Core Viewpoint - Yunqi Capital, a 5.1% shareholder of Staar Surgical Company, opposes the proposed sale of the company to Alcon based on the terms announced on August 5 [1] Group 1 - Yunqi Capital believes the sale price of $28 per share is inadequate [1]

Core Viewpoint - Yunqi Capital Limited, a 5.1% shareholder of STAAR Surgical Company, opposes the proposed sale of STAAR to Alcon Inc. on the terms announced on August 5, 2025 [1] Group 1 - Yunqi Capital has released an open letter to fellow STAAR shareholders detailing the reasons for its opposition to the transaction [1]

Core Viewpoint - STAAR Surgical Company has entered into a definitive merger agreement with Alcon for $28.00 per share in cash, with the STAAR Board recommending stockholders vote in favor of the merger [1] Group 1: Merger Details - The merger agreement was announced on August 5, 2025, and a virtual Special Meeting of Stockholders is scheduled for October 23 at 8:30 a.m. to vote on the merger [1] - The STAAR Board of Directors unanimously believes that the merger with Alcon is in the best interests of STAAR and its stockholders [1] Group 2: Strategic Rationale - The value provided by the Alcon merger is perceived to exceed what STAAR could achieve independently in the foreseeable future, especially considering STAAR's lower growth rate [1] - The company faces substantial competitive and macro challenges in its markets, particularly with significant exposure to China, where economic uncertainty and declining sales trends have been noted [1]

Core Viewpoint - The Ademi Firm is investigating STAAR for potential breaches of fiduciary duty and other legal violations related to its transaction with Alcon Inc, where STAAR shareholders will receive $28 per share in cash, valuing the transaction at approximately $[1] Group 1 - The investigation by the Ademi Firm focuses on possible breaches of fiduciary duty by STAAR in its dealings with Alcon Inc [1] - Shareholders of STAAR are set to receive $28 per share in cash as part of the transaction [1] - The total valuation of the transaction is approximately $[1]

Core Insights - The article highlights the ongoing high activity in mergers and acquisitions (M&A) within the global medical device sector in 2025, driven by technology, cross-regional expansion, and supply chain integration [2][5][56] Group 1: M&A Trends and Key Transactions - In 2025, significant M&A activities are observed, including a $17.5 billion acquisition by Waters of BD Life Sciences, which aims to create a comprehensive diagnostic platform [29][32] - Alcon has been particularly active in the ophthalmology sector, completing multiple acquisitions to strengthen its full-chain capabilities from surgical to non-surgical solutions [5][6][11] - The cardiovascular and neuro-interventional sectors are seeing a shift towards less invasive treatments and diversified therapeutic approaches, including non-drug solutions [12][30] Group 2: Sector-Specific Insights - The ophthalmology market is experiencing increased concentration, with Alcon's strategy focusing on a comprehensive technology loop covering refractive surgery, cataracts, retinal diseases, and corneal regeneration [5][11] - The cardiovascular and neuro-interventional M&A activities are characterized by a focus on reducing trauma and recovery time, with innovations like ultrasound renal denervation and non-drug thrombectomy gaining traction [12][30] - The production and supply chain capabilities are being enhanced through acquisitions of key components and materials, which are crucial for maintaining delivery reliability and optimizing profit structures [20][31] Group 3: AI and Precision Diagnostics - The AI and precision diagnostics segment is witnessing strategic acquisitions that enhance high-margin business lines and clinical authority, with notable transactions like Waters acquiring BD [28][32] - The integration of AI technologies into clinical applications is progressing, with companies focusing on data assets and algorithm platforms to enhance diagnostic accuracy and market competitiveness [44][55] Group 4: Women's Health and Specialty Surgery - The women's health and specialty surgery sectors are characterized by high margins and strong brand reliance, with acquisitions focusing on specific surgical pathways that are difficult to replace [37][43] - Companies like Hologic are expanding their portfolios to cover the entire patient journey from diagnosis to treatment, enhancing customer loyalty and repeat business [42][56] Group 5: Future Outlook and Strategic Implications - The M&A landscape in 2025 reflects a strategic repositioning of companies to adapt to clinical trends and market demands, with a focus on comprehensive coverage of treatment pathways and supply chain security [53][55] - The article emphasizes the importance of aligning technology and market positioning early to capitalize on potential acquisition opportunities and achieve high valuations [55][56]

