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PROSPECTUS SUPPLEMENT
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Filed Pursuant to Rule
424(b)(5)
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(to Prospectus Dated June 16,
2009)
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Registration No.
333-159293
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STAAR
Surgical Company
300,000
Shares of Common Stock
______________
We are
offering 300,000 shares of our common stock pursuant to this prospectus
supplement and the accompanying prospectus.
Our
common stock is traded on the Nasdaq Global Market under the trading symbol
“STAA.” On June 16, 2009 the last reported price of our common
stock on the Nasdaq Global Market was $1.88 per share.
_________________________________________________________
Investment
in our common stock involves a high degree of risk. Please carefully
consider the “Risk Factors” described beginning on page S-5 of this
prospectus supplement.
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Per Share
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Total
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Public
offering price
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$ | 1.88 | $ | 564,000 | ||||
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Proceeds,
before expenses, to STAAR Surgical Company
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$ | 1.88 | $ | 564,000 | ||||
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Delivery
of the shares is expected to be made on or about June 17, 2009, against
payment for the shares to be received by us on the same date.
Neither
the Securities and Exchange Commission, nor any state securities commission, has
approved or disapproved of these securities or passed upon the adequacy or
accuracy this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal
offense.
______________
The date
of this prospectus supplement is June 17, 2009.
TABLE
OF CONTENTS
Prospectus
Supplement
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Page
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Special
Note Regarding Forward-Looking Statements
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S-3
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The
Offering
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S-4
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Risk
Factors
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S-5
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Dilution
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S-6
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Use
of Proceeds
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S-7
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Legal
Matters
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S-8
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Experts
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S-8
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Information
Incorporated by Reference
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S-9
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Prospectus
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Page
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Special
Note Regarding Forward-Looking Statements
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2
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Prospectus
Summary
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4
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Risk
Factors
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7
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Securities
We May Offer
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7
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Use
of Proceeds
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9
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Description
of Capital Stock
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9
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Description
of Subscription Rights
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15
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Description
of Warrants
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13
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Plan
of Distribution
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16
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Ratio
of Earnings to Fixed Charges and Preferred Dividends
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18
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Legal
Matters
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18
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Experts
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19
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Where
You Can Find More Information
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19
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Information
Incorporated by Reference
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20
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You
should rely only on the information contained in this prospectus supplement and
the accompanying prospectus and information to which we have referred
you. We have not authorized anyone else to provide you with different
information. In particular, we have not authorized any dealer or
salesperson to give any information or to represent anything not contained in
this prospectus supplement. You must not rely on any unauthorized information or
representation. This prospectus supplement is an offer to sell only the
securities it specifically describes on the front of the document, and only
under circumstances and in jurisdictions where we can lawfully do
so. You should assume that the information in this prospectus
supplement and the prospectus is accurate only as of the date on the front of
the document. Any information we have incorporated by reference is
accurate only as of the date of the document incorporated by reference,
regardless of the time this prospectus supplement is delivered or the time a
security is sold.
S-1
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a registration
statement on Form S-3 (File No. 333-159293) we filed with the Securities
and Exchange Commission using a “shelf” registration process. Under
this “shelf” registration process, we may from time to time sell securities
described in the accompanying prospectus in one or more offerings. This document
consists of two parts. The first part is this prospectus supplement, which
describes the specific terms of our common stock offering. The second part is
the accompanying prospectus, which provides more general information. This
prospectus supplement and the accompanying prospectus include important
information about us, our common stock and other information you should know
before investing. This prospectus supplement also adds, updates and changes
information in the accompanying prospectus.
You
should rely only on the information in this prospectus supplement and the
accompanying prospectus or documents to which we otherwise refer
you. We have not authorized anyone to provide you with different
information. If anyone provides you with different or inconsistent
information, you should not rely on it. If the information in this
prospectus supplement or any free writing prospectus we may authorize to be
delivered to you differs in any way from the information contained in the
accompanying prospectus, you should rely on the information in this prospectus
supplement or the free writing prospectus. Before purchasing our
common stock, you should carefully read this prospectus supplement, and the
accompanying prospectus together with the additional information about us
described under “Where You Can
Find More Information” and “Incorporation of Documents by
Reference” in the accompanying prospectus.
