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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31,
    2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 000-19627
    BIOLASE TECHNOLOGY,
    INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

87-0442441(State or Other Jurisdiction
    of Incorporation or Organization)

(I.R.S. Employer
    Identification No.)  4 Cromwell
    Irvine, California 92618 (Address of Principal
    Executive Offices, including zip code) (949) 361-1200
 (Registrants telephone
    number, including area code)
    Securities registered pursuant to Section 12(b) of the
    Act:
  (Title of Each Class)

(Name of Each Exchange on Which Registered)Common Stock, par value $0.001 per share

The NASDAQ Stock Market LLC
    (NASDAQ Capital Market)   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
    o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting company
    þ    Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





BIOLASE
    TECHNOLOGY, INC.
  ANNUAL
    REPORT ON
    FORM 10-K
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
  TABLE OF
    CONTENTS
   
 PART IItem 1.


Business


2Executive Officers of the Registrant


20Item 1A.


Risk Factors


21Item 1B.


Unresolved Staff Comments


36Item 2.


Properties


36Item 3.


Legal Proceedings


36Item 4.


(Removed and Reserved)


37PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


37Item 6.


Selected Financial Data


39Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


40Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


52Item 8.


Financial Statements and Supplementary Data


52Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


52Item 9A.


Controls and Procedures


52Item 9B.


Other Information


53PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


53Item 11.


Executive Compensation


53Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


53Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


54Item 14.


Principal Accountant Fees and Services


54PART IVItem 15.


Exhibits and Financial Statement Schedules


54EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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CAUTIONARY
    STATEMENT REGARDING FORWARD LOOKING STATEMENTS
  Form 10-K (Form 10-K),
  Form 10-K.
  Form 10-K
 1




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PART I  Item 1.
    Business  Overview
          Recent
    Developments
  tm tm
  tm
  tm
   2




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Industry
    Background
  General
          Traditional
    Dental Instruments
    High Speed Drills.
  Cutting Instruments.
 3




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Alternative
    Dental Instruments
    Electrosurge Systems.
  Traditional Laser Systems.
  Our
    Solution
          Benefits
    to Dental Professionals
  
    Expanded range of procedures and revenue
    opportunities.  Our laser systems often allow
    general dentists to perform surgical and cosmetic procedures
    that they are unable or unwilling to perform with conventional
    methods, and which would typically be referred to a specialist.
    Our systems allow dentists to perform these procedures easily
    and efficiently, increasing their range of skills, professional
    satisfaction and revenues.
    Additional procedures through increased
    efficiency.  Our systems can shorten and reduce
    the number of patient visits, providing dental professionals
    with the ability to service more patients. For hard tissue
    procedures, our Waterlase systems can reduce the need for
    anesthesia, which enables the dental practitioner to perform
    multiple procedures in one visit. For soft tissue procedures,
    the Waterlase and Diode systems allow tissue to be cut more
    precisely and with minimal bleeding when compared to traditional
    tools such as scalpels and electrosurge systems. We have FDA
    clearance for Deep Pocket Therapy with New
    Attachmenttm

    using the Waterlase System. This is a non-surgical alternative
    treatment for moderate to advanced gum disease, the leading
    cause for tooth loss for adults over 35 and a condition
    impacting more than half of Americans over age 55.
    Additionally, the
    ezlasetm

    system can 4




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be used to quickly perform tooth whitening with our proprietary
    whitening gel and to treat various indications of oral facial
    pain.  
    Increased loyalty and expanded patient
    base.  We believe the improved patient comfort and
    convenience offered by our laser systems will help improve
    patient retention, attract new patients, increase revenue per
    patient, increase demand for elective procedures, increase
    acceptance of treatment plans and increase
    word-of-mouth
    referrals.
    Fewer post-operative complications.  Our laser
    systems can reduce trauma, swelling and general discomfort,
    resulting in fewer post-operative complications that require
    follow up treatment. Our laser systems effectively eliminate the
    risk of cross-contamination that can occur with traditional
    dental tools. Practitioners can devote time to new cases, rather
    than treating complications from prior procedures.  Benefits
    to Patients
  
    Comfort.  The Waterlase system is able to
    perform various types of dental procedures without causing the
    heat, vibration, microfractures, trauma or pressure associated
    with traditional dental methods without cross-contamination. In
    many cases, procedures can be performed without the need for
    local anesthesia.
    Convenience.  Our Waterlase system does not
    require anesthesia in many cases, which allows dental
    practitioners to perform procedures in multiple quadrants of the
    mouth during a single office visit.
    Reduced trauma.  The Waterlase system avoids
    the thermal heat transfer, vibration and grinding action
    associated with high speed dental drills. As a result, our
    systems can result in less trauma, swelling, bleeding and
    general discomfort to the patient.
    Broader range of available procedures.  Due to
    the improved comfort and convenience of our Waterlase system, we
    believe patients are more likely to consider cosmetic and other
    elective procedures that would generally be time consuming and
    uncomfortable, including osseous crown lengthening, periodontal
    surgeries and numerous other procedures.  Business
    Strategy
    
    Increasing awareness of our laser systems among dental
    practitioners and patients.  We intend to further
    penetrate the dental market by educating dental practitioners
    and patients about the clinical benefits of Waterlase Dentistry.
    We plan to increase adoption of our laser systems by dental
    practitioners through our continued participation in key
    industry trade shows, the World Clinical Laser Institute
    (WCLItm)

    (which we founded in 2002), dental schools and other educational
    forums. We also intend to market our systems to dental
    practitioners through our laser specialists and advertising. We
    continue to explore marketing efforts aimed directly at patients.
    Expanding sales and distribution
    capabilities.  In the United States and Canada, we
    distributed our products directly to dental practitioners
    utilizing our direct sales force through August 2006. Since
    September 2006, we began distributing our products in North
    America exclusively through Henry Schein, Inc.
    (HSIC), a leading U.S. dental products and
    equipment distributor. In September 2010, we changed our
    relationship with HSIC from an exclusive to a non-exclusive
    distributor of our products in North America. We also have
    distribution agreements with various other independent
    distributors to distribute our products in the United States,
    Canada, and various countries in Europe and the Pacific Rim. We
    are currently developing an infrastructure to support growth in
    sales and marketing both domestically and internationally. This
    infrastructure includes product management, information 5




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technology systems and personnel to manage our sales force,
    compile sales and marketing data, and better serve our customers
    and distributors.  
    Expanding product platform and
    applications.  We plan to expand our product line
    and product applications by developing product enhancements and
    new laser technologies including new products for use in the
    medical community. To such end we launched the Diolase 10 in
    late 2009 for use in the medical specialty markets, including
    sports medicine, orthopedics, physical therapy and
    chiropractics. We also have an objective to increase our sales
    of disposable products that are used by dental practitioners
    when performing procedures using our dental laser systems.
    Additionally, we may strategically acquire complementary
    products and technologies. In February 2011, we established a
    new division, Biolase Imaging, to design and distribute
    state-of-the-art
    extra-oral and intra-oral dental imaging devices.
    Expanding our Er,Cr:YSGG and 940 nm diode technologies into
    the medical field.  Our Waterlase and Diode
    lasers, their delivery systems and accessories have applications
    in many other medical specialties, including ophthalmology,
    sports medicine, dermatology and podiatry. We currently hold a
    strong patent position which is complemented by our FDA-cleared
    general indications for use of our lasers with ocular tissue.
    Our patented Er,Cr:YSGG Waterlase technology has the potential
    to address presbyopia, as well as several other major medical
    applications in dermatology, cosmetic surgery, orthopedics, and
    urology. We plan to commercialize or license these applications
    in the future. We expect to use distribution partners and other
    strategic partnerships to enter into these markets.
    Continuing high quality manufacturing and customer
    service.  Our manufacturing operations are focused
    on producing high quality dental laser systems. We intend to
    continually develop and refine our manufacturing processes to
    increase production efficiencies and product quality. We provide
    high quality maintenance and support services through our
    support hotline and dedicated staff of in-house and field
    service personnel. Additionally, we maintain a network of
    factory-trained service technicians to provide maintenance and
    support services to customers in Europe and other markets
    outside North America.
    Strengthening and defending technology
    leadership.  We believe our proprietary Waterlase
    system and YSGG Laser technology represent significant
    advancements in dentistry. We will pursue the protection of our
    intellectual property rights by expanding our existing patent
    portfolio in the United States and internationally. We intend to
    strategically enforce our intellectual property rights worldwide.  Products
    Waterlase systems.
 6




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Diode systems. ezlase tm , ezlase ® ezlase ®
  Imaging systems. state-of-the-art
  Medical systems. tm ezlase
 7




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Related
    Accessories and Disposable Products
  ezlase
  Warranties
    Insurance
    Manufacturing
     8