Core Insights - Staar Surgical's international revenue performance is critical for assessing its financial resilience and growth prospects [1][2][3] Group 1: Financial Performance - The company's total revenue for the quarter was $44.32 million, a decline of 55.2% year over year [4] - Other International contributed $18.18 million, accounting for 41% of total revenue, which was a surprise of -24.34% compared to the consensus estimate of $24.03 million [5] - Japan generated $10.92 million, representing 24.6% of total revenue, with a positive surprise of +8.28% compared to the projected $10.08 million [6] - China accounted for 12% of total revenue, translating to $5.3 million, with a significant surprise of +454.87% against the expected $0.96 million [7] Group 2: Future Revenue Predictions - For the current fiscal quarter, analysts anticipate total revenues of $89.27 million, reflecting a 0.8% increase year over year [8] - Expected revenue contributions for the current quarter are 23.8% from Other International ($21.26 million), 12.8% from Japan ($11.38 million), and 54.2% from China ($48.36 million) [8] - For the full year, total revenue is projected to be $258.21 million, down 17.7% from the previous year, with specific contributions from Other International (36.1%), Japan (17.3%), and China (36.9%) [9] Group 3: Market Context - Staar Surgical's reliance on international markets presents both opportunities and challenges, necessitating close monitoring of international revenue trends [10] - The interconnected global economy and geopolitical factors are increasingly influencing earnings predictions for companies with overseas operations [10][11]

Core Viewpoint - Monteverde & Associates PC is investigating the proposed sale of STAAR Surgical Company to Alcon Research LLC, where STAAR shareholders are set to receive $28.00 in cash per share, raising questions about the fairness of the deal [1]. Group 1: Company Overview - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has recovered millions for shareholders [1]. - The firm is located in the Empire State Building, New York City, and specializes in class action securities litigation [2]. Group 2: Transaction Details - The proposed transaction involves STAAR Surgical Company selling to Alcon Research LLC, with shareholders receiving $28.00 per share [1]. - The investigation aims to determine if the deal is fair for STAAR shareholders [1].

Core Insights - Staar Surgical reported a revenue of $44.32 million for the quarter ended June 2025, marking a year-over-year decline of 55.2% and an EPS of -$0.07 compared to $0.33 a year ago, indicating significant financial challenges [1] - The revenue exceeded the Zacks Consensus Estimate of $41.56 million by 6.63%, while the EPS surprise was 87.5% against a consensus estimate of -$0.56, suggesting better-than-expected performance in terms of earnings [1] Revenue Performance - Net Geographic Sales in the United States were $5.64 million, slightly below the average estimate of $6.46 million, reflecting a year-over-year increase of 4.4% [4] - Net Geographic Sales from Other International markets totaled $18.18 million, significantly lower than the average estimate of $24.03 million, showing a year-over-year decline of 10.6% [4] - Sales in Japan reached $10.92 million, surpassing the average estimate of $10.08 million with a year-over-year increase of 10.4% [4] - In China, sales were reported at $5.3 million, a dramatic drop from the average estimate of $0.96 million, representing a year-over-year decline of 91.6% [4] Stock Performance - Staar Surgical's shares have returned +59.8% over the past month, significantly outperforming the Zacks S&P 500 composite, which saw a change of +0.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Staar Surgical reported a quarterly loss of $0.07 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.56, representing an earnings surprise of +87.50% [1] - The company posted revenues of $44.32 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 6.63%, although this is a decline from year-ago revenues of $99 million [2] - Over the last four quarters, Staar Surgical has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Movement and Outlook - Staar Surgical shares have increased by approximately 11.2% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the earnings outlook for the upcoming quarters [3][4] - The current consensus EPS estimate for the next quarter is $0.18 on revenues of $87.83 million, while for the current fiscal year, it is -$0.78 on revenues of $258.21 million [7] Industry Context - The Medical - Dental Supplies industry, to which Staar Surgical belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Staar Surgical's stock may also be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

