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Item 9A. Controls and Procedures

2025-02-21 compared with 2024-02-27 · 274 added, 222 removed, 1059 unchanged (32% of the section changed)

Controls and Procedures

Attached as exhibits to this Annual Report on Form 10-K are certifications of STAAR’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the Exchange Act).

This “Controls and Procedures” section includes information concerning the controls and controls evaluation referred to in the certifications.

The report of BDO USA, P.C., our independent registered public accounting firm, regarding its audit of STAAR’s internal control over financial reporting follows below.

This section should be read in conjunction with the certifications and the BDO USA, P.C.

report for a more complete understanding of the topics presented.

Attached as exhibits to this Annual Report on Form 10-K are certifications of STAAR’s Chief Executive Officer, our principal executive officer (PEO), and Chief Financial Officer, our principal financial officer (PFO), which are required to be made by Rule 13a-14 or Rule 15d-14 of the Securities Exchange Act of 1934, as amended (the Exchange Act).

This item includes information concerning the controls and controls evaluation referred to in the certifications.

This item should be read in conjunction with the certifications for a more complete understanding of the certifications.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of the disclosure controls and procedures of the Company.

Based on that evaluation, our CEO and CFO concluded, as of the end of the period covered by our Form 10-K for the fiscal year ended December 29, 2023, that our disclosure controls and procedures were effective.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this Annual Report, our management carried out an evaluation, with the participation of our PEO and PFO, of the effectiveness of the disclosure controls and procedures of the Company.

Based on that evaluation, our PEO and PFO concluded, as of December 27, 2024, that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

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Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company.

The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.

The Company’s management, including our PEO and PFO, is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) and

15d-15(f)) for the Company.

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with generally accepted accounting principles in the United States of America.

Because of its inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements and can provide only reasonable, not absolute assurance, that its objectives will be achieved.

Further, because of changing conditions, effectiveness of internal control over financial reporting may vary over time.

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Based on its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 27, 2024.

The report of BDO USA, P.C., our independent registered public accounting firm, regarding its audit of the Company’s internal control over financial reporting follows below.

Report of Independent Registered Public Accounting Firm

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 29, 2023 and December 30, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 29, 2023, and the related notes and financial statement schedule and our report dated February 27, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 27, 2024 and December 29, 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 27, 2024, and the related notes and financial statement schedule listed in the accompanying index and our report dated February 21, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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Othe r Information

During the quarter ended December 29, 2023 , no director or officer adopted or terminated :

(i) Any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b51-1(c);

(ii) Any “non-Rule 10b5-1 trading arrangement” as defined in paragraph (c) of item 408(a) of Regulation S-K.

During the quarter ended December 27, 2024 , no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any “ Rule 10b5-1 trading arrangements” or any “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408(a) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Of ficers and Corporate Governance

We have adopted a Code of Business Conduct and Ethics that applies to all our directors, officers, and employees.

Information regarding our executive officers will be set forth in the Proxy Statement under the caption “Information Regarding Executive Officers,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 10.

Information regarding our directors and certain corporate governance and other matters will be set forth in the Proxy Statement under the captions “Proposal No.

Election of Directors,” “Information Regarding Director Nominees,” and “Corporate Governance,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 10.

The Corporate Governance Guidelines adopted by our Board of Directors, as well as the charters of the Audit Committee, the Nominating and Governance Committee and the Compensation Committee of the Board are each posted in the Investors section of our website, www.staar.com, under the Investor Resources & FAQs tab, as a Corporate Governance Document.

We have adopted a Code of Business Conduct and Ethics that applies to all our directors, officers, and employees, including our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, or Controller, or persons performing similar functions.

The Code of Business Conduct and Ethics is posted in the Investors section of our website, www.staar.com, under the Investor Resources & FAQs tab, as a Corporate Governance Document.

We intend to disclose future amendments to, or waivers from, provisions of our Code of Business Conduct and Ethics that apply to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, or Controller, or persons performing similar functions, within four business days of such amendment or waiver.

The other information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

We intend to disclose any future amendments to certain provisions of the Code of Business Conduct and Ethics, or waivers thereunder granted to executive officers and directors, on our website within four business days of such amendment or waiver.

We have adopted an Insider Trading Policy that governs the purchase, sale, and other dispositions of our securities by directors, officers and employees, as well as by the Company itself.

We believe our policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards applicable to us.

The Insider Trading Policy is posted in the Investors section of our website, www.staar.com, under the Investor Resources & FAQs tab, as a Corporate Governance Document, and a copy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

Executi ve Compensation

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

Information regarding compensation of our executives and directors will be set forth in the Proxy Statement under the captions “Compensation Discussion and Analysis,” “Compensation Tables,” and “Compensation of Directors,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 11.

Security Ownership of Certain Beneficial Ow ners and Management and Related Stockholder Matters

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

Information regarding security ownership of certain beneficial owners and management will be set forth in the Proxy Statement under the caption “Security Ownership of Principal Shareholders and Management,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 12.

Information regarding securities authorized for issuance under equity compensation plans will be set forth in the Proxy Statement under the caption “Equity Compensation Plan Information,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 12.

Certain Relationships and Relate d Transactions, and Director Independence

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

Information regarding certain relationships and related transactions and director independence will be set forth in the Proxy Statement under the captions “Review of Related Person Transactions,” and “Corporate Governance,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 13.

Principal Accou nting Fees and Services

The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.

Information regarding principal accounting fees and services will be set forth in the Proxy Statement under the caption “Proposal No.

Ratification of Independent Registered Public Accounting Firm - Principal Accountant Fees and Services,” which is incorporated herein by reference and made a part hereof in response to the information required by Item 14.

Exhibits and Financ ial Statement Schedules

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Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

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Form of Severance Agreement between the Company and certain executives (incorporated by reference to Exhibit 10.31 to the Company’s Quarterly Report on Form 10-Q, for the period ended March 31, 2023, as filed with the Commission on May 3, 2023).

