Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'LUNA | ' |
Entity Registrant Name | 'LUNA INNOVATIONS INC | ' |
Entity Central Index Key | '0001239819 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 14,483,957 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $8,184,665 | $6,340,461 |
Accounts receivable, net | 5,656,564 | 7,059,635 |
Inventory, net | 3,775,508 | 3,336,916 |
Prepaid expenses | 492,696 | 667,773 |
Other current assets | 70,208 | 35,629 |
Total current assets | 18,179,641 | 17,440,414 |
Property and equipment, net | 2,155,032 | 2,426,638 |
Intangible assets, net | 327,293 | 437,839 |
Other assets | 61,501 | 152,877 |
Total assets | 20,723,467 | 20,457,768 |
Current Liabilities: | ' | ' |
Current portion of long-term debt obligation | 1,500,000 | 1,500,000 |
Current portion of capital lease obligation | 65,627 | 54,091 |
Accounts payable | 1,270,190 | 1,797,571 |
Accrued liabilities | 2,717,560 | 2,747,175 |
Deferred credits | 558,076 | 832,822 |
Total current liabilities | 6,111,453 | 6,931,659 |
Long-term debt obligation | 1,000,000 | 2,125,000 |
Long-term lease obligation | 127,337 | 128,917 |
Total liabilities | 7,238,790 | 9,185,576 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, par value $ 0.001, 1,321,514 shares authorized, issued and outstanding at September 30, 2013 and December 31, 2012 | 1,322 | 1,322 |
Common stock, par value $ 0.001, 100,000,000 shares authorized, 14,483,900 and 14,009,280 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 14,779 | 14,245 |
Additional paid-in capital | 62,430,014 | 61,361,505 |
Accumulated deficit | -48,961,438 | -50,104,880 |
Total stockholders' equity | 13,484,677 | 11,272,192 |
Total liabilities and stockholders' equity | $20,723,467 | $20,457,768 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,321,514 | 1,321,514 |
Preferred stock, issued | 1,321,514 | 1,321,514 |
Preferred stock, outstanding | 1,321,514 | 1,321,514 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 14,483,900 | 14,009,280 |
Common stock, shares outstanding | 14,483,900 | 14,009,280 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues: | ' | ' | ' | ' |
Technology development revenues | $3,130,206 | $3,691,154 | $8,564,744 | $11,528,700 |
Products and licensing revenues | 2,587,763 | 3,155,953 | 7,623,203 | 8,715,630 |
Total revenues | 5,717,969 | 6,847,107 | 16,187,947 | 20,244,330 |
Cost of revenues: | ' | ' | ' | ' |
Technology development costs | 2,282,061 | 2,646,293 | 6,663,194 | 8,074,595 |
Products and licensing costs | 1,228,134 | 1,307,285 | 3,516,196 | 3,821,980 |
Total cost of revenues | 3,510,195 | 3,953,578 | 10,179,390 | 11,896,575 |
Gross Profit | 2,207,774 | 2,893,529 | 6,008,557 | 8,347,755 |
Operating expense: | ' | ' | ' | ' |
Selling, general and administrative | 2,221,428 | 2,592,908 | 7,388,835 | 7,777,206 |
Research, development and engineering | 558,214 | 630,059 | 2,065,337 | 1,923,300 |
Total operating expense | 2,779,642 | 3,222,967 | 9,454,172 | 9,700,506 |
Operating loss | -571,868 | -329,438 | -3,445,615 | -1,352,751 |
Other income/(expense): | ' | ' | ' | ' |
Other (expenses)/income, net | -1,521 | 37,866 | 85,289 | 85,083 |
Interest expense | -42,654 | -68,455 | -150,732 | -222,473 |
Total other expense | -44,175 | -30,589 | -65,443 | -137,390 |
Loss from continuing operations before income taxes | -616,043 | -360,027 | -3,511,058 | -1,490,141 |
Income tax (benefit)/expense | -131,784 | 15,618 | -1,087,839 | 21,417 |
Loss from continuing operations | -484,259 | -375,645 | -2,423,219 | -1,511,558 |
(Loss)/income from discontinued operations, net of income taxes | -129,653 | 155,436 | 3,642,822 | 714,081 |
Net (loss)/income | -613,912 | -220,209 | 1,219,603 | -797,477 |
Preferred stock dividend | 26,166 | 34,095 | 76,161 | 94,974 |
Net (loss)/income attributable to common stockholders | ($640,078) | ($254,304) | $1,143,442 | ($892,451) |
Net loss per share from continuing operations: | ' | ' | ' | ' |
Basic | ($0.03) | ($0.03) | ($0.17) | ($0.11) |
Diluted | ($0.03) | ($0.03) | ($0.17) | ($0.11) |
Net (loss)/income per share from discontinued operations: | ' | ' | ' | ' |
Basic | ($0.01) | $0.01 | $0.25 | $0.05 |
Diluted | ($0.01) | $0.01 | $0.22 | $0.04 |
Net (loss)/income per share attributable to common stockholders: | ' | ' | ' | ' |
Basic | ($0.04) | ($0.02) | $0.08 | ($0.06) |
Diluted | ($0.04) | ($0.02) | $0.07 | ($0.06) |
Weighted average common shares and common equivalent shares outstanding: | ' | ' | ' | ' |
Basic | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 |
Diluted | 14,441,707 | 16,312,622 | 16,593,102 | 16,269,306 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows used in operating activities | ' | ' |
Net income/(loss) | $1,219,603 | ($797,477) |
Adjustments to reconcile net income/(loss) to net cash used in operating activities | ' | ' |
Depreciation and amortization | 711,375 | 814,498 |
Share-based compensation | 896,554 | 1,411,672 |
Warrant expense | ' | 52,889 |
Gain on sale of discontinued operations, net of income taxes | -3,738,697 | ' |
Allowance for doubtful accounts or bad debt expense | 124,810 | ' |
Tax benefit from utilization of net operating loss carryforward | -1,157,833 | ' |
Change in assets and liabilities: | ' | ' |
Accounts receivable | 1,880,545 | -1,771,022 |
Inventory | -438,592 | -243,565 |
Other current assets | 26,931 | 107,826 |
Other assets | 91,376 | 56,375 |
Accounts payable and accrued expenses | -600,471 | -36,216 |
Deferred credits | -274,746 | -359,250 |
Net cash used in operating activities | -1,259,145 | -764,270 |
Cash flows provided by/(used in) investing activities | ' | ' |
Acquisition of property and equipment | -161,519 | -242,396 |
Intangible property costs | -187,928 | -131,727 |
Proceeds from sale of discontinued operations, net of fees | 4,522,460 | ' |
Net cash provided by/(used in) investing activities | 4,173,013 | -374,123 |
Cash flows used in financing activities | ' | ' |
Payments on capital lease obligations | -40,993 | -37,924 |
Payment of debt obligations | -1,125,000 | -1,125,000 |
Proceeds from the exercise of options and warrants | 96,329 | 84,501 |
Net cash used in financing activities | -1,069,664 | -1,078,423 |
Net increase/(decrease) in cash and cash equivalents | 1,844,204 | -2,216,816 |
