10-Q

4

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

June 30, 2024

or

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

For the transition period from to

Commission File Number: 001-36385

BIOLASE, INC.

(Exact name of 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	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 August 1, 2024, the registrant had 36,597,056 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 - June 30, 2024 and December 31, 2023	2
		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) - Three and Six Months Ended June 30, 2024 and 2023	4
		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	35
Item 4.		Controls and Procedures	35
PART II		OTHER INFORMATION
Item 1.		Legal Proceedings	36
Item 1A.		Risk Factors	36
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.		Defaults Upon Senior Securities	38
Item 4.		Mine Safety Disclosures	38
Item 5.		Other Information	38
Item 6.		Exhibits	39
	Signatures		41

1

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIOLASE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	June 30,			December 31,
	2024			2023
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	5,272		$	6,566
Accounts receivable, less allowance of $329 and $244 as of June 30, 2024 and December 31, 2023, respectively		4,842			5,483
Inventory		10,904			11,433
Prepaid expenses and other current assets		1,076			1,381
Total current assets		22,094			24,863
Property, plant, and equipment, net		4,263			5,525
Goodwill		2,926			2,926
Right-of-use assets, leases		1,101			1,519
Other assets		257			268
Total assets	$	30,641		$	35,101
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	5,491		$	6,065
Accrued liabilities		7,662			7,518
Stock warrant liability		2,616			1,363
Deferred revenue, current portion		2,132			2,452
Current portion of term loans, net of discount		13,275			2,265
Total current liabilities		31,176			19,663
Deferred revenue		186			256
Warranty accrual		843			593
Non-current term loans		150			11,782
Non-current operating lease liability		315			772
Other liabilities		97			79
Total liabilities		32,767			33,145
Mezzanine Equity:
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, 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, 33,406 and 3,416 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		33			3
Additional paid-in capital		322,380			317,103
Accumulated other comprehensive loss		(659	)		(553	)
Accumulated deficit		(326,083	)		(316,800	)
Total stockholders' equity (deficit)		(4,329	)		(247	)
Total liabilities, convertible redeemable preferred stock and  stockholders' equity (deficit)	$	30,641		$	35,101

See accompanying notes to condensed consolidated financial statements.

2

BIOLASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net revenue	$	11,555		$	14,286		$	21,687		$	24,753
Cost of revenue		6,946			8,168			13,741			15,299
Gross profit		4,609			6,118			7,946			9,454
Operating expenses:
Sales and marketing		3,694			6,189			7,077			10,812
General and administrative		3,064			2,357			6,260			4,815
Engineering and development		1,071			1,444			2,354			2,991
Total operating expenses		7,829			9,990			15,691			18,618
Loss from operations		(3,220	)		(3,872	)		(7,745	)		(9,164	)
Loss on foreign currency transactions		(112	)		(235	)		(208	)		(215	)
Interest expense, net		(586	)		(583	)		(1,208	)		(1,160	)
Other income (loss), net		1,140			(147	)		(82	)		(147	)
Non-operating income (loss), net		442			(965	)		(1,498	)		(1,522	)
Loss before income tax provision		(2,778	)		(4,837	)		(9,243	)		(10,686	)
Income tax provision		(20	)		(31	)		(40	)		(31	)
Net loss		(2,798	)		(4,868	)		(9,283	)		(10,717	)
Other comprehensive loss items:
Foreign currency translation adjustments		(20	)		39			(106	)		119
Comprehensive loss	$	(2,818	)	$	(4,829	)	$	(9,389	)	$	(10,598	)
Net loss	$	(2,798	)	$	(4,868	)	$	(9,283	)	$	(10,717	)
Deemed dividend on convertible preferred stock		—			(9,377	)		—			(9,377	)
Net loss attributable to common stockholders	$	(2,798	)	$	(14,245	)	$	(9,283	)	$	(20,094	)
Net loss per share attributable to common stockholders:
Basic and Diluted - Note 1	$	(0.08	)	$	(26.14	)	$	(0.36	)	$	(45.98	)
Shares used in the calculation of net loss per share:
Basic and Diluted - Note 1		33,391			545			25,616			437

See accompanying notes to condensed consolidated financial statements.

3

BIOLASE, INC.

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

(Unaudited, In thousands)

	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	)

See accompanying notes to condensed consolidated financial statements.

4

BIOLASE, INC.

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

(In thousands)

(Unaudited)

	Mezzanine Equity										Stockholders' Equity (Deficit)
	Series H Convertible Redeemable Preferred Stock						Series I Redeemable Preferred Stock				Common Stock				Additional  Paid-in Capital			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares			Amount			Shares		Amount		Shares		Amount		Amount			Loss			Deficit			Equity (Deficit)
Balance, March 31, 2023		—		$	—			—	$	—		263	$	—	$	310,828		$	(653	)	$	(302,017	)	$	8,158
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		—			—			—		—		—		—		404			—			—			404
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.

5

BIOLASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2024			2023
Cash Flows from Operating Activities:
Net loss	$	(9,283	)	$	(10,717	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation		1,310			1,573
Provision for bad debts		86			42
Provision for inventory excess and obsolescence		76			—
Amortization of debt issuance costs		242			214
Change in fair value of warrants		(514	)		(78	)
Issuance costs for common stock warrants		830			224
Stock-based compensation		67			775
Gain on disposal of fixed assets		(232	)		—
Changes in operating assets and liabilities:
Accounts receivable		555			82
Inventory		374			(163	)
Prepaid expenses and other current assets		734			713
Accounts payable and accrued liabilities		(527	)		(1,903	)
Deferred revenue		(390	)		18
Net cash and cash equivalents used in operating activities		(6,672	)		(9,220	)
Cash Flows from Investing Activities:
Purchases of property, plant, and equipment		(27	)		(944	)
Proceeds from disposal of property, plant, and equipment		284			—
Net cash and cash equivalents provided by (used in) investing activities		257			(944	)
Cash Flows from Financing Activities:
Proceeds from the sale of common stock and pre-funded warrants, net of fees		2,786			8,502
Proceeds from the sale of Series H Convertible Preferred Stock, net of fees		—			2,738
Proceeds from the sale of warrants, net of fees		3,020			918
Principal payment on loan		(865	)		—
Proceeds from the exercise of common stock warrants		8			115
Proceeds from the exercise of preferred share warrants		270			520
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	$	5,272		$	6,930
Supplemental cash flow disclosure:
Cash paid for interest	$	968		$	930
Cash received for interest	$	3		$	5
Cash paid for income taxes	$	42		$	12
Cash paid for operating leases	$	157		$	159
Non-cash property, plant and equipment additions acquired under inventory	$	78		$	—
Common stock issued upon cashless warrant exercise	$	1,989		$	—
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.

6

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 June 30, 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 June 30, 2024 and for the years ended December 31, 2023 and 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, 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

7

types of financings that can be conducted, 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.

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 six months ended June 30, 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.

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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 June 30, 2024 and 90% for the three and six months ended June 30, 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 June 30, 2024 and 10% for the three and six months ended June 30, 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 June 30, 2024 and December 31, 2023.

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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):

	June 30,			December 31,
	2024			2023
Undelivered elements (training and installation)	$	407		$	449
Extended warranty contracts		1,911			2,259
Total deferred revenue		2,318			2,708
Less: long-term portion of deferred revenue		(186	)		(256	)
Deferred revenue — current	$	2,132		$	2,452

The balance of contract assets was immaterial as the Company did not have a significant amount of uninvoiced receivables at June 30, 2024 and December 31, 2023.

The amount of revenue recognized during the six months ended June 30, 2024 and 2023 that was included in the opening contract liability balance related to undelivered elements was $0.4 million and $0.3 million, respectively. The amounts related to extended warranty contracts was $0.9 million and $1.1 million for the six months ended June 30, 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.

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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
	June 30,				June 30,
	2024		2023		2024		2023
Revenue recognized over time	$	1,713	$	1,415	$	3,201	$	2,584
Revenue recognized at a point in time		9,842		12,871		18,486		22,169
Net revenue	$	11,555	$	14,286	$	21,687	$	24,753

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
End-customer	$	8,240	$	10,741	$	14,930	$	17,499
Distributors		3,315		3,545		6,757		7,254
Net revenue	$	11,555	$	14,286	$	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 June 30, 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.

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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 Series J Convertible Preferred Stock. Net proceeds allocated to the Series J Convertible Preferred Stock and Series J Warrants was $2.7 million and $0.8 million respectively.

The Series J Convertible Preferred stock was classified as mezzanine equity on the consolidated balance sheet as they are contingently redeemable prior to the Series J Maturity Date and the conversion from preferred shares to shares of common stock is at the option of the holder at any time before the Series J Maturity Date. The Series J Warrants were classified as accrued liabilities on the consolidated balance sheet as the warrants are convertible into preferred shares, which are mandatorily redeemable in cash upon the Series J Maturity Date if they are not converted to shares of common stock before such date.

The Series J Convertible Preferred Stock was issued at a discount with the total redemption value of the Series J Convertible Preferred Shares 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 was $7.6 million and was recognized as a decrease in additional paid-in-capital at the commitment date. Upon conversion of Series J Warrants to Series J Convertible Preferred shares, the value of the Series J 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, 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

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effective on May 24, 2023 and the offering closed on May 26, 2023. Each Series H 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 proceeds from the offering were $4.6 million before broker fees and related expenses of approximately $0.9 million. In accordance with applicable accounting standards, the $4.6 million gross proceeds were allocated to the Series H Convertible Preferred Stock and the Series H Warrants in the amount of $3.4 million and $1.2 million, respectively. The allocation was based on the fair value of the Series H Warrants of $1.2 million as of the commitment date, with the residual proceeds of $3.4 million allocated to the Series H Convertible Preferred Stock. Net proceeds allocated to the Series H Convertible Preferred Stock and Series H Warrants was $2.7 million and $1.0 million, respectively.

The Series H Convertible Preferred Stock was classified as mezzanine equity on the consolidated balance sheet as they are contingently redeemable prior to the Series H Maturity Date and the conversion from preferred shares to shares of common stock is at the option of the holder at any time before the Series H Maturity Date. The Series H Warrants were classified as accrued liabilities on the consolidated balance sheet as the warrants are convertible into preferred shares, 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 June 30, 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.

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Under the terms of the 2018 Plan, approximately 58,815 shares of common stock remain available for issuance as of June 30, 2024. 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 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 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
	June 30,						June 30,
	2024			2023			2024			2023
Cost of revenue	$	—		$	5		$	—		$	23
Sales and marketing		49			105			71			302
General and administrative		(95	)		(25	)		(3	)		405
Engineering and development		—			(1	)		(1	)		45
Total	$	(46	)	$	84		$	67		$	775

Stock Option Activity

There were no option grants or exercises during the six months ended June 30, 2024 and 2023.

Restricted Stock Units

A summary of unvested RSU activity for the six months ended June 30, 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		(27	)	$	19.80
Forfeited or cancelled		(6	)	$	19.51
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.

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Based on the terms and conditions of the February 2024 Offering, the Company determined that liability classification was appropriate for the Class A Common Warrants and Class B Common 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 Common 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 Common Warrants, which are categorized as a Level 3 instrument, is the volatility rate of 85%. The Class B Common Warrants were valued using a Monte Carlo simulation. The unobservable inputs utilized in determining the fair value of the Class B Common 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 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 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

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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.

