BIOLASE, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2017

The following table summarizes warrant activity (in thousands, except per share data):

				Weighted-Average
				Exercise Price
	Shares			Per Share
Warrants outstanding, January 1, 2015		10,094		$	4.18
Granted/Issued		—		$	—
Exercised		—		$	—
Forfeited, cancelled, or expired		—		$	—
Warrants outstanding, December 31, 2015		10,094		$	4.18
Granted/Issued		2,035		$	2.00
Exercised		—		$	—
Forfeited, cancelled, or expired		(723	)	$	6.50
Warrants outstanding, December 31, 2016		11,406		$	4.18
Granted/Issued		3,926		$	1.80
Exercised		—		$	—
Forfeited, cancelled, or expired		(9,206	)	$	4.00
Warrants outstanding, December 31, 2017		6,126		$	1.93
Warrants exercisable, December 31, 2017		5,991		$	1.88
Vested warrants expired during the 12 months ended December 31, 2017		9,206		$	4.00

Summary of Option Activity

Stock options may be granted as incentive or non-qualified options; however, no incentive stock options have been granted to date. The exercise price of options is at least equal to the market price of the stock as of the date of grant. Options may vest over various periods but typically vest on a quarterly basis over four years. Options expire after five years, ten years, or within a specified time from termination of employment, if earlier. The Company issues new shares of BIOLASE common stock upon the exercise of stock options. The following table summarizes option activity under the 2002 Plan (in thousands, except per share data):

						Weighted-Average
				Weighted-Average		Remaining
				Exercise Price		Contractual Term		Aggregate Intrinsic
	Shares			Per Share		(Years)		Value(1)
Options outstanding, January 1, 2015		3,475		$	3.03
Granted at fair market value		1,931		$	2.22
Granted at above fair market value		1,340		$	2.46
Exercised		(38	)	$	1.15
Forfeited, cancelled, or expired		(2,215	)	$	2.64
Options outstanding, December 31, 2015		4,493		$	3.03
Granted at fair market value		3,113		$	1.42
Exercised		(1	)	$	0.82
Forfeited, cancelled, or expired		(993	)	$	3.01
Options outstanding, December 31, 2016		6,612		$	2.72
Granted at fair market value		2,231		$	1.03
Exercised		(3	)	$	0.86
Forfeited, cancelled, or expired		(2,103	)	$	1.83
Options outstanding, December 31, 2017		6,737		$	1.80		7.21	$	—
Options exercisable, December 31, 2017		3,454		$	2.24		5.57	$	—
Vested options expired during the 12 months ended December 31, 2017		288		$	3.42

(1)	The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of a grant.

Additional Information of Option Activity

The following table summarizes additional information for those options under the 2002 Plan that are outstanding and exercisable as of December 31, 2017 (in thousands, except per share data):

	Options Outstanding						Exercisable
					Weighted-Average
	Number		Weighted-Average		Remaining		Number		Weighted-Average
Range of Exercise Prices	of Shares		Exercise Price		Life (Years)		of Shares		Exercise Price
$ 0.43 — $ 1.21		1,428	$	0.80		8.65		451	$	0.97
$ 1.22 — $ 1.44		917	$	1.42		7.67		563	$	1.42
$ 1.45 — $ 1.60		1,481	$	1.48		8.93		3	$	1.45
$ 1.61 — $ 2.38		1,573	$	2.02		6.70		1,207	$	2.08
$ 2.39 — $ 5.07		1,338	$	3.20		4.06		1,230	$	3.25
Total		6,737	$	1.80		7.21		3,454	$	2.24

Cash Proceeds, Along With Fair Value Disclosures Related to Grants, Exercises, and Vesting Options

Cash proceeds, along with fair value disclosures related to grants, exercises, and vesting options, are as follows for the years ended December 31 (in thousands, except per share amounts):

	Years Ended
	December 31,
	2017		2016		2015
Proceeds from stock options exercised	$	3	$	1	$	44
Tax benefit related to stock options exercised(1)	N/A		N/A		N/A
Intrinsic value of stock options exercised(2)	$	1	$	—	$	52
Weighted-average fair value of options granted	$	0.69	$	1.03	$	1.54
Total fair value of shares vested during the year	$	1,286	$	1,728	$	2,268

(1)	Excess tax benefits received related to stock option exercises are presented as financing cash inflows. For the periods presented, the Company did not receive a tax benefit related to the exercise of stock options due to its net operating losses.

(2)	The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the market price of the stock on the date of grant.

Summary of Restricted Stock Units Activity

The following table summarize RSU activity under the 2002 Plan (in thousands):



	Shares
Unvested restricted stock units, January 1, 2015		37
Granted		—
Vested		(37	)
Forfeited or cancelled		—
Unvested restricted stock units, December 31, 2015		—
Granted		907
Vested		(488	)
Forfeited or cancelled		—
Unvested restricted stock units, December 31, 2016		419
Granted		2,351
Vested		(404	)
Forfeited or cancelled		(577	)
Unvested restricted stock units, December 31, 2017		1,789

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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