---



U.S. SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON, D.C. 20549

---

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF

THE SECURITIES EXCHANGE ACT OF
1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
2003

Commission File Number:  0-27372

---



|STOCKERYALE, INC.                                           
|------------------------------------------------------------
|(Exact name of registrant as specified in its
      charter)
|                                                            
|Massachusetts                                               
|(State of Incorporation)                                    
|                                                            
|32 Hampshire Road,  Salem, New
      Hampshire 03079        
|(Address of registrant's principal executive
      office)  
|                                                            
|(603) 893-8778                                              
|(Registrant's telephone number)                             



---



Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15 (d) of the Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
xYes 
   o  No

Indicate by check mark whether the registrant is
 an accelerated filer (as defined in 12b-2 of the Exchange Act). 
oYes 
   x  No

As of October 31, 2003 there were 14,403,797 shares of the
issuer's common stock outstanding.



---

---



STOCKERYALE, INC.

INDEX TO FORM
10-Q



PART I - FINANCIAL INFORMATIONItem 1Financial StatementsUnaudited
      Condensed Consolidated Balance Sheets at September 30, 2003 and Audited December
      31, 20021Unaudited
      Condensed Consolidated Statement of Operations for the three and nine
      months ended September 30, 2003 and 20022Unaudited Condensed Consolidated Statement of Cash Flows for the
      nine months ended September 30, 2003 and 20023Notes to Unaudited Condensed Consolidated Financial
      Statements4Item 2Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations10Item 3Quantitative
      and Qualitative Disclosure About Market Risk15Item 4Controls & Procedures15PART II - OTHER INFORMATIONItem 1Legal
      Proceedings16Item 2Changes in Securities16Item 3Defaults Upon Senior Securities16Item 4Submission of Matters to a Vote of Security Holders16Item 5Other Information16Item 6Exhibits and Reports on Form 8-K16Signature
      (s)17







|i  /  STKR |  | 2003 Form 10-Q
|---------- |  | --------------

---

Table of Contents


Part I


Item 1


ITEM
1.    FINANCIAL STATEMENTS

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

|In thousands                                                                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                 
|Assets                                                                                                                                                                                           
|Current
      assets:                                                                                                                                                                            
|Cash and cash
      equivalents                                                                                                                                                                  
|Restricted
      cash                                                                                                                                                                            
|Accounts
      receivable, less reserves of approximately $81 at September 30, 2003 and
      $155 at December 31, 2002                                                                          
|Inventories                                                                                                                                                                                      
|Prepaid
      expenses and other current assets                                                                                                                                                  
|Total current
      assets                                                                                                                                                                       
|Property,
      plant and equipment, net                                                                                                                                                         
|Goodwill                                                                                                                                                                                         
|Identified
      intangible assets, net                                                                                                                                                          
|Officer note
      receivable                                                                                                                                                                    
|Other
      long-term assets                                                                                                                                                                     
|Total assets                                                                                                                                                                                     
|Liabilities
      and stockholders' equity                                                                                                                                                       
|Current
      liabilities:                                                                                                                                                                       
|Current
      portion of long-term debt                                                                                                                                                          
|Short-term
      debt                                                                                                                                                                            
|Accounts
      payable                                                                                                                                                                           
|Accrued
      expenses                                                                                                                                                                           
|Short-term
      portion of capital lease obligation                                                                                                                                             
|Total current
      liabilities                                                                                                                                                                  
|Long-term debt
      and capital lease obligations - less current portion, net of unamortized
      discount of $1,148 at September 30, 2003 and $269 at December 31, 2002                       
|Other long-term liabilities                                                                                                                                                                      
|Stockholders'
      equity:                                                                                                                                                                      
|Common stock,
      par value $0.001-shares authorized 100,000,000; Shares issued and
      outstanding 14,403,650 and 12,771,524 at September 30, 2003 and December
      31, 2002, respectively
|Paid-in
      capital                                                                                                                                                                            
|Accumulated
      other comprehensive income (loss)                                                                                                                                              
|Accumulated
      deficit                                                                                                                                                                        
|Total
      stockholders' equity                                                                                                                                                                 
|Total
      liabilities and stockholders' equity                                                                                                                                                 

See notes to unaudited condensed consolidated
financial statements.




|1  /  STKR |  | 2003 Form 10-Q
|---------- |  | --------------

---

Table of Contents


Part I


Item 1


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



|In thousands, except per share
          data |  |                           |        |   |                          
|--------------------------------------------- |  | ------------------------- | ------ | - | -------------------------
|                                              |  | Three
      Months        |        |   | Nine
      Months        
|                                              |  | Ended
      September 30, |        |   | Ended
      September 30,
|                                              |  |                           | 2003   |   |                          
|Net sales                                     |  | $                         | 3,670  |   |                          
|Cost of sales                                 |  |                           | 2,724  |   |                          
|Gross profit                                  |  |                           | 946    |   |                          
|Operating
      expenses:                     |  |                           |        |   |                          
|Selling
      expenses                        |  |                           | 585    |   |                          
|General and
      administrative              |  |                           | 1,009  |   |                          
|Amortization
      expense                    |  |                           | 80     |   |                          
|Asset
      Impairment                        |  |                           | 605    |   |                          
|Research and
      development                |  |                           | 831    |   |                          
|Total
      operating expenses                |  |                           | 3,110  |   |                          
|Operating loss                                |  |                           | (2,164 | ) |                          
|Interest and
      other income/(expense)     |  |                           | 15     |   |                          
|Interest
      expense                        |  |                           | 290    |   |                          
|Loss before
      income tax benefit          |  |                           | (2,439 | ) |                          
|Income tax
      provision (benefit)          |  |                           | 14     |   |                          
|Net loss                                      |  | $                         | (2,453 | ) |                          
|Basic and
      diluted loss per share:       |  |                           |        |   |                          
|Net loss per
      share                      |  | $                         | (0.17  | ) |                          
|Weighted
      average shares outstanding:    |  |                           |        |   |                          
|Basic and
      diluted                       |  |                           | 14,401 |   |                          
|                                             





See notes to unaudited condensed consolidated
financial statements.