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 six months ended June 30, 2024 is as follows (in thousands, except exercise price amounts):

				Weighted
				Average
	Shares			Exercise Price
Warrants outstanding as of December 31, 2023		4,323		$	11.88
Granted or Issued		42,427		$	0.57
Exercised		(22,874	)	$	—
Warrants outstanding as of June 30, 2024		23,876		$	2.52
Warrants exercisable as of June 30, 2024		23,876		$	2.52
Vested warrants expired during the period  ended June 30, 2024		—		$	—

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

	December 31,							Fair Value			June 30,
	2023		Additions		Exercises			Adjustment			2024
Series H Warrants	$	620	$	—	$	—		$	56		$	676
Series J Warrants		743		—		(95	)		(16	)		632
Class A Warrants		—		2,280		(1,960	)		(106	)		214
Class B Warrants		—		1,379		—			(419	)		960
Investor Warrants		—		192		—			(58	)		134
Total Level 3	$	1,363	$	3,851	$	(2,055	)	$	(543	)	$	2,616

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. As of December 31, 2023, approximately

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2,113 of these phantom RSUs were cancelled due to non-achievement of performance metrics, and during the three months ended March 31, 2024 an additional 828 units were cancelled due to non-achievement. As of March 31, 2024, 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 June 30, 2024, $0.5 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

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 six months ended June 30, 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 three and six months ended June 30, 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 24,456,808 and 366,154 shares were not included in the calculation of diluted net loss per share amounts for the periods ended June 30, 2024 and June 30, 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):

	June 30,		December 31,
	2024		2023
Raw materials	$	5,528	$	6,168
Work-in-process		1,514		1,299
Finished goods		3,862		3,966
Inventory	$	10,904	$	11,433

Inventory has been reduced by estimates for excess and obsolete amounts totaling $2.3 million as of June 30, 2024 and $2.5 million as of December 31, 2023.

NOTE 6—PROPERTY, PLANT, AND EQUIPMENT

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

	June 30,			December 31,
	2024			2023
Building	$	199		$	205
Leasehold improvements		1,251			1,251
Equipment and computers		14,467			14,628
Furniture and fixtures		519			519
Construction in progress		—			92
Total property, plant, and equipment before depreciation and land		16,436			16,695
Less: Accumulated depreciation		(12,328	)		(11,330	)
Total property, plant, and equipment, net before land		4,108			5,365
Land		155			160
Property, plant, and equipment, net	$	4,263		$	5,525

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Depreciation expense related to property, plant, and equipment totaled $0.7 million and $1.3 million for the three and six months ended June 30, 2024 and $1.4 million and $1.6 million for the three and six months ended June 30, 2023.

During the three months ended June 30, 2023, the Company revised its accounting for laser equipment transferred as part of its marketing efforts to potential customers and other sales representatives without any payment. As a result, a cumulative adjustment of $0.8 million was recorded to depreciation expense in the three and six months ended June 30, 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):

	June 30,		December 31,
	2024		2023
Payroll and benefits	$	3,640	$	3,343
Warranty accrual, current portion		1,000		1,321
Operating lease liability		904		888
Accrued professional services		994		422
Taxes		349		452
Accrued insurance premium		161		473
Other		614		619
Accrued liabilities	$	7,662	$	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
	June 30,						June 30,
	2024			2023			2024			2023
Balance, beginning of period	$	1,891		$	1,855		$	1,914		$	1,653
Provision for estimated warranty cost		808			802			1,487			1,960
Warranty expenditures		(856	)		(885	)		(1,558	)		(1,841	)
Balance, end of period		1,843			1,772			1,843			1,772
Less: long-term portion of warranty accrual		843			397			843			397
Current portion of warranty accrual	$	1,000		$	1,375		$	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.

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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):

	June 30,			December 31,
	2024			2023
SWK Loan	$	13,695		$	14,560
EIDL Loan		150			150
Discount and debt issuance costs on SWK Loan		(420	)		(663	)
Total		13,425			14,047
Current term loans		13,275			2,265
Non current term loans, net of discount	$	150		$	11,782

The Company recognized approximately $0.6 million and $1.2 million in interest expense for the three and six months ended June 30, 2024, respectively, and $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 June 30, 2024 was 14.59%.

The future minimum principal and interest payments as of June 30, 2024 are as follows (in thousands):

	Principal		Interest (1)
Remainder of 2024	$	1,400	$	896
2025		12,295		842
2026		—		9
2027		3		6
2028 and thereafter		147		83
Total future payments	$	13,845	$	1,836
(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 June 30, 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.

During the three months ended June 30, 2024 all remaining long-term balances related to the SWK Loan were reclassified to current liabilities due to the loan maturity date of May 31, 2025.

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As of June 30, 2024, the Company was in compliance with the debt covenants of the Credit Agreement.

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
	June 30,						June 30,
	2024			2023			2024			2023
Cash paid for operating lease liabilities	$	80		$	92		$	157		$	159
Right-of-use assets obtained in exchange for new operating    lease obligations	$	—		$	19		$	—		$	483
Weighted-average remaining lease term	1.4 years			2.3 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 June 30, 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.

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Maturities of lease liabilities as of June 30, 2024 for leases that have commenced 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

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 June 30, 2024, sales to customers in the United States accounted for approximately 71% and 69% of net revenue and international sales accounted for approximately 29% and 31% of net revenue, respectively. For the three and six months ended June 30, 2023, sales to customers in the United States accounted for approximately 75% and 71% of net revenue and international sales accounted for approximately 25% 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 June 30, 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
	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

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

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

NOTE 12—CONCENTRATIONS

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

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2024				2023				2024				2023
Laser systems	$	6,007	52.0	%	$	8,754	61.3	%	$	11,182	51.6	%	$	15,019	60.7	%
Consumables and other		3,835	33.2	%		4,117	28.8	%		7,304	33.6	%		7,150	28.9	%
Services		1,713	14.8	%		1,415	9.9	%		3,201	14.8	%		2,584	10.4	%
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	21,687	100.0	%	$	24,753	100.0	%

No individual customer represented more than 10% of the Company’s revenue for the three and six months ended June 30, 2024 or 2023.

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.

As 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.

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 June 30, 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 June 30, 2024, the Company recorded an income tax provision of $20,000 and $40,000 resulting in an effective tax rate of 0.7% and 0.4%, respectively. During the three and six months ended June 30, 2023, the Company recorded an income tax provision of $31,000, resulting in an effective tax rate of 0.6% and 0.3%, respectively. The income tax provisions for the three and six months ended June 30, 2024 and 2023 were calculated using the discrete year-to-date method. The

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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

The Company has evaluated all events or transactions that occurred after June 30, 2024 through August 8, 2024, which is the date that the condensed consolidated financial statements were available to be issued. During this period, there were no material subsequent events requiring recognition or disclosure, other than those described 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.

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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 several years;

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

•our failure to relist our common stock on a national exchange or maintain compliance with the requirements of the 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;

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•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

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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 June 30, 2024, the sale of lasers accounted for approximately 52% of our total sales, and consumables, accessories, and services accounted for approximately 48% of our total sales.

We currently operate in a single reportable business segment. We had net revenues of $11.6 million and $21.7 million for the three and six months ended June 30, 2024, respectively and net revenues of $14.3 million and $24.8 million for the three and six months ended June 30, 2023, respectively. We had net losses of $2.8 million and $9.3 million for the three 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 $30.6 million as of June 30, 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.

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 systems, we sell teeth whitening gel kits.

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 19% and 12% for the three and six months ended June 30, 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.

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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 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

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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
	June 30,								June 30,
	2024				2023				2024				2023
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	21,687	100.0	%	$	24,753	100.0	%
Cost of revenue		6,946	60.1	%		8,168	57.2	%		13,741	63.4	%		15,299	61.8	%
Gross profit		4,609	39.9	%		6,118	42.8	%		7,946	36.6	%		9,454	38.2	%
Operating expenses:
Sales and marketing		3,694	32.0	%		6,189	43.3	%		7,077	32.6	%		10,812	43.7	%
General and administrative		3,064	26.5	%		2,357	16.5	%		6,260	28.9	%		4,815	19.5	%
Engineering and development		1,071	9.3	%		1,444	10.1	%		2,354	10.9	%		2,991	12.1	%
Total operating expenses		7,829	67.8	%		9,990	69.9	%		15,691	72.4	%		18,618	75.3	%
Loss from operations		(3,220)	(27.9)	%		(3,872)	(27.1)	%		(7,745)	(35.8)	%		(9,164)	(37.1)	%
Non-operating income (loss), net		442	3.9	%		(965)	(6.8)	%		(1,498)	(6.8)	%		(1,522)	(6.1)	%
Loss before income tax provision		(2,778)	(24.0)	%		(4,837)	(33.9)	%		(9,243)	(42.6)	%		(10,686)	(43.2)	%
Income tax provision		(20)	(0.2)	%		(31)	(0.2)	%		(40)	(0.2)	%		(31)	(0.1)	%
Net loss	$	(2,798)	(24.2)	%	$	(4,868)	(34.1)	%	$	(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.

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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
	June 30,						June 30,
	2024			2023			2024			2023
GAAP net loss attributable to common stockholders	$	(2,798	)	$	(14,245	)	$	(9,283	)	$	(20,094	)
Deemed dividend on convertible preferred stock		—			9,377			—			9,377
GAAP net loss	$	(2,798	)	$	(4,868	)	$	(9,283	)	$	(10,717	)
Adjustments:
Interest expense, net		586			583			1,208			1,160
Income tax provision		20			31			40			31
Depreciation		650			1,424			1,310			1,573
Severance expense		—			229			182			229
Change in allowance for doubtful accounts		113			59			86			42
Stock-based and other non-cash compensation		(46	)		84			67			775
Stock warrant issuance costs		—			224			830			224
Gain on warrants		(1,070	)		(77	)		(514	)		(77	)
Adjusted EBITDA	$	(2,545	)	$	(2,311	)	$	(6,074	)	$	(6,760	)

Comparison of Results of Operations

Three Months Ended June 30, 2024 Compared with Three 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 three 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):

	Three Months Ended
	June 30,								Amount			Percent
	2024				2023				Change			Change
Laser systems	$	6,007	52.0	%	$	8,754	61.3	%	$	(2,747	)		(31.4	)%
Consumables and other		3,835	33.2	%		4,117	28.8	%		(282	)		(6.8	)%
Services		1,713	14.8	%		1,415	9.9	%		298			21.1	%
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	(2,731	)		(19.1	)%

The following table summarizes our unaudited net revenue by geographic location based on the location of customers for the three 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):

	Three Months Ended
	June 30,								Amount			Percent
	2024				2023				Change			Change
United States	$	8,240	71.3	%	$	10,741	75.2	%	$	(2,501	)		(23.3	)%
International		3,315	28.7	%		3,545	24.8	%		(230	)		(6.5	)%
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	(2,731	)		(19.1	)%

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.

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Net revenue decreased by $2.7 million, or 19%, during the three 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. 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.

