IRIDEX CORP
For the period ended Sep 28, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Nov 12, 2024
IRIX$0.66-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-08.
0000950170-24-094090
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-11-12.
0000950170-24-125541
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 73 current paragraphs.
51 unchanged; 21 reworded; 1 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
For the nine months ended September 28, 2024, net cash $2.8 million was provided by financing activities of issuance of convertible notes, net. For the nine months ended September 30, 2023, net cash used in financing activities was $50 thousand.
Removed paragraphs (1)
Previous report
For the six months ended June 29, 2024, no net cash was used in financing activities. For the six months ended July 1, 2023, net cash used in financing activities was $26 thousand, primarily for taxes related to net share settlement of equity awards partially offset by the net proceeds arising from stock option exercises.
Reworded paragraphs (21)
Previous wording
Our total revenues decreased by $0.2 million, or 1.7%, from $12.9 million to $12.6 million. The decrease was driven by overall softer demand in our Glaucoma "Cyclo G6" product lines, partially offset by increases in Medical Retina PASCAL products, and lower royalties due to the expiration of licensed patents.
Current wording
Our total revenues decreased by $1.3 million, or 9.9%, from $12.9 million to $11.6 million. The decrease was driven by overall softer demand in our Retina product lines and lower royalties due to the expiration of licensed patents, partially offset by increases Glaucoma "Cyclo G6" product lines.
Previous wording
Gross profit decreased $0.2 million, or 4.3% from $5.3 million to $5.1 million. Gross margin decreased by 1% from 41.7% to 40.7%. The decrease in gross margin was driven by lower royalty revenues.
Current wording
Gross profit decreased $1.3 million, or 23.1% from $5.6 million to $4.3 million. Gross margin decreased by 6.4% from 43.7% to 37.3%. The decrease in gross margin was driven by lower royalty revenues.
Previous wording
Research and development expenses decreased by $0.3 million, or 18.6% from $1.8 million to $1.5 million. Spending on investment in PASCAL product line and on new and expanded product portfolio decreased as we completed these projects.
Current wording
Research and development expenses decreased by $0.2 million, or 15.7% from $1.5 million to $1.3 million. Spending on investment in PASCAL product line and on new and expanded product portfolio decreased as we completed these projects.
Previous wording
Sales and marketing expenses decreased $0.8 million, or 18.2%, from $4.3 million to $3.5 million. The decrease was related to lower sales costs associated with lower commissions and reduction on headcount.
Current wording
Sales and marketing expenses decreased $1.2 million, or 30.8%, from $3.8 million to $2.6 million. The decrease was related to lower sales costs associated with lower commissions and reduction on headcount.
Previous wording
General and administrative expenses increased by $0.6 million, or 29.7% from $2.2 million to $2.8 million. The increase is a result of higher consulting costs and deal related legal expenses.
Current wording
General and administrative expenses increased by $0.3 million, or 15.6% from $1.9 million to $2.2 million. The increase is a result of higher consulting costs and deal related legal expenses.
Previous wording
Other expense, net was $22 thousand for the three months ended June 29, 2024 compared to other income, net, of $0.1 million for the three months ended July 1, 2023. Other income (expense), net, consisted primarily of interest income or expense and foreign currency gain or loss.
Current wording
Other expense, net was $46 thousand for the three months ended September 28, 2024 compared to other expense, net, of $58 thousand for the three months ended September 30, 2023. Other income (expense), net, consisted primarily of interest income or expense and foreign currency transaction gain or loss.
Previous wording
We recorded an income tax provision of $19 thousand and $10 thousand for the three months ended June 29, 2024 and July 1, 2023, respectively.
Current wording
We recorded an income tax provision of $17 thousand and $8 thousand for the three months ended September 28, 2024 and September 30, 2023, respectively.
Previous wording
The following comparisons are between the six months ended June 29, 2024 and July 1, 2023 (in thousands):
Current wording
The following comparisons are between the nine months ended September 28, 2024 and September 30, 2023 (in thousands):
Previous wording
Our total revenues decreased by $2.2 million, or 8.2%, from $26.6 million to $24.4 million. The decrease was driven by softer demand in our Glaucoma product lines, partially offset by increases in Medical Retina PASCAL products, and lower royalties due to the expiration of licensed patents.
Current wording
Our total revenues decreased by $3.4 million, or 8.7%, from $39.4 million to $36.0 million. The decrease was driven by softer demand in our Glaucoma and Retina product lines, and by lower royalties due to the expiration of licensed patents.
Previous wording
Gross profit decreased $1.7 million, or 3.2%, from $11.3 million to $9.6 million. Gross margin decreased by 3.2% from 42.5% to 39.3%. The decrease in gross margin was driven by lower revenues and manufacturing overhead absorbed by less royalty revenue.
Current wording
Gross profit decreased $3.0 million, or 17.8%, from $16.9 million to $13.9 million. Gross margin decreased by 4.2% from 42.9% to 38.7%. The decrease in gross margin was driven by lower revenues and higher manufacturing overhead absorbed by less revenue.
Previous wording
Research and development expenses decreased by $0.6 million, or 15.5%, from $3.6 million to $3.0 million. Spending on investment in PASCAL product line and on new and expanded product portfolio decreased as we completed these new projects. We implemented cost savings measures including reductions in workforce that resulted in lower headcount expenses.
Current wording
Research and development expenses decreased by $0.8 million, or 15.6%, from $5.1 million to $4.3 million. Spending on investment in PASCAL product line and on new and expanded product portfolio decreased as we completed these new projects. We implemented cost savings measures including reductions in workforce that resulted in lower headcount expenses.