|2  /  STKR |  | 2003 Form 10-Q
|---------- |  | --------------

---

Table of Contents


Part I


Item 1


UNAUDITED CONDENSED
 CONSOLIDATED STATEMENTS OF CASH
FLOWS

|In thousands                                                                     
|---------------------------------------------------------------------------------
|                                                                                 
|                                                                                 
|Operations                                                                       
|Net
      loss                                                                   
|                                                                                 
|Adjustments to
      reconcile net loss to net cash used in operating activities:
|Depreciation
      and amortization                                              
|Deferred
      income taxes and other charges                                    
|Loss on
      investment in joint venture                                        
|Asset
      Impairment                                                           
|Other changes
      in assets and liabilities:                                   
|Accounts
      receivable, net                                                   
|Inventories                                                                      
|Prepaid
      expenses and other current assets                                  
|Accounts
      payable                                                           
|Accrued
      expenses                                                           
|Officer note
      receivable                                                    
|Other assets
      and liabilities                                               
|Net cash used
      in operating activities                                      
|Financing                                                                        
|Proceeds from
      sale of common stock                                         
|Net proceeds from issuance of convertible note                                   
|Proceeds from long term debt                                                     
|Borrowings/repayments ofrevolving credit facilities                              
|Principal repayment of long-term debt                                            
|Restricted
      cash related to Merrill Lynch                                   
|Other                                                                            
|Net cash
      provided by financing activities                                  
|Investing                                                                        
|Proceeds from asset dispositions                                                 
|Purchases of
      property, plant and equipment                                 
|Net investment
      in joint venture                                            
|Net cash used
      in investing                                                 
|Effect of
      exchange rates                                                   
|Net change in
      cash and equivalents                                         
|Cash and
      equivalents, beginning of year                                    
|Cash and
      equivalents, end of year                                          
|Supplemental
      disclosure of cash flow information:                          
|Interest
      paid                                                              
|Stock issued
      in CIENA acquisition                                          



See notes to unaudited condensed consolidated
financial statements.




|3  /  STKR |  | 2003 Form 10-Q
|---------- |  | --------------

---

Table of Contents


Part I


Item 1






NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


September 30, 2003


(1) ORGANIZATION AND BASIS OF
PRESENTATION

The interim condensed
consolidated financial statements presented have been prepared by StockerYale,
Inc. (the "Company") are unaudited and, in the opinion of the management,
reflect all adjustments of a normal recurring nature necessary for a fair
statement of (a) the results of operations for the three and nine months ended
September 30, 2003 and 2002, (b) the financial position at September 30, 2003
and December 31, 2002, and (c) the cash flows for the nine month periods ended
September 30, 2003 and 2002. These interim results are not necessarily
indicative of results for a full year or any other interim period.

The unaudited consolidated
balance sheet presented as of December 31, 2002, has been derived from the
consolidated financial statements that have been audited by the Company's
independent auditors. The accompanying financial statements and notes are
condensed as permitted by Form 10-Q and do not contain certain information
included in the annual financial statements and notes of the Company.  The
condensed consolidated financial statements and notes included herein should be
read in conjunction with the consolidated financial statements and notes
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2002.

The Company has prepared the
unaudited condensed financial statements on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company will be required to generate
sufficient cash flow to meet its obligations on a timely basis through improved
operations, refinancing of existing debt and/or additional financing.

The Company
 has taken action to address these financing issues and closed a new credit facility in Canada in
 June, which, brought  it into compliance with all debt agreements. Furthermore, the Company
 placed a $2.5 million convertible note and entered into a new credit facility with its senior
 lender during the third quarter.

(2) LOSS PER SHARE

In accordance with Statement
of Financial Accounting Standards ("SFAS") No. 128, Earnings per Share, basic and diluted net
 loss per common share for the three and nine months ended September 30, 2003 and 2002 is calculated
 by dividing the net loss applicable to common stockholders by the weighted average number of common
 shares outstanding. There were 3,191,298 and 2,938,417 options and 1,147,000 and 19,500 warrants
outstanding as of September 30, 2003 and 2002, respectively, which were
not included in the diluted per share calculation because their inclusion would
be anti-dilutive.

(3) INVENTORIES Inventories are stated at the
lower of cost (first-in, first-out basis) or market and include materials, labor
and overhead. Inventories are as follows: (in thousands)September 30, 2003December 31, 2002Finished goods$764$1,028Work-in-process181
    101Raw materials3,435
    3,349$4,380$4,478 Management performs periodic
reviews of inventory to dispose of items not required by their manufacturing
plan and reduce the carrying cost of inventory to the lower of cost or
market.


4  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 1
 (4) STOCK BASED COMPENSATION The Company accounts for
employee stock options and share awards under the intrinsic-value method
prescribed by Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, (APB 25). No compensation cost has been
recognized for stock option grants since the options granted to date have
exercise prices per share of not less than the fair value of the Company's stock
at the date of the grant. Had the Company determined the stock-based
compensation expense for the Company's stock options under the provisions of
Statement of Financial Accounting Standards No. 123, Accounting for Stock
Based Compensation, the Company's net loss and net loss per share based upon
the fair value at the grant date for stock options awards would have increased
the pro-forma loss as indicated below:
 
 (in
    thousands)
    
    Three Months Ended
    
    
    Nine Months EndedSeptember
      30,
    
    
    September 30,2003
    
    
    
    2002
    
    
    
    2003
    
    
    
    2002Net loss as
    reported
    
    $
    (2,453
    )
    
    $
    (2,608
    )
    
    $
    (6,993
    )
    
    $
    (10,772
    )Additional
      compensation expense
    
    
    (1,080
    )
    
    
    (1,302
    )
    
    
    (3,233
    )
    
    
    (3,392
    )Pro forma
    
    $
    (3,533
    )
    
    
    (3,910
    )
    
    $
    (10,226
    )
    
    
    (14,164
    )Net loss per share (basic and
    diluted)As
      reported
    
    $
    (0.17
    )
    
    $
    (0.20
    )
    
    $
    (0.52
    )
    
