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PROSPECTUS
SUPPLEMENT
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Filed
Pursuant to Rule 424(b)(5)
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(to
Prospectus Dated June 16, 2009)
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Registration
No. 333-159293
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STAAR
Surgical Company
4,255,319
Shares of Common Stock
______________
We are
offering 4,255,319 shares of our common stock pursuant to this prospectus
supplement and the accompanying prospectus.
Our
common stock is traded on the Nasdaq Global Market under the trading symbol
“STAA.” On June 16, 2009 the last reported price of our common
stock on the Nasdaq Global Market was $1.88 per share.
_________________________________________________________
Investment
in our common stock involves a high degree of risk. Please carefully
consider the “Risk Factors” described beginning on page S-5 of this
prospectus supplement.
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Per Share
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Total
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|||||||
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Public
offering price
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$ | 1.88 | $ | 8,000,000 | ||||
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Proceeds,
before expenses, to STAAR Surgical Company
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$ | 1.88 | $ | 8,000,000 | ||||
______________
Delivery
of the shares is expected to be made on or about June 17, 2009, against
payment for the shares to be received by us on the same date.
Neither
the Securities and Exchange Commission, nor any state securities commission, has
approved or disapproved of these securities or passed upon the adequacy or
accuracy this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal
offense.
______________
The date
of this prospectus supplement is June 16, 2009.
TABLE
OF CONTENTS
Prospectus
Supplement
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Page |
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Special
Note Regarding Forward-Looking Statements
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S-3
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The
Offering
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S-4
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Risk
Factors
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S-5
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Dilution
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S-6
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Use
of Proceeds
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S-7
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Legal
Matters
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S-8
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Experts
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S-8
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Information
Incorporated by Reference
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S-9
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Prospectus
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Page
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Special
Note Regarding Forward-Looking Statements
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2
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Prospectus
Summary
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4
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Risk
Factors
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7
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Securities
We May Offer
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7
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Use
of Proceeds
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9
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Description
of Capital Stock
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9
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Description
of Subscription Rights
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15
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Description
of Warrants
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13
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Plan
of Distribution
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16
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Ratio
of Earnings to Fixed Charges and Preferred Dividends
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18
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Legal
Matters
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18
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Experts
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19
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Where
You Can Find More Information
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19
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Information
Incorporated by Reference
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20
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You
should rely only on the information contained in this prospectus supplement and
the accompanying prospectus and information to which we have referred
you. We have not authorized anyone else to provide you with different
information. In particular, we have not authorized any dealer or
salesperson to give any information or to represent anything not contained in
this prospectus supplement. You must not rely on any unauthorized information or
representation. This prospectus supplement is an offer to sell only the
securities it specifically describes on the front of the document, and only
under circumstances and in jurisdictions where we can lawfully do
so. You should assume that the information in this prospectus
supplement and the prospectus is accurate only as of the date on the front of
the document. Any information we have incorporated by reference is
accurate only as of the date of the document incorporated by reference,
regardless of the time this prospectus supplement is delivered or the time a
security is sold.
S-1
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a registration
statement on Form S-3 (File No. 333-159293) we filed with the Securities
and Exchange Commission using a “shelf” registration process. Under
this “shelf” registration process, we may from time to time sell securities
described in the accompanying prospectus in one or more offerings. This document
consists of two parts. The first part is this prospectus supplement, which
describes the specific terms of our common stock offering. The second part is
the accompanying prospectus, which provides more general information. This
prospectus supplement and the accompanying prospectus include important
information about us, our common stock and other information you should know
before investing. This prospectus supplement also adds, updates and changes
information in the accompanying prospectus.
You
should rely only on the information in this prospectus supplement and the
accompanying prospectus or documents to which we otherwise refer
you. We have not authorized anyone to provide you with different
information. If anyone provides you with different or inconsistent
information, you should not rely on it. If the information in this
prospectus supplement or any free writing prospectus we may authorize to be
delivered to you differs in any way from the information contained in the
accompanying prospectus, you should rely on the information in this prospectus
supplement or the free writing prospectus. Before purchasing our
common stock, you should carefully read this prospectus supplement, and the
accompanying prospectus together with the additional information about us
described under “Where You Can
Find More Information” and “Incorporation of Documents by
Reference” in the accompanying prospectus.
You
should assume that the information in this prospectus supplement is accurate
only as of the date on the cover page, and that the information in the
accompanying prospectus is accurate only as of the date on its cover
page. Any information we have incorporated by reference in this
prospectus supplement is accurate only as of the date of the document
incorporated by reference, unless we indicate otherwise. Our business, financial
condition, results of operations and prospects may have changed materially since
that date.
This
prospectus supplement and the accompanying prospectus do not constitute an offer
to sell, or a solicitation of an offer to purchase, the securities offered by
this prospectus supplement and the accompanying prospectus in any jurisdiction
to or from any person to whom or from whom it is unlawful to make such offer or
solicitation of an offer in such jurisdiction.
We
further note that any representations, warranties and covenants we may have made
in any agreement filed as an exhibit to any document incorporated by reference
in the accompanying prospectus were made solely for the benefit of the parties
to that agreement, including, in some cases, for the purpose of allocating risk
among the parties to the agreement. You should not deem these to be
representations, warranties or covenants to you. Moreover, such
representations, warranties or covenants were accurate only as of the date when
made. Accordingly, you should not rely on such representations, warranties and
covenants as accurately representing the current state of our
affairs.
S-2
Unless
the context otherwise requires, the terms “we,” “our” or “us” and “STAAR” refer
to STAAR Surgical Company and its subsidiaries
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements
in this prospectus supplement that are not statements of historical fact are
forward-looking statements. Forward-looking statements also appear in
the prospectus and the other documents to which we refer you in this prospectus
supplement and the prospectus. They may be found, among other places,
in the sections entitled “Business” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our most recent report on Form
10-K, in our quarterly reports on Form 10-Q, and amendments to these documents
filed with the SEC. These statements relate to our future plans,
objectives, expectations and intentions. Among other things,
forward-looking statements include statements about the following:
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·
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our
strategy;
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our
business prospects including, expectations for revenue or other
performance of our business or of specific
products;
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the
status of applications for approval of products by the FDA or regulatory
agencies of other countries;
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sufficiency
of our cash reserves;
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product
development;
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research
and development and other expenses;
and
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our
prospects in litigation and other legal
risks.
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You may
also generally identify forward-looking statements by the use of words such as
“expect,” “anticipate,” “intend,” “plan” and similar expressions.
You
should not place undue reliance on our forward-looking
statements. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous risks
and uncertainties that are beyond our control, including those we discuss in
“Risk Factors” and elsewhere in this prospectus supplement, in the accompanying
prospectus and in our other reports we file with the SEC. The
forward-looking statements in this prospectus supplement speak only as of the
date shown on the cover page, and you should not rely on these statements
without also considering the risks and uncertainties associated with these
statements and our business.
S-3
The
Offering
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Common
stock offered
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4,255,319 shares
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Common
stock to be
outstanding
after this
offering
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34,446,948 shares
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Use
of Proceeds
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Of
the net proceeds of this offering, we intend to use approximately $7.5
million to fund a deposit with the California Superior Court to secure a
stay of enforcement pending appeal of an approximately $4.9 million
judgment entered against us, and to apply the remainder to general
corporate purposes. See “Use of
Proceeds.”
