Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 29, 2018	Mar. 14, 2019	Jun. 29, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	IRIDEX CORP
Entity Central Index Key	0001006045
Document Type	10-K
Document Period End Date	Dec. 29, 2018
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-29
Trading Symbol	IRIX
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Public Float			$ 40,449,599
Entity Common Stock, Shares Outstanding		13,632,797

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Current assets:
Cash and cash equivalents	$ 21,194	$ 21,707
Accounts receivable, net of allowance for doubtful accounts of $213 as of December 29, 2018 and $226 as of December 30, 2017	9,083	7,863
Inventories	8,794	9,381
Prepaid expenses and other current assets	547	500
Total current assets	39,618	39,451
Property and equipment, net	1,220	1,403
Intangible assets, net	100	116
Goodwill	533	533
Other long-term assets	201	143
Total assets	41,672	41,646
Current liabilities:
Accounts payable	2,516	1,724
Accrued compensation	2,962	2,459
Accrued expenses	2,763	2,153
Accrued warranty	622	1,536
Deferred revenue	2,225	2,520
Total current liabilities	11,088	10,392
Long-term liabilities:
Accrued warranty	238	199
Other long-term liabilities	385	533
Total liabilities	11,711	11,124
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.01 par value: Authorized: 30,000,000 shares; Issued and outstanding 11,596,274 and 11,304,736 shares as of December 30, 2017 and December 31, 2016, respectively	145	126
Additional paid-in capital	71,548	59,385
Accumulated other comprehensive income	70
Accumulated deficit	(41,802)	(28,989)
Total stockholders’ equity	29,961	30,522
Total liabilities and stockholders’ equity	$ 41,672	$ 41,646

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Statement Of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 213	$ 226
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	13,602,052	11,596,274
Common stock, shares outstanding	13,602,052	11,596,274

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Income Statement [Abstract]
Total revenues	$ 42,600	$ 41,593
Cost of revenues	25,129	26,090
Gross profit	17,471	15,503
Operating expenses:
Research and development	4,006	5,208
Sales and marketing	16,782	14,541
General and administrative	9,551	8,782
Gain on sale of intellectual property		(175)
Impairment of long-lived assets		35
Total operating expenses	30,339	28,391
Loss from operations	(12,868)	(12,888)
Other income (expense), net	92	(107)
Loss from operations before provision for (benefit from) income taxes	(12,776)	(12,995)
Provision for (benefit from) income taxes	37	(128)
Net loss	$ (12,813)	$ (12,867)
Net loss per share:
Basic	$ (1.05)	$ (1.11)
Diluted	$ (1.05)	$ (1.11)
Weighted average shares used in computing net loss per common share:
Basic	12,199	11,555
Diluted	12,199	11,555

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (12,813)	$ (12,867)
Change in foreign currency translation adjustments	70
Comprehensive loss	$ (12,743)	$ (12,867)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning Balance, value at Dec. 31, 2016	$ 39,160	$ 124	$ 55,158		$ (16,122)
Beginning Balance, shares at Dec. 31, 2016		11,304,736
Proceeds from issuance of common stock, net of issuance costs, value	2,263	$ 2	2,261
Proceeds from issuance of common stock, net of issuance costs, shares		172,500
Issuance of common stock under stock option plan	$ 377		377
Issuance of common stock under stock option plan, shares	64,380	64,380
Employee stock-based compensation expense	$ 1,922		1,922
Release of restricted stock, value	(333)		(333)
Release of restricted stock, shares		54,658
Net loss	(12,867)				(12,867)
Ending Balance, value at Dec. 30, 2017	$ 30,522	$ 126	59,385		(28,989)
Ending Balance, shares at Dec. 30, 2017	11,596,274	11,596,274
Proceeds from issuance of common stock, net of issuance costs, value	$ 10,475	$ 19	10,456
Proceeds from issuance of common stock, net of issuance costs, shares		1,916,667
Issuance of common stock under stock option plan	$ 98		98
Issuance of common stock under stock option plan, shares	24,050	24,050
Employee stock-based compensation expense	$ 1,803		1,803
Release of restricted stock, value	(194)		(194)
Release of restricted stock, shares		65,061
Other comprehensive income	70			$ 70
Net loss	(12,813)				(12,813)
Ending Balance, value at Dec. 29, 2018	$ 29,961	$ 145	$ 71,548	$ 70	$ (41,802)
Ending Balance, shares at Dec. 29, 2018	13,602,052	13,602,052

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Operating activities:
Net loss	$ (12,813)	$ (12,867)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on sale of intellectual property		(175)
Impairment of long-lived assets		35
Loss on disposal of property and equipment	4
Depreciation and amortization	809	858
Change in fair value of earn-out liability	149	260
Stock-based compensation	1,803	1,922
Changes in operating assets and liabilities:
Accounts receivable	(1,159)	2,162
Inventories	463	2,091
Prepaid expenses and other current assets	(54)	(50)
Other long-term assets	(49)	(63)
Accounts payable	788	(270)
Accrued compensation	503	113
Accrued expenses	614	25
Accrued warranty	(875)	1,132
Deferred revenue	(295)	1,137
Other long-term liabilities	87	125
Net cash used in operating activities	(10,025)	(3,565)
Investing activities:
Acquisition of property and equipment	(440)	(575)
Proceeds from sale of intellectual property		175
Payment on earn-out liability	(387)	(382)
Net cash used in investing activities	(827)	(782)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs	10,475	2,263
Proceeds from stock option exercises	98	377
Taxes paid related to net share settlements of equity awards	(194)	(333)
Net cash provided by financing activities	10,379	2,307
Effect of foreign exchange rate changes	(40)
Net decrease in cash and cash equivalents	(513)	(2,040)
Cash and cash equivalents, beginning of year	21,707	23,747
Cash and cash equivalents, end of year	21,194	21,707
Cash paid during the year for:
Income taxes	13	7
Supplemental disclosure of non-cash activities:
Transfer of inventory to property and equipment	$ 166	$ 171

Organization

12 Months Ended

Dec. 29, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

1. Organization

Description of Business.

IRIDEX Corporation (“IRIDEX”, the “Company”, “we”, “us”, or “our”) is a leading worldwide provider of therapeutic based laser systems, delivery devices and consumable instrumentation used to treat sight-threatening eye diseases in ophthalmology. Our ophthalmology products are sold in the United States and Germany predominantly through a direct sales force and internationally through independent distributors.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Financial Statement Presentation.

The consolidated financial statements include the accounts of IRIDEX and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Our fiscal year always ends on the Saturday closest to December 31. Fiscal 2018 ended on December 29, 2018 (“FY 2018”) and Fiscal 2017 ended on December 30, 2017 (“FY 2017”). Fiscal years 2018 and 2017 each included 52 weeks of operations.

Use of Estimates.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results.

Cash and Cash Equivalents.

We consider all highly liquid debt instruments with insignificant interest rate risk and an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist primarily of cash deposits in money market funds that are available for withdrawal without restriction.

Sales Returns Allowance and Allowance for Doubtful Accounts.

We estimate future product returns related to current period product revenue. We analyze historical returns, and changes in customer demand and acceptance of our products when evaluating the adequacy of the sales returns allowance. Significant management judgment and estimates must be made and used in connection with establishing the sales returns allowance in any accounting period. 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. The balance for the provision for sales returns was $277 thousand and $570 thousand as of December 29, 2018 and December 30, 2017, respectively, and is recorded within the deferred revenue accounts in the consolidated balance sheets.

Similarly management must make estimates regarding the uncollectibility of accounts receivable. We are exposed to credit risk in the event of non-payment by customers to the extent of amounts recorded on the consolidated balance sheets. As sales levels change, the level of accounts receivable would likely also change. In addition, in the event that customers were to delay their payments to us, the levels of accounts receivable would likely increase. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on past payment history with the customer, analysis of the customer’s current financial condition, the aging of the accounts receivable balance, customer concentration and other known factors.

A reconciliation of the changes in our allowance for doubtful accounts balances for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

	Balance at							Balance
	Beginning of							at End of
Description	The period		Additions		(Deductions)			The period
Allowance for doubtful accounts Years ended
December 29, 2018		226		31		(44	)		213
December 30, 2017		230		24		(28	)		226

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. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory and are charged to cost of revenues. Once the cost of the inventory is reduced, a new lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. 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.

As part of our normal business, we generally utilize various finished goods inventory as either sales demos to facilitate the sale of our products to prospective customers, or as loaners that we allow our existing customers to use while we repair their products. We are amortizing these demos and loaners over an estimated useful life of four years. The amortization of the demos is charged to sales and marketing expense while the amortization on the loaners is charged to cost of revenues. The gross value of demos and loaners was $3.1 million and $2.4 million, and the accumulated amortization was $1.4 million and $0.9 million as of December 29, 2018 and December 30, 2017, respectively. The net book value of demos and loaners is charged to cost of revenues when such demos or loaners are sold.

Property and Equipment.

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight–line basis over the estimated useful lives of the assets, which is generally three years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the lease term. Repairs and maintenance costs are expensed as incurred.

Valuation of Goodwill and Intangible Assets.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company reviews goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company performs an annual impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The Company has determined that it has a single reporting unit for purposes of performing its goodwill impairment test. As the Company uses the market approach to assess impairment, its common stock price is an important component of the fair value calculation. If the Company’s stock price continues to experience significant price and volume fluctuations, this will impact the fair value of the reporting unit and can lead to potential impairment in future periods. The Company performed its annual impairment test during the second quarter of fiscal 2018 and determined that its goodwill was not impaired. As of December 29, 2018, we had not identified any factors that indicated there was an impairment of our goodwill and determined that no additional impairment analysis was then required.

Intangible assets with definite lives are amortized over the useful life of the asset. We review our amortizing intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future non-discounted net cash flow the asset is expected to generate. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. In such circumstances, we conduct an impairment analysis in accordance with Accounting Standard Codification (“ASC”) 350, “Intangibles – Goodwill and Other” (“ASC 350”).

Revenue Recognition.

Our revenues arise from the sale of laser consoles, delivery devices, consumables, service, and support activities. We also derive revenue from royalties from third parties which are typically based on licensees’ net sales of products that utilize our technology. Our revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”

The Company has the following revenue transaction types: (1) Product Sale Only, (2) VIP/LAP Programs, (3) Extended Warranty, (4) System Repairs (outside of warranty) and (5) Royalty Revenue.

(1)

Product Sale Only: The Company’s products consist of laser consoles, delivery devices and consumable instrumentation, including laser probes. The Company’s products are currently sold for use by ophthalmologists specializing in the treatment of glaucoma and retinal diseases. Inside the United States and Germany the products are sold directly to the end users. In other countries outside of the United States, the Company utilizes independent, third-party distributors to market and sell the Company’s products. There is no continuing obligation subsequent to the shipment to the distributors.

Under the new guidance, there is no change in our revenue recognition for product-sale-only transactions, as compared to revenue recognition for these transactions under the prior revenue recognition standards. The Company recognizes revenue from product sale at a point in time. When a system or disposables are sold without any additional deliverables, the Company recognizes 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.