Cash and cash equivalents-beginning of period | 6,340,461 | 8,939,127 |
Cash and cash equivalents-end of period | 8,184,665 | 6,722,311 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid for interest | 142,188 | 217,812 |
Dividend on preferred stock, 59,469 shares of common stock issuable at September 30, 2013 and 2012 | 76,160 | 94,974 |
Cash paid for income taxes | $14,010 | $15,618 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Parenthetical) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Dividend on preferred stock, shares of common stock issuable | 59,469 | 59,469 |
Basis_of_Presentation_and_Sign
Basis of Presentation and Significant Accounting Policies | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | ' | ||||||||||||||||||||||||||||||||
1 | Basis of Presentation and Significant Accounting Policies | ||||||||||||||||||||||||||||||||
Nature of Operations | |||||||||||||||||||||||||||||||||
Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”) is incorporated in the State of Delaware and headquartered in Roanoke, Virginia. We develop, manufacture and market fiber optic test & measurement, sensing, and instrumentation products and are focused on bringing new and innovative technology solutions to measure, monitor, protect and improve critical processes in the telecommunications, medical, composite and defense industries. We are organized into two main groups, which work closely together to turn ideas into products: our Technology Development segment and our Products and Licensing segment. Our business model is designed to accelerate the process of bringing new and innovative technologies to market. We have a history of net losses from continuing operations from 2005 through the nine months ended September 30, 2013 attributable to our operations and other charges. We have historically managed our liquidity through cost reduction initiatives, debt financings and capital market transactions. | |||||||||||||||||||||||||||||||||
Since the second half of 2008, the increased turmoil in the U.S. and global capital markets and a global slowdown of economic growth created a substantially more difficult business environment. Our ability to access the capital markets may be limited. Economic and market conditions may not improve significantly during the remainder of 2013 and could get worse. | |||||||||||||||||||||||||||||||||
Although there can be no guarantees, we believe that our current cash balance, in addition to the funds available to us under the Credit Facilities described in Note 4 below, will provide adequate liquidity for us to meet our working capital needs over the next twelve months. | |||||||||||||||||||||||||||||||||
Unaudited Interim Financial Information | |||||||||||||||||||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring accruals considered necessary to present fairly our financial position at September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |||||||||||||||||||||||||||||||||
The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 29, 2013. As used herein, the terms “Luna”, the “Company”, “we”, “our” and “us” mean Luna Innovations Incorporated and its consolidated subsidiaries. | |||||||||||||||||||||||||||||||||
Consolidation Policy | |||||||||||||||||||||||||||||||||
Our consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company and our wholly owned subsidiaries. We eliminate from our financial results all significant intercompany transactions. We do not have any investments in entities we believe are variable interest entities for which we are the primary beneficiary. | |||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: | |||||||||||||||||||||||||||||||||
• | Level 1—Quoted prices for identical instruments in active markets | ||||||||||||||||||||||||||||||||
• | Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets | ||||||||||||||||||||||||||||||||
• | Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable | ||||||||||||||||||||||||||||||||
The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of our debt approximates fair value, as we consider the floating interest rate on our credit facilities with Silicon Valley Bank to be at market. Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. This includes items such as nonfinancial assets and liabilities initially measured at fair value in a business combination and nonfinancial long-lived asset groups measured at fair value for an impairment assessment. In general, nonfinancial assets including intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. | |||||||||||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||||||||||
The preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may differ from such estimates and assumptions. | |||||||||||||||||||||||||||||||||
Per Share Net Loss from Continuing Operations and Net (Loss)/Income Attributable to Common Stockholders | |||||||||||||||||||||||||||||||||
Net income/(loss) per share From Continuing | Net income/(loss) per share | ||||||||||||||||||||||||||||||||
Operations | |||||||||||||||||||||||||||||||||
For the three months ended | For the nine months ended | For the three months ended | For the nine months ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (484,259 | ) | $ | (375,645 | ) | $ | (2,423,219 | ) | $ | (1,511,558 | ) | |||||||||||||||||||||
Net (loss)/income attributable to stockholders | $ | (640,078 | ) | (254,304 | ) | $ | 1,143,442 | $ | (892,451 | ) | |||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||||||||||
Basic weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | |||||||||||||||||||||||||
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | — | — | — | — | — | — | 730,702 | — | |||||||||||||||||||||||||
Convertible preferred stock | — | — | — | — | — | — | 1,321,514 | — | |||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | 255,056 | — | |||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | 14,441,707 | 13,939,938 | 16,593,102 | 13,903,809 | |||||||||||||||||||||||||
Basic net (loss)/income per common share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.08 | $ | (0.06 | ) | ||||||||||
Diluted net (loss)/income per common share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.07 | $ | (0.06 | ) | ||||||||||
Weighted-average anti-dilutive shares related to: | |||||||||||||||||||||||||||||||||