PART I – FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The unaudited financial statements reveal a significant sales decline and net loss due to challenges in China and major restructuring charges [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet shows increased cash but decreased investments and total assets, reflecting a contraction in the company's financial position **Condensed Consolidated Balance Sheets (in thousands)** | Metric | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $167,131 | $144,159 | | Investments available for sale | $22,752 | $86,335 | | Accounts receivable trade, net | $34,440 | $77,897 | | Inventories, net | $53,107 | $43,305 | | Total current assets | $292,792 | $367,940 | | Property, plant and equipment, net| $74,417 | $84,889 | | Total assets | $437,781 | $509,524 | | Total current liabilities | $59,228 | $70,306 | | Total liabilities | $101,208 | $112,189 | | Total stockholders' equity | $336,573 | $397,335 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The income statement highlights a sharp drop in net sales and a shift from operating income to a significant operating loss year-over-year **Condensed Consolidated Statements of Operations (in thousands, except per share amounts)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $44,320 | $99,005 | $86,909 | $176,361 | | Cost of sales | $11,521 | $20,593 | $26,105 | $36,914 | | Gross profit | $32,799 | $78,412 | $60,804 | $139,447 | | Operating income (loss) | $(29,964) | $11,898 | $(87,365) | $9,617 | | Income (loss) before income taxes | $(25,915) | $10,334 | $(80,401) | $8,123 | | Net income (loss) | $(16,812) | $7,379 | $(71,023) | $4,040 | | Basic EPS | $(0.34) | $0.15 | $(1.44) | $0.08 | | Diluted EPS | $(0.34) | $0.15 | $(1.44) | $0.08 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) The company experienced a comprehensive loss driven by a net loss, contrasting with comprehensive income in the prior year **Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(16,812) | $7,379 | $(71,023) | $4,040 | | Other comprehensive income (loss), net of tax | $(41) | $(751) | $1,386 | $(1,350) | | Comprehensive income (loss) | $(16,853) | $6,628 | $(69,637) | $2,690 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Stockholders' equity decreased significantly due to a substantial net loss, partially offset by stock-based compensation **Changes in Stockholders' Equity (in thousands)** | Metric | Balance at Dec 27, 2024 | Net Loss (6 months) | Other Comprehensive Income (6 months) | Stock-based Compensation (6 months) | Repurchase of Common Stock (6 months) | Balance at June 27, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $397,335 | $(71,023) | $1,386 | $14,321 | $(4,479) | $336,573 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash flow from operations turned negative, though the overall cash position increased due to proceeds from investment maturities **Condensed Consolidated Statements of Cash Flows (in thousands)** | Metric | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(32,983) | $11,267 | | Net cash provided by (used in) investing activities | $60,471 | $(4,481) | | Net cash provided by (used in) financing activities | $(5,488) | $4,219 | | Effect of exchange rate changes | $972 | $(1,267) | | Increase in cash and cash equivalents | $22,972 | $9,738 | | Cash and cash equivalents, at end of the period | $167,131 | $192,776 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes detail accounting policies, restructuring charges, investment changes, and the subsequent merger agreement with Alcon [Note 1 — Basis of Presentation and Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%94%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the company's business, basis of financial presentation, and details significant restructuring and impairment charges - The Company designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems[22](index=22&type=chunk) - Reclassified certain personnel costs from research and development to sales and marketing to better reflect their nature in supporting existing products[25](index=25&type=chunk) **Restructuring, Impairment and Related Charges (in thousands)** | Charge Type | Three Months Ended June 27, 2025 | Six Months Ended June 27, 2025 | | :--- | :--- | :--- | | Severance and reduction in workforce | $3,645 | $12,453 | | Consulting expenses | $227 | $866 | | Impairment on leasehold improvements and machinery & equipment | $700 | $7,759 | | Impairment on real property right-of-use assets | $676 | $4,083 | | Impairment for internally developed software | $0 | $2,751 | | **Total Charges** | **$5,248** | **$27,912** | [Note 2 — Investments Available for Sale](index=12&type=section&id=Note%202%20%E2%80%94%20Investments%20Available%20for%20Sale) The company's portfolio of available-for-sale investments decreased substantially, with all remaining investments maturing within one year **Investments Available for Sale (in thousands)** | Investment Type | June 27, 2025 (Estimated Fair Value) | December 27, 2024 (Estimated Fair Value) | | :--- | :--- | :--- | | Commercial paper | $4,154 | $21,468 | | Certificates of deposit | $1,507 | $1,997 | | U.S. Treasury securities | $999 | $11,355 | | Corporate debt securities | $16,092 | $51,515 | | **Total investments AFS** | **$22,752** | **$86,335** | - All investments available for sale as of June 27, 2025, **mature within one year**[37](index=37&type=chunk) - **No allowance for expected credit losses** was recorded for the three and six months ended June 27, 2025, and June 28, 2024[36](index=36&type=chunk) [Note 3 — Inventories](index=13&type=section&id=Note%203%20%E2%80%94%20Inventories) Net