    $
    (0.85
    )Pro
      forma
    
    
    (0.25
    )
    
    
    (0.31
    )
    
    
    (0.76
    )
    
    
    (1.12
    )
 
 The fair value of options
at the date of grant were estimated using the Black-Scholes option pricing model
with the following assumptions:
 For the Quarter EndedSeptember  30,For the Nine Months EndedSeptember  30,20032002
    20032002Volatility262%112%
    262%112%Expected option life-years from
      vest55
    55Interest rate (risk free)3.10%2.93%
    2.77%3.96%Dividends----
 (5) COMPREHENSIVE LOSS SFAS No. 130, Reporting
Comprehensive Income, requires disclosure of all components of comprehensive
income (loss) on an annual and interim basis. Comprehensive income (loss) is
defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources. The
Company's total comprehensive income (loss) is as follows:
 
 (in thousands)Three Months EndedNine Months EndedSeptember 30,September 30,2003200220032002Net loss$(2,453)$(2,608)$(6,993)$(10,772)Other comprehensive income (loss):Cumulative
      translation adjustment24(523)1,213(57)Comprehensive loss$(2,429)$(3,131)$(5,780)(10,829)
  5  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 1
 (6) INTANGIBLE
ASSETS Intangible assets consist primarily of acquired
patented technology and trademarks. Intangible assets are amortized over their
estimated useful lives which range from two to five years. The Company has no
intangible assets with indefinite lives. The Company reviews intangible assets
when indications of potential impairment exists, such as a significant reduction
in cash flows associated with the assets. Intangible assets as of June 30, 2003
and 2002 are as follows:
 
 For the Quarter Ended(in thousands)September 30,
        2003December 31,
        2002Identified intangible assets$3,549$3,549Less: accumulated amortization$2,004$1,764$1,545$1,785 
 Amortization of intangible assets was $80,000 and
$81,000 for the three months ended September 30, 2003 and 2002, respectively and
$239,000 and $250,000 for the nine months ended September 30, 2003 and 2002,
respectively.
 
 As of September 30, 2003, the estimated future
amortization expense of intangible assets, in thousands,  is as
follows:
 
 20032004200520062007
      and
      thereafter$78$318$318$318$513
 
 (7) ASSET IMPAIRMENT In the
 third quarter, the Company performed an impairment analysis as required by generally accepted
 accounting principles, resulting in an impairment charge of $605,000 related to closing the
 Company's Maryland specialty optical fiber facility and the write-off of equipment deposits for the
 optical segment of the business. (8) USE OF ESTIMATES The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of income and
expenses during the reporting periods. Actual results in the future could vary
from the amounts derived from management's estimates and assumptions. (9) REVENUE RECOGNITION The Company recognizes
revenue from product sales at the time of shipment and when persuasive evidence
of an arrangement exists, performance of the Company's obligation is complete,
the price to the buyer is fixed or determinable, and collectibility is
reasonably assured.  In certain limited situations, customers have the
right to return products. Such rights of return, have not precluded revenue
recognition because the Company has a long history with such returns and
accordingly provides a reserve. 6 /  STKR2003 Form 10-Q
  Table of Contents
 Part I
 Item 1
 (10) RECENT ACCOUNTING
 PRONOUNCEMENTS In June,
 2002, FASB issued SFAS No. 146, Accounting for Cost Associated with Exit or Disposal Activities.
 SFAS No. 146 nullifies previous guidance on accounting for costs associated with exit or disposal
 activities and requires a liability for these costs to be recognized and measured at its fair value
 in the period in which the liability is incurred. SFAS No. 146 is effective for exit or disposal
 activities initiated after December 31, 2002. In November
 2002, the Financial Accounting Standards Board issued Financial Accounting Standards Board
 Interpretation No. 45, "Guarantor of Accounting and Disclosure Requirements for Guarantees,
 Including Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 elaborates on the
 disclosures to be made by a guarantor in its interim and annual financial statements about
 obligations under specified guarantees that have been issued. The interpretation also clarifies
 that a guarantor is required to recognize, at the inception of a guarantee, a liability for the
 fair value of the obligation undertaken in issuing the guarantee. The disclosure requirements of
 FIN 45 are effective for financial statements of interim or annual periods ending after December
 15, 2002. The recognition of a guarantor's obligation should be applied prospectively to guarantees
 issued after December 15, 2002. The
 adoption of FIN 45 did not have a material impact on the Company's financial position, results of
 operations or cash flows. (11) OFFICER NOTE RECEIVABLE As
 described in our annual report on Form 10-K, subsequent to the approval of the Board of Directors,
 the Company issued a promissory note to the chairman and chief executive officer of the Company on
 May 31, 2002 in the principal amount of $250,000. The note is payable upon demand and bears an
 annual interest rate of 4.5%. As of September 30, 2003, the Company has received $5,000 in payments
 and the principal and accrued interest outstanding is $248,750 and $11,250, respectively. (12) SEGMENT INFORMATION The Company has adopted the
SFAS No. 131, Disclosures About Segments of an Enterprise and Related
information. SFAS No. 131 requires financial and supplementary information
to be disclosed on an annual and interim basis of each reportable segment of an
enterprise. SFAS No. 131 also establishes standards for related disclosures
about product and services, geographic areas and major customers. Operating
segments are identified as components of an enterprise about which separate
discrete financial information is available for evaluation by the chief
decision-making group, in making decisions how to allocate resources and assess
performance. The Company's chief decision-maker is the chief executive
officer. The illumination segment
develops and manufactures specialized illumination products for the inspection,
machine vision, medical and military markets. Illumination products are sold
both through distributors as well as directly to original equipment
manufacturers (OEM's). The optical components segment develops and manufactures
specialty optical fibers and phase masks used primarily in sensor, gyroscope and
telecommunication equipment. Optical component products are sold primarily to
original equipment manufacturers (OEM's).
 