Outstanding Stock Options | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 | 4,957,984 | 5,663,511 | |||||||||||||||||||||||||
Convertible preferred stock | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | — | 1,321,514 | |||||||||||||||||||||||||
Preferred stock dividends | 274,879 | 195,587 | 255,056 | 175,764 | 274,879 | 195,587 | — | 175,764 | |||||||||||||||||||||||||
Restricted stock | 261,257 | 169,515 | 219,759 | 169,515 | 261,257 | 169,515 | — | 169,515 | |||||||||||||||||||||||||
The weighted-average anti-dilutive shares shown in the foregoing table were not included in the computation of diluted net loss from continuing operations and net (loss)/income per share attributable to common stockholders. For reporting periods in which we have reported net income attributable to common stockholders, weighted-average anti-dilutive shares comprise stock options that have exercise prices above the average stock price for the period. For reporting periods in which we have a net loss from continuing operations or net loss attributable to common stockholders, the weighted-average anti-dilutive shares comprise shares that would have been dilutive had we had net income from continuing operations or net income attributable to common stockholders (e.g., convertible preferred stock, preferred stock dividends, restricted stock and stock options that have exercise prices below the average stock price for the period), plus the number of stock options that would be anti-dilutive had we had a net income from continuing operations or net income attributable to common stockholders. | |||||||||||||||||||||||||||||||||
Share-Based Compensation | |||||||||||||||||||||||||||||||||
We recognize share-based compensation expense based upon the fair value of the underlying equity award on the date of the grant. For restricted stock awards and restricted stock units, we recognize expense based upon the price of our underlying stock at the date of the grant. We have elected to use the Black-Scholes option pricing model to value any option or warrant awards granted. We amortize share-based compensation for such awards on a straight-line basis over the related service period of the awards taking into account the effects of the employees’ expected exercise and post-vesting employment termination behavior. To compute the volatility used in this model we use the historical volatility of our common stock over the expected life of options granted. The risk-free interest rate is based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. The expected life and estimated post employment termination behavior is based upon historical experience of homogeneous groups within our company. We also assume an expected dividend yield of zero for all periods, as we have never paid a dividend on our common stock and do not have any plans to do so in the future. | |||||||||||||||||||||||||||||||||
The fair value of each option granted during the nine months ended September 30, 2013 and 2012 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: | |||||||||||||||||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.27 - 2.34% | 1.18 - 1.49% | |||||||||||||||||||||||||||||||
Expected life of options (in years) | 7.5 | 7.5 | |||||||||||||||||||||||||||||||
Expected stock price volatility | 108% | 108% | |||||||||||||||||||||||||||||||
A summary of the activity for our 2003 Stock Plan and 2006 Equity Incentive Plan is presented below for the nine months ended September 30, 2013: | |||||||||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||||||||
Number of | Price per Share | Weighted | Aggregate | Number of | Weighted | Aggregate | |||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||
Range | Average | Intrinsic | Shares | Average | Intrinsic | ||||||||||||||||||||||||||||
Exercise | Value (1) | Exercise | Value (1) | ||||||||||||||||||||||||||||||
Price | Price | ||||||||||||||||||||||||||||||||
Balance, January 1, 2013 | 5,422,130 | $0.35 - $6.74 | $ | 2.19 | $ | 639,904 | 3,775,388 | $ | 2.37 | $ | 604,292 | ||||||||||||||||||||||
Granted | 667,840 | $1.20 - $1.31 | $ | 1.29 | |||||||||||||||||||||||||||||
Exercised | (93,719 | ) | $0.35 - $1.18 | $ | 0.49 | ||||||||||||||||||||||||||||
Canceled | (673,565 | ) | $0.35 - $6.74 | $ | 2.24 | ||||||||||||||||||||||||||||
Balance, September 30, 2013 | 5,322,686 | $0.35 - $6.55 | $ | 2.09 | $ | 757,365 | 3,862,724 | $ | 2.29 | $ | 691,280 | ||||||||||||||||||||||
-1 | The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only. The aggregate intrinsic value is based on the closing price of our Common Stock on the NASDAQ Capital Market, as applicable, on the respective dates. | ||||||||||||||||||||||||||||||||
At September 30, 2013, the outstanding stock options to purchase an aggregate of 5.3 million shares had a weighted average remaining contractual term of 6.1 years, and the exercisable stock options to purchase an aggregate of 3.9 million shares had a weighted average remaining contractual term of 5.2 years. | |||||||||||||||||||||||||||||||||
For the three months ended September 30, 2013 and 2012, we recognized $0.3 million and $0.5 million, respectively, and for the nine months ended September 30, 2013 and 2012, we recognized $0.9 million and $1.4 million, respectively, in share-based compensation expense, which is included in our selling, general and administrative expenses in the accompanying consolidated financial statements. We expect to recognize $1.8 million in share-based compensation expense over the weighted average remaining service period of 1.6 years for stock options outstanding as of September 30, 2013. | |||||||||||||||||||||||||||||||||
Intangible Assets and Other Long Lived Assets | |||||||||||||||||||||||||||||||||
Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair market value, less cost to sell. | |||||||||||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. | |||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||||||||||||||
There are no recently issued accounting standards that are expected to have a material impact on our consolidated results of operations, financial position and cash flows. | |||||||||||||||||||||||||||||||||
Discontinued_Operations
Discontinued Operations | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations | ' | ||||||||||||||||