You
should assume that the information in this prospectus supplement is accurate
only as of the date on the cover page, and that the information in the
accompanying prospectus is accurate only as of the date on its cover
page. Any information we have incorporated by reference in this
prospectus supplement is accurate only as of the date of the document
incorporated by reference, unless we indicate otherwise. Our business, financial
condition, results of operations and prospects may have changed materially since
that date.
This
prospectus supplement and the accompanying prospectus do not constitute an offer
to sell, or a solicitation of an offer to purchase, the securities offered by
this prospectus supplement and the accompanying prospectus in any jurisdiction
to or from any person to whom or from whom it is unlawful to make such offer or
solicitation of an offer in such jurisdiction.
We
further note that any representations, warranties and covenants we may have made
in any agreement filed as an exhibit to any document incorporated by reference
in the accompanying prospectus were made solely for the benefit of the parties
to that agreement, including, in some cases, for the purpose of allocating risk
among the parties to the agreement. You should not deem these to be
representations, warranties or covenants to you. Moreover, such
representations, warranties or covenants were accurate only as of the date when
made. Accordingly, you should not rely on such representations, warranties and
covenants as accurately representing the current state of our
affairs.
S-2
Unless
the context otherwise requires, the terms “we,” “our” or “us” and “STAAR” refer
to STAAR Surgical Company and its subsidiaries
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements
in this prospectus supplement that are not statements of historical fact are
forward-looking statements. Forward-looking statements also appear in
the prospectus and the other documents to which we refer you in this prospectus
supplement and the prospectus. They may be found, among other places,
in the sections entitled “Business” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our most recent report on Form
10-K, in our quarterly reports on Form 10-Q, and amendments to these documents
filed with the SEC. These statements relate to our future plans,
objectives, expectations and intentions. Among other things,
forward-looking statements include statements about the following:
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our
strategy;
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our
business prospects including, expectations for revenue or other
performance of our business or of specific
products;
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the
status of applications for approval of products by the FDA or regulatory
agencies of other countries;
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sufficiency
of our cash reserves;
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product
development;
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research
and development and other expenses;
and
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our
prospects in litigation and other legal
risks.
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You may
also generally identify forward-looking statements by the use of words such as
“expect,” “anticipate,” “intend,” “plan” and similar expressions.
You
should not place undue reliance on our forward-looking
statements. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous risks
and uncertainties that are beyond our control, including those we discuss in
“Risk Factors” and elsewhere in this prospectus supplement, in the accompanying
prospectus and in our other reports we file with the SEC. The
forward-looking statements in this prospectus supplement speak only as of the
date shown on the cover page, and you should not rely on these statements
without also considering the risks and uncertainties associated with these
statements and our business.
S-3
The
Offering
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Common
stock offered
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300,000 shares
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Common
stock to be outstanding after this offering
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34,746,948 shares
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Use
of Proceeds
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Of
the net proceeds of this offering and the offering completed on June 16,
2009, we intend to use approximately $7.5 million to fund a deposit with
the California Superior Court to secure a stay of enforcement pending
appeal of an approximately $4.9 million judgment entered against us, and
to apply the remainder to general corporate purposes. See
“Use of Proceeds.”
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Nasdaq
Global Market symbol
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STAA
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Risk
Factors
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You
should read the “Risk Factors” section of the prospectus supplement and
the other information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus for a discussion of
factors you should carefully consider before deciding to invest in shares
of our common
stock.
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Except as
otherwise indicated, the number of shares to be outstanding after this offering
throughout this prospectus supplement is based on 34,446,948 shares outstanding
on June 16, 2009. That number includes the 4,255,319 shares
issuable in STAAR’s registered direct public offering made on June 16, 2009, and
excludes the following:
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3,770,134 shares
of common stock issuable upon the exercise of outstanding stock options,
with a weighted average exercise price of $5.67 per
share;
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1,700,000
shares issuable on conversion of our Series A Redeemable Convertible
Preferred Stock.
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1,470,000
shares of common stock issuable upon the exercise of outstanding warrants,
of which 70,000 have an exercise price of $6.00 per share and 1,400,000
have an exercise price of $4.00 per share;
and
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114,581
shares available for future issuance under our 2003 Omnibus Equity
Incentive Plan.