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Nasdaq
Global Market symbol
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STAA
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Risk
Factors
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You
should read the “Risk Factors” section of the prospectus supplement and
the other information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus for a discussion of
factors you should carefully consider before deciding to invest in shares
of our common
stock.
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Except as
otherwise indicated, the number of shares to be outstanding after this offering
throughout this prospectus supplement is based on 30,191,629 shares outstanding
on June 15, 2009. That number excludes the
following:
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·
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3,770,134 shares
of common stock issuable upon the exercise of outstanding stock options,
with a weighted average exercise price of $5.67 per
share;
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1,700,000
shares issuable on conversion of our Series A Redeemable Convertible
Preferred Stock.
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1,470,000
shares of common stock issuable upon the exercise of outstanding warrants,
of which 70,000 have an exercise price of $6.00 per share and 1,400,000
have an exercise price of $4.00 per share;
and
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·
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114,581
shares available for future issuance under our 2003 Omnibus Equity
Incentive Plan.
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Dividend
Policy
We intend
to retain any future earnings to finance the growth and development of our
business and do not anticipate paying any cash dividends in the foreseeable
future.
S-4
RISK
FACTORS
Investment
in our securities involves a high degree of risk. Please carefully
consider the “Risk Factors” published in our most recent Annual Report on Form
10-K and in our most recent Quarterly Report on Form 10-Q filed with the SEC
before making a decision to invest in our common stock. These reports
are incorporated by reference into this prospectus
supplement. Instructions for obtaining copies appears under the
heading “Where You Can Find More Information.” Each of these risk
factors describes a circumstance that has the potential to materially harm our
business, operating results or financial condition and reduce the value of an
investment in our securities. It is important for investors to read
and consider all of them. These risks are not the only risks we
face.
In
addition to those risks, investors should consider the following risks and
uncertainties related to this offering that could affect the value of an
investment in our securities:
Risks
Related to this Offering
The
market price of our common stock is likely to be volatile.
Our stock
price has fluctuated widely, ranging from $0.79 to $5.98 during the twelve month
period ended June 15, 2009. Our stock price could continue to
experience significant fluctuations in response to factors such as market
perceptions, quarterly variations in operating results, litigation or the
outcome of litigation, operating results that vary from the expectations of
securities analysts and investors, changes in financial estimates, changes in
market valuations of competitors, announcements by us or our competitors of a
material nature, additions or departures of key personnel, future sales of
common stock and stock volume fluctuations. Also, general political
and economic conditions such as continued recession or interest rate
fluctuations may adversely affect the market price of our stock.
Investors
in this offering will pay a much higher price than the book value of our
stock.
If you
purchase common stock in this offering, you will incur an immediate and
substantial dilution in net tangible book value of approximately $1.60 per
share, after giving effect to the sale by us of 4,255,319 shares of common stock
offered in this offering at the public offering price of $1.88 per
share.
Future
sales of our common stock could reduce our stock price.
Our Board
of Directors could issue additional shares of common or preferred stock to raise
additional capital or for other corporate purposes without stockholder
approval. In addition, the Board of Directors could designate and
sell a class of preferred stock with preferential rights over the common stock
with respect to dividends or other distributions. Sales of common or
preferred stock could dilute the interest of existing stockholders and reduce
the market price of our common stock. Even in the absence of such
sales, the perception among investors that additional sales of equity securities
may take place could reduce the market price of our common stock.
S-5
Following
this offering we will continue to have limited working capital.
We have a
history of losses and in recent periods our cash requirements have exceeded the
level of cash generated by operations. We will use approximately $7.5 million of
the proceeds of this offering to fund a deposit with the court to secure a stay
of enforcement of judgment pending appeal in the Parallax case. The
remaining proceeds will not significantly enhance our working capital and may
not satisfy our need for cash resources to handle unexpected events or continued
losses. As a result we may need to seek additional resources through debt or
equity financing, but our ability to obtain adequate financing on satisfactory
terms is limited. Our ability to raise financing through sales of equity
securities depends on general market conditions and the demand for STAAR’s
common stock. We may be unable to raise adequate capital through sales of equity
securities, and if our stock has a low market price at the time of such sales
our existing stockholders could experience substantial dilution. An
inability to secure additional financing could jeopardize our ability to
continue operations.
DILUTION
Our net
tangible book value as of April 3, 2009 was approximately $1,659,000, or
approximately $0.05 per share of outstanding common stock. Historical
net tangible book value per share represents total tangible assets, less total
liabilities and the redemption value of the issued and outstanding Series A
Redeemable Convertible Preferred Stock, divided by the number of shares of
common stock outstanding. Dilution in net tangible book value per share
represents the difference between the amount per share paid by purchasers of our
common stock in this offering and the net tangible book value per share of our
common stock immediately after the offering.
After
giving effect to our sale of 4,255,319 shares of common stock in this offering
at the public offering price of $1.88 per share, and after deduction of the
estimated offering expenses payable by us, our net tangible book value as of
April 3, 2009 would have been approximately $9,634,000, or $0.28 per share.
This represents an immediate increase in net tangible book value of $0.23 per
share to existing stockholders and an immediate dilution in net tangible book
value of $1.60 per share to purchasers of common stock in this
offering.
The
following table illustrates this per share dilution of net tangible book
value:
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Public
offering price per share
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$ | 1.88 | ||
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Historical
net tangible book value per share as of April 3, 2009
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$ | 0.05 | ||
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Increase
per share attributable to new investors
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$ | 0.23 | ||
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Net
tangible book value per share after the offering
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$ | 0.28 | ||
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Dilution
per share to new investors
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$ | 1.60 |
The table
above is based on 30,191,629 shares of common stock outstanding on June 15,
2009, which has been calculated as described on page S-4.
S-6
USE
OF PROCEEDS
We expect
to receive approximately $8 million in net proceeds from the sale of the
4,255,319 shares of common stock offered by us in this offering, based on the
public offering price of $1.88 per share, after deducting the estimated offering
expenses payable by us.
We intend
to use approximately $7.5 million of the net proceeds of this offering to fund a
deposit with the court to secure a stay of enforcement of an approximately $4.9
million judgment in the case Parallax Medical Systems, Inc. v.
STAAR Surgical Company. The remaining proceeds will be used
for general corporate purposes, including the repayment of some of our
outstanding indebtedness, the cost of additional pending litigation and the
Parallax appeal,
expansion of sales and marketing, AND working capital. We have not
determined the amounts we plan to spend on any of the general corporate purposes
listed above or the timing of these expenditures. Accordingly, our management
will have broad discretion to allocate the net proceeds from this offering not
applied to the deposit. Until they are so allocated, we intend to
invest those remaining net proceeds in investment-grade, interest-bearing
securities.
The
deposited funds will be invested by the California Superior Court in an interest
bearing account (currently bearing interest at a rate of approximately
1.5%). If the Court of Appeals upholds the Parallax judgment, or any
part of it, the plaintiff will receive from the deposit an amount equal to the
surviving judgment amount plus interest on that amount at a rate of 10% per
annum. If the judgment is overturned on appeal and remanded for a new
trial, the full amount of the deposit, plus interest, will be refunded to
STAAR. If STAAR pays the judgment or settles the case prior to the
decision of the Court of Appeals, any balance of deposit remaining after such a
payment will be refunded to STAAR. STAAR will apply any such refund
to the general corporate purposes as described in the preceding
paragraph.
