| Company: | BIOLASE, Inc |
| Ticker Symbol: | BIOL |
| Class Period: | Jan-7-13 to Aug-12-13 |
| Date Filed: | Aug-27-13 |
| Lead Plaintiff Deadline: | Oct-26-13 |
| Court: | Central District of California |
| Allegations: | |
BIOLASE is a biomedical company operating in one reportable business segment that develops, manufactures, and markets proprietary lasers in dentistry and medicine and also markets and distributes two-dimensional ("2-D") and three-dimensional ("3-D") digital imaging equipment and CAD/CAM intra-oral scanners; products that are focused on technologies that advance the practice of dentistry and medicine.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company's business, operations and prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public that: (1) contrary to Defendants' statements during the Class Period that dental lasers were "becom[ing] the standard of care in dental practices worldwide" and feeding demand for BIOLASE's product offerings, in reality, because there is little evidence demonstrating the use of dental lasers (instead of drills) provides long-term benefits to teeth, and because both children and adults can have cavities filled without the numbing injections BIOLASE claims WaterLase products preclude, only 5% of dental offices use dental lasers and dentists were hesitant to adopt dental lasers -- especially BIOLASE's -- because of their high costs; (2) due to the relatively high costs associated with its dental lasers offerings, BIOLASE's efforts to switch to a direct sales model in the U.S. during the Class Period were failing; (3) contrary to Defendants' Class Period statements that they did "not expect to be troubled with the multitude of extraneous issues that [BIOLASE] faced throughout [its] challenging turnaround, including exiting [its] exclusive global distribution relationship with Henry Schein," the high debt burden the Company assumed to exit the Henry Schein arrangement, coupled with the onerous terms of the Comerica lines of credit, were financially handicapping the Company; and (4) contrary to Defendants' Class Period statements that "the cash generated from operations and the borrowings available under the lines of credit with Comerica Bank [would] be sufficient to fund [BIOLASE's] working capital requirements for 2013," there was no cash being generated from operations and the Company was in default of the Comerica lines of credit. As a result of defendants' false and misleading statements, the Company's stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on August 7, 2013, after the close of trading, the Company issued a press release announcing its second quarter 2013 financial results. Rather than the $15.69 million in revenues Defendants had led the market to expect through their bullish Class Period statements, BIOLASE reported revenues of just $14.2 million -- down 2.74% from the $14.6 million the Company had reported in the fourth quarter 2012. Rather than the $0.04 per share loss Defendants had led the market to expect, and had reported in the second quarter of 2012, BIOLASE reported a loss of $0.06 per share.
On this news, shares in BIOLASE dropped more than 26%, closing at $2.51 per share on August 8, 2013, from a close of $3.42 per share on August 7, 2013, on unusually heavy trading volume of over 1.9 million shares.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