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):

	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	)%

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 June 30, 2024, 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 unfavorable absorption of fixed expenses, partially offset by lower material costs and favorable mix of products sold for the three months ended June 30, 2024.

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):

	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	)%

Sales and Marketing Expense. Sales and marketing expenses during the three months ended June 30, 2024 decreased by $2.5 million, or 40%, as compared to the same period in 2023. This 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 $0.9 million decrease in depreciation expense recognized for equipment used in sales and marketing for demos, training and educational purposes, of which $0.8 million was non-recurring in the three months ended June 30, 2023, a $0.4 million decrease in other expenses including travel and tradeshow related costs, and $0.1 million in severance expenses that did not occur in the three months ended June 30, 2024.

General and Administrative Expense. General and administrative expenses during the three months ended June 30, 2024 increased by $0.7 million, or 30%, compared to the same period in 2023. This increase is primarily due to $0.5 million in higher legal, audit and consulting expenses and a $0.2 million increase in accruals for a new annual performance award program that was implemented in the first 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 $112 thousand loss on foreign currency transactions during the three months ended June 30, 2024 compared to an approximately $235 thousand loss on foreign currency transactions during the three months ended June 30, 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 June 30, 2024 which was consistent with the three months ended June 30, 2023.

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Other Income (Expense), Net. Other Income for the three months ended June 30, 2024 was $1.1 million and relates to $1.0 million of gains recorded on the revaluation of liability classified stock warrants and $0.1 million of gains recorded upon the sale of property, plant, and equipment during the three 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 three 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 $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	)%

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 $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	)%

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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.

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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 June 30, 2024, we had approximately $5.3 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 cash used in operating activities of $6.7 million and principal payments on our term loan of $0.9 million, partially offset by net proceeds of $5.8 million from the February 2024 public offering, $0.3 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):

	Six Months Ended
	June 30,
	2024			2023
Net cash flows used in operating activities	$	(6,672	)	$	(9,220	)
Net cash flows provided by (used in) investing activities		257			(944	)
Net cash flows provided by financing activities		5,219			12,793
Effect of exchange rate changes		(98	)		120
Net change in cash and cash equivalents	$	(1,294	)	$	2,749

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 six months ended June 30, 2024 totaled $6.7 million and was primarily comprised of our net loss of $9.3 million.

Investing Activities

Cash provided by investing activities for the six months ended June 30, 2024 totaled $0.3 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 six months ended June 30, 2024 totaled $5.2 million and was derived from $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 $98 thousand effect of exchange rate on cash for the six months ended June 30, 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 June 30, 2024, we had a working capital deficit of approximately $9.1 million. Our 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.

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

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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.

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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.

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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 the three and six months ended June 30, 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 June 30, 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 $326.1 million as of June 30, 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 $9.3 million and $10.7 million for the six months ended June 30, 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.

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The 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.

Because of the trading volatility often associated with low-priced stocks not listed on a national securities exchange, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of those policies and practices may make the processing of trades in low-priced stocks economically unattractive to brokers. Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, a low average price per share of common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were higher.

As a result of Nasdaq delisting our securities from trading on its exchange, we could face significant material adverse consequences, including:

•a limited availability of market quotations for our securities:

•reduced liquidity with respect to our securities;

•a determination that our common stock is a "penny stock" which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading actvity in the secondary trading market for our common stock;

•a limited amount of news and analyst coverage for our company; and

•a decreased ability to issue additional securities or obtain additional financing in the future.

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

Rule 15g-9 under the Exchange Act, establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In 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.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

37

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

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.

38

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

39

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
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

40

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

41

EX-31.1

Exhibit 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 ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Beaver, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 of BIOLASE, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2024	By:	/s/ John R. Beaver
		John R. Beaver
		President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 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 ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jennifer Bright, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 of BIOLASE, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2024	By:	/s/ Jennifer Bright
		Jennifer Bright
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of BIOLASE, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024 (the “Report”), I, John R. Beaver, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: August 8, 2024	By:	/s/ John R. Beaver
	Name:	John R. Beaver
	Title:	President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of BIOLASE, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024 (the “Report”), I, Jennifer Bright, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: August 8, 2024	By:	/s/ Jennifer Bright
	Name:	Jennifer Bright
	Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Aug. 01, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Registrant Name	BIOLASE, INC.
Entity Central Index Key	0000811240
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		36,597,056
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity File Number	001-36385
Entity Tax Identification Number	87-0442441
Entity Address, Address Line One	27042 Towne Centre Drive
Entity Address, Address Line Two	Suite 270
Entity Address, City or Town	Lake Forest
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92610
City Area Code	949
Local Phone Number	361-1200
Entity Incorporation, State or Country Code	DE
Document Transition Report	false
Document Quarterly Report	true

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 5,272	$ 6,566
Accounts receivable, less allowance of $329 and $244 as of June 30, 2024 and December 31, 2023 respectively	4,842	5,483
Inventory	10,904	11,433
Prepaid expenses and other current assets	1,076	1,381
Total current assets	22,094	24,863
Property, plant, and equipment, net	4,263	5,525
Goodwill	2,926	2,926
Right-of-use assets, leases	1,101	1,519
Other assets	257	268
Total assets	30,641	35,101
Current liabilities:
Accounts payable	5,491	6,065
Accrued liabilities	7,662	7,518
Stock warrant liability	2,616	1,363
Deferred revenue, current portion	2,132	2,452
Current portion of term loans, net of discount	13,275	2,265
Total current liabilities	31,176	19,663
Deferred revenue	186	256
Warranty accrual	843	593
Non current term loans	150	11,782
Non current operating lease liability	315	772
Other liabilities	97	79
Total liabilities	32,767	33,145
Mezzanine Equity:
Total mezzanine equity	2,203	2,203
Stockholders' equity:
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	322,380	317,103
Accumulated other comprehensive loss	(659)	(553)
Accumulated deficit	(326,083)	(316,800)
Total stockholders' equity (deficit)	(4,329)	(247)
Total liabilities, convertible redeemable preferred stock and stockholders' equity (deficit)	30,641	35,101
Series H Preferred Stock [Member]
Mezzanine Equity:
Preferred stock Value	346	346
Series J Convertible Preferred Stock [Member]
Mezzanine Equity:
Preferred stock Value	$ 1,857	$ 1,857

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Allowance for accounts receivable	$ 329	$ 244
Convertible preferred stock, shares issued	1,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	33,406,000	3,416,000
Common stock, shares outstanding	33,406,000	3,416,000
Series H Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Temporary Equity, Shares Authorized	370,000	370,000
Convertible preferred stock, shares issued	7,000	5,000
Convertible preferred stock, shares outstanding	7,000	5,000
Series J Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Temporary Equity, Shares Authorized	160,000	160,000
Convertible preferred stock, shares issued	17,000	15,000
Convertible preferred stock, shares outstanding	17,000	15,000

XML

Condensed Consolidated Statements Of Operations And Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Net revenue	$ 11,555	$ 14,286	$ 21,687	$ 24,753
Cost of revenue	6,946	8,168	13,741	15,299
Gross profit	4,609	6,118	7,946	9,454
Operating expenses:
Sales and marketing	3,694	6,189	7,077	10,812
General and administrative	3,064	2,357	6,260	4,815
Engineering and development	1,071	1,444	2,354	2,991
Total operating expenses	7,829	9,990	15,691	18,618
Loss from operations	(3,220)	(3,872)	(7,745)	(9,164)
Loss on foreign currency transactions	(112)	(235)	(208)	(215)
Interest expense, net	(586)	(583)	(1,208)	(1,160)
Other income (loss), net	1,140	(147)	(82)	(147)
Non-operating income (loss), net	442	(965)	(1,498)	(1,522)
Loss before income tax provision	(2,778)	(4,837)	(9,243)	(10,686)
Income tax provision	(20)	(31)	(40)	(31)
Net loss	(2,798)	(4,868)	(9,283)	(10,717)
Other comprehensive loss items:
Foreign currency translation adjustments	(20)	39	(106)	119
Comprehensive loss	(2,818)	(4,829)	(9,389)	(10,598)
Net loss	(2,798)	(4,868)	(9,283)	(10,717)
Deemed dividend on convertible preferred stock	0	(9,377)	0	(9,377)
Net loss attributable to common stockholders	$ (2,798)	$ (14,245)	$ (9,283)	$ (20,094)
Net loss per share attributable to common stockholders:
Earnings Per Share, Basic	$ (0.08)	$ (26.14)	$ (0.36)	$ (45.98)
Earnings Per Share, Diluted	$ (0.08)	$ (26.14)	$ (0.36)	$ (45.98)
Shares used in the calculation of net loss per share:
Weighted Average Number of Shares Outstanding, Basic	33,391	545	25,616	437
Weighted Average Number of Shares Outstanding, Diluted	33,391	545	25,616	437

