Biolase (BIOL) late Tuesday said it has voluntarily started Chapter 11 bankruptcy proceedings and will seek court approval to remain open for business to complete the sale of its assets.

Under terms of a proposed "stalking horse" transaction, OTC-listed medical device firm Sonendo is offering to pay $14 million in cash for substantially all of Biolase's assets under court supervision. The bid will create a minimum price for the sales process, which may attract other potential buyers.

Biolase also has secured at least $2.5 million in debtor-in-possession financing, including a $1.4 million interim advance, subject to court approval.