2 | Discontinued Operations | ||||||||||||||||
On March 1, 2013, we completed the sale of our Secure Computing and Communications group (“SCC”), which was part of our Technology Development segment, to an unaffiliated third party for a gross sales price of $6.1 million of cash. Prior to the sale, SCC provided innovative solutions designed to secure critical technologies within the U.S. government. SCC conducted applied research and provided services to the government in this area, with its revenues primarily derived from U.S. government contracts and purchase orders. Of the purchase price, we received approximately $5.4 million at closing and are to receive $110,000 on December 31, 2013. An additional $600,000 was placed in escrow to be released in tranches over 18 months, subject to certain events and dates and to any indemnification claims of the acquirer. In connection with the sale, we incurred approximately $0.8 million in transaction costs that included various charges related to investment banker and legal fees. In addition, the acquirer has entered into a sublease with us for the facilities historically occupied by SCC through December 31, 2013 for a total of $0.3 million. In the transaction, we sold the equipment, contracts and intellectual property associated with SCC. Approximately 20 employees of SCC transferred to the acquirer. Included in the transaction were current assets of approximately $0.2 million and long term assets with a net book value of approximately $0.1 million, at February 28, 2013. SCC accounted for 18.5% of our revenues, and 20.7% of our cost of revenues for the year ended December 31, 2012. We recorded an aggregate after-tax gain on the sale of this group of $3.7 million or $0.22 per diluted share in our results of operations for the nine months ended September 30, 2013. | |||||||||||||||||
We have reported the results of operations of SCC as discontinued operations in our consolidated financial statements. We allocated a portion of the consolidated tax expense to discontinued operations based on the ratio of the discontinued group’s income or loss before allocations. | |||||||||||||||||
Following the sale of SCC, we have continued to act on behalf of the purchaser and bill the government for certain contracts that have not yet been transferred by the government to the purchaser. We record these amounts as revenues, with an offsetting amount as cost of revenues, within (loss)/income from discontinued operations. We expect to continue recording such revenues and costs until all of these contracts are transferred to the purchaser by the government. | |||||||||||||||||
The loss from discontinued operations for the three months ended September 30, 2013, is the result of the allocation of the alternative minimum tax computation on the company’s results as a whole at September 30, 2013. | |||||||||||||||||
The key components of (loss)/income from discontinued operations were as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net revenues | $ | 559,191 | $ | 1,183,672 | $ | 1,790,628 | $ | 4,339,942 | |||||||||
Cost of revenues | 559,191 | 931,183 | 1,722,005 | 3,173,858 | |||||||||||||
Operating expenses | — | 97,053 | 229,745 | 452,003 | |||||||||||||
Income/(loss) before income taxes | — | 155,436 | (161,122 | ) | 714,081 | ||||||||||||
Allocated tax expense/(benefit) | 236 | — | (65,247 | ) | — | ||||||||||||
Operating (loss)/ income from discontinued operations | (236 | ) | 155,436 | (95,875 | ) | 714,081 | |||||||||||
(Loss)/gain on sale, net of $0.1 million, and $1.2 million, of related income taxes, respectively | (129,417 | ) | — | 3,738,697 | — | ||||||||||||
(Loss)/income from discontinued operations, net of income taxes | $ | (129,653 | ) | $ | 155,436 | $ | 3,642,822 | $ | 714,081 | ||||||||
Inventory
Inventory | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory | ' | ||||||||
3 | Inventory | ||||||||
Inventory consists of finished goods, work-in-process and parts valued at the lower of cost (determined on the first-in, first-out basis) or market. We provide reserves for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions. | |||||||||
Components of inventory are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Finished goods | $ | 733,475 | $ | 195,578 | |||||
Work-in-process | 448,704 | 252,227 | |||||||
Parts | 2,705,235 | 2,975,297 | |||||||
3,887,414 | 3,423,102 | ||||||||
Less: Inventory reserves | 111,906 | 86,186 | |||||||
Total inventory, net | $ | 3,775,508 | $ | 3,336,916 | |||||
Debt
Debt | 9 Months Ended | |
Sep. 30, 2013 | ||
Debt | ' | |
4 | Debt | |
Silicon Valley Bank Credit Facilities | ||
We currently have a Loan and Security Agreement with Silicon Valley Bank (“SVB”) in which we have a term loan with an original borrowing amount of $6.0 million (the “Term Loan”). The Term Loan is to be repaid by us in 48 monthly installments, plus accrued interest payable monthly in arrears, and unless earlier terminated, matures on the earlier of either May 1, 2015 or an event of a default under the loan agreement. The term loan carries a floating annual interest rate equal to SVB’s prime rate then in effect plus 2%. We may repay amounts due under the Term Loan at any time with no penalties. | ||
In addition to the terms and conditions of the Term Loan, we also have a revolving credit facility (the “Line of Credit” and together with the Term Loan, the “Credit Facilities”) with a maximum borrowing capacity of $1.0 million. The interest rate on the Line of Credit is SVB’s prime rate plus 1.25%, payable monthly in arrears, and we are required to pay an unused Line of Credit fee of one-quarter of one percent (0.25%), payable monthly. We may terminate the Line of Credit for a termination fee of $10,000, which fee would not be payable in the event that the Line of Credit is replaced by another loan facility with SVB. The Line of Credit has a maturity date of May 17, 2014. | ||
Amounts due under the Credit Facilities are secured by substantially all of our assets, including intellectual property, personal property and bank accounts. | ||
