Premier Laser Bankruptcy Expected Within a Week

Struggling Premier Laser Systems Inc., edging closer to bankruptcy, said Wednesday it has laid off all but nine employees and has only enough cash to operate for a week.

The once-promising maker of dental and vision lasers, which shut down operations and furloughed more than two-thirds of its 80 workers just two weeks ago, laid off an additional 13 Tuesday, leaving a skeleton crew at the Irvine headquarters, Chief Executive Michael J. Quinn said.

The company probably will file for bankruptcy protection within the next seven days, Quinn said.

“We’re like a cat,” he said. “We have nine lives, and we’re through six of them.”

Premier’s remaining employees, mostly executives, are working with a consultant to devise a plan for saving the faltering firm, which is down to its last $200,000.

To raise cash, Quinn said, Premier is trying to auction its 75 patents or sell the company’s dental or vision division. At least six companies have expressed serious interest in acquiring the patents or buying part of the company, Quinn said.

Although Premier has made a name for itself in the dental laser market, pioneering a laser for painless treatment of tooth decay, Quinn said he is leaning toward keeping the vision business.

“I’d rather continue to own and run the vision business, because I think it’s larger worldwide, it’s growing like mad and it’s much more lucrative,” he said. “We have a real foothold in that business.”

Dental lasers, which cost $15,000 to $55,000, never caught on with dentists because of their high price, Quinn said.

Premier, which became a Wall Street favorite after its laser for treating tooth decay received regulatory clearance, has been beset by myriad problems.

At the end of last year, Premier’s liabilities exceeded assets by more than $4 million.

The company, which has lost more than $100 million since it was founded in 1991, has never had a successful commercial product, Quinn said.

Quinn, who joined the company in late November, said it has been a “rude awakening” to discover the extent of the company’s difficulties.

As recently as three months ago, he said, Premier was selling “poor” quality products and failing to respond adequately to customers’ concerns.

Quinn has shaken up the executive ranks. Founder Colette Cozean was replaced as chairwoman and ousted as chief technology officer. Two vice presidents close to Cozean were also pushed out, and two of her allies on the board retired in January.

Cozean and Jeffrey Anderson, former vice president for regulatory affairs, have sued the company for a total of nearly $500,000. Cozean alleges that Premier failed to pay her certain benefits and salary. Anderson seeks severance pay.

A bankruptcy reorganization might be Premier’s best option for attracting badly needed capital, Quinn said.

“Investors want a company that’s clean operationally and not cluttered with legal matters and administrative nightmares,” he said.

The company announced the new round of layoffs after the stock market closed. Premier’s shares closed at $1.16, down 3 cents, in Nasdaq trading.

The stock had traded as high as $14 a share in 1997 after Premier received approval from the Food and Drug Administration to market a laser that could be used directly on teeth to treat tooth decay.