##### Table of Contents



As filed with the Securities and Exchange Commission on
    September 6, 2007
 
 
 Registration No. 333-144940
 
 
   UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
   
 Amendment No. 1
 
 
 to
 
  Form S-1
 
 
 REGISTRATION
    STATEMENT
 UNDER THE SECURITIES ACT OF
    1933
   EYEONICS, INC.
 (Exact name of Registrant as
    specified in its charter)
   Delaware

3851

33-0818615(State or other jurisdiction
    of
    incorporation or organization)

(Primary Standard Industrial
    Classification Code Number)

(I.R.S. Employer
    Identification Number)   26970 Aliso Viejo Parkway,
    Suite 100
 Aliso Viejo, CA 92656
 (866) 393-6642
 (Address, including zip code,
    and telephone number, including area code, of Registrants
    principal executive offices)
   J. Andy Corley
 Chairman, President and Chief
    Executive Officer
 26970 Aliso Viejo Parkway,
    Suite 100
 Aliso Viejo, CA 92656
 (866) 393-6642
 (Name, address, including zip
    code, and telephone number, including area code, of agent for
    service)
   Copies to:
 J. Casey McGlynn, Esq.
    Martin J. Waters, Esq.
    Matthew K. Desharnais, Esq.
    Wilson Sonsini Goodrich & Rosati
    Professional Corporation
    12235 El Camino Real, Suite 200
    San Diego, CA 92130
    (858) 350-2300

Steven J. Naber
    Chief Financial Officer
    26970 Aliso Viejo Parkway, Suite 100
    Aliso Viejo, CA 92656
    (866) 393-6642

Charles K. Ruck
    B. Shayne Kennedy
    Latham & Watkins LLP
    650 Town Center Drive,
    20thFloor
    Costa Mesa, CA 92626
    (714) 540-1235     Approximate date of commencement of proposed sale to the
    public:
  o
  o
  o
  o
   
   The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission
    acting pursuant to said Section 8(a) may determine.




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The information
contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.  
 Subject to completion, dated
    September 6, 2007
 
  Shares
  
  Common Stock
  $     
    per share
     
   
    This investment involves risk. See Risk Factors
    beginning on page 8.
     
 Per Share

TotalInitial public offering price

$



$Underwriting discount

$



$Proceeds, before expenses, to
    eyeonics, inc.

$



$Proceeds, before expenses, to the
    selling stockholders

$



$  
 
    
  The underwriters have a
    30-day
    option to purchase up
    to          
    additional shares of our common stock from us
    and          additional
    shares of our common stock from the selling stockholders to
    cover over-allotments, if any. We will not receive any of the
    proceeds from the shares of common stock sold by the selling
    stockholders.
 
  Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
    Piper Jaffray
    Banc
    of America Securities LLC   Canaccord
    Adams
    BMO
    Capital Markets  The date of this prospectus
    is          ,
    2007.




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[image
    of crystalens]
    [image of
    crystalens implanted within the eye]   crystalens is the first and only FDA approved accommodating
    intraocular lens for the treatment of cataracts in adults with
    or without presbyopia. crystalens is implanted into the eye upon
    the removal of a cataractous lens and is designed to mimic the
    eyes natural focusing mechanism. Hinges on both sides of
    the optic facilitate movement of the lens inside the eye in
    reaction to the natural contracting and relaxing of the
    eyes muscles. This movement of the lens, or accommodation,
    promotes vision across a broad range of distances comparable to
    that of a healthy human lens. The haptics extending from the
    opposing sides of the optic facilitate positioning and stability
    within the eye and are anchored by the loops.




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##### 



TABLE OF
    CONTENTS
  
 PageSummary


1Risk
    Factors


8Information
    Regarding Forward-Looking Statements


29Use of
    Proceeds


30Dividend
    Policy


30Capitalization


31Dilution


33Selected Financial Data


36Managements
    Discussion and Analysis of Financial Condition and Results
    Of Operations


38Business


56Management


77Compensation
    Discussion and Analysis


85Principal and
    Selling Stockholders


101Related Party
    Transactions


104Description of
    Capital Stock


109Shares Eligible for
    Future Sale


113Underwriting


117Material United
    States Federal Tax Considerations for
    Non-United
    States Holders of Common Stock


123Legal
    Matters


127Experts


127Where You Can Find
    More Information


127Index to Financial
    Statements


F-1EXHIBIT 10.15EXHIBIT 23.1  
       You should rely only on the information contained in this
    prospectus and in any free-writing prospectus authorized by us.
    We have not, and the underwriters have not, authorized any other
    person to provide you with different information. This
    prospectus is not an offer to sell, nor is it an offer to buy,
    these securities in any state where the offer or sale is not
    permitted. The information in this prospectus is complete and
    accurate as of the date on the front cover, but the information
    may have changed since that date.
  ® ® tm
 i




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SUMMARY
  This summary highlights key aspects of the information
    contained elsewhere in this prospectus. This summary does not
    contain all the information you should consider before investing
    in our common stock. You should read the entire prospectus
    carefully, especially the risks of investing in our common stock
    that we discuss under the Risk Factors section and
    the financial statements and the notes to those statements.
    References in this prospectus to we, us,
    our, company and eyeonics
    refer to eyeonics, inc.
  Overview
 
   
 
   
  Vision
    and Vision Impairment
       1




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Our
    Market
    Limitations
    of Standard Monofocal IOLs
    Limitations
    of Multifocal PIOLs
    
    limited range of vision;
    compromised clarity of vision;
    significant rates of side effects;
    required patient tolerance and adjustment; and   2




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
    potentially significant patient consulting time required of
    surgeons.  Our
    Solution
    
    Provides a Broad Range of
    Vision.  crystalens ability to accommodate
    allows the eye to focus on objects across a broad range of
    vision from near to intermediate to far and enables patients to
    eliminate or significantly reduce dependence on contact lenses
    or glasses.
    Maintains Clarity of Vision.  Unlike multifocal
    PIOLs, crystalens directs all available light received by the
    eye to a single focal point, resulting in contrast sensitivity
    comparable to that of a healthy eyes natural lens.
    Minimal Side Effects.  crystalens data
    submitted to the FDA indicate minimal patient complaints of
    moderate or severe glare and halos. crystalens is not required
    to include warnings related to night driving or other conditions
    on its labeling.
    Patient Adjustment not Required.  crystalens
    produces a single image consistent with normal vision, meaning
    patients do not need to adapt to viewing multiple images.
    Minimal Patient Consulting Time.  Because
    crystalens accommodates to perform like the eyes natural
    lens, and achieves vision comparable to a healthy natural lens,
    we believe ophthalmologists do not need to spend considerable
    time prior to or after implantation of crystalens consulting
    patients on the tolerance of side effects.  Our
    Strategy
    
    establish crystalens as the treatment of choice for cataract
    patients;
    drive overall PIOL market growth and expand our market share;
    continue to strengthen our United States sales and marketing
    infrastructure and establish an international sales and
    marketing organization; and
    refine and enhance crystalens and broaden our product portfolio
    through ongoing research and development.   3




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Risks
    Associated With Our Business
 
   
 
  
    we have a limited operating history and may not achieve
    profitability; 
 
  
    we currently derive all of our revenues from a single product,
    crystalens Five-O; 
 
  
    we will depend on the adoption of our product by
    ophthalmologists and other eye care professionals to generate
    revenue from the sale of our product; 
 
  
    we compete with large multinational competitors who already have
    their own IOLs on the market and who have more experience and
    resources in manufacturing, sales and marketing and research and
    development than we do; 
 
  
    we may be subject to adverse changes to healthcare laws and
    regulations that govern us and our products. Any such changes
    that would affect a patients ability to privately pay for
    our crystalens products would adversely affect our total
    revenues; 
 
  
    we may be unable, for many reasons, including those that are
    beyond our control, to implement our current business strategy,
    including our plan to expand into markets outside of the United
    States; 
 
  
    in order to demonstrate the safety and efficacy of our new
    products, we will likely need to conduct expensive clinical
    trials involving large patient populations comparing our lenses
    to other currently established IOLs; 
 
  
    there can be no assurance that the results of these clinical
    trials will demonstrate the safety and efficacy of our products;
    and 
 
  
    our success also depends on our ability to effectively design,
    develop, maintain and prosecute adequate intellectual property
    coverage, obtain regulatory approvals for, and commercialize our
    products. 
  Corporate
    Information
  (866) 393-6642. www.eyeonics.com
  ® ®
   4




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The
    Offering
  Common stock offered by us
    
    sharesCommon stock offered by selling stockholders
    
    sharesCommon stock to be outstanding after this offering
    
    sharesEstimated initial public offering price per share
    
    $      to
    $Use of proceeds
    
    We intend to use the net proceeds of this offering to establish
    an international sales and marketing organization and to expand
    our existing United States sales and marketing organization, for
    research and development, including clinical trials and
    regulatory compliance, and for working capital and general
    corporate purposes. See Use of Proceeds. If the
    underwriters exercise their over-allotment option, we will not
    receive any of the proceeds from the sale of shares by the
    selling stockholders.Proposed NASDAQ Global Market symbol
    
    EYON    
    4,611,701 shares of common stock issuable upon exercise of
    all outstanding options under our 1998 Stock Plan and
    stand-alone option agreements at a weighted-average exercise
    price of $2.29 per share;
    27,692 shares of common stock issuable upon exercise of a
    warrant outstanding at an exercise price of $3.25 per share;
    1,750,000 shares of common stock reserved for future grant
    or issuance under our 2007 Equity Incentive Plan and
    250,000 shares of common stock reserved for future grant or
    issuance under our 2007 Employee Stock Purchase Plan; and
    automatic annual increases in the number of shares of common
    stock reserved for issuance under our 2007 Equity Incentive Plan
    and 2007 Employee Stock Purchase Plan.    
    a          -for-          
    reverse split of the shares of our common and preferred stock to
    occur prior to the completion of this offering;
    no exercise of the underwriters over-allotment option;
    the conversion of all our outstanding convertible preferred
    stock into 20,756,973 shares of common stock immediately
    upon the closing of this offering and the retirement of
    500,000 shares of Series A convertible preferred stock
    held as treasury stock; and
    the filing of our amended and restated certificate of
    incorporation, which will occur upon the completion of this
    offering.   5




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Summary
    Financial Data
    
 Years Ended December 31,


Six Months Ended June 30,2004


2005


2006


2006


2007(in thousands, except share and per share amounts)Total revenues

$
12,943


$
16,120


$
17,068


$
8,397


$
13,622Cost of revenues


1,887



3,535



3,242



864



1,462Gross profit


11,056



12,585



13,826



7,532



12,160Operating expenses:Research and development


2,012



2,856



2,973



1,430



1,598Selling and marketing


7,908



11,696



15,521



8,754



7,336General and administrative


2,968



3,585



4,356



2,044



6,970Total operating expenses


12,888



18,137



22,850



12,228



15,904Loss from operations


(1,832
)


(5,552
)


(9,024
)


(4,696
)


(3,745
)Interest income


96



131



609



330



252Loss before income taxes


(1,735
)


(5,421
)


(8,415
)


(4,366
)


(3,492
)Provision for income taxes


















86Net loss

$
(1,735
)

$
(5,421
)

$
(8,415
)

$
(4,366
)

$
(3,578
)Net loss per share 
    basic and
    diluted(1)

$
(4.12
)

$
(8.21
)

$
(10.85
)

$
(5.95
)

$
(4.32
)Weighted-average common shares
    outstanding  basic and
    diluted(1)


421,330



660,557



775,494



733,481



829,130Pro forma net loss per
    share  basic and
    diluted(1)









$
(0.39
)





$
(0.17
)Pro forma weighted-average shares
    outstanding(1)










21,532,467







21,586,103  
 
 
 
  (1)
    See Note 1 of the notes to our consolidated financial
    statements for a description of the method used to compute basic
    and diluted net loss per share and pro forma basic and diluted
    net loss per share. 
  As of June 30, 2007Pro Forma AsActual

Pro
    Forma(1)

Adjusted(2)(in thousands)Balance Sheet Data:Cash, cash equivalents and
    short-term investments

$
9,834


$
9,834Working capital


10,724



10,724Total assets


16,915



16,915Long-term obligations, less
    current portion


94



94Redeemable convertible preferred
    stock


43,710



Accumulated deficit


(38,071
)


(40,695
)Total stockholders (deficit)
    equity


(31,647
)


12,063    6




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(1)
    On a pro forma basis to give effect to (1) the conversion
    of all our outstanding shares of convertible preferred stock
    into 20,756,973 shares of common stock immediately upon
    closing of this offering and (2) the retirement of
    500,000 shares of Series A convertible preferred stock
    held as treasury stock.(2)
    On a pro forma as adjusted basis to give effect to the automatic
    conversion of all outstanding shares of convertible preferred
    stock into common stock upon the completion of this offering and
    to reflect the sale of      shares
    of our common stock in this offering at an assumed initial
    offering price to the public of $     
    per share, after deducting the underwriting discounts,
    commissions and estimated offering expenses payable by us. Each
    $1.00 increase (decrease) in the assumed public offering price
    of $      per share would increase
    (decrease) each of cash, cash equivalents and short-term
    investments, working capital, total assets and total
    stockholders equity by approximately
    $      million, assuming that the
    number of shares offered by us, as set forth on the cover page
    of this prospectus, remains the same, and after deducting
    estimated underwriting discounts and commissions and estimated
    offering expenses payable by us. We may also increase or
    decrease the number of shares we are offering. Each increase of
    1.0 million shares in the number of shares offered by us,
    together with a corresponding $1.00 increase in the assumed
    offering price of $      per share,
    would increase each of cash, cash equivalents and short-term
    investments, working capital, total assets and total
    stockholders equity by approximately
    $      million. Similarly, each
    decrease of 1.0 million shares in the number of shares
    offered by us, together with a corresponding $1.00 decrease in
    the assumed offering price of $     
    per share, would decrease each of cash, cash equivalents and
    short-term investments, working capital, total assets and total
    stockholders equity by approximately
    $      million. The pro forma as
    adjusted information discussed above is illustrative only and
    will adjust based on the actual public offering price and other
    terms of this offering determined at pricing.   7




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RISK
    FACTORS
  Investing in our common stock involves a high degree of risk.
    You should carefully consider the following risk factors, as
    well as the other information in this prospectus, before
    deciding whether to invest in shares of our common stock. If any
    of the following risks actually occur, our business, financial
    condition and results of operations would suffer. In that case,
    the trading price of our common stock would likely decline and
    you might lose all or part of your investment in our common
    stock. The risks described below are not the only ones we
    face.
  Risks
    Related to Our Business
  We have a
    history of operating losses and may not be able to attain
    profitability, even if we generate
    significant revenues.
    We expect
    to derive substantially all of our future revenue from sales of
    a single product, crystalens, and this product could fail to
    generate significant revenue or achieve market
    acceptance.
    
    the presence of competing products sold by companies with longer
    operating histories, more recognizable names and more
    established distribution networks;
    the results of any adverse long-term clinical studies relating
    to the effectiveness of our crystalens product; 8




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
    the availability of alternative treatments or procedures that
    may be, or may be perceived to be, more effective, safer or less
    costly than crystalens;
    perceptions of crystalens as compared to other treatments for
    cataracts; and
    the lack of full reimbursement from healthcare payors for
    premium IOLs, or PIOLs, including crystalens.    Legislative
    or regulatory reform of the healthcare system may affect our
    ability to sell crystalens profitably.
    Our
    business model depends on the ability of patients to privately
    pay for the incremental presbyopia-correcting aspects of
    crystalens implantation for the treatment of
    cataracts.
   9




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Patients
    may not be willing to pay for the price difference between a
    standard monofocal IOL and a PIOL such as ours, an increment
    which is typically not covered by medicare or other third-party
    payors.
   
  Ophthalmologists
    and other eye care professionals may not recommend PIOLs over
    standard monofocal IOLs or adopt our crystalens product over
    other PIOLs.
 