On March 21, 2013, we entered into a Fourth Loan Modification Agreement with SVB that replaced the existing financial covenants with a single covenant that we maintain a minimum cash balance of $5.0 million with SVB. The Credit Facilities also require us to observe a number of operational covenants, including protection and registration of intellectual property rights, and certain customary negative covenants. As of September 30, 2013, we were in compliance with all covenants under the Credit Facilities. | ||
In addition, the Credit Facilities contain customary events of default, including nonpayment of principal, interest or other amounts, violation of covenants, material adverse change, an event of default under any subordinated debt documents, incorrectness of representations and warranties in any material respect, bankruptcy, judgments in excess of a threshold amount, and violations of other agreements in excess of a threshold amount. If any event of default occurs SVB may declare due immediately all borrowings under the Credit Facilities and foreclose on the collateral. Furthermore, an event of default under the Credit Facilities would result in an increase in the interest rate on any amounts outstanding. As of September 30, 2013, there were no events of default on our Credit Facilities. | ||
The balance under the Term Loan at September 30, 2013 was $2.5 million of which $1.0 million was classified as long-term and $1.5 million was classified as short-term. No amounts were outstanding under the Line of Credit and the available credit capacity was $1.0 million at September 30, 2013. |
Capital_Stock_and_Additional_P
Capital Stock and Additional Paid-in Capital | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Capital Stock and Additional Paid-in Capital | ' | ||||||||||||||||||||
5 | Capital Stock and Additional Paid-in Capital | ||||||||||||||||||||
The following details our equity transactions during the nine months ended September 30, 2013: | |||||||||||||||||||||
Preferred Stock | Common Stock | Additional | |||||||||||||||||||
Paid-in | |||||||||||||||||||||
Capital | |||||||||||||||||||||
Shares | $ | Shares | $ | $ | |||||||||||||||||
Balances, December 31, 2012 | 1,321,514 | 1,322 | 14,009,280 | 14,245 | 61,361,505 | ||||||||||||||||
Exercise of stock options | — | — | 125,842 | 125 | 81,204 | ||||||||||||||||
Share-based compensation | — | — | 337,500 | 338 | 896,216 | ||||||||||||||||
Stock dividends to Carilion Clinic(1) | — | — | — | 60 | 76,100 | ||||||||||||||||
Other issuance of common stock (2) | — | — | 11,278 | 11 | 14,989 | ||||||||||||||||
Balances, September 30, 2013 | 1,321,514 | 1,322 | 14,483,900 | 14,779 | 62,430,014 | ||||||||||||||||
-1 | The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to September 30, 2013. For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through September 30, 2013, the Series A Preferred Stock issued to Carilion has accrued $684,009 in dividends. The accrued and unpaid dividends as of September 30, 2013 will be paid by the issuance of 294,702 shares of our common stock upon Carilion’s written request. | ||||||||||||||||||||
-2 | Represents shares of common stock issued to one director in lieu of cash fees for annual service. |
Operating_Segments
Operating Segments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Operating Segments | ' | ||||||||||||||||
6 | Operating Segments | ||||||||||||||||
Our operations are divided into two operating segments—“Technology Development” and “Products and Licensing”. | |||||||||||||||||
The Technology Development segment provides applied research to customers in our areas of focus. Our engineers and scientists collaborate with our network of government, academic and industry experts to identify technologies and ideas with promising market potential. We then compete to win fee-for-service contracts from government agencies and industrial customers who seek innovative solutions to practical problems that require new technology. The Technology Development segment derives its revenue primarily from services. This segment previously included SCC, which we sold on March 1, 2013, and the amounts below do not include the revenues, expenses and assets of SCC. | |||||||||||||||||
The Products and Licensing segment derives its revenue from product sales, funded product development and technology licenses. | |||||||||||||||||
Through September 30, 2013, our Chief Executive Officer and his direct reports collectively represented our chief operating decision makers, and they evaluated segment performance based primarily on revenue and operating income or loss. The accounting policies of our segments are the same as those described in the summary of significant accounting policies (see Note 1 to our Financial Statements, “Organization and Summary of Significant Accounting Policies,” presented in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 29, 2013). | |||||||||||||||||
The table below presents revenues and operating loss for reportable segments not including discontinued operations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Revenues: | |||||||||||||||||
Technology development revenues | $ | 3,130,206 | $ | 3,691,154 | $ | 8,564,744 | $ | 11,528,700 | |||||||||
Products and licensing revenues | 2,587,763 | 3,155,953 | 7,623,203 | 8,715,630 | |||||||||||||
Total revenues | $ | 5,717,969 | $ | 6,847,107 | $ | 16,187,947 | $ | 20,244,330 | |||||||||
Technology development operating loss | $ | (259,483 | ) | $ | (501,213 | ) | $ | (1,863,668 | ) | $ | (1,376,129 | ) | |||||
Products and licensing operating (loss)/income | (312,385 | ) | 171,775 | (1,581,947 | ) | 23,378 | |||||||||||
Total operating loss | $ | (571,868 | ) | $ | (329,438 | ) | $ | (3,445,615 | ) | $ | (1,352,751 | ) | |||||
Depreciation, technology development | $ | 70,410 | $ | 108,575 | $ | 228,349 | $ | 237,313 | |||||||||
Depreciation, products and licensing | $ | 59,307 | $ | 49,038 | $ | 205,647 | $ | 179,407 | |||||||||
Amortization, technology development | $ | 49,936 | $ | 29,300 | $ | 145,944 | $ | 115,690 | |||||||||
Amortization, products and licensing | $ | 42,478 | $ | 40,457 | $ | 131,435 | $ | 87,461 | |||||||||
The table below presents assets for reportable segments: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Total segment assets: | |||||||||||||||||
Technology development | $ | 10,903,743 | $ | 13,342,725 | |||||||||||||
Products and licensing | 9,819,724 | 7,115,043 | |||||||||||||||