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Marketing
    and Sales
  Marketing
    Dental Practitioners. tm tm three-day
  Chiropractors, Sports Medicine.
  Patients.
  Sales
   9




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Years Ended December 31,2010


2009


2008Waterlase systems

$
8,241



32
%

$
22,950



53
%

$
40,328



62
%Diode systems


7,907



30
%


8,813



20
%


12,040



19
%Consumables and service


8,432



32
%


10,374



24
%


8,642



13
%Products and services


24,580



94
%


42,137



97
%


61,010



94
%License fees and royalty


1,645



6
%


1,210



3
%


3,615



6
%Net revenue

$
26,225



100
%

$
43,347



100
%

$
64,625



100
%       Years Ended December 31,2010


2009


2008United States

$
16,900


$
31,134


$
48,526International


9,325



12,213



16,099$
26,225


$
43,347


$
64,625     Notes to the Consolidated
    Financial Statements Summary of Significant
    Accounting Policies  Segment
    Information
  North American Sales.
    International Sales.
 10




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Customer Concentration.
  Customer Service.
  Financing Options.
  Seasonality.
  Engineering
    and Product Development
       11




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Intellectual
    Property and Proprietary Rights
  soon-to-expire
    Competition
    ezlase ezlase ezlase over-the-counter
   12




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
    acceptance by leading dental practitioners;
    product performance;
    product pricing;
    intellectual property protection;
    customer education and support;
    timing of new product research; and
    development of successful national and international
    distribution channels.      Government
    Regulation
  FDAs
    Premarket Clearance and Approval Requirements
         13




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and/or and/or
       14




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Pervasive
    and Continuing FDA Regulation
    
    product listing and establishment registration, which helps
    facilitate FDA inspections and other regulatory action;
    QSR, which requires manufacturers, including third-party
    manufacturers, to follow stringent design, testing, control,
    documentation and other quality assurance procedures during all
    aspects of the manufacturing process;
    labeling regulations and FDA prohibitions against the promotion
    of products for uncleared, unapproved or off-label uses or
    indications;
    clearance of product modifications that could significantly
    affect safety or efficacy or that would constitute a major
    change in intended use of one of our cleared devices;
    approval of product modifications that affect the safety or
    effectiveness of one of our future approved devices;
    medical device reporting, or MDR, regulations, which require
    that manufacturers comply with FDA requirements to report if
    their device may have caused or contributed to a death or
    serious injury, or has malfunctioned in a way that would likely
    cause or contribute to a death or serious injury if the
    malfunction of the device or a similar device were to recur;
    post-approval restrictions or conditions, including
    post-approval study commitments;
    post-market surveillance regulations, which apply when necessary
    to protect the public health or to provide additional safety and
    effectiveness data for the device;
    the FDAs recall authority, whereby it can ask, or under
    certain conditions order, device manufacturers to recall from
    the market a product that is in violation of governing laws and
    regulations;
    regulations pertaining to voluntary recalls; and
    notices of corrections or removals.        
    fines and civil penalties;
    unanticipated expenditures to address or defend such actions;
    delays in clearing or approving, or refusal to clear or approve,
    our products;
    withdrawal or suspension of approval of our products or those of
    our third-party suppliers by the FDA or other regulatory bodies; 15




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
    product recall or seizure;
    interruption of production;
    operating restrictions;
    injunctions; and
    criminal prosecution.        Foreign
    Regulation
    Other
    U.S. Regulation
   16




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Environmental
    Health
    Care Fraud and Abuse
  § 1320a-7b(b))
  and/or
   17




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non-U.S. jurisdictions non-U.S. officials
    Privacy
    and Security of Health Information
       18




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Third
    Party Reimbursement
           19




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Employees
   Executive
    Officers of the Registrant      Name

Age


PositionFederico Pignatelli


58


Chief Executive Officer, Executive Chairman of the BoardFrederick D. Furry


43


Chief Financial Officer   Federico Pignatelli
  Frederick Furry
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K http://www.biolase.com,
  Additional
    Information
  ® ® ® ® ® ® ® ® tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm tm
 20




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Item 1A.
    Risk
    Factors  The following risk factors and other information included in
    this
    Form 10-K
    should be carefully considered. The risks and uncertainties
    described below are not the only ones we face. Additional risks
    and uncertainties not presently known to us or that we presently
    deem less significant may also impair our business operations.
    If any of the following risks come to fruition, our business,
    financial condition, results of operations and future growth
    prospects would likely be materially and adversely affected. In
    these circumstances, the market price of our stock could
    decline, and you could lose all or part of your investment
  Risks
    Related to Our Revenue
  Although
    our financial statements have been prepared assuming the Company
    will continue as a going concern, our management and our
    independent registered public accounting firm, in its report
    accompanying our consolidated financial statements as of and for
    the year ended December 31, 2010, have questioned our
    ability to continue as a going concern as a result of our
    recurring losses from operations, declining revenues, and
    working capital deficit as of December 31,
    2010.
    The
    recent slowdown of the economy and continued uncertainties in
    the global financial markets may continue to adversely affect
    our liquidity, operating results, and financial
    condition.
    
    reduce demand for our products and services, increase order
    cancellations and result in longer sales cycles and slower
    adoption of new technologies;
    increase the difficulty of collecting accounts receivable and
    the risk of excess and obsolete inventories; 21




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
    increase price competition in our served markets; and
    result in supply interruptions, which could disrupt our ability
    to produce our products.  We
    have experienced net losses for each of the past three years and
    we may experience additional losses and have difficulty
    achieving profitability in the future.
    Our
    business is capital intensive and the failure to obtain capital
    could require that we curtail capital
    expenditures.
      
    our results of operations;
    general economic conditions and conditions in the dental or
    medical device industries;
    the perception of our business in the capital markets;
    our ratio of debt to equity;
    our financial condition;
    our business prospects; and
    interest rates.    Our
    distributors may cancel, reduce or delay orders of our products,
    any of which could reduce our revenue.
   22




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Dentists
    and patients have been hesitant in adopting laser technologies
    and our inability to overcome this hesitancy could limit the
    market acceptance of our products and market
    share.
      Any
    failure in our efforts to train dental practitioners could
    reduce the market acceptance of Waterlase Dentistry and reduce
    our revenues.
   23




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If
    future data proves to be inconsistent with our clinical results
    or if competitors products present more favorable results
    our revenues may decline.
    We
    face competition from other companies, many of which have
    substantially greater resources than we do. If we do not
    successfully develop and commercialize enhanced or new products
    that remain competitive with products or alternative
    technologies developed by others, we could lose revenue
    opportunities and customers and our ability to grow our business
    would be impaired.
      If our
    customers cannot obtain third party reimbursement for their use
    of our products, they may be less inclined to purchase our
    products.
    Our
    ability to use net operating loss carryforwards may be
    limited.
   24




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Risks
    Related to Our Intellectual Property
  If the
    patents that we own or license, or our other intellectual
    property rights, do not adequately protect our technologies, we
    may lose market share to our competitors and be unable to
    operate our business profitably.
    If
    third parties claim that we infringe their intellectual property
    rights, we may incur liabilities and costs and may have to
    redesign or discontinue selling certain products.
   25




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Risks
    Related to Our Regulatory Environment
  Changes
    in government regulation or the inability to obtain or maintain
    necessary government approvals could harm our
    business.
    and/or
    We may
    be subject to or otherwise affected by federal and state health
    care laws, including fraud and abuse and health information
    privacy and security laws, and could face penalties if we are
    unable to fully comply with such regulations, we could face
    substantial penalties.
    
    the Federal Food, Drug, and Cosmetic Act, which regulates the
    design, testing, manufacture, labeling, marketing, distribution
    and sale of prescription drugs and medical devices;
    state food and drug laws;
    the federal Anti-Kickback Law, which prohibits persons from
    knowingly and willfully soliciting, offering, receiving or
    providing remuneration, directly or indirectly, in cash or in
    kind, to induce either; 26




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
    the referral of an individual, or furnishing or arranging for a
    good or service, for which payment may be made under federal
    healthcare programs such as the Medicare and Medicaid Programs;
    Medicare laws and regulations that prescribe the requirements
    for coverage and payment, including the amount of such payment,
    and laws prohibiting false claims for reimbursement under
    Medicare and Medicaid;
    the federal physician self-referral prohibition, commonly known
    as the Stark Law, which, in the absence of a statutory or
    regulatory exception, prohibits the referral of Medicare
    patients by a physician to an entity for the provision of
    designated healthcare services, if the physician or a member of
    the physicians immediate family has a direct or indirect
    financial relationship, including an ownership interest in, or a
    compensation arrangement with, the entity and also prohibits
    that entity from submitting a bill to a federal payor for
    services rendered pursuant to a prohibited referral;
    state laws that prohibit the practice of medicine by
    non-physicians and fee-splitting arrangements between physicians
    and non-physicians, as well as state law equivalents to the
    Anti-Kickback Law and the Stark Law, which may not be limited to
    government reimbursed items; and
    the Federal Trade Commission Act and similar laws regulating
    advertising and consumer protection.    Product
    sales or introductions may be delayed or canceled as a result of
    the FDA regulatory process which could cause our sales or
    profitability to decline.
    