(2)

VIP/LAP Programs: The Company sometimes enters into VIP or Laser Advantage Program (LAP) contracts with customers. For the VIP program, under the terms of such contracts, the customer is not charged for the system upon the initial agreement, but rather is obligated to purchase a quarterly minimum quantity of Endoprobes (classified as disposables) at a premium during the contract period, such that at the end of the contract period the system has been paid in full. The Company decided to replace its previously utilized VIP program (contract length of two years) with an LAP program (contract length of 12 months or less) beginning in fourth quarter of 2016. Under the LAP program, the system is given away free of charge and title is transferred after the customer purchases the minimum required number of boxes of probes (classified as disposables). Customers with older machines have the ability to trade in their old machines for the most current laser equipment offered in the program (G6 Laser) and receive a discount on the program’s minimum purchase requirements. Under ASC 606, this non-cash consideration must be included in the transaction price. However, the Company has determined that there is no value associated with the old machine and the trade in is essentially offered to encourage customers to purchase more consumables under the program.

Under the new guidance, there is no change in our revenue recognition for product sales under VIP/LAP programs as compared to revenue recognition for these transactions under the prior revenue recognition standards. The Company recognizes revenue from product sales under VIP/LAP programs at a point in time. For both programs, the Company allocates 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.

(3)

Extended Warranty: The Company offers a standard 2-year warranty on all system sales (5 years on the laser heads for its IQ 532/577 laser consoles). The Company also offers an extended warranty which is sold to customers in incremental, one-year warranty periods which begin subsequent to the expiration of the standard 2-year warranty. The customer can opt to purchase the extended warranty at the time of the system sale or after the initial system sale.

Under the new guidance, there is no change in our revenue recognition for extended warranty as compared to revenue recognition for these transactions under the prior revenue recognition standards. The Company recognizes revenue from extended warranty ratably over the warranty period. Revenue recognition for the sale of an extended warranty is largely dependent on the timing of the sale as follows:

Extended Warranty Sale in Conjunction with System Sale: If the customer opts to purchase an extended warranty at the time of the system sale, the Company allocates 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.

Extended Warranty Sale Subsequent to System Sale: If the customer opts to purchase an extended warranty after the initial system sale, the Company determines the amount of time that has elapsed since the initial system sale. If the extended warranty is purchased within 60 days of the initial sale, the Company considers this sale to be an additional element of the original sale and allocates 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. If the extended warranty is purchased subsequent to sixty days after the initial sale, the sale of the extended warranty is deemed a separate contract and is deferred at the selling price and recognized ratably over the extended warranty period as the performance obligation is satisfied.

(1)

System Repairs (outside of warranty): Customers will sometime request repairs from the Company subsequent to the expiration of the standard warranty and outside of an extended warranty contract.

Under the new guidance, there is no change in our revenue recognition for system repairs (outside warranty) as compared to revenue recognition for these transactions under the prior revenue recognition standards. The Company recognizes revenue from system repairs (outside of warranty) at a point in time. When the customer requests repairs from the Company subsequent to the expiration of the standard warranty and outside of an extended warranty contracts, 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.

(2)

Royalty Revenue: The Company has royalty agreements with two customers related to the sale of the Company’s intellectual property. Under the terms of these agreements, the customer is to remit a percentage of sales to the Company.

Under the new guidance, since these arrangements are for sales-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, the Company recognizes revenue only as the subsequent sale occurs. However, the Company notes 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.

The Company elected the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period of the asset that the Company would have otherwise recognized is one year or less. There is no change in the Company’s accounting for commissions.

Taxes Collected from Customers and Remitted to Governmental Authorities.

Taxes collected from customers and remitted to governmental authorities are recognized on a net basis in the accompanying consolidated statements of operations as well as accrued expenses to the degree which is appropriate.

Deferred Revenue.

Deferred revenue represents contract liabilities. Revenue related to extended service contracts is deferred and recognized on a straight-line basis over the period of the applicable service period. Costs associated with these service arrangements are recognized as incurred. Approximately $1.6 million of the deferred revenue balance is expected to be recognized over the next 12 months.

A reconciliation of the changes in our deferred revenue balances for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

FY 2016: Balance as of December 31, 2016	$	1,383
Additions to deferral		2,451
Revenue recognized		(1,314	)
FY 2017: Balance as of December 30, 2017		2,520
Additions to deferral		1,984
Revenue recognized		(2,279	)
FY 2018: Balance as of December 29, 2018	$	2,225

Warranty.

We provide reserves for the estimated cost of product warranties at the time revenue is recognized based on historical experience of known product failure rates and expected material and labor costs to provide warranty services. We generally provide a two-year warranty on our products. In March 2017, the Company began offering a 5 year warranty on the laser heads for its IQ 532/577 laser consoles. Actual warranty costs incurred have not materially differed from those accrued. The Company’s warranty policy is applicable to products which are considered defective in their performance or fail to meet the product specifications. Additionally, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. If estimates are determined to be greater than the actual amounts necessary, we may reverse a portion of such provisions in future periods. Warranty costs are reflected in the consolidated statements of operations as costs of revenues.

A reconciliation of the changes in our warranty liability for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

FY 2016: Balance as of December 31, 2016	$	603
Accruals for product warranties		1,476
Cost of warranty claims		(344	)
FY 2017: Balance as of December 30, 2017		1,735
Accruals for product warranties		454
Cost of warranty claims		(1,329	)
FY 2018: Balance as of December 29, 2018	$	860

Shipping and Handling Costs.

Our shipping and handling costs billed to customers are included in revenues and the associated expense is recorded in cost of revenues for all periods presented. Shipping and handling costs billed to customers amounted to $0.3 million for each of the fiscal years 2018 and 2017.

Research and Development.

Research and development expenditures are charged to operations as incurred.

Advertising.

Advertising and promotion costs are expensed as they are incurred; such costs were approximately $0.5 million in 2018 and $0.2 million in 2017 and are included in sales and marketing expenses in the accompanying consolidated statements of operations.

Income Taxes.

We account for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Under ASC 740, the liability method is used in accounting for income taxes. Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We annually evaluate the realizability of our deferred tax assets by assessing our valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. In 2014, we released valuation allowance against most of our deferred tax assets except that we retained a valuation allowance for certain deferred tax assets associated with our California research and development credit (“CA R&D credit”). In 2018, based on the Company's recent history of losses and its forecasted losses, management believes on the more likely than not basis that a full valuation allowance is required. Accordingly, in the fourth quarter of fiscal year 2018, the Company provided a full valuation allowance on its federal and states deferred tax assets.

Accounting for Uncertainty in Income Taxes.

We account for uncertain tax positions in accordance with ASC 740. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under ASC 740, an entity may only recognize or continue to recognize tax positions that meet a "more-likely-than-not" threshold. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There were no accrued interest and penalties during the years ended December 29, 2018 and December 30, 2017.

Accounting for Stock-Based Compensation.

The Company accounts for stock-based compensation granted to employees and directors, including employees stock option awards, restricted stock and restricted stock units in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee’s service period. The Company recognizes compensation expense on a ratable basis over the requisite service period of the award.

The Company values options using the Black-Scholes option pricing model. Restricted stock and time-based restricted stock units are valued at the grant date fair value of the underlying common shares. Performance-based restricted stock units 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. The Monte Carlo simulation model incorporates assumptions for the holding period, risk-free interest rate, stock price volatility and dividend yield.

Concentration of Credit Risk and Other Risks and Uncertainties.

Our cash and cash equivalents are deposited in demand and money market accounts. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and therefore, bear minimal risk.

We market our products to distributors and end-users throughout the world. Sales to international distributors are generally made on open credit terms and letters of credit. Management performs ongoing credit evaluations of our customers and maintains an allowance for potential credit losses. Historically, we have not experienced any significant losses related to individual customers or a group of customers in any particular geographic area. For the years ended December 29, 2018 and December 30, 2017, no single customer accounted for greater than 10% of total revenues. As of December 29, 2018 and December 30, 2017, no customer accounted for more than 10% of accounts receivable balance.

Our products require approvals from the Food and Drug Administration and international regulatory agencies prior to commercialized sales. Our future products may not receive required approvals. If we were denied such approvals, or if such approvals were delayed, it would have a materially adverse impact on our business, results of operations and financial condition.

Reliance on Certain Suppliers.

Certain components and services used to manufacture and develop our products are presently available from only one or a limited number of suppliers or vendors. The loss of any of these suppliers or vendors would potentially require a significant level of hardware and/or software development efforts to incorporate the products or services into our products.

Net Income per Share.

Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents consist of incremental common shares issuable upon the exercise of stock options and release (vesting) of restricted stock units and awards and are calculated under the treasury stock method. Common stock equivalent shares from unexercised stock options and unvested restricted stock units are excluded from the computation for periods in which we incur a net loss or if the exercise price of such options is greater than the average market price of our common stock for the period as their effect would be anti-dilutive. See Note 15 - Computation of Basic and Diluted Net Income Per Common Share.

Reclassifications

Certain reclassifications have been made to the prior year statements included in these consolidated financial statements to conform to the current year presentation. The reclassifications had no impact on previously reported net loss or accumulated deficit.

Recently Adopted Accounting Standards.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606) (“ASC 606”), which, along with amendments issued in 2015, 2016 and 2017, replaces nearly all current U.S. GAAP guidance on this topic with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. This new guidance provides a five-step analysis in determining when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

As part of our assessment and implementation plan, we evaluated our policies, procedures and internal controls. In preparation for adoption of the standard, the Company has implemented internal controls to enable the preparation of financial information, including the assessment of the impact of the standard. The Company has adopted this guidance using the modified retrospective method in the first quarter of fiscal 2018. Under the modified retrospective method, the new standards apply to all new contracts initiated on or after the effective date, and for contracts which have remaining obligations as of the effective date, an adjustment to the opening balance of retained earnings is required. Based on the results of the procedures taken in adopting this standard, we determined that our accounting for revenues under the then prescribed standard (ASC 605) was not different from the new ASC 606 standard. As such, we did not have any adjustments to our opening balance of our retained earnings.

In August 2016, the FASB issued ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The amendment gives guidance and reduces diversity in practice with respect to certain types of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this standard in fiscal year 2018 did not have a material impact on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, to ASC 740 “Income Taxes,” which simplifies the recording of an inter-entity transfer of assets other than inventory. The new guidance requires that a company recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new guidance becomes effective for annual reporting periods beginning after December 15, 2017 and must be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the adoption period. The adoption of this standard in fiscal year 2018 did not have a material impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in ASU 2017-09 include guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. These amendments require the entity to account for the effects of a modification unless all of the following conditions are met: the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or value using an alternative measurement method) of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The adoption of this standard in fiscal year 2018 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Standards Not Yet Adopted.

In February 2016, the FASB issued ASU 2016-02, “Leases,” which, along with subsequent amendments, modified lessee accounting guidance under Topic 840. This ASU requires the Company to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than twelve months. This ASU also requires disclosures enabling the users of financial statements to understand the amount, timing and uncertainty of cash flows arising from leases. This new standard will become effective for annual periods beginning after December 15, 2018 (including interim reporting periods within those periods). Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company will adopt the new standard in the first quarter of its fiscal year 2019 using the optional transition method. The Company will elect not to reassess whether any expired or existing contracts are or contain leases, not to reassess the lease classification for any expired or existing leases, not to reassess initial direct costs for any existing leases and not to separate non-lease components from lease components and instead account for each separate lease component and the non-lease components associated with that lease component as a single lease component for new or modified leases. While we continue to evaluate certain provisions of the standard, based on our current estimates, we expect the adoption of the standard will result in recognition of right-of-use assets and lease liabilities, primarily relating to real estate operating leases, of approximately $4.0 million and $4.5 million, respectively, as of the first day of fiscal year 2019, on the Company’s consolidated balance sheets. No material impact is expected to the Company’s consolidated statements of operations or its consolidated statements of cash flows.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which removes, modifies and adds certain disclosure requirements on fair value measurements. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect of the adoption of this guidance on its consolidated financial statements.