inventories increased, driven by a significant rise in finished goods, particularly consigned inventory **Inventories, Net (in thousands)** | Inventory Component | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Raw materials and purchased parts | $10,353 | $9,705 | | Work in process | $10,441 | $8,168 | | Finished goods | $34,368 | $26,710 | | Total inventories, gross | $55,162 | $44,583 | | Less inventory reserves | $(2,055) | $(1,278) | | **Total inventories, net** | **$53,107** | **$43,305** | - Finished goods inventory includes consigned inventory of **$14,329,000** at June 27, 2025, a significant increase from **$1,958,000** at December 27, 2024[39](index=39&type=chunk) [Note 4 — Prepayments, Deposits, and Other Current Assets](index=13&type=section&id=Note%204%20%E2%80%94%20Prepayments,%20Deposits,%20and%20Other%20Current%20Assets) Total prepayments and other current assets remained relatively stable, with notable decreases in prepaid rent and insurance **Prepayments, Deposits, and Other Current Assets (in thousands)** | Asset Component | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Prepayments and deposits | $8,158 | $7,887 | | Prepaid rent | $170 | $2,910 | | Prepaid insurance | $1,210 | $2,432 | | Value added tax (VAT) receivable | $2,640 | $1,359 | | BVG (Swiss Pension) prepayment | $1,273 | $7 | | Other | $1,911 | $1,649 | | **Total** | **$15,362** | **$16,244** | [Note 5 — Property, Plant and Equipment](index=13&type=section&id=Note%205%20%E2%80%94%20Property,%20Plant%20and%20Equipment) Net property, plant, and equipment decreased due to depreciation and significant impairment charges on fixed and software assets **Property, Plant and Equipment, Net (in thousands)** | Asset Component | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Machinery and equipment | $43,487 | $46,113 | | Computer equipment and software | $11,315 | $12,976 | | Furniture and fixtures | $7,727 | $7,627 | | Leasehold improvements | $18,671 | $19,766 | | Construction in process | $30,551 | $32,014 | | Total property, plant and equipment, gross | $111,751 | $118,496 | | Less accumulated depreciation | $(37,334) | $(33,607) | | **Total property, plant and equipment, net** | **$74,417** | **$84,889** | - Recognized fixed asset impairment expense of **$7,759,000** for the six months ended June 27, 2025, primarily on leasehold improvements and machinery[42](index=42&type=chunk) - Recognized impairment of **$2,751,000** for internally developed software due to a transition to a cloud-based solution[42](index=42&type=chunk) [Note 6 – Cloud-Based Software](index=14&type=section&id=Note%206%20%E2%80%93%20Cloud-Based%20Software) The company significantly increased its investment in capitalized cloud-based software assets during the period **Capitalized Cloud-Based Software, Net (in thousands)** | Metric | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Capitalized cloud-based software | $22,865 | $15,763 | | Less accumulated amortization | $(200) | $0 | | **Total capitalized cloud-based software, net** | **$22,665** | **$15,763** | - Additions to cloud-based software were **$7,101,000** for the six months ended June 27, 2025[45](index=45&type=chunk) [Note 7 – Other Current Liabilities](index=15&type=section&id=Note%207%20%E2%80%93%20Other%20Current%20Liabilities) Other current liabilities decreased, though severance payable increased substantially due to restructuring activities **Other Current Liabilities (in thousands)** | Liability Component | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Accrued salaries and wages | $13,821 | $16,140 | | Accrued bonuses | $3,354 | $1,300 | | Severance payable | $4,123 | $356 | | Accrued insurance | $1,106 | $2,701 | | Income taxes payable | $1,067 | $6,547 | | Marketing obligations | $3,462 | $2,699 | | Other | $10,121 | $13,344 | | **Total other current liabilities** | **$37,054** | **$43,087** | - Recognized **$12,453,000** for severance costs related to leadership realignment and workforce reduction for the six months ended June 27, 2025[46](index=46&type=chunk) [Note 8 – Operating Leases](index=15&type=section&id=Note%208%20%E2%80%93%20Operating%20Leases) Operating lease liabilities increased slightly, and the company recognized significant impairment on right-of-use assets from exiting properties **Operating Lease Right-of-Use Assets and Liabilities (in thousands)** | Metric | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets, net | $33,027 | $36,850 | | Current operating lease obligations | $5,103 | $3,894 | | Long-term operating lease obligations | $35,417 | $34,807 | | **Total operating lease liability** | **$40,520** | **$38,701** | | Weighted-average remaining lease term (in years) | 6.8 | 7.1 | | Weighted-average discount rate | 6.00% | 5.98% | - Recognized impairment on real property right-of-use assets of **$4,083,000** for the six months ended June 27, 2025[47](index=47&type=chunk) [Note 9 — Income Taxes](index=16&type=section&id=Note%209%20%E2%80%94%20Income%20Taxes) The company recorded an income tax benefit due to pre-tax losses, with effective tax rates influenced by foreign jurisdiction