UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
Commission File Number 0-11634
(Check one): |_| Form 10-K |_| Form 20-F |_| Form 11-K |X| Form 10-Q
|_| Form N-SAR |_| Form N-CSR
For Period Ended: July 4, 2003
Transition Report on Form 10-K
Transition Report on Form 20-F
Transition Report on Form 11-K
Transition Report on Form 10-Q
Transition Report on Form N-SAR
For the transition period ended: ____________________
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Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
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If the notification relates to a portion of the filing checked above,
identify the item(s) to which the notification relates:
PART I-- REGISTRANT INFORMATION
STAAR SURGICAL COMPANY
(Full Name of Registrant)
N/A
(Former Name if Applicable)
1911 Walker Avenue,
(Address of Principal Executive Office (Street and Number))
Monrovia, California 91016
(City, State and Zip Code)
PART II-- RULE 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition
report on Form 10-K, 20-F, 11-K or N-SAR, or portion thereof,
will be filed on or before the fifteenth calendar day following
|X| the prescribed due date; or the subject quarterly report or
transition report on Form 10-Q, or portion thereof will be
filed on or before the fifth calendar day following the
prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III-- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 11-K, 20-F,
10-Q, N-SAR, or the transition report portion thereof, could not be filed within
the prescribed time period.
Due to the recent change in the Registrant's independent
auditors, the Registrant requires additional time to gather
certain information necessary to complete the financial
statements required by the Registrant's Quarterly Report on
Form 10-Q (the "Form 10-Q"). As a result, the Registrant will
not be able to timely file the Form 10-Q without unreasonable
effort and expense.
The Registrant anticipates that additional information will
be obtained so that it will be able to file the Form 10-Q within
the extension period permitted by this filing.
PART IV-- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
John Bily (626) 303-7902
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that
the registrant was required to file such report(s) been filed? If answer
is no, identify report(s).
|X| Yes |_| No
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(3) Is it anticipated that any significant change in results of operations
for the corresponding period for the last fiscal year will be reflected by
the earnings statements to be included in the subject report or portion
thereof?
|X| Yes |_| No
If so, attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable estimate
of the results cannot be made.
This Notification of Late Filing on Form 12b-25 contains statements which
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These statements include comments regarding the intent,
belief or current expectations of STAAR and its management. The words
"anticipates," "expects," "intends," "plans," variations thereof and similar
expressions are intended to identify forward-looking statements. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those projected in the forward-looking
statements. These risks and uncertainties include the timing and nature of the
determinations to be made by STAAR's present and former auditors, and the
factors discussed in STAAR's filings made with the Securities and Exchange
Commission.
In addition to changes resulting from operating performance, STAAR may
report changes in its results of operations for the quarter ended July 4, 2003
arising from non-cash accounting charges based on changes in accounting
treatment.
On May 30, 2003, STAAR terminated its engagement of BDO Seidman, LLP
("BDO") as its independent auditor. BDO had served as STAAR's principal
independent accountants since 1993. On June 12, 2003, STAAR engaged McGladrey &
Pullen, LLP (McGladrey) as its principal independent accountant to audit the
Company's financial statements for the fiscal year ending January 2, 2004.
McGladrey has recommended that management re-evaluate the accounting
treatment of certain promissory notes issued to STAAR by former officers and
directors (the "Notes"). The Notes were issued to the Company as evidence of the
makers' obligation to pay for the exercise of stock options. Each Note was
secured by a pledge of the stock purchased through that exercise. With the
concurrence of BDO, the Company has accounted for the Notes as full-recourse
obligations.
Current management has aggressively pursued collection of all indebtedness
under outstanding Notes. Approximately $5.2 million in original principal amount
of Notes has been paid in full, and the Company expects the remaining
approximately $2 million owed to it on outstanding Notes to also be paid in
full. However, after reviewing certain events and actions, including previous
management's course of conduct in modifying and not obtaining full
collateralization or collection of certain of the Notes on their original due
dates, McGladrey recommends that the Notes be accounted for as non-recourse
notes, which may require a retroactive change in accounting treatment for some
or all of the Notes.
As of the date of this Notification, STAAR is currently in discussions with
both McGladrey and BDO to obtain a consensus on proper accounting treatment and
what corrective action, if any, is required. Because a final determination has
not been made, STAAR cannot provide an estimation of its results of operations
for the quarterly period ended July 4, 2003 with this Notification.
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STAAR's cash position will not be affected if STAAR re-characterizes the
Notes as non-recourse obligations, reverses its prior reserves and reclassifies
the accrued interest related to the Notes from income to equity. However, those
changes would have the following principal effects on the Company's financial
statements:
o The exercise of a stock option with a non-recourse note is treated as
a new or continuation of the existing option rather than a completed
share purchase and, depending upon the terms of the Notes, may be
subject to variable plan accounting. Accordingly, if the Notes are
determined to be non-recourse notes, the Company will record a
compensation charge against earnings during each period in which a
Note was unpaid and the value of the stock purchased with the Note
exceeded the initial principal amount of the Note.
o Prior reserves established for the possibility of default on the Notes
were recorded as charges against income in 2000 and 2001 totaling $3.6
million. No reserve would have been required if the Notes had been
accounted for as non-recourse. As a result, income may have been
understated in 2000 and 2001 by the amount of such charges.
o Accrued interest payable on certain Notes was recorded as "other
income" in the amount of $280,430 for the quarterly period ended April
4, 2003.The accrued interest may instead have been more appropriately
recorded as additional paid-in capital and, if that is the case,
income for the period was overstated by a like amount.
Management expects to resolve these issues and to complete its Quarterly Report
on Form 10-Q, including interim financial statements reflecting any new
methodology and prepared in accordance with Rule 10-01 of Regulation S-X, on or
before August 25, 2003.
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STAAR SURGICAL COMPANY
(Name of Registrant as Specified in its Charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: August 19, 2003 By: /s/ John Bily
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John Bily
Chief Financial Officer
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