 
   
 
   
 
 
  Our
    operating results may fluctuate significantly.
    
    fluctuations in the demand for our products;
    the timing and success of our international launch;
    fluctuations in the number of cataract procedures performed by
    our customers, which could decrease significantly during holiday
    seasons and summer months, when significant numbers of
    physicians and patients may schedule vacations; 10




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
    new product introductions by us or our competitors and deferrals
    of customer orders in anticipation of, or exchanges of inventory
    following, the introduction of new products or product
    enhancements by us; 
  
    variances in the sales terms, timing, volume of customer orders
    or exchanges from period to period; 
 
  
    the length of our sales cycle which varies and may be
    unpredictable; and 
 
  
    variations in the royalty rates and offsets and royalty
    termination dates applicable to our products. 
    The
    medical device industry is highly competitive and subject to
    rapid technological change. If our competitors are better able
    to develop and market products that are safer, more effective,
    less costly or otherwise more attractive than our crystalens
    product or any new products that we may develop, our commercial
    opportunity may be reduced or eliminated.
        
    greater financial and human resources for product development,
    sales and marketing and patent litigation;
    significantly greater name recognition;
    longer operating histories;
    established relations with healthcare professionals, customers
    and third-party payors;
    additional lines of products, and the ability to offer rebates
    or bundle products to offer higher discounts or incentives; 11




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
    established distribution networks; and
    greater experience in conducting research and development,
    manufacturing, clinical trials, obtaining regulatory approval
    for products and marketing approved products.      If we do
    not introduce new commercially successful products in a timely
    manner, our products may become obsolete over time, customers
    may not buy our products and our revenue and profitability may
    decline.
    
    changing reimbursement protocols;
    changing customer needs;
    the introduction of new products and technologies;
    evolving surgical practices;
    evolving industry standards; and
    other unforeseen reasons.    
    properly identify and anticipate customer needs;
    commercialize new products in a cost-effective and timely manner;
    manufacture and deliver products in sufficient volumes on time;
    obtain regulatory approval for new products;
    differentiate our offerings from competitors offerings;
    achieve positive clinical outcomes; 12




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
    satisfy the increased demands from healthcare payors, providers
    and patients for lower-cost procedures;
    innovate and develop new materials, product designs and surgical
    techniques; and
    provide adequate medical and consumer education relating to new
    products and attract key ophthalmologists and other eye care
    professionals to advocate these new products.      
    the research methodology used may not be successful in
    identifying potential products;
    competitors may develop alternatives that render our future
    products, if any, obsolete;
    our products may not be deployed safely or effectively;
    our future products, if any, may, on further study, be shown to
    have harmful side effects or other characteristics that indicate
    they are unlikely to be effective;
    our clinical trials may not be successful; and
    we may not receive regulatory approval.  If we are
    unable to adequately protect our intellectual property, our
    competitors and other third parties could produce products based
    on our intellectual property, which would substantially impair
    our ability to compete.
   13




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We may
    become subject to claims of infringement or misappropriation of
    the intellectual property rights of others, which could prohibit
    us from selling our product offerings, require us to obtain
    licenses from third parties to develop non-infringing
    alternatives and/or subject us to substantial monetary damages
    and injunctive relief.
   14




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The
    clinical trial process required to obtain regulatory approvals
    is costly and uncertain, and could result in delays in new
    product introductions.
        follow-up
 15




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##### Table of Contents



follow-up
    
    obtaining regulatory approval to commence a clinical trial;
    reaching agreement on acceptable terms with prospective clinical
    research organizations, or CROs, and trial sites, the terms of
    which can be subject to extensive negotiation and may vary
    significantly among different CROs and trial sites;
    manufacturing sufficient quantities of a product candidate for
    use in clinical trials;
    obtaining institutional review board, or IRB, approval to
    conduct a clinical trial at a prospective site; and
    recruiting and enrolling patients, and maintaining their
    participation in clinical trials.  follow-up follow-up
    
    failure to conduct the clinical trial in accordance with
    applicable regulatory requirements or our clinical protocols;
    inspection of the clinical trial operations or trial sites by
    the FDA or other regulatory authorities resulting in the
    imposition of a clinical hold;
    unforeseen safety issues; and
    lack of adequate funding to continue the clinical trial.   16




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We plan
    to expand into markets outside of the United States, which will
    subject us to additional business and regulatory risks and there
    can be no assurance our product will be accepted in
    international markets.
      
    competition from established companies, many of which are well
    positioned within their local markets with longer operating
    histories, more recognizable names and more established
    distribution networks;
    overcoming negative perceptions generated by our first attempt
    to introduce crystalens internationally;
    overcoming negative perceptions concerning silicon-based lenses;
    the availability and level of reimbursement within prevailing
    foreign healthcare payment systems and the ability of patients
    to elect to privately pay for our crystalens product;
    difficulties in enforcing intellectual property rights;
    pricing pressure that we may experience internationally;
    required compliance with existing and changing foreign
    regulatory requirements and laws;
    laws and business practices favoring local companies;
    longer sales and payment cycles;
    difficulties in enforcing agreements and collecting receivables
    through certain foreign legal systems;
    political and economic instability;
    foreign currency risks that could adversely affect our financial
    results; 17




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
    potentially adverse tax consequences, tariffs and other trade
    barriers;
    international terrorism and
    anti-American
    sentiment;
    difficulties and costs associated with staffing and managing
    foreign operations; and
    export restrictions and controls relating to technology.    We and
    our suppliers are subject to extensive government regulation. A
    failure to comply with regulatory requirements or to receive
    regulatory clearance or approval for our products may increase
    our costs or prevent us from selling our products.
      We must
    comply with continuing post-market regulatory requirements of
    the FDA and other regulatory authorities and may become subject
    to substantial penalties if we fail to do so, and, even after a
    product has been approved for sale by the FDA or another
    regulatory authority, we could be required to, or may
    voluntarily, recall or withdraw the product from the market if
    we learn that it is potentially unsafe.
     18




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Under our
    current FDA approval, we are limited to marketing and
    advertising crystalens for the treatment of cataract patients
    with or without presbyopia.
 
 
   
 19




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We
    anticipate significant growth, which we may fail to manage
    effectively.
    
    new and increased responsibilities for our management team;
    increased pressure on our operating and financial systems,
    controls and reporting systems;
    the need to hire, train and manage additional qualified
    personnel;
    management of an increasing number of relationships with our
    customers, suppliers and other third parties;
    strain on our ability to source a larger supply of components
    which meet our required specifications on a timely basis; and
    additional manufacturing capacity requirements.    We depend
    on certain single-source suppliers for key components of our
    products, and the loss of any of these suppliers, or their
    inability to supply us with an adequate supply of materials,
    could harm our business.
    There are
    potential complications associated with crystalens and potential
    long term complications or unfavorable side effects could emerge
    in the future.
 
   
 20




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Product
    liability suits brought against us could result in expensive and
    time-consuming litigation, payment of substantial damages and an
    increase in our insurance rates.
    We rely
    on third parties to conduct and assist us with the clinical
    trials and pre-clinical development often needed for regulatory
    approval and commercialization of our products. Any product
    candidates that fail to perform as anticipated could delay or
    jeopardize clinical development of our product
    condition.
  pre-clinical
  Federal
    and state laws pertaining to healthcare fraud and abuse could
    materially adversely affect our business and results of
    operations.
   21




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The audit
    of our financial statements for the year ended December 31,
    2006 identified a material weakness in our internal controls
    over financial reporting concerning the accounting for
    significant non-routine transactions, and if not corrected, this
    material weakness could result in a material misstatement of our
    results of operations or financial condition, which could harm
    our business and cause our stock price to decline.
      A loss of
    key executives or failure to attract qualified personnel could
    limit our growth and adversely affect our business.
   22




---



##### Table of Contents



We may
    not be able to utilize our net operating loss carryforwards,
    which could cause us to be subject to tax on our income earlier
    than anticipated.
    If any of
    our employees, consultants or others breach their proprietary
    information agreements, our competitive position could be
    harmed.
    Because
    we have operated as a private company, we have no experience
    complying with public company obligations, including recently
    enacted changes in securities laws and regulations. Compliance
    with these requirements will increase our costs and require
    additional management resources, and we still may fail to
    comply.
    Form 10-K. Form 10-K
 23




---



##### Table of Contents



We may
    need substantial additional funding and may be unable to raise
    capital when needed, which would force us to delay, reduce or
    eliminate our product development programs or commercialization
    efforts.
    
    expand our sales and marketing organization in the United States
    and internationally;
    fund our operations, clinical trials and commercialization
    efforts for new product candidates, if any such products receive
    regulatory approval for commercial sale;
    scale-up our
    manufacturing operations;
    pursue additional research and development;
    defend, in litigation or otherwise, any claims that we infringe
    third-party patent or other intellectual property rights; and
    acquire companies or in-license products or intellectual
    property.    
    the scope, rate of progress and cost of our clinical trials and
    other research and development activities;
    the cost of filing and prosecuting patent applications and
    defending and enforcing our patent and other intellectual
    property rights;
    the cost of defending, in litigation or otherwise, any claims
    that we infringe third-party patent or other intellectual
    property rights;
    the terms and timing of any collaborative, licensing and other
    arrangements that we may establish;
    the cost and timing of regulatory approvals;
    the cost and timing of establishing sales, marketing and
    distribution capabilities;
    the cost of establishing clinical and commercial supplies of our
    products and any products that we may develop;
    the effect of competing technological and market developments;
    licensing technologies for future development; and
    the extent to which we acquire or invest in businesses, products
    and technologies, although we currently have no commitments or
    agreements relating to any of these types of transactions.   24




---



##### Table of Contents



We
    generally do not have long-term contracts with our
    customers.
    Our
    facilities in California are located near an earthquake fault,
    and an earthquake or other types of natural disasters or
    resource shortages could disrupt our operations and adversely
    affect results.
    Our
    operations involve hazardous materials, and we must comply with
    environmental laws and regulations, which can be
    expensive.
   25




---



##### Table of Contents



If we
    choose to acquire new or complementary businesses, products or
    technologies instead of developing them ourselves, we may be
    unable to complete those acquisitions or to successfully
    integrate them in a cost-effective and non-disruptive
    manner.
    Risks
    Related to This Offering and Ownership of Our Common
    Stock
  Our
    common stock has not been publicly traded, and we expect that
    the price of our common stock will fluctuate
    substantially.
    
    the depth and liquidity of the market for our common stock;
    volume, timing and nature of orders for our products;
    developments generally affecting medical device companies;
    the announcement of new products or product enhancements by us
    or our competitors;
    changes in earnings estimates or recommendations by securities
    analysts;
    investor perceptions of us and our business, including changes
    in market valuations of medical device companies;
    actions by institutional or other large stockholders;
    our results of operations and financial performance; and
    general economic, industry and market conditions.   26




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##### Table of Contents



New
    investors will incur immediate and substantial dilution in the
    net tangible book value of the stock purchased.
 
   
  A sale of
    a substantial number of shares of our common stock may cause the
    price of our common stock to decline.
 
  180-day
 
  lock-up
  lock-up
  Our
    directors, officers and principal stockholders have significant
    voting power and may take actions that may not be in the best
    interests of our other stockholders.
   27




---



##### Table of Contents



We have
    broad discretion in the use of proceeds of this offering for
    working capital and general corporate purposes.
    Anti-takeover
    provisions in our amended and restated certificate of
    incorporation and amended and restated bylaws, and Delaware law,
    contain provisions that could discourage a takeover.
    
    a classified board so that only one of the three classes of
    directors on our board of directors is elected each year;
    elimination of cumulative voting in the election of directors;
    procedures for advance notification of stockholder nominations
    and proposals;
    the ability of our board of directors to amend our bylaws
    without stockholder approval;
    a supermajority stockholder vote requirement for amending
    certain provisions of our amended and restated certificate of
    incorporation and our amended and restated bylaws; and
    the ability of our board of directors to issue up to
    10,000,000 shares of preferred stock without stockholder
    approval upon the terms and conditions and with the rights,
    privileges and preferences as our board of directors may
    determine.    We have
    not paid dividends in the past and do not expect to pay
    dividends in the future, and any return on investment may be
    limited to the value of our stock.
   28




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##### Table of Contents



INFORMATION
    REGARDING FORWARD-LOOKING STATEMENTS
     29




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##### Table of Contents



USE
    OF PROCEEDS
      
    $      million to establish an
    international sales and marketing organization and to expand our
    existing United States sales and marketing activities; and
    $      million for research and
    development, including clinical trials and regulatory compliance. 
   
    DIVIDEND
    POLICY
   30




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##### Table of Contents



CAPITALIZATION
      
    on an actual basis;
    on a pro forma basis to give effect to (1) the conversion
    of all our outstanding shares of convertible preferred stock
    into 20,756,973 shares of common stock immediately upon
    closing of this offering and (2) the retirement of
    500,000 shares of Series A convertible preferred stock
    held as treasury stock; and
    on a pro forma as adjusted basis to reflect (1) the receipt
    of the estimated net proceeds from the sale
    of           shares
    of common stock offered by us at an assumed offering price of
    $      per share, the midpoint of the
    range on the cover page of this prospectus, after deducting
    underwriting discounts and commissions and estimated offering
    expenses and (2) the filing and effectiveness of our
    amended and restated certificate of incorporation.  
 As of June 30, 2007Pro FormaActual


Pro Forma


as
    Adjusted(1)(in thousands, except share andper share data)Redeemable convertible preferred
    stock, $0.001 par value  14,013,093 shares
    authorized, 13,869,274 shares issued and outstanding,
    actual; no shares authorized, issued and outstanding, pro forma
    and pro forma as adjusted

$
43,710


$



$Stockholders (deficit) equity:Preferred stock, $0.001 par
    value  no shares authorized, issued and outstanding,
    actual and pro forma; 10,000,000 shares authorized, no
    shares issued and outstanding, pro forma as adjustedSeries A convertible preferred
    stock, $0.001 par value; 7,387,699 shares authorized,
    7,387,699 shares issued and outstanding, actual; no shares
    authorized, issued and outstanding, pro forma and pro forma as
    adjusted


7



Common stock, $0.001 par
    value   30,000,000 authorized, 850,447 issued and
    outstanding, actual; 30,000,000 shares authorized, 21,
    607,420 shares issued and outstanding, pro forma; and
    100,000,000 shares authorized, shares issued and
    outstanding, pro forma as adjusted


1



22Additional paid-in capital


9,112



52,808Deferred stock-based compensation


(12
)


(12
)Cumulative other comprehensive loss


(60
)


(60
)Accumulated deficit


(38,071
)


(40,695
)Treasury stock (Series A
    convertible preferred), at cost  500,000 shares
    actual, and no shares pro forma and pro forma as adjusted


(2,625
)


Total stockholders (deficit)
    equity


(31,647
)


12,063Total capitalization

$
12,063


$
12,063


$  
    (1)
    Each $1.00 increase (decrease) in the assumed public offering
    price of $      per share would
    increase (decrease) each of cash, cash equivalents and
    short-term investments, additional paid-in capital, total
    stockholders equity and total capitalization by
    approximately $      million,
    assuming that the number of shares offered by us, as set forth
    on the cover page of this prospectus, remains the same, and
    after deducting estimated underwriting discounts and commissions
    and estimated offering expenses payable by us. We may also
    increase or decrease the number of shares we are offering. Each
    increase of 1.0 million shares in the number of shares
    offered by us, together with a corresponding $1.00 increase in
    the assumed offering price of $     
    per share, would increase each of cash, cash equivalents and
    short-term investments, additional paid-in capital, total
    stockholders equity and total capitalization by
    approximately $      million.
    Similarly, each decrease of 1.0 million shares in the
    number of shares offered by us, together with a corresponding
    $1.00 decrease in the assumed offering price of
    $      per share, would decrease each
    of cash, cash equivalents and short-term investments, as paid-in
    capital total stockholders equity and total capitalization
    by approximately $      million.
    The pro forma as adjusted information discussed above is
    illustrative only and will adjust based on the actual public
    offering price and other terms of this offering determined at
    pricing. 31




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##### Table of Contents




    4,611,701 shares of common stock issuable upon exercise of
    all outstanding options under our 1998 Stock Plan and
    stand-alone option agreements at a weighted-average exercise
    price of $2.29 per share;
    27,692 shares of common stock issuable upon exercise of a
    warrant outstanding at an exercise price of $3.25 per share;
    1,750,000 shares of common stock reserved for future grant
    or issuance under our 2007 Equity Incentive Plan and
    250,000 shares of common stock reserved for future grant or
    issuance under our 2007 Employee Stock Purchase Plan; and
    automatic annual increases in the number of shares of common
    stock reserved for issuance under our 2007 Equity Incentive Plan
    and 2007 Employee Stock Purchase Plan. 32




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##### Table of Contents



DILUTION
        
    the conversion of all our outstanding shares of convertible
    preferred stock into 20,756,973 shares of common stock
    immediately upon closing of this offering; and
    the receipt of the estimated net proceeds from the sale
    of           shares
    of common stock offered by us at an assumed offering price of
    $      per share, the midpoint of the
    range on the cover page of this prospectus, after deducting
    underwriting discounts and commissions and estimated offering
    expenses and the filing and effectiveness of our amended and
    restated certificate of incorporation to authorize
    100,000,000 shares of common stock and
    10,000,000 shares of undesignated preferred stock.    Assumed initial public offering
    price per share





$Net tangible book value per share
    as of June 30, 2007

$
(37.21
)Pro forma increase in net tangible
    book value per share attributable to conversion of convertible
    preferred stock


37.77Pro forma net tangible book value
    per share as of June 30, 2007


0.56Increase in pro forma net tangible
    book value per share attributable to this offeringPro forma as adjusted net tangible
    book value per share after this offeringDilution per share to new
    investors in this offering





$    33




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##### Table of Contents



Weighted-Shares Purchased


Total Consideration


Average PriceNumber


Percent


Amount


Percent


per ShareExisting stockholders


21,607,420




%

$
52,829,989




%

$
2.44New investorsTotal






100.0
%

$




100.0
%         
    4,611,701 shares of common stock issuable upon exercise of
    all outstanding options under our 1998 Stock Plan and
    stand-alone option agreements at a weighted-average exercise
    price of $2.29 per share;
    27,692 shares of common stock issuable upon exercise of a
    warrant outstanding at an exercise price of $3.25 per share. 34




---



##### Table of Contents




    1,750,000 shares of common stock reserved for future grant
    or issuance under our 2007 Equity Incentive Plan and
    250,000 shares of common stock reserved for future grant or
    issuance under our 2007 Employee Stock Purchase Plan; and
    automatic annual increases in the number of shares of common
    stock reserved for issuance under our 2007 Equity Incentive Plan
    and 2007 Employee Stock Purchase Plan. 
   
