SCHEDULE: Yunqi Capital Urges STAAR Surgical to Terminate Merger

Yunqi Capital, a 5.1% shareholder, has issued an open letter to STAAR Surgical's board, calling for the termination of a proposed merger and offering a board seat for its CIO.

Summary

• Yunqi Capital and its affiliated reporting persons beneficially own 2,500,061 shares of STAAR Surgical Co. common stock, representing 5.1% of the class.
• On October 31, 2025, the reporting persons issued a press release, an open letter to STAAR Surgical's Board of Directors.
• The letter calls for the termination of the proposed merger.
• It questions the Issuer's adjournment and postponement of the special meeting of stockholders.
• The letter urges the Issuer to acknowledge stockholder opposition already expressed through the special meeting voting process.
• Yunqi Capital believes the Board's composition would benefit from additional stockholder perspective.
• Christopher M. Wang, Chief Investment Officer of Yunqi Capital Limited, has offered to serve on the Board to provide this perspective and welcomes discussions.

Sentiment

Score: 3

Explanation: The sentiment is negative from the perspective of the activist investor regarding the current management's actions and the proposed merger. It indicates significant dissatisfaction and a call for change, which introduces uncertainty for the company.

Positives

• Activist investor Yunqi Capital is actively advocating for shareholder interests by challenging the proposed merger.
• The reporting persons have a significant 5.1% stake, indicating a strong vested interest in the company's direction.
• Christopher M. Wang's offer to join the board could bring a fresh, shareholder-focused perspective to corporate governance.

Negatives

• The proposed merger is facing significant opposition from a major shareholder, potentially indicating dissatisfaction with the deal's terms or strategic rationale.
• Concerns are raised regarding the adjournment and postponement of the special meeting, which could suggest a lack of transparency or an attempt to circumvent shareholder dissent.
• The activist stance implies a belief that the current board may not be adequately representing stockholder interests.

Risks

• The ongoing dispute with a significant shareholder could create uncertainty and instability for STAAR Surgical Co.
• Shareholder opposition may complicate or derail the proposed merger, potentially leading to financial penalties or a loss of strategic opportunity.
• A prolonged activist campaign could divert management's attention and resources from core business operations.
• The questioning of the special meeting's adjournment could lead to further scrutiny from shareholders or regulatory bodies regarding corporate governance practices.

Future Outlook

Yunqi Capital's future outlook for STAAR Surgical Co. appears to hinge on the termination of the proposed merger and a potential change in board composition to better represent stockholder interests. The reporting persons are seeking to influence the company's strategic direction.

Management Comments

• "[The Fifth Press Release] calls for termination of the Proposed Merger."
• "[The Fifth Press Release] questions the Issuer's adjournment and postponement of the special meeting of stockholders and urges the Issuer to heed the stockholder opposition already expressed through the special meeting voting process."
• "The Board's composition would benefit from additional stockholder perspective and that the chief investment officer of Yunqi Capital Limited, Christopher M. Wang, would be pleased to serve on the Board to provide this perspective and would welcome conversations with the Board to that end."

Industry Context

This activist filing highlights increasing shareholder scrutiny over M&A activities and corporate governance within the medical device and ophthalmology sectors. As companies navigate consolidation and strategic shifts, major shareholders are becoming more vocal in challenging board decisions, particularly concerning valuations and shareholder representation. This action by Yunqi Capital reflects a broader trend of investors demanding greater accountability and alignment with long-term shareholder value.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders**: Potential for increased influence on corporate strategy and governance if Yunqi Capital's demands are met. Uncertainty regarding the merger's future could impact share value.
• **Board of Directors**: Faces pressure to address shareholder concerns and potentially reconsider the proposed merger and board composition.
• **Management**: May need to engage in discussions with Yunqi Capital and address the issues raised, potentially diverting focus.
• **Employees**: The uncertainty surrounding the merger and potential strategic shifts could create anxiety.

Next Steps

• STAAR Surgical Co.'s Board of Directors is expected to respond to Yunqi Capital's open letter and the call for merger termination.
• Discussions may ensue between Yunqi Capital and STAAR Surgical's Board regarding Christopher M. Wang's potential board appointment.
• The outcome of the proposed merger will be a key next step, potentially influenced by this shareholder opposition.

Key Dates

Recommendation

The filing indicates significant shareholder activism against a proposed merger and calls for board changes. This introduces substantial uncertainty regarding the company's strategic direction and the future of the merger. While the activist's intent is to enhance shareholder value, the immediate impact is likely to be volatility and a period of contention. An investor should hold to observe how the company's board responds to these demands and the ultimate outcome of the merger discussions before making a definitive buy or sell decision.

Keywords

STAAR Surgical, Yunqi Capital, Schedule 13D, Activist Investor, Merger Opposition, Corporate Governance, Shareholder Activism, Board Representation, Special Meeting, Ophthalmology