XML

Condensed Consolidated Statements Of Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Total	Series H Preferred Stock [Member]	Series J Convertible Preferred Stock [Member]	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Mezzanine Equity Series H Preferred Stock [Member]	Mezzanine Equity Series I Preferred Stock [Member]	Mezzanine Equity Series J Convertible Preferred Stock [Member]
Beginning balance at Dec. 31, 2022	$ 4,889				$ 301,790	$ (733)	$ (296,168)
Balance (in shares) at Dec. 31, 2022				77,000
Issuance of Series H Convertible Preferred Stock, net of fees	(7,762)				(7,762)			$ 10,500
Issuance of Series H/I Convertible Preferred Stock, net of fees, shares								175,000	85,000
Conversion of Series H/J Convertile Redeemable Preferred Stock	10,980			$ 1	10,979			$ (10,980)
Conversion of Series H/J Convertile Redeemable Preferred Stock, shares				655,000				(183,000)
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants	(430)				(430)			$ 1,200
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants, Shares								20,000
Sale of common stock units and pre-funded units, net of fees	8,503				8,503
Sale of common stock and pre-funded warrants, net of fees ,shares				172,000
Deemed dividend on Series F Convertible Preferred Stock	9,377
Stock-based compensation	925				925
Issuance of stock from RSUs, net, shares				1,000
Exercise of common stock warrants	114				114
Exercise of common stock warrants, shares				114,000
Net Income (Loss)	(10,717)						(10,717)
Foreign currency translation adjustments	119					119
Ending balance at Jun. 30, 2023	6,621			$ 1	314,119	(614)	(306,885)	$ 720
Ending Balance (in shares) at Jun. 30, 2023				1,019,000
Ending balance, shares at Jun. 30, 2023								12,000	85,000
Beginning balance at Mar. 31, 2023				$ 0	310,828	(653)	(302,017)
Beginning balance at Mar. 31, 2023	8,158
Balance (in shares) at Mar. 31, 2023				263,000
Issuance of Series H Convertible Preferred Stock, net of fees	(7,762)				(7,762)			$ 10,500
Issuance of Series H/I Convertible Preferred Stock, net of fees, shares								175,000	85,000
Conversion of Series H/J Convertile Redeemable Preferred Stock	10,980			$ 1	10,979			$ (10,980)
Conversion of Series H/J Convertile Redeemable Preferred Stock, shares				655,000				(183,000)
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants	(430)				(430)			$ 1,200
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants, Shares								20,000
Deemed dividend on Series F Convertible Preferred Stock	9,377
Stock-based compensation	404				404
Issuance of stock from RSUs, net, shares				1,000
Exercise of common stock warrants	100				100
Exercise of common stock warrants, shares				100,000
Net Income (Loss)	(4,868)						(4,868)
Foreign currency translation adjustments	39					39
Ending balance at Jun. 30, 2023	6,621			$ 1	314,119	(614)	(306,885)	$ 720
Ending Balance (in shares) at Jun. 30, 2023				1,019,000
Ending balance, shares at Jun. 30, 2023								12,000	85,000
Beginning balance at Dec. 31, 2023	(247)			$ 3	317,103	(553)	(316,800)	$ 346		$ 1,857
Beginning balance at Dec. 31, 2023	$ 2,203
Beginning balance, shares at Dec. 31, 2023		5,000	15,000					5,000		15,000
Balance (in shares) at Dec. 31, 2023	3,416,000			3,416,000
Conversion of Series H/J Convertile Redeemable Preferred Stock	$ 528				528					$ (528)
Conversion of Series H/J Convertile Redeemable Preferred Stock, shares				138,000						(5,000)
Paid-in-kind dividend on Series H Convertible Redeemable Preferred Stock								2,000
Paid-in-kind dividend on Series J Convertible Redeemable Preferred Stock, Shares										2,000
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants	(164)				(164)					$ 528
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants, Shares										5,000
Sale of common stock units and pre-funded units, net of fees	2,786			$ 8	2,778
Sale of common stock and pre-funded warrants, net of fees ,shares				7,795,000
Exercise of Class A Warrants, Shares				13,063,000
Exercise of Class A Warrants	1,989			$ 13	1,976
Deemed dividend on Series F Convertible Preferred Stock	0
Stock-based compensation	159				159
Issuance of stock from RSUs, net, shares				15,000
Exercise of common stock warrants	9			$ 9
Exercise of common stock warrants, shares				8,979,000
Net Income (Loss)	(9,283)						(9,283)
Foreign currency translation adjustments	(106)					(106)
Ending balance at Jun. 30, 2024	(4,329)			$ 33	322,380	(659)	(326,083)	$ 346		$ 1,857
Ending Balance at Jun. 30, 2024	$ 2,203
Ending Balance (in shares) at Jun. 30, 2024	33,406,000			33,406,000
Ending balance, shares at Jun. 30, 2024		7,000	17,000					7,000		17,000
Beginning balance at Mar. 31, 2024	$ (1,934)			$ 33	321,957	(639)	(323,285)	$ 346		$ 1,857
Beginning balance, shares at Mar. 31, 2024								5,000		16,000
Balance (in shares) at Mar. 31, 2024				33,257,000
Conversion of Series H/J Convertile Redeemable Preferred Stock	528				528					$ (528)
Conversion of Series H/J Convertile Redeemable Preferred Stock, shares				138,000						(5,000)
Paid-in-kind dividend on Series H Convertible Redeemable Preferred Stock								2,000
Paid-in-kind dividend on Series J Convertible Redeemable Preferred Stock, Shares										1,000
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants	(164)				(164)					$ 528
Exercise of Series H/J Convertible Redeemable Preferred Stock Warrants, Shares										5,000
Sale of common stock units and pre-funded units, net of fees	2				2
Deemed dividend on Series F Convertible Preferred Stock	0
Stock-based compensation	57				57
Issuance of stock from RSUs, net, shares				11,000
Net Income (Loss)	(2,798)						(2,798)
Foreign currency translation adjustments	(20)					(20)
Ending balance at Jun. 30, 2024	(4,329)			$ 33	$ 322,380	$ (659)	$ (326,083)	$ 346		$ 1,857
Ending Balance at Jun. 30, 2024	$ 2,203
Ending Balance (in shares) at Jun. 30, 2024	33,406,000			33,406,000
Ending balance, shares at Jun. 30, 2024		7,000	17,000					7,000		17,000

XML

Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash Flows from Operating Activities:
Net loss	$ (9,283)	$ (10,717)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation	1,310	1,573
Provision for bad debts	86	42
Provision for inventory excess and obsolescence	76	0
Amortization of debt issuance costs	242	214
Change in fair value of warrants	(514)	(78)
Issuance costs for common stock warrants	830	224
Stock-based compensation	67	775
Gain on disposal of fixed assets	(232)	0
Changes in operating assets and liabilities:
Accounts receivable	555	82
Inventory	374	(163)
Prepaid expenses and other current assets	734	713
Accounts payable and accrued liabilities	(527)	(1,903)
Deferred revenue	(390)	18
Net cash and cash equivalents used in operating activities	(6,672)	(9,220)
Cash Flows from Investing Activities:
Purchases of property, plant, and equipment	(27)	(944)
Proceeds from disposal of property, plant, and equipment	284	0
Net cash and cash equivalents provided by (used in) investing activities	257	(944)
Cash Flows from Financing Activities:
Proceeds from the sale of common stock and pre-funded warrants, net of fees	2,786	8,502
Proceeds from the sale of Series H Convertible Preferred Stock, net of fees	0	2,738
Proceeds from the sale of warrants, net of fees	3,020	918
Principal payment on term loan	(865)	0
Proceeds from the exercise of common stock warrants	8	115
Proceeds from the exercise of preferred share warrants	270	520
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	5,272	6,930
Supplemental cash flow disclosure:
Cash paid for interest	968	930
Cash received for interest	3	5
Cash paid for income taxes	42	12
Cash paid for operating leases	157	159
Non-cash property, plant and equipment additions acquired under inventory	78	0
Common stock issued upon cashless warrant exercise	1,989	0
Common stock issued upon exercise of preferred stock	528	10,980
Non-cash right-of-use assets obtained in exchange for lease obligation	$ 0	$ 483

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (2,798)	$ (4,868)	$ (9,283)	$ (10,717)

XML

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Description of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

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 June 30, 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 June 30, 2024 and for the years ended December 31, 2023 and 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, 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, 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.

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.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 six months ended June 30, 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 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.

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Revenue Recognition

6 Months Ended

Jun. 30, 2024

Revenue Recognition [Abstract]

Revenue Recognition

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 June 30, 2024 and 90% for the three and six months ended June 30, 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 June 30, 2024 and 10% for the three and six months ended June 30, 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 June 30, 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):

	June 30,			December 31,
	2024			2023
Undelivered elements (training and installation)	$	407		$	449
Extended warranty contracts		1,911			2,259
Total deferred revenue		2,318			2,708
Less: long-term portion of deferred revenue		(186	)		(256	)
Deferred revenue — current	$	2,132		$	2,452

The balance of contract assets was immaterial as the Company did not have a significant amount of uninvoiced receivables at June 30, 2024 and December 31, 2023.

The amount of revenue recognized during the six months ended June 30, 2024 and 2023 that was included in the opening contract liability balance related to undelivered elements was $0.4 million and $0.3 million, respectively. The amounts related to extended warranty contracts was $0.9 million and $1.1 million for the six months ended June 30, 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				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
	June 30,				June 30,
	2024		2023		2024		2023
Revenue recognized over time	$	1,713	$	1,415	$	3,201	$	2,584
Revenue recognized at a point in time		9,842		12,871		18,486		22,169
Net revenue	$	11,555	$	14,286	$	21,687	$	24,753

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
End-customer	$	8,240	$	10,741	$	14,930	$	17,499
Distributors		3,315		3,545		6,757		7,254
Net revenue	$	11,555	$	14,286	$	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.

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Convertible Redeemable Preferred Stock and Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Temporary Equity And Equity [Abstract]

Convertible Redeemable Preferred Stock and Stockholders' Equity

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 June 30, 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 Series J Convertible Preferred Stock. Net proceeds allocated to the Series J Convertible Preferred Stock and Series J Warrants was $2.7 million and $0.8 million respectively.

The Series J Convertible Preferred stock was classified as mezzanine equity on the consolidated balance sheet as they are contingently redeemable prior to the Series J Maturity Date and the conversion from preferred shares to shares of common stock is at the option of the holder at any time before the Series J Maturity Date. The Series J Warrants were classified as accrued liabilities on the consolidated balance sheet as the warrants are convertible into preferred shares, which are mandatorily redeemable in cash upon the Series J Maturity Date if they are not converted to shares of common stock before such date.

The Series J Convertible Preferred Stock was issued at a discount with the total redemption value of the Series J Convertible Preferred Shares 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 was $7.6 million and was recognized as a decrease in additional paid-in-capital at the commitment date. Upon conversion of Series J Warrants to Series J Convertible Preferred shares, the value of the Series J 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, 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 Series H 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 proceeds from the offering were $4.6 million before broker fees and related expenses of approximately $0.9 million. In accordance with applicable accounting standards, the $4.6 million gross proceeds were allocated to the Series H Convertible Preferred Stock and the Series H Warrants in the amount of $3.4 million and $1.2 million, respectively. The allocation was based on the fair value of the Series H Warrants of $1.2 million as of the commitment date, with the residual proceeds of $3.4 million allocated to the Series H Convertible Preferred Stock. Net proceeds allocated to the Series H Convertible Preferred Stock and Series H Warrants was $2.7 million and $1.0 million, respectively.

The Series H Convertible Preferred Stock was classified as mezzanine equity on the consolidated balance sheet as they are contingently redeemable prior to the Series H Maturity Date and the conversion from preferred shares to shares of common stock is at the option of the holder at any time before the Series H Maturity Date. The Series H Warrants were classified as accrued liabilities on the consolidated balance sheet as the warrants are convertible into preferred shares, 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 June 30, 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 58,815 shares of common stock remain available for issuance as of June 30, 2024. 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 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 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
	June 30,						June 30,
	2024			2023			2024			2023
Cost of revenue	$	—		$	5		$	—		$	23
Sales and marketing		49			105			71			302
General and administrative		(95	)		(25	)		(3	)		405
Engineering and development		—			(1	)		(1	)		45
Total	$	(46	)	$	84		$	67		$	775

Stock Option Activity

There were no option grants or exercises during the six months ended June 30, 2024 and 2023.

Restricted Stock Units

A summary of unvested RSU activity for the six months ended June 30, 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		(27	)	$	19.80
Forfeited or cancelled		(6	)	$	19.51
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 Offering, the Company determined that liability classification was appropriate for the Class A Common Warrants and Class B Common 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 Common 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 Common Warrants, which are categorized as a Level 3 instrument, is the volatility rate of 85%. The Class B Common Warrants were valued using a Monte Carlo simulation. The unobservable inputs utilized in determining the fair value of the Class B Common 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 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 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.

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 six months ended June 30, 2024 is as follows (in thousands, except exercise price amounts):

				Weighted
				Average
	Shares			Exercise Price
Warrants outstanding as of December 31, 2023		4,323		$	11.88
Granted or Issued		42,427		$	0.57
Exercised		(22,874	)	$	—
Warrants outstanding as of June 30, 2024		23,876		$	2.52
Warrants exercisable as of June 30, 2024		23,876		$	2.52
Vested warrants expired during the period  ended June 30, 2024		—		$	—

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

	December 31,							Fair Value			June 30,
	2023		Additions		Exercises			Adjustment			2024
Series H Warrants	$	620	$	—	$	—		$	56		$	676
Series J Warrants		743		—		(95	)		(16	)		632
Class A Warrants		—		2,280		(1,960	)		(106	)		214
Class B Warrants		—		1,379		—			(419	)		960
Investor Warrants		—		192		—			(58	)		134
Total Level 3	$	1,363	$	3,851	$	(2,055	)	$	(543	)	$	2,616

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. 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, 2024 an additional 828 units were cancelled due to non-achievement. As of March 31, 2024, 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 June 30, 2024, $0.5 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

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 six months ended June 30, 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 three and six months ended June 30, 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 24,456,808 and 366,154 shares were not included in the calculation of diluted net loss per share amounts for the periods ended June 30, 2024 and June 30, 2023, respectively, as their effect would have been anti-dilutive.

