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Basis of Presentation and Significant Accounting Policies | 9 Months Ended
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Sep. 26, 2025
Accounting Policies [Abstract] |
Basis of Presentation and Significant Accounting Policies | Note 1 — Basis of Presentation and Significant Accounting Policies STAAR Surgical Company, a Delaware corporation, was first incorporated in 1982, and together with its subsidiaries designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems used to deliver the lenses into the eye. The accompanying Condensed Consolidated Financial Statements present the financial position, results of operations, and cash flows of STAAR Surgical Company and its wholly owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in the Comprehensive Financial Statements have been condensed or omitted pursuant to such rules and regulations. The Consolidated Balance Sheet as of December 27, 2024 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 27, 2024. The Condensed Consolidated Financial Statements for the three and nine months ended September 26, 2025 and September 27, 2024, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and results of operations. The results of operations for the three and nine months ended September 26, 2025 and September 27, 2024, are not necessarily indicative of the results to be expected for any other interim period or for the entire year. Each of the Company’s fiscal reporting periods ends on the Friday nearest to the quarter ending date and generally consists of 13 weeks. Unless the context indicates otherwise “we,” “us,” the “Company,” and “STAAR” refer to STAAR Surgical Company and its consolidated subsidiaries. Proposed Merger with Alcon On August 4, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Alcon Research, LLC, a Delaware limited liability company (“Alcon”), and Rascasse Merger Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of Alcon (“Merger Sub”). The Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Alcon. The Board of Directors has unanimously (a) determined that the Merger Agreement and the transactions contemplated thereby are fair to, and in the best interests of, the Company and its stockholders (b) approved and declared advisable the Merger Agreement and the transactions contemplated thereby and (c) resolved to recommend that the Company’s stockholders adopt the Merger Agreement. On September 24, 2025, Broadwood Partners, L.P. and certain of its affiliates (collectively, the “Broadwood Group”) filed a definitive proxy statement with the SEC to solicit votes of STAAR stockholders in opposition to the Board’s recommendation that stockholders should vote to adopt the Merger Agreement. The stockholders of the Company will be asked to vote on the adoption of the Merger Agreement at a special meeting of stockholders (the “Special Meeting”). The Special Meeting was originally scheduled for October 23 2025, but was adjourned and later postponed to December 3, 2025. See Note 16 for further details. Under the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock of the Company issued and outstanding immediately prior to the Effective Time (other than certain excluded shares as described in the Merger Agreement) will be cancelled and converted into the right to receive $28.00 in cash, without interest. Note 1 — Basis of Presentation and Significant Accounting Policies (Continued) Proposed Merger with Alcon (Continued) The respective obligations of the Company, Alcon and Merger Sub to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of a number of conditions, including: (1) the adoption of the Merger Agreement by the Company’s stockholders; (2) the absence of any law or order prohibiting consummation of the Merger in specified jurisdictions in which the Company, Alcon or their respective subsidiaries have business operations; (3) certain specified regulatory approvals; (4) the accuracy of the other party’s representations and warranties, subject to certain materiality standards set forth in the Merger Agreement; and (5) compliance by the other party in all material respects with such other party’s obligations under the Merger Agreement. In addition, Alcon’s and Merger Sub’s obligation to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of a condition that there has not occurred a material adverse effect on the Company since the date of the Merger Agreement that is continuing. The availability of financing is not a condition to the consummation of the Merger. If the Merger Agreement is terminated under specified circumstances, the Company may be required to pay Alcon a termination fee of up to $43.4 million, and if the Merger Agreement is terminated under certain other circumstances, Alcon may be required to pay the Company a termination fee equal to $72.4 million. Reclassifications The Company reclassified certain personnel costs including salary-related and payroll tax expenses, bonus and stock-based compensation related expenses and travel related expenses previously included in research and development to sales and marketing. These costs support internal and external training and education of the Company’s existing products, and as such, the Company determined that classification of these costs in sales and marketing better reflects the nature of the costs and financial performance of the Company as it operates. The Company has made certain reclassification adjustments to conform prior period amounts to current presentation, which include reclassification adjustments between Research and development expenses and Sales and marketing expenses on its Condensed Consolidated Statements of Operations as follows (in thousands):
|  | Three Months Ended September 27, 2024 |  |  | Nine Months Ended September 27, 2024 |
|  | Prior Presentation |  |  | Reclassification |  |  | New Presentation |  |  | Prior Presentation |  |  | Reclassification |  |  | New Presentation |
Sales and marketing |  | $ | 26,623 |  |  | $ | 2,249 |  |  | $ | 28,872 |  |  | $ | 82,150 |  |  | $ | 6,385 |  |  | $ | 88,535 |