Form of Executive Change in Control Agreement between the Company and certain officers

Letter of the Company dated March 27, 2012 to Samuel Gesten, Vice President and General Counsel, regarding compensation (incorporated by reference to Exhibit 10.91 to the Company’s Annual Report on Form 10-K, for the year ended December 28, 2012, as filed with the Commission on March 12, 2013).

Letter of the Company dated July 27, 2015 to Keith Holliday, Vice President, Research and Development, regarding compensation (incorporated by reference to Exhibit 10.38 to the Company’s

Quarterly Report on Form 10-Q, for the period ended October 2, 2015, as filed with the Commission on November 4, 2015).

Letter of the Company dated August 10, 2012 to James Francese, Vice President, Global Marketing, regarding compensation (incorporated by reference to Exhibit 10.92 to the Company’s Annual Report on Form 10-K, for the year ended December 28, 2012, as filed with the Commission on March 12, 2013).

Form of Executive Change in Control Agreement between the Company and certain officers (incorporated by Reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2023, as filed with the Commission on February 27, 2024).

Letter of the Company dated July 27, 2015 to Keith Holliday, Vice President, Research and Development, regarding compensation (incorporated by reference to Exhibit 10.38 to the Company’s Quarterly Report on Form 10-Q, for the period ended October 2, 2015, as filed with the Commission on November 4, 2015).

Letter of the Company dated September 11, 2017 to Scott Barnes, Chief Medical Officer, regarding compensation (incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K, for the year ended January 3, 2020, as filed with the Commission on February 26, 2020).

Letter of the Company dated June 30, 2020 to Patrick Williams, Chief Financial Officer, regarding compensation (incorporated by reference to Exhibit 10.38 to the Company’s Quarterly Report on Form 10-Q, for the period ended July 3, 2020, as filed with the Commission on August 5, 2020).

Consulting Agreement made as of January 1, 2023 by and between the Company and Caren Mason (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the Commission on December 19, 2022).

Employment Agreement effective January 1, 2023 by and between the Company and Thomas G.

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Letter of the Company dated March 24, 2023 to Warren Foust, Chief Operating Officer, regarding compensation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the Commission on March 29, 2023).

Letter of the Company, dated October 24, 2023 to Nathaniel Sisitsky, General Counsel, regarding compensation

Basic Agreement on Unsterilized Intraocular Lens Sales Transactions between Canon Staar Co., Inc.

and Nidek Co., Ltd., dated May 23, 2005 (incorporated by reference to Exhibit 10.82 to the Company’s Annual Report on Form 10-K, for the year ended January 1, 2010 as filed with the Commission on April 1, 2010).

Basic Agreement on Injector Product Sales Transactions between Canon Staar Co., Inc.

and Nidek Co., Ltd., dated May 23, 2005 (incorporated by reference to Exhibit 10.83 to the Company’s Annual Report on Form 10-K, for the year ended January 1, 2010 as filed with the Commission on April 1, 2010).

Memorandum of Understanding Concerning Basic Agreements for Purchase and Sale between STAAR Japan Inc.

and Nidek Co., Ltd., dated December 25, 2008 (incorporated by reference to Exhibit 10.84 to the Company’s Annual Report on Form 10-K, for the year ended January 1, 2010 as filed with the Commission on April 1, 2010).

Acrylic Preset Supply Warranty Agreement between STAAR Japan Inc.

and Nidek Co., Ltd., dated December 25, 2008 (incorporated by reference to Exhibit 10.85 to the Company’s Annual Report on Form 10-K, for the year ended January 1, 2010 as filed with the Commission on April 1, 2010).

Letter of the Company, dated October 24, 2023 to Nathaniel Sisitsky, General Counsel, regarding compensation (incorporated by Reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2023, as filed with the Commission on February 27, 2024).

Form of Distributorship Agreement (incorporated by reference to Exhibit 10.37 to the Company’s Quarterly Report on Form 10-Q, for the period ended June 29, 2018, as filed with the Commission on August 1, 2018).

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(incorporated by reference to Exhibit 10.46 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2000, as filed with the Commission on March 29, 2001).

Tenth Amendment of Lease dated May 13, 2022, by and between the Company and Oxford Spectrum Wilson LLC

Tenth Amendment of Lease dated May 13, 2022, by and between the Company and Oxford Spectrum Wilson LLC (incorporated by Reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2023, as filed with the Commission on February 27, 2024).

Tenancy Agreement dated June 13, 2019 between Einfache Gesellschaft Calderari & Schwab.

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First Amendment to Lease Agreement dated March 23, 2023 between the Company and 2000 Gold L.P.

(incorporated by Reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2023, as filed with the Commission on February 27, 2024).

Lease Agreement commencing dated March 19, 2018 between the Company and Bukewihge Properties, LLC (incorporated by reference to Exhibit 10.36 to the Company’s Quarterly Report on Form 10-Q, for the period ended March 30, 2018, as filed with the Commission on May 2, 2018).

First Amendment to Lease Agreement dated August 11, 2022 between the Company and Bukewihge Properties, LLC (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K, for the year ended December 30, 2022, as filed with the Commission on February 23, 2023).

Second Amendment to Lease Agreement dated November 15, 2023 between the Company and Bukewihge Properties, LLC

Amended and Restated Omnibus Equity Incentive Plan (incorporated by reference to Appendix 1 of the Company’s Proxy Statement on Form DEF 14A as filed with the Commission on April 26, 2023).

Second Amendment to Lease Agreement dated November 15, 2023 between the Company and Bukewihge Properties, LLC (incorporated by Reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2023, as filed with the Commission on February 27, 2024).

STAAR Surgical Company Amended and Restated Omnibus Equity Incentive Plan ( incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the Commission on June 21, 2024).

Amendment No.

1 to the STAAR Surgical Company Amended and Restated Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the Commission on June 21, 2024).