 The Company evaluates
performance and allocates resources based on revenues and operating income
(loss). The operating loss for each segment includes selling, research and
development and expenses directly attributable to the segment. In addition, the
operating loss includes amortization of acquired intangible assets, including
any impairment of these assets and of goodwill. The Company's non-allocable
overhead costs, which include corporate general and administrative expenses, are
allocated between the segments based upon an estimate of costs associated with
each segment. Segment assets include accounts receivable, inventory, machinery
and equipment, goodwill and intangible assets directly associated with the
product line segment.
 
 
 
 7 /  STKR2003 Form 10-Q
  Table of Contents
 Part I
 Item 1
 
 The Corporate assets
include cash and cash equivalents, buildings and furniture and
fixtures.
 Quarter
      Ended September 30, 2003Quarter
      Ended September 30, 2002IlluminationOptical
      ComponentsTotalIllumination(1)Optical
      ComponentsTotalNet sales$3,486$184$3,670$3,286$170$3,456Gross margin1,054(108)94666434698Operating loss(540)(1,624)(2,164)(498)(2,090)(2,588) Nine
      Months EndedSeptember 30, 2003Nine
      Months Ended September 30, 2002IlluminationOptical
      ComponentsTotalIllumination(1)Optical
      ComponentsTotalNet sales$10,060$780$10,840$9,060$827$9,887Gross margin3,009(328)2,6811,4751631,638Operating loss(1,925)(4,362)(6,287)(3,692)(7,080)(10,772) September 30, 2003December
      31, 2002IlluminationOptical
      ComponentsCorporateTotalIlluminationOptical
      ComponentsCorporateTotalTotal current assets$7,167$469$2,246$9,882$6,301$404$5,790$12,495Property, plant & equipment1,9077,79712,39522,0997779,69913,17423,650Intangible assets1,545--1,5451,785--1,785Goodwill2,677--2,6772,677--2,677Other assets--94194140559249713$13,296$8,266$15,582$37,144$11,945$10,162$19,213$41,320 (1) Illumination revenue in
2002 includes printer and recorder revenues which were transferred to an outside
distributor in 2003. The Company's export sales
are denominated in U.S. dollars. These sales are as follows:
 Three Months Ended September
      30,
    
    
    Nine Months Ended September
      30,Export sales by region (in thousands)
    

    2003

    

    2002

    

    2003

    

    2002United States
    
    $
    2,202
    
    
    $
    2,074
    
    $
    6,504
    
    
    $
    5,931Canada
    
    
    330
    
    
    
    311
    
    
    976
    
    
    
    890Europe
    
    
    807
    
    
    
    760
    
    
    2,384
    
    
    
    2,176Asia
    
    
    331
    
    
    
    311
    
    
    976
    
    
    