Fair Value Measurement

12 Months Ended

Dec. 29, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

3. Fair Value Measurement

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:

•

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

•

Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

•

Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in our 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 December 29, 2018 and December 30, 2017, approximate fair value because of the short maturity of these instruments.

As of December 29, 2018 and December 30, 2017, 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 was as follows (in thousands):

	As of December 29, 2018								As of December 30, 2017
	Fair Value Measurements								Fair Value Measurements
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	20,708	$	—	$	—	$	20,708	$	20,950	$	—	$	—	$	20,950
Liabilities:
Earn-out liability	$	—	$	—	$	334	$	334	$	—	$	—	$	572	$	572

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 financial assets or liabilities. The fair value of the earn-out liability arising from the acquisition of RetinaLabs, Inc. is classified within Level 3 of the fair value hierarchy since it is based on significant unobservable inputs. The significant unobservable inputs include projected royalties and discount rates to present value the payments. A significant increase (decrease) in the projected royalty payments in isolation could result in a significantly higher (lower) fair value measurement and a significant increase (decrease) in the discount rate in isolation could result in a significantly lower (higher) fair value measurement. The fair value of the earn-out liability is calculated on a quarterly basis by the Company based on a collaborative effort of the Company’s operations, finance and accounting groups as additional information becomes available. Any change in the fair value adjustment is recorded in the statement of operations of that period. The decrease in re-measurement of the contingent earn-out was due to a decrease in expected future revenues to be generated from these acquisitions. The deal was structured with an earn-out component. The earn-out liability is included in accrued expenses and other long-term liabilities in the consolidated balance sheets.

Charges related to fair value adjustments for the earn-out liability were $149 thousand and $260 thousand for the fiscal years 2018 and 2017, respectively.

The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of December 29, 2018 and December 30, 2017.

As of December 29, 2018	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Weighted Average (range)
Earn-out liability	$	334	Discounted cash flow	Projected royalties (in thousands)	$1,245
				Discount rate	10.33% (10.20% - 27.00%)

As of December 30, 2017	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Weighted Average (range)
Earn-out liability	$	572	Discounted cash flow	Projected royalties (in thousands)	$1,622
				Discount rate	10.90% (10.90% - 27.00%)

The following table provides a reconciliation of the beginning and ending balances of the contingent consideration – cash (Level 3 liabilities) (in thousands):

Balance as of December 31, 2016	$	694
Payments against earn-out		(382	)
Change in fair value of earn-out liability		260
Balance as of December 30, 2017		572
Payments against earn-out		(387	)
Change in fair value of earn-out liability		149
Balance as of December 29, 2018	$	334

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Inventories

12 Months Ended

Dec. 29, 2018

Inventory Disclosure [Abstract]

Inventories

4. Inventories

The components of our inventories are as follows (in thousands):

	FY 2018		FY 2017
	December 29, 2018		December 30, 2017
Raw materials	$	2,675	$	4,147
Work in process		1,075		1,278
Finished goods		5,044		3,956
Total inventories	$	8,794	$	9,381

Property and Equipment

12 Months Ended

Dec. 29, 2018

Property Plant And Equipment [Abstract]

Property and Equipment

5. Property and Equipment

The components of our property and equipment are as follows (in thousands):

	FY 2018			FY 2017
	December 29, 2018			December 30, 2017
Equipment	$	10,502		$	10,088
Leasehold improvements		2,516			2,364
Less: accumulated depreciation and amortization		(11,798	)		(11,049	)
Property and equipment, net	$	1,220		$	1,403

Depreciation expense related to property and equipment was $793 thousand and $842 thousand for the fiscal years 2018 and 2017, respectively.

Intangible Assets

12 Months Ended

Dec. 29, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

7. Intangible Assets

The components of our purchased intangible assets as of December 29, 2018 are as follows (in thousands):

	Useful Lives	FY 2018 Annual Amortization		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Useful Lives Remaining
Customer relations	15 Years	$	16	$	240	$	140	$	100	6.25 Years
Patents	Varies		—		600		600		—	Varies
		$	16	$	840	$	740	$	100

The components of our purchased intangible assets as of December 30, 2017 are as follows (in thousands):

	Useful Lives	FY 2017 Annual Amortization		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Useful Lives Remaining
Customer relations	15 Years	$	16	$	240	$	124	$	116	7.25 Years
Patents	Varies		—		600		600		—	Varies
		$	16	$	840	$	724	$	116

Aggregate amortization expense for each of the fiscal years 2018 and 2017 was $16 thousand. The amortization of customer relations was charged to sales and marketing expense and the amortization of patents was charged to cost of revenues.

Estimated future amortization expense for purchased intangible assets is as follows (in thousands):

Fiscal Year:
2019	$	16
2020		16
2021		16
2022		16
2023		16
Thereafter		20
Total	$	100

Accrued Expenses

12 Months Ended

Dec. 29, 2018

Payables And Accruals [Abstract]

Accrued Expenses

8. Accrued Expenses

The components of our accrued expenses are as follows (in thousands):

	FY 2018		FY 2017
	December 29, 2018		December 30, 2017
Customer deposits	$	671	$	509
Earn-out – short term		334		337
Distributor commission		291		293
Sales and use tax payable		26		57
Royalties payable		84		82
Deferred rent		131		—
Other accrued expenses		1,226		875
Total accrued expenses	$	2,763	$	2,153

Commitments and Contingencies

12 Months Ended

Dec. 29, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Lease Agreements.

We lease our operating facilities in Mountain View, California, under a non-cancelable operating lease through February 28, 2022. There are no remaining options to extend or renew the terms of this lease. Rent expense for fiscal years 2018 and 2017 was approximately $1.2 million and $1.1 million, respectively.

Our operating lease commitments consist of facility and office equipment leases. Future minimum lease payments under current operating leases as of December 29, 2018 are summarized as follows (in thousands):

Fiscal Year	Operating Lease Payments
2019	$	1,430
2020		1,509
2021		1,495
2022		310
2023		—
Total future minimum lease payments	$	4,744

Manufacture and Supply Agreement.

Future minimum payments for manufacture and supply commitments as of December 29, 2018 are summarized as follows (in thousands):

Fiscal Year	Contract Manufacturing and Supply Commitments
2019	$	9,035
2020		1,407
Total contract manufacturing and supply commitments	$	10,442

License Agreements.

We are obligated to pay royalties equivalent to 5% of sales on certain products under certain license agreements with termination dates as early as the end of 2018 and as late as the end of 2021. Royalty expense, charged to cost of revenues, was approximately $0.3 million for each of the fiscal years 2018 and 2017.

Indemnification Arrangements.

We enter into standard indemnification arrangements in our ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified parties (generally our business partners or customers) in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to our products. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these agreements is not determinable. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal.

We have entered into indemnification agreements with our directors and officers that may require us to indemnify our directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of a culpable nature. These agreements also require us to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified and to make good faith determination whether or not it is practicable for us to obtain directors and officers insurance. We currently have directors and officers liability insurance.

Legal Proceedings.

In January 2018, we filed a lawsuit against Quantel Medical, S.A., Quantel USA, Inc., and Quantel, S.A. (collectively, “Quantel”) in the U.S. District Court for the Northern District of California. The lawsuit alleges that Quantel products infringe U.S. Patent No. 7,771,417, that Quantel breached an earlier agreement between Quantel and the Company, and that Quantel has infringed upon the Company’s MicroPulse® trademark, Registration No. 4550188 on the principal register. Quantel previously had a limited license to the asserted Company patent and trademark. Our complaint filed in connection with this matter asserts that the license was terminated in early 2017 for material breach, but that Quantel continued to use our intellectual property without authorization.

In March 2017, OD-OS GmbH noticed an opposition to the Company’s European Patent No. currently EP 1 856 774 at the European Patent Office (“EPO”). On June 8, 2018, Quantel intervened in the Opposition. Oral proceedings on the opposition took place on July 13, 2018. At the conclusion of those proceedings, the EPO’s Opposition Division communicated that it would move to revoke the patent. The formal written decision from the Opposition Division was issued on October 1, 2018. The Company filed its notice of appeal on October 10, 2018.

In late May of 2018, Quantel applied to the Paris District Court in Paris, France for a ruling that its products do not infringe the French Part of Iridex’s European Patent at issue in the opposition, EP 1 856 774.

On February 12, 2019, we announced the resolution of our dispute with Quantel and dismissed the lawsuit we filed against Quantel in the U.S. District Court for the Northern District of California. Quantel dismissed and ceased its participation in parallel proceedings against us in Europe.

In addition, from time to time, we may be involved in legal proceedings arising in the ordinary course of business.

In general, management believes that claims which are pending or known to be threatened, will not have a material adverse effect on our financial position or results of operations and are adequately covered by our liability insurance. However, it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one of more of these contingencies or because of the diversion of management’s attention and the incurrence of significant expenses.

Stockholders' Equity

12 Months Ended

Dec. 29, 2018

Equity [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

1998 Stock Plan.

The 1998 Stock Plan (the “1998 Plan”), as amended, provides for the granting to employees (including officers and non-employee directors) of incentive stock options and for the granting to employees (including officers and non-employee directors) and consultants of nonstatutory stock options, stock purchase rights (“SPRs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance units and stock appreciation rights. The exercise price of incentive stock options and stock appreciation rights granted under the 1998 Plan must be at least equal to the fair market value of the shares at the time of grant. With respect to any recipient who owns stock possessing more than 10% of the voting power of our outstanding capital stock, the exercise price of any option or SPR granted must be at least equal to 110% of the fair market value at the time of grant. Options granted under the 1998 Plan are exercisable at such times and under such conditions as determined by the administrator; generally over a four year period. The maximum term of incentive stock options granted to any recipient must not exceed ten years; provided, however, that the maximum term of an incentive stock option granted to any recipient possessing more than 10% of the voting power of our outstanding capital stock must not exceed five years. In the case of SPRs, unless the administrator determines otherwise, we have a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s employment with us for any reason (including death or disability). Such repurchase option lapses at a rate determined by the administrator. The purchase price for shares repurchased is the original price paid by the purchaser. The form of consideration for exercising an option or stock purchase right, including the method of payment, is determined by the administrator. The 1998 Plan expired in February 2008.

2008 Equity Incentive Plan.

On June 11, 2008, the shareholders approved the adoption of the 2008 Equity Incentive Plan, (the “Incentive Plan”). There are no material changes in the Incentive Plan from the 1998 Plan. In 2014, the stockholders approved an amendment to the Incentive Plan for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986, as amended, to increase the share reserve under the Incentive Plan, and to make certain other amendments to the terms of the Incentive Plan. The maximum aggregate number of shares that may be awarded and sold under the Incentive Plan is 2,850,000 shares plus any shares subject to stock options or similar awards granted under the 1998 Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the 1998 Plan that are forfeited to us on or after February 23, 2008, which was the date the 1998 Plan expired.

The following table represents the shares activity and the total number of shares available for grant under the Incentive Plan:

	Shares Available for Grant
Balances as of December 31, 2016		162,155
Additional shares reserved		650,000
Options granted		(524,400	)
Restricted stock granted		(212,538	)
Options cancelled		73,694
Awards cancelled		48,059
Balances as of December 30, 2017		196,970
Additional shares reserved		1,000,000
Options granted		(178,435	)
Restricted stock granted		(628,125	)
Options cancelled		166,798
Awards cancelled		143,754
Balances as of December 29, 2018		700,962

Awards (RSU, PSU, RSA) with a per share or unit purchase price lower than 100% of the fair market value of the Company's common stock on the date of grant under the 2008 Equity Incentive Plan, as amended, are counted against shares authorized under the plan as one and one-half shares of common stock for each share. When cancelled, these shares are added back to the Plan as one and one-half shares.