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Inventory

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Inventory

NOTE 5—INVENTORY

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

	June 30,		December 31,
	2024		2023
Raw materials	$	5,528	$	6,168
Work-in-process		1,514		1,299
Finished goods		3,862		3,966
Inventory	$	10,904	$	11,433

Inventory has been reduced by estimates for excess and obsolete amounts totaling $2.3 million as of June 30, 2024 and $2.5 million as of December 31, 2023.

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Property, Plant, and Equipment

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

NOTE 6—PROPERTY, PLANT, AND EQUIPMENT

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

	June 30,			December 31,
	2024			2023
Building	$	199		$	205
Leasehold improvements		1,251			1,251
Equipment and computers		14,467			14,628
Furniture and fixtures		519			519
Construction in progress		—			92
Total property, plant, and equipment before depreciation and land		16,436			16,695
Less: Accumulated depreciation		(12,328	)		(11,330	)
Total property, plant, and equipment, net before land		4,108			5,365
Land		155			160
Property, plant, and equipment, net	$	4,263		$	5,525

Depreciation expense related to property, plant, and equipment totaled $0.7 million and $1.3 million for the three and six months ended June 30, 2024 and $1.4 million and $1.6 million for the three and six months ended June 30, 2023.

During the three months ended June 30, 2023, the Company revised its accounting for laser equipment transferred as part of its marketing efforts to potential customers and other sales representatives without any payment. As a result, a cumulative adjustment of $0.8 million was recorded to depreciation expense in the three and six months ended June 30, 2023.

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Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets And Goodwill

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.

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Accrued Liabilities

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Accrued Liabilities

NOTE 8—ACCRUED LIABILITIES

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

	June 30,		December 31,
	2024		2023
Payroll and benefits	$	3,640	$	3,343
Warranty accrual, current portion		1,000		1,321
Operating lease liability		904		888
Accrued professional services		994		422
Taxes		349		452
Accrued insurance premium		161		473
Other		614		619
Accrued liabilities	$	7,662	$	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
	June 30,						June 30,
	2024			2023			2024			2023
Balance, beginning of period	$	1,891		$	1,855		$	1,914		$	1,653
Provision for estimated warranty cost		808			802			1,487			1,960
Warranty expenditures		(856	)		(885	)		(1,558	)		(1,841	)
Balance, end of period		1,843			1,772			1,843			1,772
Less: long-term portion of warranty accrual		843			397			843			397
Current portion of warranty accrual	$	1,000		$	1,375		$	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.

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Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

NOTE 9—DEBT

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

	June 30,			December 31,
	2024			2023
SWK Loan	$	13,695		$	14,560
EIDL Loan		150			150
Discount and debt issuance costs on SWK Loan		(420	)		(663	)
Total		13,425			14,047
Current term loans		13,275			2,265
Non current term loans, net of discount	$	150		$	11,782

The Company recognized approximately $0.6 million and $1.2 million in interest expense for the three and six months ended June 30, 2024, respectively, and $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 June 30, 2024 was 14.59%.

The future minimum principal and interest payments as of June 30, 2024 are as follows (in thousands):

	Principal		Interest (1)
Remainder of 2024	$	1,400	$	896
2025		12,295		842
2026		—		9
2027		3		6
2028 and thereafter		147		83
Total future payments	$	13,845	$	1,836
(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 June 30, 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.

During the three months ended June 30, 2024 all remaining long-term balances related to the SWK Loan were reclassified to current liabilities due to the loan maturity date of May 31, 2025.

As of June 30, 2024, the Company was in compliance with the debt covenants of the Credit Agreement.

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.

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Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

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
	June 30,						June 30,
	2024			2023			2024			2023
Cash paid for operating lease liabilities	$	80		$	92		$	157		$	159
Right-of-use assets obtained in exchange for new operating    lease obligations	$	—		$	19		$	—		$	483
Weighted-average remaining lease term	1.4 years			2.3 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 June 30, 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 June 30, 2024 for leases that have commenced 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

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

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Segment Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment Information

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 June 30, 2024, sales to customers in the United States accounted for approximately 71% and 69% of net revenue and international sales accounted for approximately 29% and 31% of net revenue, respectively. For the three and six months ended June 30, 2023, sales to customers in the United States accounted for approximately 75% and 71% of net revenue and international sales accounted for approximately 25% 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 June 30, 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
	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

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

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

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Concentrations

6 Months Ended

Jun. 30, 2024

Risks and Uncertainties [Abstract]

Concentrations

NOTE 12—CONCENTRATIONS

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

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2024				2023				2024				2023
Laser systems	$	6,007	52.0	%	$	8,754	61.3	%	$	11,182	51.6	%	$	15,019	60.7	%
Consumables and other		3,835	33.2	%		4,117	28.8	%		7,304	33.6	%		7,150	28.9	%
Services		1,713	14.8	%		1,415	9.9	%		3,201	14.8	%		2,584	10.4	%
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	21,687	100.0	%	$	24,753	100.0	%

No individual customer represented more than 10% of the Company’s revenue for the three and six months ended June 30, 2024 or 2023.

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.

As 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.

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.

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Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

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 June 30, 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 June 30, 2024, the Company recorded an income tax provision of $20,000 and $40,000 resulting in an effective tax rate of 0.7% and 0.4%, respectively. During the three and six months ended June 30, 2023, the Company recorded an income tax provision of $31,000, resulting in an effective tax rate of 0.6% and 0.3%, respectively. The income tax provisions for the three and six months ended June 30, 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.

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Subsequent Events

6 Months Ended

Jun. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

NOTE 14—SUBSEQUENT EVENTS

The Company has evaluated all events or transactions that occurred after June 30, 2024 through August 8, 2024, which is the date that the condensed consolidated financial statements were available to be issued. During this period, there were no material subsequent events requiring recognition or disclosure, other than those described 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.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Use of Estimates

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

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 six months ended June 30, 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 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

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 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

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.

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Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2024

Revenue Recognition [Abstract]

Summary of Opening and Closing Balances of Contract Liabilities

The opening and closing balances of the Company’s contract liabilities are as follows (in thousands):

	June 30,			December 31,
	2024			2023
Undelivered elements (training and installation)	$	407		$	449
Extended warranty contracts		1,911			2,259
Total deferred revenue		2,318			2,708
Less: long-term portion of deferred revenue		(186	)		(256	)
Deferred revenue — current	$	2,132		$	2,452

Summary of Disaggregation of Revenues Related to Geographic Areas

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

Summary of Revenues Disaggregated by Timing of Goods and Services Transferred

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
	June 30,				June 30,
	2024		2023		2024		2023
Revenue recognized over time	$	1,713	$	1,415	$	3,201	$	2,584
Revenue recognized at a point in time		9,842		12,871		18,486		22,169
Net revenue	$	11,555	$	14,286	$	21,687	$	24,753

Summary of Sales by End Market

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

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

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Convertible Redeemable Preferred Stock And Stockholders Equity (Tables)

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Summary of Income Statement Classification of Compensation Expense

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
	June 30,						June 30,
	2024			2023			2024			2023
Cost of revenue	$	—		$	5		$	—		$	23
Sales and marketing		49			105			71			302
General and administrative		(95	)		(25	)		(3	)		405
Engineering and development		—			(1	)		(1	)		45
Total	$	(46	)	$	84		$	67		$	775

Summary of Unvested Restricted Stock Units

A summary of unvested RSU activity for the six months ended June 30, 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		(27	)	$	19.80
Forfeited or cancelled		(6	)	$	19.51
Unvested RSUs as of June 30, 2024		11		$	34.68

Summary of Warrant Activity

A summary of the share equivalent of warrant activity for the six months ended June 30, 2024 is as follows (in thousands, except exercise price amounts):

				Weighted
				Average
	Shares			Exercise Price
Warrants outstanding as of December 31, 2023		4,323		$	11.88
Granted or Issued		42,427		$	0.57
Exercised		(22,874	)	$	—
Warrants outstanding as of June 30, 2024		23,876		$	2.52
Warrants exercisable as of June 30, 2024		23,876		$	2.52
Vested warrants expired during the period  ended June 30, 2024		—		$	—

Summary our stock warrants measured at fair value on a recurring basis

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

	December 31,							Fair Value			June 30,
	2023		Additions		Exercises			Adjustment			2024
Series H Warrants	$	620	$	—	$	—		$	56		$	676
Series J Warrants		743		—		(95	)		(16	)		632
Class A Warrants		—		2,280		(1,960	)		(106	)		214
Class B Warrants		—		1,379		—			(419	)		960
Investor Warrants		—		192		—			(58	)		134
Total Level 3	$	1,363	$	3,851	$	(2,055	)	$	(543	)	$	2,616

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Inventory (Tables)

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Components of Inventory

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

	June 30,		December 31,
	2024		2023
Raw materials	$	5,528	$	6,168
Work-in-process		1,514		1,299
Finished goods		3,862		3,966
Inventory	$	10,904	$	11,433

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Property, Plant, and Equipment (Tables)

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Summary of Property, Plant, and Equipment

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

	June 30,			December 31,
	2024			2023
Building	$	199		$	205
Leasehold improvements		1,251			1,251
Equipment and computers		14,467			14,628
Furniture and fixtures		519			519
Construction in progress		—			92
Total property, plant, and equipment before depreciation and land		16,436			16,695
Less: Accumulated depreciation		(12,328	)		(11,330	)
Total property, plant, and equipment, net before land		4,108			5,365
Land		155			160
Property, plant, and equipment, net	$	4,263		$	5,525

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Components of Accrued Liabilities

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

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

Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties

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
	June 30,						June 30,
	2024			2023			2024			2023
Balance, beginning of period	$	1,891		$	1,855		$	1,914		$	1,653
Provision for estimated warranty cost		808			802			1,487			1,960
Warranty expenditures		(856	)		(885	)		(1,558	)		(1,841	)
Balance, end of period		1,843			1,772			1,843			1,772
Less: long-term portion of warranty accrual		843			397			843			397
Current portion of warranty accrual	$	1,000		$	1,375		$	1,000		$	1,375

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Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Summary of Principal Outstanding and Unamortized Discount

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

	June 30,			December 31,
	2024			2023
SWK Loan	$	13,695		$	14,560
EIDL Loan		150			150
Discount and debt issuance costs on SWK Loan		(420	)		(663	)
Total		13,425			14,047
Current term loans		13,275			2,265
Non current term loans, net of discount	$	150		$	11,782

Summary of Future Minimum Principal and Interest Payments

The future minimum principal and interest payments as of June 30, 2024 are as follows (in thousands):