    delay or eliminate commercialization of products we develop;
    require us to perform costly procedures;
    diminish any competitive advantages that we may attain; and
    reduce our ability to collect revenues or royalties. 27




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Our
    products are subject to recall even after receiving FDA
    clearance or approval; any recalls would harm our reputation,
    business and financial results.
    Risks
    Related to Our Business and Operations
  Any
    failure to significantly expand sales of our products with our
    distribution partners will negatively impact our
    business.
    We may
    incur problems in manufacturing our products which may harm our
    business.
   28




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Components
    used in our products are complex in design and any defects may
    not be discovered prior to shipment to customers. These defects
    could result in warranty obligations which would increase our
    cost and may negatively affect our operating results and our
    reputation.
      
    loss of customer orders and delay in order fulfillment;
    damage to our brand reputation;
    increased cost of our warranty program due to product repair or
    replacement;
    inability to attract new customers;
    diversion of resources from our manufacturing and research and
    development departments into our service department; and
    legal action.    Product
    liability claims against us could be costly and could harm our
    reputation.
    Our
    suppliers may not supply us with a sufficient amount of
    materials and components or materials and components of adequate
    quality.
   29




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
    we may not be able to obtain adequate supply in a timely manner
    or on commercially reasonable terms;
    we may have difficulty locating and qualifying alternative
    suppliers for the various components in our laser systems;
    switching components may require product redesign and submission
    to the FDA of a 510(k) application, which could significantly
    delay production;
    our suppliers manufacture products for a range of customers, and
    fluctuations in demand for the products those suppliers
    manufacture for others may affect their ability to deliver
    components for us in a timely manner; and
    our suppliers may encounter financial hardships, be acquired, or
    experience other business events unrelated to our demand for
    components, which could inhibit or prevent their ability to
    fulfill our orders and meet our requirements.    Rapidly
    changing standards and competing technologies could harm demand
    for our products or result in significant additional
    costs.
    We
    have significant international sales and are subject to risks
    associated with operating in international
    markets.
    
    adverse changes in tariffs and trade restrictions;
    political, social and economic instability and increased
    security concerns;
    fluctuations in foreign currency exchange rates; 30




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
    longer collection periods and difficulties in collecting
    receivables from foreign entities;
    exposure to different legal standards;
    transportation delays and difficulties of managing international
    distribution channels;
    reduced protection for our intellectual property in some
    countries;
    difficulties in obtaining domestic and foreign export, import
    and other governmental approvals, permits and licenses and
    compliance with foreign laws;
    the imposition of governmental controls;
    unexpected changes in regulatory or certification requirements;
    difficulties in staffing and managing foreign
    operations; and
    potentially adverse tax consequences and the complexities of
    foreign value-added tax systems.    Fluctuations
    in our revenue and operating results on a quarterly and annual
    basis could cause the market price of our common stock to
    decline.
    
    variation in demand for our products, including seasonality;
    our ability to research, develop, market and sell new products
    and product enhancements in a timely manner;
    our ability to control costs;
    our ability to control quality issues with our products;
    regulatory actions that impact our manufacturing processes;
    the size, timing, rescheduling or cancellation of orders from
    distributors;
    the introduction of new products by competitors;
    the length of and fluctuations in sales cycles;
    the availability and reliability of components used to
    manufacture our products;
    changes in our pricing policies or those of our suppliers and
    competitors, as well as increased price competition in general;
    legal expenses, particularly related to litigation matters; 31




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
    general economic conditions including the availability of credit
    for our existing and potential customer base to finance
    purchases;
    the mix of our domestic and international sales and the risks
    and uncertainties associated with international business;
    costs associated with any future acquisitions of technologies
    and businesses;
    limitations on our ability to use net operating loss
    carry-forwards under the provisions of Internal Revenue Code
    Section 382 and similar state laws;
    developments concerning the protection of our intellectual
    property rights;
    catastrophic events such as hurricanes, floods and earthquakes,
    which can affect our ability to advertise, sell and distribute
    our products, including through national conferences held in
    regions in which these disasters strike; and
    global economic, political and social events, including
    international conflicts and acts of terrorism.  quarter-to-quarter
  The
    recent financial crisis and general slowdown of the economy may
    adversely affect the credit availability and liquidity of our
    customers and suppliers.
    We are
    subject to a variety of litigation in the course of our business
    that could adversely affect our results of operations and
    financial condition.
   32




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Our
    operations are consolidated primarily in one facility. A
    disruption at this facility could result in a prolonged
    interruption of our business and adversely affect our results of
    operation and financial condition.
    If we
    lose the services of our key personnel, or if we are unable to
    attract other key personnel, we may not be able to manage our
    operations or meet our growth objectives.
    Existing
    or future acquisitions of businesses could negatively affect our
    business, financial condition and results of operations if we
    fail to integrate the acquired businesses successfully into our
    existing operations or if we discover previously undisclosed
    liabilities.
    
    difficulties in integrating any acquired companies, personnel,
    products and other assets into our existing business;
    delays in realizing the benefits of the acquired company,
    product or other assets;
    diversion of our managements time and attention from other
    business concerns;
    limited or no direct prior experience in new markets or
    countries we may enter;
    higher costs of integration than we anticipated; and
    Difficulties in retaining key employees of the acquired business
    who are necessary to manage these acquisitions.   33




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##### Table of Contents



If we
    fail to comply with the reporting obligations of the Securities
    Exchange Act of 1934 and Section 404 of the Sarbanes-Oxley
    Act of 2002, or if we fail to maintain adequate internal control
    over financial reporting, our business, results of operations
    and financial condition and investors confidence in us
    could be materially and adversely affected.
      Climate
    change initiatives may materially and adversely affect our
    business.
  on-site
  Risks
    Related to Our Stock
  Our
    stock price may be volatile, and your investment in our stock
    could suffer a decline in value.
    
    actual or anticipated fluctuations in our operating results or
    future prospects; 34




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##### Table of Contents




    our announcements or our competitors announcements of new
    products;
    the publics reaction to our press releases, our other
    public announcements and our filings with the SEC;
    strategic actions by us or our competitors, such as acquisitions
    or restructurings;
    new laws or regulations or new interpretations of existing laws
    or regulations applicable to our business;
    changes in accounting standards, policies, guidance,
    interpretations or principles;
    changes in our growth rates or our competitors growth
    rates;
    developments regarding our patents or proprietary rights or
    those of our competitors;
    our inability to raise additional capital as needed;
    concerns or allegations as to the safety or efficacy of our
    products;
    changes in financial markets or general economic conditions;
    sales of stock by us or members of our management team, our
    Board of Directors or certain institutional
    stockholders; and
    changes in stock market analyst recommendations or earnings
    estimates regarding our stock, other comparable companies or our
    industry generally.  You
    could experience substantial dilution of your investment as a
    result of subsequent exercises of our outstanding convertible
    securities or the future grant of equity by us.
  Form S-3,
  Our
    corporate documents and Delaware law contain provisions that
    could discourage, delay or prevent a change in control of our
    company and reduce the market price of our stock.
     35




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##### Table of Contents



We may
    elect to not declare cash dividends on our stock, or may elect
    to only pay dividends on an infrequent or irregular basis, and
    any return on your investment may be limited to the value of our
    stock.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings   36




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##### Table of Contents



Item 4.
    (Removed
    and Reserved) PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market
    Information
      Price RangeHigh

LowFiscal 2010:First Quarter

$
2.46


$
1.55Second Quarter

$
2.06


$
1.37Third Quarter

$
1.55


$
0.61Fourth Quarter

$
1.99


$
1.17Fiscal 2009:First Quarter

$
1.25


$
0.30Second Quarter

$
1.80


$
0.85Third Quarter

$
2.88


$
1.56Fourth Quarter

$
2.30


$
1.68       Dividend
    Policy
   37




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##### Table of Contents



Stock
    Performance Graph
      COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Biolase Technology, Inc., The NASDAQ Composite Index
    And The NASDAQ Medical Equipment Index
  
  ASSUMES
    $100 INVESTED ON DECEMBER 31, 2005
    ASSUMES DIVIDENDS REINVESTED
    FISCAL YEAR ENDED DECEMBER 31, 2010
  Years Ended December 31,2005

2006

2007

2008

2009

2010Biolase Technology, Inc.