S-7
PLAN
OF DISTRIBUTION
We are
selling 4,255,319 shares of our common stock under this prospectus supplement
directly to certain institutional investors at a price of $1.88 per
share.
We
currently anticipate that the closing of the sale of our common stock under this
prospectus supplement will take place on or about June 17, 2009. On the closing
date, we will issue the shares of common stock to the institutional investors
and we will receive funds in the amount of the aggregate purchase
price. The shares of common stock will be delivered in book-entry
form through the Depository Trust Company’s DWAC system.
Our
common stock is traded on the NASDAQ Global Market under the symbol “STAA” and
the shares of common stock sold in this offering will be listed on the NASDAQ
Global Market. The transfer agent for our common stock is American
Stock Transfer & Trust Company.
LEGAL
MATTERS
The
validity of the issuance of the common stock being registered in the
registration statement of which this prospectus supplement is a part will be
passed upon for us by Charles Kaufman, Esq. Mr. Kaufman, who
participated in the preparation of this prospectus supplement, the prospectus
and the related registration statement, is employed by STAAR as its Vice
President and General Counsel, owns 23,000 shares of our Common Stock and holds
options to purchase an additional 90,000 shares of our Common
Stock.
EXPERTS
The
consolidated financial statements and schedule and management’s report on the
effectiveness of internal control over financial reporting incorporated in this
prospectus supplement by reference to the Annual Report on Form 10-K for the
fiscal year ended January 2, 2009 have been audited by BDO Seidman, LLP, an
independent registered public accounting firm, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon such reports given upon the authority of
that firm as experts in auditing and accounting.
A brief
summary of STAAR’s business and products is included in the accompanying
prospectus. STAAR also expects to enhance the IOL product offering
described in that summary as a result of the following recent product
approvals:
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·
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The
FDA has granted 510(k) clearance for STAAR’s Epiphany™ Injector System for
use with the Affinity™ Collamer® Three-Piece IOL and the Elastimide™
Silicone IOL. The Epiphany injector is a manually loaded
version of STAAR Japan’s Preloaded Injector system. It is intended to
provide superior delivery to users of STAAR’s three-piece
lenses. The approval is also part of the regulatory pathway for
potential U.S. approval of the Preloaded Injector system. U.S. sales of
the Epiphany Injector are expected to begin in August
2009.
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S-8
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·
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STAAR
received CE Mark approval to sell the KS-X Preloaded Hydrophobic Acrylic
Injector in the European Community. The KS-X system mates a
preloaded delivery system manufactured by STAAR Japan with an
independently sourced acrylic lens, and has been sold in the Japanese
market for two years. Approval of the KS-X injector system will
allow STAAR to bring its proven preloaded to technology to the growing
number of surgeons who prefer hydrophobic acrylic lenses for their
patients in the European Community and other countries that recognize CE
Marking.
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WHERE YOU CAN FIND MORE
INFORMATION
We are a
reporting company and file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission, or
the SEC. You may read and copy these reports, proxy statements and other
information at the SEC’s public reference rooms at 100 F. Street, N.E.,
Washington, D.C. 20549. You can request copies of these documents by
writing to the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
rooms. Our SEC filings are also available on the SEC’s web site at
http://www.sec.gov.
We will
furnish without charge to each person to whom a copy of this prospectus
supplement is delivered, on written or oral request, a copy of the information
that has been incorporated by reference into this prospectus supplement (except
exhibits, unless they are specifically incorporated by reference into this
prospectus supplement). You should direct any requests for copies to: Investor
Relations, STAAR Surgical Company, 1911 Walker Avenue, Monrovia, California
91016, telephone number (626) 303-7902.
INFORMATION
INCORPORATED BY REFERENCE
The SEC
allows us to “incorporate by reference” in this prospectus supplement the
information that we file with the SEC. This means that we can
disclose important information by referring the reader to those SEC
filings. The information incorporated by reference is considered to
be part of this prospectus supplement, and later information we file with the
SEC will update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
prior to the termination of the offering:
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our
Annual Report on Form 10-K for our fiscal year ended January 2,
2009;
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our
Quarterly Report on Form 10-Q for the period ended April 3,
2009;
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our
Current Report on Form 8-K, filed with the SEC on April 17,
2009;
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our
Proxy Statement for the Annual Meeting of Stockholders held on
June 11, 2009, filed with the SEC on May 1, 2009;
and
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·
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the
description of our common stock contained in Amendment No. 1 to our
registration statement on Form 8-A/A filed with the SEC on
April 18, 2003, including any amendment or report filed for the
purpose of updating this
description.
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S-9
You may
obtain copies of those documents from us, free of cost, by contacting us at the
address or telephone number provided in “Where You Can Find More Information”
immediately above.
Any
statements made in this prospectus supplement or the accompanying prospectus, or
in any document incorporated or deemed to be incorporated by reference in this
prospectus supplement or the accompanying prospectus, will be deemed to be
modified or superseded for purposes of this prospectus supplement and the
accompanying prospectus to the extent that a statement contained in any
subsequently filed document that is also incorporated or deemed to be
incorporated by reference in this prospectus supplement or the accompanying
prospectus, modifies or supersedes the statement. Any statement so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this prospectus supplement or the accompanying
prospectus.
To the
extent that any statement in this prospectus supplement is inconsistent with any
statement that is incorporated by reference and that was made on or before the
date of this prospectus supplement, the statement in this prospectus supplement
will supersede such incorporated statement. The incorporated statement will not
be deemed, except as modified or superseded, to constitute a part of this
prospectus supplement, the accompanying prospectus or the registration
statement. Statements contained in this prospectus supplement as to the contents
of any contract or other document are not necessarily complete and, in each
instance, we refer you to the copy of each contract or document filed as an
exhibit to the registration statement.
S-10
PROSPECTUS
STAAR
Surgical Company
$10,000,000
Common
Stock
Preferred
Stock
Warrants
Subscription
Rights
______________
From time
to time, we may sell common stock, preferred stock, warrants or subscription
rights. A prospectus supplement specifying the terms of the
offering will accompany this prospectus. Our common stock is traded
on the Nasdaq Global Market under the trading symbol “STAA.” If we
offer other securities, the prospectus supplement will provide information about
their listing on a securities exchange, if any.
_________________________________________________________
Investing
in our securities involves a high degree of risk. You should carefully read and
consider the risk factors included in our periodic reports, in any prospectus
supplements relating to specific offerings of securities and in other documents
that we file with the Securities and Exchange Commission. See “Risk Factors” on
page 7.
______________
This
prospectus may not be used to offer or sell any securities unless accompanied by
a prospectus supplement.
We may
sell the securities through underwriters or agents or directly to
purchasers. The names of any underwriters or agents will appear on
the accompanying prospectus supplement. For additional information on
methods of sale, please see the sections entitled “Plan of Distribution” in this
prospectus and the accompanying prospectus supplement. The prospectus
supplement also shows the net proceeds we expect to receive from the
sale.
Neither
the Securities and Exchange Commission, nor any state securities commission, has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
______________
The date
of this prospectus is June 16, 2009.