	Principal		Interest (1)
Remainder of 2024	$	1,400	$	896
2025		12,295		842
2026		—		9
2027		3		6
2028 and thereafter		147		83
Total future payments	$	13,845	$	1,836
(1) Estimated using London Interbank Bank Offered Rate (“LIBOR”) as of June 30, 2024

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Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Information related to Right-of-use Assets and Liabilities

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Cash paid for operating lease liabilities	$	80		$	92		$	157		$	159
Right-of-use assets obtained in exchange for new operating    lease obligations	$	—		$	19		$	—		$	483
Weighted-average remaining lease term	1.4 years			2.3 years			1.4 years			2.3 years
Weighted-average discount rate		12.3	%		12.3	%		12.3	%		12.3	%

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities as of June 30, 2024 for leases that have commenced 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

Future minimum rental commitments under lease agreements with non-cancelable Operating Leases

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

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Summary of Net Revenue by Geographic Location

Net revenue by geographic location based on the location of customers was 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

Summary of Property, Plant and Equipment by Geographic Location

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

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

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Concentrations (Tables)

6 Months Ended

Jun. 30, 2024

Risks and Uncertainties [Abstract]

Summary of Net Revenue from Various Products

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

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2024				2023				2024				2023
Laser systems	$	6,007	52.0	%	$	8,754	61.3	%	$	11,182	51.6	%	$	15,019	60.7	%
Consumables and other		3,835	33.2	%		4,117	28.8	%		7,304	33.6	%		7,150	28.9	%
Services		1,713	14.8	%		1,415	9.9	%		3,201	14.8	%		2,584	10.4	%
Net revenue	$	11,555	100.0	%	$	14,286	100.0	%	$	21,687	100.0	%	$	24,753	100.0	%

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Description of Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Basis Of Presentation [Line Items]
Net Income (Loss)	$ (2,798)	$ (4,868)	$ (9,283)	$ (10,717)
Proceeds from the sale of common stock and pre-funded warrants, net of fees			2,786	8,502
Working capital	9,100		9,100		$ 5,200
Cash and cash equivalents	5,272		5,272		6,566
Accounts receivable, net	$ 4,842		$ 4,842		$ 5,483
Common Stock, Par or Stated Value Per Share	$ 0.001		$ 0.001		$ 0.001
Principal Payment On Loan			$ 865	0
Proceeds from disposal of property, plant, and equipment			284	$ 0
February 2024 Public Offering [Member]
Basis Of Presentation [Line Items]
Net Income (Loss)			(9,300)
Proceeds from the sale of common stock and pre-funded warrants, net of fees			5,800
Principal Payment On Loan			900
Proceeds from disposal of property, plant, and equipment			$ 300
2024 Annual Meeting [Member]
Basis Of Presentation [Line Items]
Common Stock, Par or Stated Value Per Share	0.001		$ 0.001
Reverse Stock Split			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
Biolase Stockholders [Member]
Basis Of Presentation [Line Items]
Common Stock, Par or Stated Value Per Share	$ 0.001		$ 0.001
Reverse Stock Split			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”).

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Revenue Recognition [Abstract]
Revenue recognized from contract liability			$ 400	$ 300
Contract With Customer Liability Revenue Recognized Extended Warranty			900	$ 1,100
Undelivered elements (product training, installation, product and support services)	$ 407		$ 407		$ 449
Revenue from services transferred to customers over time, percentage	15.00%	10.00%	15.00%	10.00%
Revenue from products and services transferred to customers, percentage	85.00%	90.00%	85.00%	90.00%

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Revenue Recognition - Summary of Opening and Closing Balances of Contract Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenue Recognition [Abstract]
Undelivered elements (training and installation)	$ 407	$ 449
Extended warranty contracts	1,911	2,259
Total deferred revenue	2,318	2,708
Less: long-term portion of deferred revenue	(186)	(256)
Deferred revenue — current	$ 2,132	$ 2,452

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Revenue Recognition - Summary of Disaggregation of Revenues Related to Geographic Areas (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation Of Revenue [Line Items]
Net revenue	$ 11,555	$ 14,286	$ 21,687	$ 24,753
United States
Disaggregation Of Revenue [Line Items]
Net revenue	8,240	10,741	14,930	17,499
International
Disaggregation Of Revenue [Line Items]
Net revenue	$ 3,315	$ 3,545	$ 6,757	$ 7,254

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Revenue Recognition - Summary of Revenues Disaggregated by Timing of Goods and Services Transferred (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation Of Revenue [Line Items]
Net revenue	$ 11,555	$ 14,286	$ 21,687	$ 24,753
Revenue Recognized Over Time
Disaggregation Of Revenue [Line Items]
Net revenue	1,713	1,415	3,201	2,584
Revenue Recognized at a Point in Time
Disaggregation Of Revenue [Line Items]
Net revenue	$ 9,842	$ 12,871	$ 18,486	$ 22,169

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Revenue Recognition - Summary of Sales by End Market (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation Of Revenue [Line Items]
Net revenue	$ 11,555	$ 14,286	$ 21,687	$ 24,753
End-customer
Disaggregation Of Revenue [Line Items]
Net revenue	8,240	10,741	14,930	17,499
Distributors
Disaggregation Of Revenue [Line Items]
Net revenue	$ 3,315	$ 3,545	$ 6,757	$ 7,254

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Convertible Redeemable Preferred Stock And Stockholders' Equity - Summary of Income Statement Classification of Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ (46)	$ 84	$ 67	$ 775
Cost of Revenue
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Allocated Share-based Compensation Expense	0	5	0	23
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Allocated Share-based Compensation Expense	49	105	71	302
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Allocated Share-based Compensation Expense	(95)	(25)	(3)	405
Engineering and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 0	$ (1)	$ (1)	$ 45

