718937--3/15/2006--STAAR_SURGICAL

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{product, liability, claim}

{provision, law, control}

{customer, product, revenue}

{property, intellectual, protect}

{product, market, service}

{regulation, change, law}

{cost, regulation, environmental}

{capital, credit, financial}

{stock, price, share}

{condition, economic, financial}

{operation, natural, condition}

{system, service, information}

{investment, property, distribution}

{regulation, government, change}

{product, candidate, development}

{personnel, key, retain}

{debt, indebtedness, cash}

{competitive, industry, competition}

{stock, price, operating}

We have only limited working capital. We have limited access to credit and could default of the terms of our loan agreement. We have only limited access to financing. Recent FDA compliance issues have harmed our reputation, and we expect to devote significant resources to maintaining compliance in the future. Our success depends on the successful marketing of the ICL in the United States market. Our core domestic business has suffered declining sales, which sales of new products have only partially offset. We face stronger competition from multifocal and accommodating lenses because of a change in Medicare reimbursement rules. Our sales are subject to significant seasonal variation. We depend on independent manufacturers representatives. Product recalls have been costly and may be so in the future. We could experience losses due to product liability claims. We compete with much larger companies. Most of our products have single-site manufacturing approvals, exposing us to risks of business interruption. The global nature of our business may result in fluctuations and declines in our sales and profits. We obtain some of the components of our products from a single source, and an interruption in the supply of those components could reduce our sales. Our activities involve hazardous materials and emissions and may subject us to environmental liability. We risk losses through litigation. We depend on key employees. We have licensed our technology to our joint venture company and have granted certain rights to the partners that could be exercised in the event of a change in control of the Company. Changes in accounting standards could affect our financial results. We are subject to international taxation laws that could affect our financial results. If we suffer loss to our facilities due to catastrophe, our operations could be seriously harmed. If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted. Risks Related to the Ophthalmic Products Industry If we fail to keep pace with advances in our industry or fail to persuade physicians to adopt the new products we introduce, customers may not buy our products and our sales may decline. Resources devoted to research and development may not yield new products that achieve commercial success. Failure of users of our products to obtain adequate reimbursement from third-party payors could limit market acceptance of our products, which could affect our sales and profits. We are subject to extensive government regulation, which increases our costs and could prevent us from selling our products. We depend on proprietary technologies, but may not be able to protect our intellectual property rights adequately. We may not successfully develop and launch replacements for our products that lose patent protection. Risks Related to Ownership of Our Common Stock Our Certificate of Incorporation could delay or prevent an acquisition or sale of our company. Our bylaws contain other provisions that could have an anti-takeover effect, including the following: Anti-takeover provisions of Delaware law could delay or prevent an acquisition of our company. Future sales of our common stock could reduce our stock price.

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718937--3/15/2006--STAAR_SURGICAL_CO