Bernstein Liebhard & Lifshitz, LLP Announces Class Action Lawsuit Commenced Against Biolase Technology, Inc. (BLTI)

Market Wire, September, 2004

A securities class action lawsuit was commenced in the United States District Court for the Central District of California, on behalf of all persons who purchased or acquired Biolase Technology, Inc. (NASDAQ: BLTI) ("Biolase" or the "Company") securities (the "Class") between October 29, 2003 to July 16, 2004, inclusive (the "Class Period"). A copy of the complaint is available from the Court or from Bernstein Liebhard & Lifshitz, LLP. Please visit our website at http://www.bernlieb.com or contact us at (800) 217-1522 or by e-mail at BLTI@bernlieb.com.

Plaintiff alleges that during the Class Period, beginning in October 2003, Biolase reported double-digit revenue and profit growth and represented that the Company would grow its business even more rapidly in 2004. Among other things, the Company represented that Biolase was effectively penetrating the largely untapped market for dental lasers, and that the Company could both increase its impressive growth of 2003 while at the same time ramping up its marketing efforts. As defendants knew but failed to disclose to the investing public, such representations were materially false and misleading when made because, among other reasons: (i) demand for the Company's products was declining during the Class Period, especially internationally. This was masked by the fact that increased sales, recognized by the Company upon shipment to distributors, reflected inventory-buildup by distributors, who would meet end-user demand from existing inventory, which would foreseeably lead to decreased growth and profitability for Biolase; (ii) the Company's introduction of Diolase Plus, a low-priced ($12,000) alternative to its main product, the Waterlase system ($50,000), confused purchasers and led to decreased demand for the Waterlase system. The investing public was wholly unaware of the materially negative effect that Diolase Plus was having on Biolase's business; and (iii) the Company's growth in revenue and profitability could not continue, much less increase, in line with the Company's representations.

On July 16, 2004, the Company announced that its performance in the second quarter of 2004 would be far worse than expected and would force the Company to materially lower its expected sales growth for 2004, due to weakened demand. In reaction to this surprising announcement that business was not, and would not be, as good as the Company had previously represented, the price of Biolase common stock plummeted, falling 27% in one day, from $12.05 per share on July 16, 2004 to $8.78 per share on July 19, 2004 (the next trading day), on unusually heavy trading volume.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Biolase securities during the Class Period. If you purchased or otherwise acquired Biolase securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than October 5, 2004.

A "lead plaintiff" is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard & Lifshitz, LLP, or other counsel of your choice, to serve as your counsel in this action.

Bernstein Liebhard & Lifshitz, LLP has been retained as one of the law firms to represent the Class. The attorneys at Bernstein Liebhard & Lifshitz, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. For more information about Bernstein Liebhard & Lifshitz, LLP, please visit our website at http://www.bernlieb.com.

If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential Class member or lead plaintiff, you may contact our Shareholder Relations Department at Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, (800) 217-1522 or (212) 779-1414 or by e-mail at BLTI@bernlieb.com.

Contact: Shareholder Relations Department Bernstein Liebhard & Lifshitz, LLP (800) 217-1522 or (212) 779-1414 BLTI@bernlieb.com