Form of Option Grant and Stock Option Agreement for employees (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K, for the year ended December 30, 2016, as filed with the Commission on March 2, 2017).

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Form of Restricted Stock Award Grant and Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K, for the year ended December 30, 2016, as filed with the Commission on March 2, 2017).

Insider Trading Policy.

List of Subsidiaries.

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Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Compensation Recoupment (Clawback) Policy .

Compensation Recoupment (Clawback) Policy (incorporated by Reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K, for the year ended December 29, 2023, as filed with the Commission on February 27, 2024).

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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(principal accounting and financial officer)

/s/ ARTHER C.

February 21, 2025

/s/ STEPHEN C.

February 21, 2025

/s/ WEI JIANG

February 21, 2025

/s/ ELIZABETH YEU

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Elizabeth Yeu

February 27, 2024

/s/ LILIAN ZHOU

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Consolidated Balance Sheets at December 27, 2024 and December 29, 2023

Consolidated Statements of Income for the years ended December 29, 2023, December 30, 2022 and December 31, 2021

Consolidated Statements of Comprehensive Income for the years ended December 29, 2023, December 30, 2022 and December 31, 2021

Consolidated Statements of Operations for the years ended December 27, 2024, December 29, 2023 and December 30, 2022

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 27, 2024, December 29, 2023 and December 30, 2022

Consolidated Statements of Stockholders’ Equity for the years ended December 27, 2024, December 29, 2023 and December 30, 2022

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of STAAR Surgical Company (the “Company”) as of December 29, 2023 and December 30, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 29, 2023, and the related notes and schedule (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 29, 2023 and December 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 29, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of STAAR Surgical Company (the “Company”) as of December 27, 2024 and December 29, 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 27, 2024, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 27, 2024 and December 29, 2023, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 27, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 27, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 21, 2025 expressed an unqualified opinion thereon.

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Cash and cash equivalents

Investments available for sale

Accounts receivable trade, net

Investments available for sale (amortized cost basis of $ 86,346 and

$ 37,843 at December 27, 2024 and December 29, 2023, respectively)

Accounts receivable trade, net of allowance for credit losses of $ 32

and $ 191 at December 27, 2024 and December 29, 2023, respectively

Inventories, net

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Total current assets

Investments available for sale

Investments available for sale (amortized cost basis of $ 11,590 at

December 29, 2023)

Property, plant and equipment, net

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Operating lease right-of-use assets, net

Intangible assets, net

Deferred income taxes

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STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEM ENTS OF INCOME

CONSOLIDATED STATEM ENTS OF OPERATIONS

Years Ended December 27, 2024, December 29, 2023 and December 30, 2022

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Total selling, general and administrative expenses

Operating income

Other income (expense), net:

Interest income (expense), net

Operating income (loss)

Other income, net:

Interest income, net

Loss on foreign currency transactions

Royalty income

Other income (loss), net

Total other income (expenses), net

Income before income taxes

Other income, net

Total other income, net

Income (loss) before income taxes

Provision for income taxes

Net income per share:

Net income (loss)

Net income (loss) per share:

Weighted average shares outstanding:

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STAAR SURGICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years Ended December 27, 2024, December 29, 2023 and December 30, 2022

(In thousands)

Net income (loss)

Other comprehensive income (loss):

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Change in unrealized gain (loss)

Reclassification into other income (expense), net

Foreign currency translation loss

Other comprehensive income (loss), net of tax

Comprehensive income

Comprehensive income (loss)

The accompanying notes are an integral part of these consolidated financial statements.

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(In thousands)

Income (Loss)

Balance, at January 1, 2021

Common Stock Shares

Common Stock Par Value

Additional Paid-In Capital

Accumulated Other Compre-hensive Income (Loss)

Accumulated Deficit

Balance, at December 31, 2021

Other comprehensive income

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Balance, at December 30, 2022

Other comprehensive income

Other comprehensive loss

Common stock issued upon exercise of options

Stock-based compensation

Repurchase of employee common stock for taxes withheld

Unvested restricted stock

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Unvested restricted stock

Forfeited restricted stock

Vested restricted and performance stock units

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Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by

operating activities:

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Purchase of investments available for sale

Proceeds from sale or maturity of investments available for sale

Proceeds from maturity of investments available for sale

Proceeds from sale of investments available for sale

Net cash provided by (used in) investing activities

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Repayment of finance lease obligations

Repayment of line of credit

Repurchase of employee common stock for taxes withheld

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The accompanying notes are an integral part of these consolidated financial statements.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Fiscal years 2024, 2023 and 2022 are based on a 52-week period.

Segment Reporting

The Company adopted Accounting Standards Update (“ASU”) 2023-07 as of the beginning of fiscal 2024.

The Company operates in one reportable segment, ophthalmic surgical product segment, as all of the Company’s sales are generated from ophthalmic surgical products.

The accounting policies for of the ophthalmic surgical product segment are the same as those described in Note 1 of the Consolidated Financial Statements.

The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer and President.

The CODM assesses performance for the ophthalmic surgical product segment by comparing actual results to forecasts and decides how to allocate resources, i.e., headcount and compensation, based on net income or on operating results, if a net loss, that is reported on the Consolidated Statements of Operations.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

See “Note 1 – Organization and Description of Business and Accounting Policies – Concentration of Credit Risk and Sales,” “Note 16 – Disaggregation of Revenues, Geographic Sales and Product Sales” and “Note 17 – Geographic Assets” for specific information regarding the Company’s sales and long-lived assets.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Foreign Currency

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Loss on foreign currency transactions (2)

(1) Shown as a separate line item on the Consolidated Statements of Comprehensive Income.

(2) Shown as a separate line item on the Consolidated Statements of Income.

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

(1) Shown as a separate line item on the Consolidated Statements of Comprehensive Income (Loss).

(2) Shown as a separate line item on the Consolidated Statements of Operations.