The following table shows stock-based compensation expenses by functional area in the consolidated statements of operations for 2018 and 2017(in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Cost of revenues	$	47	$	152
Research and development		129		354
Sales and marketing		448		307
General and administrative		1,179		1,109
Total stock-based compensation expense	$	1,803	$	1,922

Stock-based compensation expense capitalized to inventory was immaterial for 2018 and 2017.

As of December 29, 2018, there was $4.8 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements under the Incentive Plan. The cost is expected to be recognized over a weighted average period of 2.38 years.

Summary of Stock Options

The following table summarizes information regarding activity in our stock option plans during the fiscal years ended 2018 and 2017 (in thousands except share and per share data):

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price
Balances as of December 31, 2016		470,985			8.69
Options granted		524,400			9.90
Options exercised		(64,380	)		5.86
Options cancelled or forfeited		(73,694	)		10.47
Balances as of December 30, 2017		857,311		$	9.49
Options granted		178,435			6.00
Options exercised		(24,050	)		4.09
Options cancelled or forfeited		(166,798	)		9.85
Balances as of December 29, 2018		844,898		$	8.84

The following table summarizes information with respect to stock options outstanding and exercisable as of December 29, 2018:

	Options Outstanding						Options Vested and Exercisable
Range of Exercise Prices	Number of Shares Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number of Shares Exercisable		Weighted Average Exercise Price
$3.49 - $5.69		99,341		4.77	$	5.03		37,966	$	4.37
$5.81 - $6.00		89,926		5.28	$	5.93		25,390	$	5.91
$6.30 - $8.47		85,912		3.85	$	7.24		50,582	$	7.23
$8.58 - $9.05		85,874		4.11	$	8.83		55,959	$	8.71
$9.34 - $9.40		11,875		1.40	$	9.36		11,875	$	9.36
$9.54 - $9.54		324,854		5.08	$	9.54		135,188	$	9.54
$10.14 - $11.16		83,853		3.81	$	10.80		65,004	$	10.75
$12.85 - $12.85		15,394		4.70	$	12.85		8,520	$	12.85
$14.61 - $14.61		25,000		5.19	$	14.61		10,939	$	14.61
$16.29 - $16.29		22,869		3.18	$	16.29		16,893	$	16.29
$3.49 - $16.29		844,898		4.61	$	8.84		418,316	$	9.12

The determination of the fair value of options granted is computed using the Black-Scholes option pricing model with the following weighted average assumptions:

	Employee Stock Option Plan
	FY 2018			FY 2017
Average risk free interest rate		2.69	%		1.83	%
Expected life (in years)	4.55 years			4.55 years
Dividend yield		—			—
Average volatility		40.9	%		41.8	%

The weighted average grant date fair value of options granted as calculated using the Black-Scholes option pricing was $2.27 and $3.68 per share for the fiscal years 2018 and 2017, respectively.

Option pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of our stock price history over a period commensurate with the expected term of the options, trading volume of our stock, look-back volatilities and Company specific events that affected volatility in a prior period. The expected term of employee stock options represents the weighted average period the stock options are expected to remain outstanding and is based on the history of exercises and cancellations on all past option grants made, the contractual term, the vesting period and the expected remaining term of the outstanding options. The risk-free interest rate is based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options. No dividend yield is included as we have not issued any dividends and does not anticipate issuing any dividends in the future.

Information regarding stock options outstanding, exercisable and expected to vest as of December 29, 2018 is summarized below:

	Number of		Weighted Average		Weighted Average Remaining Contractual		Aggregate Intrinsic Value
	Shares		Exercise Price		Life (years)		(thousands)
Options outstanding		844,898	$	8.84		4.61	$	12
Options vested and expected to vest		797,921	$	8.87		4.53	$	12
Options exercisable		418,316	$	9.12		3.38	$	12

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on the last trading day of fiscal 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 29, 2018. This amount is subject to change due to changes to the fair market value of our common stock. The total intrinsic value of options exercised for fiscal years 2018 and 2017 was approximately $0.1 million and $0.3 million, respectively.

Restricted Stock Awards/Restricted Stock Units

Effective for the 2018 fiscal year and thereafter, each non-employee member of the Board of Directors received an annual equity award of either restricted stock or RSU, at the election of such Board member, in each case equal to $40 thousand worth of our common stock (determined at the fair market value of the shares at the time such award is granted) under our Incentive Plan. Each equity award or RSU vests in full on the one-year anniversary of the date of grant provided that the non-employee member continues to serve on the Board through such date.

Summary of Restricted Stock Units and Awards

We recognize the estimated compensation expense of restricted stock units and awards, net of estimated forfeitures, over the vesting term. The estimated compensation expense is based on the fair value of our common stock on the date of grant.

Information regarding the restricted stock units outstanding, vested and expected to vest as of December 29, 2018 is summarized below:

Number of

Weighted

Average

Remaining

Contractual

Life (years)

Aggregate

Intrinsic

Value (thousands)

Restricted stock units outstanding

597,121

1.44

2,657

Restricted stock units vested and expected to vest

492,239

1.33

2,190

The intrinsic value of the restricted stock units is calculated based on the closing price of our shares as quoted on the Nasdaq Global Market on the last trading day of the fiscal year, December 28, 2018, of $4.45.

The majority of the restricted stock units that were released in fiscal year 2018 were net-share settled such that we withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were based on the value of the restricted stock units on their release date as determined by our closing stock price. These net-share settlements had the effect of share repurchases as they reduced and retired the number of shares that would have otherwise been issued as a result of the release and did not represent an expense to us. For the fiscal year ended December 29, 2018, 86,941 shares of restricted stock units were released with an intrinsic value of approximately $0.6 million. We withheld 26,181 shares to satisfy approximately $194 thousand of employees’ minimum tax obligation on the released restricted stock units.

Information regarding the RSU activity during the years ended December 29, 2018 and December 30, 2017 is summarized below:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2016		335,805		$	11.20
Restricted stock units granted		137,391		$	9.88
Restricted stock units released		(80,009	)	$	12.37
Restricted stock units forfeited		(32,039	)	$	11.44
Outstanding as of December 30, 2017		361,148		$	10.42
Restricted stock units granted		418,750		$	7.79
Restricted stock units released		(86,941	)	$	7.38
Restricted stock units forfeited		(95,836	)	$	10.01
Outstanding as of December 29, 2018		597,121		$	9.08

During the year ended December 29, 2018, the Company awarded 418,750 restricted stock units at a weighted average grant date fair value of $7.79 per share. Of this amount, 238,200 stock units represent performance-based shares that are subject to service, performance or market vesting conditions with a weighted average grant date fair value of $7.89 per share.

RSUs granted with market conditions are valued using a Monte Carlo simulation model and compensation expense is recognized ratably during the service period even if the market condition is not satisfied. To the extent that the market condition is not met, the RSUs will not vest and will be cancelled.

RSUs granted with performance conditions are valued at the grant date fair value of the underlying common shares. The Company makes a determination regarding the probability of the performance criteria being achieved and compensation expense is recognized ratably over the requisite service period, if it is expected that the performance criteria will be met.

Information regarding the restricted stock awards activity during the year ended December 29, 2018 and December 30, 2017 is summarized below:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2016		1,289		$	15.51
Restricted stock awards granted		4,301		$	9.30
Restricted stock awards released		(1,289	)	$	15.51
Outstanding as of December 30, 2017		4,301		$	9.30
Restricted stock awards granted		—			—
Restricted stock awards released		(4,301	)	$	9.30
Outstanding as of December 29, 2018		—			—

Income Taxes

12 Months Ended

Dec. 29, 2018

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

Loss from operations before provision for (benefit from) income taxes was comprised of the following:

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
United States	$	(12,671	)	$	(12,800	)
Foreign		(105	)		(195	)
Total	$	(12,776	)	$	(12,995	)

The provision for (benefit from) income taxes includes:

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Current:
Federal	$	—	$	(90	)
State		26		16
Foreign		9		—
		35		(74	)
Deferred:
Federal		1		(55	)
State		1		1
		2		(54	)
Provision for (benefit from) income taxes	$	37	$	(128	)

Our effective tax rate differs from the statutory federal income tax rate as shown in the following schedule:

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
Income tax provision at statutory rate		21.0	%		34.0	%
State income taxes, net of federal benefit		2.7	%		2.4	%
Permanent differences		(0.4	)%		(0.0	)%
Research and development credits		0.1	%		0.6	%
Change in valuation allowance		(24.8	)%		(32.5	)%
Foreign rate differential		(0.2	)%		(0.5	)%
Other		1.3	%		(3.0	)%
Effective tax rate		(0.3	)%		1.0	%

The tax effect of temporary differences and carryforwards that give rise to significant portions of the net deferred tax assets are presented below (in thousands):

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
Net operating losses	$	8,195		$	5,757
Research and development credits		3,048			2,839
Accruals and reserves		2,357			2,031
Deferred revenue		304			341
Property and equipment		314			314
Intangible assets		452			495
Stock compensation		797			528
Other tax credits		1			1
Net deferred tax asset		15,468			12,306
Valuation allowance		(15,485	)		(12,320	)
Net deferred tax liabilities	$	(17	)	$	(14	)

Our accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of our deferred tax assets. Assessing the realizability of deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. Our management forecasts taxable income by considering all available positive and negative evidence including our history of operating income or losses and our financial plans and estimates which are used to manage the business. These assumptions require significant judgment about future taxable income. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are reduced.

As of December 29, 2018, based on the Company's recent history of losses and its forecasted losses, management believes on the more likely than not basis that a full valuation allowance is required. Accordingly, in the fourth quarter of fiscal year 2018, the Company provided a full valuation allowance on its federal and state deferred tax assets. As of December 29, 2018, the Company had federal and state net operating loss (“NOL”) carry forwards of $32.3 million and $21.1 million respectively. The federal NOL will begin to expire in 2033 and the state NOL will begin to expire in 2021.

The Company has federal and state research credit carry forwards of approximately $1.9 million and $2.7 million, respectively, available to and development credits are subject to IRC sections 382 and 383. In the event of a change in ownership as defined by these code sections, the usage of the above mentioned NOL’s and credits may be limited.

The comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted in the United States on December 22, 2017 and includes, among other items, a reduction in the federal corporate income tax rate from 35% to 21%, certain interest expense deduction limitations and changes in the timing of certain taxable income. We are required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring our U.S. deferred tax assets and liabilities and reassessing the net realizability of our deferred tax assets and liabilities.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the tax effects of the Tax Act. We have completed our analysis and accounting with respect the Tax Act and identified no additional changes from amounts previously recorded. However, changes in law, interpretations, and facts may result in adjustments to these amounts. Based on the Company’s net operating loss carryovers and valuation allowance, there is no impact to its consolidated financial statements as a result of the accounting for the tax effects of the Tax Act.

The Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under ASC 740, an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to unrecognized tax benefits as a component of income tax expense. There is no accrued interest and penalty during the year ended December 29, 2018.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Balance at the beginning of the year	$	1,105	$	1,029
Additions based upon tax positions related to the current year		35		73
Additions based upon tax positions related to the prior year		15		3
Balance at the end of the year	$	1,155	$	1,105

If the ending balance of $1.2 million of unrecognized tax benefits at December 29, 2018 were recognized, $0 of the recognition would affect the income tax rate. The Company does not anticipate any material change in our unrecognized tax benefits over the next twelve months. The unrecognized tax benefits may change during the next year for items that arise in the ordinary course of business.