$
100.00


$
109.51


$
29.54


$
18.65


$
23.90


$
21.90NASDAQ Composite Index


100.00



111.74



124.67



73.77



107.12



125.93NASDAQ Medical Equipment


100.00



101.15



135.54



72.03



101.17



106.70  38




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K,
  Years Ended December 31,2010


2009


2008


2007


2006(In thousands, except per share data)Consolidated Statements of Operations Data:Net revenue

$
26,225


$
43,347


$
64,625


$
66,889


$
69,700Cost of revenue(1)


17,400



23,285



31,963



32,364



33,211Gross profit


8,825



20,062



32,662



34,525



36,489Other income, net


















6Operating expenses:Sales and marketing(1)


9,938



11,041



22,040



26,648



24,400General and administrative(1)


6,557



7,835



12,006



10,941



11,709Engineering and development(1)


3,790



4,146



5,580



5,104



4,876Patent infringement legal settlement(2)










1,232







348Impairment of intangible asset(3)










232







Impairment of property, plant and equipment(4)


35







355







Restructuring charge(5)














802



Total operating expenses


20,320



23,022



41,445



43,495



41,333Loss from operations


(11,495
)


(2,960
)


(8,783
)


(8,970
)


(4,838
)Non-operating (loss) income


(468
)


123



(225
)


1,853



311Loss before income taxes


(11,963
)


(2,837
)


(9,008
)


(7,117
)


(4,527
)Income tax provision


58



119



121



163



162Net loss as reported

$
(12,021
)

$
(2,956
)

$
(9,129
)

$
(7,280
)

$
(4,689
)Net loss from operations per share:Basic

$
(0.47
)

$
(0.12
)

$
(0.36
)

$
(0.38
)

$
(0.21
)Diluted

$
(0.47
)

$
(0.12
)

$
(0.36
)

$
(0.38
)

$
(0.21
)Net loss per share:Basic

$
(0.49
)

$
(0.12
)

$
(0.38
)

$
(0.31
)

$
(0.20
)Diluted

$
(0.49
)

$
(0.12
)

$
(0.38
)

$
(0.31
)

$
(0.20
)Shares used in computing net loss per share:Basic


24,450



24,282



24,178



23,853



23,472Diluted


24,450



24,282



24,178



23,853



23,472Consolidated Balance Sheet Data*:Working (deficit) capital

$
(5,717
)

$
5,250


$
5,023


$
10,993


$
17,299Total assets

$
18,147


$
22,177


$
35,708


$
44,308


$
48,578Long-term liabilities

$
1,534


$
3,086


$
2,547


$
3,034


$
4,922Stockholders (deficit) equity

$
(3,047
)

$
7,929


$
9,390


$
16,491


$
21,966     (1)
    
    2010, 2009 and 2008 include $727,000, $1.4 million and
    $1.7 million, respectively, in total compensation cost
    related to stock options classified in cost of revenue, sales
    and marketing, general and administrative, and engineering and
    development expenses.(2)
    
    Relates to cash payment made in connection with the intellectual
    property portfolio of Diodem, LLC, (Diodem), which
    was acquired in January 2005 as part of a litigation settlement
    with the owners of Diodem.(3)
    
    Refer to Note 4 in the notes to the Consolidated Financial
    Statements.(4)
    
    Refer to Note 3 in the notes to the Consolidated Financial
    Statements.(5)
    
    In connection with the terminations resulting from our 2007
    restructuring, we recognized $802,000 of severance and severance
    related costs.*
    
    Certain amounts have been reclassified to conform to current
    year presentation. 39




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion or our results of operations and
    financial condition should be read together with the financial
    statements, related notes and other financial information
    included in this
    Form 10-K.
    The following discussion may contain predictions, estimates and
    other forward-looking statements that involve a number of risks
    and uncertainties, including those discussed under
    Item 1A-Risk
    Factors and elsewhere in this
    Form 10-K.
    These risks could cause our actual results to differ materially
    from any future performance suggested below.
  Overview
             40




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##### Table of Contents



Critical
    Accounting Policies
    Revenue Recognition.
   41




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##### Table of Contents



Accounting for Stock-Based Payments.
  Valuation of Accounts Receivable.
  Valuation of Inventory. first-in,
  Valuation of Long-Lived Assets.
 42




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##### Table of Contents



Valuation of Goodwill and Other Intangible
    Assets.
  Warranty Cost.
  Litigation and Other Contingencies.
  Income Taxes. paid-in-capital.
 43




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##### Table of Contents



Results
    of Operations
    Years Ended December 31,2010


2009


2008Net revenue


100.0
%


100.0
%


100.0
%Cost of revenue


66.3



53.7



49.5Gross profit


33.7



46.3



50.5Operating expenses:Sales and marketing


37.9



25.5



34.1General and administrative


25.0



18.0



18.5Engineering and development


14.5



9.6



8.6Patent infringement legal settlement










1.9Impairment of intangible asset










0.4Impairment of property, plant and equipment


0.1







0.6Total operating expenses


77.5



53.1



64.1Loss from operations


(43.8
)


(6.8
)


(13.6
)Non-operating (loss) income, net


(1.8
)


0.3



(0.3
)Loss before income taxes


(45.6
)


(6.5
)


(13.9
)Income tax provision


0.2



0.3



0.2Net loss


(45.8
)%


(6.8
)%


(14.1
)%     Years Ended December 31,2010


2009





2008Waterlase systems

$
8,241



32
%

$
22,950



53
%

$
40,328



62
%Diode systems


7,907



30
%


8,813



20
%


12,040



19
%Consumables and service


8,432



32
%


10,374



24
%


8,642



13
%Products and services


24,580



94
%


42,137



97
%


61,010



94
%License fees and royalty


1,645



6
%


1,210



3
%


3,615



6
%Net revenue

$
26,225



100
%

$
43,347



100
%

$
64,625



100
%   Year
    Ended December 31, 2010 Compared With Year Ended
    December 31, 2009
  Net Revenue.
   44




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##### Table of Contents



Turbo tm
  Gross Profit.
  Operating Expenses.
  Sales and Marketing Expense.
  General and Administrative Expense.
  Engineering and Development
    Expense.
  Non-Operating
    Income (Loss)
  Gain (Loss) on Foreign Currency
    Transactions.
 45




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##### Table of Contents



Interest Income.
  Interest Expense.
  Provision for Income Taxes.
  Year
    Ended December 31, 2009 Compared With Year Ended
    December 31, 2008
  Net Revenue.
    Turbo tm
  Gross Profit.
  Operating Expenses.
  Sales and Marketing Expense.
 46




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##### Table of Contents



General and Administrative Expense.
  Engineering and Development
    Expense.
  Non-Operating
    Income (Loss)
  Gain (Loss) on Foreign Currency
    Transactions.
  Interest Income.
  Interest Expense.
  Provision for Income Taxes.
  Selected
    Quarterly Financial Data
    March 31,

June 30,

September 30,

December 31,(In thousands, except per share data)2010Net revenue

$
4,395


$
5,892


$
6,220


$
9,718Gross profit

$
270


$
1,931


$
1,791


$
4,833(Loss) Income from operations(1)

$
(5,308
)

$
(4,122
)

$
(2,424
)

$
359Net (loss) income(1)

$
(5,305
)

$
(4,164
)

$
(2,726
)

$
174Net (loss) income per share(3):Basic

$
(0.22
)

$
(0.17
)

$
(0.11
)

$
0.01Diluted

$
(0.22
)

$
(0.17
)

$
(0.11
)

$
0.01 47




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##### Table of Contents



March 31,

June 30,

September 30,

December 31,(In thousands, except per share data)2009Net revenue

$
6,594


$
14,317


$
12,085


$
10,351Gross profit

$
1,768


$
8,098


$
5,833


$
4,363(Loss) income from operations(2)

$
(4,929
)

$
2,474


$
904


$
(1,409
)Net (loss) income(2)

$
(4,676
)

$
2,330


$
859


$
(1,469
)Net (loss) income per share(3):Basic

$
(0.19
)

$
0.10


$
0.04


$
(0.06
)Diluted

$
(0.19
)

$
0.10


$
0.04


$
(0.06
)     (1)
    
    (Loss) income from operations and net (loss) income includes
    $206,000, $180,000, $113,000 and $228,000 in compensation cost
    related to stock options for the quarters ended March 31,
    June 30, September 30, and December 31, 2010,
    respectively.(2)
    
    (Loss) income from operations and net (loss) income includes
    $468,000, $317,000, $318,000 and $254,000 in compensation cost
    related to stock options for the quarters ended March 31,
    June 30, September 30, and December 31, 2009,
    respectively.(3)
    
    Net (loss) income per share calculations for each of the
    quarters were based upon the weighted average number of shares
    outstanding for each period, and the sum of the quarters may not
    necessarily be equal to the full year net (loss) income per
    common share amount.  Liquidity
    and Capital Resources
         48