 
   
 35




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##### Table of Contents



SELECTED
    FINANCIAL DATA
    
 Six Months EndedYears Ended December 31,


June 30,2002


2003


2004


2005


2006


2006


2007(in thousands, except share and per share amounts)Total revenues

$
1,062


$
686


$
12,943


$
16,120


$
17,068


$
8,397


$
13,622Cost of revenues


210



418



1,887



3,535



3,242



864



1,462Gross profit


852



268



11,056



12,585



13,826



7,532



12,160Operating expenses:Research and development


1,435



1,380



2,012



2,856



2,973



1,430



1,598Selling and marketing


856



3,057



7,908



11,696



15,521



8,754



7,336General and administrative


1,072



1,877



2,968



3,585



4,356



2,044



6,970Total operating expenses


3,363



6,314



12,888



18,137



22,850



12,228



15,904Loss from operations


(2,511
)


(6,046
)


(1,832
)


(5,552
)


(9,024
)


(4,696
)


(3,745
)Interest income


74



73



96



131



609



330



252Loss before income taxes


(2,437
)


(5,973
)


(1,735
)


(5,421
)


(8,415
)


(4,366
)


(3,492
)Provision for income taxes


























86Net loss

$
(2,437
)

$
(5,973
)

$
(1,735
)

$
(5,421
)

$
(8,415
)

$
(4,366
)

$
(3,578
)Net loss per share 
    basic and
    diluted(1)

$
(19.08
)

$
(20.93
)

$
(4.12
)

$
(8.21
)

$
(10.85
)

$
(5.95
)

$
(4.32
)Weighted-average sharesoutstanding  basic and
    diluted(1)


127,726



285,442



421,330



660,557



775,494



733,481



829,130Pro forma net loss per
    share  basic and
    diluted(1)

















$
(0.39
)





$
(0.17
)Pro forma weighted-average shares
    outstanding(1)


















21,532,467







21,586,103  
 36




---



##### Table of Contents



(1)
    See Note 1 of the notes to our consolidated financial
    statements for a description of the method used to compute basic
    and diluted net loss per share and pro forma basic and diluted
    net loss per share 
  As ofAs of December 31,

June 30, 20072002

2003

2004

2005

2006

Actual(in thousands)Balance Sheet Data:Cash, cash equivalents and
    short-term investments

$
1,994


$
8,328


$
6,837


$
6,185


$
10,717


$
9,834Working capital


2,189



8,261



6,772



5,204



8,397



10,724Total assets


3,192



10,353



11,334



10,942



15,369



16,915Long-term obligations, less
    current portion


28



56



87



124



147



94Redeemable convertible preferred
    stock


15,260



27,520



27,520



30,658



43,710



43,710Accumulated deficit


(9,875
)


(15,848
)


(17,583
)


(23,004
)


(34,492
)


(38,071
)Total stockholders equity
    (deficit)


2,409



8,753



7,535



(24,326
)


(34,055
)


(31,647
)  37




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##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS OF
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  The following discussion and analysis of our financial
    condition and results of operations should be read together with
    our consolidated financial statements and the related notes to
    those financial statements included elsewhere in this
    prospectus. In addition to historical financial information, the
    following discussion and analysis contains forward-looking
    statements that involve risks, uncertainties and assumptions.
    Our actual results and the timing of selected events may differ
    materially from those anticipated in these forward-looking
    statements as a result of many factors, including those
    discussed under Risk Factors and elsewhere in this
    prospectus.
  Overview
 
   
 
  AT-45
 
     38




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##### Table of Contents



Material
    Weakness in Internal Controls
      Financial
    Operations
  Total
    Revenues
    Cost
    of Revenues
    AT-45
 39




---



##### Table of Contents



For the Six MonthsFor the Years Ended December 31,


Ended June 30,2004


2005


2006


2006


2007(in thousands)Product costs

$
892


$
905


$
874


$
450


$
792Royalties


624



769



841



414



670Education course costs


371



461











Inventory impairment charge






1,400



1,527







Total cost of revenues

$
1,887


$
3,535


$
3,242


$
864


$
1,462   Research
    and Development
      Sales
    and Marketing
    General
    and Administrative
 
   
 
  Interest
    Income
 
   40




---



##### Table of Contents



Results
    of Operations
    
 Year Ended December 31,


Six Months Ended June 30,Percent








Percent








Percent2004


2005


Change


2005


2006


Change


2006


2007


Change(in thousands)Total revenues

$
12,943


$
16,120



24.5
%

$
16,120


$
17,068



5.9
%

$
8,397


$
13,622



62.2
%Cost of revenues


1,887



3,535



87.3
%


3,535



3,242



(8.3
)%


864



1,462



69.2
%Gross profit


11,056



12,585



13.8
%


12,585



13,826



9.9
%


7,532



12,160



61.4
%Operating expenses:Research and development


2,012



2,856



41.9
%


2,856



2,973



4.1
%


1,430



1,598



11.7
%Selling and marketing


7,908



11,696



47.9
%


11,696



15,521



32.7
%


8,754



7,336



(16.2
)%General and administrative,


2,968



3,585



20.8
%


3,585



4,356



21.5
%


2,044



6,970



241.0
%Total operating expenses


12,888



18,137



40.7
%


18,137



22,850



26.0
%


12,228



15,904



30.1
%Loss from operations


(1,832
)


(5,552
)


203.1
%


(5,552
)


(9,024
)


62.5
%


(4,696
)


(3,745
)


(20.3
)%Interest income


96



131



36.5
%


131



609



364.9
%


330



252



(23.6
)%Loss before income taxes


(1,735
)


(5,421
)


212.4
%


(5,421
)


(8,415
)


55.2
%


(4,366
)


(3,492
)


(20.0
)%Provision for income taxes






























86



NMNet loss

$
(1,735
)

$
(5,421
)


212.4
%

$
(5,421
)

$
(8,415
)


55.2
%

$
(4,366
)

$
(3,578
)


(18.0
)%  
 
 
  Comparison
    of Six Months Ended June 30, 2007 and 2006
  Total Revenues.
  Gross Profit. Five-O
  Research and Development.
 
  Selling and Marketing.
 
 41




---



##### Table of Contents



General and Administrative.
 
  Interest Income.
  Income Taxes.
  Comparison
    of the Years Ended December 31, 2006 and 2005
  Total Revenues.
  Gross Profit.
 42




---



##### Table of Contents



Research and Development.
  Selling and Marketing.
  General and Administrative.
  Interest Income.
  Income Taxes.
  Comparison
    of the Years Ended December 31, 2005 and 2004
  Total Revenues.
  Gross Profit.
  Research and Development.
 43




---



##### Table of Contents



Selling and Marketing.
  General and Administrative.
  Interest Income.
  Income Taxes.
  Liquidity
    and Capital Resources
  Sources
    of Liquidity
   44




---



##### Table of Contents



Cash
    Flows
  December 31,


June 30,2004


2005


2006


2007(in thousands)Cash, cash equivalents and
    short-term investments

$
6,837


$
6,185


$
10,717


$
9,834Working capital


6,772



5,204



8,397



10,724Net cash used in operating
    activities


(1,063
)


(3,368
)


(5,376
)


(709
)Net cash provided by (used in)
    investing activities


2,692



1,483



(6,926
)


742Net cash provided by financing
    activities


83



3,289



10,483



48   Cash Flows from Operating
    Activities.
       45




---



##### Table of Contents



Cash Flows From Investing
    Activities.
        Cash Flows from Financing
    Activities.
  Operating Capital and Capital Expenditure
    Requirements.
   46




---



##### Table of Contents




    the scope, rate of progress and cost of our clinical trials and
    other research and development activities;
    the cost of filing and prosecuting patent applications and
    defending and enforcing our patent and other intellectual
    property rights;
    the cost of defending, in litigation or otherwise, any claims
    that we infringe third-party patent or other intellectual
    property rights;
    the terms and timing of any collaborative, licensing and other
    arrangements that we may establish;
    the cost and timing of regulatory approvals;
    the cost and timing of establishing sales, marketing and
    distribution capabilities;
    the cost of establishing clinical and commercial supplies of our
    products and any products that we may develop;
    the effect of competing technological and market developments;
    licensing technologies for future development; and
    the extent to which we acquire or invest in businesses, products
    and technologies, although we currently have no commitments or
    agreements relating to any of these types of transactions. 47




---



##### Table of Contents



Contractual
    Obligations
    Payment due by PeriodLess than 1Contractual Obligations

Total


Year


1-3 Years


3-5 Years(in thousands)Capital Lease Obligations

$
217


$
74


$
143


$
Operating Lease Obligations


438



305



133



Accrued Royalty Payments


675



675







Total Contractual Obligations

$
1,330


$
1,054


$
276


$
   Royalty
    Payments
         48




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##### Table of Contents



Related
    Party Transactions
    Seasonality
    Off-Balance
    Sheet Arrangements
    Quantitative
    and Qualitative Disclosures About Market Risk
    Critical
    Accounting Policies and Estimates
   49




---



##### Table of Contents



Revenue
    Recognition
   
   
    Inventories
   50




---



##### Table of Contents



Allowance
    for Doubtful Accounts
      Long-Lived
    Assets
  and/or
  Non-Cash
    Compensation Expense  Principal Stockholder
    Contribution
   51




---



##### Table of Contents



Deferred
    Income Taxes and Uncertain Tax Positions
      Stock-Based
    Compensation
  Share-Based Payment No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
 52




---



##### Table of Contents



Valuation of
    Privately-Held-Company Equity Securities Issued as
    Compensation
 
     53




---



##### Table of Contents



Number of


Exercise


Fair Value Estimate


Intrinsic ValueDate of Issuance

Type of Equity Issuance


Options Granted


Price


per Common Share


per ShareOctober 2006


Common stock options



411,500


$
3.40


$
3.40



n/aNovember  December 2006


Common stock options



51,500


$
3.40


$
3.40



n/aFebruary 2007


Common stock options



469,738


$
3.20


$
3.36


$
0.16May 2007


Common stock options



558,000


$
3.20


$
5.91


$
2.71June 2007


Common stock options



200,000


$
5.11


$
5.91


$
0.80     
    our quarterly revenue trends were generally flat during 2006,
    which prompted us to lower our 2007 forecast in mid 2006;
    our revenues in January 2007 reflected an improvement over
    2006 monthly trends, which we cautiously attributed to
    increased market acceptance of our crystalens Five-O introduced
    in November 2006; and
    through the six months ended June 30, 2007 we experienced a
    trailing six month upward trend in revenues, at which point we
    also decreased the marketability discount to reflect an increase
    in the likelihood that a public offering would occur.      Recently
    Issued Accounting Pronouncements
  Inventory Costs  an amendment of ARB No. 43,
    Chapter 4
 54




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##### Table of Contents



Fair Value Measurements Accounting for Derivative Instruments
    and Hedging Activities
    The
    Fair Value Option for Financial Assets and Financial Liabilities item-by-item
  Factors
    Affecting Our Comparability
  Stock-Based Compensation Expense.
 55




---



##### Table of Contents



BUSINESS
  Overview
 
   
   
   
 56




---



##### Table of Contents



Vision
    and Vision Impairment
    
       57




---



##### Table of Contents



Our
    Market
      Limitations
    of Standard Monofocal IOLs
      Limitations
    of Multifocal PIOLs
    
    Limited Range of Vision.  Because each
    focal point is at a fixed distance, patients are required to
    adjust the position of an object to within one of the predefined
    focal points, 58




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rather than relying on the eyes natural focusing
    mechanisms to view an object across a continuum of distances.
    Currently available multifocal PIOLs split most light to focus
    primarily at near and far images, thereby leaving the least
    light available for intermediate vision. The effectiveness of
    multifocal PIOLs at a range of distances also varies with pupil
    size. Small pupils can block the outer edge of multifocal PIOLs,
    which is used to create one of the multiple focal points in the
    eye. This blockage can effectively limit a persons ability
    to use one of the focal points set in a multifocal PIOL. Since
    pupil size decreases in bright light conditions and as patients
    age, the effectiveness of multifocal PIOLs in providing a broad
    range of vision is further reduced in these circumstances.  
    Compromised Clarity of Vision.  By
    splitting light to produce multiple focal points, multifocal
    PIOLs result in reduced contrast sensitivity, or overall
    clarity, and sharpness of vision. This compromised clarity
    affects all ranges of vision and can be more significant in
    bright and low light conditions and at intermediate distance.
    Additionally, the splitting of the light that occurs with
    multifocal PIOLs may exacerbate the deterioration of vision in
    patients with age-related macular degeneration, a condition
    affecting the eye that is particularly vulnerable to reduced
    contrast sensitivity. 
  
    Significant Rates of Side
    Effects.  Multifocal PIOLs demonstrate
    significant rates of visual side effects. Patients often report
    increased sensitivity to light, experienced as glare or halos of
    light around objects being viewed. Patients also report further
    reduced contrast sensitivity at night, which we believe is the
    reason that several multifocal commercialized products, such as
    Advanced Medical Optics ReZoom and its predecessor, Array,
    and Alcons ReStor, include a warning against night driving
    on their labeling. According to product labeling for the ReStor
    and data submitted to the FDA for the Array/ReZoom, multifocal
    patients reported the following significant rates of side
    effects: 
  % of Patients


% of PatientsReporting Moderate or


Reporting Moderate orProduct

Severe Halos


Severe GlareAdvanced Medical
    Optics:Array/ReZoom


38.8
%


47.3
%Alcon:ReStor


30.4
%


27.5
%     
    Required Patient Tolerance and
    Adjustment.  Multifocal PIOLs require the
    patient to neuroadapt, or adjust to abnormal or unfamiliar
    stimuli in order to simultaneously view multiple images produced
    by the PIOL that are not produced by a healthy eye.
    Additionally, patients who experience glare, halos and loss of
    contrast sensitivity associated with multifocal PIOLs must also
    adapt to these issues. The length of time that it takes to
    neuroadapt, and the ultimate success of neuroadaption varies
    among patients and in some instances may not occur at all.
    Patients who fail to neuroadapt may need to have the PIOL
    removed and replaced with an alternative IOL technology in a
    secondary surgical intervention.
    Potentially Significant Patient Consulting Time Required
    of Surgeons.  Multifocal PIOLs may produce
    widely varied outcomes and, based on patient expectations, may
    lead to low levels of satisfaction with visual range, acceptance
    of reduced sharpness, tolerance of side effects and ability to
    adapt to multiple images. Because it is difficult to predict
    which patients will be dissatisfied, suffer from side effects or
    be unable to neuroadapt, surgeons 59




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may be required to spend significant time consulting multifocal
    PIOL patients before surgery in order to manage expectations.
    Additional post-surgery time may also be required to address
    those patients who struggle to adapt and tolerate side effects
    associated with multifocal PIOLs. This additional pre-operation
    and post-operation time required of the surgeon beyond the
    initial surgical implantation procedure can be burdensome and is
    generally not reimbursable.  Our
    Solution
    
    Provides a Broad Range of
    Vision.  crystalens moves and changes shape
    using the eyes natural focusing mechanism, instead of
    remaining fixed and stationary within the eye. This movement, or
    accommodation, allows the eye to focus on objects across a broad
    range of distances from near to intermediate to far, regardless
    of pupil size, and enables patients to significantly reduce
    dependence on corrective lenses. In particular, this
    accommodation provides significant advantages in addressing
    intermediate vision, which we believe is not effectively
    addressed by standard monofocal IOLs or multifocal PIOLs.
    Maintains Clarity of Vision.  Unlike
    multifocal PIOLs, crystalens directs all available light
    received by the eye to a single focal point, resulting in
    contrast sensitivity comparable to that of a healthy natural
    lens.
    Minimal Side Effects.  crystalens data
    submitted to the FDA show that only 9.1% of patients experienced
    moderate or severe halos and only 6.8% of patients experienced
    moderate or severe glare. crystalens is not required to include
    warnings related to night driving or other conditions on its
    labeling.
    Patient Adjustment Not
    Required.  crystalens produces a single image
    consistent with normal vision, meaning patients do not need to
    neuroadapt to viewing multiple images. Patients also do not need
    to tolerate or adjust to high levels of halos and glare often
    associated with multifocal PIOLs. Therefore, we believe that
    patient satisfaction with crystalens is high, and as a result,
    there are low instances of crystalens removal and replacement
    with an alternative technology.
    Minimal Patient Consulting
    Time.  Because crystalens accommodates to
    perform like the eyes natural lens, and achieves vision
    comparable to a healthy natural lens, we believe surgeons do not
    need to spend considerable time prior to or after implantation
    of crystalens consulting patients on the tolerance of side
    effects and the process of neuroadaptation.   60




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Our
    Strategy
    
    Establish crystalens as the treatment of choice for
    cataract patients.  We developed the first
    PIOL and the only FDA-approved accommodating PIOL on the market
    today. We believe crystalens provides better visual outcomes
    than either standard monofocal IOLs or multifocal PIOLs and
    therefore should be offered to all cataract patients. We plan to
    continue building awareness and support for our product
    offerings among ophthalmologists, other eye care professionals
    and patients.
    Drive overall PIOL market growth and expand our market
    share.  We intend to increase awareness and
    understanding of PIOL technology by expanding our physician
    educational programs and offering more information to consumers
    through web accessible literature and direct marketing
    initiatives. We intend to educate ophthalmologists, other eye
    care professionals and their patients on the benefit and value
    of PIOL products and, in particular, the advantages of
    accommodating PIOLs. Through our educational efforts, we intend
    to expand the overall size of the PIOL market and increase our
    share of this market by distinguishing our accommodating PIOL
    technology from the technology offered by our competitors.
    Continue to strengthen our United States sales and
    marketing infrastructure and establish an international sales
    and marketing organization.  We have
    established a direct United States sales force of experienced
    professionals to increase awareness of our crystalens among
    ophthalmologists, other eye care professionals and patients. We
    also employ clinical outcome specialists who educate
    ophthalmologists and other eye care professionals on the
    benefits of crystalens and provide support to our customers. We
    intend to increase the number of United States sales, marketing
    and clinical personnel to support our planned future sales
    growth and marketing program initiatives. In addition, we have
    regulatory approval to market crystalens in European markets and
    plan to establish an international sales and marketing
    organization to drive international awareness and adoption of
    crystalens.
    Refine and enhance crystalens and broaden our product
    portfolio through ongoing research and
    development.  Since the launch of our first
    crystalens product in 2004, we have introduced two new
    generations of our crystalens products. We intend to continue to
    enhance and maintain our accommodating PIOL technology
    leadership through focused research and development efforts. We
    are currently advancing our crystalens technology and developing
    new product candidates based on a number of enhancements such as
    new materials, improved functionality and expanded features. 61




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Our
    Technology Platform
    
     62




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17-year
  United StatesCommercialization

Product Features or Benefits overGeneration

Date

Prior Generation of crystalenscrystalens AT-45


January 2004


   accommodates
    using the eyes natural focusing mechanism   allows the
    eye to focus on objects across a broad range of vision   projects
    all available light received by the eye to a single focal pointcrystalens AT-45 SE


August 2005


   360 degree
    square edge on the posterior side of the lens   facilitates
    lens orientation during implantation   available
    in quarter diopter sizes in the most widely used powerscrystalens Five-O