The Company files U.S. federal and state returns. The tax years 2011 to 2017 remain open in several jurisdictions, none of which have individual significance.

Loan and Security Agreement

12 Months Ended

Dec. 29, 2018

Debt Disclosure [Abstract]

Loan and Security Agreement

13. Loan and Security Agreement

In November 2016, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Silicon Valley Bank providing for a $15.0 million secured revolving loan facility (“Revolving Loan Facility”), with availability subject to an accounts receivable borrowing base formula. Borrowings under the Revolving Loan Facility accrue interest at a per annum rate equal to the Wall Street Journal Prime Rate as in effect from time to time, plus 1.5%. The Loan Agreement does not include any financial covenants. The Company may borrow, repay and reborrow funds under the Revolving Loan Facility until November 2, 2019, at which time the Revolving Loan Facility matures and all outstanding amounts must be repaid. As of December 29, 2018 and December 30, 2017, there were no amounts outstanding.

Business Segments and Geographical Information

12 Months Ended

Dec. 29, 2018

Segment Reporting [Abstract]

Business Segments and Geographical Information

14. Business Segments and Geographical Information

We operate in one segment, ophthalmology. We develop, manufacture and market medical devices. Our revenues arise from the sale of consoles, delivery devices, consumables, service and support activities.

Revenue information shown by product is as follows (in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Systems	$	20,009	$	19,703
Recurring revenues(1)		22,591		21,890
Total revenues	$	42,600	$	41,593
(1) Include service contract revenues of $1,318 and $1,160 recognized during fiscal years 2018 and 2017, respectively. Service contract revenues are recognized ratably over the service contract period.

Revenue information shown by geographic region is as follows (in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
United States	$	22,097	$	23,017
Europe		9,742		8,097
Americas, excluding the U.S.		2,590		2,319
Asia/Pacific Rim		8,171		8,160
	$	42,600	$	41,593

Revenues are attributed to countries based on location of end customers. For fiscal years 2018 and 2017 no individual country accounted for more than 10% of our sales, except for the United States, which accounted for 51.9% and 55.3% of revenues in 2018 and 2017, respectively.

Computation of Basic and Diluted Net Loss Per Common Share

12 Months Ended

Dec. 29, 2018

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Loss Per Common Share

15. Computation of Basic and Diluted Net Loss Per Common Share

A reconciliation of the numerator and denominator of basic and diluted net income per common share is provided as follows (in thousands, except per share amounts):

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
Numerator:
Net loss	$	(12,813	)	$	(12,867	)
Denominator:
Weighted average shares of common stock (basic)		12,199			11,555

Weighted average shares of common stock (diluted)		12,199			11,555
Per share data:
Basic net (loss) income per share	$	(1.05	)	$	(1.11	)
Diluted net (loss) income per share	$	(1.05	)	$	(1.11	)

As of December 29, 2018 and December 30, 2017, stock options, restricted stock units and restricted stock awards of 1,196,352 and 837,269 shares, respectively, were excluded from the computation of diluted weighted average shares outstanding because to do so would have been anti-dilutive.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Financial Statement Presentation

Financial Statement Presentation.

The consolidated financial statements include the accounts of IRIDEX and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents.

Sales Returns Allowance and Allowance for Doubtful Accounts

Sales Returns Allowance and Allowance for Doubtful Accounts.

A reconciliation of the changes in our allowance for doubtful accounts balances for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

	Balance at							Balance
	Beginning of							at End of
Description	The period		Additions		(Deductions)			The period
Allowance for doubtful accounts Years ended
December 29, 2018		226		31		(44	)		213
December 30, 2017		230		24		(28	)		226

Inventories

Inventories.

Property and Equipment

Property and Equipment.

Valuation of Goodwill and Intangible Assets

Valuation of Goodwill and Intangible Assets.

Revenue Recognition

Revenue Recognition.

The Company has the following revenue transaction types: (1) Product Sale Only, (2) VIP/LAP Programs, (3) Extended Warranty, (4) System Repairs (outside of warranty) and (5) Royalty Revenue.

(1)

(2)

(3)

(1)

System Repairs (outside of warranty): Customers will sometime request repairs from the Company subsequent to the expiration of the standard warranty and outside of an extended warranty contract.

(2)

Taxes Collected from Customers and Remitted to Governmental Authorities

Taxes Collected from Customers and Remitted to Governmental Authorities.

Deferred Revenue

Deferred Revenue.

A reconciliation of the changes in our deferred revenue balances for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

FY 2016: Balance as of December 31, 2016	$	1,383
Additions to deferral		2,451
Revenue recognized		(1,314	)
FY 2017: Balance as of December 30, 2017		2,520
Additions to deferral		1,984
Revenue recognized		(2,279	)
FY 2018: Balance as of December 29, 2018	$	2,225

Warranty

Warranty.

A reconciliation of the changes in our warranty liability for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

FY 2016: Balance as of December 31, 2016	$	603
Accruals for product warranties		1,476
Cost of warranty claims		(344	)
FY 2017: Balance as of December 30, 2017		1,735
Accruals for product warranties		454
Cost of warranty claims		(1,329	)
FY 2018: Balance as of December 29, 2018	$	860

Shipping and Handling Costs

Shipping and Handling Costs.

Research and Development

Research and Development.

Research and development expenditures are charged to operations as incurred.

Advertising

Advertising.

Income Taxes

Income Taxes.

Accounting for Uncertainty in Income Taxes

Accounting for Uncertainty in Income Taxes.

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation.

Concentration of Credit Risk and Other Risks and Uncertainties

Concentration of Credit Risk and Other Risks and Uncertainties.

Reliance on Certain Suppliers

Reliance on Certain Suppliers.

Net Income per Share

Net Income per Share.

Reclassifications

Recently Adopted Accounting Standards and Recent Accounting Standards Not Yet Adopted

Recently Adopted Accounting Standards.

Recent Accounting Standards Not Yet Adopted.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Reconciliation of Changes in Allowance for Doubtful Accounts

A reconciliation of the changes in our allowance for doubtful accounts balances for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

	Balance at							Balance
	Beginning of							at End of
Description	The period		Additions		(Deductions)			The period
Allowance for doubtful accounts Years ended
December 29, 2018		226		31		(44	)		213
December 30, 2017		230		24		(28	)		226

Reconciliation of Changes in Deferred Revenue

A reconciliation of the changes in our deferred revenue balances for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

FY 2016: Balance as of December 31, 2016	$	1,383
Additions to deferral		2,451
Revenue recognized		(1,314	)
FY 2017: Balance as of December 30, 2017		2,520
Additions to deferral		1,984
Revenue recognized		(2,279	)
FY 2018: Balance as of December 29, 2018	$	2,225

Reconciliation of Changes in Warranty Liability

A reconciliation of the changes in our warranty liability for the years ended December 29, 2018 and December 30, 2017 are as follows (in thousands):

FY 2016: Balance as of December 31, 2016	$	603
Accruals for product warranties		1,476
Cost of warranty claims		(344	)
FY 2017: Balance as of December 30, 2017		1,735
Accruals for product warranties		454
Cost of warranty claims		(1,329	)
FY 2018: Balance as of December 29, 2018	$	860

Fair Value Measurement (Tables)

12 Months Ended

Dec. 29, 2018

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis

	As of December 29, 2018								As of December 30, 2017
	Fair Value Measurements								Fair Value Measurements
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	20,708	$	—	$	—	$	20,708	$	20,950	$	—	$	—	$	20,950
Liabilities:
Earn-out liability	$	—	$	—	$	334	$	334	$	—	$	—	$	572	$	572

Quantitative Information about the Inputs and Valuation Methodologies Used for Fair Value Measurements

As of December 29, 2018	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Weighted Average (range)
Earn-out liability	$	334	Discounted cash flow	Projected royalties (in thousands)	$1,245
				Discount rate	10.33% (10.20% - 27.00%)

As of December 30, 2017	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Weighted Average (range)
Earn-out liability	$	572	Discounted cash flow	Projected royalties (in thousands)	$1,622
				Discount rate	10.90% (10.90% - 27.00%)

Reconciliation of the Changes in the Company's Earn-Out - Cash (Level 3 Liabilities) Balance

The following table provides a reconciliation of the beginning and ending balances of the contingent consideration – cash (Level 3 liabilities) (in thousands):

Balance as of December 31, 2016	$	694
Payments against earn-out		(382	)
Change in fair value of earn-out liability		260
Balance as of December 30, 2017		572
Payments against earn-out		(387	)
Change in fair value of earn-out liability		149
Balance as of December 29, 2018	$	334

Inventories (Tables)

12 Months Ended

Dec. 29, 2018

Inventory Disclosure [Abstract]

Components of Inventories

The components of our inventories are as follows (in thousands):

	FY 2018		FY 2017
	December 29, 2018		December 30, 2017
Raw materials	$	2,675	$	4,147
Work in process		1,075		1,278
Finished goods		5,044		3,956
Total inventories	$	8,794	$	9,381

Property and Equipment (Tables)

12 Months Ended

Dec. 29, 2018

Property Plant And Equipment [Abstract]

Component of Property and Equipment

The components of our property and equipment are as follows (in thousands):

	FY 2018			FY 2017
	December 29, 2018			December 30, 2017
Equipment	$	10,502		$	10,088
Leasehold improvements		2,516			2,364
Less: accumulated depreciation and amortization		(11,798	)		(11,049	)
Property and equipment, net	$	1,220		$	1,403

Intangible Assets (Tables)

12 Months Ended

Dec. 29, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Components of Purchased Intangible Assets

The components of our purchased intangible assets as of December 29, 2018 are as follows (in thousands):

	Useful Lives	FY 2018 Annual Amortization		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Useful Lives Remaining
Customer relations	15 Years	$	16	$	240	$	140	$	100	6.25 Years
Patents	Varies		—		600		600		—	Varies
		$	16	$	840	$	740	$	100

The components of our purchased intangible assets as of December 30, 2017 are as follows (in thousands):

	Useful Lives	FY 2017 Annual Amortization		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Useful Lives Remaining
Customer relations	15 Years	$	16	$	240	$	124	$	116	7.25 Years
Patents	Varies		—		600		600		—	Varies
		$	16	$	840	$	724	$	116

Estimated Future Amortization Expense for Purchased Intangible Assets

Estimated future amortization expense for purchased intangible assets is as follows (in thousands):

Fiscal Year:
2019	$	16
2020		16
2021		16
2022		16
2023		16
Thereafter		20
Total	$	100

Accrued Expenses (Tables)

12 Months Ended

Dec. 29, 2018

Payables And Accruals [Abstract]

Components of Accrued Expenses

The components of our accrued expenses are as follows (in thousands):

	FY 2018		FY 2017
	December 29, 2018		December 30, 2017
Customer deposits	$	671	$	509
Earn-out – short term		334		337
Distributor commission		291		293
Sales and use tax payable		26		57
Royalties payable		84		82
Deferred rent		131		—
Other accrued expenses		1,226		875
Total accrued expenses	$	2,763	$	2,153

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 29, 2018

Commitments And Contingencies Disclosure [Abstract]

Future Minimum Lease Payments under Current Operating Leases

Fiscal Year	Operating Lease Payments
2019	$	1,430
2020		1,509
2021		1,495
2022		310
2023		—
Total future minimum lease payments	$	4,744

Future Minimum Payments for Manufacture and Supply Commitments

Future minimum payments for manufacture and supply commitments as of December 29, 2018 are summarized as follows (in thousands):

Fiscal Year	Contract Manufacturing and Supply Commitments
2019	$	9,035
2020		1,407
Total contract manufacturing and supply commitments	$	10,442