TABLE
OF CONTENTS
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Page
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Special
Note Regarding Forward-Looking Statements
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2
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Prospectus
Summary
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4
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Risk
Factors
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7
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Securities
We May Offer
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7
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Use
of Proceeds
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9
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Description
of Capital Stock
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9
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Description
of Subscription Rights
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15
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Description
of Warrants
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13
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Plan
of Distribution
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16
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Ratio
of Earnings to Fixed Charges and Preferred
Dividends
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18
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Legal
Matters
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18
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Experts
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19
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Where
You Can Find More Information
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19
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Information
Incorporated by Reference
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20
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You
should rely only on the information contained in this prospectus and information
to which we have referred you. We have not authorized anyone else to provide you
with different information. In particular, we have not authorized any dealer or
salesperson to give any information or to represent anything not contained in
this prospectus. You must not rely on any unauthorized information or
representation. This prospectus is an offer to sell only the securities it
specifically describes on the front of the document, and only under
circumstances and in jurisdictions where we can lawfully do so.
______________
Unless the context otherwise requires,
the terms “we,” “our,” “us,” the “Company” and “STAAR” refer to STAAR Surgical
Company and its subsidiaries.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement we have filed with the Securities
and Exchange Commission, or SEC, using a “shelf” registration
process. Under this shelf registration we may sell common stock,
preferred stock, warrants or subscription rights in one or more offerings, up to
a maximum total dollar amount of $10,000,000. This prospectus
provides you with a general description of each of those types of
securities. Whenever we offer or sell securities in connection with
this shelf registration we will also provide a prospectus supplement that
contains a more complete description of the securities offered and the structure
of the offering. We may also use the prospectus supplement to add,
update or change any of the information contained in this
prospectus. This prospectus, together with the relevant prospectus
supplement and other documents to which we refer you, includes all material
information relating to any offering. Before purchasing our common
stock please carefully read both this prospectus and the prospectus supplement
together with the additional information described below under “Where You Can
Find More Information” and “Incorporation of Documents by
Reference.”
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This
prospectus may not be used to consummate a sale of securities unless it is
accompanied by a prospectus supplement.
You
should assume that the information in this prospectus is accurate only as of the
date on the cover page. Any information we have incorporated by reference in
this prospectus is accurate only as of the date of the document incorporated by
reference, unless we indicate otherwise, regardless of the time this prospectus
is delivered or the time a security is sold. Our business, financial condition,
results of operations and prospects may have changed materially since that
date.
This
prospectus does not constitute an offer to sell, or a solicitation of an offer
to purchase, the securities offered by this prospectus in any jurisdiction to or
from any person to whom or from whom it is unlawful to make such offer or
solicitation of an offer in such jurisdiction.
Representations,
warranties or covenants that may appear in any agreement filed as an exhibit to
a document incorporated by reference in this prospectus were made solely for the
benefit of the parties to that agreement. The parties made those
statements for the private purpose of allocating contractual risk, not to
establish facts. Even if accurate when made, these statements may not
be accurate now, and they may have been qualified by schedules or other
disclosures that have not been filed or incorporated by reference into this
prospectus. Only the parties to such an agreement are entitled to enforce its
representations, warranties or covenants. You should not rely on
those statements for any purpose.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements
in this prospectus that are not statements of historical fact are
forward-looking statements. Forward-looking statements also appear in
other documents to which we refer you in this prospectus. They may be
found, among other places, in the sections entitled “Business” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in our
most recent report on Form 10-K, in our quarterly reports on Form 10-Q filed
after our most recent Form 10-K, and any amendments to these documents filed
with the SEC. These statements relate to our future plans,
objectives, expectations and intentions. Among other things,
forward-looking statements include statements about the following:
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our
strategy;
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our
business prospects including expectations for revenue or other performance
of our business or of specific
products;
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the
status of applications for approval of products by the FDA or regulatory
agencies of other countries;
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sufficiency
of our cash reserves;
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product
development;
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research
and development and other expenses;
and
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legal
risks.
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You may
also generally identify forward-looking statements by the use of words such as
“expect,” “anticipate,” “intend,” “plan” and similar expressions.
You
should not place undue reliance on our forward-looking
statements. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous risks
and uncertainties that are beyond our control, including those we discuss in
“Risk Factors” and elsewhere in this prospectus, in the accompanying prospectus
supplement, and in our other reports we file with the SEC. The
forward-looking statements in this prospectus speak only as of the date of this
prospectus, and you should not rely on these statements without also considering
the risks and uncertainties associated with these statements and our
business.
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PROSPECTUS
SUMMARY
STAAR
Surgical Company develops and manufactures visual implants and other innovative
ophthalmic products to improve or correct the vision of patients with cataracts
and refractive conditions and distributes them worldwide.
Intraocular
lenses
We
generate most of our revenue by manufacturing and selling foldable intraocular
lenses, known as IOLs, and related products for cataract
surgery. STAAR pioneered the foldable IOL, a flexible prosthetic lens
used to replace a cataract patient’s natural lens after it has been extracted in
minimally invasive small incision cataract extraction. STAAR makes
IOLs out of silicone and out of Collamer®, STAAR’s proprietary biocompatible
collagen copolymer lens material. STAAR’s IOLs are available in both
three-piece and one-piece designs. STAAR’s range of IOLs includes the
following:
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three-piece
IOLs, available in silicone or
Collamer;
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single-piece
IOLs, available in silicone or
Collamer;
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The
silicone Toric IOL, used in cataract surgery to treat preexisting
astigmatism;
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The
Preloaded Injector, a silicone or acrylic IOL preloaded into a single-use
disposable injector;
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Most of
STAAR’s IOLs sold worldwide feature aspheric optics, an advanced design intended
to provide a clearer image than traditional spherical lenses, especially in low
light. STAAR has developed a proprietary aspheric design (patent
pending) that is optimized for the naturally curved surface of the retina and
certain other anatomical features of the human eye, and that provides
outstanding image quality even if accidentally moved off center.
Because
the great majority of cataract patients are elderly and qualify for Medicare,
most of STAAR’s U.S. cataract revenue derives indirectly from reimbursement
payments by the Center for Medicaid and Medicare Services, or
CMS. STAAR’s aspheric lenses have been granted “New Technology
Intraocular Lens” status, which provides an additional $50 reimbursement to
doctors or hospitals that use these lenses in ambulatory surgical centers,
enabling STAAR to increase the average selling price for these
lenses.
Outside
the U.S. as well, government agencies or government sponsored entities generally
pay the cost of IOLs for cataract patients. As a result, STAAR believes that IOL
revenues are likely to remain relatively stable even under adverse conditions in
the general economy.
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Visian
ICL
Manufacturing
and selling lenses used in refractive surgery is an increasingly important
source of revenue for STAAR. We have used our proprietary biocompatible Collamer
material to develop and manufacture implantable Collamer lenses, or ICLs.
STAAR’s VISIAN® ICL and VISIAN® Toric ICL, or TICL™, treat refractive disorders
such as myopia (near-sightedness), hyperopia (far-sightedness) and astigmatism.
