What changed in IRIDEX CORP's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of IRIDEX CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+186 added−163 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-29)
Top changes in IRIDEX CORP's 2025 10-K
186 paragraphs added · 163 removed · 131 edited across 1 sections
- Item 1A. Risk Factors+186 / −163 · 131 edited
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
131 edited+55 added−32 removed275 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
131 edited+55 added−32 removed275 unchanged
2024 filing
2025 filing
Biggest changeFY 2023 FY 2022 December 30, 2023 December 31, 2022 Total revenues 100.0 % 100.0 % Cost of revenues 58.0 % 55.5 % Gross margin 42.0 % 44.5 % Operating expenses: Research and development 13.2 % 12.6 % Sales and marketing 31.3 % 31.9 % General and administrative 16.9 % 13.3 % Total operating expenses 61.40 % 57.8 % Loss from operations (19.4 %) (13.3 %) Other income, net 1.0 % 0.1 % Loss from operations before provision for income taxes (18.4 %) (13.2 %) Provision for income taxes 0.2 % 0.1 % Net loss (18.6 %) (13.3 %) Comparison of 2023 and 2022 Revenues (in thousands) FY 2023 FY 2022 Change in $ Change in % Cyclo G6 $ 13,461 $ 14,694 $ (1,233 ) (8.4 %) Retina 29,445 31,657 (2,212 ) (7.0 %) Other 8,963 10,621 (1,658 ) (15.6 %) Total revenues $ 51,869 $ 56,972 $ (5,103 ) (9.0 %) 41 Our total revenues decreased by $5.1 million or 9.0% from $57.0 million in 2022 to $51.9 million in 2023.
Biggest changeYear Ended December 28, 2024 December 30, 2023 Revenues 100.0 % 100.0 % Cost of revenues 59.9 % 58.0 % Gross margin 40.1 % 42.0 % Operating expenses: Research and development 11.2 % 13.2 % Sales and marketing 25.8 % 31.3 % General and administrative 20.1 % 16.9 % Total operating expenses 57.1 % 61.4 % Loss from operations (17.0 %) (19.4 %) Other income (expense), net (1.1 %) 1.0 % Loss from operations before provision for income taxes (18.1 %) (18.4 %) Provision for income taxes 0.1 % 0.2 % Net loss (18.2 %) (18.6 %) Comparison of 2024 and 2023 Revenues Year Ended Change in $ Change in % December 28, 2024 December 30, 2023 Cyclo G6 $ 12,697 $ 13,461 $ (764 ) (5.7 %) Retina 27,827 29,445 (1,618 ) (5.5 %) Other 8,145 8,963 (818 ) (9.1 %) Total revenues $ 48,669 $ 51,869 $ (3,200 ) (6.2 %) Our total revenues decreased by $3.2 million or 6.2% from $51.9 million in 2023 to $48.7 million in 2024.
We cannot assure you that we will be successful in managing these or any other significant risks that we encounter in divesting a business or product line, and any divestiture we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows, and may also result in a diversion of management attention, operational difficulties and losses.
We cannot assure you that we will be successful in managing these or any other significant risks that we encounter in divesting a product line, and any divestiture we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows, and may also result in a diversion of management attention, operational difficulties and losses.
We believe that continued and increased sales, if any, of these medical laser systems is dependent upon a number of factors including the following: • the impact of any future resurgence any future global pandemic or other public health emergencies on timing of ophthalmic treatment procedures; • acceptance of product performance, features, ease of use, scalability and durability, including with respect to our MicroPulse laser photocoagulation systems, and our PASCAL product; • recommendations and opinions by ophthalmologists, other clinicians, and their associated opinion leaders; • marketing and clinical study outcomes; 25 • price of our products and prices of competing products and technologies, particularly in light of the current macro-economic environment where healthcare systems and healthcare operators are becoming increasingly price sensitive; • availability of competing products, technologies and alternative treatments; and • level of reimbursement for treatments administered with our products.
We believe that continued and increased sales, if any, of these medical laser systems is dependent upon a number of factors including the following: • the impact of any future resurgence any future global pandemic or other public health emergencies on timing of ophthalmic treatment procedures; • acceptance of product performance, features, ease of use, scalability and durability, including with respect to our MicroPulse laser photocoagulation systems, and our PASCAL product; • recommendations and opinions by ophthalmologists, other clinicians, and their associated opinion leaders; 25 • marketing and clinical study outcomes; • price of our products and prices of competing products and technologies, particularly in light of the current macro-economic environment where healthcare systems and healthcare operators are becoming increasingly price sensitive; • availability of competing products, technologies and alternative treatments; and • level of reimbursement for treatments administered with our products.
When the customer requests repairs from us subsequent to the expiration of the standard warranty and outside of a service contract, these repair contracts are considered separate from the initial sale, and as such, revenue is recognized as the repair services are rendered and the performance obligation satisfied.
When the customer requests repairs from us subsequent to the expiration of the standard warranty and outside of a service contract, these repair contracts are considered separate from the initial sale. As such, revenue is recognized as the repair services are rendered and the performance obligation satisfied.
The costs are considered incremental and recoverable of obtaining revenue contracts with customers. These deferred costs are amortized on a straight-line basis over the estimated period of benefit, which typically ranges from 2 to 3 years.
The costs are considered incremental and recoverable of obtaining revenue contracts with customers. These deferred costs are amortized on a straight-line basis over the estimated period of benefit, which typically ranges from 2 to 3 years. These deferred costs are amortized on a straight-line basis over the estimated period of benefit, which typically ranges from 2 to 3 years.