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##### Table of Contents



Form S-3 Form S-3
  and/or
   49




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##### Table of Contents



Concentration
    of Credit Risk
    Receivables
    and Allowance for Doubtful Accounts
    Consolidated
    Cash Flows
    Years Ended December 31,2010


2009


2008Net cash provided by (used in):Operating activities

$
(3,812
)

$
(2,571
)

$
(4,520
)Investing activities


(237
)


(444
)


(981
)Financing activities


2,814



(5,231
)


2,384Effect of exchange rates on cash


(46
)


(14
)


(214
)Net change in cash and cash equivalents

$
(1,281
)

$
(8,260
)

$
(3,331
)   Fiscal
    2010 Compared to Fiscal 2009
         50




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##### Table of Contents



Fiscal
    2009 Compared Fiscal 2008
        Contractual
    Obligations
      Less Than


1 to 3


3 to 5


More Than1 Year


Years


Years


5 years


TotalOperating lease obligations

$
409


$
1,018


$
755


$



$
2,182License agreement


25















25Purchase obligations


229



455



455



3,341



4,480Other long-term liabilities


342















342Total

$
1,005


$
1,473


$
1,210


$
3,341


$
7.029     and/or
  Seasonality
   51




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##### Table of Contents



Recent
    Accounting Pronouncements
  Notes to the Consolidated Financial
    Statements Summary of Significant Accounting
    Policies
  Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk      Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K, Page F-1 Form 10-K, Form 10-K
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
 52




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##### Table of Contents



Internal Control  Integrated
    Framework
    Changes
    in Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
  Form 10-K.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   53




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K
  (1)
    Financial
    Statements:  PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2010 and 2009


F-3Consolidated Statements of Operations for the
    years ended December 31, 2010, 2009 and 2008


F-4Consolidated Statements of Stockholders
    Equity (Deficit) for the years ended December 31, 2010,
    2009 and 2008


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2010, 2009 and 2008


F-6Notes to Consolidated Financial Statements


F-7   (2)
    Financial
    Statement Schedule:  Schedule II  Consolidated Valuation and
    Qualifying Accounts and Reserves for the years ended
    December 31, 2010, 2009 and 2008

S-1     (3)
    Exhibits:  Form 10-K
  ExhibitNumber

Description3
.1

Restated Certificate of Incorporation, as amended. (Filed with
    Registrants Amendment No. 1 to Registration Statement
    on
    Form S-1
    filed December 23, 2005 and incorporated herein by
    reference.)3
.2

Fifth Amended and Restated Bylaws of Biolase Technology, Inc.,
    adopted July 2, 1010. (Filed with Registrants Current
    Report on
    Form 8-K
    filed on July 7, 2010 and incorporated herein by reference.)4
.1

Certificate of Designations, Preferences and Rights of 6%
    Redeemable Cumulative Convertible Preferred Stock of Biolase
    Technology, Inc. (Included in Exhibit 3.1.)4
.2

Certificate of Designations, Preferences and Rights of
    Series A 6% Redeemable Cumulative Convertible Preferred
    Stock of Biolase Technology, Inc. (Included in Exhibit 3.1.)4
.3

Certificate of Correction Filed to Correct a Certain Error in
    the Certificate of Designation of Biolase Technology, Inc. filed
    in the Office of Secretary of State of Delaware on July 25,
    1996. (Included in Exhibit 3.1.) 54




---



##### Table of Contents



ExhibitNumber

Description4
.4

Certificate of Designations of Series B Junior
    Participating Cumulative Preferred Stock of Biolase Technology,
    Inc. (Included in Exhibit 3.1.)4
.5

Rights Agreement, dated as of December 31, 1998, between
    the Registrant and U.S. Stock Transfer Corporation. (Filed with
    Registrants Registration Statement on
    Form 8-A
    filed December 29, 1998 and incorporated herein by
    reference.)4
.6

Amendment to Rights Agreement, dated December 19, 2008,
    between the Registrant and Computershare Trust Company,
    N.A. (Filed with the Registrants Current Report on
    Form 8-K
    filed on December 22, 2008 and incorporated herein by
    reference.)4
.7

Specimen of common stock certificate. (Filed with
    Registrants Registration Statement on
    Form S-3
    filed June 3, 2002 and incorporated herein by reference.)4
.8

Warrant to Purchase 81,037 shares of Common Stock of the
    Registrant issued to Diodem, LLC dated January 24, 2005.
    (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed September 30, 2005 and incorporated herein by
    reference.)4
.9

Warrant to Purchase 71,186 shares of Common Stock of the
    Registrant issued to MidCap Financial, LLC, dated May 27,
    2010 (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed August 16, 2010 and incorporated herein by reference.)4
.10

Warrant to Purchase 30,508 shares of Common Stock of the
    Registrant issued to Silicon Valley Bank, dated May 27,
    2010 (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed August 16, 2010 and incorporated herein by reference.)4
.11

Registration Rights Agreement between the Registrant and Diodem,
    LLC dated January 24, 2005. (Filed with Registrants
    Quarterly Report on
    Form 10-Q
    filed September 30, 2005 and incorporated herein by
    reference.)4
.12

Form of Warrant to Purchase Common Stock of Registrant issued to
    assignees of Diodem, LLC dated August 15, 2005. (Filed with
    Registrants Quarterly Report on
    Form 10-Q
    filed November 9, 2005 and incorporated herein by
    reference.)4
.13

Amendment No. 1 to Warrant, dated September 23, 2010,
    in favor of MidCap Financial, LLC. (Filed with Registrants
    Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)4
.14

Amendment No. 1 to Warrant, dated September 23, 2010,
    in favor of SVB Financial Group. (Filed with Registrants
    Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)10
.1

Form of Purchase Order Term and Conditions relating to domestic
    sales (effective for sales after August 4, 2003). (Filed
    with Amendment No. 2 to Registrants Annual Report on
    Form 10-K/A
    filed December 16, 2003 and incorporated herein by
    reference.)10
.2*

1990 Stock Option Plan. (Filed with Registrants
    Registration Statement on
    Form S-1
    filed October 9, 1992 and incorporated herein by reference.)10
.3*

Form of Stock Option Agreement under the 1990 Stock Option Plan.
    (Filed with Registrants Annual Report on
    Form 10-K
    filed July 19, 2005 and incorporated herein by reference.)10
.4*

1993 Stock Option Plan. (Filed with Registrants Annual
    Report on
    Form 10-K
    filed April 14, 1994 and incorporated herein by reference.)10
.5*

Form of Stock Option Agreement under the 1993 Stock Option Plan.
    (Filed with Registrants Annual Report on
    Form 10-K
    filed April 14, 1994 and incorporated herein by reference.)10
.6*

2002 Stock Incentive Plan. (Filed with Registrants
    definitive Proxy Statement filed October 17, 2005 and
    incorporated herein by reference.)10
.7*

Form of Stock Option Agreement under the 2002 Stock Option Plan.
    (Filed with Registrants Annual Report on
    Form 10-K
    filed July 19, 2005 and incorporated herein by reference.)10
.8

2002 Stock Incentive Plan (Filed with Registrants
    definitive Proxy Statement filed April 10, 2007 and
    incorporated herein by reference.) 55




---



##### Table of Contents



ExhibitNumber

Description10
.9

Definitive Asset Purchase Agreement dated January 24, 2005
    by and among Diodem, LLC, BL Acquisition II, Inc. and the
    Registrant (Filed on January 28, 2005 with
    Registrants Current Report on
    Form 8-K
    and incorporated herein by reference.)10
.10

License Agreement between SurgiLight, Inc. and the Registrant
    dated February 3, 2005 (Filed on March 18, 2005 with
    Registrants Current Report on
    Form 8-K
    and incorporated herein by reference.)10
.11*

Form of Indemnification Agreement between Registrant and its
    officers and directors. (Filed with Registrants Quarterly
    Report on
    Form 10-Q
    filed November 9, 2005 and incorporated herein by
    reference.)10
.12*

Form of Resale Restriction Agreement, dated December 16,
    2005 between Registrant and certain key employees and officers.
    (Filed on December 22, 2005 with Registrants Current
    Report of
    Form 8-K
    and incorporated herein by reference.)10
.13*

Resale Restriction Agreement, dated as of December 29, 2005
    between Registrant and Jeffrey W. Jones. (Filed on
    January 10, 2006 with Registrants Current Report of
    Form 8-K
    and incorporated herein by reference.)10
.14

Lease, dated January 10, 2006 between Registrant and The
    Irvine Company LLC. (Filed on January 17, 2006 with
    Registrants Current Report on
    Form 8-K
    and incorporated herein by reference.)10
.15