November 2006


   optic size
    increased from 4.5mm to 5.0mm   12mm
    overall length also available for larger eyes   greater
    plate width provides increased stability   facilitates
    consistent positioning of the lens in the eye   smoother
    translation of the plates during accommodation   crystalens
    Clinical and
    Follow-Up
    Survey Data
   63




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crystalens
    Uncorrected Visual Acuity, Bilateral Implants
    (1 Year Postoperative, n=124)
  
    crystalens
    vs. Standard Monofocal IOL Visual Acuity
    (3-6 Months Postoperative)
  
 64




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follow-up
  follow-up
  follow-up
  The IOL
    Implantation Procedure
    follow-up
  Research
    and Development
   65




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Sales and
    Marketing
        Competition
   66




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Manufacturing
    and Distribution
      Intellectual
    Property
     67




---



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® ®
  License
    Agreements
   68




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Government
    Regulation
   69




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
    a device that was legally marketed prior to May 28, 1976,
    the date upon which the Medical Device Amendments of 1976 were
    enacted, or
    another commercially available, similar device which was
    subsequently cleared through the 510(k) process.       70




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and/or Five-O
    
    the registration and listing regulation, which requires
    manufacturers to register all manufacturing facilities and list
    all medical devices placed into commercial distribution;
    the Quality System Regulation, or QSR, which requires
    manufacturers to follow elaborate design, testing, control,
    documentation and other quality assurance procedures during the
    manufacturing process;
    labeling regulations; 71




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
    the FDAs general prohibition against promoting products
    for unapproved or off-label uses; and the Medical
    Device Reporting, or MDR, regulation, which requires that
    manufacturers report to the FDA if their device may have caused
    or contributed to a death or serious injury or malfunctioned in
    a way that would likely cause or contribute to a death or
    serious injury if it were to reoccur;
    Medical device correction and removal reporting, which requires
    that manufacturers report to the FDA if they repair, modify,
    adjust, re-label, destroy or inspect a medical device after it
    has been delivered to its point of use, where such action has
    been initiated to reduce a risk to health posed by the medical
    device, or to remedy a violation of the Federal Food, Drug, and
    Cosmetic Act that may present a risk to health, and recall
    requirements;
    Device tracking requirements (intraocular lenses are not subject
    to the device tracking regulations but registration of implants
    is one of the required conditions of pre-market approval); and
    Post market surveillance requirements.    Fraud and Abuse. and/or
  Anti-Kickback Laws.
  
    the referral of persons eligible for benefits under a federal
    healthcare program, including Medicare, Medicaid, the VA health
    programs and TRICARE, or a state health program; or
    the recommendation, purchase, lease or order of items or
    services that are covered, in whole or in part, by a federal
    healthcare program or state health programs.   72




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False Claims Laws. and/or
  HIPAA.
  International.
   73




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AT-45 SE
    
    reimbursement;
    product standards;
    packaging requirements;
    labeling requirements;
    quality system requirements;
    import restrictions;
    tariff regulations;
    duties; and
    tax requirements.    Third-Party
    Payor Coverage and Reimbursement
     74




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Employees
   75




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Facilities
    Litigation
     76




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MANAGEMENT
  Executive
    Officers and Directors
 
   
  
 Name

Age

PositionJ. Andy Corley


51


Chairman, President and Chief
    Executive OfficerSteven J. Naber


54


Chief Financial OfficerPaul Barros


46


Vice President, InternationalMichael J. Breen


51


Vice President, Clinical OutcomesJohnnie S. Garcia


51


Vice President, Manufacturing and
    DistributionJ. Michael Judy


46


Vice President, Global Marketing
    and North American SalesPaul S. Kramsky


53


Vice President, Regulatory Affairs
    and Quality SystemsJames A. Lightman


49


Vice President, General Counsel
    and SecretaryRebecca L. Patterson


30


Vice President, Finance and Sales
    OperationsJames Robert
    Hurley(1)(2)


58


DirectorRichard L.
    Lindstrom, M.D.


59


DirectorWilliam J.
    Link, Ph.D.(1)(2)


61


DirectorLloyd H.
    Malchow(2)(3)


53


DirectorJames M.
    Shapiro(3)


49


DirectorShelley B.
    Thunen(1)(3)


53


Director  
   (1)
 (2)
 (3)
  Executive
    Officers
  J. Andy Corley
  Steven J. Naber
 77




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Paul Barros
  Michael J. Breen, O.D.
  Johnnie S. Garcia
  J. Michael Judy
  Paul S. Kramsky
  James A. Lightman
 78




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Rebecca L. Patterson
  Directors
 
  James Robert Hurley
 
  Richard L. Lindstrom, M.D.
  William J. Link, Ph.D.
 79




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Lloyd H. Malchow
 
  James M. Shapiro
 
  Shelley B. Thunen
  Composition
    of the Board of Directors
   
   
 80




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
    Class I will consist of Dr. Lindstrom and
    Mr. Shapiro, and their terms will expire at our first
    annual meeting of stockholders to be held following the
    completion of this offering; 
  
    Class II will consist of Messrs. Hurley and Malchow
    and Ms. Thunen and their terms will expire at our second
    annual meeting of stockholders to be held following the
    completion of this offering; and 
 
  
    Class III will consist of Mr. Corley and Dr. Link
    and their terms will expire at our third annual meeting of
    stockholders to be held following the completion of this
    offering. 
  2 3
  Committees
    of the Board of Directors
    Audit
    Committee
    
    evaluating the qualifications and performance of our independent
    auditors and determining whether to retain our existing
    independent auditors or engage new independent auditors;
    reviewing and pre-approving the engagement of our independent
    auditors to perform audit services and any permissible non-audit
    services;
    reviewing our annual and quarterly financial statements, reports
    and earnings releases and discussing the statements and reports
    with our independent auditors and management, including separate
    meetings with our independent auditor;
    monitoring the rotation of partners of our independent auditors
    on our engagement team as required by law; 81




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
    reviewing with our independent auditors and management
    significant issues that arise regarding accounting principles
    and financial statement presentation, and matters concerning the
    scope, adequacy and effectiveness of our financial controls;
    reviewing and approving in advance any proposed related party
    transactions and monitoring compliance with our code of ethics;
    providing the report that the SEC requires in our annual proxy
    statement;
    establishing procedures for the receipt, retention and treatment
    of complaints received by us regarding financial controls,
    accounting or auditing matters; and
    reviewing and evaluating, at least annually, the performance of
    the audit committee and its members, including compliance of the
    audit committee with its charter.  Compensation
    Committee
 
   
  
    evaluating and recommending to our board of directors the
    compensation and other terms of employment of our executive
    officers and reviewing and approving corporate performance goals
    and objectives relevant to such compensation;
    evaluating and recommending to our board of directors the type
    and amount of compensation to be paid or awarded to board
    members;
    evaluating and recommending to our board of directors the equity
    incentive plans, compensation plans and similar programs
    advisable for us, as well as modification or termination of
    existing plans and programs;
    administering our equity incentive plans;
    establishing policies with respect to equity compensation
    arrangements;
    reviewing and approving the terms of any employment agreements,
    severance arrangements,
    change-in-control
    protections and any other compensatory arrangements for our
    executive officers; and
    reviewing and evaluating, at least annually, the performance of
    the compensation committee.  Nominating
    and Corporate Governance Committee
 
   
 82




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
    assisting the board in identifying prospective director nominees
    and recommending to the board of directors the director nominees
    for each annual meeting of stockholders;
    recommending members for each board committee;
    ensuring that the board is properly constituted to meet its
    fiduciary obligations to our company and the stockholders and
    that we follow appropriate governance standards;
    developing and recommending to the board, governance principles
    applicable to our company; and
    overseeing the evaluation of the board and management.    Board of
    Directors Compensation
      OptionName

Awards(1) ($)


TotalJuliett
    Bakker(2)






J. Stuart Cumming, MD, F.A.C.S.,
    FRCOphth(3)(4)






Richard L. Lindstrom,
    M.D(5)


167,603



167,603William J. Link,
    Ph.D(6)






James M.
    Shapiro(7)






    (1)
    Amounts represent the compensation expense recognized by us in
    2006 related to stock options granted in 2006 and prior years as
    prescribed under SFAS No. 123(R). For a discussion of
    valuation assumptions see Note 7 to our consolidated financial
    statements included elsewhere in this prospectus; except that no
    forfeitures were assumed to take place. On March 31, 2006,
    Dr. Lindstrom received a grant of 75,000 options to
    purchase our common stock in connection with the license of
    certain intellectual property. The grant date fair market value
    of these options was $243,000 as prescribed under
    SFAS No. 123(R). For a discussion of valuation
    assumptions see Note 8 to our financial statements included
    elsewhere in this prospectus.(2)
    Ms. Bakker resigned from our board of directors effective
    July 13, 2007. Ms. Bakker did not hold any outstanding
    options or unvested stock awards as of December 31, 2006. 83




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(3)
    Dr. Cumming resigned from our board of directors effective
    July 13, 2007. Dr. Cumming did not hold any
    outstanding options or unvested stock awards as of
    December 31, 2006.(4)
    Excludes $104,000 paid to Dr. Cumming in his capacity as
    our consultant during 2006.(5)
    Dr. Lindstrom has outstanding options to purchase an
    aggregate of 100,000 shares as of December 31, 2006
    and did not hold any unvested stock award as of such date.(6)
    Dr. Link was awarded options to purchase an aggregate of
    100,000 shares as of December 31, 2006. However, such
    options were subsequently transferred to Brentwood Associates
    VIII, L.P. Dr. Link did not hold any unvested stock awards as of
    December 31, 2006.(7)
    Mr. Shapiro did not hold any outstanding options or
    unvested stock awards as of December 31, 2006.    Compensation
    Committee Interlocks and Insider Participation
   84




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COMPENSATION
    DISCUSSION AND ANALYSIS
 
   
  Objectives
    and Philosophy of Executive Compensation
 
  th th
 
 
   
 
   
 85




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Elements
    of Executive Compensation
   
  Base Salary.
 
  Percentage Increasein Base SalaryName and Principal Position

in 2006 (%)J. Andy Corley


11.0
(1)Chairman, President and Chief
    Executive OfficerSteven J. Naber


17.0
(1)Chief Financial OfficerJ. Michael Judy


Vice President, Global Marketing
    and North American SalesMichael J. Breen


13.0
(1)Vice President, Clinical OutcomesGiacomo
    Nizi(2)


Vice President, International
    Sales    (1)
    Represents increase in base salary during 2004 to 2006. These
    officers did not receive base salary increases in 2005.(2)
    Mr. Nizi resigned as Vice President, International Sales
    effective December 31, 2006 and remains a consultant to us. 
  Non-Equity
    Incentive
    Programs. On
    December 7, 2006, based on the recommendations of the Chief
    Executive Officer and Chief Financial Officer, our board of
    directors approved, in their discretion based on the compared
    growth of our market share of crystalens within the PIOL channel
    with the overall
 
 86




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Long-Term Incentives.
 
   87




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Severance
    Agreements
    401(k) Plan.
 88




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##### Table of Contents



Executive
    Compensation
    SUMMARY
    COMPENSATION TABLE
  
 All OtherOption


Compen-Name and Principal Position

Salary ($)(1)


Bonus ($)


Awards($)(1)(2)


sation ($)(1)


Total ($)J. Andy Corley


395,000



91,667







8,000
(3)


494,667Chairman, President and  Chief
    Executive OfficerSteven J. Naber


275,000



71,667







5,600
(3)


352,267Chief Financial OfficerJ. Michael Judy


200,000



36,667



51,691



4,000
(3)


292,358Vice President, Global Marketingand North American SalesMichael J. Breen


168,333



33,333



6,302



850
(3)


208,818Vice President, Clinical OutcomesGiacomo Nizi


175,000











85,356
(4)


260,356Vice President, International
    Sales  
   (1)
    As of July 27, 2007, the annual salaries for
    Messrs. Corley, Naber, Judy and Breen are $420,000,
    $294,000, $220,000 and $178,500, respectively.(2)
    Amounts represent the compensation expense recognized by us in
    2006 related to stock options granted in 2006 and prior years as
    prescribed under SFAS No. 123(R). For a discussion of
    valuation assumptions see Note 7 to our consolidated
    financial statements included elsewhere in this prospectus;
    except that no forfeitures were assumed to take place.(3)
    Amounts represent matching company contributions under our
    401(k) plan.(4)
    Mr. Nizi resigned as Vice President, International Sales
    effective December 31, 2006 and remains a consultant to us.
    Other compensation represents severance payments paid or accrued
    as of December 31, 2006. 89




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Grants of
    Plan-Based Awards in 2006
    All OtherOptionAwards:





Grant DateNumber of


Exercise of


Fair ValueSecurities


Base Price of


of Stock andUnderlying


Option


OptionName

Grant Date


Options


Awards(1)


Awards(2)Michael J. Breen


10/11/2006



15,000


$
3.40


$
27,900Vice President, Clinical Outcomes    (1)
    Stock options granted in 2006 have an exercise price based upon
    the fair market value of our stock on the date of grant based
    upon the good faith determination of our board of directors.
    Subsequent to this offering, the exercise price of stock options
    will be equal to the grant date closing price of our stock.(2)
    Amounts represent the aggregate grant date fair value of stock
    options granted in 2006 under SFAS No. 123(R). For a
    discussion of the valuation assumptions, see Note 7 to our
    consolidated financial statements included elsewhere in this
    prospectus.  Equity
    Incentive Awards Outstanding as of December 31,
    2006
    
 Option AwardsNumber of


Number ofSecurities


SecuritiesUnderlying


UnderlyingUnexercised


Unexercised


Option


Option


VestingOptions


Options


Exercise


Expiration


CommencementName

Exercisable


Unexercisable


Price ($)


Date


DateSteven J. Naber


25,000







0.50



09/27/2011



09/27/2001Chief Financial Officer


75,000







0.50



03/04/2012



03/04/200269,247



5,753(1
)


0.55



04/20/2013



04/20/2003J. Michael Judy


36,884



13,116(2
)


0.95



02/07/2014



02/07/2004Vice President, Global Marketing


18,658



11,342(2
)


1.25



07/04/2014



07/04/2004and North American Sales


6,397



13,603(2
)


3.40



09/18/2015



09/18/2005Michael J. Breen


25,000







0.50



07/18/2010



07/18/2000Vice President, Clinical Outcomes


15,000







0.50



09/27/2011



09/27/200110,000







0.50



12/10/2011



12/10/20017,500







0.50



09/30/2012



09/30/20025,420



2,080(2
)


0.95



02/07/2014



02/07/20040



15,000(2
)


3.40



10/08/2016



10/08/2006Giacomo Nizi


161,000







0.50



11/06/2010



02/01/2001Vice President, International Sales


50,000







0.50



10/03/2012



10/03/2002  
   (1)
    The stock option vests in equal monthly installments over four
    years, beginning with the first month of the vesting
    commencement date.(2)
    The stock option vests as to 25% of the shares on the first
    anniversary of the vesting commencement date and the remaining
    shares in equal monthly installments over the next
    36 months. 90




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Aggregated
    Option Exercises and Stock Vested in 2006
    Pension
    Benefits
    Nonqualified
    Deferred Compensation
    Potential
    Payments Upon Termination or Change of Control
  Severance
    Agreements
   
   
   91




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gross-up
     92




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1998
    Stock Plan
      Value of OptionName

Trigger


Acceleration($)(1)(2)J. Andy Corley


Merger or sale of all assets



Chairman, President and  Chief
    Executive OfficerSteven J. Naber


Merger or sale of all assets



15,247Chief Financial OfficerJ. Michael Judy


Merger or sale of all assets



51,630Vice President, Global Marketingand North American SalesMichael J. Breen


Merger or sale of all assets



4,681Vice President, Clinical OutcomesGiacomo Nizi


Merger or sale of all assets



(3
)Vice President, International
    Sales    (1)
    Represents the aggregate value of the acceleration of vesting of
    the executives unvested stock options as of
    December 29, 2006 based on the spread between the fair
    value of our common stock $3.20 on December 29, 2006 and
    the stock options exercise prices.(2)
    We have not included quantitative disclosure of the benefits
    that would provided to our named executive officers under the
    Change of Control Severance Agreements in the table above
    because the table assumes that the triggering events took place
    on the last business day of fiscal 2006, and the Change of
    Control Severance Agreements were not in place prior to such
    date.(3)
    Mr. Nizi resigned as Vice President, International Sales
    effective December 31, 2006 and remains a consultant to us.
    In connection with his resignation he received certain severance
    and other benefits equal to $85,356, required to be provided to
    him under applicable laws in Italy.  Employee
    Proprietary Agreements
   93




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Employee
    Benefit and Stock Plans
  1998
    Stock Plan.
  General.
  Share reserve.
 
  Administration.
 
 
  Eligibility.
 
  Option Terms.
   94




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##### Table of Contents



Stock Purchase Rights.
 
  Transferability of Awards.
 
 
  Change in Control Transactions.
 
 
  Plan Amendments and Termination.
 
  2007
    Equity Incentive Plan
   
  Share Reserve.
 
  
    4% of the outstanding shares of common stock on the last day of
    the immediately preceding fiscal year; 95




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##### Table of Contents




    875,000 shares; or
    such other lesser amount as our board of directors may determine. 
  Administration.
 
 
  Stock Options.
 
   
  Stock Appreciation Rights.
 
 
  Restricted Stock Awards.
 
 
  Restricted Stock Units.
 
 96




---



##### Table of Contents



Performance Units and
    Shares. and/or
 
 
  Formula Awards to Outside
    Directors.
 
 
  Transferability of Awards.
 
 
  Change in Control Transactions.
 
   97




---



##### Table of Contents



Plan Amendments and Termination.
 
  2007
    Employee Stock Purchase Plan
    Share Reserve.
 
  Administration.
 
 
  Eligibility.
 
  
    immediately after the grant would own stock possessing 5% or
    more of the total combined voting power or value of all classes
    of our capital stock, or
    whose rights to purchase stock under all of our employee stock
    purchase plans would accrue at a rate that exceeds $25,000 worth
    of our stock for each calendar year in which such rights are
    outstanding. 
  Offering Periods.
 