These disorders of vision affect a large proportion of the population. Unlike
the IOL, which replaces a cataract patient’s cloudy lens, these products are
designed to work with the patient’s natural lens to correct refractive
disorders. The surgeon implants the foldable Visian lens through a tiny
incision, under local anesthesia. STAAR began selling the Visian ICL outside the
U.S. in 1996 and inside the U.S. in 2006. STAAR began selling the Visian TICL
outside the U.S. in 2002. These products are sold in more than 50 countries.
STAAR’s goal is to establish the position of the ICL and TICL throughout the
world as one of the primary choices for refractive surgery.
ICL sales
in the U.S. increased by approximately 18% in 2008 over the prior year, and have
increased outside the U.S. at a double digit annual percentage rate since
2001. However, refractive surgery is an elective procedure generally
not covered by health insurance. Patients must pay for the procedure,
frequently through installment financing arrangements. Patients can
defer the choice to have refractive surgery if they lack the disposable income
to pay for it, they do not feel their income is secure, or they cannot obtain
credit. As a result, a severe or prolonged recession may reduce sales
of ICLs.
Other
surgical products
We offer
a number of other products used in ophthalmic surgery that complement our IOL
and Visian ICL product lines. We market STAARVISC II, a viscoelastic
material which is used as a protective lubricant and to maintain the shape of
the eye during surgery. We also manufacture Cruise Control™, a
single-use disposable filter used in phacoemulsification, which is the process
of removing a cataract patient’s cloudy lens through a small incision using
ultrasound and suction. Cruise Control allows for a faster, cleaner
phacoemulsification procedure and is compatible with all phacoemulsification
equipment. We also make the AquaFlow Collagen Glaucoma Drainage
Device, an implantable device used for the surgical treatment of glaucoma. We
also sell other instruments, devices and equipment that we manufacture or that
others in the ophthalmic industry manufacture.
Sales of
other surgical products accounted for approximately 31% of our total revenues
for the 2008 fiscal year, 35% of total revenues for the 2007 fiscal year and 33%
of total revenues for the 2006 fiscal year.
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Operations
STAAR has
significant operations both within and outside the U.S., and receives the
majority of its revenue from its activities outside the U.S. STAAR’s principal
business units and their operations are as follows:
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United
States. STAAR operates its global administrative
headquarters and a manufacturing facility in Monrovia, California. The
Monrovia manufacturing facility principally makes Collamer and silicone
IOLs and injector systems for IOLs and ICLs. STAAR also manufactures the
Collamer material in the U.S.
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Switzerland. STAAR
operates an administrative and manufacturing facility in Nidau,
Switzerland under its wholly owned subsidiary, STAAR Surgical AG. The
Nidau manufacturing facility makes all of STAAR’s ICLs and TICLs and also
manufactures Collamer IOLs. STAAR Surgical AG handles distribution and
other administrative affairs for Europe and other territories outside
North America and Japan.
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Japan. Through
its wholly owned subsidiary, STAAR Japan, Inc., STAAR maintains executive
offices and distribution facilities in Shin-Urayasu, Japan and a
manufacturing facility in Ichikawa City. All of STAAR’s
preloaded injectors are manufactured at the Ichikawa City
facility. STAAR Japan is also currently seeking approval from
the Japanese regulatory authorities to market in Japan STAAR’s Visian ICL
and TICL, Collamer IOL and AquaFlow
Device.
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Germany. STAAR’s
wholly owned subsidiary, Domilens Vertrieb Für Medizinische Produkte GmbH,
is headquartered in Hamburg, Germany. Products sold by Domilens
include implantable lenses, related surgical equipment, consumables and
other supplies. Domilens sells custom surgical kits that incorporate a
surgeon’s preferred supplies and consumables in a single ready-to-use
package, and services phacoemulsification and other surgical equipment.
Domilens distributes and services products of third party manufacturers
and distributes STAAR’s ICLs, IOLs, and Preloaded
Injectors.
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Corporate
Information
Originally
incorporated in California in 1982, STAAR reincorporated in Delaware in 1986.
Our executive offices are located at 1911 Walker Avenue, Monrovia, California
91016, and our telephone number is (626) 303-7902. Our website address is
www.staar.com. The information on our website is not a part of this
prospectus.
STAAR
Surgical Company, STAAR’s Logo, Visian®, Collamer®, STAARvisc™, SonicWAVE™ and
AquaFlow™ are trademarks of STAAR in the U.S. and other countries. Collamer® is
the brand name for STAAR’s proprietary collagen copolymer lens
material
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RISK
FACTORS
Investment
in our securities involves a high degree of risk. Before deciding
whether to purchase any of our securities, please read and carefully consider
the “Risk Factors” sections in the prospectus supplement, in our most recent
Annual Report on Form 10-K filed with the SEC, and in our most recent Quarterly
Report on Form 10-Q if we filed it after the most recent Form
10-K. These reports are incorporated by reference into this
prospectus, along with any filings containing information that amends,
supplements or supersedes those reports. Instructions for obtaining
copies appears under the heading “Where You Can Find More
Information.” Each of these risk factors describes a circumstance
that has the potential to materially harm our business, operating results or
financial condition and reduce the value of an investment in our
securities. It is important for investors to read and consider all of
them.
SECURITIES
WE MAY OFFER
We may
offer any of the following types of securities, with a maximum total value of up
to $10,000,000:
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common
stock
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preferred
stock
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subscription
rights to purchase common or preferred
stock
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warrants
to purchase common or preferred
stock
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We may
offer these securities from time to time under this prospectus at prices and on
terms to be determined by market conditions at the time of the
offering. This prospectus provides you with a general description of
the securities we may offer. In connection with each offering we will
provide a prospectus supplement that contains a more complete description of the
securities offered and the structure of the offering. The prospectus
supplement will include the following information, to the extent
applicable:
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the
type of security offered, whether common or preferred equity, warrants or
a combination;
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the
amount of securities and the price
range;
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the
aggregate offering price;
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the
maturity date, if applicable;
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the
rates and times of payment of dividends, if
any;
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redemption,
conversion or sinking fund terms, if
any;
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voting
or other rights, if any;
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conversion
or exercise prices, if any;
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information
about any trustee or paying agent;
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the
plan of distribution;
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intended
use of proceeds;
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information
about the legal counsel who will pass the legality of the securities
offered; and
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federal
income tax considerations, if material to the securities
offered.
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The
prospectus supplement also may add, update or change information contained in
this prospectus or in documents we have incorporated by
reference. However, no prospectus supplement will offer a security
that is not included in the registration statement of which this prospectus is a
part at the time of its effectiveness or offer a security of a type that is not
described in this prospectus.
This
prospectus may not be used to consummate a sale of securities unless it is
accompanied by a prospectus supplement.
We may
offer and sell the securities directly to investors or through agents,
underwriters or dealers. We, and our agents or underwriters, reserve the right
to accept or reject all or part of any proposed purchase of securities. If we do
offer securities through agents or underwriters, we will include the following
information in the prospectus supplement to the extent applicable:
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the
names of the underwriters or
agents;
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the
fees, discounts or commissions to be paid to
them;
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the
net proceeds to us; and
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information
about the legal counsel advising them on matters related to the
offering.
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USE
OF PROCEEDS
Unless we
describe other use in the prospectus supplement, we will use the net proceeds
from the sale of the securities for general corporate purposes, including among
other things repayment of indebtedness, expansion of sales and marketing,
working capital, capital expenditures, technology acquisition and continuing
research and development. Until applied to that use, we intend to invest the net
proceeds in investment grade, interest-bearing securities.