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Dividend
Policy
We intend
to retain any future earnings to finance the growth and development of our
business and do not anticipate paying any cash dividends in the foreseeable
future.
S-4
RISK
FACTORS
Investment
in our securities involves a high degree of risk. Please carefully
consider the “Risk Factors” published in our most recent Annual Report on Form
10-K and in our most recent Quarterly Report on Form 10-Q filed with the SEC
before making a decision to invest in our common stock. These reports
are incorporated by reference into this prospectus
supplement. Instructions for obtaining copies appears under the
heading “Where You Can Find More Information.” Each of these risk
factors describes a circumstance that has the potential to materially harm our
business, operating results or financial condition and reduce the value of an
investment in our securities. It is important for investors to read
and consider all of them. These risks are not the only risks we
face.
In
addition to those risks, investors should consider the following risks and
uncertainties related to this offering that could affect the value of an
investment in our securities:
Risks
Related to this Offering
The
market price of our common stock is likely to be volatile.
Our stock
price has fluctuated widely, ranging from $0.79 to $5.98 during the twelve month
period ended June 16, 2009. Our stock price could continue to
experience significant fluctuations in response to factors such as market
perceptions, quarterly variations in operating results, litigation or the
outcome of litigation, operating results that vary from the expectations of
securities analysts and investors, changes in financial estimates, changes in
market valuations of competitors, announcements by us or our competitors of a
material nature, additions or departures of key personnel, future sales of
common stock and stock volume fluctuations. Also, general political
and economic conditions such as continued recession or interest rate
fluctuations may adversely affect the market price of our stock.
Investors
in this offering will pay a much higher price than the book value of our
stock.
If you
purchase common stock in this offering, you will incur an immediate and
substantial dilution in net tangible book value of approximately $1.59 per
share, after giving effect to the sale by us of 300,000 shares of common stock
offered in this offering at the public offering price of $1.88 per
share.
Future
sales of our common stock could reduce our stock price.
Our Board
of Directors could issue additional shares of common or preferred stock to raise
additional capital or for other corporate purposes without stockholder
approval. In addition, the Board of Directors could designate and
sell a class of preferred stock with preferential rights over the common stock
with respect to dividends or other distributions. Sales of common or
preferred stock could dilute the interest of existing stockholders and reduce
the market price of our common stock. Even in the absence of such
sales, the perception among investors that additional sales of equity securities
may take place could reduce the market price of our common stock.
S-5
Following
this offering we will continue to have limited working capital.
We have a
history of losses and in recent periods our cash requirements have exceeded the
level of cash generated by operations. We will use approximately $7.5 million of
the total proceeds of this offering and the offering completed on June 16, 2009
to fund a deposit with the court to secure a stay of enforcement of judgment
pending appeal in the Parallax case. The
remaining proceeds will not significantly enhance our working capital and may
not satisfy our need for cash resources to handle unexpected events or continued
losses. As a result we may need to seek additional resources through debt or
equity financing, but our ability to obtain adequate financing on satisfactory
terms is limited. Our ability to raise financing through sales of equity
securities depends on general market conditions and the demand for STAAR’s
common stock. We may be unable to raise adequate capital through sales of equity
securities, and if our stock has a low market price at the time of such sales
our existing stockholders could experience substantial dilution. An
inability to secure additional financing could jeopardize our ability to
continue operations.
DILUTION
Our net
tangible book value as of April 3, 2009 was approximately $1,659,000, or
approximately $0.05 per share of outstanding common stock. Historical
net tangible book value per share represents total tangible assets, less total
liabilities and the redemption value of the issued and outstanding Series A
Redeemable Convertible Preferred Stock, divided by the number of shares of
common stock outstanding. Dilution in net tangible book value per share
represents the difference between the amount per share paid by the purchaser of
our common stock in this offering and the net tangible book value per share of
our common stock immediately after the offering.