 
  Limitations.
 
 
  Purchase of Shares.
 
 98




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##### Table of Contents



Transferability of Awards.
 
 
  Change of Control Transactions.
 
 
  Plan Amendments and Termination.
 
  Limitation
    of Liability and Indemnification Matters
    
    any breach of the directors duty of loyalty to the
    corporation or its stockholders;
    act or omissions not in good faith or that involve intentional
    misconduct or a knowing violation of law;
    unlawful payments of dividends or unlawful stock repurchases or
    redemptions as provided in Section 174 of the Delaware
    General Corporation Law; or
    any transaction from which the director derived an improper
    personal benefit.   99




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##### Table of Contents



100




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##### Table of Contents



PRINCIPAL
    AND SELLING STOCKHOLDERS
    
    each person, or group of affiliated persons, known by us to own
    beneficially 5% or more of the outstanding shares of our common
    stock;
    each of our directors;
    each of our named executive officers;
    all of our executive officers and directors as a group; and
    the selling stockholder(s) (to the extent that the
    underwriters over-allotment option is exercised).    c/o eyeonics,
  101




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##### Table of Contents



Number of


Percentage of SharesShares


Beneficially OwnedBeneficially


Before this


After thisBeneficial Owner

Owned


Offering


Offering5% Stockholders:Entities associated with Brentwood
    Venture
    Capital(1)


5,890,590



27.1
%11150 Santa Monica Blvd.,
    Suite 1200Los Angeles, CA 90025The Poskitt
    Trust(2)


4,062,698



18.8
%The Law Trust Limited5 Mount PleasantDouglas, Isle Of Mann IM1 2PUBritish IslesEntities associated with ABS
    Ventures(3)


3,240,967



15.0
%890 Winter Street, Suite 225Waltham, MA 02451Pequot Capital Management,
    Inc.(4)


2,511,290



11.6
%500 Nyala Farm RoadWestport, CT 06880The Jesse Anderson Corley And
    Deborah
    C.(5)


2,275,001



10.5
%Corley Living Trust Dated
    September 12, 1997Versant Venture Management
    LLC(6)


1,333,333



6.2
%3000 Sand Hill RoadBuilding 4, Suite #210Menlo Park, CA 94025Directors and Named Executive
    Officers:J. Andy
    Corley(7)


2,306,251



10.7
%Steven J.
    Naber(8)


356,250



1.7
%J. Michael
    Judy(9)


78,124




*Michael J.
    Breen(10)


65,572




*Giacomo
    Nitzi(11)


211,000




*James Robert Hurley







*Richard L.
    Lindstrom, M.D.(12)


110,416




*William J.
    Link, Ph.D.(13)


7,223,923



33.2
%Lloyd H.
    Malchow(14)


2,083




*James M.
    Shapiro(15)


3,240,967



15.0
%Shelley B.
    Thunen(16)







*All executive officers and
    directors as a group
    (16 persons)(17)


13,767,189



61.2
%Selling Stockholders:Pequot Capital Management,
    Inc.(18)


2,511,001



11.6
%  
   
 (1)
    Includes (i) preferred stock held by Brentwood Associates
    VIII, L.P. that is convertible into 5,636,939 shares of
    common stock; (ii) preferred stock held by Brentwood
    Affiliates Fund II, L.P. that is convertible into
    153,651 shares of common stock; and
    (iii) 100,000 shares of common stock that Brentwood
    Associates VIII, L.P. has the right to acquire from us within
    60 days of July 15, 2007 pursuant to the exercise of
    stock options. Brentwood VIII Ventures, LLC is the general
    partner of these stockholders. William J. Link, our director, is
    a Managing Member of Brentwood VIII Ventures, LLC. 
  (2)
    The Law Trust Limited is the trustee of the Poskitt Trust.
    J. Stuart Cumming, our former director and Chief Scientific
    Officer and current consultant, is a beneficiary of the Poskitt
    Trust. 
  (3)
    Includes preferred stock held by ABS Ventures VI, L.L.C. and ABS
    Investors, L.L.C. that is convertible into 3,206,067 and
    34,900 shares of common stock, respectively. The shares of
    common stock held by ABS Ventures VI, L.L.C. represented the
    entire holdings of ABS Ventures VI, L.L.C. Calvert Capital IV,
    L.L.C. is the general partner of ABS Ventures VI, L.P., which is 
 102




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##### Table of Contents



the sole member of ABS Ventures
    VI, L.L.C. James M. Shapiro, our director, is a manager of the
    general partner of ABS Ventures VI, L.P. 
  (4)
    Consists of preferred stock held by Pequot Private Equity
    Fund II, L.P. that is convertible into common stock. Pequot
    Capital Management, Inc. is the investment manager of this
    stockholder. Arthur J. Samberg is the executive officer,
    director and controlling shareholder of Pequot Capital
    Management
    Inc.          of
    these shares are subject to the underwriters
    over-allotment option and will be sold in this offering only if
    the underwriters exercise that option. Assuming that the
    over-allotment option is exercised in full, Pequot Capital
    Management, Inc. will beneficially
    own           shares
    of our common stock after the offering, which would
    represent     % of our outstanding
    shares at that time. 
  (5)
    Mr. Corley is the trustee of the Jesse Anderson Corley and
    Deborah C. Corley Living Trust Dated September 12, 1997.
    Debra C. Corley is the wife of Mr. Corley. Mr. Corley
    is our Chairman, President and Chief Executive Officer. 
 
  (6)
    Includes (i) preferred stock held by Versant Venture
    Capital II, L.P. that is convertible into 1,297,124 shares
    of common stock; (ii) preferred stock held by Versant
    Affiliates
    Fund II-A,
    L.P. that is convertible into 24,616 shares of common
    stock; and (iii) preferred stock held by Versant Side
    Fund II, L.P. that is convertible into 11,593 shares
    of common stock. Versant Venture Management LLC is the
    investment manager of these stockholders. William J. Link, our
    director, is a Managing Director of Versant Venture Management
    LLC. 
 
  (7)
    Includes amounts described in note (5) above as well as
    43,750 shares of common stock that J. Andy Corley has the
    right to acquire from us within 60 days of July 15,
    2007 pursuant to the exercise of stock options. 
 
  (8)
    Includes (i) 175,000 shares of common stock held by
    Mr. Naber; and (ii) 187,250 shares of common
    stock that Mr. Naber has the right to acquire from us
    within 60 days of July 15, 2007 pursuant to the
    exercise of stock options. 
 
  (9)
    Includes 86,458 shares of common stock that Mr. Judy
    has the right to acquire from us within 60 days of
    July 15, 2007 pursuant to the exercise of stock options. 
 
  (10)
    Includes 67,552 shares of common stock that Mr. Breen
    has the right to acquire from us within 60 days of
    July 15, 2007 pursuant to the exercise of stock options. 
  (11)
    Includes 211,000 shares of common stock that Mr. Nitzi
    has the right to acquire from us within 60 days of
    July 15, 2007 pursuant to the exercise of stock options. 
  (12)
    Includes 114,583 shares of common stock that
    Dr. Lindstrom has the right to acquire from us within
    60 days of July 15, 2007 pursuant to the exercise of
    stock options. 
 
  (13)
    See note (1) and (6). Mr. Link disclaims beneficial
    ownership of these shares. 
 
  (14)
    Includes 2,083 shares of common stock that Mr. Malchow has
    the right to acquire from us within 60 days of July 15,
    2007 pursuant to the exercise of stock options. 
 
  (15)
    See note (3) above. Mr. Shapiro disclaims beneficial
    ownership of these shares. 
 
  (17)
    Includes (i) preferred stock convertible into
    12,639,891 shares of common stock;
    (ii) 260,000 shares of common stock; and
    (iii) 825,631 shares of our common stock that can be
    acquired from us within 60 days of July 15, 2007
    pursuant to the exercise of stock options. 
 
  (16)
    Includes 4,166 shares of common stock that Ms. Thunen
    has the right to acquire from us within 60 days of July 15,
    2007 pursuant to the exercise of stock options. 
 
  (18)
    See note (4) above. 
 103




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##### Table of Contents



RELATED
    PARTY TRANSACTIONS
    
    the amounts involved exceeded or will exceed $120,000; and
    a director, executive officer, holder of more than 5% of our
    common stock or any member of their immediate family had or will
    have a direct or indirect material interest.  Sales of
    Series E Redeemable Convertible Preferred Stock
      Series EInvestor

Preferred Stock5% StockholdersVersant Venture Capital II,
    L.P.(1)(2)


1,333,333Brentwood Associates VIII,
    L.P.(2)


872,397ABS Ventures VI
    L.L.C.(2)


488,402Pequot Private Equity
    Fund II, L.P.


280,521    (1)
    Includes 24,616 shares held by Versant Affiliates
    Fund II-A,
    L.P. and 11,593 shares held by Versant Side Fund II,
    L.P.(2)
    Each of Versant Venture Capital, Brentwood VIII Ventures,
    L.L.C., the general partner of Brentwood Associates VIII, L.P.
    and ABS Ventures VI L.L.C. have a director that sits on our
    board of directors.  Director
    Relationships
    Director

Principal StockholderWilliam J. Link, Ph.D.

Entities associated with Brentwood
    Venture CapitalVersant Venture Capital II, L.P.James M. Shapiro

ABS Ventures VI L.L.C.   Investor
    Rights Agreement
   104




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##### Table of Contents



Stock
    Option Grants
    Number ofShares


Exercise


Vesting ScheduleUnderlying


Price per


Commencing on theName

Date of Grant


Option


Share


Date of GrantJ. Andy Corley


2/07/07



300,000


$
3.20




(1)Steven J. Naber


5/01/07



150,000


$
3.20




(1)Paul Barros


7/13/07



200,000


$
6.24




(2)Michael J. Breen


2/10/04



7,500


$
0.95




(2)10/11/06



15,000


$
3.40




(1)5/01/07



40,000


$
3.20




(1)Johnnie S. Garcia


7/06/04



15,000


$
1.25




(2)2/01/06



10,000


$
3.40




(2)2/07/07



20,000


$
3.20




(2)J. Michael Judy


2/10/04



50,000


$
0.95




(2)7/06/04



30,000


$
1.25




(2)9/20/05



20,000


$
3.40




(2)5/01/07



100,000


$
3.20




(1)Paul S. Kramsky


2/10/04



10,000


$
0.95




(1)10/11/06



5,000


$
3.40




(2)5/01/07



20,000


$
3.20




(1)James A. Lightman


6/18/07



150,000


$
5.11




(2)Rebecca L. Patterson


7/06/04



10,000


$
1.25




(2)9/08/04



10,000


$
2.75




(2)10/11/06



20,000


$
3.40




(2)2/07/07



10,000


$
3.20




(2)    (1)
    Vesting Schedule: 1/48 of the shares per month.(2)
    Vesting Schedule: 1/4 of the shares after the one year
    anniversary and then 1/48 of the shares per month thereafter.  Severance
    Agreements
   105




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##### Table of Contents



Indemnification
    Non-Employee
    Director Compensation
    
 Number ofShares

ExerciseDate of

Underlying

Price per

Vesting Schedule, CommencingName

Grant

Option

Share

on the Date of GrantRichard L. Lindstrom, M.D.


6/12/02



15,000(1
)

$
0.50


1/24 of the shares per month7/17/03



10,000(1
)

$
0.65


1/18 per month5/11/06



75,000(2
)

$
3.40


1/2 of the shares after the firstmonth and then 1/24 of theshares per month thereafter2/07/07



50,000(3
)

$
3.20


1/24 of the shares per monthJames Robert Hurley


8/22/07



50,000(3
)

$
6.57


1/24 of the shares per monthLloyd H. Malchow


7/23/07



50,000(3
)

$
6.24


1/24 of the shares per monthShelley B. Thunen


6/18/07



50,000(3
)

$
5.11


1/24 of the shares per month  
   (1)
    These options were granted pursuant to a consulting agreement.(2)
    These options were granted pursuant to a license agreement.(3)
    These options were granted pursuant to a board of director
    position.    Stock
    Acquisition Agreement C&C Vision International
    Ltd.
   106




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##### Table of Contents



Reorganization
    of Nice and Poskitt Trust License Agreements; Licensed
    Rights; Status of Related Parties
   
   
     107




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Royalties
    Payable to J. Andy Corley
    License
    Agreement with Dr. Lindstrom
    Distribution
    Rights
  non-United
  Other
    Physician Consulting Arrangements
  EITF 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
  Policies
    and Procedures for Related Party Transactions
   108




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##### Table of Contents



DESCRIPTION
    OF CAPITAL STOCK
      Common
    Stock
      Preferred
    Stock
     109




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Options
    and Purchase Rights
    Registration
    Rights
 
   
  Form S-3 S-3 S-3
     110




---



##### Table of Contents



Warrant
 
   
  Anti-Takeover
    Provisions
  Certificate
    of Incorporation and Bylaw Provisions
      Undesignated Preferred Stock.
  Stockholder Meetings.
  Requirements for Advance Notification of Stockholder
    Nominations and Proposals.
 111




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##### Table of Contents



Elimination of Stockholder Action by Written
    Consent.
  Election and Removal of Directors.
  Amendment of Charter Provisions. 2 3
  Delaware
    Anti-Takeover Statute
    
    any merger or consolidation involving the corporation and the
    interested stockholder;
    any sale, transfer, pledge or other distribution of 10% or more
    of the assets of the corporation involving the interested
    stockholder;
    subject to certain exceptions; any transaction that results in
    the issuance or transfer by the corporation of any stock of the
    corporation to the interested stockholder;
    any transaction involving the corporation that has the effect of
    increasing the proportionate share of the stock or any class or
    series of the corporation beneficially owned by the interested
    stockholder; or
    the receipt by the interested stockholder of the benefit of any
    loss, advances, guarantees, pledges or other financial benefits
    by or through the corporation.  Transfer
    Agent and Registrar
    NASDAQ
    Global Market Listing
 
   
 112




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SHARES
    ELIGIBLE FOR FUTURE SALE
    Sales of
    Restricted Shares
    lock-up
  
    shares
    will be eligible for sale under Rule 144(k) or Rule 701
    upon the expiration of the
    lock-up
    agreements, as more particularly and except as described below,
    beginning 180 days after the date of this prospectus;
    shares
    will be eligible for sale under Rule 144 upon the expiration of
    the lock-up
    agreements, as more particularly and except as described below,
    beginning 180 days after the date of this prospectus;
    shares
    will be eligible for sale, upon exercise of vested options, upon
    the expiration of the
    lock-up
    agreements, as more particularly and except as described below,
    beginning 180 days after the date of this prospectus; and
    shares
    will be eligible for sale, upon exercise of the outstanding
    warrant, upon the expiration of the
    lock-up
    agreement, as more particularly and except as described below,
    beginning 180 days after the date of this prospectus.  Lock-Up
    Agreements
  lock-up
 113




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##### Table of Contents



180-day lock-up lock-up lock-up lock-up 16-day lock-up lock-up 18-day
  Rule 144
    
    one percent of the number of common shares then outstanding,
    which will equal
    approximately           shares
    immediately after this offering (assuming no exercise of the
    underwriters overallotment option and no exercise of the
    outstanding options or warrant); or
    the average weekly trading volume of our common shares on the
    Nasdaq Global Market during the four calendar weeks preceding
    the filing of a notice on Form 144 with respect to such
    sale.  lock-up
  lock-up
  Rule 144(k)
   114




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##### Table of Contents



lock-up
  Rule 701
    lock-up lock-up lock-up
  Stock
    Plan and Non-Plan Grants
  form S-8 lock-up
 115




---



##### Table of Contents



Registration
    Rights
  lock-up
 116




---



##### Table of Contents



UNDERWRITING
    
 Number ofUnderwriters $

SharesPiper Jaffray & Co.Banc of America Securities LLCCanaccord Adams Inc.BMO Capital Markets Corp.Total  
      30-day
    No Exercise


Full ExercisePer ShareTotal to be paid by usTotal to be paid by selling
    stockholdersTotal  117




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##### Table of Contents



lock-up
  lock-up
  180-day lock-up lock-up lock-up lock-up 16-day lock-up lock-up 18-day
    
    the history of and the prospects for the industry in which we
    compete;
    our past and present operations;
    our historical results of operations;
    our prospects for future earnings;
    the prevailing conditions of the applicable United States
    securities market at the time of this offering;
    the recent market prices of securities of generally comparable
    companies; 118




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##### Table of Contents




    the general condition of the securities markets at the time of
    this offering; and
    other relevant factors.           119




---



##### Table of Contents



European Economic Area.
  
    to legal entities which are authorized or regulated to operate
    in the financial markets or, if not so authorized or regulated,
    whose corporate purpose is solely to invest in securities;
    to any legal entity which has two or more of (a) an average
    of at least 250 employees during the last financial year;
    (b) a total balance sheet of more than 43,000,000 and
    (c) an annual net turnover of more than 50,000,000,
    as shown in its last annual or consolidated accounts; or
    in any other circumstances which do not require the publication
    by us of a prospectus pursuant to Article 3 of the
    Prospectus Directive.    France. Autorité des marchés financiers Autorité des marchés
    financiers investisseurs
    qualifiés and/or cercle
    restreint dinvestisseurs 411-2, 411-1, 411-2, 734-1, 744-1, 754-1 764-1
 120




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##### Table of Contents



411-1, 411-2, 412-1 621-8 621-8-3
  United Kingdom.
  
    it has not offered or sold and will not offer or sell the shares
    other than to persons whose ordinary activities involve them in
    acquiring, holding, managing or disposing of investments (as
    principal or as agent) for the purposes of their businesses or
    who it is reasonable to expect will acquire, hold, manage or
    dispose of investments (as principal or agent) for the purposes
    of their businesses where the issue of the shares would
    otherwise constitute a contravention of Section 19 of the
    Financial Services and Markets Act 2000 by us;
    it has only communicated or caused to be communicated and will
    only communicate or cause to be communicated an invitation or
    inducement to engage in investment activity (within the meaning
    of Section 21 of the Financial Services and Market Act
    2000) received by it in connection with the issue or sale of the
    shares in circumstances in which Section 21(1) of the
    Financial Services and Market Act 2000 does not apply to us; and
    it has complied and will comply with all applicable provisions
    of the Financial Services and Market Act 2000 with respect to
    anything done by it in relation to the shares in, from or
    otherwise involving the United Kingdom.    Italy. Commissione
    Nazionale per le Società e la Borsa
   121