Total | $ | 20,723,467 | $ | 20,457,768 | |||||||||||||
Property plant and equipment, and intangible assets, Technology development | $ | 1,306,086 | $ | 1,868,235 | |||||||||||||
Property plant and equipment, and intangible assets, Products and licensing | $ | 1,176,239 | $ | 996,242 | |||||||||||||
There are no material inter-segment revenues for any period presented. | |||||||||||||||||
The United States Government accounted for approximately 62% and 60% of total consolidated revenues for the three months ended September 30, 2013 and 2012, respectively, and 56% and 60% of total consolidated revenues for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||||||||||
International revenues (customers outside the United States) accounted for approximately 16% and 18% of total consolidated revenues for the three months ended September 30, 2013 and 2012, respectively, and 23% and 16% of total consolidated revenue for the nine months ended September 30, 2013 and 2012, respectively. |
Contingencies_and_Guarantees
Contingencies and Guarantees | 9 Months Ended | |
Sep. 30, 2013 | ||
Contingencies and Guarantees | ' | |
7 | Contingencies and Guarantees | |
We are from time to time involved in certain legal proceedings in the ordinary course of conducting our business. While the ultimate liability pursuant to these actions cannot currently be determined, we believe these legal proceedings will not have a material adverse effect on our financial position or results of operations. | ||
In September 2011 we executed a non-cancelable $1.2 million purchase order for multiple shipments of tunable lasers to be delivered over a 12-month period beginning in 2012. At September 30, 2013, we had fulfilled the purchase requirement for these tunable lasers. | ||
We have entered into indemnification agreements with our officers and directors, to the extent permitted by law, pursuant to which we have agreed to reimburse the officers and directors for legal expenses in the event of litigation and regulatory matters. The terms of these indemnification agreements provide for no limitation to the maximum potential future payments. We have a directors and officers insurance policy that may, in certain instances, mitigate the potential liability and payments. |
Basis_of_Presentation_and_Sign1
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Nature of Operations | ' | ||||||||||||||||||||||||||||||||
Nature of Operations | |||||||||||||||||||||||||||||||||
Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”) is incorporated in the State of Delaware and headquartered in Roanoke, Virginia. We develop, manufacture and market fiber optic test & measurement, sensing, and instrumentation products and are focused on bringing new and innovative technology solutions to measure, monitor, protect and improve critical processes in the telecommunications, medical, composite and defense industries. We are organized into two main groups, which work closely together to turn ideas into products: our Technology Development segment and our Products and Licensing segment. Our business model is designed to accelerate the process of bringing new and innovative technologies to market. We have a history of net losses from continuing operations from 2005 through the nine months ended September 30, 2013 attributable to our operations and other charges. We have historically managed our liquidity through cost reduction initiatives, debt financings and capital market transactions. | |||||||||||||||||||||||||||||||||
Since the second half of 2008, the increased turmoil in the U.S. and global capital markets and a global slowdown of economic growth created a substantially more difficult business environment. Our ability to access the capital markets may be limited. Economic and market conditions may not improve significantly during the remainder of 2013 and could get worse. | |||||||||||||||||||||||||||||||||
Although there can be no guarantees, we believe that our current cash balance, in addition to the funds available to us under the Credit Facilities described in Note 4 below, will provide adequate liquidity for us to meet our working capital needs over the next twelve months. | |||||||||||||||||||||||||||||||||
Unaudited Interim Financial Information | ' | ||||||||||||||||||||||||||||||||
Unaudited Interim Financial Information | |||||||||||||||||||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring accruals considered necessary to present fairly our financial position at September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |||||||||||||||||||||||||||||||||
The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 29, 2013. As used herein, the terms “Luna”, the “Company”, “we”, “our” and “us” mean Luna Innovations Incorporated and its consolidated subsidiaries. | |||||||||||||||||||||||||||||||||
Consolidation Policy | ' | ||||||||||||||||||||||||||||||||
Consolidation Policy | |||||||||||||||||||||||||||||||||
Our consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company and our wholly owned subsidiaries. We eliminate from our financial results all significant intercompany transactions. We do not have any investments in entities we believe are variable interest entities for which we are the primary beneficiary. | |||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: | |||||||||||||||||||||||||||||||||
• | Level 1—Quoted prices for identical instruments in active markets | ||||||||||||||||||||||||||||||||
• | Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets | ||||||||||||||||||||||||||||||||
• | Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable | ||||||||||||||||||||||||||||||||
The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of our debt approximates fair value, as we consider the floating interest rate on our credit facilities with Silicon Valley Bank to be at market. Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. This includes items such as nonfinancial assets and liabilities initially measured at fair value in a business combination and nonfinancial long-lived asset groups measured at fair value for an impairment assessment. In general, nonfinancial assets including intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. | |||||||||||||||||||||||||||||||||
Use of Estimates | ' | ||||||||||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||||||||||
The preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may differ from such estimates and assumptions. | |||||||||||||||||||||||||||||||||
Per Share Net Loss from Continuing Operations and Net (Loss)/Income Attributable to Common Stockholders | ' | ||||||||||||||||||||||||||||||||
Per Share Net Loss from Continuing Operations and Net (Loss)/Income Attributable to Common Stockholders | |||||||||||||||||||||||||||||||||
Net income/(loss) per share From Continuing | Net income/(loss) per share | ||||||||||||||||||||||||||||||||
Operations | |||||||||||||||||||||||||||||||||
For the three months ended | For the nine months ended | For the three months ended | For the nine months ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (484,259 | ) | $ | (375,645 | ) | $ | (2,423,219 | ) | $ | (1,511,558 | ) | |||||||||||||||||||||
Net (loss)/income attributable to stockholders | $ | (640,078 | ) | (254,304 | ) | $ | 1,143,442 | $ | (892,451 | ) | |||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||||||||||
Basic weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | |||||||||||||||||||||||||
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | — | — | — | — | — | — | 730,702 | — | |||||||||||||||||||||||||
Convertible preferred stock | — | — | — | — | — | — | 1,321,514 | — | |||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | 255,056 | — | |||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | 14,441,707 | 13,939,938 | 16,593,102 | 13,903,809 | |||||||||||||||||||||||||
Basic net (loss)/income per common share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.08 | $ | (0.06 | ) | ||||||||||
Diluted net (loss)/income per common share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.07 | $ | (0.06 | ) | ||||||||||
Weighted-average anti-dilutive shares related to: | |||||||||||||||||||||||||||||||||
Outstanding Stock Options | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 | 4,957,984 | 5,663,511 | |||||||||||||||||||||||||
Convertible preferred stock | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | — | 1,321,514 | |||||||||||||||||||||||||
Preferred stock dividends | 274,879 | 195,587 | 255,056 | 175,764 | 274,879 | 195,587 | — | 175,764 | |||||||||||||||||||||||||
Restricted stock | 261,257 | 169,515 | 219,759 | 169,515 | 261,257 | 169,515 | — | 169,515 | |||||||||||||||||||||||||
The weighted-average anti-dilutive shares shown in the foregoing table were not included in the computation of diluted net loss from continuing operations and net (loss)/income per share attributable to common stockholders. For reporting periods in which we have reported net income attributable to common stockholders, weighted-average anti-dilutive shares comprise stock options that have exercise prices above the average stock price for the period. For reporting periods in which we have a net loss from continuing operations or net loss attributable to common stockholders, the weighted-average anti-dilutive shares comprise shares that would have been dilutive had we had net income from continuing operations or net income attributable to common stockholders (e.g., convertible preferred stock, preferred stock dividends, restricted stock and stock options that have exercise prices below the average stock price for the period), plus the number of stock options that would be anti-dilutive had we had a net income from continuing operations or net income attributable to common stockholders. | |||||||||||||||||||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||||||||||||||||||
Share-Based Compensation | |||||||||||||||||||||||||||||||||
We recognize share-based compensation expense based upon the fair value of the underlying equity award on the date of the grant. For restricted stock awards and restricted stock units, we recognize expense based upon the price of our underlying stock at the date of the grant. We have elected to use the Black-Scholes option pricing model to value any option or warrant awards granted. We amortize share-based compensation for such awards on a straight-line basis over the related service period of the awards taking into account the effects of the employees’ expected exercise and post-vesting employment termination behavior. To compute the volatility used in this model we use the historical volatility of our common stock over the expected life of options granted. The risk-free interest rate is based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. The expected life and estimated post employment termination behavior is based upon historical experience of homogeneous groups within our company. We also assume an expected dividend yield of zero for all periods, as we have never paid a dividend on our common stock and do not have any plans to do so in the future. | |||||||||||||||||||||||||||||||||
The fair value of each option granted during the nine months ended September 30, 2013 and 2012 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: | |||||||||||||||||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.27 - 2.34% | 1.18 - 1.49% | |||||||||||||||||||||||||||||||
Expected life of options (in years) | 7.5 | 7.5 | |||||||||||||||||||||||||||||||
Expected stock price volatility | 108% | 108% | |||||||||||||||||||||||||||||||
A summary of the activity for our 2003 Stock Plan and 2006 Equity Incentive Plan is presented below for the nine months ended September 30, 2013: | |||||||||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||||||||
Number of | Price per Share | Weighted | Aggregate | Number of | Weighted | Aggregate | |||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||
Range | Average | Intrinsic | Shares | Average | Intrinsic | ||||||||||||||||||||||||||||
Exercise | Value (1) | Exercise | Value (1) | ||||||||||||||||||||||||||||||
Price | Price | ||||||||||||||||||||||||||||||||
Balance, January 1, 2013 | 5,422,130 | $0.35 - $6.74 | $ | 2.19 | $ | 639,904 | 3,775,388 | $ | 2.37 | $ | 604,292 | ||||||||||||||||||||||
Granted | 667,840 | $1.20 - $1.31 | $ | 1.29 | |||||||||||||||||||||||||||||
Exercised | (93,719 | ) | $0.35 - $1.18 | $ | 0.49 | ||||||||||||||||||||||||||||
Canceled | (673,565 | ) | $0.35 - $6.74 | $ | 2.24 | ||||||||||||||||||||||||||||
