Report on Form 10-KSB dated May 6,
1996 and incorporated by reference.
(5) Filed with the Company's 1996 Third Quarter Report on Form 10-QSB dated
November 19, 1996 and incorporated by reference.
(6) Filed with the Company's 1996 Annual Report on Form 10-KSB dated April
11, 1997 and incorporated by reference.
(7) Filed with the Company's Registration Statement on Form 8-A dated
December 29, 1998 and incorporated by reference.
(8) Filed with the Company's 1998 Annual Report on Form 10-K dated April
15, 1999 and incorporated by reference.
Item 17. Undertakings.
- ------- ------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement, to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-1
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Certificate of Incorporation, the Delaware General
Corporation Law or otherwise, the Registration has been informed that in the
opinion of the commission such indemnification as against public policy as
expressed in the Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of its counsel the matter has already been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it against public policy as
expressed in the Act, and shall be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes:
(1) That for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424B(b)(1) or (4) or 497(h)
under the Act, as amended, shall be deemed to be part of this registration as of
the time it was declared effective.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Clemente, State of California on the 28th of
April, 1999.
REGISTRANT:
BIOLASE TECHNOLOGY, INC.
By: /s/ Jeffrey W. Jones
-------------------------------------
Jeffrey W. Jones
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------- ------------------------------------------------- ------------
<S> <C> <C>
/s/ Jeffrey W. Jones President, Chief Executive Officer (Principal April 28, 1999
- ------------------------------------------------ Executive Officer) and a Director
Jeffrey W. Jones
/s/ Stephen R. Tartamella Vice President, Chief Financial Officer April 28, 1999
- ------------------------------------------------ (Principal Financial and Accounting Officer) and
Stephen R. Tartamella Secretary
/s/ Federico Pignatelli Chairman of the Board April 28, 1999
- ------------------------------------------------
Federico Pignatelli
/s/ George V. d'Arbeloff Director April 28, 1999
- ------------------------------------------------
George V. d'Arbeloff
Director
- ------------------------------------------------
William A. Owens
</TABLE>
II-3
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF KELLY LYTTON MINTZ & VANN LLP]
April 28, 1999
BioLase Technology, Inc.
981 Calle Amanecer
San Clemente, CA 92673
Re: BioLase Technology, Inc.
------------------------
Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 (the "Registration Statement") of BioLase Technology, Inc., a Delaware
corporation (the "Company"), together with the exhibits as filed in connection
therewith and the form of a prospectus contained therein, which you have filed
with the Securities and Exchange Commission ("SEC") in connection with the
registration under the Securities Act of 1933, as amended, of 4,013,900 shares
of the Company's Common Stock, $.001 par value (the "Shares").
For purposes of this opinion, we have examined such matters of law and
originals, or copies certified or otherwise identified to our satisfaction, of
such documents, corporate records and other instruments as we have deemed
necessary. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as certified,
photostatic or conformed copies, and the authenticity of the originals of all
such latter documents. We have also assumed the due execution and delivery of
all documents where due execution and delivery are prerequisites to the
effectiveness thereof. We have relied upon certificates of public officials and
certificates of officers of the Company for the accuracy of material, factual
matters contained therein which were not independently established.
<PAGE>
BioLase Technology, Inc.
April 28, 1999
Page 2
Based on the foregoing and on all other documents, instruments and
matters examined for the rendering of this opinion, it is our opinion that,
subject to effectiveness of the Registration Statement with the SEC (such
Registration Statement as amended and finally declared effective, and the form
of Prospectus contained therein or subsequently filed pursuant to Rule 430A or
Rule 424 under the Securities Act of 1933, as amended, being hereinafter
referred to as the "Registration Statement" and the "Prospectus", respectively)
and to registration or qualification under the securities laws of the state in
which the Shares may be sold, upon the sale and issuance of the Shares in the
matter referred to in the Registration Statement, and upon payment therefore
(where applicable), the Shares will be legally issued, fully paid and
nonassessable, and will be binding obligations of the Company.
We express no opinion as to the applicability or effect of any laws,
orders or judgments of any state or jurisdiction other than federal securities
laws and a substance of laws of the States of California and Delaware. Further,
our opinion is based solely upon existing laws, rules and regulations, and we
undertake no obligation to advise you of any changes that may be brought to our
attention after the date hereof.
We consent to the use of our name under the caption "Legal Matters" in
the Prospectus, constituting part of the Registration Statement, and to the
filing of this opinion as an exhibit to the Registration Statement.
By giving you this opinion and consent, we do not admit that we are
experts with respect to any part of the Registration Statement or Prospectus
within the meaning of the term "expert" as used in Section 11 of the Securities
Act of 1933, as amended, or the rules and regulations promulgated thereunder by
the SEC, nor do we admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.
Should you have any questions or comments concerning the foregoing,
please do not hesitate to contact Cathryn S. Gawne, Esq. of this office.
Very truly yours,
/s/ KELLY LYTTON MINTZ & VANN LLP
KELLY LYTTON MINTZ & VANN LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Amendment No. 2 to Form S-3 (File No. 333-58329) of our report, which includes
an explanatory paragraph regarding the Company's ability to continue as a going
concern, dated March 16, 1999 on our audits of the consolidated financial
statements and consolidated financial statement schedule of BioLase Technology,
Inc. We also consent to the reference to our firm under the caption "Experts".
/s/ PRICEWATERHOUSECOOPERS LLP
Newport Beach, California
April 26, 1999
