IRIX

IRIDEX is a $19.6M nano-cap selling glaucoma and retina lasers (Cyclo G6, PASCAL, IQ systems) plus single-use probes. The bull case is that FY2026 shows real repair: revenue $52.7M (+8.2%), net loss halved to -$4.44M (from -$8.91M), operating loss down 69% to -$2.57M, and operating cash burn cut to -$2.12M. At 0.4x sales the stock is optically cheap, current assets ($25.3M) comfortably cover current liabilities ($13.2M), and cash grew to $6.03M. On the surface, a healing micro-cap.

But the quality underneath is poor and the 'improvement' is partly manufactured. The company has lost money every single year on record — FY2021 through FY2026 — and carries a -$92.4M accumulated deficit against just $4.92M of equity (liabilities/equity 4.92x). Critically, a big chunk of the loss reduction came from cutting R&D 32.7% to $3.67M — for a company whose entire pitch is 'breakthrough' MicroPulse/Endpoint Management technology, gutting innovation spend to buy survival is mortgaging the future, not building operating leverage. Gross profit actually fell 1.4% even as revenue rose 8.2%, so gross margin (36.5%, thin for medtech) is compressing, not scaling. Revenue also remains below the FY2022 peak of $57.0M, so this is choppy, not durable, growth.