DESCRIPTION
OF CAPITAL STOCK
Our
authorized capital stock consists of 60 million shares of common stock, par
value $0.01 per share, and 10 million shares of preferred stock, par value $0.01
per shares. As of May 1, 2009, there were 30,108,794 shares of
common stock outstanding and 1,700,000 shares of Series A Convertible Preferred
Stock outstanding.
Common
Stock
The
holders of our common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. The
holders of common stock are not entitled to cumulative voting in the election of
directors.
Subject
to the preferences of any then outstanding shares of preferred stock, each
holder of our common stock is entitled to receive a pro rata share of any
dividends that may be declared by the Board of Directors out of funds legally
available for that purpose. If our company is liquidated, dissolved
or wound up, each holder of the common stock is entitled to a pro rata share of
the net proceeds of that transaction after payment of all liabilities and the
payment of the liquidation preferences of any then outstanding shares of
preferred stock.
As of the
date of this Prospectus, STAAR has 1,700,000 shares of outstanding Series A
Convertible Preferred Stock. If this stock were outstanding at the
time of a sale, liquidation or winding up of the company, an aggregate of $6.8
million of the proceeds of that transaction would be distributed to the
preferred stockholders before the remainder is distributed on a pro rata basis
to common stockholders.
Holders
of common stock have no preemptive rights and no right to convert their common
stock into any other securities. No redemption or sinking fund
provisions apply to any of our common stock. Except for restricted
stock issued to some our employees as incentive compensation, all outstanding
shares of common stock are fully paid and non-assessable, and all shares of
common stock to be issued under this prospectus will be fully paid and
non-assessable.
Preferred
Stock
Our
certificate of incorporation gives our Board of Directors the authority, without
further action by the stockholders, to issue up to 10 million shares of
preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions of this preferred stock, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences,
sinking fund terms and the number of shares constituting any series or the
designation of a series, without further vote or action by the
stockholders. Of the 10 million authorized shares of preferred stock,
on the date of this prospectus we have 1.7 million shares outstanding and
another 8.3 million authorized for potential issuance.
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If STAAR
sells preferred stock, we will file a document called a “certificate of
designation” with the state of Delaware as a part of our certificate of
incorporation. The certificate of designation serves to legally
create a series of preferred stock having the rights, preferences, privileges
and restrictions that have been determined by the board of directors. Before we
make any offering of preferred stock we will file the form of certificate of
designation with the SEC as an exhibit to the registration statement of which
this prospectus forms a part, or as an exhibit to a current report on From
8-K. The terms of the preferred stock that will be described in the
certificate of designation will include the following to the extent
applicable:
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the
title of the class and series;
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the
number of shares designated to be in the same class and series and to
share the same rights, preferences and
privileges;
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any
liquidation preference per share;
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the
dividend rate, period and payment date and method of calculation for
dividends;
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whether
dividends will be cumulative or non-cumulative and, if cumulative, the
date from which dividends will
accumulate;
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the
procedures for any auction and remarketing, if
any;
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the
provisions for a sinking fund, if
any;
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the
provisions for redemption or repurchase, if applicable, and any
restrictions on our ability to exercise those redemption and repurchase
rights;
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whether
the preferred stock will be convertible into our common stock and, if it
is, the conversion price, or how it will be calculated, and the conversion
period;
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voting
rights, if any, of the preferred
stock;
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restrictions
on transfer, sale or other assignment, if
any;
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whether
interests in the preferred stock will be represented by depositary
shares;
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a
discussion of any material or special U.S. federal income tax
considerations applicable to the preferred
stock;
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the
relative ranking and preferences of the preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our
affairs;
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any
limitations on issuance of any class or series of preferred stock ranking
senior to or on a parity with the series of preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our affairs;
and
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any
other specific terms, preferences, rights or limitations of, or
restrictions on, the preferred
stock.
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The
prospectus supplement will provide additional information regarding the
preferred stock, including the following:
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the
number of shares of preferred stock
offered;
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the
price range at which the preferred stock will be offered;
and
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whether
the preferred stock will be listed on any securities exchange or
market.
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If we
issue shares of preferred stock under this prospectus, the shares will be fully
paid and non-assessable and will not have, or be subject to, any preemptive or
similar rights.
The
General Corporation Law of the State of Delaware, the state of our
incorporation, provides that the holders of preferred stock will have the right
to vote separately as a class on any proposed fundamental change in the rights
of the preferred stock. This right is in addition to any voting rights specified
in the applicable certificate of designation.
The
issuance of preferred stock could adversely affect the voting power, conversion
or other rights of holders of our common stock. Preferred stock could
be issued quickly with terms designed to delay or prevent a change in control of
our company or make removal of management more difficult. In
addition, the issuance of preferred stock may have the effect of decreasing the
market price of our common stock.
Anti-Takeover
Effects of Provisions of Delaware Law and Our Charter Documents
Delaware
Takeover Statute
We are
subject to Section 203 of the Delaware General Corporation Law. This
is an anti-takeover law, which restricts transactions and business combinations
between a corporation and an interested stockholder owning 15% or more of the
corporation’s outstanding voting stock, for a period of three years from the
date the stockholder becomes an interested stockholder. With some
exceptions, unless the transaction is approved by the board of directors and the
holders of at least two-thirds of the outstanding voting stock of the
corporation, excluding shares held by the interested stockholder, this law
prohibits significant business transactions such as a merger with, disposition
of assets to, or receipt of disproportionate financial benefits by, the
interested stockholder, or any other transaction that would increase the
interested stockholder’s proportionate ownership of any class or series of the
corporation’s stock. The statutory ban does not apply to a person who
became an interested stockholder in a transaction approved by the board of
directors. The statutory ban also does not apply if, upon consummation of the
transaction in which a person becomes an interested stockholder, the interested
stockholder owns at least 85% of the outstanding voting stock of the
corporation. This calculation does not include shares held by persons
who are both directors and officers or by employee stock plans.
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Charter
Documents
Provisions
of our certificate of incorporation and bylaws could make it more difficult for
a third party to acquire our company, or discourage a third party from
attempting to acquire control of our company. These provisions are
intended to discourage coercive takeover practices and inadequate takeover bids
and to encourage persons seeking to acquire control of our company to first
negotiate with our board of directors. However, these provisions
could also limit the price investors might be willing to pay in the future for
our common stock and could have the effect of delaying or preventing a change in
control. We believe that the benefits of increased protection of our
ability to negotiate with the proponent of an unsolicited acquisition proposal
outweigh the disadvantages of discouraging these proposals because, among other
things, negotiation may result in an improvement of their
terms. Nevertheless, these provisions could limit the price that
investors might be willing to pay in the future for shares of our common stock.
These provisions include the following:
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directors
may be removed only for cause;
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our
stockholders may not act by written consent or call special
meetings;
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stockholders
must submit nominations for the board of directors in
advance;
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the
board of directors may alter some of the provisions of our bylaws without
stockholder approval, and
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our
board of directors has the authority to issue up to 8,300,000 shares of
preferred stock and to determine the price, rights, preferences,
privileges and restrictions, including voting rights, of those shares
without any further vote or action by the
stockholders.