As a practical expedient, we will not recognize such sales commission as a contract asset but rather recognize as expense when incurred if the amortization period of the asset that we would have otherwise recognized is one year or less. Contract Fulfillment Costs We recognized an asset from the costs incurred to fulfill a contract.
As a practical expedient, we will not recognize such sales commission as a contract asset but rather recognize as an expense when incurred if the amortization period of the asset that we would have otherwise recognized is one year or less. Contract Fulfillment Costs We recognized an asset from the costs incurred to fulfill a contract.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at commencement date in determining the present value of lease payments.
ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments.
We compete by providing features and services that are valued by our customers such as: enhanced product performance and clinical outcomes, ease of use, durability, versatility, customer training services and rapid repair of equipment. Our principal ophthalmic laser competitors are Alcon Inc., DORC, Bausch Health Companies Inc., Carl Zeiss Meditec AG, Lumenis Ltd., Nidek Co.
We compete by providing features and services that are valued by our customers such as: enhanced product performance and clinical outcomes, ease of use, durability, versatility, customer training services and rapid repair of equipment. Our principal ophthalmic laser competitors are Alcon Inc., Bausch Health Companies Inc., Carl Zeiss Meditec AG, Lumenis Ltd., Nidek Co.
Factors influencing these adjustments include changes in demand, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from our estimates. Provision for Credit Loss and Sales Returns We estimate future sales returns related to current period product revenue.
Factors influencing these adjustments include changes in demand, product life cycle and development plans, component cost trends, 44 product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from our estimates. Provision for Credit Loss and Sales Returns We estimate future sales returns related to current period product revenue.
There is no continuing obligation after shipment is made to these distributors. We recognize revenue from product sale at a point in time subject to the allocation of transaction price to additional performance obligations, if any. (2) Service Contracts: We offer a standard two-year warranty on all system sales.
There is no continuing obligation after shipment is made to these distributors. We recognize revenue from product sales at a point in time subject to the allocation of transaction price to additional performance obligations, if any. (2) Service Contracts: We offer a standard two-year warranty on all system sales.
We determined that the exclusivity rights, training and customer support represents a single combined performance obligation for each region, to be recognized as exclusivity fee revenue on a straight-line basis over the 10-year period for each region, commencing on the date that regulatory approval is obtained for each region, based on the Standalone Selling Price (“SSP”) for such combined performance obligation for each region.
We determined that the exclusivity rights, training, and customer support represents a single combined performance obligation for each region, to be recognized as exclusivity fee revenue on a straight-line basis over the 10 year period for each region, commencing on the date that regulatory approval is obtained for each region, based on the standalone selling price for such combined performance obligation for each region.
These challenges related to acquisitions or investments could adversely affect our business, operating results and financial condition. Our products may be misused, which could harm our reputation and our business. We market and sell our products for use by highly skilled physicians with specialized training and experience in the treatment of eye-related disorders.
These challenges related to acquisitions or investments could adversely affect our business, operating results and financial condition. 32 Our products may be misused, which could harm our reputation and our business. We market and sell our products for use by highly skilled physicians with specialized training and experience in the treatment of eye-related disorders.
To the 33 extent that trade tariffs and other restrictions imposed by the United States increase the price of, or limit the amount of, raw materials and finished goods imported into the United States, the costs of our raw materials may be adversely affected and the demand from our customers for products and services may be diminished, which could adversely affect our revenues and profitability.
To the extent that trade tariffs and other restrictions imposed by the United States increase the price of, or limit the amount of, raw materials and finished goods imported into the United States, the costs of our raw materials may be adversely affected and the demand from our customers for products and services may be diminished, which could adversely affect our revenues and profitability.
Governance 37 The audit committee of our Board of Directors (the “Audit Committee”) has oversight responsibility for risks and incidents relating to cybersecurity threats, including compliance with disclosure requirements, cooperation with law enforcement, and related effects on financial and other risks, and it reports any findings and recommendations, as appropriate, to the full Board for consideration.
Governance The audit committee of our board of directors (the “Audit Committee”) has oversight responsibility for risks and incidents relating to cybersecurity threats, including compliance with disclosure requirements, cooperation with law enforcement, and related effects on financial and other risks , and it reports any findings and recommendations, as appropriate, to the full Board for consideration .
To the extent that we do not achieve such yields or product reliability, our business, operating results, financial condition and customer relationships would be adversely affected. We provide warranties on certain of our product sales, and allowances for estimated warranty costs are recorded during the period of sale.
To the extent that we do not achieve such yields or product reliability, our business, operating results, financial condition and 20 customer relationships would be adversely affected. We provide warranties on certain of our product sales, and allowances for estimated warranty costs are recorded during the period of sale.
If we underestimate demand for our product and consequently, our components, materials and fully assembled products requirements, we may have inadequate inventory, which could interrupt our manufacturing, delay delivery of our product to our customers and result in the loss of customer sales. Any of these occurrences would negatively impact our business and operating results.
If we underestimate demand for our product and consequently, our components, materials and fully assembled product requirements, we may have inadequate inventory, which could interrupt our manufacturing, delay delivery of our product to our customers and result in the loss of customer sales. Any of these occurrences would negatively impact our business and operating results.
We also offer a service contract which is sold to customers in incremental, one-year periods which begin subsequent to the expiration of the standard two-year warranty. The customer can opt to purchase the service contract at the time of the system sale or after the initial system sale. We recognize revenue from service contracts ratably over the service period.
We also offer a service contract which is sold to customers in incremental, one-year periods that begin subsequent to the expiration of the standard two-year warranty. The customer can opt to purchase the service contract at the time of the system sale or after the initial system sale. We recognize revenue from service contracts ratably over the service period.