Cash and Cash Equivalents

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however, the Company periodically assesses the financial condition of the institutions and believes that the risk of any loss is minimal.

The book value of money market accounts approximates fair value and are classified as Level 1.

Use of Estimates

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Revenue Recognition

The Company recognizes revenue when its contractual performance obligations with customers are satisfied.

The Company recognizes revenue when its contractual performance obligations with customers are satisfied and collectability is reasonably assured.

The Company’s performance obligations are generally limited to single sales orders with product shipping to the customer within a month of receipt of the sales order.

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The Company presents sales tax and similar taxes it collects from its customers on a net basis (excluded from revenues).

From time to time, the Company consigns or ships inventory to third parties outside the United States in advance of anticipated demand.

While the Company does not recognize revenue on shipment of consigned inventory, the Company believes it can help address challenges and delays associated with importation and logistics.

Further, the Company believes that increasing the amount of product in-country can mitigate potential impacts from geopolitical risk and tariff changes.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Revenue Recognition (Continued)

Historically, the Company marketed and sold cataract IOLs and related injectors and injector parts.

The Company phased out sales of such products in fiscal 2023, and it does not expect to sell any such products in fiscal 2024 or thereafter.

The Company phased out sales of such products in fiscal 2023, and it did not sell any such products in fiscal 2024.

Sales of such products involved sales by the Company of injector parts to an unrelated customer and supplier (collectively referred to as “supplier”) whereby these injector part sales were either made as a final sale to the supplier or, were sold to be combined with an acrylic cataract IOL by the supplier into finished goods inventory (a preloaded acrylic cataract IOL).

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non-consignment sales and consignment sales.

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Revenue Recognition (Continued)

• Non-consignment Sales – The Company recognizes revenue from non-consignment product sales at a point-in-time when control has been transferred, which is typically at shipping point, except for certain customers and for STAAR Japan, which is typically recognized when the customer receives the product.

The Company does not have significant deferred revenues as of December 29, 2023, December 30, 2022 and December 31, 2021, as delivery to the customer is generally made within the same or the next day of shipment.

The Company does no t have significant deferred revenues as of December 27, 2024, December 29, 2023 and December 30, 2022, as delivery to the customer is generally made within the same or the next day of shipment.

In December 2024, the Company shipped a $ 27.5 million order of ICLs to one of its distributors in China.

The distributor requested extended payment terms, and the Company agreed.

As these payment terms were significantly longer than the terms included in the Company’s distributor agreement, management determined that collectability was not probable, and the Company did no t recognize the revenue associated with the shipment in the quarter ended December 27, 2024.

However, as the shipment was received by the distributor, and control of the product passed to the distributor, the cost of the inventory was charged to cost of sales in the quarter ended December 27, 2024.

Revenue for this order will not be recognized until payments are received from the distributor, at which point the collectability concern is alleviated.

• Consignment Sales – The Company’s products are marketed to ophthalmic surgeons, hospitals, ambulatory surgery centers or vision centers, and distributors.

2 unchanged sentences

See Note 16 for additional information on disaggregation of revenues, geographic sales information and product sales.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Revenue Recognition (Continued)

The Company also enters into certain strategic cooperation agreements with customers in which, as consideration for certain commitments made by the customer, including minimum purchase commitments, the Company agrees, among other things, to share the expense for marketing, educational training and general support of the Company’s products.

13 unchanged sentences

Amounts determined to be uncollectible are written off against the allowance for credit losses.

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Concentration of Credit Risk and Sales

1 unchanged sentence

This risk is limited due to the large number of customers comprising the Company’s customer base, and their geographic dispersion.

As of December 29, 2023 and December 30, 2022 , there was one customer who accounted for 70 % and 59 %, respectively, of the Company’s consolidated trade receivables.

As of December 27, 2024 and December 29, 2023, the Company’s China distributors accounted for 58 % and 70 %, respectively, of the Company’s consolidated trade receivables.

Ongoing credit evaluations of customers’ financial condition are performed and, generally, no collateral is required.

The Company maintains reserves for potential credit losses and such losses, taken together, have not exceeded management’s expectations.

There was one customer who accounted for 58 %, 52 % and 47 % of the Company’s consolidated net sales for the years ended 2023, 2022 and 2021 , respectively.

The Company’s China distributors accounted for 51 % , 58 % and 52 % of the Company’s consolidated net sales for the years ended 2024, 2023 and 2022 , respectively.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Sales Return Reserve

17 unchanged sentences

The cost of investments AFS is adjusted for amortization of premiums and accretion of discounts to maturity.

Interest earned, including amortization of premiums and accretion of discounts recognized, is included in interest income (expense) on the Consolidated Statements of Income.

Interest earned, including amortization of premiums and accretion of discounts recognized, is included in interest income (expense) on the Consolidated Statements of Operations.

The cost of investments for purposes of computing realized and unrealized gains and losses is based on the specific identification method.

The Company recognizes impairment of a debt security for which there has been a decline in fair value below amortized cost if management intends to sell the security, or it is more-likely-than-not that the Company will be required to sell the security before recovery of its amortized cost basis.

Impairment related to credit losses is recognized in other income (expense) on the Consolidated Statements of Income.

Impairment related to credit losses is recognized in other income (expense) on the Consolidated Statements of Operations.

Any portion of impairment not related to credit losses is recognized in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

The measurement of the credit loss component is equal to the difference between the debt security’s amortized cost basis and the present value of its expected future cash flows discounted at the security’s effective yield.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

27 unchanged sentences

The shorter of the useful life of the asset or the expected term of the associated lease

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Goodwill, which has an indefinite life, is not amortized but instead is tested for impairment on an annual basis or between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

4 unchanged sentences

As of December 27, 2024 and December 29, 2023 , the carrying value of goodwill was $ 1,786,000 .

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Long-Lived Assets

4 unchanged sentences

Amortization is computed on the straight-line basis, which is the Company’s best estimate of the economic benefits realized over the estimated useful lives of the assets which range from 3 to 20 years for patents, certain acquired rights and licenses, 10 years for customer relationships, and 3 to 10 years for developed technology.

