IRIDEX CORP
For the period ended Mar 29, 2025. Filed May 13, 2025.
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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.
Mar 29, 2025 · Filed May 13, 2025
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 2024-09-28; filed 2024-11-12.
0000950170-24-125541
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-29; filed 2025-05-13.
0000950170-25-070469
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 55 current paragraphs.
36 unchanged; 13 reworded; 6 added; 20 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (6)
Current report
Our total revenues increased by $0.1 million, or 1.1%, from $11.8 million to $11.9 million. The increase was driven by an increase in our glaucoma product group and in services and other revenue, partially offset by a decrease in our retina products.
Current report
Gross profit increased $0.6 million, or 13.4% from $4.5 million to $5.1 million. Gross margin increased by 4.6% from 37.9% to 42.5%. The increase in gross margin was the result of lower manufacturing expenses and a more favorable product mix.
Current report
Research and development expenses decreased by $0.7 million, or 43.0% from $1.6 million to $0.9 million. The decrease was related to our cost savings measures we implemented, resulting in lower headcount expenses. Spending on investment in new and expanded products was also curtailed.
Current report
Sales and marketing expenses decreased $1.3 million, or 34.5%, from $3.7 million to $2.5 million. The decrease was related to our cost savings measures, including reductions in workforce that resulted in lower headcount expenses, lower consulting expenses, travel expenses, lower tradeshows and public relations expenses, and lower clinical studies expenses.
Current report
Other expense, net, was $1.5 million for the three months ended March 29, 2025, driven primarily by the costs associated with the Lind Note payable settlement. Other expense, net, was $0.1 million for the three months ended March 30, 2024, consisting primarily of interest and amortization of loan expenses related to the Lind Note transaction.
Current report
On March 19, 2025, the Company entered into the Novel Securities Agreement and a Note Purchase Agreement and the Novel Note Purchase Agreement with Novel. Pursuant to the Novel Securities Agreement and the Novel Note Purchase Agreement, Novel has the right to purchase additional convertible promissory notes (the “Growth Notes”) in an aggregate principal amount of $10,000,000. The Growth Notes are issuable in three installments, with one third of the aggregate principal amount issuable upon each yearly anniversary of the March 19, 2025. Notwithstanding any provision in the Transaction Documents (as defined in the Initial Novel Note) to the contrary, in no circumstance shall the Company be required to deliver to Novel any shares of Series B Preferred Stock or common stock pursuant to the terms of the Transaction Documents to the extent that (i) the aggregate of all such shares issued by the Company would exceed 19.99% of either (a) the total number of shares of common stock outstanding as of March 19, 2025 or (b) the total voting power of the Company’s securities outstanding as of March 19, 2025 that are entitled to vote on a matter being voted on by holders of the common stock, or (ii) such delivery would cause the holder to become, directly or indirectly, a “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more than 19.99% of either (a) the total number of shares of common stock outstanding as of such date or (b) the total voting power of the Company’s securities outstanding as of such date that are entitled to vote on a matter being voted on by holders of the common stock, in each case, unless shareholder approval has been obtained
Removed paragraphs (20)
Previous report
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 report
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 report
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 report
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 report
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 report
Revenues
Previous report
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 report
Gross Profit and Gross Margin
Previous report
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 report
Research and Development
Previous report
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 report
Sales and Marketing
Previous report
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 report
General and Administrative
Previous report
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 report
Other Income (Expense), Net
Previous report
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 report
Income Taxes
Previous report
Management evaluates whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the financial statements are issued.
Previous report
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.
Reworded paragraphs (13)
Previous wording
Our products are sold in the United States and Germany predominantly through a direct sales force and internationally (aside from Germany) primarily through independent distributors.
Current wording
Our products are sold in the United States and Germany predominantly through a direct sales force and internationally (aside from Germany, Italy, UK (Glaucoma), India, and other smaller markets) primarily through Topcon Corporation (“Topcon”) and other independent distributors.
Previous wording
Current macroeconomic conditions exhibit challenges that can affect capital equipment purchasing demand and timing, including recessionary fears, inflation concerns, changing interest rates, concerns related to the upcoming presidential election in the United States, as well as other geopolitical developments, have impacted and may continue to impact business spending and the economy as a whole. As a result, we have seen customers extend purchase decision cycles. We have also experienced some demand softness due to pricing effects from the strength of the U.S. Dollar that have impacted and may continue to impact our operations.