Research and development |  |  | 14,497 |  |  |  | (2,249 | ) |  |  | 12,248 |  |  |  | 41,931 |  |  |  | (6,385 | ) |  |  | 35,546 |
The reclassification adjustments did not have a material impact on previously recorded amounts and had no impact on the Company’s Total selling, general and administrative expenses, Operating income (loss), Net income (loss) or Net earnings (loss) per share. The Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Comprehensive Income (Loss), Stockholders’ Equity and Cash Flows were not affected by changes in the presentation of these costs. Additionally, non-cash lease expense is now presented on its own line in the Company’s Condensed Consolidated Statements of Cash Flows instead of combined with the changes in other current and non-current liabilities as follows (in thousands):
|  | Nine Months Ended September 27, 2024 |
|  | Prior Presentation |  |  | Reclassification |  |  | New Presentation |
Non-cash operating lease expense |  | $ | — |  |  | $ | 2,589 |  |  | $ | 2,589 |
Other current and non-current liabilities |  |  | (1,048 | ) |  |  | (2,589 | ) |  |  | (3,637 | )
Net cash provided by (used in) operating activities presented in the Condensed Consolidated Statements of Cash Flows was not affected by this change in presentation. Note 1 — Basis of Presentation and Significant Accounting Policies (Continued) Merger Transaction and Related Costs In connection with the proposed merger with Alcon, the Company incurred professional service expenses of $5,926,000 during the three months ended September 26, 2025, which are included in Merger transaction and related costs on the Condensed Consolidated Statements of Operations. The Company expects to continue to incur professional service expenses until the Merger is finalized. Restructuring, Impairment and Related Charges In the first half of 2025, the Company took a number of steps to change its leadership team, realign its leadership structure to better address market needs, reduce costs and discretionary spending, and better position the Company to return to sustainable growth. As part of this leadership realignment and related efforts, during the three and nine months ended September 26, 2025, the Company recognized costs related to severance and reduction in workforce of $18,000 and $12,471,000, respectively; consulting expenses of $8,000 and $874,000, respectively; impairment expenses on leasehold improvements and machinery and equipment of $0 and $7,759,000, respectively, as the Company will no longer be using these assets; and impairment on real property right-of-use assets of $0 and $4,083,000, respectively, as the Company is actively pursuing subleasing opportunities for two of its leased properties. In addition, the Company also recognized impairment of $0 and $2,751,000, respectively during the three and nine months ended September 26, 2025 for internally developed software that it will no longer be using as it will transition to a cloud-based software solution. An aggregate of $26,000 and $27,938,000 for such costs, expenses and charges is included in Restructuring, impairment and related charges on the Condensed Consolidated Statements of Operations for the three and nine months ended September 26, 2025. The restructuring effort was substantially completed as of June 27, 2025. For more detail, see Notes 5, 7 and 8. Vendor Concentration There was one vendor that accounted for over 10% of the Company’s consolidated accounts payable as of September 26, 2025 and December 27, 2024. There was one vendor that accounted for over 10% of the Company’s purchases for the three months ended September 26, 2025. Segment Reporting The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The Company’s CODM manages and allocates resources to the operations of the Company on a consolidated basis. The CODM assesses performance by comparing actual results to forecasts and decides how to allocate resources, i.e., headcount and compensation, based on consolidated net loss. Significant segment expenses are consistent with those presented on the Condensed Consolidated Statements of Operations. The measure of segment assets is reported on the balance sheet as total consolidated assets and the expenditures for additions to long-lived assets, and depreciation and amortization expense is consistent with those presented on the Condensed Statement of Cash Flows. See “Note 14 – Disaggregation of Revenues, Geographic Sales and Product Sales” and “Note 15 – Geographic Assets” for specific information regarding the Company’s sales and long-lived assets. Note 1 — Basis of Presentation and Significant Accounting Policies (Continued) Recent Accounting Pronouncements Not Yet Adopted 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. 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. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements. 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 the annual disclosure requirements of ASU 2024-03 at the beginning of fiscal year 2026 and will adopt the interim disclosure requirement beginning fiscal year 2027. The Company is currently evaluating the disclosure requirements and its effect on the Condensed Consolidated Financial Statements. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA introduces changes in U.S. tax law, with certain provisions applicable to the Company beginning in 2025. These changes include the immediate expensing of domestic research and experimental expenditures, accelerated tax deductions for qualified property, and modifications to certain international tax frameworks. The Company has incorporated OBBBA into the income tax provision as of September 26, 2025 resulting in an immaterial impact to the effective tax rate. The Company continues to evaluate the impact the new legislation will have on its Condensed Consolidated Financial Statements.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 + Details
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