    890Total sales
    
    $
    3,670
    
    
    $
    3,456
    
    $
    10,840
    
    
    $
    9,887 
 8  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 1
 (13) DEBT The Company has various debt covenants under
 its multiple credit facilities. As of September 30, 2003, the Company was in compliance with all
 debt covenants. The specific covenants, which could require either amendment and/or waiver to
 remain in compliance as of December 31, 2003, are described in the footnotes below. Merrill Lynch Financial Services
 On September 30, 2003, the Company entered into an agreement to modify the terms of its credit
 facility with Merrill Lynch Business Financial Services. The new agreement provides a credit
 facility of $3,450,000 through a term note of $2,450,000 and a line of credit of $1,000,000. The
 new facility has a one year maturity and bears an interest rate of one month libor + 5.5%. On
 September 30, 2003 the interest rate was approximately 6.5%. Outstanding borrowings as of September
 30, 2003 were $3,173,000.
  Laurus Master Funds
 On September 24, 2003, the Company sold a Convertible Note
 to Laurus Master Funds, LTD. The
 $2,500,000 Convertible Note matures on September 24, 2006, bears interest at a rate equal to the
 Prime Rate plus 3. 5%, but in no event less than 7.5%, and provides the holder with the option to
 convert the loan to common stock at $1.07 per share subject to certain adjustment features.
 StockerYale has the right to elect to make the monthly required payments on the convertible note
 (comprised of principal amortization and interest) in the form of shares of common stock,
 determined based on the $1.07 conversion price, as adjusted from time to time. The Company also
 issued to the holder seven-year warrants to purchase shares in the following warrant amounts and
 exercise prices per share of common stock: 225,000 shares at $1.23 per share, 150,000 shares at
 $1.34 per share and 100,000 shares at $1.44 per share.
 The Company can
  elect to pay monthly principal amortization in cash at 103% of the principal amount. The Company
  may also elect to pay both principal amortization and interest in common stock, if the market
  price of the the stock at the time of the payment is  110% of the fixed conversion price. The
  Company may elect to redeem the principal amount outstanding at 120% within the first year, 115%
  within the second year and 110% during the third year. The principal amortization payments begin
  120 days from the execution of the agreement at a rate of $78,125 per month. As of September 30,
  2003, $781,250 has been classified as short-term debt and $1,718,750 has been classified as
  long-term debt. As of September 30, 2003, $2,500,000 was
 outstanding under the convertible note. The aggregate purchase price of the convertible note and
 warrants ($2,500,000) was allocated between the note, the common stock conversion option and warrants based upon
 their relative fair market value. The purchase price assigned to the note, common stock beneficial conversion option and
 warrants was $1,553,000, $546,000 and $401,000 respectively. The difference between the face amount
 of the convertible note of $2.5 million and the aggregate purchase price of the convertible note  of
 $1,553,000 was recorded as a debt discount and is being amortized over the life of the convertible
 note. Bank of Ireland
 On September 24, 2003, StockerYale, Inc. entered into a guarantee of a Euros125,000 in connection with
 a credit facility provided by the Bank of Ireland to StockerYale Ireland. The credit facility
 provides a Euro 50,000 line of credit and a Euro 75,000 overdraft facility. The credit facility is
 secured by the assets of StockerYale Ireland and StockerYale, Inc.'s guarantee and bears a variable interest rate approximating 9.0%.
 The facility is subject to an annual renewal. Outstanding borrowings as of September 30, 2003 were
 $181,000 US.
  TJJ Corporation
 On September 18, 2003,
 the Company entered into an agreement with TJJ Corporation amending the $5,000,000
term note maturing in December 27, 2005.   The new agreement results in loan amortization commencing in October
2003 and a reduction in the stockholders' equity covenant from $22,000,000 to $20,000,000.  As of
  September 30, 2003, the Company's stockholders' equity was $21,062,000. The new principal
amortization is $100,000 per month for three months, $150,000 for the next three months and $200,000 per month
for the following eleven months. The maturity was also changed to March 1, 2005.  All other terms of the term
note remained the same. Outstanding borrowings as of September 30, 2003 were $5,000,000.
  9  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Items 1,  2
 National Bank of Canada
 On August 23, 2003, the Company amended its credit facility with National
  Bank of Canada reducing the restricted term deposit from C$1,000,000 ($740,000 US)to C$250,000
  ($185,000 US) and reducing the term loan from C$2,300,000 ($1,702,000 US) to C$1,550,000
  ($1,147,000 US) . The net availability of the term loan remained the same. In addition, the bank
  added Canadian Provincial Government research and development tax credits as additional eligible
  accounts receivable, which increased the availability of the revolving credit facility by
  approximately C$300,000 ($222,000 US). All other terms of the credit facility remained the same,
  including StockerYale, Inc.'s guarantee to fund StockerYale Canada's deficits if requested by the
  bank.
 StockerYale Canada is required by the credit facility to reduce inventory levels to
   C$3,000,000 ($2,220,000 US) by December 31, 2003. As of September 30, 2003, StockerYale Canada's
   inventory balance was C$3,900,000 ($2,855,000 US). Outstanding borrowings as of September 30,
 2003 were C$3,490,000 ($2,582,000 US). Item
2.     MANAGEMENT'S DISCUSSION AND ANALYSISOF FINANCIAL
CONDITION AND OPERATING RESULTS This Quarterly Report
on Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act
of 1934. The company's actual results could differ materially from those set
forth in the forward-looking statements. When the Company uses words such as "anticipate," "believe," "estimate," "expect," "intend," and other similar
expressions, they generally identify forward-looking statements. Forward-looking
statements include, for example, statements relating to acquisitions and related
financial information, development activities, business strategy and prospects,
future capital expenditures, sources and availability of capital, environmental
and other regulations and competition. Investors should exercise caution in
interpreting and relying on forward-looking statements since they involve known
risks, uncertainties and other factors which are, in some cases, beyond the
company's control and could materially affect the Company's actual results,
performance or achievements. Such factors include, without limitation: market
conditions that could make it more difficult or expensive for the Company to
obtain the necessary capital to finance its research and development projects,
operations, as well as its ability to refinance existing debt; the existence of
other independent suppliers of optical fiber, who may have greater resources
than the Company; and the uncertainty that the company's significant investments
in research and development will not result in products that achieve market
acceptance. Additional such factors are discussed in the section entitled
"certain factors affecting future operating results" on page 20 of the Company's
annual report on form 10-K for the fiscal year ended December 31,
2002. RESULTS OF OPERATIONS  The following discussion
should be read in conjunction with the attached unaudited condensed consolidated
financial statements and notes thereto and with our audited financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2002. THREE MONTHS ENDED SEPTEMBER 30, 2003 AND
2002 Net Sales Net revenue increased 6.2% to $3.7 million in
 the third quarter of 2003 from $3.5 million for the same period in 2002. The Company achieved an
 18% growth rate in its illumination sales, which offset flat revenues in the optical sector and a