Current wording
Current macroeconomic conditions exhibit challenges that can affect capital equipment purchasing demand and timing, including recessionary fears, inflation concerns, tariffs and retaliatory responses, trade wars, heightened interest rates as a result of government actions to combat inflation, and uncertainty in the global banking and financial services market, as well as other geopolitical developments, have impacted and may continue to impact business spending and the economy as a whole. As a result, we have seen customers extend purchase decision cycles. We have also experienced some demand softness due to pricing effects from the strength of the U.S. Dollar that have impacted and may continue to impact our operations.
Previous wording
For more information on risks associated with the current macroeconomic conditions, see the section titled “Risk Factors” in Item 1A of Part II.
Current wording
For more information on risks associated with the current macroeconomic conditions, see the sections titled “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 28, 2024.
Previous wording
While we believe that the market for our products remains strong, the overall capital expenditure landscape within hospitals, surgical centers and physician offices may continue to be negatively impacted by persistent macroeconomic concerns.
Current wording
While we believe that the market for our products remains strong, the overall capital expenditure landscape within hospitals, surgical centers and physician offices may continue to be negatively impacted by persistent macroeconomic concerns, including those from ongoing geopolitical uncertainty, tariffs and trade wars.
Previous wording
Gross margins may fluctuate due to changes in the relative proportion of domestic and international sales, the product mix of sales, introduction of new products, manufacturing variances, total unit volume changes that lead to greater or lesser production efficiencies and other factors.
Current wording
Gross margins may fluctuate due to changes in the relative proportion of domestic and international sales, the product mix of sales, introduction of new products, manufacturing variances, total unit volume changes, responses to the evolving macroeconomic and geopolitical uncertainty, including tariffs and trade wars, and other factors.
Previous 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.
Current wording
General and administrative expenses decreased by $0.5 million, or 21.8% from $2.5 million to $1.9 million. The decrease is a primarily due to a decrease in consulting costs and deal related legal expenses.
Previous 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.
Current wording
We recorded an income tax provision of $12 thousand and $38 thousand for the three months ended March 29, 2025 and March 30, 2024, respectively.
Previous 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.
Current wording
As of March 29, 2025, we had cash and cash equivalents of $7.2 million and working capital of $14.3 million compared to cash and cash equivalents of $2.4 million and working capital of $7.0 million as of March 30, 2024.
Previous 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.
Current wording
Net cash used in operating activities was $1.1 million in the three months ended March 29, 2025 compared to net cash used in operating activities of $1.6 million in the three months ended March 30, 2024. The increase in net cash provided by operating activities was primarily due to reduction in net loss and reduction in inventory, offset by decreases in collections of accounts receivable and a paydown of liabilities.
Previous 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.
Current wording
For the three months ended March 29, 2025, net cash used in investing activities was $11 thousand, which consisted of capital expenditures. For the three months ended March 30, 2024, net cash used in investing activities was $3 thousand, which consisted of capital expenditures.
Previous wording
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.
Current wording
For the three months ended March 29, 2025, net cash from financing activities was $6.0 million. We received $10 million in issuance of convertible preferred shares and convertible debt, offset by $4.0 million in early prepayment of convertible debt. For the three months ended March 30, 2024, no net cash was used in financing activities.
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 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.
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 March 29, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $7.2 million. We have incurred net losses over the last several years, and as of March 29, 2025, have an accumulated deficit of approximately $89.6 million.
Previous 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.
Current wording
We believe our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs over the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, 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. 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 significant 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.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following comparisons are between the nine months ended September 28, 2024 and September 30, 2023 (in thousands):
Previous report — wording carried elsewhere
While we believe that the market for our products remains strong, the overall capital expenditure landscape within hospitals, surgical centers and physician offices may continue to be negatively impacted by persistent macroeconomic concerns discussed above.
Previous report — wording carried elsewhere
Gross margins may fluctuate due to changes in the relative proportion of domestic and international sales, the product mix of sales, introduction of new products, manufacturing variances, total unit volume changes that lead to greater or lesser production efficiencies and other factors.
Previous report — wording carried elsewhere
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.