taxes **Income Tax Provision (Benefit) (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Provision (benefit) for income taxes | $(9,103) | $2,955 | $(9,378) | $4,083 | | Effective tax rate | 35.1% | 28.6% | 11.7% | 50.3% | - Effective tax rates differ from the U.S. federal statutory rate of **21%** primarily due to income tax expense generated in foreign jurisdictions[50](index=50&type=chunk) [Note 10 – Defined Benefit Pension Plans](index=17&type=section&id=Note%2010%20%E2%80%93%20Defined%20Benefit%20Pension%20Plans) Net periodic pension costs increased compared to the prior year, driven by higher service costs and actuarial losses **Net Periodic Pension Cost (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Service cost | $436 | $313 | $840 | $638 | | Interest cost | $63 | $87 | $125 | $171 | | Expected return on plan assets | $(139) | $(136) | $(274) | $(268) | | Prior service credit | $(53) | $(45) | $(106) | $(90) | | Settlement gain | $(4) | $0 | $(8) | $0 | | Actuarial loss recognized in current period | $73 | $28 | $146 | $56 | | **Net periodic pension cost** | **$376** | **$247** | **$723** | **$507** | [Note 11 — Stockholders' Equity](index=17&type=section&id=Note%2011%20%E2%80%94%20Stockholders'%20Equity) The company initiated a share repurchase program and continued to record stock-based compensation expense **Stock-Based Compensation Expense (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Employee stock options | $1,640 | $3,518 | $4,045 | $6,691 | | RSUs | $3,345 | $3,053 | $6,308 | $5,343 | | PSUs | $2,211 | $2,119 | $2,607 | $2,804 | | **Total stock-based compensation expense** | **$7,802** | **$9,042** | **$13,817** | **$15,381** | - The Board of Directors authorized a share repurchase program of up to **$30 million** in May 2025[60](index=60&type=chunk) - During the quarter ended June 27, 2025, the Company purchased **260,515 shares** for an aggregate of **$4,479,000** under the repurchase program[60](index=60&type=chunk) [Note 12 - Commitments and Contingencies](index=20&type=section&id=Note%2012%20-%20Commitments%20and%20Contingencies) The company is involved in routine legal matters that are not expected to have a material adverse effect on its financial condition - The Company is involved in various legal proceedings and other matters arising in the normal course of business[62](index=62&type=chunk) - Management does not believe that any known claims are likely to have a **material adverse effect** on the Company's financial condition or results of operations[62](index=62&type=chunk) [Note 13 — Basic and Diluted Net Income (Loss) Per Share](index=20&type=section&id=Note%2013%20%E2%80%94%20Basic%20and%20Diluted%20Net%20Income%20(Loss)%20Per%20Share) The company reported a net loss per share, and a significant number of potential common shares were excluded as anti-dilutive **Basic and Diluted Net Income (Loss) Per Share** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(16,812) | $7,379 | $(71,023) | $4,040 | | Basic EPS | $(0.34) | $0.15 | $(1.44) | $0.08 | | Diluted EPS | $(0.34) | $0.15 | $(1.44) | $0.08 | - Due to a net loss for the three and six months ended June 27, 2025, the number of **diluted shares was equal to the number of basic shares**[63](index=63&type=chunk) **Anti-Dilutive Securities Excluded from Diluted EPS (in thousands)** | Security Type | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Stock options | 7,128 | 3,031 | 7,089 | 3,275 | | Restricted stock, RSUs and PSUs | 1,009 | 180 | 885 | 63 | | **Total Anti-Dilutive Securities** | **8,137** | **3,211** | **7,974** | **3,338** | [Note 14 — Disaggregation of Sales, Geographic Sales and Product Sales](index=21&type=section&id=Note%2014%20%E2%80%94%20Disaggregation%20of%20Sales,%20Geographic%20Sales%20and%20Product%20Sales) Sales are entirely from ophthalmic surgical products, with a dramatic decline in China sales being the primary driver of the overall revenue drop - **100% of the Company's sales** are generated from the ophthalmic surgical product segment, primarily implantable Collamer lenses (ICLs)[65](index=65&type=chunk) **Net Sales by Category (in thousands)** | Sales Category | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Non-consignment sales | $37,525 | $94,775 | $75,376 | $166,539 | | Consignment sales | $6,795 | $4,230 | $11,533 | $9,822 | | **Total net sales** | **$44,320** | **$99,005** | **$86,909** | **$176,361** | **Net Sales by Geographic Market (in thousands)** | Geographic Market | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Domestic | $5,635 | $5,399 | $11,094 | $10,334 | | Foreign: China | $5,299 | $63,519 | $4,422 | $101,996 | | Foreign: Japan | $10,915 | $9,887 | $22,310 | $20,344 | | Foreign: Korea | $4,293 | $3,924 | $11,815 | $10,660 | | Foreign: Other | $18,178 | $16,276 | $37,268 | $33,027 | | **Total net sales** | **$44,320** | **$99,005** | **$86,909** | **$176,361** | [Note 15 — Geographic Assets](index=23&type=section&id=Note%2015%20%E2%80%94%20Geographic%20Assets) The majority of the company's long-lived assets, including property and equipment, are located in the United States **Long-Lived Assets by Geographic