Service Contract Sale in Conjunction with System Sale: If the customer opts to purchase a service contract at the time of the system sale, we allocate the transaction price of the distinct performance obligations in the contract by determining stand-alone selling price using historical pricing net of any variable consideration or discounts to specifically allocate to a particular performance obligation. 43 b.
Service Contract Sale in Conjunction with System Sale: If the customer opts to purchase a service contract at the time of the system sale, we allocate the transaction price of the distinct performance obligations in the contract by determining stand-alone selling price using historical pricing net of any variable consideration or discounts to specifically allocate to a particular performance obligation. b.
Performance-based restricted stock units granted with market conditions and performance-based stock options with market conditions are valued using the Monte Carlo simulation model. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock.
Performance-based restricted stock units granted with market conditions and performance-based stock options with market conditions are valued using the Monte Carlo simulation model. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying 45 stock.
If we are unable to comply with the requirements of Section 404 in a timely manner, the market price of our stock could decline and we could be subject to sanctions or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities, which could require additional financial and management resources.
If we are unable to comply with the requirements of Section 404 in a timely 35 manner, the market price of our stock could decline and we could be subject to sanctions or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities, which could require additional financial and management resources.
As a result, this may lead to a period of regional, national, and global economic slowdown or regional, national, or global recessions that would curtail or delay spending by hospitals and affect demand for 19 our products as well as increase the risk of customer defaults or delays in payments.
As a result, this may lead to a period of regional, national, and global economic slowdown or regional, national, or global recessions that would curtail or delay spending by hospitals and affect demand for our products as well as increase the risk of customer defaults or delays in payments.
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.
Additionally, if we raise additional funds through further issuances of equity, our existing stockholders could suffer significant dilution in their percentage ownership 42 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.
Denial of coverage and reimbursement of our products, or the revocation or changes to coverage and reimbursement policies, could have a material adverse effect on our business, results of operations and financial condition. Third-party payers are increasingly scrutinizing and continue to challenge the coverage of new products and the level of reimbursement for covered products.
Denial of coverage and reimbursement of our products, or the revocation or changes to coverage and reimbursement policies, could have a material adverse effect on our business, results of operations and financial condition. 22 Third-party payers are increasingly scrutinizing and continue to challenge the coverage of new products and the level of reimbursement for covered products.
Additionally, new investors could gain rights, preferences and privileges senior to those of existing holders of our common stock. We may also issue debt securities, which may impose restrictive covenants on our operations or otherwise adversely affect the holdings or the rights of our stockholders.
Additionally, new investors could gain rights, preferences and privileges senior to those of existing holders of our common stock and preferred stock. We may also issue debt securities, which may impose restrictive covenants on our operations or otherwise adversely affect the holdings or the rights of our stockholders.
The arrangements with three customers are for sales-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies. Therefore, we recognize revenue at a point in time, only as the subsequent sale occurs.
The arrangements with three customers are for sales-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies. Therefore, we recognize revenue at a point in time, only as the 43 subsequent sale occurs.
To raise capital, we may sell common stock, convertible securities or other equity-linked securities in one or more transactions at prices and in a manner we determine from time to time. If we sell additional equity securities, our existing stockholders may be materially diluted.
To raise capital, we may sell common stock and preferred stock, or other convertible or equity-linked securities in one or more transactions at prices and in a manner we determine from time to time. If we sell additional equity securities, our existing stockholders may be materially diluted.
Our certificate of incorporation and bylaws contain other provisions that could have an anti-takeover effect, including the following: • the authorized number of directors may be changed only by resolution of our board of directors; • only our board of directors is authorized to fill vacant directorships, including newly created seats; • special meetings of our stockholders may be called only by our board of directors, the chairman of the board, chief executive officer or president, thus prohibiting a stockholder from calling a special meeting; • stockholders must give advance notice to nominate directors or propose other business; and • stockholders are not permitted to cumulate votes in the election of directors.
Our amended and restated certificate of incorporation and bylaws contain other provisions that could have an anti-takeover effect, including the following: • the authorized number of directors may be changed only by resolution of our board of directors; • only our board of directors is authorized to fill vacant directorships, including newly created seats; • special meetings of our stockholders may be called only by our board of directors, the chairman of the board, chief executive officer or president, thus prohibiting a stockholder from calling a special meeting; • stockholders must give advance notice to nominate directors or propose other business; and • stockholders are not permitted to cumulate votes in the election of directors.
These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
These risk assessments include identification of reasonably foreseeable internal and 36 external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
Regulatory and legal factors • healthcare reform measures and changes in third-party coverage and reimbursement policies; • compliance with healthcare laws; • our compliance with potential governmental, regulatory and other legal proceedings relative to advertising, promotion and marketing; • patents and proprietary rights related to our intellectual property; • compliance with government regulations, including the FDA’s quality system regulation and laser performance standards; 18 • regulatory approval for clinical trials; • compliance with product liability claims; • developments in trade policies; • tax laws; • federal, state and foreign laws, including changes to those laws; and • environmental requirements.
Regulatory and legal factors • healthcare reform measures and changes in third-party coverage and reimbursement policies; • compliance with healthcare laws; • our compliance with potential governmental, regulatory and other legal proceedings relative to advertising, promotion and marketing; • patents and proprietary rights related to our intellectual property; • compliance with government regulations, including the FDA’s quality system regulation and laser performance standards; • regulatory approval for clinical trials; 17 • compliance with product liability claims; • developments in trade policies; • tax laws; • federal, state and foreign laws, including changes to those laws; and • environmental requirements.
Our sales and operating results may vary significantly from quarter to quarter and from year to year in the future. Our operating results are affected by a number of factors, many of which are beyond our control.
Our operating results may fluctuate from quarter to quarter and year to year. Our sales and operating results may vary significantly from quarter to quarter and from year to year in the future. Our operating results are affected by a number of factors, many of which are beyond our control.
The macroeconomic conditions on our business and operations remains uncertain, and it is not possible for us to predict the duration and extent to which they will affect our business, future results of operations, and financial condition. For more information on risks associated with the current macroeconomic conditions, see the sections titled “Risk Factors” in Item 1A of Part I.
The macroeconomic conditions on our business and operations remain uncertain, and it is not possible for us to predict the duration and extent to which they will affect our business, future results of operations, and financial condition. For more information on risks associated with the current macroeconomic conditions, see the sections titled “Risk Factors” in Item 1A of Part I.
We also derive revenue from royalties from third parties which are typically based on licensees’ net sales of products that utilize our technology.
We also derive revenue from royalties from third parties which are typically based on the licensees’ net sales of products that utilize our technology.
However, we note that such sales being reported by the licensee with a quarter in arrear, such revenue is recognized at the time it is reported and paid by the licensee given that any estimated variable consideration would have to be fully constrained due to the unpredictability of such estimate and the unavoidable risk that it may lead to significant revenue reversals.
However, we note that such sales being reported by the licensee with a quarter in arrears, such revenue is recognized at the time it is reported and paid by the licensee given that any estimated variable consideration would have to be fully constrained due to the unpredictability of such estimate and the unavoidable risk that it may lead to significant revenue reversals.
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. We are not currently party to any material legal proceedings. I tem 4. Mine Safety Disclosures Not applicable. 38 P ART II I tem 5.
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. We are not currently party to any material legal proceedings. I tem 4. Mine Safety Disclosures Not applicable. 37 P ART II I tem 5.
For certain of our products, we are responsible for the cost of the fully assembled product that is manufactured by a third-party. 40 Research and development expenses consist primarily of personnel costs, materials to support new product development and research support provided to clinicians at medical institutions developing new applications which utilize our products and regulatory expenses.
For certain of our products, we are responsible for the cost of the fully assembled product that is manufactured by a third-party. 39 Research and development expenses consist primarily of personnel costs, materials to support new product development and research support provided to clinicians at medical institutions developing new applications, which utilize our products and regulatory expenses.
In addition, we may not realize the expected value from the divestiture of a business or product lines and may need to raise additional capital to replace the revenue generated from the business or product line that is divested. We can provide no assurance that such capital will be available or available on terms that are acceptable to us.
In addition, we may not realize the expected value from the divestiture of product lines and may need to raise additional capital to replace the revenue generated from the product line that is divested. We can provide no assurance that such capital will be available or available on terms that are acceptable to us.
There can be no assurance that our common stock trading price will not suffer declines. Our common stock may experience an imbalance between supply and demand resulting from low trading volumes and therefore 35 broad market fluctuations could have a significant impact on the market price of our common stock regardless of our performance.
There can be no assurance that our common stock trading price will not suffer declines. Our common stock may experience an imbalance between supply and demand resulting from low trading volumes 34 and therefore broad market fluctuations could have a significant impact on the market price of our common stock regardless of our performance.
We devote our resources and designate high-level personnel, including our internal Senior IT manager who reports to our Chief Operational Officer, to manage the risk assessment and mitigation process. As part of our overall risk management system and in collaboration with human resources, IT, and management, we monitor, test, and train our employees on our safeguards.
We devote our resources and designate high-level personnel, including our internal Senior IT manager who reports to our Chief Executive Officer, to manage the risk assessment and mitigation process . As part of our overall risk management system and in collaboration with human resources, IT, and management, we monitor, test, and train our employees on our safeguards.
We have the right to terminate the exclusive distribution rights granted to Topcon for any of the regions at any point in time during the 10-year exclusivity term for a termination fee that is based on a multiple of 1.2 times the revenue generated by us in 2019 for the respective region.
We has the right to terminate the exclusive distribution rights granted to Topcon for any of the regions at any point in time during the 10 year exclusivity term for a termination fee that is based on a multiple of 1.2 times the revenue generated by us in 2019 for the respective region.
In the offices and clinics, ophthalmologists use our laser systems with either an indirect laser ophthalmoscope or a slit-lamp adapter. In 2023 and 2022, our products were sold in the United States and Germany predominantly through a direct sales force and internationally (aside from Germany) primarily through independent distributors.
In the offices and clinics, ophthalmologists use our laser systems with either an indirect laser ophthalmoscope or a slit-lamp adapter. In 2024 and 2023, our products were sold in the United States and Germany predominantly through a direct sales force and internationally (aside from Germany) primarily through independent distributors.
Ltd., Lumibird, ARC Gmbh, Meridian, OD-OS GmBh and Norlase. We also compete with alternative glaucoma surgical device companies such as Alcon, Inc., Novartis AG, Allergan, Inc., Glaukos Corporation and New World Medical, Inc. Pharmaceuticals represent alternative treatments to our laser procedures.
Ltd., Lumibird, ARC GmbH, Meridian, OD-OS GmbH and Norlase. We also compete with alternative glaucoma surgical device companies such as Alcon, Inc., Novartis AG, Allergan, Inc., Glaukos Corporation, Sight Sciences and New World Medical, Inc. Pharmaceuticals represent alternative treatments to our laser procedures.
Inventories Inventories are stated at the lower of cost or net realizable value and include on-hand inventory physically held at our facility, sales demo inventory and service loaner inventory. Cost is determined on a standard cost basis which approximates actual cost on a first-in, first-out (“FIFO”) method.
Inventories Inventories are stated at the lower of cost or net realizable value and include on-hand inventory physically held at our facility, sales demo inventory and service loaner inventory. Cost is determined on a standard cost basis which approximates actual cost on a First-in, First-out ("FIFO") method.
Material differences may result in the amount and timing of our revenue for any period if management made different judgments or utilized different estimates. Our provision for sales returns is recorded net of the associated costs. Similarly, management must make estimates regarding the collectibility of accounts receivable.
Material differences may result in the amount and timing of our revenue for any period if management made different judgments or utilized different estimates. Our provision for sales returns is recorded net of the associated costs. Similarly, management must make estimates regarding the collectability of accounts receivable.
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.
Our future capital requirements will depend on many factors, including our growth rates, 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.
California can experience earthquakes, catastrophic wildfires, and intermittent power outages. Any such loss at any of our facilities caused by fires, flooding, power outages, or earthquakes could disrupt our operations, delay production, shipments and revenue and result in large expense to repair and replace our facilities.
California can experience earthquakes, catastrophic wildfires, and intermittent power outages. Any such loss at any of our facilities caused by fires, flooding, power outages, or earthquakes could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair and replace our facilities.
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. Process documentation is maintained by third party software provider through our document control department.
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. Process documentation is maintained by third party software provider through our document control departmen t.
Dollars using exchange rates in effect at the end of the period. Revenue and expenses are translated to U.S. Dollars using rates that approximate those in effect during the period. The resulting translation adjustments are included in our Consolidated Balance Sheets in the stockholders’ equity section as a component of accumulated other comprehensive income (loss).
Revenue and expenses are translated to U.S. dollars using rates that approximate those in effect during the period. The resulting translation adjustments are included in our Consolidated Balance Sheets in the stockholders’ equity section as a component of accumulated other comprehensive income (loss).
All of our international revenues and costs for the fiscal year 2023 have been denominated in U.S. dollars except for sales transacted through our German subsidiary.
All of our international revenues and costs for the fiscal year 2024 have been denominated in U.S. dollars except for sales transacted through our German subsidiary.
Operational factors • the success of our relationship with our strategic partner and main distributor Topcon; • quality control and production issues; • the complexity of our laser systems; • defects in our laser systems; • direct and independent sales forces and a network of international distributors to sell our products; • dependence on international sales; • new products and applications and improving existing products; • fluctuations in our sales and operating results; • the ophthalmology market; • competition in our industry; • the loss of key personnel; • the collaborative relationships used to enhance products and applications; • costs, sales volumes, results of operations, and revenues; • meeting product demand; • dependence on sole source and limited source suppliers; • catastrophic loss; • disruptions to our information technology system and breaches of data security; • maintaining relationships with health care providers; • the misuse of our products; • our reputation and brand; • the inability of our customers to obtain credit or material increases in interest rates; • adverse developments affecting financial institutions, including bank failures; • recalls of our products; and • managing growth effectively.
Operational factors • the success of our relationship with our strategic partner and main distributor Topcon; • quality control and production issues; • the complexity of our laser systems; • defects in our laser systems; • direct and independent sales forces and a network of international distributors to sell our products; • dependence on international sales; • new products and applications and improving existing products; • fluctuations in our sales and operating results; • the ophthalmology market; • competition in our industry; • the loss of key personnel; • the collaborative relationships used to enhance products and applications; • costs, sales volumes, results of operations, and revenues; • meeting product demand; • dependence on sole source and limited source suppliers; • catastrophic loss; • disruptions to our information technology system and breaches of data security; • maintaining relationships with health-care providers; • the misuse of our products; • our reputation and brand; • the inability of our customers to obtain credit or material increases in interest rates; • recalls of our products; and • managing growth effectively.
We are unable to predict the extent to which any future global pandemic or other public health emergencies or outbreaks and related macroeconomic impacts may adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives .
We are unable to predict the extent to which any future global pandemic or other public health emergencies or outbreaks and related macroeconomic impacts may adversely impact our business operations, financial performance, results of operations and financial position.
The ultimate impact of the volatile macroeconomic conditions on our operations and financial performance depends on many factors that are not within our control, including, but not limited, to: the recommendations by medical authorities on whether hospitals should and may perform elective surgical procedures; hospitals’ abilities and willingness to devote resources to elective surgical procedures; governmental, business and individuals’ actions that have been and may continue to be taken in response to any future resurgence of the COVID-19 pandemic or other public health emergencies or outbreaks (including restrictions on travel and transport and workforce pressures); the impact of other public health emergencies or any future outbreak of disease and actions taken in response on global and regional economies, travel, and economic activity; the availability of federal, state, local or non-U.S. funding programs; general economic uncertainty in key global markets and financial market volatility; global economic conditions and levels of economic growth; and the pace of recovery when the current volatile macroeconomic conditions subside.
The ultimate impact of the volatile macroeconomic conditions on our operations and financial performance depends on many factors that are not within our control, including, but not limited, to: the recommendations by medical authorities on whether hospitals should and may perform elective surgical procedures; hospitals’ abilities and willingness to devote resources to elective surgical procedures; governmental, business and individuals’ actions in response to any future health emergencies or outbreaks (including restrictions on travel and transport and workforce pressures); the impact of other public health emergencies or any future outbreak of disease and actions taken in response on global and regional economies, travel, and economic activity; the availability of federal, state, local or 18 non-U.S. funding programs; general economic uncertainty in key global markets and financial market volatility; global economic conditions and levels of economic growth; and the pace of recovery when the current volatile macroeconomic conditions subside.
(5) Exclusive Distribution Rights: In March 2021, we entered into a distribution agreement with Topcon, pursuant to which we granted Topcon exclusive right to distribute our retina and glaucoma products in certain geographies outside the United States.
(5) Exclusive Distribution Rights: On March 2, 2021, we entered into a distribution agreement (“Distribution Agreement”) with Topcon, pursuant to which we granted Topcon the exclusive right to distribute the our retina and glaucoma products in certain geographies outside the United States.
As of December 30, 2023, we were not a party to finance lease arrangements. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
As of December 28, 2024, we were not a party to finance lease arrangements. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
As of December 30, 2023 and December 31, 2022, we recognized deferred costs incurred to obtain revenue contracts with customers, net of accumulated amortization, of $0.2 million and $0.2 million, respectively, and included these amounts in Prepaid expenses and other current assets and Other long-term assets in our consolidated balance sheets.
As of December 28, 2024 and December 30, 2023, we recognized deferred costs incurred to obtain revenue contracts with customers, net of accumulated amortization, of $0.2 million and included these amounts in Prepaid expenses and other current assets and Other long-term assets in our consolidated balance sheets.
Our revenue is recognized in accordance with ASC 606, “Revenue from Contracts with Customers.” We recognize revenue using the five-step model: (1) identifying the contract with the customer, (2) identifying the performance obligations in the contract, (3) determining expected transaction price, (4) allocating the transaction price to the distinct performance obligations in the contract, and (5) recognizing revenue when (or as) the performance obligations are satisfied.
Our revenue is recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.” We recognize revenue using the five-step model: (1) identifying the contract with the customer, (2) identifying the performance obligations in the contract, (3) determining expected transaction price, (4) allocating the transaction price to the distinct performance obligations in the contract, and (5) recognizing revenue when (or as) the performance obligations are satisfied.
Our international operations and sales are subject to a number of risks and potential costs, including: • macroeconomic conditions, including the impact of any future global pandemic on the global economy and financial markets; • fluctuations in foreign currency exchange rates; • uncertainty in the global banking and financial services market; • product and production issues; • performance of our international channel of distributors; • longer accounts receivable collection periods; • impact of recessions in global economies and availability of credit; • political and economic instability; • change in international regulatory agreements and requirements ; • trade sanctions and embargoes; • impact of international conflicts, terrorist and military activity, civil unrest; • foreign certification requirements, including continued ability to use the “CE” mark in Europe, and other local regulatory requirements, pending MDR approvals; • differing local product preferences and product requirements; • cultural differences; • changes in foreign medical reimbursement and coverage policies and programs; • reduced or limited protections of intellectual property rights in jurisdictions outside the United States; • potentially adverse tax consequences, such as those related to changes in tax laws or tax rates or their interpretations; • protectionist, adverse and changing foreign governmental laws and regulations; • greater risk of our employees failing to comply with both U.S. and foreign laws, including anti-trust regulations, the U.S.
Our international operations and sales are subject to a number of risks and potential costs, including: • fluctuations in foreign currency exchange rates; • product and production issues; • performance of our international channel of distributors; • longer accounts receivable collection periods; • impact of recessions in global economies and availability of credit; 21 • political and economic instability; • change in international regulatory agreements and requirements; • trade sanctions and embargoes; • tariffs and trade wars; • impact of international conflicts, terrorist and military activity, civil unrest; • foreign certification requirements, including continued ability to use the “CE” mark in Europe, and other local regulatory requirements, pending MDR approvals; • differing local product preferences and product requirements; • cultural differences; • changes in foreign medical reimbursement and coverage policies and programs; • reduced or limited protections of intellectual property rights in jurisdictions outside the United States; • potentially adverse tax consequences, such as those related to changes in tax laws or tax rates or their interpretations; • protectionist, adverse and changing foreign governmental laws and regulations; • greater risk of our employees failing to comply with both U.S. and foreign laws, including anti-trust regulations, the U.S.
There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or applicable foreign government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis. 24 Our operating results may fluctuate from quarter to quarter and year to year.
There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or applicable foreign government, or that any bank or financial institution 24 with which we do business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis.
In addition, our customers may delay, cancel or redirect planned capital expenditures in order to focus resources on any future outbreak of disease, global pandemic or in response to macroeconomic disruption related to any future global pandemic.
Upon such events, our customers may delay, cancel or redirect planned capital expenditures in order to focus resources on any future outbreak of disease, global pandemic or in response to macroeconomic disruption related to any future global pandemic.
In addition, as of December 30, 2023, we have 12 patent applications pending in the United States and 18 international patent applications pending. Our patent applications may not be approved. Any patents granted now or in the future may offer only limited protection against potential infringement and development by our competitors of competing products.
In addition, as of December 28, 2024, we have 12 patent applications pending in the United States and 20 international patent applications pending. Our patent applications may not be approved. Any patents granted now or in the future may offer only limited protection against potential infringement and development by our competitors of competing products.
During fiscal years ended 2023 and 2022, $1.5 million and $1.3 million in revenue related to the exclusive distribution rights was recorded, respectively. Costs of Obtaining Revenue Contracts We recognized assets from certain costs incurred to obtain revenue contracts. These costs relate to sales commissions arising from the sale of our products.
During fiscal years ended 2024 and 2023, $1.5 million in revenue related to the exclusive distribution rights was recorded each year. Costs of Obtaining Revenue Contracts We recognized assets from certain costs incurred to obtain revenue contracts. These costs relate to sales commissions arising from the sale of our products.
Market for Registrant’s Common Equity and Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information for Common Equity Our common stock is currently quoted on the Nasdaq Global Market under the symbol “IRIX”. As of February 29, 2024, there were approximately 33 holders of record (not in street name) of our common stock.
Market for Registrant’s Common Equity and Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information for Common Equity Our common stock is currently quoted on the Nasdaq Capital Market under the symbol “IRIX”. As of February 28, 2025, there were approximately 33 holders of record (not in street name) of our common stock.
Total revenues in 2023 and 2022 were $51.9 million and $57.0 million, respectively. We generated net losses of $9.6 million and $7.5 million in 2023 and 2022, respectively. Sales to international distributors are made on open credit terms or letters of credit and are currently denominated in U.S. dollars and accordingly, are not subject to risks associated with currency fluctuations.
Total revenues in 2024 and 2023 were $48.7 million and $51.9 million, respectively. We generated net losses of $8.9 million and $9.6 million in 2024 and 2023, respectively. Sales to international distributors are made on open credit terms or letters of credit and are currently denominated in U.S. dollars and accordingly, are not subject to risks associated with currency fluctuations.
Factors contributing to these fluctuations include the following: • general macroeconomic conditions, including inflationary pressures and heightened interest rates, uncertainty in the global banking and financial services market, potential federal government shutdown, global pandemics and responsive measures and the wars between Russia-Ukraine and Israel-Hamas; • changes in the prices at which we can sell our products, including the impact of changes in foreign currency exchange rates; • introduction of new products, product enhancements and new applications by our competitors, including new drugs, entry of new competitors into our markets, pricing pressures and other competitive factors; • any delays or reductions in product shipments, or product recalls, resulting from manufacturing, distribution or other operational issues; • the timing of the introduction and market acceptance of new products, product enhancements and new applications; • changes in demand for our existing line of ophthalmology products; • the cost and availability of components and subassemblies, including the willingness and ability of our sole or limited source suppliers to timely deliver components at the times and prices that we have planned; • our ability to maintain sales volumes at a level sufficient to cover fixed manufacturing and operating costs; • fluctuations in our product mix within ophthalmology products and foreign and domestic sales; • the effect of regulatory approvals and changes in domestic and foreign regulatory requirements; • our long and highly variable sales cycle; • changes in customers’ or potential customers’ budgets as a result of, among other things, reimbursement policies of government programs and private insurers for treatments that use our products; • variances in shipment volumes as a result of product, supply chain due to global constraints or other factors and training issues; and • increased product innovation costs.
Factors contributing to these fluctuations include the following: • general macroeconomic conditions, including inflationary pressures and changing interest rates, changes in tax law or policy, tariffs, geopolitical tensions and conflicts, and global pandemics and related responsive measures; • changes in the prices at which we can sell our products, including the impact of changes in foreign currency exchange rates; • introduction of new products, product enhancements and new applications by our competitors, including new drugs, entry of new competitors into our markets, pricing pressures and other competitive factors; • any delays or reductions in product shipments, or product recalls, resulting from manufacturing, distribution or other operational issues; • the timing of the introduction and market acceptance of new products, product enhancements and new applications; • changes in demand for our existing line of ophthalmology products; • the cost and availability of components and subassemblies, including the willingness and ability of our sole or limited source suppliers to timely deliver components at the times and prices that we have planned; • our ability to maintain sales volumes at a level sufficient to cover fixed manufacturing and operating costs; • fluctuations in our product mix within ophthalmology products and foreign and domestic sales; • the effect of regulatory approvals and changes in domestic and foreign regulatory requirements; • our long and highly variable sales cycle; • changes in customers’ or potential customers’ budgets as a result of, among other things, reimbursement policies of government programs and private insurers for treatments that use our products; • variances in shipment volumes as a result of product, supply chain due to global constraints or other factors and training issues; and • increased product innovation costs.
The estimated fair value of the exclusive distribution rights for all regions combined totaled approximately $14.8 million. Of this amount, we fully constrained and returned to Topcon the arrangement fee allocated to Belarus (approximately $0.2 million recorded as customer deposit under Other current liabilities) because obtaining the necessary regulatory approvals and termination of existing distributor relationship was not feasible.
The estimated fair value of the exclusive distribution rights for all regions combined totaled approximately $14.8 million. Of this amount, we fully-constrained and returned to Topcon the arrangement fee allocated to Belarus (approximately $0.2 million) because obtaining the necessary regulatory approvals and termination of existing distributor relationship was not feasible.
Amortization expense was $105 thousand and $36 thousand, respectively, for the fiscal years ended December 30, 2023 and December 31, 2022. There were no impairment expenses for both the fiscal years ended December 30, 2023 and December 31, 2022, respectively. 44 Sales commissions that do not represent incremental and recoverable costs of obtaining a contract are expensed as incurred.
Amortization expense was $146 thousand and $105 thousand, respectively, for the fiscal years ended December 28, 2024 and December 30, 2023. There were no impairment expenses for both the fiscal years ended December 28, 2024 and December 30, 2023, respectively. Sales commissions that do not represent incremental and recoverable costs of obtaining a contract are expensed as incurred.
ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our consolidated financial statement disclosures.
During 42 2022, net cash used in financing activities was $0.1 million, primarily from payroll taxes related to net share settlement of equity awards partially offset by the net proceeds arising from the proceeds from stock option exercises. We have historically funded our operations primarily through sales of our products to customers, and through common stock and borrowing arrangements.
During 2023, net cash used in financing activities was $5 thousand, primarily from payroll taxes related to net share settlement of equity awards partially offset by the net proceeds arising from the proceeds from stock option exercises. We have historically funded our operations primarily through sales of our products to customers, and through common stock and borrowing arrangements.
If we fail to comply with the FDA’s quality system regulation and laser performance standards, our manufacturing operations could be halted, and our business would suffer. We are currently required to demonstrate and maintain compliance with the FDA’s QSR.
If we fail to comply with the FDA’s quality system regulation and laser performance standards, our manufacturing operations could be halted, and our business would suffer. We are currently required to demonstrate and maintain compliance with the FDA’s QSR, or QMSR when it goes into effect.
As of December 30, 2023 and December 31, 2022, we recognized deferred costs incurred to fulfill a contract with a customer, net of accumulated amortization, of $0.7 million and $0.8 million, respectively, and included these amounts in Prepaid expenses and other current assets and Other long-term assets in the Company’s consolidated balance sheets.
As of December 28, 2024 and December 30, 2023, we recognized deferred costs incurred to fulfill a contract with a customer, net of accumulated amortization, of $0.6 million and $0.7 million, respectively, and included these amounts in Prepaid expenses and other current assets and Other long-term assets in our consolidated balance sheets.
We file patent applications to protect technology, inventions and improvements that are significant to the development of our business. As of December 30, 2023, our patent portfolio includes 66 active United States patents and 84 active international patents on the technologies related to our products and processes.
We file patent applications to protect technology, inventions and improvements that are significant to the development of our business. As of December 28, 2024, our patent portfolio includes 68 active United States patents and 94 active international patents on the technologies related to our products and processes.
Financing and transactional risks • divestitures of our businesses or product lines; • efforts to acquire additional companies or product lines; • raising additional capital; and • provisions in our charter documents, Delaware law and contractual provisions that could delay or prevent an acquisition or sale of our company.
Financing and transactional risks • divestitures of our businesses or product lines; and • provisions in our charter documents, Delaware law and contractual provisions that could delay or prevent an acquisition or sale of our company.
Divestitures of our businesses or product lines may materially and adversely affect our financial condition, results of operations or cash flows and require us to raise additional capital to replace revenue from those business units or product lines. We have two main businesses: glaucoma and retina, domestic and international operations within each and many product lines within the two businesses.
Divestitures of our product lines may materially and adversely affect our financial condition, results of operations or cash flows and require us to raise additional capital to replace revenue from those product lines. We have two main product lines: glaucoma and retina, with domestic and international sales within each. We periodically evaluate the strategic fit and may sell product lines.
We derive, and expect to continue to derive, a large portion of our revenues from international sales. For the fiscal year 2023, our international sales were $25.8 million, or 49.8% of total revenues. We anticipate that international sales will continue to account for a significant portion of our revenues in the foreseeable future.
We derive, and expect to continue to derive, a large portion of our revenues from international sales. For the fiscal year 2024, our international sales were $26.0 million, or 53.4% of total revenues. We anticipate that international sales will continue to account for a significant portion of our revenues in the foreseeable future.
We are exposed to risks associated with worldwide economic slowdowns and related uncertainties. We are subject to macroeconomic fluctuations in the U.S. and worldwide economy including inflationary pressures that may cause the cost of manufacturing our products or servicing our products to increase.
We are subject to macroeconomic fluctuations in the U.S. and worldwide economy including inflationary pressures that may cause the cost of manufacturing our products or servicing our products to increase.
Amortization expense was $83 thousand and $62 thousand, respectively, for the fiscal years ended December 30, 2023 and December 31, 2022. There were no impairment expenses for both the fiscal years ended December 30, 2023 and December 31, 2022, respectively.
Amortization expense was $83 thousand, for the fiscal years ended December 28, 2024 and December 30, 2023. There were no impairment expenses for both the fiscal years ended December 28, 2024 and December 30, 2023.
During the fourth quarter of fiscal year 2023, the trading price of our common stock fluctuated from a low of $1.90 per share to a high of $3.28 per share. During the fiscal year 2023, the trading price of our common stock fluctuated from a low of $1.33 per share to a high of $3.28 per share.
During the fourth quarter of fiscal year 2024, the closing trading price of our common stock fluctuated from a low of $1.36 per share to a high of $1.90 per share. During the fiscal year 2024, the closing trading price of our common stock fluctuated from a low of $1.36 per share to a high of $3.53 per share.
We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
We use the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
As of December 30, 2023, our principal sources of liquidity consisted of cash and cash equivalents of $7.0 million. We have incurred net losses over the last several years, and as of December 30, 2023, have an accumulated deficit of approximately $79.0 million. We expect to continue to incur operating losses and negative cash flows from operations.
As of December 28, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $2.4 million. We have incurred net losses over the last several years, and as of December 28, 2024, have an accumulated deficit of approximately $88.0 million. We may continue to incur operating losses and negative cash flows from operations.
If availability of credit becomes more limited, or interest rates increase, these financing arrangements may be harder to obtain or become more expensive for our customers, which may decrease demand for our products.
If availability of credit becomes more limited, or interest rates increase, these financing arrangements may be harder to obtain or become more expensive for our customers, which may decrease demand for our products. Any reduction in the sales of our products would cause our business to suffer.
In the event that we are not able to demonstrate compliance with Section 404 of the Sarbanes-Oxley Act in a timely manner, that our internal controls are perceived as inadequate or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our company and our stock price could decline. 36 Our charter documents, anti-takeover provisions of Delaware law, and contractual provisions could delay or prevent an acquisition or sale of our company.
In the event that we are not able to demonstrate compliance with Section 404 of the Sarbanes-Oxley Act in a timely manner, that our internal controls are perceived as inadequate or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our company and our stock price could decline.
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