 $0.3 million decline in the printer and recorded product line, which the Company transferred to a
 distributor in November of 2002. Record LED shipments from the Company's Irish subsidiary was the
 principal factor for higher illumination sales. Excluding the printer and recorder product line,
 sales increased 16.1% for the third quarter versus the comparable quarter in 2002. 10  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 2
 Gross Profit Gross margins improved from
$0.7 million or 20% of sales in 2002 to $1.0 million or 26% of sales in 2003 as
increased sales and lower manufacturing overhead contributed incremental profits
of $0.1 million and $0.2 million, respectively. Operating Expenses Operating expenses,
 excluding an asset impairment charge of $0.6 million, decreased
$0.8 million or 24% from $3.3 million in the third quarter of 2002 to $2.5
million in the third quarter of 2003. Research and development expenses
declined $0.7 million or 44% due to reduced salaries and benefits, lower
development costs and the elimination of  joint venture expenditures. Lower
salaries and commissions combined with tighter marketing expenditures resulted
in a $0.1 million or 17% decline in selling expenditures. General and
administrative expenses were level at $1.0 million as lower salaries were offset by higher professional fees. Interest Expense Interest expense was $290,000
in the third quarter of fiscal 2003 compared to $95,000 in 2002 due to both
higher interest rates and a higher level of borrowing. Asset Impairment The $0.6
 million asset impairment charge represents the costs related to closing our Maryland specialty
 optical fiber facility and the write-off of equipment deposits for the
 optical segment of the business. NINE MONTHS ENDED SEPTEMBER 30, 2003 AND
2002 Net Sales Revenues increased $1.0 million or 10% to $10.8
 million as higher illumination sales, especially in the laser and LED product lines, offset lower
 phase mask sales and the transfer of the printer and recorder product line in 2002. Excluding the
 printer and recorder product line, revenues in 2003 increased 20% compared to 2002. Gross Profit Gross margins
 improved
$1.0 million or 64%  in 2003 to $2.7 million or 25% of sales as increased
sales and lower manufacturing overhead contributed incremental profits of $0.3
million and $0.7 million, respectively.
 11  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 2
 Operating Expenses Operating expenses,
 excluding an asset impairment charge of $0.6 million, decreased
$4.1 million or 33% from $12.4 million for the first nine months of 2002 to $8.4
million in the first nine months of 2003. Research and development expenses
declined $2.6 million or 50% due to reduced salaries, lower development costs
and the elimination of joint venture expenditures. Lower salaries combined with tighter marketing expenditures
resulted in a $0.5 million or 18% decline in selling expenditures. General and
administrative expenses were reduced $1.0 million or 22% due to lower salaries,
 insurance and professional fees. Interest Expense Interest expense was $727,000
for the nine months ended September 30, 2003 compared to $265,000 in 2002 due to both
higher interest rates and a higher level of borrowing. LIQUIDITY AND CAPITAL RESOURCES As discussed
 in both the previously filed Form 10-K for the year ended December 31, 2002 and Form 10-Q for the
 quarters ended March 31, 2003 and June 30, 2003, the Company continues to pursue various options to
raise additional capital to finance operations. Two of these options were
consummated in the second quarter of 2003, including the completion of
refinancing the Company's Canadian subsidiary's credit facility with the
National Bank of Canada and closing a $1.2 million equity placement with several
of the Company's institutional investors. The new National Bank of Canada credit
facility did not raise any additional capital. The new facility principally
retired the Toronto Dominion (TD) Bank facility upon closing, however, the new
facility provides the Company incremental future financing beyond the levels
available under the TD Bank loan agreement. The private placement of $1,200,000
was composed of 1,610,000 shares of common stock at $0.60 per share plus
$270,000 convertible at $0.60 per share less issuance expenses. During the
 third quarter of 2003, the Company closed a $2.5 million (net proceeds $2.3 million) convertible note with Laurus Master Funds,
 LTD. The note bears an interest rate of Prime plus 3.5% and provides Laurus Master Funds with the
 right to convert the note into common stock at $1.07 per share.  In addition, the company established a new $3.5 million credit facility with
 Merrill Lynch Business financial Services, which increased its borrowing capacity by $0.3 million.
 The
 Company also submitted a proposal in the third quarter for a Canadian government development loan.
 The Company anticipates a decision by the Canadian government in the fourth quarter with funding
 commencing in the first quarter of 2004. The Company is also evaluating various asset disposition
 options, including both equipment and building sales to reduce debt and improve cash flow. For the nine months ended
 September 30, 2003, cash decreased $0.7 million. Cash
used in operating activities was $4.6 million for the period ended September 30, 2003
which primarily resulted from an operating loss of $7.0 million, partially offset by a $2.1 million in depreciation and
amortization and an asset impairment charge of $0.6 million.
 12  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 2
 Cash from
 financing activities was $3.5 million as a result of proceeds from the sale of common stock of $1.1
 million and the term note with Laurus Master Funds of $2.3 million. The remaining debt changes due to
 refinancing were effectively cash neutral. Investing activities provided
$0.4 million principally due to proceeds from a land sale in Montreal. Laurus Master Funds
 On September 24, 2003, the Company sold a Convertible Note
 to Laurus Master Funds, LTD. The
 $2,500,000 Convertible Note matures on September 24, 2006, bears interest at a rate equal to the
 Prime Rate plus 3. 5%, but in no event less than 7.5%, and provides the holder with the option to
 convert the loan to common stock at $1.07 per share subject to certain adjustment features.
 StockerYale has the right to elect to make the monthly required payments on the convertible note
 (comprised of principal amortization and interest) in the form of shares of common stock,
 determined based on the $1.07 conversion price, as adjusted from time to time. The Company also
 issued to the holder seven-year warrants to purchase shares in the following warrant amounts and
 exercise prices per share of common stock: 225,000 shares at $1.23 per share, 150,000 shares at
 $1.34 per share and 100,000 shares at $1.44 per share. The Company can
  elect to pay monthly principal amortization in cash at 103% of the principal amount. The Company
  may also elect to pay both principal amortization and interest in common stock, if the market
  price of the the stock at the time of the payment is  110% of the fixed conversion price. The
  Company may elect to redeem the principal amount outstanding at 120% within the first year, 115%
  within the second year and 110% during the third year. The principal amortization payments begin
  120 days from the execution of the agreement at a rate of $78,125 per month. As of September 30,
  2003, $781,250 has been classified as short-term debt and $1,718,750 has been classified as
  long-term debt.
 As of September 30, 2003, $2,500,000 was
 outstanding under the convertible note. The aggregate purchase price of the convertible note and
 warrants ($2,500,000) was allocated between the note, the common stock conversion option and warrants based upon
 their relative fair market value. The purchase price assigned to the note, common stock beneficial conversion option and
 warrants was $1,553,000, $546,000 and $401,000 respectively. The difference between the face amount
 of the convertible note of $2.5 million and the aggregate purchase price of the convertible note  of
 $1,553,000 was recorded as a debt discount and is being amortized over the life of the convertible
 note.