During 2023, the Company recognized impairment of $ 154,000 for the remaining unamortized Japan patent and licenses related to cataract IOLs.

Amortization expense for intangible assets were as follows (in thousands):

Amortization expense

Cloud-Based Software Implementation Costs

4 unchanged sentences

Amortization is recognized as a component of selling, general, and administrative expenses, in the same line item as the expense for the associated hosting arrangement.

As of December 29, 2023 , the Company recognized $ 2,406,000 of net capitalized cloud-based software implementation costs recorded within Other assets on the Consolidated Balance Sheets.

There were no capitalized cloud-based software implementation costs recognized at December 30, 2022.

As of December 27, 2024 and December 29, 2023, the Company recognized $ 15,763,000 and $ 2,406,000 , respectively, of net capitalized cloud-based software implementation costs related to several systems, including enterprise resource planning and customer relationship management systems, recorded within Other assets on the Consolidated Balance Sheets.

As of December 27, 2024 , these assets are not currently placed into service.

No amortization of capitalized cloud-based software implementation costs was recognized during the year ended December 29, 2023 .

These assets are expected to be placed into service throughout 2025.

No amortization of capitalized cloud-based software implementation costs was recognized during the years ended 2024 and 2023 .

Lease Accounting

The Company recognizes right-of-use (“ROU”) assets and lease liabilities for leases with terms greater than twelve months on the Consolidated Balance Sheets.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Income.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Operations.

A contract contains a lease if the contract conveys the right to control an identified asset for a period of time in exchange for consideration.

1 unchanged sentence

In addition, the Company must have both the right to obtain substantially all of the economic benefits from use of the identified asset and has the right to direct the use of the identified asset.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9 unchanged sentences

When the estimated undiscounted future cash flows are less than their carrying amount, an impairment loss is recognized equal to the difference between the assets’ fair value and their carrying value.

Vendor Concentration

There was one vendor that accounted for over 10 % of the Company’s consolidated accounts payable as of December 27, 2024 .

There were no vendors that accounted for over 10 % of the Company’s consolidated accounts payable as of December 29, 2023 .

Research and Development Costs

6 unchanged sentences

The Company does not offset deferred tax liabilities and assets attributable to different tax entities or to different tax jurisdictions.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Income Taxes (Continued)

In evaluating the Company’s ability to recover the deferred tax assets within a jurisdiction from which they arise, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations.

4 unchanged sentences

The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and reflected in the financial statements in the period of enactment.

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Income Taxes (Continued)

The Company has made a policy election to apply the incremental cash tax savings approach when analyzing the impact Global Intangible Low Tax Income (“GILTI”) could have on its U.S.

6 unchanged sentences

Accrued interest, if any, related to uncertain tax positions is included as a component of income tax expense, and penalties, if incurred, are recognized as a component of operating income or loss.

The Company does not have any uncertain tax positions as of any of the periods presented.

Basic and Diluted Net Income Per Share

Basic and Diluted Net Income (Loss) Per Share

The Company has only one class of common stock and no participating securities which would require the two-class method of calculating basic earnings per share.

Basic per share information is calculated by dividing net income by the weighted average number of shares outstanding during the period, net of unvested stock-based awards.

Diluted per share information is calculated by dividing net income by the weighted average number of shares outstanding during the period, adjusted for the effects of potentially dilutive securities using the treasury stock method.

Basic per share information is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period, net of unvested stock-based awards.

Diluted per share information is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period, adjusted for the effects of potentially dilutive securities using the treasury stock method.

When the Company incurs a net loss, the number of diluted shares is equal to the number of basic shares.

Potentially dilutive securities include the Company’s outstanding stock-based awards.

As of December 27, 2024 , the Company had outstanding grants of stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”).

Stock options that are anti-dilutive, where their exercise price exceeds the average market price of the common stock, are not included in the treasury stock method calculation for diluted net income per share.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Employee Defined Benefit Plans

4 unchanged sentences

If the projected benefit obligation exceeds the fair value of plan assets, then that difference or unfunded status represents the pension liability.

The Company records a net periodic pension cost in the Consolidated Statements of Income.

The Company records a net periodic pension cost in the Consolidated Statements of Operations.

The liabilities and annual income or expense of both plans are determined using methodologies that involve several actuarial assumptions, the most significant of which are the discount rate and the expected long-term rate of asset return (asset returns and fair-value of plan assets are applicable for the Swiss Plan only).

The fair values of plan assets are determined based on prevailing market prices.

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Stock-Based Compensation

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan (the “Equity Plan”).

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan, as amended (the “Equity Plan”).

The Equity Plan provides the Company with the ability to grant various types of stock-based awards to executive officers, employees, consultants and members of its Board of Directors (the “Board”).

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Shares subject to RSU and PSU awards are not issuable until the requisite service and applicable performance conditions are satisfied, so they are not included in the Company’s shares of common stock issued and outstanding until the vesting of such awards.

Comprehensive Income (Loss)

The Company presents comprehensive income (loss) on the Consolidated Balance Sheets and the Consolidated Statements of Comprehensive Income.

Total comprehensive income (loss) includes, in addition to the net income, changes in equity that are excluded from the Consolidated Statements of Income and are recorded directly into a separate section of stockholders’ equity on the Consolidated Balance Sheets.

The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the years ended December 29, 2023, December 30, 2022 and December 31, 2021 (in thousands):

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 1 — Organization and Description of Business and Accounting Policies (Continued)

Comprehensive Income (Loss) (Continued)

Comprehensive Income (Loss)

The Company presents comprehensive income (loss) on the Consolidated Balance Sheets and the Consolidated Statements of Comprehensive Income (Loss).

Total comprehensive income (loss) includes, in addition to the net income (loss), changes in equity that are excluded from the Consolidated Statements of Operations and are recorded directly into a separate section of stockholders’ equity on the Consolidated Balance Sheets.

