Premier Laser’s Woes Continue as Merger Partner Calls It Off

Dental laser maker Premier Laser Systems Inc., which shut operations and laid off 68% of its work force this week, said Friday that a Sacramento company has backed out of a merger agreement.

Irvine-based Premier said Ophthalmic Imaging Systems Inc., a maker of digital and image enhancement systems, terminated the previously announced merger agreement between the companies.

In October, Premier Laser agreed to a swap stock to acquire the 49% of Ophthalmic that it doesn’t already own. Premier Laser was to have traded 0.8 of a share for each Ophthalmic share.

But Premier’s stock has fallen by more than two-thirds since early October, closing Friday at $1.03 a share, down 16 cents, in Nasdaq trading.

The development comes as Premier Laser, which pioneered a laser to treat tooth decay painlessly, is under pressure to come up with financing or a buyer--or file a bankruptcy petition.

Michael Quinn, Premier’s chief executive, acknowledged in an interview this week that the company is desperate for cash, and he hinted that bankruptcy reorganization might be the most acceptable option for potential investors.

Quinn, who joined Premier in November, could not be reached for comment Friday.

By the end of December, Premier had less than $415,000 in cash on hand after losing $3.3 million in the final three months. Its liabilities exceeded assets by more than $4 million.

Ophthalmic executives could not be reached for comment Friday.