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Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is American Stock Transfer
& Trust Company. Its address is 59 Maiden Lane, New York,
N.Y. 10038, and its telephone number is (718) 921-8293.
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DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include
in any applicable prospectus supplements, summarizes the material terms and
provisions of the warrants that we may offer under this prospectus and the
related warrant agreements and warrant certificates. While the terms summarized
below will apply generally to any warrants that we may offer, we will describe
the particular terms of any series of warrants in more detail in the applicable
prospectus supplement. If we provide for different warrant terms in the
prospectus supplement, the terms of any warrants offered under that prospectus
supplement may differ from the terms described below. However, no prospectus
supplement shall fundamentally change the terms that are described in this
prospectus, or offer a security that is not included in the registration
statement of which this prospectus is a part at the time of its effectiveness or
described in this prospectus. Specific warrant agreements will
contain additional important terms and provisions and will be incorporated by
reference as an exhibit to the registration statement that includes this
prospectus or as an exhibit to a current report on Form 8-K.
General
A warrant
is a right to purchase our securities at a predetermined price. We
will describe in the applicable prospectus supplement the terms of the series of
warrants, including the following:
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the
offering price and aggregate number of warrants
offered;
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the
currency for which the warrants may be
purchased;
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if
applicable, the designation and terms of the securities with which the
warrants are issued and the number of warrants issued with each such
security;
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if
applicable, the date on and after which the warrants and the related
securities will be separately
transferable;
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in
the case of warrants to purchase common stock or preferred stock, the
number of shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which these
shares may be purchased upon such
exercise;
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the
effect of any merger, consolidation, sale or other disposition of our
business on the warrant agreements and the
warrants;
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the
terms of any rights to redeem or call the
warrants;
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any
provisions for changes to or adjustments in the exercise price or number
of securities issuable upon exercise of the
warrants;
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the
dates on which the right to exercise the warrants will commence and
expire;
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the
manner in which the warrant agreements and warrants may be
modified;
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federal
income tax consequences of holding or exercising the
warrants;
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the
terms of the securities issuable upon exercise of the warrants;
and
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any
other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
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Before
exercising their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise, including the right
to receive dividends, if any, or payments upon our liquidation, dissolution or
winding up, or to exercise voting rights, if any.
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in
the applicable prospectus supplement at the exercise price that we describe in
the applicable prospectus supplement. Unless we otherwise specify in the
applicable prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. New York time on the expiration date that
we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become
void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information,
and paying the required amount to the warrant agent in immediately available
funds, as provided in the applicable prospectus supplement. We will set forth on
the reverse side of the warrant certificate and in the applicable prospectus
supplement the information that the holder of the warrant will be required to
deliver to the warrant agent.
On
receipt of the required payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the warrant agent or any
other office indicated in the applicable prospectus supplement, we will issue
and deliver the securities purchasable upon such exercise. If fewer than all of
the warrants represented by the warrant certificate are exercised, then we will
issue a new warrant certificate for the remaining amount of warrants. If we so
indicate in the applicable prospectus supplement, holders of the warrants may
surrender securities as all or part of the exercise price for
warrants.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant
agreement and will not assume any obligation or relationship of agency or trust
with any holder of any warrant. A single bank or trust company may act as
warrant agent for more than one issue of warrants. A warrant agent will have no
duty or responsibility in case of any default by us under the applicable warrant
agreement or warrant, including any duty or responsibility to initiate any
proceedings at law or otherwise, or to make any demand upon us. Any holder of a
warrant may, without the consent of the related warrant agent or the holder of
any other warrant, enforce by appropriate legal action its right to exercise,
and receive the securities purchasable upon exercise of, its
warrants.
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Outstanding
Warrants
As of
June 1, 2009, we have outstanding warrants to purchase 1,470,000 shares of
our common stock. No other warrants to purchase our common stock or
any of our other securities are currently outstanding, and we have no other
current contractual obligations to issue warrants.
DESCRIPTION
OF SUBSCRIPTION RIGHTS
A
subscription right is a right to purchase our securities that is distributed to
our existing stockholders. From time to time STAAR may distribute to
its existing stockholders, on a pro rata basis, rights to purchase additional
shares of common stock or preferred stock at a predetermined price. We may issue
these subscription rights independently or together with any other security
offered by this prospectus. The subscription rights may or may not be
transferable. In connection with any offering of subscription rights,
STAAR may enter into a standby arrangement with one or more underwriters or
other purchasers, under which arrangement the underwriters or other purchasers
commit to purchase any securities remaining unsubscribed for after the
offering.
In any
offering of subscription rights, the prospectus supplement will describe the
following specific terms of the subscription rights:
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the
price, if any, for the subscription
rights;
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the
exercise price to be paid for each share of common stock or preferred
stock purchased on exercise of the subscription
rights;
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the
number of subscription rights issued to each
stockholder;
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the
number of shares and the terms of the common stock or preferred stock that
a holder of subscription rights may purchase on
exercise;
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the
extent to which the holder may transfer the subscription
rights;
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the
date on which the right to exercise the subscription rights shall
commence, and the date on which the subscription rights shall
expire;
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any
other terms of the subscription rights, including the terms, procedures
and limitations relating to the exchange and exercise of the subscription
rights;
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the
extent to which the subscription rights may include an over-subscription
privilege allowing the holder to purchase securities offered to, but not
purchased by, other holders;
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if
applicable, the material terms of any standby underwriting or purchase
arrangement entered into by us in connection with the offering of
subscription rights, including the identity of the underwriter or other
purchaser who has committed to purchase unsubscribed
securities.
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If we
offer subscription rights, the prospectus supplement will summarize the material
terms of the subscription rights but may not be complete. The summary
of the subscription rights will be qualified its entirety by reference to a form
of subscription rights certificate, which will set forth the complete terms and
conditions of the subscription rights. We will file the form of
subscription rights certificate with the SEC. For more information on
how you can obtain copies of any subscription rights certificate STAAR may
offer, see “Where You Can Find More Information” on
page 18. Before you participate in any offering of subscription
rights we urge you to read the form of subscription rights certificate and any
applicable prospectus supplement in their entirety.
PLAN
OF DISTRIBUTION
We may
sell the securities covered by this prospectus, directly to purchasers or
through underwriters, broker-dealers or agents, who may receive compensation in
the form of discounts, concessions or commissions from us.
We may
sell the securities in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time of
sale or at negotiated prices. We may make these sales in transactions
that may involve crosses or block transactions. A prospectus
supplement or supplements will describe the terms of the offering of the
securities, including:
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the
name or names of underwriters, if
any;
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the
purchase price of the securities and the proceeds we will receive from the
sale;
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any
over-allotment options under which underwriters may purchase additional
securities from us;
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any
agency fees or underwriting discounts and other items constituting agents’
or underwriters’ compensation;
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any
public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers;
and
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any
securities exchange or market on which the securities may be
listed.
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Only the
underwriters named in a prospectus supplement are underwriters of the securities
offered by that prospectus supplement.
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If
underwriters are used in the sale, they will acquire the securities for their
own account and may resell the securities from time to time in one or more
transactions at a fixed public offering price or at varying prices determined at
the time of sale. The obligations of the underwriters to purchase the securities
will be subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. Subject to certain conditions, the underwriters will be obligated to
purchase all of the securities offered by the prospectus supplement. Any public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may change from time to time. We may use underwriters with whom we have
a material relationship. We will describe in the prospectus supplement, naming
the underwriter, the nature of any such relationship.
