Premier Laser’s Merger Falls Along With Its Stock

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.

The Irvine laser maker said Ophthalmic Imaging Systems, a maker of digital and image enhancement systems, terminated the previously announced merger agreement between the companies.

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

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

The breakup comes as Premier Laser, which pioneered a laser to treat tooth decay painlessly, is under pressure to find 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. In an earlier press release, it said that Steven R. Verdonner resigned Jan. 29 as the company’s director, president and chief executive “to pursue other business opportunities.”

Premier said in its release Friday that while the merger of the two companies was not feasible at the present time, the companies plan to continue working together and exploring ways to take advantage of “potential synergies.”