Letter Agreement, dated June 28, 2006, by and between The
    Procter & Gamble Company and the Registrant. (Filed
    with Registrants Quarterly Report on
    Form 10-Q
    filed August 9, 2006 and incorporated herein by reference.)10
.16

License Agreement, dated January 24, 2007, by and between
    The Procter & Gamble Company and the Registrant.
    (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed May 10, 2007 and incorporated herein by reference.)10
.17

Loan and Security Agreement, dated May 27, 2010, by and
    among the Registrant, MidCap Financial, LLC, and Silicon Valley
    Bank (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed August 16, 2010 and incorporated herein by reference.)10
.18

Secured Promissory Note, dated May 27, 2010, in favor of
    MidCap Financial, LLC (Filed with Registrants Quarterly
    Report on
    Form 10-Q
    filed August 16, 2010 and incorporated herein by reference.)10
.19

Secured Promissory Note, dated May 27, 2010, in favor of
    Silicon Valley Bank (Filed with Registrants Quarterly
    Report on
    Form 10-Q
    filed August 16, 2010 and incorporated herein by reference.)10
.20

Intellectual Property Security Agreement, dated May 27,
    2010, by and between the Registrant and MidCap Financial, LLC
    (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed August 16, 2010 and incorporated herein by reference.)10
.21

Settlement Agreement, dated July 1, 2010, by and among
    Federico Pignatelli and the directors and officers named
    therein. (Filed July 7, 2010 with Registrants Current
    Report on
    Form 8-K
    and incorporated herein by reference.)10
.22

Settlement Agreement, dated July 6, 2010, by and between
    the Registrant and Brett Scott. (Filed with Registrants
    Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)10
.23

Separation and General Release Agreement, dated August 24,
    2010, by and between the Registrant and David M. Mulder (Filed
    with Registrants Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)10
.24

Distribution and Supply Agreement, dated September 23,
    2010, by and between the Registrant and Henry Schein, Inc.
    (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)10
.25

Amended and Restated Security Agreement, dated
    September 23, 2010, by and between Biolase Technology, Inc.
    and Henry Schein, Inc. (Filed with Registrants Quarterly
    Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)10
.26

Forbearance Agreement, dated August 16, 2010, by and among
    Biolase Technology, Inc., MidCap Financial LLC, and Silicon
    Valley Bank. (Filed with Registrants Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.) 56




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##### Table of Contents



ExhibitNumber

Description10
.27

Waiver and Amendment No. 1 to Loan and Security Agreement,
    dated September 23, 2010, by and among Biolase Technology,
    Inc., MidCap Funding III, LLC, and Silicon Valley Bank (Filed
    with Registrants Quarterly Report on
    Form 10-Q
    filed November 3, 2010 and incorporated herein by
    reference.)10
.28

Controlled Equity Offering Agreement, dated December 23,
    2010, by and between Biolase Technology, Inc. and Ascendiant
    Securities, LLC (Filed December 23, 2010 with
    Registrants Current Report on
    Form 8-K
    and incorporated herein by reference.)14
.1

Biolase Technology, Inc. Code of Business Conduct and Ethics.
    (Filed with the Registrants Definitive Proxy Statement for
    its 2004 Annual Meeting of Stockholders filed May 10, 2004
    and incorporated herein by reference.)21
.1

Subsidiaries of the Registrant23
.1

Consent of Independent Registered Public Accounting Firm, BDO
    USA, LLP24
.1

Power of Attorney (included in Signature page).31
.1

Certification of CEO pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a),
    promulgated under the Securities Exchange Act of 1934, as
    amended.31
.2

Certification of CFO pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a),
    promulgated under the Securities Exchange Act of 1934, as
    amended.32
.1

Certification of CEO pursuant to 18 U.S.C.
    Section 1350 as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.32
.2

Certification of CFO pursuant to 18 U.S.C.
    Section 1350 as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.     
    
    Confidential treatment was granted for certain confidential
    portions of this exhibit pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934. In accordance with
    Rule 24b-2,
    these confidential portions were omitted from this exhibit and
    filed separately with the Securities and Exchange Commission.*
    
    Management contract or compensatory plan or arrangement. 57




---



##### Table of Contents



SIGNATURES
  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, the Registrant has duly
    caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
  Biolase
    Technology, Inc.,
    Dated: March 23, 2011



By: /s/  FEDERICO
    PIGNATELLIFederico Pignatelli
    Chief Executive OfficerDated: March 23, 2011



By: /s/  FREDERICK
    D. FURRYFrederick D. Furry
    Chief Financial Officer     Signature

Title

Date/s/  FEDERICO
    PIGNATELLIFederico
    Pignatelli

Chairman of the Board and 
    Chief Executive Officer, 
    (Principal Executive Officer)

March 23, 2011/s/  FREDERICK
    D. FURRYFrederick
    D. Furry

Chief Financial Officer, 
    (Principal Financial Officer and 
    Principal Accounting Officer)

March 23, 2011/s/  DR. ALEX
    K. ARROWDr. Alex
    K. Arrow

Director

March 23, 2011/s/  DR. NORMAN
    J. NEMOYDr. Norman
    J. Nemoy

Director

March 23, 2011/s/  GREGORY
    E. LICHTWARDTGregory
    E. Lichtwardt

Director

March 23, 2011  58




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  Index to
    Consolidated Financial Statements and Schedule
  PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2010 and 2009


F-3Consolidated Statements of Operations for the
    years ended December 31, 2010, 2009 and 2008


F-4Consolidated Statements of Stockholders
    Equity (Deficit) for the years ended December 31, 2010,
    2009 and 2008


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2010, 2009 and 2008


F-6Notes to Consolidated Financial Statements


F-7SCHEDULE Schedule numbered in accordance with Rule 5.04 of
    Regulation S-X:II. Consolidated Valuation and Qualifying
    Accounts and Reserves


S-1    F-1




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm                   F-2




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.CONSOLIDATED BALANCE SHEETS (in
    thousands, except per share data)
  December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
1,694


$
2,975Accounts receivable, less allowance of $311 and $421 in 2010 and
    2009, respectively


3,331



4,229Inventory, net


6,987



7,861Prepaid expenses and other current assets


1,355



1,347Assets held for sale


576



Total current assets


13,943



16,412Property, plant and equipment, net


755



2,180Intangible assets, net


342



472Goodwill


2,926



2,926Deferred tax asset


11



17Other assets


170



170Total assets

$
18,147


$
22,177LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Term loan payable, current portion

$
2,622


$
Accounts payable


4,029



4,887Accrued liabilities


5,482



5,152Customer deposits


5,877



Deferred revenue, current portion


1,650



1,123Total current liabilities


19,660



11,162Deferred tax liabilities


544



473Warranty accrual, long term


424



448Deferred revenue, long-term


433



1,975Other liabilities, long-term


133



190Total liabilities


21,194



14,248Commitments and contingenciesStockholders equity (deficit):Preferred stock, par value $0.001; 1,000 shares authorized,
    no shares issued and outstanding






Common stock, par value $0.001; 50,000 shares authorized,
    26,565 and 26,340 shares issued in 2010 and 2009,
    respectively; 24,601 shares and 24,376 shares
    outstanding in 2010 and 2009, respectively


27



27Additional paid-in capital


118,375



117,228Accumulated other comprehensive loss


(324
)


(222
)Accumulated deficit


(104,726
)


(92,705
)13,352



24,328Treasury stock (cost of 1,964 shares repurchased)


(16,399
)


(16,399
)Total stockholders equity (deficit)


(3,047
)


7,929Total liabilities and stockholders equity (deficit)

$
18,147


$
22,177    F-3




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF OPERATIONS (in
    thousands, except per share data)
  Years Ended December 31,2010


2009


2008Products and services revenues

$
24,580


$
42,137


$
61,010License fees and royalty revenue


1,645



1,210



3,615Net revenue


26,225



43,347



64,625Cost of revenue


17,400



23,285



31,963Gross profit


8,825



20,062



32,662Operating expenses:Sales and marketing


9,938



11,041



22,040General and administrative


6,557



7,835



12,006Engineering and development


3,790



4,146



5,580Patent infringement legal settlement










1,232Impairment of intangible asset










232Impairment of property, plant and equipment


35







355Total operating expenses


20,320



23,022



41,445Loss from operations


(11,495
)


(2,960
)


(8,783
)(Loss) gain on foreign currency transactions


(110
)


176



(186
)Interest income


3



5



118Interest expense


(361
)


(58
)


(157
)Non-operating (loss) income, net


(468
)


123



(225
)Loss before income tax provision


(11,963
)


(2,837
)


(9,008
)Income tax provision


58



119



121Net loss

$
(12,021
)

$
(2,956
)

$
(9,129
)Net loss per share:Basic

$
(0.49
)