The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the years ended December 27, 2024, December 29, 2023 and December 30, 2022 (in thousands):

Foreign Currency Translation

Investments Available for Sale

Balance, at January 1, 2021

Defined Benefit Pension Plan – Japan

Defined Benefit Pension Plan – Switzerland

Accumulated Other Com-prehensive Income (Loss)

Balance, at December 31, 2021

Other comprehensive income (loss)

5 unchanged sentences

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280).” ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments (a) disclose significant segment expenses regularly provided to the chief operating decision maker (“CODM”), (b) disclose an amount for other segment items by reportable segment and description of its composition, (c) extend certain annual disclosures to interim periods, (d) clarify single reportable segment entities must apply Topic 280 in its entirety, (e) permit more than one measure of segment profit or loss to be reported under certain conditions and (f) require disclosure of the title and position of the CODM.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company will adopt the annual disclosure requirements of ASU 2023-07 as of beginning of fiscal year 2024 and will adopt the interim disclosure requirements beginning fiscal year 2025.

The Company is currently evaluating the disclosure requirements and its effect on the Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740).” ASU 2023-09 improves the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes (Topic 740).” ASU 2023-09 improves the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

It also includes certain other amendments to improve the effectiveness of income tax disclosures regarding (a) income or loss from continuing operations disaggregated between domestic and foreign and (b) income tax expense or benefit from continuing operations disaggregated by federal, state and foreign.

2 unchanged sentences

The Company is currently evaluating the disclosure requirements and its effect on the Consolidated Financial Statements.

STAAR SURGICAL COMPANY AND SUBSDIARIES

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).” ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement;

rather it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 requires footnote disclosure about specific expenses to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses:

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization and (5) depreciation, depletion and amortization recognized as part of oil- and gas-production activities or other types of depletion expenses.

The tabular disclosure would also include certain other expenses, when applicable.

ASU 2024-03 does not change or remove existing expense disclosure requirements;

however, it may affect where that information appears in the footnotes to the financial statements.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The requirements will be applied prospectively with the option for retrospective application.

Early adoption is permitted.

The Company will adopt ASU 2024-03 at the beginning of fiscal year 2026.

The Company is currently evaluating the disclosure requirements and its effect on the Consolidated Financial Statements.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11 unchanged sentences

Treasury securities

agency securities

Corporate debt securities

15 unchanged sentences

These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers and other industry and economic events.

The Company assessed each debt security (see Note 1 for information on composition of the portfolio) with gross unrealized losses for credit impairment.

As part of that assessment, the Company concluded that it does not intend to sell and it is more-likely-than-not that the Company will not be required to sell, prior to the recovery of the amortized cost basis.

The Company did no t recognize impairment for the years ended December 29, 2023 and December 30, 2022.

The Company assessed each debt security (see Note 1 for information on composition of the portfolio) in a gross unrealized loss position to determine whether the decline in fair value below amortized cost was a result of credit losses or other factors, whether the Company expects to recover the amortized cost of the debt security, the Company’s intent to sell and whether it is more-likely-than-not that the Company will not be required to sell the debt security before the recovery of the amortized cost basis.

There has been no allowance for expected credit losses recorded for the years ended 2024, 2023 and 2022.

The following table shows the fair value of investments AFS by contractual maturity (dollars in thousands):

5 unchanged sentences

Treasury securities

agency securities

Corporate debt securities

Total investments AFS

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 2 — Investments Available for Sale (Continued)

During 2024, several of the Company’s investments AFS with an aggregate fair value of $ 1,314,000 were subject to early redemption.

The Company recognized a gain upon redemption of $ 3,000 for the year ended 2024.

During 2023 and 2022, two of the Company’s investments AFS were the subject of a downgraded credit rating.

The Company sold its investments of $ 1,300,000 and $ 359,000 during 2023 and 2022, respectively, in aggregate securities following the downgrade.

The Company recognized a realized loss upon sale of less than $ 1,000 for 2023 and 2022.

The Company recognized a realized loss upon sale of less than $ 1,000 for the years ended 2023 and 2022.

Note 3 — Accounts Receivable Trade, Net

20 unchanged sentences

(1) No individual category in “other” exceeds 5 % of the total prepayments, deposits and other current assets.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9 unchanged sentences

Total property, plant and equipment, net

Depreciation expense and loss on disposal of property, plant and equipment were as follows (in thousands):

Depreciation expense

Construction in process primarily consists of the build out and validation of machinery and equipment.

The Company recorded depreciation expense in the following categories as follows (in thousands):

Cost of sales

General and administrative

Selling and marketing

Research and development

Total depreciation expense

Loss on disposal of property, plant and equipment was as follows (in thousands):

Loss on disposal of property, plant and equipment

Note 7 — Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

Long-lived amortized intangible assets

Patents and licenses

During 2023, the Company recognized impairment of $ 154,000 for the remaining unamortized Japan patent and licenses related to cataract IOLs.

Amortization expense for intangible assets were as follows (in thousands):

Amortization expense

The loss recognized for the year ended 2024 consisted primarily of an asset that is no longer in use and was recorded in selling and marketing expense on the Consolidated Statements of Operations.

Note 7 — Other Current Liabilities

7 unchanged sentences

(1) No individual category in “Other” exceeds 5 % of the other current liabilities.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4 unchanged sentences

Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):

Machinery and equipment

Computer equipment and software

14 unchanged sentences

Financing cash flows

ROU assets obtained in exchange for new finance lease liabilities

Operating Leases

4 unchanged sentences

For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

25 unchanged sentences

Total lease liability

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

Income (loss) from continuing operations before provision for income taxes was as follows (in thousands):

Income before income taxes

The provision (benefit) for income taxes consisted of the following (in thousands):

Income (loss) before income taxes

The provision for income taxes consisted of the following (in thousands):

Current tax provision:

5 unchanged sentences

federal tax rate to the Company’s effective tax rate was as follows (dollars in thousands):

Income before income taxes

Income (loss) before income taxes

Income tax expense:

6 unchanged sentences

Valuation allowance

Return to provision adjustment

Uncertain tax positions

Non-deductible expenses

Total income tax expense

Effective tax rate

The Company has elected to recognize U.S.

taxes on GILTI as a period expense in the year the tax is incurred.