Previous wording
Sales and marketing expenses decreased by $1.3 million, or 15.4%, from $8.5 million to $7.2 million. The decrease was related to the reduction in headcount and lower consulting and travel expenses.
Current wording
Sales and marketing expenses decreased by $2.5 million, or 20.1%, from $12.4 million to $9.9 million. The decrease was related to the reduction in headcount and lower consulting and travel expenses.
Previous wording
General and administrative expenses increased by $0.9 million, or 19.4%, from $4.4 million to $5.3 million. The increase is a result of higher consulting costs and deal related legal expenses.
Current wording
General and administrative expenses increased by $1.2 million, or 18.3%, from $6.3 million to $7.5 million. The increase is a result of higher consulting costs and deal related legal expenses.
Previous wording
Other expense, net increased by $0.6 million from net income of $0.4 million to net other expense, net of $0.2 million for the six months ended June 29, 2024. Other income (expense), net, consisted primarily of interest income or expense and foreign currency gain or loss.
Current wording
Other expense, net increased by $0.5 million from net income of $0.3 million to net other expense, net of $0.2 million for the nine months ended September 28 2024. Other income (expense), net, consisted primarily of interest income or expense and foreign currency transaction gain or loss.
Previous wording
We recorded an income tax provision of $57 thousand and $22 thousand for the six months ended June 29, 2024 and July 1, 2023, respectively.
Current wording
We recorded an income tax provision of $74 thousand and $30 thousand for the nine months ended September 28, 2024 and September 30, 2023, respectively.
Previous wording
As of June 29, 2024, we had cash and cash equivalents of $4.1 million and working capital of $8.9 million compared to cash and cash equivalents of $7.0 million and working capital of $14.5 million as of December 30, 2023.
Current wording
As of September 28, 2024, we had cash and cash equivalents of $3.9 million and working capital of $8.5 million compared to cash and cash equivalents of $7.0 million and working capital of $14.5 million as of December 30, 2023.
Previous wording
Net cash used in operating activities was $3.0 million in the six months ended June 29, 2024 compared to net cash used in operating activities of $4.0 million in the six months ended July 1, 2023. The decrease in net cash used in operating activities, expressed in direct cash flow terms, was primarily due to cash provided by inventory, prepaids, and other current assets and accrued expenses, offset by increases in cash used in accounts payable.
Current wording
Net cash used in operating activities was $6.0 million in the nine months ended September 28, 2024 compared to net cash used in operating activities of $5.8 million in the nine months ended September 30, 2023. The increase in net cash used in operating activities, expressed in direct cash flow terms, was primarily due to cash used in inventory, prepaids, and other current assets and accrued expenses, partially offset by decreases in cash paid to accounts payable and increased cash collections from accounts receivable.
Previous wording
For the six months ended June 29, 2024, and July 1, 2023 net cash used in investing activities was $3 thousand and $59 thousand, respectively, which consisted of capital expenditures.
Current wording
For the nine months ended September 28, 2024, and September 30, 2023 net cash used in investing activities was $4 thousand and $141 thousand, respectively, which consisted of capital expenditures.
Previous wording
We have historically funded our operations primarily through sales of our products to customers, sales of our common stock and borrowing arrangements. As of June 29, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $4.1 million. We have incurred net losses over the last several years, and as of June 29, 2024, have an accumulated deficit of approximately $85.2 million. We expect to continue to incur operating losses and negative cash flows from operations.
Current wording
We have historically funded our operations primarily through sales of our products to customers, sales of our common stock and borrowing arrangements. As of September 28, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $3.9 million. We have incurred net losses over the last several years, and as of September 28, 2024, have an accumulated deficit of approximately $89.6 million. We expect to continue to incur operating losses and negative cash flows from operations.
Previous wording
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. For the six months ended June 29, 2024, we implemented cost savings initiatives to increase operational efficiencies across all departments, which we expect will decrease our operating expenses and increase working capital over the next five quarters. Based on these cost savings initiatives implemented by us and the closing of the $3.4 million Note with Lind (with an option to have an additional $1.5 million Subsequent Note), management believes we have alleviated substantial doubt about our ability to satisfy our liquidity needs over the next 12 months.
Current wording
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern. For the nine months ended September 28, 2024, we implemented cost savings initiatives to increase operational efficiencies across all departments, which we expect will decrease our operating expenses and increase working capital through January 3, 2026. Based on these cost savings initiatives implemented by us and the closing of the $3.4 million Note with Lind (with an option to have an additional $1.5 million in a Subsequent Note), management believes we have alleviated substantial doubt about our ability to satisfy our liquidity needs over the next 12 months.
Previous wording
Subsequent to the second quarter close, on August 7, 2024, we closed a Note with Lind and raised net proceeds of approximately $3.4 million. These funds are sufficient to meet our immediate and near-term capital requirements. Our future capital requirements will depend on many factors, including our strategic alternatives, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, the introduction of new and enhanced products and our costs to implement new manufacturing technologies. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Any debt financing obtained by us in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Additionally, if we raise additional funds through further issuances of equity, our existing stockholders could suffer dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be limited.
Current wording
On August 7, 2024, we closed a Note with Lind and raised net proceeds of approximately $3.4 million. These funds are sufficient to meet our immediate and near-term capital requirements. Our future capital requirements will depend on many factors, including our strategic alternatives, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, the introduction of new and enhanced products and our costs to implement new manufacturing technologies. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Any debt financing obtained by us in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Additionally, if we raise additional funds through further issuances of equity, our existing stockholders could suffer dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be limited.