$
(0.12
)

$
(0.38
)Diluted

$
(0.49
)

$
(0.12
)

$
(0.38
)Shares used in the calculation of net loss per share:Basic


24,450



24,282



24,178Diluted


24,450



24,282



24,178    F-4




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY (DEFICIT) (in
    thousands)
  Common Stock








Accumulatedand Additional








Other





TotalPaid-in Capital


Treasury Stock


Comprehensive


Accumulated


Stockholders


ComprehensiveShares


Amount


Shares


Amount


Gain (Loss)


Deficit


Equity (Deficit)


LossBalances, January 1, 2008


25,967


$
113,456



(1,964
)

$
(16,399
)

$
54


$
(80,620
)

$
16,491


$
(7,334
)Exercise of stock options


241



532



















532Stock-based compensation






1,735



















1,735Other compensation






2



















2Net loss






















(9,129
)


(9,129
)


(9,129
)Foreign currency translation adjustment


















(241
)






(241
)


(241
)Balances, December 31, 2008


26,208



115,725



(1,964
)


(16,399
)


(187
)


(89,749
)


9,390


$
(9,370
)Exercise of stock options, net


132



173



















173Stock-based compensation






1,357



















1,357Net loss






















(2,956
)


(2,956
)


(2,956
)Foreign currency translation adjustment


















(35
)






(35
)


(35
)Balances, December 31, 2009


26,340



117,255



(1,964
)


(16,399
)


(222
)


(92,705
)


7,929


$
(2,991
)Exercise of stock options, net


225



199



















199Stock-based compensation






727



















727Non-employee equity instruments






19



















19Other compensation






87



















87Warrants issued in connection with loan payable






115



















115Net loss






















(12,021
)


(12,021
)


(12,021
)Foreign currency translation adjustment


















(102
)






(102
)


(102
)Balances, December 31, 2010


26,565


$
118,402



(1,964
)

$
(16,399
)

$
(324
)

$
(104,726
)

$
(3,047
)

$
(12,123
)    F-5




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (in
    thousands)
  Years Ended December 31,2010


2009


2008Cash Flows From Operating Activities:Net loss

$
(12,021
)

$
(2,956
)

$
(9,129
)Adjustments to reconcile net loss to net cash and cash
    equivalents used in operating activities:Depreciation and amortization


1,070



1,444



1,909Loss on disposal of assets, net


55



13



10Impairment of property, plant and equipment


35







387Recovery of bad debts


(80
)


(62
)


(68
)Impairment of intangible asset










232Recovery of sales returns allowance






(77
)


Provision for inventory excess and obsolescence






1,090



104Amortization of discounts on term loan payable


37







Amortization of debt issuance costs


70







Stock-based compensation


727



1,357



1,735Non-employee equity instruments


19







Other non-cash compensation


87







2Deferred income taxes


77



109



52Changes in operating assets and liabilities:Accounts receivable


978



(290
)


7,457Inventory


874



3,459



(4,887
)Prepaid expenses and other current assets


173



(275
)


167Customer deposits


5,877







Accounts payable and accrued liabilities


(774
)


(4,990
)


888Deferred revenue


(1,016
)


(1,393
)


(3,379
)Net cash and cash equivalents used in operating activities


(3,812
)


(2,571
)


(4,520
)Cash Flows From Investing Activities:Additions to property, plant and equipment


(237
)


(449
)


(981
)Proceeds from sale of property, plant and equipment






5



Net cash and cash equivalents used in investing activities


(237
)


(444
)


(981
)Cash Flows From Financing Activities:Borrowings under a line of credit






4,293



29,340Payments under a line of credit






(9,697
)


(27,488
)Proceeds from term loan payable


3,000







Payments under term loan payable


(300
)






Payment of debt issuance costs


(85
)






Proceeds from exercise of stock options and warrants


199



173



532Net cash and cash equivalents provided by (used in) financing
    activities


2,814



(5,231
)


2,384Effect of exchange rate changes


(46
)


(14
)


(214
)Decrease in cash and cash equivalents


(1,281
)


(8,260
)


(3,331
)Cash and cash equivalents, beginning of year


2,975



11,235



14,566Cash and cash equivalents, end of year

$
1,694


$
2,975


$
11,235Supplemental cash flow disclosure:Cash activity during the year for:Interest paid

$
236


$
58


$
157Income taxes paid (refunded)

$
(96
)

$
34


$
208    F-6




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENT
  NOTE 1  BASIS
    OF PRESENTATION
  The
    Company
    Basis
    of Presentation
    Use of
    Estimates
    Fair
    Value of Financial Instruments
    Liquidity
    and Managements Plans
     F-7




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
        Form S-3 Form S-3
  and/or
     F-8




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
      NOTE 2  SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES
  Cash
    and Cash Equivalents
    Accounts
    Receivable
    Inventory
  first-in,
 F-9




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
  Property,
    Plant and Equipment
      Building

30 yearsLeasehold improvements

3 to 5 yearsEquipment and computers

3 to 5 yearsFurniture and fixtures

5 years     Goodwill
    and Other Intangible Assets
      Long-Lived
    Assets
   F-10




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    Other
    Comprehensive (Loss) Income
    Foreign
    Currency Translation and Transactions
  end-of-period
  Revenue
    Recognition
       F-11




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
          Provision
    for Warranty Expense
      Years Ended December 31,2010


2009


2008Initial warranty accrual, beginning balance

$
2,235


$
2,612


$
1,987Provision for estimated warranty cost


3,126



2,820



4,752Warranty expenditures


(2,636
)


(3,197
)


(4,127
)Initial warranty accrual, ending balance


2,725



2,235



2,612Total warranty accrual, long term


424



448



313Total warranty accrual, current portion

$
2,301


$
1,787


$
2,299  F-12




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
  Shipping
    and Handling Costs and Revenues
    Advertising
    Costs
    Engineering
    and Development
    Income
    Taxes
      Stock-Based
    Compensation
    Years Ended December 31,2010


2009


2008Cost of revenue

$
41


$
137


$
167Sales and marketing


193



397



473General and administrative


407



664



932Engineering and development


86



159



163$
727


$
1,357


$
1,735    F-13




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
      2010

2009

2008Expected term (years)


4.54



4.97



5.10Volatility


91
%


84
%


68
%Annual dividend per share

$
0.00


$
0.00


$
0.00Risk-free interest rate


1.94
%


2.03
%


2.80
%   Net
    Loss Per Share  Basic and Diluted
      Recent
    Accounting Pronouncements
      Newly
    Adopted Accounting Standards
   F-14




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    and/or
  Accounting
    Standards not yet Adopted
      NOTE 3  SUPPLEMENTARY
    BALANCE SHEET INFORMATION
  December 31,ACCOUNTS RECEIVABLE (in thousands):

2010


2009Components of accounts receivable, net of allowances are as
    follows:Trade

$
3,139


$
4,024Royalties


30



19World Clinical Laser Institute co-sponsorship






54Training and service receivable






43Other


162



89Total receivables

$
3,331


$
4,229  F-15




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##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    ChargesBalance at

(Reversals)

Write-offs

Balance atBeginning

to Cost

and

End ofof Year

or Expenses

Returns

YearYear Ended December 31, 2008Allowance for doubtful accounts

$
1,033



(68
)


(439
)

$
526Allowance for sales returns

$
187










$
187Year Ended December 31, 2009Allowance for doubtful accounts

$
526



(62
)


(43
)

$
421Allowance for sales returns

$
187



(77
)





$
110Year Ended December 31, 2010Allowance for doubtful accounts

$
421



(80
)


(30
)

$
311Allowance for sales returns

$
110










$
110   December 31,INVENTORY, NET (in thousands):

2010


2009Raw materials

$
3,440


$
3,400Work-in-process


1,184



1,497Finished goods


2,363



2,964Inventory, net

$
6,987


$
7,861     December 31,PROPERTY, PLANT AND EQUIPMENT, NET (in thousands):

2010


2009Land

$



$
273Building






418Leasehold improvements


914



914Equipment and computers


5,767



6,049Furniture and fixtures


1,019



1,019Construction in progress


55



457,755



8,718Accumulated depreciation and amortization


(7,000
)


(6,538
)Property, plant and equipment, net

$
755


$
2,180      F-16




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
      December 31,2010Land

$
252Building


324Assets held for sale

$
576   December 31,ACCRUED LIABILITIES (in thousands):

2010


2009Payroll and benefits

$
1,180


$
1,694Warranty accrual, current portion


2,301



1,787Sales tax


429



68Deferred rent credit


37



112Accrued professional services


583



530Accrued insurance premium


342



517Accrued support services


173



Other


437



444Accrued liabilities

$
5,482


$
5,152   December 31,DEFERRED REVENUE (in thousands):