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122




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##### Table of Contents



MATERIAL
    UNITED STATES FEDERAL TAX CONSIDERATIONS
 FOR
    NON-UNITED
    STATES HOLDERS OF COMMON STOCK
  non-United non-United
  
    an individual citizen or resident of the United States;
    a corporation (or other entity treated as a corporation for
    United States federal income tax purposes) created or organized
    under the laws of the United States, any state thereof or the
    District of Columbia;
    a trust (i) whose administration is subject to the primary
    supervision of a United States court and which has one or more
    United States persons who have the authority to control all
    substantial decisions of the trust, or (ii) that has a
    valid election in effect under applicable United States Treasury
    regulations to be treated as a United States person; or
    an estate the income of which is subject to United States
    federal income taxation regardless of its source.      INVESTORS CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD
    CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE
    UNITED STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR
    PARTICULAR SITUATIONS AND THE CONSEQUENCES OF FOREIGN, STATE OR
    LOCAL LAWS AND TAX TREATIES.
 123




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##### Table of Contents



Distributions
    on Our Common Stock
    non-United non-United States non-United Form W-8BEN non-United non-United non-United States non-United
  Sale of
    Common Stock
  Non-United
  
    the gain is effectively connected with the conduct by the
    non-United
    States holder of a United States trade or business or, if an
    applicable income tax treaty applies, is attributable to a
    permanent establishment of the
    non-United
    States holder in the United States, in which case the special
    rules, described below, will apply;
    the
    non-United
    States holder is a nonresident alien individual who holds our
    common stock as a capital asset and who is present in the United
    States for 183 days or more in the taxable year of the
    sale, exchange or other disposition, and certain other
    requirements are met; or
    the rules of the Foreign Investment in Real Property Tax Act, or
    FIRPTA (described below), treat the gain as effectively
    connected with a United States trade or business.  non-United non-United
 124




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##### Table of Contents



non-United
  non-United non-United
  Dividends
    or Gain Effectively Connected With a United States Trade or
    Business
  non-United non-United non-United Form W-8ECI,
  non-United Non-United
  United
    States Federal Estate Tax
   125




---



##### Table of Contents



Backup
    Withholding and Information Reporting
    non-United non-United non-United Form W-8BEN Form W-8ECI, non-United non-United
    THE PRECEDING DISCUSSION OF UNITED STATES FEDERAL INCOME TAX
    CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX
    ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX
    ADVISOR REGARDING THE PARTICULAR UNITED STATES FEDERAL, STATE,
    LOCAL AND FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING AND
    DISPOSING OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY
    PROPOSED CHANGE IN APPLICABLE LAWS.
 126




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##### Table of Contents



LEGAL
    MATTERS
    EXPERTS
    WHERE
    YOU CAN FIND MORE INFORMATION
  Form S-1
  http://www.sec.gov. 1-800-SEC-0330
 127




---



##### Table of Contents



eyeonics,
    inc.
  Index to Consolidated Financial Statements
 
 PageReport of Independent Registered
    Public Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2005 and 2006


F-3Consolidated Statements of
    Operations for the Years Ended December 31, 2004, 2005 and
    2006


F-4Consolidated Statements of
    Comprehensive Loss for the Years Ended December 31, 2004,
    2005 and 2006


F-5Consolidated Statements of
    Stockholders Deficit for the Years Ended December 31,
    2004, 2005 and 2006


F-6Consolidated Statements of Cash
    Flows for the Years Ended December 31, 2004, 2005 and 2006


F-7Notes to Consolidated Financial
    Statements as of and for the Years Ended December 31, 2004,
    2005 and 2006


F-8Consolidated Balance Sheet as of
    June 30, 2007 (Unaudited)


F-33Consolidated Statements of
    Operations for the Six Months Ended June 30, 2006 and 2007
    (Unaudited)


F-34Consolidated Statements of
    Comprehensive Loss for the Six Months Ended June 30, 2006
    and 2007 (Unaudited)


F-35Consolidated Statements of Cash
    Flows for the Six Months Ended June 30, 2006 and 2007
    (Unaudited)


F-36Notes to Consolidated Financial
    Statements as of June 30, 2007 and for the Six Months Ended
    June 30, 2006 and 2007 (Unaudited)


F-38  
 F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED ACCOUNTING FIRM
              
     F-2




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    As of December 31, 2005 and 2006
 2005


2006ASSETSCURRENT ASSETS:Cash and cash equivalents

$
4,284,772


$
2,466,983Short-term investments


1,900,000



8,250,000Accounts receivable, net of
    allowance for doubtful accounts of $73,377 (2005) and $123,377
    (2006)


2,166,204



2,457,884Inventories


912,664



404,934Prepaid expenses


428,270



383,857Total current assets


9,691,910



13,963,658PROPERTY, PLANT AND
    EQUIPMENT  Net


1,249,029



1,402,825OTHER ASSETS


1,559



2,259TOTAL

$
10,942,498


$
15,368,742LIABILITIES AND
    STOCKHOLDERS DEFICITCURRENT LIABILITIES:Accounts payable

$
782,432


$
633,432Accrued expenses, including
    related party amounts of $1,372,624 (2005) and $2,180,278 (2006)


3,158,225



4,799,806Deferred revenue


531,804



105,624Capital lease obligation


14,987



27,882Total current liabilities


4,487,448



5,566,744LONG-TERM LIABILITIES


123,535



146,518COMMITMENTS AND CONTINGENCIES
    (Notes 8 and 9)REDEEMABLE CONVERTIBLE PREFERRED
    STOCK 
    $0.001 par value  14,013,093 shares
    authorized; 13,869,274 issued and outstanding; aggregate
    liquidation preference of $43,710,326


43,710,326



43,710,326Series E subscription
    receivable


(13,052,818
)


Total redeemable convertible
    preferred stock


30,657,508



43,710,326STOCKHOLDERS DEFICIT:Series A convertible
    preferred stock, $0.001 par value  8,412,698
    (2005) and 7,387,699 (2006) shares authorized; 8,412,698
    (2005) and 7,387,699 (2006) shares issued and
    outstanding; liquidation preference of $3,693,850


8,413



7,388Common stock, $0.001 par
    value  30,000,000 shares authorized; 730,004
    (2005) and 826,139 (2006) shares issued and outstanding


730



826Additional paid-in capital


2,011,847



3,144,238Deferred stock-based compensation


(232,405
)


(35,539
)Cumulative other comprehensive loss


(35,643
)


(54,264
)Accumulated deficit


(23,003,938
)


(34,492,495
)Treasury stock (Series A
    convertible preferred), at cost  1,024,999 (2005) and
    500,000 (2006)


(3,074,997
)


(2,625,000
)Total stockholders deficit


(24,325,993
)


(34,054,846
)TOTAL

$
10,942,498


$
15,368,742    F-3




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 For the
    Years Ended December 31, 2004, 2005 and 2006
  2004


2005


2006REVENUES:Product revenue

$
12,395,410


$
15,734,824


$
17,068,223Course revenue


547,900



385,316



Total revenues


12,943,310



16,120,140



17,068,223COST OF REVENUES


1,886,978



3,535,148



3,241,786GROSS PROFIT


11,056,332



12,584,992



13,826,437OPERATING EXPENSES:Research and development


2,011,791



2,855,851



2,972,887Selling and marketing


7,907,660



11,695,824



15,521,360General and administrative


2,968,447



3,585,424



4,356,235Total operating expenses


12,887,898



18,137,099



22,850,482LOSS FROM OPERATIONS


(1,831,566
)


(5,552,107
)


(9,024,045
)INTEREST INCOME


96,256



131,429



609,460NET LOSS


(1,735,310
)


(5,420,678
)


(8,414,585
)Net loss per share

$
(4.12
)

$
(8.21
)

$
(10.85
)Weighted-average shares
    outstanding-basic and diluted


421,330



660,557



775,494Pro forma net loss per share-basic
    and diluted (unaudited)









$
(0.39
)Pro forma weighted-average shares
    oustanding-basic and diluted (unaudited)










21,532,467    F-4




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE LOSS
 For the
    Years Ended December 31, 2004, 2005 and 2006
  2004


2005


2006NET LOSS

$
(1,735,310
)

$
(5,420,678
)

$
(8,414,585
)OTHER COMPREHENSIVE (LOSS)
    INCOME  Foreign currency translation adjustment


(17,634
)


9,059



(18,621
)COMPREHENSIVE LOSS

$
(1,752,944
)

$
(5,411,619
)

$
(8,433,206
)    F-5




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS DEFICIT
 For the
    Years Ended December 31, 2004, 2005 and 2006
  Deferred


CumulativeAdditional


Stock-


Other











TotalSeries A Convertible Preferred Stock


Common Stock


Paid-In


Based


Comprehensive


Accumulated


Treasury Stock


StockholdersShares


Amount


Shares


Amount


Capital


Compensation


Loss


Deficit


Shares


Amount


DeficitBALANCE  January 1,
    2004


8,412,698


$
8,413



393,331


$
393


$
208,853


$
(34,917
)

$
(27,068
)

$
(15,847,950
)


1,024,999


$
(3,074,997
)

$
(18,767,273
)Exercise of stock options










239,679



240



82,632























82,872Foreign currency translation
    adjustment


























(17,634
)














(17,634
)Stock option grants


















923,345



(923,345
)


















Stock-based compensation






















452,771



















452,771Net loss






























(1,735,310
)










(1,735,310
)BALANCE  January 1,
    2005


8,412,698



8,413



633,010



633



1,214,830



(505,491
)


(44,702
)


(17,583,260
)


1,024,999



(3,074,997
)


(19,984,574
)Exercise of stock options










96,994



97



151,571























151,668Foreign currency translation
    adjustment


























9,059















9,059Stock option grants


















645,446



(645,446
)


















Stock-based compensation






















918,532



















918,532Net loss






























(5,420,678
)










(5,420,678
)BALANCE 
    December 31, 2005


8,412,698



8,413



730,004



730



2,011,847



(232,405
)


(35,643
)


(23,003,938
)


1,024,999



(3,074,997
)


(24,325,993
)Exercise of stock options










96,135



96



55,500























55,596Foreign currency translation
    adjustment


























(18,621
)














(18,621
)Stock-based compensation


















1,088,735























1,088,735Reclassification of deferred
    stock-based compensation associated with modification


















(11,844
)


11,844



















Repurchase of Series A
    convertible preferred


































500,000



(2,625,000
)


(2,625,000
)Retirement of Series A
    convertible preferred


(1,024,999
)


(1,025
)






















(3,073,972
)


(1,024,999
)


3,074,997



Amortization of deferred
    stock-based compensation






















185,022



















185,022Net loss






























(8,414,585
)










(8,414,585
)BALANCE 
    December 31, 2006


7,387,699


$
7,388



826,139


$
826


$
3,144,238


$
(35,539
)

$
(54,264
)

$
(34,492,495
)


500,000


$
(2,625,000
)

$
(34,054,846
)     F-6




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 For the
    Years Ended December 31, 2004, 2005 and 2006
  2004


2005


2006CASH FLOWS FROM OPERATING
    ACTIVITIES:Net loss

$
(1,735,310
)

$
(5,420,678
)

$
(8,414,585
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization


208,499



291,704



396,586Provision for bad debt expense


73,377







50,000(Gain) loss on foreign currency
    exchange transactions


(5,897
)


12,657



(652
)Stock-based compensation


452,771



918,532



1,273,757Loss on disposal of assets










26,155Changes in operating assets and
    liabilities:Accounts receivable


(1,899,267
)


(126,396
)


(341,033
)Inventories


(184,436
)


451,424



507,991Prepaid expenses


(148,925
)


(206,443
)


53,040Other assets


3,880



3,168



(497
)Accounts payable


43,048



283,094



(149,869
)Accrued expenses


1,883,126



718,441



1,622,801Deferred revenue


222,853



(298,249
)


(426,180
)Long-term liabilities


23,068



4,822



26,473Net cash used in operating
    activities


(1,063,213
)


(3,367,924
)


(5,376,013
)CASH FLOWS FROM INVESTING
    ACTIVITIES:Purchase of available-for-sale
    securities










(15,655,075
)Sales of available-for-sale
    securities


3,203,997



2,034,746



9,305,075Purchase of property, plant and
    equipment


(512,297
)


(551,459
)


(575,851
)Net cash provided (used in) by
    investing activities


2,691,700



1,483,287



(6,925,851
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Net proceeds from exercise of
    stock options


82,872



151,668



55,596Repurchase of Series A
    convertible preferred stock










(2,625,000
)Proceeds from the issuance of
    Series E redeemable convertible preferred stock






3,137,515



13,052,818Net cash provided by financing
    activities


82,872



3,289,183



10,483,414EFFECT OF EXCHANGE RATES ON CASH
    AND CASH EQUIVALENTS


1,896



(21,940
)


661INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS


1,713,255



1,382,606



(1,817,789
)CASH AND CASH
    EQUIVALENTS  Beginning of year


1,188,911



2,902,166



4,284,772CASH AND CASH
    EQUIVALENTS  End of year

$
2,902,166


$
4,284,772


$
2,466,983OTHER SUPPLEMENTAL
    DISCLOSURE  Cash paid for income taxes

$
800


$
800


$
800NON-CASH FINANCING TRANSACTIONS:Equipment acquired under capital
    lease

$



$
58,639


$
34,984Series E subscription
    receivable

$



$
13,052,818


$
    F-7




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  1.
    Organization
    and Summary of Significant Accounting Policies      Basis of Presentation
  Principles of Consolidation
  Cash and Cash Equivalents
  Short-Term Investments Accounting for Certain Investments in Debt and Equity
    Securities
  Concentration of Credit Risks 
 F-8




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
        2004


2005


2006Allowance for doubtful accounts,
    beginning of year

$



$
73,377


$
73,377Provision for doubtful accounts


73,377







50,000Write-offs, net of recoveries










Allowance for doubtful accounts,
    end of year

$
73,377


$
73,377


$
123,377   Inventories work-in-process first-in,
  Property, Plant and Equipment
  Furniture and fixtures


3  5 yearsComputer equipment and software


5 yearsLeasehold improvements


Shorter of lease term or useful lifeProduction equipment 
    including tooling


5 years     Long-Lived Assets Accounting for the
    Impairment or Disposal of Long-Lived Assets
 F-9




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    Fair Value of Financial
    Instrument Disclosures about Fair Value of Financial Instruments
  Revenue Recognition and Deferred
    Revenue Revenue
    Recognition
 
  Product Revenues
 
   F-10




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    Course Revenues
 
  Cost of Revenues
 
      2004


2005


2006(in thousands)Product costs

$
891,922


$
904,949


$
873,521Royalties


623,622



769,303



840,946Education course costs


371,434



460,585



Provision for obsolete inventory






1,400,311



1,527,319Total cost revenues

$
1,886,978


$
3,535,148


$
3,241,786   Income Taxes Accounting for Income Taxes
  Research and Development
 F-11




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  Shipping and Handling No. 00-10, Accounting for Shipping and Handling Fees and Costs,
  Advertising
  Stock-Based Compensation Accounting for Stock Issued to Employees Accounting
    for Stock-Based Compensation No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
  Accounting for Stock-Based Compensation-Transition and
    Disclosure
    2004


2005Net loss as reported

$
(1,735,310
)

$
(5,420,678
)Add: Stock-based employee
    compensation expense included in reported net loss


86,653



80,415Deduct: Total stock-based employee
    compensation expense determined under fair-value based method
    for all awards  net of related tax effects


(346,732
)


(971,827
)Pro forma net loss

$
(1,995,389
)

$
(6,312,090
)Net loss per share-basic and
    diluted-as reported

$
(4.12
)

$
(8.21
)Net loss per share-basic and
    diluted-pro forma

$
(4.74
)

$
(9.56
)  F-12




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  Share-Based Payment
  Share-Based
    Payment
       F-13




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
 
   
  
 2004


2005


2006Research and development

$
193,713


$
421,621


$
191,002Selling and marketing


184,256



346,332



1,009,133General and administrative


74,802



150,579



73,622$
452,771


$
918,532


$
1,273,757  
  Foreign Currency Translation
    Net Loss per Share
    2004


2005


2006Weighted-average common stock
    outstanding


460,311



691,235



790,095Less: Unvested common shares
    subject to repurchase


(38,981
)


(30,678
)


(14,601
)Total weighted-average number of
    shares used in computing net loss per share-basic and diluted


421,330



660,557



775,494  F-14




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    2004


2005


2006Unvested common shares


38,981



30,678



14,601Warrant to purchase common stock


27,692



27,692



27,692Options to purchase common stock


1,822,459



2,405,599



3,103,040Convertible preferred stock, net
    of treasury stock


18,173,100



21,256,973



20,756,973Total units excluded from
    computation of diluted net loss per share


20,062,232



23,720,942



23,902,306   Pro Forma Net Loss per Share
    (unaudited)
    Weighted-average common stock
    outstanding


790,095Less: Unvested common shares
    subject to repurchase


(14,601
)Plus: Conversion of convertible
    preferred stock


20,756,973Total weighted-average number of
    shares used in computing pro forma net loss per share-basic and
    diluted


21,532,467   Use of Estimates
  Segment Reporting  Disclosures about Segments of an
    Enterprise and Related Information,
  Reclassifications
 F-15




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  Recent Accounting Pronouncements Inventory
    Costs  an amendment of ARB No. 43,
    Chapter 4
    Fair Value Measurements. . Accounting for Derivative Instruments
    and Hedging Activities
    The
    Fair Value Option for Financial Assets and Financial
    Liabilities. item-by-item
 F-16