Stockholders' Equity (Tables)

12 Months Ended

Dec. 29, 2018

Equity [Abstract]

Share Activity and Total Number of Share Available for Grant

The following table represents the shares activity and the total number of shares available for grant under the Incentive Plan:

	Shares Available for Grant
Balances as of December 31, 2016		162,155
Additional shares reserved		650,000
Options granted		(524,400	)
Restricted stock granted		(212,538	)
Options cancelled		73,694
Awards cancelled		48,059
Balances as of December 30, 2017		196,970
Additional shares reserved		1,000,000
Options granted		(178,435	)
Restricted stock granted		(628,125	)
Options cancelled		166,798
Awards cancelled		143,754
Balances as of December 29, 2018		700,962

Stock-Based Compensation Expenses

The following table shows stock-based compensation expenses by functional area in the consolidated statements of operations for 2018 and 2017(in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Cost of revenues	$	47	$	152
Research and development		129		354
Sales and marketing		448		307
General and administrative		1,179		1,109
Total stock-based compensation expense	$	1,803	$	1,922

Summary of Activity in Stock Option Plan

Summary of Stock Options

The following table summarizes information regarding activity in our stock option plans during the fiscal years ended 2018 and 2017 (in thousands except share and per share data):

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price
Balances as of December 31, 2016		470,985			8.69
Options granted		524,400			9.90
Options exercised		(64,380	)		5.86
Options cancelled or forfeited		(73,694	)		10.47
Balances as of December 30, 2017		857,311		$	9.49
Options granted		178,435			6.00
Options exercised		(24,050	)		4.09
Options cancelled or forfeited		(166,798	)		9.85
Balances as of December 29, 2018		844,898		$	8.84

Stock Options Outstanding and Exercisable

The following table summarizes information with respect to stock options outstanding and exercisable as of December 29, 2018:

	Options Outstanding						Options Vested and Exercisable
Range of Exercise Prices	Number of Shares Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number of Shares Exercisable		Weighted Average Exercise Price
$3.49 - $5.69		99,341		4.77	$	5.03		37,966	$	4.37
$5.81 - $6.00		89,926		5.28	$	5.93		25,390	$	5.91
$6.30 - $8.47		85,912		3.85	$	7.24		50,582	$	7.23
$8.58 - $9.05		85,874		4.11	$	8.83		55,959	$	8.71
$9.34 - $9.40		11,875		1.40	$	9.36		11,875	$	9.36
$9.54 - $9.54		324,854		5.08	$	9.54		135,188	$	9.54
$10.14 - $11.16		83,853		3.81	$	10.80		65,004	$	10.75
$12.85 - $12.85		15,394		4.70	$	12.85		8,520	$	12.85
$14.61 - $14.61		25,000		5.19	$	14.61		10,939	$	14.61
$16.29 - $16.29		22,869		3.18	$	16.29		16,893	$	16.29
$3.49 - $16.29		844,898		4.61	$	8.84		418,316	$	9.12

Weighted Average Assumptions for Fair Value of Options Granted

The determination of the fair value of options granted is computed using the Black-Scholes option pricing model with the following weighted average assumptions:

	Employee Stock Option Plan
	FY 2018			FY 2017
Average risk free interest rate		2.69	%		1.83	%
Expected life (in years)	4.55 years			4.55 years
Dividend yield		—			—
Average volatility		40.9	%		41.8	%

Stock Options Outstanding, Exercisable and Expected to Vest

Information regarding stock options outstanding, exercisable and expected to vest as of December 29, 2018 is summarized below:

	Number of		Weighted Average		Weighted Average Remaining Contractual		Aggregate Intrinsic Value
	Shares		Exercise Price		Life (years)		(thousands)
Options outstanding		844,898	$	8.84		4.61	$	12
Options vested and expected to vest		797,921	$	8.87		4.53	$	12
Options exercisable		418,316	$	9.12		3.38	$	12

Restricted Stock Units Outstanding, Vested and Expected to Vest

Information regarding the restricted stock units outstanding, vested and expected to vest as of December 29, 2018 is summarized below:

Number of

Weighted

Average

Remaining

Contractual

Life (years)

Aggregate

Intrinsic

Value (thousands)

Restricted stock units outstanding

597,121

1.44

2,657

Restricted stock units vested and expected to vest

492,239

1.33

2,190

Restricted Stock Units and Awards

Information regarding the RSU activity during the years ended December 29, 2018 and December 30, 2017 is summarized below:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2016		335,805		$	11.20
Restricted stock units granted		137,391		$	9.88
Restricted stock units released		(80,009	)	$	12.37
Restricted stock units forfeited		(32,039	)	$	11.44
Outstanding as of December 30, 2017		361,148		$	10.42
Restricted stock units granted		418,750		$	7.79
Restricted stock units released		(86,941	)	$	7.38
Restricted stock units forfeited		(95,836	)	$	10.01
Outstanding as of December 29, 2018		597,121		$	9.08

Information regarding the restricted stock awards activity during the year ended December 29, 2018 and December 30, 2017 is summarized below:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2016		1,289		$	15.51
Restricted stock awards granted		4,301		$	9.30
Restricted stock awards released		(1,289	)	$	15.51
Outstanding as of December 30, 2017		4,301		$	9.30
Restricted stock awards granted		—			—
Restricted stock awards released		(4,301	)	$	9.30
Outstanding as of December 29, 2018		—			—

Income Taxes (Tables)

12 Months Ended

Dec. 29, 2018

Income Tax Disclosure [Abstract]

Loss from Operations Before Provision for (Benefit from) Income Taxes

Loss from operations before provision for (benefit from) income taxes was comprised of the following:

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
United States	$	(12,671	)	$	(12,800	)
Foreign		(105	)		(195	)
Total	$	(12,776	)	$	(12,995	)

Provision for (Benefit from) Income Taxes

The provision for (benefit from) income taxes includes:

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Current:
Federal	$	—	$	(90	)
State		26		16
Foreign		9		—
		35		(74	)
Deferred:
Federal		1		(55	)
State		1		1
		2		(54	)
Provision for (benefit from) income taxes	$	37	$	(128	)

Effective Tax Rate Differs from the Statutory Federal Income Tax Rate

Our effective tax rate differs from the statutory federal income tax rate as shown in the following schedule:

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
Income tax provision at statutory rate		21.0	%		34.0	%
State income taxes, net of federal benefit		2.7	%		2.4	%
Permanent differences		(0.4	)%		(0.0	)%
Research and development credits		0.1	%		0.6	%
Change in valuation allowance		(24.8	)%		(32.5	)%
Foreign rate differential		(0.2	)%		(0.5	)%
Other		1.3	%		(3.0	)%
Effective tax rate		(0.3	)%		1.0	%

Tax Effect of Temporary Differences and Carryforwards that Give Rise to Significant Portions of the Net Deferred Tax Assets

The tax effect of temporary differences and carryforwards that give rise to significant portions of the net deferred tax assets are presented below (in thousands):

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
Net operating losses	$	8,195		$	5,757
Research and development credits		3,048			2,839
Accruals and reserves		2,357			2,031
Deferred revenue		304			341
Property and equipment		314			314
Intangible assets		452			495
Stock compensation		797			528
Other tax credits		1			1
Net deferred tax asset		15,468			12,306
Valuation allowance		(15,485	)		(12,320	)
Net deferred tax liabilities	$	(17	)	$	(14	)

A Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Balance at the beginning of the year	$	1,105	$	1,029
Additions based upon tax positions related to the current year		35		73
Additions based upon tax positions related to the prior year		15		3
Balance at the end of the year	$	1,155	$	1,105

Business Segments and Geographical Information (Tables)

12 Months Ended

Dec. 29, 2018

Segment Reporting [Abstract]

Schedule of Revenue Information by Product

Revenue information shown by product is as follows (in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
Systems	$	20,009	$	19,703
Recurring revenues(1)		22,591		21,890
Total revenues	$	42,600	$	41,593
(1) Include service contract revenues of $1,318 and $1,160 recognized during fiscal years 2018 and 2017, respectively. Service contract revenues are recognized ratably over the service contract period.

Revenue Information by Geographic Region

Revenue information shown by geographic region is as follows (in thousands):

	FY 2018		FY 2017
	Year Ended		Year Ended
	December 29, 2018		December 30, 2017
United States	$	22,097	$	23,017
Europe		9,742		8,097
Americas, excluding the U.S.		2,590		2,319
Asia/Pacific Rim		8,171		8,160
	$	42,600	$	41,593

Computation of Basic and Diluted Net Income Per Common Share (Tables)

12 Months Ended

Dec. 29, 2018

Earnings Per Share [Abstract]

Reconciliation of Numerator and Denominator of Basic and Diluted Net Income Per Common Share

A reconciliation of the numerator and denominator of basic and diluted net income per common share is provided as follows (in thousands, except per share amounts):

	FY 2018			FY 2017
	Year Ended			Year Ended
	December 29, 2018			December 30, 2017
Numerator:
Net loss	$	(12,813	)	$	(12,867	)
Denominator:
Weighted average shares of common stock (basic)		12,199			11,555

Weighted average shares of common stock (diluted)		12,199			11,555
Per share data:
Basic net (loss) income per share	$	(1.05	)	$	(1.11	)
Diluted net (loss) income per share	$	(1.05	)	$	(1.11	)

Summary of Significant Accounting Policies - Additional Information (Details)	1 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 29, 2018 USD ($) Customer	Dec. 30, 2017 USD ($) Customer	Dec. 30, 2018 USD ($)
Disclosure Summary Of Significant Accounting Policies [Line Items]
Provision for sales returns		$ 277,000	$ 570,000
Gross value of demos and loaners		3,100,000	2,400,000
Accumulated amortization on inventory demos and loaners		$ 1,400,000	900,000
Estimated useful life of demos and loaners		4 years
Estimated useful lives of the assets		3 years
Extended product warranty period		1 year
Extended warranty, period to determine nature of sale		60 days
Products warranty period		2 years
Advertising and promotion costs		$ 500,000	200,000
Accrued interest and penalty incurred		$ 0	$ 0
Subsequent Event
Disclosure Summary Of Significant Accounting Policies [Line Items]
Right-of-use assets				$ 4,000,000
Lease liabilities				$ 4,500,000
Revenue, Total \| Customer Concentration Risk
Disclosure Summary Of Significant Accounting Policies [Line Items]
Number of customers \| Customer		0	0
Accounts Receivable \| Credit Concentration Risk
Disclosure Summary Of Significant Accounting Policies [Line Items]
Number of customers \| Customer		0	0
IQ 532/577 Laser Consoles
Disclosure Summary Of Significant Accounting Policies [Line Items]
Products warranty period	5 years
Shipping and Handling
Disclosure Summary Of Significant Accounting Policies [Line Items]
Shipping and handling costs		$ 300,000	$ 300,000
Royalty Agreements
Disclosure Summary Of Significant Accounting Policies [Line Items]
Number of customers \| Customer		2

Summary of Significant Accounting Policies - Reconciliation of Changes in Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of The period	$ 226	$ 230
Additions	31	24
Deductions	(44)	(28)
Balance at End of The period	$ 213	$ 226

Summary of Significant Accounting Policies - Additional Information (Details1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-12-30 $ in Millions	Dec. 29, 2018 USD ($)
Disclosure Summary Of Significant Accounting Policies [Line Items]
Deferred revenue balance expected to be recognized over next 12 months	$ 1.6
Deferred revenue balance expected to be recognized over a period	12 months

