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LAKE FOREST, CA - BIOLASE, Inc. (NASDAQ:BIOL), a provider of dental laser systems, has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. The company announced today that it will continue operations during the restructuring process and is seeking court approval for a planned asset sale to Sonendo Inc., a fellow dental technology firm.
The proposed asset purchase agreement involves Sonendo acquiring substantially all BIOLASE assets for $14.0 million in cash, with additional terms including the assumption of certain liabilities and an adjustment based on working capital. This agreement is set to form the basis of a court-supervised auction process, inviting potential other bidders to participate.
BIOLASE has secured a commitment for Debtor-in-Possession (DIP) financing of at least $2.5 million from SWK Funding LLC. This includes an interim advance of $1.43 million, pending court approval. These funds are expected to allow BIOLASE to maintain its operations and financial obligations, such as employee wages and customer service continuity.
John Beaver, CEO of BIOLASE, stated that the Chapter 11 filing was the most viable option for addressing the company's liquidity issues and that partnering with Sonendo would enhance their mission in the dental industry. He also expressed gratitude for the ongoing support from customers, suppliers, and employees.
The company has engaged SSG Capital Advisors, LLC to advise on strategic options, including the potential sale of assets. The outcome of the bankruptcy and sale process is uncertain, with no guarantee of payment or distribution to BIOLASE's securityholders.
BIOLASE is known for its dental laser products, holding approximately 241 patented and 21 patent-pending technologies, and has sold over 47,700 laser systems globally as of December 31, 2023.
The press release contains forward-looking statements regarding the company's expectations about the bankruptcy process and asset sale, which are subject to various factors and uncertainties.
This news is based on a press release statement and additional information about the bankruptcy proceedings can be found on the Epiq Corporate Restructuring, LLC website.
InvestingPro Insights
The recent Chapter 11 filing by BIOLASE, Inc. (NASDAQ:BIOL) comes amid significant financial challenges for the dental laser systems provider. According to InvestingPro data, BIOLASE's market capitalization has dwindled to just $2.27 million, reflecting the severe financial distress that led to the bankruptcy filing.
InvestingPro Tips highlight that BIOLASE has not been profitable over the last twelve months, which aligns with the company's decision to seek bankruptcy protection. The tip indicating that short-term obligations exceed liquid assets further explains the liquidity issues mentioned by CEO John Beaver in the article.
The company's financial struggles are evident in its revenue figures. InvestingPro data shows that BIOLASE's revenue for the last twelve months as of Q2 2023 was $46.1 million, with a concerning revenue growth decline of -9.28% over the same period. This downward trend in revenue likely contributed to the company's decision to pursue a sale to Sonendo Inc.
It's worth noting that BIOLASE's stock has taken a significant hit, with a staggering year-to-date price total return of -93.99% as of the latest data. This dramatic decline in shareholder value underscores the severity of the company's financial situation and the potential risks for investors.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide valuable context to BIOLASE's current situation and its potential future post-restructuring.
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