Location (in thousands)** | Asset Category | U.S. (June 27, 2025) | Switzerland (June 27, 2025) | Other (June 27, 2025) | Total (June 27, 2025) | | :--- | :--- | :--- | :--- | :--- | | Property, plant and equipment, net | $57,007 | $16,926 | $484 | $74,417 | | Operating lease ROU assets, net | $23,434 | $5,851 | $3,742 | $33,027 | | **Total** | **$80,441** | **$22,777** | **$4,226** | **$107,444** | [Note 16 — Subsequent Events](index=23&type=section&id=Note%2016%20%E2%80%94%20Subsequent%20Events) Subsequent to the reporting period, the company entered into a definitive merger agreement to be acquired by Alcon - On August 4, 2025, the Company entered into an **Agreement and Plan of Merger** with Alcon Research, LLC and Rascasse Merger Sub, Inc[69](index=69&type=chunk) - Each share of common stock will be converted into the right to receive **$28.00 in cash**, without interest, upon the effective time of the Merger[72](index=72&type=chunk) - The Merger is subject to stockholder approval, regulatory approvals (including **Hart-Scott-Rodino, China, and Japan**), and other customary closing conditions[73](index=73&type=chunk) - Termination fees include up to **$43.4 million** payable by the Company to Alcon, and **$72.4 million** payable by Alcon to the Company under specified circumstances[74](index=74&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=25&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses a significant sales decline and net loss driven by China market challenges and restructuring, while highlighting mitigation strategies [Overview](index=25&type=section&id=Overview) The company designs, develops, and sells proprietary implantable Collamer® lenses (ICLs) for refractive surgery globally - STAAR Surgical Company designs, develops, manufactures, and sells implantable Collamer® lenses (ICLs) for refractive surgery[79](index=79&type=chunk) - ICLs are proprietary, foldable, phakic lenses made from Collamer, intended to be permanent but reversible[79](index=79&type=chunk) - The company's commercialization strategy focuses on sustainable profitable growth, expanding product availability, and providing surgeon training and education[80](index=80&type=chunk) [Business Environment and Factors Affecting Comparability](index=26&type=section&id=Business%20Environment%20and%20Factors%20Affecting%20Comparability) Business performance was heavily impacted by elevated distributor inventory in China, prompting a shift to consignment agreements - Net sales **decreased by 55%** for the three months ended June 27, 2025, primarily due to dynamics in the China business[81](index=81&type=chunk) - China distributors held elevated ICL product inventory as of December 27, 2024, leading to **minimal China ICL sales** in the first half of fiscal 2025[81](index=81&type=chunk) - The Company negotiated and implemented **consignment agreements** with China distributors and is ramping up Swiss production to mitigate tariff exposure[82](index=82&type=chunk) - China revenue is expected to **normalize in the second half of fiscal 2025**, with distributors making smaller purchases aligned to procedural volumes[81](index=81&type=chunk)[83](index=83&type=chunk) [Critical Accounting Estimates](index=26&type=section&id=Critical%20Accounting%20Estimates) There have been no significant changes to the company's critical accounting estimates during the reporting period - Management believes there have been **no significant changes** to the critical accounting estimates disclosed in the Annual Report on Form 10-K for the fiscal year ended December 27, 2024[85](index=85&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) The company's operational results show a significant downturn, with sales and gross profit declining sharply and expenses rising as a percentage of sales **Key Financial Metrics as Percentage of Net Sales** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | 100.0% | 100.0% | 100.0% | 100.0% | | Cost of sales | 26.0% | 20.8% | 30.0% | 20.9% | | Gross profit | 74.0% | 79.2% | 70.0% | 79.1% | | General and administrative | 47.3% | 23.9% | 52.3% | 26.6% | | Selling and marketing | 59.3% | 31.3% | 61.2% | 33.8% | | Research and development | 23.2% | 12.0% | 24.9% | 13.2% | | Restructuring, impairment and related charges | 11.8% | 0.0% | 32.1% | 0.0% | | Total selling, general and administrative | 141.6% | 67.2% | 170.5% | 73.6% | | Operating income (loss) | (67.6)% | 12.0% | (100.5)% | 5.5% | | Net income (loss) | (38.0)% | 7.4% | (81.7)% | 2.4% | [Net Sales](index=27&type=section&id=Net%20Sales) Net sales more than halved, driven by a severe decline in the APAC region, specifically China, while other regions saw modest growth **Net Sales (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change (2025 vs. 2024) | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change (2025 vs. 