According to the law firm press release, Biolase manufactures and distributes dental lasers.
The complaint alleges that during the Class Period, defendants issued false and misleading statements regarding Biolase’s business and future prospects. Specifically, defendants failed to disclose and/or concealed the following adverse facts during the Class Period: (a) contrary to defendants’ statements during the Class Period, 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 its 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; (b) due to the relatively high costs associated with its dental laser offerings, Biolase’s efforts to switch to a direct sales model in the United States during the Class Period were failing; (c) contrary to defendants’ Class Period statements, the high debt burden the Company assumed to exit its arrangement with the former exclusive distributor of its WaterLase products, coupled with the onerous terms of certain of its Comerica lines of credit, were financially handicapping the Company; and (d) contrary to defendants’ Class Period statements that “the cash generated from operations and the borrowings available under the lines of credit with Comerica [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 its Comerica lines of credit.
On August 7, 2013, Biolase 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, 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 – and a loss of $.06 per share. Then, on August 13, 2013, before the markets opened, the Company announced that it was in violation of its bank covenants. On the news of the revenue and earnings misses and the Company’s violation of prior debt covenants, the price of Biolase common stock, which had traded as high as $6.05 per share in intraday trading during the Class Period, fell more than 80% from that level to close at $1.19 per share on August 13, 2013.
On December 10, 2013, the Court issued an Order consolidating cases, appointing lead plaintiff, and approving lead counsel. Lead Plaintiff filed a consolidated complaint on February 24.
On March 30, 2015, the parties entered into a Stipulation of Settlement. The Settlement was preliminarily approved on June 5. On October 13, the Court granted final approval of the Settlement and dismissed this case.