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  2.
    Related
    Party and Other Transactions  License Agreements
  Repurchase of Series A Convertible Preferred
    Stock
  Marketing Rights
 
  Consulting Services EITF 96-18
 
 F-17




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  3.
    Inventories    2005


2006Raw materials

$
117,540


$
155,922Work-in-process


97,650



29,271Finished goods (including
    consignment inventory of $94,482 and $17,409 in 2005 and 2006,
    respectively)


697,474



219,741$
912,664


$
404,934   4.
    Property,
    Plant and Equipment    2005


2006Leasehold improvements

$
85,295


$
145,674Furniture and fixtures


297,656



318,094Computer equipment and software


731,750



900,186Production equipment


873,244



1,110,303Total property, plant and equipment


1,987,945



2,474,257Less accumulated depreciation and
    amortization


(738,916
)


(1,071,432
)Total property, plant and
    equipment  net

$
1,249,029


$
1,402,825   5.
    Accrued
    Expenses    2005


2006Accrued royalties (see
    Notes 2 and 9)

$
1,372,624


$
2,180,278Accrued compensation


688,545



1,054,413Customer account credit balances






364,658Other accrued expenses


1,097,056



1,200,457$
3,158,225


$
4,799,806   6.
    Redeemable
    Convertible Preferred Stock  Authorized Shares
 F-18




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    LiquidationCarrying Amount


Value atShares


Shares Issued


Per Share





at December 31,


December 31,Series and Date

Authorized


and Outstanding


Price


Proceeds


2005


2006


2006Series B  1998


3,321,429



3,321,429


$
1.26


$
4,185,000


$
4,185,000


$
4,185,000


$
4,185,000Series C  2001


3,691,666



3,691,666


$
3.00



11,074,998



11,074,998



11,074,998



11,074,998Series D  2003


3,799,998



3,772,306


$
3.25



12,259,995



12,259,995



12,259,995



12,259,995Series E  2005


3,200,000



3,083,873


$
5.25



16,190,333



16,190,333



16,190,333



16,190,33314,013,093



13,869,274






$
43,710,326


$
43,710,326


$
43,710,326


$
43,710,326     Liquidation Preference
    Dividends 
  Conversion Rights 
 F-19




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  Voting
    Redemption at the Holders Option
  Amendments
  7.
    Stockholders
    Equity and Stock Option Plan  Authorized Shares
     F-20




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  Liquidation Preference
    Dividends 
    Conversion Rights 
  Voting
    Stock Repurchase
 F-21




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    Stock Options
        2004


2005


2006Expected life (years)


6.00



10.00



10.00Risk-free interest rate


4.00
%


4.05
%


4.75
%Volatility


77.00
%


56.00
%


50.00
%Dividend yield










     2004


2005


2006Expected life (years)


6.00



5.00



6.25Risk-free interest rate


4.00
%


4.05
%


4.75
%Volatility


77.00
%


56.00
%


50.00
%Dividend yield










  F-22




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    Weighted-Weighted-


AverageShares


Average


Remaining


AggregateUnder


Exercise


Contractual


IntrinsicOption


Price


Term


ValueOutstanding 
    January 1, 2004


1,651,501


$
0.47Granted


1,157,181



1.73Exercised


(239,679
)


0.33Forfeited


(106,431
)


1.84Outstanding 
    January 1, 2005


2,462,572



0.99Granted


972,537



4.67Exercised


(96,994
)


1.37Forfeited


(243,563
)


3.05Outstanding 
    December 31, 2005


3,094,552



1.57Granted


951,820



3.40Exercised


(96,135
)


0.77Forfeited


(458,231
)


4.06Outstanding 
    December 31, 2006


3,492,006


$
1.88



7.12Vested and expected to vest in the
    future  December 31, 2006


3,355,757


$
1.84



7.05


$
4,565,058Exerciseable 
    December 31, 2006


2,339,348


$
1.38



6.30


$
4,233,841       Accounting for Stock-Based
    Compensation,
 F-23




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
        WeightedAverageGrant-DateShares


Fair ValueUnvested at December 31, 2005


1,314,477


$
1.72Granted


951,820



2.31Vested


(655,408
)


1.87Canceled


(458,231
)


2.28Unvested at December 31, 2006


1,152,658


$
1.90     Options Outstanding


Options ExercisableWeighted-Average


Weighted-





Weighted-Remaining


Average





AverageContractual


Exercise





ExerciseExercise Price

Shares


Life


Price


Shares


Price(in Years)$0.13


298,000



2.27


$
0.13



298,000


$
0.13$0.50


577,302



4.76


$
0.50



577,302


$
0.50$0.55


80,000



6.31


$
0.55



73,750


$
0.55$0.65


293,713



6.63


$
0.65



260,462


$
0.65$0.95


332,500



7.22


$
0.95



249,042


$
0.95$1.25


305,000



7.51


$
1.25



198,333


$
1.25$2.75


227,500



7.77


$
2.75



164,115


$
2.75$3.40


1,377,991



9.08


$
3.40



518,344


$
3.403,492,006



7.12


$
1.88



2,339,348


$
1.39  F-24




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  Valuation of
    Privately-Held-Company Equity Securities Issued as Compensation.
    Warrant to Purchase Preferred Stock
 F-25




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  8.
    Leases      Capital


OperatingYears Ending December 31

Leases


Leases2007

$
47,000


$
362,7272008


50,038



238,8682009


50,038



18,9882010


28,205



Total future minimum lease payments


175,281


$
620,583Less amount representing interest


(22,144
)Obligations under capital leases
    (current portion of $47,000)

$
153,137     9.
    Commitments
    and Contingencies  License Agreements
 
  96-18
 
 F-26




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
 
  96-18
 
  Guarantees and Indemnifications
  Legal Matters
 F-27




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  10.
    Income
    Taxes    2004


2005


2006CurrentFederal

$



$



$
State










Total current










Deferred:Federal


(233,008
)


(1,501,931
)


(2,163,258
)State


(359,565
)


(463,200
)


(694,703
)Total deferred


(592,573
)


(1,965,131
)


(2,857,961
)Valuation allowance


592,573



1,965,131



2,857,961Total

$



$



$
     2004


2005


2006Statutory federal income tax rate
    applied to earnings before income taxes and extraordinary items

$
(607,359
)

$
(1,897,237
)

$
(2,860,959
)State income taxes  net
    of federal benefits


(359,565
)


(463,200
)


(694,703
)Meals and entertainment


35,550



62,321



76,363Research and development credit


(27,858
)


(39,298
)


(36,426
)Stock-based compensation


30,329



28,145



238,877Other


4,514



64,812



2,290Foreign operations


331,816



279,326



243,508Changes in tax rate










173,089Valuation allowance


592,573



1,965,131



2,857,961Total

$



$



$
  F-28




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
    2005


2006Deferred tax assets:Net operating loss

$
6,743,477


$
8,496,560Intangible assets


588,876



624,520Research and development credits


531,248



605,989Accrued expenses


8,586



136,629Nonqualified stock option


527,937



753,950Reserves


253,830



888,239Total deferred tax assets


8,653,954



11,505,887Deferred tax liabilities:Fixed assets


(172,061
)


(166,033
)Total deferred tax liabilities


(172,061
)


(166,033
)Net deferred tax asset


8,481,893



11,339,854Valuation allowance


(8,481,893
)


(11,339,854
)Total

$



$
         11.
    Defined
    Contribution Plan   F-29




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
  12.
    Segment
    Information    2004


2005


2006United States

$
12,708,570


$
15,829,801


$
16,995,783Rest of world


234,740



290,339



72,440Total revenues

$
12,943,310


$
16,120,140


$
17,068,223     13.
    Subsequent
    Events    Accounting for Expenses or Liabilities Paid by Principal
    Stockholder(s)
     F-30




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
   
 
 
   
 
  
    Forecasted revenues for all products with corresponding license
    agreements requiring royalty payments, including those in
    development; 
 
  
    Trust royalties equal to of 5% of net sales, less estimated
    in-license offsets applied to the forecasted revenues over the
    estimated life of the agreements; 
 
  
    Royalty termination dates, which were determined based on the
    expiration dates of patents included in the agreements; and 
 
  
    Discount rates using a weighted-average cost of capital. 
 
   
    
    The increase of 250,000 in the number of shares reserved under
    the Companys 1998 Plan;
    The granting of stock options to purchase a total of
    299,000 shares. The Board of Directors further determined
    that the exercise price of such option grants would be $6.24 per
    share, which represented the estimated fair value of the
    Companys common stock as of that date;
    Upon the closing of the initial public offering contemplated by
    this prospectus, the creation of the 2007 Employee Stock
    Purchase Plan with a reserve of 250,000 shares of common
    stock; and
    Upon the closing of the initial public offering contemplated by
    this prospectus, the creation of the 2007 Equity Incentive Plan
    (2007 Plan) with a reserve of 1,750,000 shares of common
    stock. Additionally, any unissued shares, up to a total of
    250,000 shares reserved under the Companys 1998 Plan
    will be transferred for issuance under the 2007 Plan. F-31




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of and
    for the Years Ended December 31, 2004, 2005 and 2006
     
    The retirement of 500,000 shares of Series A
    convertible preferred stock held as treasury stock;
    The granting of stock options to purchase a total of
    50,000 shares. The Board of Directors further determined
    that the exercise price of such option grants would be $6.24 per
    share, which represented the estimated fair value of the
    Companys common stock as of that date; and
    Upon the closing of the initial public offering contemplated by
    this prospectus, the filing of an amended and restated
    certificate of incorporation providing for, among other things,
    authorization of 100,000,000 shares of common stock and
    10,000,000 shares of preferred stock having rights and
    benefits that would be determined at the time of issuance. F-32




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEET
 As of
    June 30, 2007 (Unaudited)
  Pro FormaJune 30,


Stockholders2007


EquityASSETSCURRENT ASSETS:Cash and cash equivalents

$
2,534,119Short-term investments


7,300,000Accounts receivable, net of
    allowance for doubtful accounts of $183,376


4,066,143Inventories


1,134,593Prepaid expenses


446,770Total current assets


15,481,625PROPERTY, PLANT AND
    EQUIPMENT  Net


1,433,065OTHER ASSETS


609TOTAL

$
16,915,299LIABILITIES AND
    STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable

$
519,171Income taxes payable


86,000Accrued expenses, including
    related party amounts of $675,003


4,013,165Deferred revenue


98,436Capital lease obligation


41,316Total current liabilities


4,758,088LONG-TERM LIABILITIES


93,729COMMITMENTS AND CONTINGENCIES
    (Note 10)REDEEMABLE CONVERTIBLE PREFERRED
    STOCK$0.001 par value 
    14,013,093 shares authorized; 13,869,274 issued and
    outstanding; no shares issued and outstanding pro forma;
    aggregate liquidation preference: $43,710,326


43,710,326STOCKHOLDERS EQUITY
    (DEFICIT):Series A convertible
    preferred stock, $0.001 par value 
    7,387,699 shares authorized; 7,387,699 issued and
    outstanding actual; no shares issued and outstanding pro forma;
    liquidation preference of $3,693,850


7,388Common stock, $0.001 par
    value  30,000,000 shares authorized;
    850,447 shares issued and outstanding actual;
    21,607,420 shares issued and outstanding pro forma


850



21,607Additional paid-in capital


9,111,925



52,808,382Deferred stock-based compensation


(11,704
)


(11,704
)Cumulative other comprehensive loss


(59,593
)


(59,593
)Accumulated deficit


(38,070,710
)


(40,695,210
)Treasury stock (Series A
    convertible preferred), at cost  500,000 shares
    actual; no shares pro forma


(2,625,000
)


Total stockholders equity
    (deficit)


(31,646,844
)

$
12,063,482TOTAL

$
16,915,299    F-33




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 For the
    Six Months Ended June 30, 2006 and 2007 (Unaudited)
  
 2006


2007TOTAL REVENUES

$
8,396,654


$
13,622,150COST OF REVENUES


864,461



1,462,280GROSS PROFIT


7,532,193



12,159,870OPERATING EXPENSES:Research and development


1,430,411



1,598,173Selling and marketing


8,753,937



7,336,418General and administrative


2,043,560



6,969,789Total operating expenses


12,227,908



15,904,380LOSS FROM OPERATIONS


(4,695,715
)


(3,744,510
)INTEREST INCOME


330,113



252,295LOSS BEFORE INCOME TAXES


(4,365,602
)


(3,492,215
)PROVISION FOR INCOME TAXES






86,000NET LOSS

$
(4,365,602
)

$
(3,578,215
)Net loss per share

$
(5.95
)

$
(4.32
)Weighted-average shares
    outstanding-basic and diluted


733,481



829,130Pro forma net loss per share-basic
    and diluted





$
(0.17
)Pro forma weighted-average shares
    oustanding-basic and diluted






21,586,103  
   F-34




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE LOSS
 For the
    Six Months Ended June 30, 2006 and 2007 (Unaudited)
  2006


2007NET LOSS

$
(4,365,602
)

$
(3,578,215
)OTHER COMPREHENSIVE
    LOSS  Foreign currency translation adjustment


(9,536
)


(5,329
)COMPREHENSIVE LOSS

$
(4,375,138
)

$
(3,583,544
)    F-35




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 For the
    Six Months Ended June 30, 2006 and 2007 (Unaudited)
  2006


2007CASH FLOWS FROM OPERATING
    ACTIVITIES:Net loss

$
(4,365,602
)

$
(3,578,215
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization


192,925



192,944Provision for bad debt expense


25,000



60,000Gain on foreign currency exchange
    transactions


(6,470
)


(1,008
)Stock-based compensation


479,415



1,544,026Compensation expense 
    principal stockholder contribution (Note 3)






4,400,000Changes in operating assets and
    liabilities:Accounts receivable


(191,653
)


(1,668,939
)Inventories


(509,995
)


(729,471
)Prepaid expenses


88,787



(64,387
)Other assets


(3,319
)


1,537Accounts payable


(205,001
)


(128,836
)Income taxes payable






86,000Accrued expenses


355,627



(782,297
)Deferred revenue


45,373



(7,188
)Long-term liabilities


(5,399
)


(33,449
)Net cash used in operating
    activities


(4,100,312
)


(709,283
)CASH FLOWS FROM INVESTING
    ACTIVITIES:Purchase of available-for-sale
    securities


(15,525,396
)


(300,000
)Sales of available-for-sale
    securities


6,250,396



1,250,000Purchase of property, plant and
    equipment


(328,230
)


(208,385
)Net cash (used in) provided by
    investing activities


(9,603,230
)


741,615CASH FLOWS FROM FINANCING
    ACTIVITIES:Net proceeds from exercise of
    stock options


24,786



47,519Repurchase of Series A
    convertible preferred stock


(2,625,000
)


Proceeds from the issuance of
    Series E redeemable convertible preferred stock


13,052,818



Net cash provided by financing
    activities


10,452,604



47,519EFFECT OF EXCHANGE RATES ON CASH
    AND CASH EQUIVALENTS


860



(12,714
)(DECREASE) INCREASE IN CASH AND
    CASH EQUIVALENTS


(3,250,078
)


67,137CASH AND CASH
    EQUIVALENTS  Beginning of period


4,284,772



2,466,982CASH AND CASH
    EQUIVALENTS  End of period

$
1,034,694


$
2,534,119OTHER SUPPLEMENTAL
    DISCLOSURE  Cash paid for income taxes

$
800


$
800NON-CASH FINANCING TRANSACTIONS:Equipment acquired under capital
    lease

$



$
77,554Property, plant and equipment
    acquired included in accounts payable

$
50,130


$
14,964    F-36




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF STOCKHOLDERS DEFICIT
 For the
    Six Months Ended June 30, 2007
 
  
 CumulativeAdditional


Deferred


Other











TotalSeries A Convertible Preferred Stock


Common Stock


Paid-In


Stock-Based


Comprehensive


Accumulated


Treasury Stock


StockholdersShares


Amount


Shares


Amount


Capital


Compensation


Loss


Deficit


Shares


Amount


DeficitBALANCE 
    December 31, 2006


7,387,699


$
7,388



826,139


$
826


$
3,144,238


$
(35,539
)

$
(54,264
)

$
(34,492,495
)


500,000


$
(2,625,000
)

$
(34,054,846
)Exercise of stock
    options










24,308



24



47,495























47,519Foreign currency translation
    adjustment


























(5,329
)














(5,329
)Stock-based
    compensation


















1,520,192























1,520,192Amortization of deferred
    stock-based compensation






















23,835



















23,835Non-cash compensation






































expense  principal
    stockholder contribution


















4,400,000























4,400,000Net loss






























(3,578,215
)










(3,578,215
)BALANCE 
    June 30, 2007


7,387,699


$
7,388



850,447


$
850


$
9,111,925


$
(11,704
)

$
(59,593
)

$
(38,070,710
)


500,000


$
(2,625,000
)

$
(31,646,844
)  
 F-37




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
  1.
    Basis of
    Presentation        2.
    Significant
    Accounting Policies  Adoption of FASB Interpretation No. 48 
    Accounting for Uncertainty in Income
    Taxes  Accounting for
    Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109
  Net Loss per Share
    2006


2007Weighted-average common shares
    outstanding


761,367



836,834Less: Unvested common shares
    subject to repurchase


(27,886
)


(7,704
)Total weighted-average number of
    shares used in computing net loss per share-basic and diluted


733,481



829,130  F-38




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
    2006


2007Unvested common shares


27,886



7,704Warrants to purchase common stock


27,692



27,692Options to purchase common stock


2,899,124



3,983,732Convertible preferred stock, net
    of treasury stock


20,756,973



20,756,973Total units excluded from
    computation of diluted net loss per share


23,711,675



24,776,101   Pro Forma Net Loss per Share
    Weighted-average common stock
    outstanding


836,834Less: Unvested common shares
    subject to repurchase


(7,704
)Plus: Conversion of convertible
    preferred stock


20,756,973Total weighted-average number of
    shares used in computing pro forma net loss per share-basic and
    diluted


21,586,103   Pro Forma Balance Sheet Information
  Stock-Based Compensation  Share-Based Payment Accounting for
    Stock Issued to Employees
 F-39




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
   
   
  
 2006


2007Research and development

$
86,366


$
163,768Selling and marketing


373,229



739,020General and administrative


19,819



612,856$
479,414


$
1,515,644  
  3.
    Related
    Party and Other Transactions  License Agreements
  Contribution of Royalties Payable Under Existing License
    Agreement
  Accounting for Expenses or Liabilities Paid by
    Principal Stockholder(s)
 
   
 F-40




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
     
 
 
   
 
  
    Forecasted revenues for all products with corresponding license
    agreements requiring royalty payments, including those in
    development; 
 
  
    Trust royalties equal to of 5% of net sales, less estimated
    in-license offsets applied to the forecasted revenues over the
    estimated life of the agreements; 
 
  
    Royalty termination dates, which were determined based on the
    expiration dates of patents included in the agreements; and 
 
  
    Discount rates using a weighted-average cost of capital. 
 