STAAR’s
historical net tangible book value as of April 3, 2009 was $0.05 per
share. The sale by STAAR of 4,255,319 shares of common stock on June
16, 2009, at a price of $1.88 per share, results in an increase in net tangible
book value to $0.28 per share. After giving effect to our sale of
300,000 shares of common stock in this offering at the public offering price of
$1.88 per share as well as the June 16, 2009 sale, and after deduction of the
estimated offering expenses payable by us, our net tangible book value as of
April 3, 2009 would have been approximately $10,196,000, or $0.29 per
share. This represents an immediate increase in net tangible book value of $0.01
per share to existing stockholders and an immediate dilution in net tangible
book value of $1.59 per share to the purchaser of common stock in this
offering.
The
following table illustrates this per share dilution of net tangible book
value:
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Public
offering price per share
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$ | 1.88 | ||
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Historical
net tangible book value per share as of June 16, 2009
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$ | 0.28 | ||
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Increase
per share attributable to new investors
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$ | 0.01 | ||
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Net
tangible book value per share after the offering
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$ | 0.29 | ||
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Dilution
per share to new investor
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$ | 1.59 |
The table
above is based on 34,746,948 shares of common stock outstanding on June 17,
2009, which has been calculated as described on page S-4.
S-6
USE
OF PROCEEDS
We expect
to receive approximately $562,000 in net proceeds from the sale of the 300,000
shares of common stock offered by us in this offering, based on the public
offering price of $1.88 per share, after deducting the estimated offering
expenses payable by us.
We intend
to use approximately $7.5 million of the net proceeds of this offering and the
offering of 4,255,319 shares on June 16, 2009 to fund a deposit with the court
to secure a stay of enforcement of an approximately $4.9 million judgment in the
case Parallax Medical Systems,
Inc. v. STAAR Surgical Company. The remaining proceeds will be
used for general corporate purposes, including the repayment of some of our
outstanding indebtedness, the cost of additional pending litigation and the
Parallax appeal,
expansion of sales and marketing, AND working capital. We have not
determined the amounts we plan to spend on any of the general corporate purposes
listed above or the timing of these expenditures. Accordingly, our management
will have broad discretion to allocate the net proceeds from this offering not
applied to the deposit. Until they are so allocated, we intend to
invest those remaining net proceeds in investment-grade, interest-bearing
securities.
The
deposited funds will be invested by the California Superior Court in an interest
bearing account (currently bearing interest at a rate of approximately
1.5%). If the Court of Appeals upholds the Parallax judgment, or any
part of it, the plaintiff will receive from the deposit an amount equal to the
surviving judgment amount plus interest on that amount at a rate of 10% per
annum. If the judgment is overturned on appeal and remanded for a new
trial, the full amount of the deposit, plus interest, will be refunded to
STAAR. If STAAR pays the judgment or settles the case prior to the
decision of the Court of Appeals, any balance of deposit remaining after such a
payment will be refunded to STAAR. STAAR will apply any such refund
to the general corporate purposes as described in the preceding
paragraph.
S-7
PLAN
OF DISTRIBUTION
We are
selling 300,000 shares of our common stock under this prospectus supplement
directly to an institutional investor at a price of $1.88 per
share.
We
currently anticipate that the closing of the sale of our common stock under this
prospectus supplement will take place on or about June 17, 2009. On the closing
date, we will issue the shares of common stock to the institutional investors
and we will receive funds in the amount of the aggregate purchase
price. The shares of common stock will be delivered in book-entry
form through the Depository Trust Company’s DWAC system.
Our
common stock is traded on the NASDAQ Global Market under the symbol “STAA” and
the shares of common stock sold in this offering will be listed on the NASDAQ
Global Market. The transfer agent for our common stock is American
Stock Transfer & Trust Company.
LEGAL
MATTERS
The
validity of the issuance of the common stock being registered in the
registration statement of which this prospectus supplement is a part will be
passed upon for us by Charles Kaufman, Esq. Mr. Kaufman, who
participated in the preparation of this prospectus supplement, the prospectus
and the related registration statement, is employed by STAAR as its Vice
President and General Counsel, owns 23,000 shares of our Common Stock and holds
options to purchase an additional 90,000 shares of our Common
Stock.
EXPERTS
The
consolidated financial statements and schedule and management’s report on the
effectiveness of internal control over financial reporting incorporated in this
prospectus supplement by reference to the Annual Report on Form 10-K for the
fiscal year ended January 2, 2009 have been audited by BDO Seidman, LLP, an
independent registered public accounting firm, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon such reports given upon the authority of
that firm as experts in auditing and accounting.