The Company utilized the high-tax exception to exclude income from foreign jurisdictions with foreign taxes at an effective rate that is higher than 90 percent of the applicable highest U.S.

corporate tax rate.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

28 unchanged sentences

Balance at end of period

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 10 — Income Taxes (Continued)

Deferred Tax Assets and Liabilities (Continued)

As of December 27, 2024, the Company had U.S.

6 unchanged sentences

will begin to expire in 2025

Post-2020 State NOL carryforwards that follow the federal NOL

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 9 — Income Taxes (Continued)

Deferred Tax Assets and Liabilities (Continued)

As of December 27, 2024, the Company had U.S.

12 unchanged sentences

In various jurisdictions, years prior to 2020 remain open solely for the purposes of examination of the Company’s NOL and credit carryforwards.

The Company operates under a tax holiday in Switzerland, which is effective through 2024, and it may be extended through 2029 if certain additional requirements are satisfied.

The tax holiday is conditional upon our meeting certain employment and investment thresholds.

The impact of these tax holidays is as follows (in thousands, except per share amounts):

The Company operates under a tax holiday in Switzerland from 2020 through 2029, which consists of two consecutive five year periods:

2020 - 2024 and 2025 - 2029.

The tax holiday is conditional upon the Company meeting specific activity and investment requirements as outlined by the Swiss Tax Authorities.

The impact of this tax holiday is as follows (in thousands, except per share amounts):

Tax impact related to tax holidays

Impact of tax holidays on diluted earnings per share

Impact of tax holidays on diluted earnings (loss) per share

Uncertain Tax Benefits

The Company does not have any uncertain tax positions as of December 29, 2023 .

The Company does not expect any significant changes in its uncertain tax positions within the next twelve months.

STAAR SURGICAL COMPANY AND SUBSDIARIES

A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of interest, are included in other current liabilities as income taxes payable, is as follows (in thousands):

Balance at beginning of period

Increases (decreases) - tax positions in prior period

Increases (decreases) - tax positions in current period

Balance at end of period

Interest of $ 540,000 was recognized for the year ended 2024 related to the 2024 uncertain tax positions.

The Company expects a reduction of these uncertain tax positions within the next twelve months.

There were no uncertain tax positions in 2023 or 2022.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13 unchanged sentences

Actuarial (gain) loss

Prior service credit

Projected benefit obligation, end of period

17 unchanged sentences

(1) The underfunded balance was included in pension liability on the Consolidated Balance Sheets.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8 unchanged sentences

Net periodic pension cost

(1) Recognized in selling general and administrative expenses on the Consolidated Statements of Income.

(2) Recognized in other income (expense), net, on the Consolidated Statements of Income.

(1) Recognized in selling general and administrative expenses on the Consolidated Statements of Operations.

(2) Recognized in other income, net, on the Consolidated Statements of Operations.

(3) Amounts reclassified from accumulated other comprehensive income (loss).

22 unchanged sentences

They are considered multiple-employer plans and therefore accounted for as single-employer plans.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

23 unchanged sentences

Benefit payments are made to beneficiaries as they become due.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

33 unchanged sentences

Net periodic pension cost

(1) Recognized in selling general and administrative expenses on the Consolidated Statements of Income.

(2) Recognized in other income (expense), net, on the Consolidated Statements of Income.

(3) Amounts reclassified from accumulated other comprehensive loss.

STAAR SURGICAL COMPANY AND SUBSDIARIES

(1) Recognized in selling general and administrative expenses on the Consolidated Statements of Operations.

(2) Recognized in other income, net, on the Consolidated Statements of Operations.

(3) Amounts reclassified from accumulated other comprehensive income (loss).

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

22 unchanged sentences

Employer contributions, net of forfeitures

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1 unchanged sentence

Incentive Plan

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan (the “Equity Plan”).

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan, as amended (the “Equity Plan”).

The Equity Plan allows for awards of stock options, stock appreciation rights, restricted stock, RSUs, and other stock- and cash-based awards, including awards that are subject to service-based and performance-based vesting conditions.

4 unchanged sentences

Grants of RSUs and PSUs outstanding under the Equity Plan generally vest based on service, performance, or a combination of both.

On June 15, 2023, the Company’s stockholders approved a proposal to increase the number of shares that may be issued pursuant to stock-based awards granted under the Equity Plan, which increased the share pool by 2,170,000 shares, for a total of 20,205,000 shares.

On June 19, 2024, the Company’s stockholders approved a proposal to increase the number of shares that may be issued pursuant to stock-based awards granted under the Equity Plan, which increased the share pool by 2,600,000 shares.

As a result of such increases, a total of 22,805,000 shares may be issued pursuant to stock-based awards granted under the Equity Plan .

As of December 27, 2024, there were 3,438,028 shares available for grants of stock-based awards under the Equity Plan.

17 unchanged sentences

Total stock-based compensation expense, gross

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18 unchanged sentences

A summary of stock option activity under the Equity Plan for the year ended December 27, 2024 was as follows:

Weighted-Average Exercise Price

Weighted-Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (in 000’s)

Outstanding at December 29, 2023

2 unchanged sentences

Exercisable at December 27, 2024

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

A summary of unvested stock options activity under the Equity Plan for the year ended December 27, 2024 was as follows:

Outstanding at December 30, 2022

Weighted-Average Grant-Date Fair Value

Unvested at December 29, 2023

Forfeited or expired

8 unchanged sentences

Performance Stock Units

Average Grant-

Date Fair Value

Average Grant-

Date Fair Value

Average Grant-

Date Fair Value

Weighted-Average Grant-Date Fair Value

Outstanding at December 29, 2023

Forfeited or expired

Outstanding at December 27, 2024

The weighted average grant date fair value of restricted stock, RSU and PSU awards granted under the Equity Plan and the total fair value of awards vested were as follows:

Weighted-average grant-date fair value

Fair value of awards vested (in thousands)

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 12 — Commitments and Contingencies

Asset Retirement Obligation

The Company recorded certain Asset Retirement Obligations (“ARO”), in connection with the Company’s obligation to return its Japan facility to its “original condition,” as defined in the lease agreement.