2010


2009Royalty advances from Procter & Gamble

$
375


$
1,875Undelivered elements (training, installation, product and
    support services)


616



347Extended warranty contracts


1,092



876Total Deferred Revenue


2,083



3,098Less Long-Term amounts:Extended warranty contracts


(58
)


(100
)Royalty advances from Procter & Gamble


(375
)


(1,875
)Total Deferred Revenue  Long Term


(433
)


(1,975
)Total Deferred Revenue  Current

$
1,650


$
1,123    F-17




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
          NOTE 4  INTANGIBLE
    ASSETS AND GOODWILL
        As of December 31, 2010


As of December 31, 2009Accumulated











AccumulatedGross


Amortization


Impairment


Net


Gross


Amortization


Impairment


NetPatents (4-10 years)

$
1,914


$
(1,572
)

$



$
342


$
1,914


$
(1,442
)

$



$
472Trademarks (6 years)


69



(69
)










69



(69
)






Trade names (Indefinite life)


979







(979
)






979







(979
)


Other (4 to 6 years)


593



(593
)










593



(593
)






Total

$
3,555


$
(2,234
)

$
(979
)

$
342


$
3,555


$
(2,104
)

$
(979
)

$
472Goodwill (Indefinite life)

$
2,926










$
2,926


$
2,926










$
2,926  F-18




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
  NOTE 5  BANK
    LINE OF CREDIT AND DEBT
          Expected term (years)


5.00Volatility


87
%Annual dividend per share

$
0.00Risk-free interest rate


1.34
%       December 31,2010Term loan payable

$
2,700Net discount


(78
)Net term loan payable


2,622Term loan payable, current portion, net of discount


Term loan payable, long-term, net of discount

$
2,622  F-19




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    NOTE 6  INCOME
    TAXES
    2010


2009


2008Current:Federal

$
(19
)

$
(50
)

$
(25
)State


4







(50
)Foreign


(3
)


57



137(18
)


7



62Deferred:Federal


55



41



37State


16



56



(4
)Foreign


5



15



2676



112



59$
58


$
119


$
121     2010


2009


2008Statutory regular federal income tax rate


(34.0
)%


(34.0
)%


(34.0
)%Change in valuation allowance


30.4
%


69.8
%


16.9
%Tax return to prior year provision adjustments


2.7
%


(9.6
)%


0.1
%Expiration of federal net operating losses


6.4
%


47.5
%


19.5
%Reduction of net operating loss attributes


(1.3
)%


0.3
%


2.7
%State tax benefit (net of federal benefit)


(6.9
)%


(47.5
)%


0.4
%Research credits


(0.6
)%


(1.8
)%


(0.5
)%Foreign amounts with no tax benefit


0.1
%


(21.7
)%


(6.0
)%Non-deductible expenses


0.8
%


2.3
%


1.4
%Stock option expenses with no tax benefit


3 .8
%






0.8
%Other


(0.9
)%


(1.1
)%


Total


0.5
%


4.2
%


1.3
%  F-20




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    2010


2009Capitalized intangible assets for tax purposes

$
1,045


$
1,690Reserves not currently deductible


2,629



2,684Deferred revenue


204



806Stock options


1,630



1,967Income tax credits


1,174



846Inventory


833



921Property and equipment


434



396Other comprehensive income


129



87Unrealized gain on foreign currency


74



26Net operating losses


26,176



20,859Total deferred tax assets


34,328



30,282Valuation allowance


(34,250
)


(30,177
)Net deferred tax assets


78



105Capitalized intangible assets


(544
)


(473
)State tax


(1
)


(1
)Other


(66
)


(87
)Total deferred tax liabilities


(611
)


(561
)Net deferred tax liabilities

$
(533
)

$
(456
)   paid-in-capital.
   F-21




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
  paid-in-capital. paid-in-capital
      Balance at January 1, 2008

$
163Additions for tax positions related to the current year


17Lapse of statute of limitations


(72
)Balance at December 31, 2008

$
108Additions for tax positions related to the current year


Changes


Balance at December 31, 2009

$
108Additions for tax positions related to the current year


Lapse of statute of limitations


(17
)Balance at December 31, 2010

$
91          F-22




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
  NOTE 7  COMMITMENTS
    AND CONTINGENCIES
  Leases
      2011

$
4092012


4872013


5312014


565Thereafter


190Total future minimum lease obligations

$
2,182     Licensed
    patent rights
    Employee
    arrangements and other compensation
     F-23




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
      out-of-pocket
    Purchase
    Commitments
    Litigation
     F-24




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    NOTE 8  STOCKHOLDERS
    EQUITY (DEFICIT)
  Preferred
    Stock
      Common
    Stock and Stock Purchase Warrants
         F-25




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
      At-the-Market
  Stock
    Options
     F-26




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    Weighted


Weighted AverageAverage


RemainingExercise Price


Contractual Term


Aggregate IntrinsicShares


Per Share


(Years)


Value(1)Options outstanding, January 1, 2008


4,411,000


$
6.30Granted at fair market value


1,414,000


$
2.29Granted at above fair market value


78,000


$
3.95Exercised


(241,000
)

$
2.21Forfeited


(1,162,000
)

$
6.68Options outstanding, December 31, 2008


4,500,000


$
5.12Granted at fair market value


963,000


$
1.19Exercised


(133,000
)

$
1.30Forfeited


(1,680,000
)

$
4.52Options outstanding, December 31, 2009


3,650,000


$
4.50Granted at fair market value


434,000


$
1.77Granted at above fair market value


1,657,000


$
2.00Exercised


(225,000
)

$
0.89Forfeited


(1,386,000
)

$
3.91Options outstanding, December 31, 2010


4,130,000


$
3.60



4.83


$
385,000Options exercisable, December 31, 2010


2,172,000


$
5.10



4.16


$
311,000Options expired during 2010


693,000


$
4.83






$
13,000     (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.    Options Outstanding


ExercisableWeightedWeighted


Average





WeightedNumber


Average


Remaining


Number


AverageRange of Exercise Prices

of Shares


Exercise Price


Life (Years)


of Shares


Exercise Price$  .72  $1.99


767,000


$
1.29



6.71



518,000


$
1.17$ 2.00  $2.99


1,937,000


$
2.09



4.97



234,000


$
2.72$ 3.00  $3.99


102,000


$
3.09



2.47



97,000


$
3.08$ 4.00  $4.99


355,000


$
4.00



5.34



354,000


$
4.00$ 5.00  $5.99


241,000


$
5.70



1.88



241,000


$
5.70$ 6.00  $9.99


435,000


$
7.53



4.19



435,000


$
7.53$ 10.00  $13.99


234,000


$
11.22



2.33



234,000


$
11.22$ 14.00  $18.99


59,000


$
14.13



3.31



59,000


$
14.13Total


4,130,000


$
3.60



4.83



2,172,000


$
5.10  F-27




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
    Twelve Months EndedDecember 31,2010

2009

2008Proceeds from stock options exercised

$
199


$
173


$
532Tax benefit related to stock options exercised(1)


N/A



N/A



N/AIntrinsic value of stock options exercised(2)

$
111


$
120


$
351Weighted-average fair value of options granted

$
1.09


$
0.81


$
1.37Total fair value of shares vested during the year

$
713


$
1,488


$
1,730     (1)
    
    Excess tax benefits received related to stock option exercises
    are presented as financing cash inflows. We currently do not
    receive a tax benefit related to the exercise of stock options
    due to our 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.  NOTE 9   SEGMENT
    INFORMATION
      Years Ended December 31,2010


2009


2008United States

$
16,900


$
31,134


$
48,526International


9,325



12,213



16,099$
26,225


$
43,347


$
64,625       NOTE 10  CONCENTRATIONS
     F-28




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENT  (Continued)
         F-29




---



##### Table of Contents



BIOLASE
    TECHNOLOGY, INC.
 Schedule II 
    Consolidated Valuation and Qualifying Accounts and ReservesFor the Years Ended December 31, 2010, 2009 and
    2008 Balance at

ChargesBeginning

(Reversals) to Cost



Balance atof Year

or Expenses

Deductions

End of Year(In thousands)Year Ended December 31, 2010:Allowance for doubtful accounts

$
421


$
(80
)

$
(30
)

$
311Allowance for sales returns


110











110Allowance for tax valuation


30,177



4,073







34,250Year Ended December 31, 2009:Allowance for doubtful accounts

$
526


$
(62
)

$
(43
)

$
421Allowance for sales returns


187



(77
)






110Allowance for tax valuation


27,442



2,735







30,177Year Ended December 31, 2008:Allowance for doubtful accounts

$
1,033


$
(68
)

$
(439
)

$
526Allowance for sales returns


187











187Allowance for tax valuation


25,783



1,659







27,442  S-1