TJJ Corporation


On September 18, 2003, the Company entered into an agreement with TJJ Corporation amending the $5,000,000
term note maturing in December 27, 2005.   The new agreement results in loan amortization commencing in October
2003 and a reduction in the stockholders' equity covenant from $22,000,000 to $20,000,000.  The new principal
amortization is $100,000 per month for three months, $150,000 for the next three months and $200,000 per month
for the following eleven months. The maturity was also changed to March 1, 2005.  All other terms of the term
note remained the same. As of September 30,
 2003, $5,000,000 was outstanding under the Term Note and the Company was in compliance with the
 covenants of the Term Note. The Company's stockholders' equity was $21,060,000 at September 30,
 2003.





|13  /  STKR |  | 2003 Form 10-Q
|----------- |  | --------------

---

Table of Contents


Part I


Item 2


Merrill Lynch Financial Services
 On September 30, 2003, the Company entered into an agreement to modify the term of its credit
 facility with Merrill Lynch Business Financial Services. The new agreement provides a credit
 facility of $3,450,000 through a term note of $2,450,000 and a line of credit of $1,000,000. The
 new facility has a one year maturity and bears an interest rate of one month libor + 5.5%.  On
 September 30, 2003 the interest rate was approximately 6.5%.
 As of September 30, 2003, $2,450,000 was outstanding under the term note and approximately $723,000
 was outstanding under the line of credit.
 The Company's obligations
under this credit facility are secured by substantially all the Company's Salem
assets, excluding real property. In addition, the Company is required to maintain a $10.0 million
 tangible net worth. The Company was in compliance with all provisions of the credit agreement as of
 September 30, 2003. National Bank of
Canada
 On May 26, 2003, the Company entered into a credit
agreement with the National Bank of Canada replacing the facility with Toronto
Dominion Bank. The new agreement provides total borrowing availability up to
$4,050,000 CDN ($3,000,000 US). Initial proceeds were used to pay off the credit agreement with
Toronto Dominion Bank.
  The credit facility consists of a $2,500,000 CDN
 ($1,850,000 US) line of credit secured by accounts receivable and inventory bearing a variable
 interest rate of Canadian prime rate plus 1.5% and a $1,550,000 CDN ($1,150,000 US) ten year term
 note bearing a variable interest rate of Canadian prime rate plus 2.25%.  As of September 30, 2003, $1,994,921 CDN ($1,475,000 US) was outstanding under the line
of credit and $1,492,500 CDN ($1,104,000 US) was outstanding under the term note. As of
September 30, 2003 the interest rate on the line of credit and the term note
were 6.50% and 7.25%, respectively.  The National Bank of Canada credit facility requires the following
financial covenants including: working capital, net worth, capital expenditures,
a financial coverage ratio and maximum inventory levels. The Company's Canadian
subsidiary was in compliance with all provisions of the credit agreement as of
September 30, 2003.  StockerYale Canada is required by the credit facility to reduce inventory levels to
 C$3,000,000 ($2,220,000 US) by December 31, 2003. As of September 30, 2003, StockerYale Canada's
 inventory balance was C$3,900,000 ($2,855,000 US). CRITICAL ACCOUNTING
POLICIES, COMMITMENTS AND CERTAIN OTHER MATTERS The Company considered the
disclosure requirements of FR-60 regarding critical accounting policies and
FR-61 regarding liquidity and capital resources, certain trading activities and
related party/certain other disclosures, and concluded that nothing materially
changed during the quarter that would warrant further disclosure under these
releases.


14  /  STKR2003 Form 10-Q  Table of Contents
 Part I
 Item 3


ITEM 3.   
 QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

FOREIGN CURRENCY EXCHANGE RISK

Management has determined
that all of the Company's foreign subsidiaries operate primarily in local
currencies that represent the functional currencies of the subsidiaries. All
assets and liabilities of foreign subsidiaries are translated into U.S. dollars
using the exchange rate prevailing at the balance sheet date, while income and
expense accounts are translated at average exchange rates during the year. As
such, the Company's operating results are affected by fluctuations in the value
of the U.S. dollar as compared to currencies in foreign countries, as a result
of the Company's transactions in these foreign markets. The Company does not
operate a hedging program to mitigate the effect of a significant rapid change
in the value of the Canadian Dollar or Euro as compared to the U.S. dollar. If
such a change did occur, the Company would have to take into account a currency
exchange gain or loss in the amount of the change in the U.S. dollar denominated
balance of the amounts outstanding at the time of such change. While the Company
does not believe such a gain or loss is likely, and would not likely be
material, there can be no assurance that such a loss would not have an adverse
material effect on the Company's results of operations or financial
condition.

INTEREST RATE
RISK

The Company is exposed to
market risk from changes in interest rates, which may adversely affect its
financial position, results of operations and cash flows. In seeking to minimize
the risks from interest rate fluctuations, the Company manages exposures through
its regular operating and financing activities. The Company is exposed to
interest rate risk primarily through its borrowings under its $2.5 million
credit line and $3.5 million Reducing Revolver with Merrill Lynch with an
interest rate at 2.5% over the one month LIBOR and its $4.8 million CDN credit
facility with the National Bank of Canada with interest rates of 1.5% and 2.5%
over the Canadian prime rate. As of June 30, 2003 the fair market value of the
Company's outstanding debt approximates its carrying value due to the short-term
maturities and variable interest rates. A 1% change in interest rates could
increase or decrease interest expense by approximately $120,000 on an annual
basis.

ITEM 4.   
 CONTROLS AND PROCEDURES

(a) Evaluation of disclosure
controls and procedures.

As required by new Rule
13a-15 under the Securities Exchange Act of 1934, within the 90 days prior to
the date of this report, the Company carried out an evaluation under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. In connection with
the new rules, we currently are in the process of further reviewing and
documenting our disclosure controls and procedures, including our internal
controls and procedures for financial reporting, and may from time to time make
changes aimed at enhancing their effectiveness and to ensure that our systems
evolve with our business.

(b) Changes in internal
controls

None

|15  /  STKR |  | 2003 Form 10-Q
|----------- |  | --------------

---

Table of Contents


Part II


Item 1


Item 1.    
 LEGAL PROCEEDINGS

At times the company may be
involved in disputes and/or litigation with respect to its products and
operations in its normal course of business. The company does not believe that
the ultimate impact of the resolution of such matters would have a material
adverse effect on the company's financial condition or results of operations.
The company is not currently involved in any legal proceedings.

Item 2.    CHANGES IN SECURITIES AND USE
OF PROCEEDS

Not applicable.

Item 3.    DEFAULTS UPON SENIOR
SECURITIES

Not applicable.

Item 4.    SUBMISSION
 OF MATTERS TO A VOTE OF SECURITY

Not applicable.

Item 5.    OTHER INFORMATION Not applicable. Item 6.    EXHIBITS, LISTS AND REPORTS ON
FORM 8-K (a)  The following is a
complete list of exhibits filed as part of this Form 10-Q:





Exhibit
Number    
   Description


31.1          
      CEO Certification


31.2          
      CFO Certification


32.1          
      CEO Certification


32.2          
      CFO Certification


(b)  Reports on
Form 8-K: None

|16  /  STKR |  | 2003 Form 10-Q
|----------- |  | --------------

---

Table of Contents Part II


SIGNATURES

Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereto duly
authorized.