A brief
summary of STAAR’s business and products is included in the accompanying
prospectus. STAAR also expects to enhance the IOL product offering
described in that summary as a result of the following recent product
approvals:
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The
FDA has granted 510(k) clearance for STAAR’s Epiphany™ Injector System for
use with the Affinity™ Collamer® Three-Piece IOL and the Elastimide™
Silicone IOL. The Epiphany injector is a manually loaded
version of STAAR Japan’s Preloaded Injector system. It is intended to
provide superior delivery to users of STAAR’s three-piece
lenses. The approval is also part of the regulatory pathway for
potential U.S. approval of the Preloaded Injector system. U.S. sales of
the Epiphany Injector are expected to begin in August
2009.
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S-8
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STAAR
received CE Mark approval to sell the KS-X Preloaded Hydrophobic Acrylic
Injector in the European Community. The KS-X system mates a
preloaded delivery system manufactured by STAAR Japan with an
independently sourced acrylic lens, and has been sold in the Japanese
market for two years. Approval of the KS-X injector system will
allow STAAR to bring its proven preloaded to technology to the growing
number of surgeons who prefer hydrophobic acrylic lenses for their
patients in the European Community and other countries that recognize CE
Marking.
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WHERE YOU CAN FIND MORE
INFORMATION
We are a
reporting company and file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission, or
the SEC. You may read and copy these reports, proxy statements and other
information at the SEC’s public reference rooms at 100 F. Street, N.E.,
Washington, D.C. 20549. You can request copies of these documents by
writing to the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
rooms. Our SEC filings are also available on the SEC’s web site at
http://www.sec.gov.
We will
furnish without charge to each person to whom a copy of this prospectus
supplement is delivered, on written or oral request, a copy of the information
that has been incorporated by reference into this prospectus supplement (except
exhibits, unless they are specifically incorporated by reference into this
prospectus supplement). You should direct any requests for copies to: Investor
Relations, STAAR Surgical Company, 1911 Walker Avenue, Monrovia, California
91016, telephone number (626) 303-7902.
INFORMATION
INCORPORATED BY REFERENCE
The SEC
allows us to “incorporate by reference” in this prospectus supplement the
information that we file with the SEC. This means that we can
disclose important information by referring the reader to those SEC
filings. The information incorporated by reference is considered to
be part of this prospectus supplement, and later information we file with the
SEC will update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
prior to the termination of the offering:
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our
Annual Report on Form 10-K for our fiscal year ended January 2,
2009;
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our
Quarterly Report on Form 10-Q for the period ended April 3,
2009;
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our
Current Report on Form 8-K, filed with the SEC on April 17,
2009;
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our
Proxy Statement for the Annual Meeting of Stockholders held on
June 11, 2009, filed with the SEC on May 1, 2009;
and
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the
description of our common stock contained in Amendment No. 1 to our
registration statement on Form 8-A/A filed with the SEC on
April 18, 2003, including any amendment or report filed for the
purpose of updating this
description.
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S-9
You may
obtain copies of those documents from us, free of cost, by contacting us at the
address or telephone number provided in “Where You Can Find More Information”
immediately above.
Any
statements made in this prospectus supplement or the accompanying prospectus, or
in any document incorporated or deemed to be incorporated by reference in this
prospectus supplement or the accompanying prospectus, will be deemed to be
modified or superseded for purposes of this prospectus supplement and the
accompanying prospectus to the extent that a statement contained in any
subsequently filed document that is also incorporated or deemed to be
incorporated by reference in this prospectus supplement or the accompanying
prospectus, modifies or supersedes the statement. Any statement so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this prospectus supplement or the accompanying
prospectus.
To the
extent that any statement in this prospectus supplement is inconsistent with any
statement that is incorporated by reference and that was made on or before the
date of this prospectus supplement, the statement in this prospectus supplement
will supersede such incorporated statement. The incorporated statement will not
be deemed, except as modified or superseded, to constitute a part of this
prospectus supplement, the accompanying prospectus or the registration
statement. Statements contained in this prospectus supplement as to the contents
of any contract or other document are not necessarily complete and, in each
instance, we refer you to the copy of each contract or document filed as an
exhibit to the registration statement.
S-10