   
 
  Consulting Services 96-18.
 
 F-41




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
    4.
    Inventories    Raw materials

$
151,082Work-in-process


192,759Finished goods (including
    consignment inventory of $352,342)


790,752$
1,134,593   5.
    Accrued
    Expenses    Accrued royalties (see
    Notes 3 and 10)

$
675,003Accrued compensation


1,205,895Customer account credit balances


531,687Other accrued expenses


1,600,580$
4,013,165   6.
    Stock
    Option Plan      2006

2007Expected life (years)

10.00

10.00Risk-free interest rate

4.77%

4.64% - 4.93%Volatility

50.00%

50.00%Dividend yield



  F-42




---



##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
    2006

2007Expected life (years)

6.25

6.25Risk-free interest rate

4.77%

4.57% - 4.91%Volatility

50.00%

50.00%Dividend yield



     Weighted-


Weighted-Shares


Average


Average


AggregateUnder


Exercise


Remaining


IntrinsicOption


Price


Contractual Term


ValueOutstanding 
    December 31, 2006


3,492,006


$
1.88Granted


1,227,738



3.51Exercised


(24,308
)


1.95Forfeited


(83,735
)


4.19Outstanding 
    June 30, 2007


4,611,701


$
2.29



7.41Vested and expected to vest in the
    future  June 30, 2007


4,404,602


$
2.24



7.32


$
16,135,492Exerciseable 
    June 30, 2007


2,773,462


$
1.60



6.22


$
11,940,842       Fair Value


IntrinsicType of


Number of

Exercise


Estimate per


Value perDate of Issuance

Equity Issuance


Options Granted

Price


Common Share


Share(1)February 2007


Common stock options


469,738

$
3.20


$
3.36


$
0.16May 2007


Common stock options


558,000

$
3.20


$
5.91


$
2.71June 2007


Common stock options


200,000

$
5.11


$
5.91


$
0.80    (1)
    Represents the difference between the exercise price and fair
    value estimate per common share if the fair value exceeds the
    exercise price.   F-43




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##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
  7.
    Capital
    Leases    2007

$
37,1262008


74,2532009


74,2532010


31,033Total future minimum lease payments

$
216,665Less amount representing interest


(22,452
)Obligations under capital leases
    (current portion of $74,253)

$
194,213     8.
    Income
    Taxes  On January 1, 2007, the Company adopted
    FIN No. 48.
    Jurisdiction

Open Tax YearsFederal

1998 - 2006California

1998 - 2006  F-44




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##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
  9.
    Segment
    Information    2006


2007United States

$
8,302,053


$
13,581,008Rest of world


94,601



41,142Total revenues

$
8,396,654


$
13,622,150     10.
    Commitments
    and Contingencies  License Agreements
 
   
   F-45




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##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
 
   
  Guarantees and Indemnifications
  Legal Matters
  11.
    Subsequent
    Events    
    The increase of 250,000 in the number of shares reserved under
    the Companys 1998 Plan;
    The granting of stock options to purchase a total of
    299,000 shares. The Board of Directors further determined
    that the exercise price of such option grants would be $6.24 per
    share, which represented the estimated fair value of the
    Companys common stock as of that date;
    Upon the closing of the initial public offering contemplated by
    this prospectus, the creation of the 2007 Employee Stock
    Purchase Plan with a reserve of 250,000 shares of common
    stock; and
    Upon the closing of the initial public offering contemplated by
    this prospectus, the creation of the 2007 Equity Incentive Plan
    (2007 Plan) with a reserve of 1,750,000 shares of common
    stock. Additionally, any unissued shares, up to a total of
    250,000 shares reserved under the Companys 1998 Plan
    will be transferred for issuance under the 2007 Plan.    
    The retirement of 500,000 shares of Series A
    convertible preferred stock held as treasury stock; F-46




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##### Table of Contents



eyeonics,
    inc. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 As of
    June 30, 2007 and for the Six Months Ended June 30, 2006 and
    2007 (Unaudited)
   
    The granting of stock options to purchase a total of
    50,000 shares. The Board of Directors further determined
    that the exercise price of such option grants would be $6.24 per
    share, which represented the estimated fair value of the
    Companys common stock as of that date; and
    Upon the closing of the initial public offering contemplated by
    this prospectus, the filing of an amended and restated
    certificate of incorporation providing for, among other things,
    authorization of 100,000,000 shares of common stock and
    10,000,000 shares of preferred stock having rights and
    benefits that would be determined at the time of issuance. F-47




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##### Table of Contents



Standard monofocal IOLs are
    designed to be fixed and stationary within the eye and therefore
    typically provide good vision at far distances. As a result,
    most people with standard monofocal IOLs rely on reading glasses
    or contact lenses to see at near and intermediate distances.

crystalens moves and changes shape
    using the eyes natural focusing mechanism, instead of
    remaining fixed and stationary within the eye. This movement, or
    accommodation, allows the eye to focus on objects across a broad
    range of distances from near to intermediate to far, thereby
    eliminating or significantly reducing dependence on reading
    glasses or contact lenses.




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##### Table of Contents



Shares
  
  eyeonics,
    inc.
  Common
    Stock
    PROSPECTUS
         Piper
    Jaffray
    Banc
    of America Securities LLC    Canaccord
    Adams
    BMO
    Capital Markets




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##### Table of Contents



PART II
  INFORMATION
    NOT REQUIRED IN PROSPECTUS
  Item 13.
    Other
    Expenses of Issuance and Distribution.    Amountto be PaidSEC registration fee

$
2,648NASD filing fee


9,125NASDAQ Global Market listing fee


*Blue Sky fees and expenses


*Printing and engraving expenses


*Legal fees and expenses


*Accounting fees and expenses


*Transfer agent and registrar fees


*Miscellaneous


*Total

$    *
    To be filed by amendment.  Item 14.
    Indemnification
    of Directors and Officers.           II-1




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##### Table of Contents



Item 15.
    Recent
    Sales of Unregistered Securities.    (1)
    Sales of
    Preferred Stock  
    In January 2006, we issued 3,083,873 shares of
    Series E redeemable convertible preferred stock at a price
    of $5.25 per share of preferred stock for aggregate gross
    proceeds of $16.2 million.  (2)
    Warrants  
    In May 2004, we issued to one accredited investor, a warrant to
    purchase 27,692 shares of our common stock at an exercise
    price of $3.25 per share for an aggregate purchase price of
    $90,000.  (3)
    Options
    and Common Stock Issuances  
    During 2004, the registrant issued and sold an aggregate of
    239,679 shares of common stock upon the exercise of options
    issued to certain officers, directors and consultants under the
    registrants 1998 Stock Plan at exercise prices ranging
    from $0.13 to $1.25 per share, for an aggregate consideration of
    $82,872.
    During 2005, the registrant issued and sold an aggregate of
    96,994 shares of common stock upon the exercise of options
    issued to certain officers, directors and consultants under the
    registrants 1998 Stock Plan at exercise prices ranging
    from $0.50 to $4.15 per share, for an aggregate consideration of
    $151,668.
    During 2006, the registrant issued and sold an aggregate of
    96,135 shares of common stock upon the exercise of options
    issued to certain officers, directors and consultants under the
    registrants 1998 Stock Plan at exercise prices ranging
    from $0.13 to $4.72 per share, for an aggregate consideration of
    $55,956.
    From January 2007 through June 2007, the registrant issued and
    sold an aggregate of 24,308 shares of common stock upon the
    exercise of options issued to certain officers, directors and
    consultants under the registrants 1998 Stock Plan at
    exercise prices ranging from $0.50 to $3.40 per share, for an
    aggregate consideration of $47,615. II-2




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##### Table of Contents




    During 2004, the registrant granted options to purchase an
    aggregate of 1,157,181 shares of common stock to certain
    officers, directors and consultants under the registrants
    1998 Stock Plan and a stand alone option agreement at exercise
    prices ranging from $0.50 to $3.40 per share.
    During 2005, the registrant granted options to purchase an
    aggregate of 972,537 shares of common stock to certain
    officers, directors and consultants under the registrants
    1998 Stock Plan at exercise prices ranging from $3.40 to $5.15
    per share.
    During 2006, the registrant granted options to purchase an
    aggregate of 951,820 shares of common stock to certain
    officers, directors and consultants under the registrants
    1998 Stock Plan at exercise prices ranging from $3.40 to $4.72
    per share.
    From January 2007 through June, 2007, the registrant granted
    options to purchase an aggregate of 1,227,738 shares of
    common stock to certain officers, directors and consultants
    under the registrants 1998 Stock Plan at exercise prices
    ranging from $3.20 to $5.11 per share.   II-3




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##### Table of Contents



Item 16.
    Exhibits
    and Financial Statement Schedules.    
 ExhibitNumber

Description1
.1

Form of Underwriting Agreement.3
.1#

Amended and Restated Certificate
    of Incorporation of the Registrant (Delaware) as currently in
    effect.3
.2

Form of Amended and Restated
    Certificate of Incorporation of the registrant (Delaware) to be
    effective upon closing of this offering.3
.3#

Bylaws of the registrant as
    currently in effect.3
.4

Form of Amended and Restated
    Bylaws of the registrant to be in effect upon the closing of the
    offering made under this Registration Statement.4
.1

Form of Common Stock Certificate
    of the registrant.4
.2#

Warrant Agreement between the
    registrant and Comerica Bank dated June 2, 2004.4
.3#

Amended and Restated Investor
    Rights Agreement, dated December 30, 2005, by and among the
    registrant and certain stockholders.5
.1

Opinion of Wilson Sonsini Goodrich
    & Rosati, Professional Corporation.10
.1#+

Form of Indemnification Agreement
    for directors and executive officers.10
.2#+

Form of 1998 Stock Plan of the
    registrant.10
.3#+

Form of 1998 Stock Plan Stock
    Option Agreement of the registrant.10
.4+

Form of 2007 Equity Incentive Plan
    of the registrant.10
.5+

Form of 2007 Employee Stock
    Purchase Plan of the registrant.10
.6+

Change of Control Severance
    Agreement for J. Andy Corley.10
.7+

Change of Control Severance
    Agreement for Steven J. Naber.10
.8+

Change of Control Severance
    Agreement for Michael J. Breen.10
.9+

Change of Control Severance
    Agreement for Johnnie S. Garcia.10
.10+

Change of Control Severance
    Agreement for J. Michael Judy.10
.11#+

Form of Employee Proprietary
    Information Agreement of the registrant.10
.12#

Exclusive License Agreement, dated
    March 31, 2006, by and between the registrant and Richard L.
    Lindstrom M.D.10
.13#

Stock Acquisition Agreement, dated
    October 12, 1998, by and among the registrant and Medevec
    Supplies Ltd. and the Nice Trust dated July 22, 1991, J. Andy
    Corley, Gerardo Lugo and Doyle Leslie.10
.14#

License Agreement, dated October
    12, 1998, by and among J. Stuart Cumming, Eppington Corporation
    N.V., Medevec Licensing, B.V. and Medevec Supplies, Ltd., as
    amended.10
.15

License Agreement, dated
    October 12, 1998, by and between the registrant and Medevec
    Supplies, Ltd., as amended.10
.16*#

Exclusive License Agreement, dated
    March 29, 2006, by and between the registrant and Steven
    Dell, M.D.10
.17#

Triple Net Lease, dated January
    19, 2006, by and between the registrant and Aliso Viejo Town
    Center Corporate Park LLC.10
.18#

Standard Industrial/Commercial
    Multi-Tenant Lease, dated July 19, 2000, by and between the
    registrant and MHW Realty, Ltd., as amended.21
.1#

List of registrants
    subsidiaries.23
.1

Consent of Deloitte & Touche,
    Independent Registered Public Accounting Firm.23
.2

Consent of Wilson Sonsini Goodrich
    & Rosati, Professional Corporation (See Exhibit 5.1).24
.1

Power of Attorney.  
  +
    Indicates a management contract or compensatory plan.*
    Confidential treatment has been requested with respect to
    certain portions of this exhibit. Omitted portions have been
    filed    separately with the Securities and Exchange Commission. 
 
    To be filed by an amendment. 
 
 #
    Filed with Registrants Registration Statement on
    Form S-1
    on July 27, 2007. 
 
 
    Filed with signature page hereto. 
 II-4




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##### Table of Contents




    To be filed by an amendment. 
 #
    Filed with Registrants Registration Statement on Form
    S-1 on
    July 27, 2007. 
 
   
  Item 17.
    Undertakings.               II-5




---



##### Table of Contents



II-6




---



##### Table of Contents



SIGNATURES
 
  th
 
    By:
    /s/  J.
    Andy Corley    POWER OF
    ATTORNEY
      
 Signature

Title

Date/s/  J.
    Andy CorleyJ.
    Andy Corley

Chairman, President and Chief
    Executive Officer (Principal Executive Officer)

September 6, 2007/s/  Steven
    J. NaberSteven
    J. Naber

Chief Financial Officer (Principal
    Accounting Officer)

September 6, 2007*James
    M. Shapiro

Director

September 6, 2007 
 II-7




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##### Table of Contents



Signature

Title

Date/s/  James
    Robert
    HurleyJames
    Robert Hurley

Director

September 6, 2007*Shelley
    B. Thunen

Director

September 6, 2007*Dr.
    Richard C. Lindstrom

Director

September 6, 2007*Dr.
    William J. Link

Director

September 6, 2007*Lloyd
    H. Malchow

Director

September 6, 2007*By: /s/  Steven
    J. NaberSteven
    J. NaberAttorney-in-Fact  
 II-8




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##### Table of Contents



EXHIBIT INDEX
  
 ExhibitNumber

Description1
.1

Form of Underwriting Agreement.3
.1#

Amended and Restated Certificate
    of Incorporation of the Registrant (Delaware) as currently in
    effect.3
.2

Form of Amended and Restated
    Certificate of Incorporation of the registrant (Delaware) to be
    effective upon closing of this offering.3
.3#

Bylaws of the registrant as
    currently in effect.3
.4

Form of Amended and Restated
    Bylaws of the registrant to be in effect upon the closing of the
    offering made under this Registration Statement.4
.1

Form of Common Stock Certificate
    of the registrant.4
.2#

Warrant Agreement between the
    registrant and Comerica Bank dated June 2, 2004.4
.3#

Amended and Restated Investor
    Rights Agreement, dated December 30, 2005, by and among the
    registrant and certain stockholders.5
.1

Opinion of Wilson Sonsini Goodrich
    & Rosati, Professional Corporation.10
.1#+

Form of Indemnification Agreement
    for directors and executive officers.10
.2#+

Form of 1998 Stock Plan of the
    registrant.10
.3#+

Form of 1998 Stock Plan Stock
    Option Agreement of the registrant.10
.4+

Form of 2007 Equity Incentive Plan
    of the registrant.10
.5+

Form of 2007 Employee Stock
    Purchase Plan of the registrant.10
.6+

Change of Control Severance
    Agreement for J. Andy Corley.10
.7+

Change of Control Severance
    Agreement for Steven J. Naber.10
.8+

Change of Control Severance
    Agreement for Michael J. Breen.10
.9+

Change of Control Severance
    Agreement for Johnnie S. Garcia.10
.10+

Change of Control Severance
    Agreement for J. Michael Judy.10
.11#+

Form of Employee Proprietary
    Information Agreement of the registrant.10
.12#

Exclusive License Agreement, dated
    March 31, 2006, by and between the registrant and Richard L.
    Lindstrom M.D.10
.13#

Stock Acquisition Agreement, dated
    October 12, 1998, by and among the registrant and Medevec
    Supplies Ltd. and the Nice Trust dated July 22, 1991, J. Andy
    Corley, Gerardo Lugo and Doyle Leslie.10
.14#

License Agreement, dated October
    12, 1998, by and among J. Stuart Cumming, Eppington Corporation
    N.V., Medevec Licensing, B.V. and Medevec Supplies, Ltd., as
    amended.10
.15

License Agreement, dated
    October 12, 1998, by and between the registrant and Medevec
    Supplies, Ltd., as amended.10
.16*#

Exclusive License Agreement, dated
    March 29, 2006, by and between the registrant and Steven
    Dell, M.D.10
.17#

Triple Net Lease, dated January
    19, 2006, by and between the registrant and Aliso Viejo Town
    Center Corporate Park LLC.10
.18#

Standard Industrial/Commercial
    Multi-Tenant Lease, dated July 19, 2000, by and between the
    registrant and MHW Realty, Ltd., as amended.21
.1#

List of registrants
    subsidiaries.23
.1

Consent of Deloitte & Touche,
    Independent Registered Public Accounting Firm.23
.2

Consent of Wilson Sonsini Goodrich
    & Rosati, Professional Corporation (See Exhibit 5.1).24
.1

Power of Attorney.  
   +
    Indicates a management contract or compensatory plan.*
    Confidential treatment has been requested with respect to
    certain portions of this exhibit. Omitted portions have been
    filed separately with the Securities and Exchange Commission.
    To be filed by an amendment. 
 #
    Filed with Registrants Registration Statement on
    Form S-1
    on July 27, 2007. 
 
 
    Filed with signature page hereto.