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $44,320 | $99,005 | (55.2)% | $86,909 | $176,361 | (50.7)% | - The sales decrease was driven by the Asia Pacific (APAC) region, which **decreased 69%** for the three months and **66%** for the six months[90](index=90&type=chunk)[91](index=91&type=chunk) - The Europe, Middle East and Africa (EMEA) region sales **increased 11%** for the three months and **14%** for the six months[90](index=90&type=chunk)[91](index=91&type=chunk) - The Americas region sales **increased 10%** for both the three and six months[90](index=90&type=chunk)[91](index=91&type=chunk) [Gross Profit](index=28&type=section&id=Gross%20Profit) Gross profit and margin fell due to lower sales volume, reduced production efficiency, and higher inventory reserves **Gross Profit and Gross Margin (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change (2025 vs. 2024) | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change (2025 vs. 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gross profit | $32,799 | $78,412 | (58.2)% | $60,804 | $139,447 | (56.4)% | | Gross margin | 74.0% | 79.2% | | 70.0% | 79.1% | | - Gross profit margin decreased primarily due to **decreased sales volume** and **higher manufacturing costs per unit** from lower production volume[92](index=92&type=chunk) [General and Administrative Expense](index=28&type=section&id=General%20and%20Administrative%20Expense) General and administrative expenses decreased due to lower outside services and compensation costs **General and Administrative Expenses (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change (2025 vs. 2024) | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change (2025 vs. 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | General and administrative expense | $20,969 | $23,641 | (11.3)% | $45,427 | $46,869 | (3.1)% | - Decrease primarily due to **decreased outside services and bonus and stock-based compensation expenses**, partially offset by increased salary-related expenses[93](index=93&type=chunk) [Selling and Marketing Expense](index=28&type=section&id=Selling%20and%20Marketing%20Expense) Selling and marketing expenses declined as the company reduced advertising and promotional activities **Selling and Marketing Expenses (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change (2025 vs. 2024) | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change (2025 vs. 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Selling and marketing expense | $26,283 | $31,005 | (15.2)% | $53,228 | $59,663 | (10.8)% | - Decrease primarily due to **decreased advertising and promotional activities**, partially offset by increased salary-related expenses[94](index=94&type=chunk) [Research and Development Expense](index=28&type=section&id=Research%20and%20Development%20Expense) Research and development spending was lower due to reduced stock-based compensation and clinical expenses **Research and Development Expenses (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change (2025 vs. 2024) | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change (2025 vs. 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Research and development expense | $10,263 | $11,868 | (13.5)% | $21,602 | $23,298 | (7.3)% | - Decrease primarily due to **decreased stock-based compensation expenses** and reduced clinical expenses associated with U.S. post-approval activities[96](index=96&type=chunk) [Restructuring, Impairment and Related Charges](index=30&type=section&id=Restructuring,%20Impairment%20and%20Related%20Charges) The company incurred substantial restructuring and impairment charges related to severance, asset write-downs, and consulting fees **Restructuring, Impairment and Related Charges (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Restructuring, impairment and related charges | $5,248 | $0 | $27,912 | $0 | - Charges include **$12,453,000 for severance**, **$7,759,000 for fixed asset impairment**, and **$4,083,000 for ROU asset impairment** for the six months ended June 27, 2025[98](index=98&type=chunk) - The restructuring effort was **substantially completed** as of June 27, 2025[98](index=98&type=chunk) [Other Income (Expense), Net](index=30&type=section&id=Other%20Income%20(Expense),%20Net) Other income increased significantly, shifting from an expense to income, primarily due to favorable foreign exchange gains **Other Income (Expense), Net (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Other income (expense), net | $4,049 | $(1,564) | $6,964 | $(1,494) | - The increase in other income (expense), net, was primarily due to **higher foreign exchange gains**[100](index=100&type=chunk) [Income Taxes](index=30&type=section&id=Income%20Taxes) The company recorded an income tax benefit as a result of its pre-tax loss, with the effective rate influenced by foreign taxes **Income Tax Provision (Benefit) (in thousands)** | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income (benefit) tax provision | $(9,103) | $2,955 | $(9,378) | $4,083 | | Effective tax rate | 35.1% | 28.6% | 11.7% | 50.3% | - The effective tax rates differ from the U.S. federal statutory rate of **21%** primarily due to income tax expense generated in foreign jurisdictions[102](index=102&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position weakened with a decrease in working capital, though cash increased from the maturity of investments - Principal sources of liquidity