|StockerYale, Inc. |                                            
|----------------- | -------------------------------------------
|                  |                                            
|                  |                                            
|November 14, 2003 | /s/ Mark W. Blodgett                       
|                  | Mark W. Blodgett,                          
|                  | Chairman and Chief Executive
      Officer 
|                  |                                            
|November 14, 2003 | /s/ Francis J. O'Brien                     
|                  | Francis J. O'Brien,                        
|                  | Chief Financial Officer and
      Treasurer
|                  |                                            




|17  /  STKR |  | 2003 Form 10-Q
|----------- |  | --------------

---

EXHIBIT31.1

CERTIFICATION

I, Mark W. Blodgett, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of StockerYale, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to make the statements
   made, in light of the circumstances under which such statements were made, not misleading with
   respect to the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects the financial
   condition, results of operations and cash flows of the registrant as of, and for, the periods
   presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing
   and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
   15d-15(e)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or
   caused such disclosure controls and procedures to be designed under our supervision, to ensure
   that material information relating to the registrant, including its consolidated subsidiaries, is
   made known to us by others within those entities, particularly during the period in which this
   report is being prepared;

b)     [Omitted pursuant to SEC Release Nos. 33-8238 and
   34-47986];

c)     Evaluated the effectiveness of the registrant's
   disclosure controls and procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the period covered by
   this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant's
   internal control over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has
   materially affected, or is reasonably likely to materially affect, the registrant's internal
   control over financial reporting; and

5. The registrant's other certifying
   officer(s) and I have disclosed, based on our most recent evaluation of internal control over
   financial reporting, to the registrant's auditors and the audit committee of the registrant's
   board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in
   the design or operation of internal control over financial reporting which are reasonably likely
   to adversely affect the registrant's ability to record, process, summarize and report financial
   information; and

b)     Any fraud, whether or not material, that involves
   management or other employees who have a significant role in the registrant's internal control
   over financial reporting.

|Date:   November 14, 2003 | /s/ Mark W. Blodgett                
|------------------------- | ------------------------------------
|                          | Mark W. Blodgett                    
|                          | Chairman and Chief Executive Officer




|Exhibit 31.1  /  STKR |  | 2003 Form 10-Q
|--------------------- |  | --------------

---

EXHIBIT 31.2

CERTIFICATION

I, Francis J. O'Brien, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of StockerYale, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to make the statements
   made, in light of the circumstances under which such statements were made, not misleading with
   respect to the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects the financial
   condition, results of operations and cash flows of the registrant as of, and for, the periods
   presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing
   and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
   15d-15(e)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or
   caused such disclosure controls and procedures to be designed under our supervision, to ensure
   that material information relating to the registrant, including its consolidated subsidiaries, is
   made known to us by others within those entities, particularly during the period in which this
   report is being prepared;

b)     [Omitted pursuant to SEC Release Nos. 33-8238 and
   34-47986];

c)     Evaluated the effectiveness of the registrant's
   disclosure controls and procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the period covered by
   this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant's
   internal control over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has
   materially affected, or is reasonably likely to materially affect, the registrant's internal
   control over financial reporting; and

5. The registrant's other certifying
   officer(s) and I have disclosed, based on our most recent evaluation of internal control over
   financial reporting, to the registrant's auditors and the audit committee of the registrant's
   board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in
   the design or operation of internal control over financial reporting which are reasonably likely
   to adversely affect the registrant's ability to record, process, summarize and report financial
   information; and

b)     Any fraud, whether or not material, that involves
   management or other employees who have a significant role in the registrant's internal control
   over financial reporting.

|Date:    November 14, 2003 | /s/ Francis J. O'Brien 
|-------------------------- | -----------------------
|                           | Francis J. O'Brien     
|                           | Chief Financial Officer




|Exhibit 31.2  /  STKR |  | 2003 Form 10-Q
|--------------------- |  | --------------

---



EXHIBIT32.1


CERTIFICATION

The undersigned officer of StockerYale, Inc. (the "Company") hereby certifies that
   the Company's quarterly report on Form 10-Q to which this certification is attached, as filed
   with the Securities and Exchange Commission on the date hereof, fully complies with the
   requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as
   amended, and that the information contained in the Report fairly presents, in all material
   respects, the financial condition and results of operations of the Company. This certification is
   provided solely pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K ("Item
   601(b)(32)") promulgated under the Securities Act of 1933, as amended (the "Securities Act"), and
   the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (A) shall
   not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the
   liability of that section, and (B) shall not be deemed to be incorporated by reference into any
   filing under the Securities Act or the Exchange Act, except to the extent that the Company
   specifically incorporates it by reference.

|Date: November 14, 2003 | Name:  | /s/ Mark W. Blodgett                | 
|----------------------- | ------ | ----------------------------------- | 
|                        |        | Mark W. Blodgett                   
|                        |        |                                    
|                        |        |                                    
|                        | Title: | Chairman andChief Executive Officer










|Exhibit 32.1  /  STKR |  | 2003 Form 10-Q
|--------------------- |  | --------------

---



EXHIBIT32.2


CERTIFICATION

The undersigned officer of StockerYale, Inc. (the "Company") hereby certifies that
   the Company's quarterly report on Form 10-Q to which this certification is attached, as filed
   with the Securities and Exchange Commission on the date hereof, fully complies with the
   requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as
   amended, and that the information contained in the Report fairly presents, in all material
   respects, the financial condition and results of operations of the Company. This certification is
   provided solely pursuant to 18 U.S.C. Section 1350 and Item 601(b)(32) of Regulation S-K ("Item
   601(b)(32)") promulgated under the Securities Act of 1933, as amended (the "Securities Act"), and
   the Exchange Act. In accordance with clause (ii) of Item 601(b)(32), this certification (A) shall
   not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the
   liability of that section, and (B) shall not be deemed to be incorporated by reference into any
   filing under the Securities Act or the Exchange Act, except to the extent that the Company
   specifically incorporates it by reference.

|Date: November14, 2003 | Name:  | /s/
                                                                                                 Francis J. O'Brien                                                                                                                                                                                                                 | 
|---------------------- | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                       |        | Francis  J. O'Brien                                                                                                                                                                                                                                                                                                                    
|                       |        |                                                                                                                                                                                                                                                                                                                                        
|                       |        |                                                                                                                                                                                                                                                                                                                                        
|                       | Title: | Chief
                                                                                                 Financial
                                                                                                 Officer
                                                                                                 andTreasurer



|Exhibit 32.2  /  STKR | END | 2003 Form 10-Q
|--------------------- | --- | --------------