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Convertible Redeemable Preferred Stock And Stockholders' Equity - Additional Information (Detail) - USD ($)								3 Months Ended			6 Months Ended		12 Months Ended
	Feb. 15, 2024	Dec. 06, 2023	Sep. 18, 2023	Sep. 13, 2023	May 26, 2023	May 24, 2023	Jan. 09, 2023	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Sep. 18, 2024	Feb. 12, 2024	Jun. 05, 2023	Mar. 31, 2023	Dec. 31, 2022
Temporary Equity And Stockholders Equity [Line Items]
Common stock, shares authorized								180,000,000			180,000,000		180,000,000
Common stock, shares issued								33,406,000			33,406,000		3,416,000
Approximate fair value approximate of the current stock price	95.00%
Common stock value								$ 33,000			$ 33,000		$ 3,000
Proceeds from the exercise of common stock warrants											$ 8,000	$ 115,000
Common stock, par value								$ 0.001			$ 0.001		$ 0.001
Change in fair value of warrants											$ (514,000)	(78,000)
Issuance costs for common stock warrants											$ 830,000	224,000
Convertible preferred stock, shares issued								1,000,000			1,000,000
Common stock authorized for issuance								908			908
Additional paid-in-capital								$ 322,380,000			$ 322,380,000		$ 317,103,000
Compensation expense related to stock options								100,000		$ 100,000	100,000	800,000
Total unrecognized compensation expense								100,000		1,000,000	100,000	$ 1,000,000
Accrued liabilities								7,662,000			7,662,000		7,518,000		$ 200,000
Other liabilities								97,000			$ 97,000		$ 79,000
Unrecognized share based compensation expense to be recognized over weighted-average period											1 year 3 months 18 days
Common stock offered											24,456,808	366,154
Proceeds from Issuance of Common Stock											$ 2,786,000	$ 8,502,000
Allocated Share-based Compensation Expense								$ (46,000)		84,000	$ 67,000	775,000
Series H Preferred Stock [Member]
Temporary Equity And Stockholders Equity [Line Items]
Temporary equity preferred stock, shares authorized								370,000			370,000		370,000
Temporary Equity, Redemption Price Per Share								$ 0.001			$ 0.001
Equity raise of gross proceeds					$ 4,600,000
Convertible preferred stock, Common shares issued upon conversion								1,923			1,923
Temporary conversion of preferred stock into common stock								190,000			190,000
Conversion of preferred stock											700,000
Temporary conversion of warrants into share								20,000			20,000
Proceeds from issuance of warrants						$ 3,400,000
Warrants And Rights Outstanding						$ 50,000
Conversion price						$ 13.98
Proceeds from the exercise of common stock warrants						$ 2,700,000
Preferred Stock Redemption Discount						10,500,000
Preferred Stock, Redemption Amount						7,800,000
Proceeds of common stock and warrants						4,600,000
Warrants issued in connection with debt instruments						3,400,000
Allocated to the warrants based upon fair values						1,200,000
Proceeds allocated to the warrants based upon fair values						$ 3,400,000
Weighted average exercise price of warrants					$ 13
Paid in-kind Dividends Percentage						20.00%
Risk-free interest rate						48.00%
Series G Preferred stock, shares authorized								370,000			370,000		370,000
Preferred stock, par value					0.001	$ 0.001		$ 0.001			$ 0.001		$ 0.001
Convertible preferred stock, shares issued								7,000			7,000		5,000
Convertible Preferred Stock outstanding								6,923			6,923
Convertible preferred stock, shares outstanding								7,000			7,000		5,000
Proceeds from offering						$ 4,600,000
Proceeds from offering from broker fees						$ 900,000
Preferred Stock, Convertible, Conversion Price, Decrease						$ 50
Combined purchase price of share and warrant					$ (0.5)	$ (0.5)
Series J Preferred Stock [Member]
Temporary Equity And Stockholders Equity [Line Items]
Temporary equity preferred stock, shares authorized								160,000			160,000
Temporary Equity, Redemption Price Per Share								$ 0.001			$ 0.001
Equity raise of gross proceeds			$ 4,500,000
Convertible preferred stock, Common shares issued upon conversion								5,621			5,621
Temporary conversion of preferred stock into common stock								70,965			70,965
Conversion of preferred stock											2,200,000
Temporary conversion of warrants into share								7,480			7,480
Proceeds from issuance of warrants				$ 3,500,000
Warrants And Rights Outstanding				$ 100,000
Conversion price				$ 3.26
Proceeds from the exercise of common stock warrants				$ 2,700,000
Preferred Stock Redemption Discount				10,300,000
Preferred Stock, Redemption Amount				7,600,000
Proceeds of common stock and warrants				4,500,000
Warrants issued in connection with debt instruments				3,500,000
Allocated to the warrants based upon fair values				1,000,000
Proceeds allocated to the warrants based upon fair values				$ 3,500,000
Weighted average exercise price of warrants			$ 30	$ 30
Paid in-kind Dividends Percentage				20.00%
Risk-free interest rate				40.00%
Series G Preferred stock, shares authorized								160,000			160,000
Preferred stock, par value				$ 0.001										$ 0.001
Conversion of preferred stock into common stock								4,500			4,500
Convertible Preferred Stock outstanding								17,136			17,136
Proceeds from offering				$ 4,500,000
Proceeds from offering from broker fees				$ 1,000,000
Preferred Stock, Convertible, Conversion Price, Decrease				$ 100
Combined purchase price of share and warrant			(0.5)	$ (0.5)
Series I Preferred Stock [Member]
Temporary Equity And Stockholders Equity [Line Items]
Temporary equity preferred stock, shares authorized								125,000			125,000
Temporary Equity, Redemption Price Per Share								$ 0.001			$ 0.001
Series G Preferred stock, shares authorized								125,000			125,000
Preferred stock, par value																$ 0.001
Series J Warrants [Member]
Temporary Equity And Stockholders Equity [Line Items]
Warrant issued								9,000			9,000
Temporary conversion of warrants into share								14,960			14,960
Proceeds from issuance of warrants				$ 1,000,000
Proceeds from the exercise of common stock warrants				800,000
Warrants issued in connection with debt instruments				1,000,000
Series H Warrants [Member]
Temporary Equity And Stockholders Equity [Line Items]
Temporary conversion of warrants into share								40,000			40,000
Proceeds from issuance of warrants						$ 1,200,000
Proceeds from the exercise of common stock warrants						1,000,000
Warrants issued in connection with debt instruments						$ 1,200,000
Weighted average exercise price of warrants						$ 13
Class A Common Warrants [Member]
Temporary Equity And Stockholders Equity [Line Items]
Weighted average exercise price of warrants	$ 0.66
Class B Common Warrants [Member]
Temporary Equity And Stockholders Equity [Line Items]
Warrant issued		2,221,880
Weighted average exercise price of warrants	$ 0.748
December Two Thousand Twenty Three Registered Direct Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Equity raise of gross proceeds		$ 1,400,000
Warrant issued		2,221,880
Weighted average exercise price of warrants		$ 1.23
Sale of common stock and pre-funded warrants, net of fees ,shares		331,000
Combined purchase price of share and warrant		$ 1.229
Net Proceeds from the Issuance of Common Stock, Pre-funded Warrants, and Warrants in Excess of Par		$ 1,000,000
Adjusted exercise price of warrants		$ 0.2256
September Two Thousand Twenty Three Public Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Equity raise of gross proceeds				1,000,000
Issuance costs for common stock warrants				$ 200,000
May Two Thousand Twenty Three Public Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Equity raise of gross proceeds					$ 1,200,000
Issuance costs for common stock warrants					$ 200,000
January 2023 Warrant [Member]
Temporary Equity And Stockholders Equity [Line Items]
Equity raise of gross proceeds							$ 8,500,000
Warrant issued							114,035
Weighted average exercise price of warrants							$ 1
Common stock, par value							$ 0.001
Sale of common stock and pre-funded warrants, net of fees ,shares							171,678
Proceeds from offering							$ 9,900,000
Combined purchase price of share and warrant							$ 35
January 2023 Prefunded Warrant [Member]
Temporary Equity And Stockholders Equity [Line Items]
Combined purchase price of share and warrant							$ 34
Underwritten Public Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Proceeds from Issuance of Common Stock	$ 7,000,000
Underwritten Public Offering [Member] | Series H Preferred Stock [Member]
Temporary Equity And Stockholders Equity [Line Items]
Weighted average exercise price of warrants					$ 26	$ 26
Sale of common stock and pre-funded warrants, net of fees ,shares						175,000
Underwritten Public Offering [Member] | Series J Preferred Stock [Member]
Temporary Equity And Stockholders Equity [Line Items]
Weighted average exercise price of warrants			$ 60	$ 60
Sale of common stock and pre-funded warrants, net of fees ,shares				75,000
Underwritten Public Offering [Member] | September Two Thousand Twenty Three Public Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Sale of common stock and pre-funded warrants, net of fees ,shares			75,000
Underwritten Public Offering [Member] | May Two Thousand Twenty Three Public Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Sale of common stock and pre-funded warrants, net of fees ,shares					175,000
Maximum [Member]
Temporary Equity And Stockholders Equity [Line Items]
Temporary equity preferred stock, shares authorized								1,000,000			1,000,000
Series G Preferred stock, shares authorized								1,000,000			1,000,000
2002 Stock Incentive Plan
Temporary Equity And Stockholders Equity [Line Items]
Common stock authorized for issuance								1,244			1,244
Options available for future grants								0			0
2018 Long-Term Incentive Plan
Temporary Equity And Stockholders Equity [Line Items]
Increase in Number of Units Available for Issuance											58,815
Options and restricted stock units outstanding								30,499,000			30,499,000
Restricted Stock Units (RSUs)
Temporary Equity And Stockholders Equity [Line Items]
Options and restricted stock units outstanding								138			138
RSUs were cancelled											6,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period											27,000
Phantom Share Units (PSUs)
Temporary Equity And Stockholders Equity [Line Items]
Additional paid-in-capital													$ 200,000					$ 100,000
Accrued liabilities										$ 500,000		500,000	$ 500,000
Cash																	$ 600,000
RSUs were cancelled									828				2,113
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period									291
Stock Appreciation Rights (SARs)
Temporary Equity And Stockholders Equity [Line Items]
Stock Option Outatanding								236,000			236,000
Allocated Share-based Compensation Expense											$ 0	$ 0
Employee Stock Option
Temporary Equity And Stockholders Equity [Line Items]
Stock options granted											0	0
Pre Funded Warrants [Member]
Temporary Equity And Stockholders Equity [Line Items]
Equity raise of gross proceeds											$ 3,700,000
Volatility	85.00%
Sale of Stock, Price Per Share	$ 0.439
Weighted average exercise price of warrants	0.001
Alternative cashless exercise price	$ 0.95
Issuance costs for common stock warrants	$ 600,000
Warrant issued	8,205,000
Pre Funded Warrants [Member] | December Two Thousand Twenty Three Registered Direct Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Warrant issued		779,940
Weighted average exercise price of warrants		$ 0.001
Common Stock
Temporary Equity And Stockholders Equity [Line Items]
Common stock, shares issued								33,406,000	33,257,000	1,019,000	33,406,000	1,019,000	3,416,000				263,000	77,000
Common stock, par value	$ 0.001
Sale of common stock and pre-funded warrants, net of fees ,shares											7,795,000	172,000
Common Stock | Underwritten Public Offering [Member]
Temporary Equity And Stockholders Equity [Line Items]
Sale of common stock and pre-funded warrants, net of fees ,shares	7,795,000
Common Stock | 2018 Long-Term Incentive Plan
Temporary Equity And Stockholders Equity [Line Items]
Common stock authorized for share issued											22,954
Common stock authorized for issuance								112,268			112,268

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Convertible Redeemable Preferred Stock And Stockholders' Equity - Summary of Unvested Restricted Stock Units (Detail) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares, Beginning Balance | shares	44,000
Shares, Vested | shares	(27,000)
Shares, Forfeited or cancelled | shares	(6,000)
Shares, Ending Balance | shares	11,000
Weighted Average Grant Shares Date Fair Value, Beginning Balance | $ / shares	$ 18.5
Weighted Average Grant Shares Date Fair Value, Vested | $ / shares	19.8
Weighted Average Grant Shares Date Fair Value, Forfeited or cancelled | $ / shares	19.51
Weighted Average Grant Shares Date Fair Value, Ending Balance | $ / shares	$ 34.68

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Convertible Redeemable Preferred Stock And Stockholders' Equity - Summary of Warrant Activity (Detail) - Warrants	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Class Of Warrant Or Right [Line Items]
Shares, Beginning Balance | shares	4,323,000
Shares, Granted or Issued | shares	42,427,000
Shares, Exercised | shares	(22,874,000)
Shares, Ending Balance | shares	23,876,000
Shares, Warrants Exercisable | shares	23,876,000
Shares, Vested warrants expired during the period | shares	0
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 11.88
Weighted Average Exercise Price, Granted or Issued | $ / shares	0.57
Weighted Average Exercise Price, Exercised | $ / shares	0
Weighted Average Exercise Price, Ending Balance | $ / shares	2.52
Weighted Average Exercise Price, Warrants Exercisable | $ / shares	2.52
Weighted Average Exercise Price, Vested warrants expired during the period ended | $ / shares	$ 0

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Convertible Redeemable Preferred Stock And Stockholders' Equity - Summary our stock warrants measured at fair value (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Temporary Equity And Stockholders Equity [Line Items]
Beginning Balance, December 31, 2023	$ 1,363
Fair Value Adjustment	(514)	$ (78)
Ending Balance, June 30, 2024	2,616
Fair value recurring | Level 3
Temporary Equity And Stockholders Equity [Line Items]
Beginning Balance, December 31, 2023	1,363
Additions	3,851
Exercises	(2,055)
Fair Value Adjustment	(543)
Ending Balance, June 30, 2024	2,616
Series H Warrants [Member] | Fair value recurring | Level 3
Temporary Equity And Stockholders Equity [Line Items]
Beginning Balance, December 31, 2023	620
Fair Value Adjustment	56
Ending Balance, June 30, 2024	676
Series J Warrants [Member] | Fair value recurring | Level 3
Temporary Equity And Stockholders Equity [Line Items]
Beginning Balance, December 31, 2023	743
Exercises	(95)
Fair Value Adjustment	(16)
Ending Balance, June 30, 2024	632
Class A Common Warrants [Member] | Fair value recurring | Level 3
Temporary Equity And Stockholders Equity [Line Items]
Additions	2,280
Exercises	(1,960)
Fair Value Adjustment	(106)
Ending Balance, June 30, 2024	214
Class B Common Warrants [Member] | Fair value recurring | Level 3
Temporary Equity And Stockholders Equity [Line Items]
Additions	1,379
Fair Value Adjustment	(419)
Ending Balance, June 30, 2024	960
Investor Warrants | Fair value recurring | Level 3
Temporary Equity And Stockholders Equity [Line Items]
Additions	192
Fair Value Adjustment	(58)
Ending Balance, June 30, 2024	$ 134

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Inventory - Components of Inventory (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 5,528	$ 6,168
Work-in-process	1,514	1,299
Finished goods	3,862	3,966
Inventory	$ 10,904	$ 11,433

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Inventory - Additional Information (Detail) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Inventory reduced by estimate for excess and obsolete amount	$ 2.3	$ 2.5

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Property, Plant and Equipment - Summary of Property, Plant, and Equipment (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property Plant And Equipment [Line Items]
Total property, plant, and equipment before depreciation and land	$ 16,436	$ 16,695
Accumulated depreciation and amortization	(12,328)	(11,330)
Property, plant, and equipment, net before land	4,108	5,365
Land	155	160
Property, plant, and equipment, net	4,263	5,525
Building
Property Plant And Equipment [Line Items]
Total property, plant, and equipment before depreciation and land	199	205
Leasehold Improvements
Property Plant And Equipment [Line Items]
Total property, plant, and equipment before depreciation and land	1,251	1,251
Equipment and Computers
Property Plant And Equipment [Line Items]
Total property, plant, and equipment before depreciation and land	14,467	14,628
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Total property, plant, and equipment before depreciation and land	519	519
Construction in Progress
Property Plant And Equipment [Line Items]
Total property, plant, and equipment before depreciation and land	$ 0	$ 92

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Property, Plant, and Equipment - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation and amortization expenses	$ 0.7	$ 1.4	$ 1.3	$ 1.6
Cumulative Adjustment Depreciation Expense		$ 0.8		$ 0.8

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Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Intangible Assets and Goodwill [Line Items]
Goodwill impairment loss			$ 0
Discount rate for goodwill	19.10%		19.10%
Goodwill	$ 2,926		$ 2,926		$ 2,926
Amortization expense	$ 0	$ 0	$ 0	$ 0