are cash, cash equivalents, investments, and operating cash flow, believed to be **sufficient for at least 12 months**[104](index=104&type=chunk) **Liquidity Position (in thousands)** | Metric | June 27, 2025 | December 27, 2024 | Change (2025 vs. 2024) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $167,131 | $144,159 | $22,972 | | Investments available for sale | $22,752 | $86,335 | $(63,583) | | **Total** | **$189,883** | **$230,494** | **$(40,611)** | | Working capital | $233,564 | $297,634 | $(64,070) | - Net cash used in operating activities was **$32.98 million** for the six months ended June 27, 2025, compared to net cash provided of **$11.27 million** in the prior year[105](index=105&type=chunk) - Net cash provided by investing activities was **$60.47 million** for the six months ended June 27, 2025, mainly from proceeds from maturities of investments[106](index=106&type=chunk) [Commitments](index=34&type=section&id=Commitments) Certain executive officers have employment agreements with change-in-control and severance provisions - The Company's CEO and certain officers have employment agreements with provisions for compensation upon a **'change in control'** or termination **'without cause'**[109](index=109&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=34&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes in the company's market risk disclosures since the last annual report - **No material changes** in the Company's qualitative and quantitative market risk since the disclosure in the Annual Report on Form 10-K for the year ended December 27, 2024[110](index=110&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of June 27, 2025[111](index=111&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[113](index=113&type=chunk) PART II – OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in routine legal proceedings not expected to materially impact its financial condition or operations - The Company is involved in various legal proceedings and other matters arising in the normal course of business[114](index=114&type=chunk) - Management does not believe that any of the claims known is likely to have a **material adverse effect** on the Company's financial condition or results of operations[114](index=114&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) New risks related to the proposed Alcon acquisition include potential business disruption and the uncertainty of the merger's completion - The announcement and pendency of the proposed acquisition by Alcon could **adversely impact** the Company's business, financial condition, and results of operations[116](index=116&type=chunk) - Risks include impairment of ability to **attract/retain employees**, difficulties maintaining customer/supplier relationships, and diversion of management time[119](index=119&type=chunk) - Completion of the Merger is subject to closing conditions, including **stockholder and regulatory approvals** (Hart-Scott-Rodino, China, Japan)[117](index=117&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk) - If the Merger Agreement is terminated, the Company may be required to pay Alcon a termination fee of up to **$43.4 million**[122](index=122&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=38&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company repurchased 260,515 shares for $4.5 million as part of its $30 million share repurchase program - The Company purchased **260,515 shares** for an aggregate of **$4.5 million** during the quarter ended June 27, 2025[128](index=128&type=chunk) - These repurchases were part of a share repurchase program authorized in May 2025 for up to **$30 million** of outstanding common stock[128](index=128&type=chunk) - As of June 27, 2025, approximately **$25.5 million remained available** for repurchases under the program[128](index=128&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=38&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not Applicable[129](index=129&type=chunk) [ITEM 5. OTHER INFORMATION](index=38&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No director or officer adopted or terminated any **Rule 10b5-1 trading plans** or non-Rule 10b5-1 trading arrangements during the quarter ended June 27, 2025[131](index=131&type=chunk) [ITEM 6. EXHIBITS](index=39&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including the Merger Agreement and required certifications - Exhibit 2.1 is the **Agreement and Plan of Merger**, dated August 4, 2025, by and among STAAR Surgical Company, Alcon Research, LLC and Rascasse Merger Sub, Inc[132](index=132&type=chunk) - Includes certifications pursuant to **Rule 13a-14(a)** of the Securities Exchange Act of 1934 and **18 U.S.C. Section 1350**[132](index=132&type=chunk) - Financial statements from the quarterly report are formatted in **Inline Extensible Business Reporting Language (iXBRL)**[132](index=132&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) The report is officially signed by the Chief Financial Officer on behalf of the company - The report was signed by **Deborah Andrews, Chief Financial Officer**, on August 6, 2025[137](index=137&type=chunk)