Summary of Significant Accounting Policies - Reconciliation of Changes in Deferred Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Reconciliation of the changes in the Company's deferred revenue balance
Balance, beginning of period	$ 2,520	$ 1,383
Additions to deferral	1,984	2,451
Revenue recognized	(2,279)	(1,314)
Balance, end of period	$ 2,225	$ 2,520

Summary of Significant Accounting Policies - Reconciliation of Changes in Warranty Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Reconciliation of the changes in the Company's warranty liability
Balance, beginning of period	$ 1,735	$ 603
Accruals for product warranties	454	1,476
Cost of warranty claims	(1,329)	(344)
Balance, end of period	$ 860	$ 1,735

Fair Value Measurement - Financial Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Money Market Funds
Assets:
Assets, Fair Value Measurements	$ 20,708	$ 20,950
Earn Out Liability
Liabilities:
Liabilities, Fair Value Measurements	334	572
Level 1 \| Money Market Funds
Assets:
Assets, Fair Value Measurements	20,708	20,950
Level 3 \| Earn Out Liability
Liabilities:
Liabilities, Fair Value Measurements	$ 334	$ 572

Fair Value Measurement - Quantitative Information about the Inputs and Valuation Methodologies Used for Fair Value Measurements (Details) - Fair Value Measurements Recurring - Earn Out Liability $ in Thousands	Dec. 29, 2018 USD ($)	Dec. 30, 2017 USD ($)
Quantitative information about the inputs and valuation methodologies used for fair value measurements
Liabilities, Fair Value Measurements	$ 334	$ 572
Level 3
Quantitative information about the inputs and valuation methodologies used for fair value measurements
Liabilities, Fair Value Measurements	$ 334	$ 572
Valuation Technique, Earn-out liability	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Level 3 \| Discounted Cash Flow \| Weighted Average
Quantitative information about the inputs and valuation methodologies used for fair value measurements
Weighted Average, Projected royalties	$ 1,245	$ 1,622
Discount Rate \| Level 3 \| Weighted Average
Quantitative information about the inputs and valuation methodologies used for fair value measurements
Weighted Average, Discount rate	10.33	10.90
Discount Rate \| Level 3 \| Minimum
Quantitative information about the inputs and valuation methodologies used for fair value measurements
Weighted Average, Discount rate	10.20	10.90
Discount Rate \| Level 3 \| Maximum
Quantitative information about the inputs and valuation methodologies used for fair value measurements
Weighted Average, Discount rate	27.00	27.00

Fair Value Measurement - Reconciliation of the Changes in the Company's Earn-Out - Cash (Level 3 Liabilities) Balance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Reconciliation of the changes in the Company's earn-out - cash (Level 3 liabilities) balance
Balance as of beginning of the period	$ 572	$ 694
Payments against earn-out	(387)	(382)
Change in fair value of earn-out liability	149	260
Balance as of the end of the period	$ 334	$ 572

Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 2,675	$ 4,147
Work in process	1,075	1,278
Finished goods	5,044	3,956
Total inventories	$ 8,794	$ 9,381

Property and Equipment - Component of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Component of property and equipment
Less: accumulated depreciation and amortization	$ (11,798)	$ (11,049)
Property and equipment, net	1,220	1,403
Equipment
Component of property and equipment
Property and equipment, gross	10,502	10,088
Leasehold Improvements
Component of property and equipment
Property and equipment, gross	$ 2,516	$ 2,364

Goodwill - Additional Information (Details) - USD ($)	12 Months Ended
Goodwill - Additional Information (Details) - USD ($)	Dec. 29, 2018	Dec. 30, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Carrying value of goodwill	$ 533,000	$ 533,000
Impairment of goodwill	$ 0	$ 0

Intangible Assets - Components of Purchased Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Components of purchased intangible assets
Annual Amortization	$ 16	$ 16
Gross Carrying Value	840	840
Accumulated Amortization	740	724
Net Carrying Value	$ 100	$ 116
Customer Relations
Components of purchased intangible assets
Useful Lives	15 years	15 years
Useful Lives Remaining	6 years 3 months	7 years 3 months
Annual Amortization	$ 16	$ 16
Gross Carrying Value	240	240
Accumulated Amortization	140	124
Net Carrying Value	100	116
Patents
Components of purchased intangible assets
Gross Carrying Value	600	600
Accumulated Amortization	$ 600	$ 600

Intangible Assets - Estimated Future Amortization Expense for Purchased Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Estimated future amortization expense for purchased intangible assets
2019	$ 16
2020	16
2021	16
2022	16
2023	16
Thereafter	20
Net Carrying Value	$ 100	$ 116

Accrued Expenses - Components of Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Components of accrued expenses
Customer deposits	$ 671	$ 509
Earn-out – short term	334	337
Distributor commission	291	293
Sales and use tax payable	26	57
Royalties payable	84	82
Deferred rent	131
Other accrued expenses	1,226	875
Total accrued expenses	$ 2,763	$ 2,153

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Commitments And Contingencies Disclosure [Abstract]
Rent expense	$ 1.2	$ 1.1
Lease expiration date	Feb. 28, 2022
Royalties pay equivalent to Percentage of sales	5.00%
Royalty expense	$ 0.3	$ 0.3
Early termination date of certain license agreement	2018
Late termination date of certain license agreement	2021

Commitments and Contingencies - Future Minimum Lease Payments under Current Operating Leases (Details) $ in Thousands	Dec. 29, 2018 USD ($)
Future minimum lease payments under current operating leases
2019	$ 1,430
2020	1,509
2021	1,495
2022	310
Total future minimum lease payments	$ 4,744

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 28, 2018
Exercisable period	3 years 4 months 17 days
Percentage of fair market value of Commons stock date of grant	100.00%
Share based payment award number of shares of common stock for each share	1.5
Total unrecognized compensation cost related to non-vested share-based compensation arrangements		$ 4,800
Cost is expected to be recognized over a weighted average period		2 years 4 months 17 days
Weighted-average grant date fair value of the options granted	$ 2.27	$ 3.68
Total intrinsic value of options exercised	$ 100	$ 300
Unvested restricted stock awarded	628,125	212,538
Restricted Stock Units (RSUs)
Grant of non-qualified stock option	$ 40
The intrinsic value of the restricted stock units			$ 4.45
Number of shares, vested	86,941	80,009
Restricted stock units released, intrinsic value	$ 600
Restricted stock units released, Shares withheld	26,181
Restricted stock units released, value withheld	$ 194
Unvested restricted stock awarded	418,750	137,391
Weighted-average grant date fair value of restricted stock awarded	$ 7.79	$ 9.88
1998 Stock Plan
Voting rights on outstanding capital stock	10.00%
Exercise price of option	110.00%
Term of incentive stock options for major stock holders	5 years
Exercisable period	4 years
Maximum term of incentive stock options granted	10 years
Expiration date of option Plan	2008-02
2008 Equity Incentive Plan
Grant of non-qualified stock option	2,850,000
Performance Award \| Restricted Stock Units (RSUs)
Unvested restricted stock awarded	238,200
Weighted-average grant date fair value of restricted stock awarded	$ 7.89

Stockholders' Equity - Summary of Share Activity and Total Number of Share Available for Grant (Details) - shares	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Shares Available for Grant, Beginning Balance	196,970	162,155
Shares Available for Grant, Additional shares reserved	1,000,000	650,000
Shares Available for Grant, Options granted	(178,435)	(524,400)
Shares Available for Grant, Restricted stock granted	(628,125)	(212,538)
Shares Available for Grant, Options cancelled	166,798	73,694
Shares Available for Grant, Awards cancelled	143,754	48,059
Shares Available for Grant, Ending Balance	700,962	196,970

Stockholders' Equity - Stock-Based Compensation Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,803	$ 1,922
Cost of revenues
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	47	152
Research and development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	129	354
Sales and marketing
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	448	307
General and administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,179	$ 1,109

Stockholders' Equity - Summary of Activity in Stock Option Plan (Details) - $ / shares	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Outstanding, Number of Shares, Beginning Balance	857,311	470,985
Number of Shares, Options granted	178,435	524,400
Number of Shares, Options exercised	(24,050)	(64,380)
Number of Shares, Options cancelled or forfeited	(166,798)	(73,694)
Number of Shares, Ending Balance	844,898	857,311
Weighted Average Exercise Price, Beginning Balance	$ 9.49	$ 8.69
Weighted Average Exercise Price, Options granted	6.00	9.90
Weighted Average Exercise Price, Options exercised	4.09	5.86
Weighted Average Exercise Price, Options cancelled or forfeited	9.85	10.47
Weighted Average Exercise Price, Ending Balance	$ 8.84	$ 9.49

Stockholders' Equity - Stock Options Outstanding and Exercisable (Details) - $ / shares	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Stock options outstanding and exercisable
Options Outstanding, Weighted Average Exercise Price	$ 9.85	$ 10.47
Range One
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	3.49
Range of Exercise Prices, Upper Range Limit	$ 5.69
Options Outstanding, Number of Shares	99,341
Options Outstanding, Weighted Average Remaining Contractual Life (years)	4 years 9 months 7 days
Options Outstanding, Weighted Average Exercise Price	$ 5.03
Options Vested and Exercisable, Number of Shares Exercisable	37,966
Options Vested and Exercisable, Weighted Average Exercise Price	$ 4.37
Range Two
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	5.81
Range of Exercise Prices, Upper Range Limit	$ 6.00
Options Outstanding, Number of Shares	89,926
Options Outstanding, Weighted Average Remaining Contractual Life (years)	5 years 3 months 10 days
Options Outstanding, Weighted Average Exercise Price	$ 5.93
Options Vested and Exercisable, Number of Shares Exercisable	25,390
Options Vested and Exercisable, Weighted Average Exercise Price	$ 5.91
Range Three
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	6.30
Range of Exercise Prices, Upper Range Limit	$ 8.47
Options Outstanding, Number of Shares	85,912
Options Outstanding, Weighted Average Remaining Contractual Life (years)	3 years 10 months 6 days
Options Outstanding, Weighted Average Exercise Price	$ 7.24
Options Vested and Exercisable, Number of Shares Exercisable	50,582
Options Vested and Exercisable, Weighted Average Exercise Price	$ 7.23
Range Four
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	8.58
Range of Exercise Prices, Upper Range Limit	$ 9.05
Options Outstanding, Number of Shares	85,874
Options Outstanding, Weighted Average Remaining Contractual Life (years)	4 years 1 month 9 days
Options Outstanding, Weighted Average Exercise Price	$ 8.83
Options Vested and Exercisable, Number of Shares Exercisable	55,959
Options Vested and Exercisable, Weighted Average Exercise Price	$ 8.71
Range Five
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	9.34
Range of Exercise Prices, Upper Range Limit	$ 9.40
Options Outstanding, Number of Shares	11,875
Options Outstanding, Weighted Average Remaining Contractual Life (years)	1 year 4 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 9.36
Options Vested and Exercisable, Number of Shares Exercisable	11,875
Options Vested and Exercisable, Weighted Average Exercise Price	$ 9.36
Range Six
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	9.54
Range of Exercise Prices, Upper Range Limit	$ 9.54
Options Outstanding, Number of Shares	324,854
Options Outstanding, Weighted Average Remaining Contractual Life (years)	5 years 29 days
Options Outstanding, Weighted Average Exercise Price	$ 9.54
Options Vested and Exercisable, Number of Shares Exercisable	135,188
Options Vested and Exercisable, Weighted Average Exercise Price	$ 9.54
Range Seven
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	10.14
Range of Exercise Prices, Upper Range Limit	$ 11.16
Options Outstanding, Number of Shares	83,853
Options Outstanding, Weighted Average Remaining Contractual Life (years)	3 years 9 months 21 days
Options Outstanding, Weighted Average Exercise Price	$ 10.80
Options Vested and Exercisable, Number of Shares Exercisable	65,004
Options Vested and Exercisable, Weighted Average Exercise Price	$ 10.75
Range Eight
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	12.85
Range of Exercise Prices, Upper Range Limit	$ 12.85
Options Outstanding, Number of Shares	15,394
Options Outstanding, Weighted Average Remaining Contractual Life (years)	4 years 8 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 12.85
Options Vested and Exercisable, Number of Shares Exercisable	8,520
Options Vested and Exercisable, Weighted Average Exercise Price	$ 12.85
Range Nine
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	14.61
Range of Exercise Prices, Upper Range Limit	$ 14.61
Options Outstanding, Number of Shares	25,000
Options Outstanding, Weighted Average Remaining Contractual Life (years)	5 years 2 months 8 days
Options Outstanding, Weighted Average Exercise Price	$ 14.61
Options Vested and Exercisable, Number of Shares Exercisable	10,939
Options Vested and Exercisable, Weighted Average Exercise Price	$ 14.61
Range Ten
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	16.29
Range of Exercise Prices, Upper Range Limit	$ 16.29
Options Outstanding, Number of Shares	22,869
Options Outstanding, Weighted Average Remaining Contractual Life (years)	3 years 2 months 4 days
Options Outstanding, Weighted Average Exercise Price	$ 16.29
Options Vested and Exercisable, Number of Shares Exercisable	16,893
Options Vested and Exercisable, Weighted Average Exercise Price	$ 16.29
Range Eleven
Stock options outstanding and exercisable
Range of Exercise Prices, Lower Range Limit	3.49
Range of Exercise Prices, Upper Range Limit	$ 16.29
Options Outstanding, Number of Shares	844,898
Options Outstanding, Weighted Average Remaining Contractual Life (years)	4 years 7 months 9 days
Options Outstanding, Weighted Average Exercise Price	$ 8.84
Options Vested and Exercisable, Number of Shares Exercisable	418,316
Options Vested and Exercisable, Weighted Average Exercise Price	$ 9.12