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Accrued Liabilities - Components of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Feb. 12, 2024	Dec. 31, 2023	Jun. 30, 2023
Payables and Accruals [Abstract]
Stock warrant liability	$ 2,616		$ 1,363
Payroll and benefits	3,640		3,343
Warranty accrual, current portion	1,000		1,321	$ 1,375
Operating Lease liability	904		888
Accrued professional services	994		422
Taxes	349		452
Accrued insurance premium	161		473
Other	614		619
Accrued liabilities	$ 7,662	$ 200	$ 7,518

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Accrued Liabilities - Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Movement in Standard Product Warranty Accrual
Balance, beginning of period	$ 1,891	$ 1,855	$ 1,914	$ 1,653
Provision for estimated warranty cost	808	802	1,487	1,960
Warranty expenditures	(856)	(885)	(1,558)	(1,841)
Balance, end of period	1,843	1,772	1,843	1,772
Less: long-term portion of warranty accrual	843	397	843	397	$ 593
Current portion of warranty accrual	$ 1,000	$ 1,375	$ 1,000	$ 1,375	$ 1,321

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Accrued Liabilities - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Feb. 12, 2024	Dec. 31, 2023
Accrued Liabilities [Line Items]
Accrued liability	$ 7,662	$ 200	$ 7,518
Maximum | United States | Waterlase Laser Systems
Accrued Liabilities [Line Items]
Product warrant period	1 year
Maximum | United States | Diode Systems
Accrued Liabilities [Line Items]
Product warrant period	2 years
Maximum | International | Waterlase Systems And Diode Systems
Accrued Liabilities [Line Items]
Product warrant period	24 months

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Debt - Summary of Principal Outstanding and Unamortized Discount (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Non current term loans	$ 13,425	$ 14,047
Current term loans	13,275	2,265
Non current term loans, net of discount	150	11,782
EIDL Loan
Debt Instrument [Line Items]
Non current term loans	150	150
SWK Loan
Debt Instrument [Line Items]
Non current term loans	13,695	14,560
Discount and debt issuance costs on SWK Loan	$ (420)	$ (663)

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Debt - Additional Information (Detail) - USD ($)			1 Months Ended	3 Months Ended		6 Months Ended
	May 22, 2020	Nov. 09, 2018	Apr. 30, 2021	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024	Feb. 15, 2024	Dec. 30, 2023	Dec. 30, 2022
Debt Instrument [Line Items]
Interest expense				$ 600,000	$ 600,000	$ 1,200,000	$ 1,200,000
Weighted-average interest rate				14.59%		14.59%
Warrants Issued on November 9, 2018
Debt Instrument [Line Items]
Loan Processing Fee						$ 1,400,000
Credit Agreement Ninth Amendment [Member]
Debt Instrument [Line Items]
Loan principal amount		$ 1,000,000
EIDL Loan
Debt Instrument [Line Items]
Loan principal amount	$ 150,000
Loan interest rate per annum	3.75%
Loan periodic payment terms	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.
Loan balance payment terms	payable through July 2050.
Extension of loan due date			2022
Note interest rate per annum	3.75%
SWK Loan
Debt Instrument [Line Items]
Interest rate		9.00%
Repayments of lines of credit		$ 700,000
Line of credit facility term		5 years
Borrowings under lines of credit						$ 13,300,000
Debt instrument, maturity term		2025
Debt instrument covenants unencumbered liquid assets								$ 3,500,000
Principal Amount Payment									$ 165,000,000
SWK Loan | London Interbank Offered Rate [Member]
Debt Instrument [Line Items]
Line of credit facility interest rate description		1.25
SWK Loan | Maximum
Debt Instrument [Line Items]
Debt instrument covenants unencumbered liquid assets										$ 2,500,000	$ 2,500,000
SWK Loan | Minimum
Debt Instrument [Line Items]
Debt instrument covenants unencumbered liquid assets										$ 1,500,000	$ 3,000,000

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Debt - Summary of Future Minimum Principal and Interest Payments (Detail) $ in Thousands	Jun. 30, 2024 USD ($)
Debt Disclosure [Abstract]
Remainder of 2024	$ 1,400
2025	12,295
2026	0
2027	3
2028 and thereafter	147
Total future payments	13,845
Remainder of 2024	896
2025	842
2026	9
2027	6
2028 and thereafter	83
Total future payments	$ 1,836

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Leases - Additional Information (Detail) $ in Thousands				3 Months Ended		6 Months Ended
	Dec. 10, 2021 ft²	Feb. 04, 2020 ft²	Jan. 22, 2020 ft²	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	May 26, 2022 ft²
Lessee Lease Description [Line Items]
Lease term			5 years
Rent expense				$ 300	$ 300	$ 600	$ 600
Lease Expiration Date			Jul. 01, 2020			Dec. 31, 2025
Operating lease, options to renew term				1 year		1 year
Operating lease, right-of-use asset				$ 1,101		$ 1,101		$ 1,519
Operating lease, liability				$ 1,219		$ 1,219
Lease facility area | ft²	15,000		11,000
Operating lease, lease not yet commenced, description						the Company had no significant leases that had not commenced.
Corona Lease [Member]
Lessee Lease Description [Line Items]
Lease Expiration Date	Jun. 30, 2025
Lease Commencement Date	Feb. 01, 2022
Lake Forest [Member]
Lessee Lease Description [Line Items]
Lease term		66 months
Lease Commencement Date		Jul. 01, 2020
Lease facility area | ft²		12,000							8,000
Manufacturing Facility [Member]
Lessee Lease Description [Line Items]
Lease Expiration Date						Jun. 30, 2025
Minimum
Lessee Lease Description [Line Items]
Lease term				1 year		1 year
Maximum
Lessee Lease Description [Line Items]
Lease term				5 years		5 years
Lease initial term of contract						1 year

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Leases - Information related to Right-of-use Assets and Liabilities (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Cash paid for operating lease liabilities	$ 80	$ 92	$ 157	$ 159
Right-of-use assets obtained in exchange for new operating lease obligations	$ 0	$ 19	$ 0	$ 483
Weighted-average remaining lease term	1 year 4 months 24 days	2 years 3 months 18 days	1 year 4 months 24 days	2 years 3 months 18 days
Weighted-average discount rate	12.30%	12.30%	12.30%	12.30%

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Leases - Schedule of Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
2024	$ 919
2025	410
2026	1
2027	0
2028 and thereafter	0
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	$ 888
Non current operating lease liability	$ 315	$ 772

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Leases - Future Minimum Rental Commitments Under Lease Agreements (Detail) $ in Thousands	Jun. 30, 2024 USD ($)
Leases [Abstract]
Remainder of 2024	$ 510
2025	817
2026	3
2027	0
2028 and thereafter	0
Total future minimum lease obligations	1,330
Less imputed interest	(111)
Total lease liabilities	$ 1,219

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Feb. 12, 2024	Dec. 31, 2023
Commitment And Contingencies [Line Items]
Accrued liability	$ 7,662	$ 200	$ 7,518

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Segment Information - Additional Information (Detail) - Sales Revenue, Net - Customer	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Customer Concentration Risk | United States
Segment Reporting Information [Line Items]
Percentage of sales	71.00%	75.00%	69.00%	71.00%
Geographic Concentration Risk | International
Segment Reporting Information [Line Items]
Percentage of sales	29.00%	25.00%	31.00%	29.00%
Number of customers which represented more than 10% of the Company's revenue	0	0	0	0

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Segment Information - Summary of Net Revenue by Geographic Location (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Segment Reporting Information [Line Items]
Net revenue	$ 11,555	$ 14,286	$ 21,687	$ 24,753
United States
Segment Reporting Information [Line Items]
Net revenue	8,240	10,741	14,930	17,499
International
Segment Reporting Information [Line Items]
Net revenue	$ 3,315	$ 3,545	$ 6,757	$ 7,254

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Segment Information - Summary of Property, Plant and Equipment by Geographic Location (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Segment Reporting Information [Line Items]
Property, plant, and equipment, net	$ 4,263	$ 5,525
United States
Segment Reporting Information [Line Items]
Property, plant, and equipment, net	4,035	5,283
International
Segment Reporting Information [Line Items]
Property, plant, and equipment, net	$ 228	$ 242

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Concentrations - Summary of Net Revenue from Various Products (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Concentration Risk [Line Items]
Net revenue	$ 11,555	$ 14,286	$ 21,687	$ 24,753
Laser systems
Concentration Risk [Line Items]
Net revenue	$ 6,007	$ 8,754	$ 11,182	$ 15,019
Laser systems | Product Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of sales	52.00%	61.30%	51.60%	60.70%
Consumables and other
Concentration Risk [Line Items]
Net revenue	$ 3,835	$ 4,117	$ 7,304	$ 7,150
Consumables and other | Product Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of sales	33.20%	28.80%	33.60%	28.90%
Services
Concentration Risk [Line Items]
Net revenue	$ 1,713	$ 1,415	$ 3,201	$ 2,584
Services | Product Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of sales	14.80%	9.90%	14.80%	10.40%
Product And Services [Member] | Product Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of sales	100.00%	100.00%	100.00%	100.00%

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Concentrations - Additional Information (Detail) - Customer	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Jun. 30, 2024	Dec. 31, 2023
Product Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Number of customers which represented more than 10% of the Company's revenue	0	0
Product Concentration Risk | Account Receivable
Concentration Risk [Line Items]
Number of customers which represented more than 10% of the Company's accounts receivable			1
Minimum | Product Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Concentration Risk Percentage	10.00%	10.00%
Minimum | Customer Concentration Risk | Account Receivable
Concentration Risk [Line Items]
Concentration Risk Percentage		12.00%
Maximum | Customer Concentration Risk | Account Receivable
Concentration Risk [Line Items]
Concentration Risk Percentage			11.00%

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Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Line Items]
Liability for unrecognized tax benefit, including related estimates of penalties and interest	$ 0	$ 0	$ 0	$ 0
Income tax provision	$ 20,000	$ 31,000	$ 40,000	$ 31,000
Projected annual effective tax rate	0.70%	0.60%	0.40%	0.30%
Statutory tax rate			21.00%

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Subsequent Events (Additional Information) (Details) - $ / shares		6 Months Ended
	Jul. 16, 2024	Jun. 30, 2024	Dec. 31, 2023
Subsequent Event [Line Items]
Common stock, par value		$ 0.001	$ 0.001
Series J Preferred Stock [Member]
Subsequent Event [Line Items]
Conversion of preferred stock		2,200,000
Series H Preferred Stock [Member]
Subsequent Event [Line Items]
Conversion of preferred stock		700,000
Subsequent Event | Series H Convertible Redeemable Preferred Stock
Subsequent Event [Line Items]
Common stock, par value	$ 0.001
Converted redeemable preferred stock	2,546
Subsequent Event | Series J Preferred Stock [Member]
Subsequent Event [Line Items]
Company issued common stock	3,190,476
Common stock, par value	$ 0.001
Subsequent Event | Series J Warrants [Member]
Subsequent Event [Line Items]
Conversion of preferred stock	8,000
Warrants To Purchase Preferred Stock	4,000