Item 3.01. Notification of Failure to Satisfy a Continued Listing Rule or
Standard - Remediated
On March 31, 2020, Biolase, Inc. (the "Company") received notice from Nasdaq
that the Company has failed to maintain a required minimum of $2,500,000 in
stockholders' equity for continued listing, as required under Listing Rule
5550(b)(1) (the "Minimum Equity Rule"). On June 4, 2020, Nasdaq granted the
Company an extension of time until August 31, 2020 to provide evidence of
compliance with the Minimum Equity Rule, by filing a Current Report on Form 8-K
which includes (1) disclosure of Nasdaq's deficiency letter and the specific
deficiency or deficiencies cited; (2) a description of the completed transaction
or event that enabled the Company to satisfy the stockholders' equity
requirement for continued listing; (3) an affirmative statement that, as of the
date of the report, the Company believes it has regained compliance with the
stockholders' equity requirement based upon the specific transaction or event
referenced in item (2) above; and (4) a disclosure stating that Nasdaq will
continue to monitor the Company's ongoing compliance with the stockholders'
equity requirement and, if at the time of its next periodic report the Company
does not evidence compliance, that it may be subject to delisting.
In addition, on December 3, 2019, the Company received notice from Nasdaq that
it has failed to maintain the minimum bid price requirement of $1 required for
continued listing under Listing Rule 5550(a)(2). Under the Nasdaq rules, the
Company had 180 days to regain compliance with this requirement. On April 17,
2020, the Company received a letter from Nasdaq that extended the Company's
deadline for compliance with this rule to August 14, 2020, wherein at such date
the Company could opt to qualify for an additional 180 day extension by meeting
the Nasdaq continued listing requirements with the exception of the bid price
requirement, provided the Company provided written notice of its intention to
cure the deficiency during the second compliance period, by effecting a reverse
stock split, if necessary.
As previously disclosed by the Company, on June 10, 2020 the Company completed a
registered direct offering of 10,800,000 shares of its Common Stock, par value
$0.001 per share ("Common Stock"), to certain accredited institutional investors
and a concurrent private placement of warrants to purchase 10,800,000 shares of
Common Stock. In connection with this offering, the Company received net
proceeds of approximately $6.1 million after deducting fees and other offering
expenses related to the registered direct offering. On July 22, 2020, the
Company completed a rights offering, pursuant to which the Company sold an
aggregate of 18,000 units consisting of an aggregate of 18,000 shares of Series
F Convertible Preferred Stock and 45,000,000 warrants, with each warrant
exercisable for one share of Common Stock, resulting in net proceeds to the
Company of approximately $15.8 million, after deducting fees and other offering
expenses relating to the rights offering.
Thus, in total, the Company believes actual shareholders' equity as of March 31,
2020 of negative $891,000 on the Company's balance sheet would be, on an as
adjusted basis, $21,131,000 as of March 31, 2020, and approximately $17,000,000
as of August 12, 2020, after giving effect to the equity transactions described
above.
As of August 12, 2020, the Company believes it has regained compliance with the
stockholders' equity requirement based upon the specific transactions and events
referenced above. Nasdaq will continue to monitor the Company's ongoing
compliance with the stockholders' equity requirement, and if at the time of its
next periodic report the Company does not evidence compliance, it may be subject
to delisting.
As of August 12, 2020, the Company believes it meets all of the Nasdaq continued
listing requirements (except the minimum bid price requirement). The Company
hereby provides notice of its intention to cure the deficiency during the second
compliance period if provided by Nasdaq (which would end February 10, 2021), by
effecting a reverse stock split, if necessary.
Thus, the Company believes it qualifies for the second 180 day extension to
comply with the bid price requirement, as it has met the continued Nasdaq
listing requirements, with the exception of the bid price requirement, and has
provided written notice of its intention to cure the deficiency during this
second compliance period.
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