Stockholders' Equity - Weighted Average Assumptions for Fair Value of Options Granted (Details)	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Weighted average assumptions for fair value of options granted
Average risk free interest rate	2.69%	1.83%
Expected life (in years)	4 years 6 months 18 days	4 years 6 months 18 days
Average volatility	40.90%	41.80%

Stockholders' Equity - Stock Options Outstanding, Exercisable and Expected to Vest (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Stock options outstanding, exercisable and expected to vest
Options outstanding, Number of Shares	844,898	857,311	470,985
Options outstanding, Weighted Average Exercise Price	$ 8.84	$ 9.49	$ 8.69
Options outstanding, Weighted Average Remaining Contractual Life (years)	4 years 7 months 9 days
Options outstanding, Aggregate Intrinsic Value	$ 12
Options vested and expected to vest, Number of Shares	797,921
Options vested and expected to vest, Weighted Average Exercise Price	$ 8.87
Options vested and expected to vest, Weighted Average Remaining Contractual Life (years)	4 years 6 months 10 days
Options vested and expected to vest, Aggregate Intrinsic Value	$ 12
Options exercisable, Number of Shares	418,316
Options exercisable, Weighted Average Exercise Price	$ 9.12
Options exercisable, Weighted Average Remaining Contractual Life (years)	3 years 4 months 17 days
Options exercisable, Aggregate Intrinsic Value	$ 12

Stockholders' Equity - Restricted Stock Units Outstanding, Vested and Expected to Vest (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Restricted stock units outstanding, vested and expected to vest
Restricted stock units outstanding, Number of Shares	597,121	361,148	335,805
Restricted stock units outstanding, Weighted Average Remaining Contractual Life (years)	1 year 5 months 8 days
Restricted stock units outstanding, Aggregate Intrinsic Value	$ 2,657
Restricted stock units vested and expected to vest, Number of Shares	492,239
Restricted stock units vested and expected to vest, Weighted Average Remaining Contractual Life (years)	1 year 3 months 29 days
Restricted stock units vested and expected to vest, Aggregate Intrinsic Value	$ 2,190

Stockholders' Equity - Restricted Stock Units and Awards (Details) - $ / shares	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Restricted stock units and awards
Number of Shares, Restricted stock granted	628,125	212,538
Restricted Stock Units (RSUs)
Restricted stock units and awards
Outstanding, Number of Shares, Beginning Balance	361,148	335,805
Number of Shares, Restricted stock granted	418,750	137,391
Number of Shares, Restricted stock released	(86,941)	(80,009)
Number of Shares, Restricted stock forfeited	(95,836)	(32,039)
Outstanding, Number of Shares, Ending Balance	597,121	361,148
Outstanding, Weighted Average Grant Date Fair Value, Beginning Balance	$ 10.42	$ 11.20
Weighted Average Grant Date Fair Value, Restricted stock granted	7.79	9.88
Weighted Average Grant Date Fair Value, Restricted stock released	7.38	12.37
Weighted Average Grant Date Fair Value, Restricted stock forfeited	10.01	11.44
Outstanding, Weighted Average Grant Date Fair Value, Ending Balance	$ 9.08	$ 10.42
Restricted Stock Awards
Restricted stock units and awards
Outstanding, Number of Shares, Beginning Balance	4,301	1,289
Number of Shares, Restricted stock granted		4,301
Number of Shares, Restricted stock released	(4,301)	(1,289)
Outstanding, Number of Shares, Ending Balance		4,301
Outstanding, Weighted Average Grant Date Fair Value, Beginning Balance	$ 9.30	$ 15.51
Weighted Average Grant Date Fair Value, Restricted stock granted		9.30
Weighted Average Grant Date Fair Value, Restricted stock released	$ 9.30	15.51
Outstanding, Weighted Average Grant Date Fair Value, Ending Balance		$ 9.30

Income Taxes - Loss from Operations Before Provision for (benefit from) Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Loss from operations before provision for (benefit from) income taxes
United States	$ (12,671)	$ (12,800)
Foreign	(105)	(195)
Loss from operations before provision for (benefit from) income taxes	$ (12,776)	$ (12,995)

Income Taxes - Provision for (benifit from) Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Current:
Federal		$ (90)
State	$ 26	16
Foreign	9
Total	35	(74)
Deferred:
Federal	1	(55)
State	1	1
Total	2	(54)
Provision for (benefit from) income taxes	$ 37	$ (128)

Income Taxes - Effective Tax Rate Differs from the Statutory Federal Income Tax Rate (Details)	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Company's effective tax rate differs from the statutory federal income tax rate
Income tax provision at statutory rate	21.00%	34.00%
State income taxes, net of federal benefit	2.70%	2.40%
Permanent differences	(0.40%)	0.00%
Research and development credits	0.10%	0.60%
Change in valuation allowance	(24.80%)	(32.50%)
Foreign rate differential	(0.20%)	(0.50%)
Other	1.30%	(3.00%)
Effective tax rate	(0.30%)	1.00%

Income Taxes - Tax Effect of Temporary Differences and Carryforwards that Give Rise to Significant Portions of the Net Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Tax effect of temporary differences and carryforwards that give rise to significant portions of the net deferred tax assets
Net operating losses	$ 8,195	$ 5,757
Research and development credits	3,048	2,839
Accruals and reserves	2,357	2,031
Deferred revenue	304	341
Property and equipment	314	314
Intangible assets	452	495
Stock compensation	797	528
Other tax credits	1	1
Net deferred tax asset	15,468	12,306
Valuation allowance	(15,485)	(12,320)
Net deferred tax liabilities	$ (17)	$ (14)

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes [Line Items]
Corporate federal income tax rate	21.00%	34.00%
Accrued interest and penalty	$ 0
Ending balance of unrecognized tax benefits	1,155,000	$ 1,105,000	$ 1,029,000
Unrecognized tax benefits recognition impact on income tax rate	$ 0
Earliest Tax Year
Income Taxes [Line Items]
Open Tax Year	2011
Latest Tax Year
Income Taxes [Line Items]
Open Tax Year	2017
Maximum
Income Taxes [Line Items]
Corporate federal income tax rate		35.00%
Federal
Income Taxes [Line Items]
Net operating loss	$ 32,300,000
Net operating loss expiration year	2033
Research credit				$ 1,900,000
State
Income Taxes [Line Items]
Net operating loss	$ 21,100,000
Net operating loss expiration year	2021
Research credit				$ 2,700,000

Income Taxes - A Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
A reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance at the beginning of the year	$ 1,105	$ 1,029
Additions based upon tax positions related to the current year	35	73
Additions based upon tax positions related to the prior year	15	3
Balance at the end of the year	$ 1,155	$ 1,105

Loan and Security Agreement - Additional Information (Details) - Loan Agreement - Silicon Valley Bank - Revolving Loan Facility - USD ($)	Nov. 02, 2016	Dec. 29, 2018	Dec. 30, 2017
Line Of Credit Facility [Line Items]
Borrowings available under secured revolving loan facility	$ 15,000,000
Loan facility, maturity date	Nov. 02, 2019
Secured revolving loan facility outstanding		$ 0	$ 0
Wall Street Journal Prime Rate
Line Of Credit Facility [Line Items]
Debt instrument, basis spread on variable interest rate	1.50%

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Business Segments and Geographical Information - Additional Information (Details) - Segment	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Segment Reporting Information [Line Items]
Number of operating segments	1
United States \| Geographic Concentration Risk \| Revenue, Total
Segment Reporting Information [Line Items]
Percentage of concentration risk	51.90%	55.30%

Business Segments and Geographical Information - Schedule of Revenue Information by Product (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	$ 42,600	$ 41,593
Systems
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	20,009	19,703
Recurring Revenues
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	$ 22,591	$ 21,890

Business Segments and Geographical Information - Schedule of Revenue Information by Product (Parenthetical) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	$ 42,600	$ 41,593
Service Contract Revenues
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	$ 1,318	$ 1,160

Business Segments and Geographical Information - Revenue Information by Geographic Region (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	$ 42,600	$ 41,593
United States
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	22,097	23,017
Europe
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	9,742	8,097
Americas, excluding the U.S.
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	2,590	2,319
Asia/Pacific Rim
Revenues From External Customers And Long Lived Assets [Line Items]
Total revenues	$ 8,171	$ 8,160

Computation of Basic and Diluted Net Loss Per Common Share - Reconciliation of Numerator and Denominator of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Numerator:
Net loss	$ (12,813)	$ (12,867)
Denominator:
Weighted average shares of common stock (basic)	12,199	11,555
Weighted average shares of common stock (diluted)	12,199	11,555
Per share data:
Basic net (loss) income per share	$ (1.05)	$ (1.11)
Diluted net (loss) income per share	$ (1.05)	$ (1.11)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Compensation And Retirement Disclosure [Abstract]
Defined Contribution Plan Employee Contribution Percentage	15.00%
Total matching contributions made by the company	$ 233	$ 248

Commitments and Contingencies - Future Minimum Payments for Manufacture and Supply Commitments (Details) $ in Thousands	Dec. 29, 2018 USD ($)
Future minimum payments for manufacturing and supply commitments
2019	$ 9,035
2020	1,407
Total contract manufacturing and supply commitments	$ 10,442

Computation of Basic and Diluted Net Loss Per Common Share - Additional Information (Details) - shares	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Stock options, restricted stock units and restricted stock awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Shares that were excluded from the computation of diluted weighted average shares outstanding	1,196,352	837,269