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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000891618-06-000530.txt : 20061222
<SEC-HEADER>0000891618-06-000530.hdr.sgml : 20061222
<ACCEPTANCE-DATETIME>20061222172909
ACCESSION NUMBER:		0000891618-06-000530
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20061218
ITEM INFORMATION:		Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
FILED AS OF DATE:		20061222
DATE AS OF CHANGE:		20061222

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			IRIDEX CORP
		CENTRAL INDEX KEY:			0001006045
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				770210467
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0102

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-27598
		FILM NUMBER:		061297858

	BUSINESS ADDRESS:	
		STREET 1:		1212 TERRA BELLA AVE
		CITY:			MOUNTAIN VIEW
		STATE:			CA
		ZIP:			94043
		BUSINESS PHONE:		6509404700

	MAIL ADDRESS:	
		STREET 1:		1212 TERRA BELLA AVENUE
		CITY:			MOUNTAIN VIEW
		STATE:			CA
		ZIP:			94043
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f26087e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<TITLE>e8vk</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 or 15(d) of the<BR>
Securities Exchange Act of 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): December&nbsp;18, 2006</B></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>IRIDEX CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
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    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>0-27598</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>77-0210467</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of <BR>
incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>1212 Terra Bella Avenue<BR>
Mountain View, California 94043</B><BR>
(Address of principal executive offices, including zip code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(650)&nbsp;940-4700</B><BR>
(Registrant&#146;s telephone number, including area code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(Former name or former address, if changed since last report)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review." -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;18, 2006, the Audit Committee of the Company&#146;s Board of Directors determined that
the financial statements contained in the Company&#146;s Quarterly Report on Form 10-Q for the first
quarter of its 2006 fiscal year, which ended April&nbsp;1, 2006, should no longer be relied upon because
of an error in such financial statements as addressed in Accounting Principles Board Opinion No.
20. As a result, the Company will restate the condensed consolidated financial statements for the
first quarter of 2006 contained in its Quarterly Report on Form 10-Q for the first quarter of 2006
in an amended Quarterly Report on Form 10-Q/A that will be filed with the Securities and Exchange
Commission. The restated condensed consolidated financial statements to be contained in the
amended Quarterly Report on Form 10-Q/A that will be filed with the Securities and Exchange
Commission will reflect adjustments relating to the overstatement of revenue in both the
ophthalmology and dermatology segments and the related cost of sales, operating expenses and income tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As disclosed in the
 Company&#146;s Current report on Form 8-K dated August&nbsp;21, 2006, in August&nbsp;2006,
the Audit Committee of the Board of Directors engaged outside counsel and initiated an independent
review of the Company&#146;s revenue recognition practices. This review was initiated in response to an
allegation made by a former employee that the Company had recognized revenue prematurely in its fourth quarter of 2004.
 The investigation concluded that the Company has prematurely recognized revenue in 2004, but the error did not arise
 from any wrongful intent to impact the Company&#146;s financials. In the course of this review, other errors unrelated to the allegation
 were
identified from the period beginning in the fourth quarter of 2003 through the first quarter of
2006. As it relates to the errors identified in the first quarter of 2006 the Company and the Audit
Committee of the Board of Directors determined that it was necessary to restate the Company&#146;s
financial results for the quarter ended April&nbsp;1, 2006 to reflect adjustments to the previously
reported financial information. While the review identified errors relating to the periods from
the fourth quarter of 2003 through December&nbsp;31, 2005, the Company concluded that these errors were
not material to the previously issued financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the review identified
 errors relating to the periods from the fourth quarter of 2003 through December&nbsp;31, 2005,
 the Company concluded that these errors were not material to the previously issued financial statements.
The first quarter of 2006 includes an adjustment to reduce revenue, cost of sales and operating expenses
by $81,000, $43,000 and $5,000, respectively, related to the correction of immaterial errors related to prior periods.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result, the
 condensed consolidated financial statements for the first quarter of 2006 are restated. The restated condensed
consolidated financial statements reflect adjustments relating to the overstatement of revenue in both
 the ophthalmology and dermatology segments and the related cost of sales, operating expenses and income tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three
 months ended April&nbsp;1, 2006 total revenue
decreased to $8.8&nbsp;million from $9.0&nbsp;million and net loss increased from
$264,000 to $303,000. Basic and diluted net loss per share increased from ($0.03) to ($0.04).
The overstatement of revenues, cost of sales and the related commissions included in operating
expenses consist of the following errors:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Recognition of $101,000 of revenue related to sales in which the customer was
provided non-standard return rights. The Company also adjusted $64,000 of associated
cost of sales and related commissions of $6,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Failure to defer revenue of $48,000 related to sales in which title transfer did not
occur prior to the end of the reporting period. The Company also adjusted $20,000 of
associated cost of sales and related commissions of $3,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Failure to defer revenue of $18,000 related to the fair value of an undelivered
element under sales arrangements with a multiple-element. No adjustment to cost of
sales or operating expense was required for this transaction.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tax benefit and accruals for income tax payable increased by $35,000 as a result of
the adjustments detailed above.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The adjustments had no impact on cash flows from operating, investing or financing activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s management determined that these errors were a result of the Company&#146;s failure
to maintain effective controls over the completeness and accuracy of the revenue recognition
process and concluded that these control deficiencies constituted a material weakness because they
could result in the misstatement of the accounts that would result in a material misstatement of
the annual or interim consolidated financial statements that would not be prevented or detected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The decision to restate the previously issued financial statements and the matters disclosed
in this Item&nbsp;4.02 have been discussed with PricewaterhouseCoopers LLP, the Company&#146;s independent registered
public accounting firm.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>IRIDEX CORPORATION</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ <FONT style="font-variant: SMALL-CAPS">Larry Tannenbaum</FONT>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left"><B>Larry Tannenbaum</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="left"><B>Chief Financial Officer, Secretary and Senior Vice<BR></B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>President of Finance and Administration</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date: <B>December&nbsp;22, 2006</B>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
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