We may
sell securities directly or through agents we designate from time to time. We
will name any agent involved in the offering and sale of securities and we will
describe any commissions we will pay the agent in the prospectus supplement.
Unless the prospectus supplement states otherwise, our agent will act on a
best-efforts basis for the period of its appointment.
We may
authorize agents or underwriters to solicit offers by certain types of
institutional investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
We will describe the conditions to these contracts and the commissions we must
pay for solicitation of these contracts in the prospectus
supplement.
We may
provide agents and underwriters with indemnification against civil liabilities
related to this offering, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or underwriters may make
with respect to these liabilities. Agents and underwriters may engage in
transactions with, or perform services for, us in the ordinary course of
business.
All
securities we offer, other than common stock, will be new issues of securities
with no established trading market. Any underwriter may make a market in these
securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. We cannot guarantee the liquidity of the
trading markets for any securities.
Any
underwriter may engage in overallotment, stabilizing transactions, short
covering transactions and penalty bids in accordance with Regulation M under the
Exchange Act. Overallotment involves sales in excess of the offering size, which
create a short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified
maximum. Short covering transactions involve purchases of the securities in the
open market after the distribution is completed to cover short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a
dealer when the securities originally sold by the dealer are purchased in a
covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
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Any
underwriters who are qualified market makers on the Nasdaq Global Market may
engage in passive market making transactions in the securities on the Nasdaq
Global Market in accordance with Rule 103 of Regulation M, during the business
day prior to the pricing of the offering, before the commencement of offers or
sales of the securities. Passive market makers must comply with applicable
volume and price limitations and must be identified as passive market makers. In
general, a passive market maker must display its bid at a price not in excess of
the highest independent bid for such security; if all independent bids are
lowered below the passive market maker’s bid, however, the passive market
maker’s bid must then be lowered when certain purchase limits are
exceeded.
RATIO
OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
We have
experienced losses in each of the years in the five-year period ended
January 2, 2009 and in the quarter ended April 3, 2009, and
accordingly we have not had sufficient earnings to cover fixed charges during
those periods. “Earnings” consist of income (loss) from continuing
operations before income taxes, extraordinary items, cumulative effect of
accounting changes, equity in net losses of affiliates and fixed charges. “Fixed
charges” consist of interest expense and the portion of operating lease expense
that represents interest. During those periods STAAR has not had any
outstanding class or series of preferred stock that paid dividends in a fixed
amount or in preference to any other class of securities, so the ratio of
earnings to combined fixed earnings and preferred dividends is the same as the
ratio of earnings to fixed charges. The following table sets forth
our ratio of earnings to fixed charges and preferred dividends for the periods
indicated:
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Fiscal
Year Ended
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Quarter
Ended
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December 31,
2004
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December 30,
2005
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December 29,
2006
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December 28,
2007
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January 2,
2009
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April 3,
2009
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Ratio
of Earnings to Fixed Charges and Preferred Dividends (1)
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(1)
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For
the fiscal years ended December 31, 2004, December 30, 2005,
December 29, 2006, December 28, 2007 and January 2, 2009, and
the quarter ended April 3, 2009, our earnings were insufficient to cover
fixed charges by $10.4 million, $9.8 million, $13.4 million,
$15.4 million, $21.7 million and $1.2 million,
respectively.
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LEGAL
MATTERS
The
validity of the securities being registered in the registration of which this
prospectus is a part will be passed upon for us by Charles Kaufman,
Esq. Mr. Kaufman, who participated in the preparation of this
prospectus and the related registration statement, is employed by STAAR as its
Vice President and General Counsel, owns 23,000 shares of our Common Stock and
holds options to purchase an additional 90,000 shares of our Common
Stock. In any offering of securities under this prospectus, the
prospectus supplement will provide information on the legal counsel who will
pass on the validity of the specific securities being offered and information on
the legal counsel for any underwriters employed in the offering.
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EXPERTS
The
consolidated financial statements and schedule and management’s report on the
effectiveness of internal control over financial reporting incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, an
independent registered public accounting firm, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon such reports given upon the authority of
that firm as experts in auditing and accounting.
The
report on the consolidated financial statements as of January 2, 2009
incorporated herein by reference contains an explanatory paragraph regarding the
Company's ability to continue as a going concern.
WHERE
YOU CAN FIND MORE INFORMATION
Because
we are subject to the informational requirements of the Securities Exchange Act,
we file reports, proxy statements and other information with the
SEC. You may read and copy these reports, proxy statements and other
information at the public reference room maintained by the SEC at the following
address:
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Public
Reference Room
100
F Street, NE
Washington,
DC 20549
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You may
obtain information on the operation of the public reference room by calling the
SEC at (800) SEC-0330. In addition, we are required to file
electronic versions of those materials with the SEC through the SEC’s EDGAR
system. The SEC maintains a web site at http://www.sec.gov, which
contains reports, proxy statements and other information regarding registrants
that file electronically with the SEC.
We have
filed with the SEC a registration statement on Form S-3 under the Securities Act
with respect to the securities offered with this prospectus. This prospectus
does not contain all of the information in the registration statement, parts of
which we have omitted, as allowed under the rules and regulations of the SEC.
You should refer to the registration statement for further information about us
and our securities. Statements contained in this prospectus as to the contents
of any contract or other document are not necessarily complete and, in each
instance, we refer you to the copy of each contract or document filed as an
exhibit to the registration statement. Copies of the registration statement,
including exhibits, may be inspected without charge at the SEC’s principal
office in Washington, D.C., and you may obtain copies from that office on
payment of the fees prescribed by the SEC.
We will
furnish without charge to each person to whom a copy of this prospectus is
delivered, on written or oral request, a copy of the information that has been
incorporated by reference into this prospectus (except exhibits, unless they are
specifically incorporated by reference into this prospectus). You should direct
any requests for copies to: Investor Relations, STAAR Surgical Company, 1911
Walker Avenue, Monrovia, California 91016, telephone number (626)
303-7902.
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INFORMATION
INCORPORATED BY REFERENCE
The SEC
allows us to “incorporate by reference” in this prospectus the information that
we file with the SEC. This means that we can disclose important
information by referring the reader to those SEC filings. The
information incorporated by reference is considered to be part of this
prospectus, and later information we file with the SEC will update and supersede
this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Section 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act prior to the termination of the
offering:
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our
Annual Report on Form 10-K for our fiscal year ended January 2,
2009;
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our
Quarterly Report on Form 10-Q for the period ended April 3,
2009;
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our
Current Report on Form 8-K filed with the SEC on April 17,
2009;
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our
Proxy Statement for the Annual Meeting of Stockholders to be held on
June 11, 2009, filed with the SEC on May 1, 2009;
and
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the
description of our common stock contained in Amendment No. 1 to our
registration statement on Form 8-A/A filed with the SEC on
April 18, 2003, including any amendment or report filed for the
purpose of updating this
description.
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You may
obtain copies of those documents from us, free of cost, by contacting us at the
address or telephone number provided in “Where You Can Find More Information”
immediately above.
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