The Company has recorded approximately $ 103,000 and $ 220,000 , representing the fair value of the ARO liability obligation in noncurrent liabilities at December 29, 2023 and December 30, 2022, respectively.

This lease expires in 2025.

The Company has recorded approximately $ 42,000 and $ 103,000 , representing the fair value of the ARO liability obligations in noncurrent liabilities at December 27, 2024 and December 29, 2023, respectively.

These leases expire in 2025 and 2029.

Open Purchase Orders

As of December 27, 2024, there were open purchase orders of $ 12,948,000 .

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 13 — Commitments and Contingencies (Continued)

Severance Paid

For 2023 and 2022, the Company recognized expense of $ 1,392,000 and $ 297,000 for one-time employee benefits paid to certain employees in STAAR Japan who work primarily in cataract IOL sales.

These one-time employee benefits were recognized in general and administrative expense on the Consolidated Statements of Income.

For 2023 and 2022, the Company recognized expense of $ 1,392,000 and $ 297,000 for one-time employee benefits paid to certain employees in STAAR Japan who worked primarily in cataract IOL sales.

These one-time employee benefits were recognized in general and administrative expense on the Consolidated Statements of Operations.

Indemnification Agreements

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The Company’s Chief Executive Officer entered into an employment agreement with the Company, effective January 1, 2023.

He and certain officers, have as provisions of their agreements, certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all its assets, or termination “without cause or for good reason” as defined in the employment agreements.

He and certain officers have as provisions of their agreements certain rights, including continuance of cash compensation and benefits, upon a “change in control,” which may include an acquisition of substantially all the Company’s assets, or termination “without cause or for good reason” as defined in the applicable agreements.

Litigation and Claims

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While the Company 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, new claims or unexpected results of existing claims could lead to significant financial harm.

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 13 — Related Party Transactions

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Due from employees

STAAR SURGICAL COMPANY AND SUBSDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 14 — Supplemental Disclosure of Cash Flow Information

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Non-cash investing and financing activities:

ROU assets obtained in exchange for new finance lease liabilities

Purchase of property and equipment included in accounts payable

Note 16 — Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands except per share amounts):

Note 15 — Basic and Diluted Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands except per share amounts):

Net income (loss)

Weighted average common shares outstanding

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Weighted average common shares outstanding for diluted

Net income per share:

Net income (loss) per share:

Because the Company had a net loss for 2024, the number of diluted shares is equal to the number of basic shares.

The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, restricted stock, RSUs and PSUs with either exercise prices or unrecognized compensation cost per share greater than the average market price per share of the Company’s common stock, which were not included in the calculation of diluted per share amounts because the effects would be anti-dilutive.

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Restricted stock, RSUs and PSUs

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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(2) No other location individually exceeds 10 % of the total net sales.

100 % of the Company’s sales are generated from the ophthalmic surgical product segment and the chief operating decision maker makes the operating decisions and allocates resources based upon the consolidated operating results, therefore, the Company operates as one operating segment for financial reporting purposes.

The Company’s principal product, ICLs, are used in refractive surgery.

Historically the Company marketed and sold cataract IOLs and related injectors and injector parts.

The Company phased out sales of such products in fiscal 2023, and it does not expect to sell any such products in fiscal 2024 or thereafter.

The Company phased out sales of such products in fiscal 2023, and it did not sell any such products in fiscal 2024 and it does not expect such sales in the future.

The composition of the Company’s net sales by product line was as follows (in thousands):

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and foreign export and import duties and tariffs, and political instability.

STAAR SURGICAL COMPANY AND SUBSDIARIES

STAAR SURGICAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 17 —Geographic Assets

The composition of the Company’s long-lived assets between those in the U.S., Japan and Switzerland was as follows (in thousands):

The Company’s long-lived assets are located in the following geographical locations in which the Company operates.

Other than the U.S.

and Switzerland, no other geographic location exceeds 10 % of each category of long-lived assets.

The composition of the Company’s long-lived assets was as follows (in thousands):

Property, plant and equipment, net

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Operating lease ROU assets, net

Intangible assets, net

Note 19 – COVID-19 Developments

In December 2019, COVID-19 surfaced and in March 2020, the World Health Organization declared a pandemic related to the rapid spread of COVID-19 around the world.

The impact of the COVID-19 outbreak on the businesses and the economy in the U.S.

and the rest of the world was significant.

The Company’s revenues have been adversely impacted since the first quarter of 2020 in global geographies characterized as “hot spots” for the COVID-19 virus and its variants as customers in those locations were limited in their ability to carry out medical procedures or were otherwise limited in their activities by government regulations intended to contain the spread of COVID-19 and variant strains.

While many world economies are returning to pre-pandemic levels of business, disruptions from COVID-19 remain a risk, particularly as novel COVID-19 variant strains emerge.

The extent to which COVID-19 and its variants may impact medical procedures and lens orders in the future, and the related impact on the Company’s results is uncertain;

however, it could have a material adverse impact on the Company’s results of operations, cash flows and financial condition.

(1) No other location individually exceeds 10 % of each category of long-lived assets.

STAAR SURGICAL COMPANY AND SUBSDIARIES

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Column C - Additions

Balance at Beginning

Balance at Beginning of Year

Charged to costs and expenses

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures