IRIDEX CORP Fair Value Disclosure
4. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
The carrying amounts of our financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses as of January 3, 2026 and December 28, 2024, approximate fair value because of the short maturity of these instruments. The Company does not recognize any non-financial assets at fair value.
As of January 3, 2026 and December 28, 2024, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):
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As of January 3, 2026 |
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As of December 28, 2024 |
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Fair Value Measurements |
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Fair Value Measurements |
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(in thousands) |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Assets: |
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Money market funds |
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$ |
268 |
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$ |
— |
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$ |
— |
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$ |
268 |
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$ |
397 |
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$ |
— |
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$ |
— |
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$ |
397 |
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The Company’s Level 1 financial assets are money market funds whose fair values are based on quoted market prices. The Company does not have any Level 2 and Level 3 financial assets or liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Apr 2, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 23, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 29, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Mar 15, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.