Balance, September 30, 2013 | 5,322,686 | $0.35 - $6.55 | $ | 2.09 | $ | 757,365 | 3,862,724 | $ | 2.29 | $ | 691,280 | ||||||||||||||||||||||
-1 | The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only. The aggregate intrinsic value is based on the closing price of our Common Stock on the NASDAQ Capital Market, as applicable, on the respective dates. | ||||||||||||||||||||||||||||||||
At September 30, 2013, the outstanding stock options to purchase an aggregate of 5.3 million shares had a weighted average remaining contractual term of 6.1 years, and the exercisable stock options to purchase an aggregate of 3.9 million shares had a weighted average remaining contractual term of 5.2 years. | |||||||||||||||||||||||||||||||||
For the three months ended September 30, 2013 and 2012, we recognized $0.3 million and $0.5 million, respectively, and for the nine months ended September 30, 2013 and 2012, we recognized $0.9 million and $1.4 million, respectively, in share-based compensation expense, which is included in our selling, general and administrative expenses in the accompanying consolidated financial statements. We expect to recognize $1.8 million in share-based compensation expense over the weighted average remaining service period of 1.6 years for stock options outstanding as of September 30, 2013. | |||||||||||||||||||||||||||||||||
Intangible Assets and Other Long Lived Assets | ' | ||||||||||||||||||||||||||||||||
Intangible Assets and Other Long Lived Assets | |||||||||||||||||||||||||||||||||
Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair market value, less cost to sell. | |||||||||||||||||||||||||||||||||
Reclassifications | ' | ||||||||||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. | |||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||||||||||||||
There are no recently issued accounting standards that are expected to have a material impact on our consolidated results of operations, financial position and cash flows. |
Basis_of_Presentation_and_Sign2
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Per Share Net Loss from Continuing Operations and Net (Loss) /Income Attributable to Common Stockholders | ' | ||||||||||||||||||||||||||||||||
Per Share Net Loss from Continuing Operations and Net (Loss)/Income Attributable to Common Stockholders | |||||||||||||||||||||||||||||||||
Net income/(loss) per share From Continuing | Net income/(loss) per share | ||||||||||||||||||||||||||||||||
Operations | |||||||||||||||||||||||||||||||||
For the three months ended | For the nine months ended | For the three months ended | For the nine months ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (484,259 | ) | $ | (375,645 | ) | $ | (2,423,219 | ) | $ | (1,511,558 | ) | |||||||||||||||||||||
Net (loss)/income attributable to stockholders | $ | (640,078 | ) | (254,304 | ) | $ | 1,143,442 | $ | (892,451 | ) | |||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||||||||||
Basic weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | |||||||||||||||||||||||||
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | — | — | — | — | — | — | 730,702 | — | |||||||||||||||||||||||||
Convertible preferred stock | — | — | — | — | — | — | 1,321,514 | — | |||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | 255,056 | — | |||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 | 14,441,707 | 13,939,938 | 16,593,102 | 13,903,809 | |||||||||||||||||||||||||
Basic net (loss)/income per common share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.08 | $ | (0.06 | ) | ||||||||||
Diluted net (loss)/income per common share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.07 | $ | (0.06 | ) | ||||||||||
Weighted-average anti-dilutive shares related to: | |||||||||||||||||||||||||||||||||
Outstanding Stock Options | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 | 4,957,984 | 5,663,511 | |||||||||||||||||||||||||
Convertible preferred stock | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | — | 1,321,514 | |||||||||||||||||||||||||
Preferred stock dividends | 274,879 | 195,587 | 255,056 | 175,764 | 274,879 | 195,587 | — | 175,764 | |||||||||||||||||||||||||
Restricted stock | 261,257 | 169,515 | 219,759 | 169,515 | 261,257 | 169,515 | — | 169,515 | |||||||||||||||||||||||||
Assumptions Used to Estimate Fair Value of Option Granted | ' | ||||||||||||||||||||||||||||||||
The fair value of each option granted during the nine months ended September 30, 2013 and 2012 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: | |||||||||||||||||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.27 - 2.34% | 1.18 - 1.49% | |||||||||||||||||||||||||||||||
Expected life of options (in years) | 7.5 | 7.5 | |||||||||||||||||||||||||||||||
Expected stock price volatility | 108% | 108% | |||||||||||||||||||||||||||||||
Summary of Activity of 2003 Stock Plan and 2006 Equity Incentive Plan | ' | ||||||||||||||||||||||||||||||||
A summary of the activity for our 2003 Stock Plan and 2006 Equity Incentive Plan is presented below for the nine months ended September 30, 2013: | |||||||||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||||||||
Number of | Price per Share | Weighted | Aggregate | Number of | Weighted | Aggregate | |||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||
Range | Average | Intrinsic | Shares | Average | Intrinsic | ||||||||||||||||||||||||||||
Exercise | Value (1) | Exercise | Value (1) | ||||||||||||||||||||||||||||||
Price | Price | ||||||||||||||||||||||||||||||||
Balance, January 1, 2013 | 5,422,130 | $0.35 - $6.74 | $ | 2.19 | $ | 639,904 | 3,775,388 | $ | 2.37 | $ | 604,292 | ||||||||||||||||||||||
Granted | 667,840 | $1.20 - $1.31 | $ | 1.29 | |||||||||||||||||||||||||||||
Exercised | (93,719 | ) | $0.35 - $1.18 | $ | 0.49 | ||||||||||||||||||||||||||||
Canceled | (673,565 | ) | $0.35 - $6.74 | $ | 2.24 | ||||||||||||||||||||||||||||
Balance, September 30, 2013 | 5,322,686 | $0.35 - $6.55 | $ | 2.09 | $ | 757,365 | 3,862,724 | $ | 2.29 | $ | 691,280 | ||||||||||||||||||||||
-1 | The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only. The aggregate intrinsic value is based on the closing price of our Common Stock on the NASDAQ Capital Market, as applicable, on the respective dates. |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Components of (Loss) Income from Discontinued Operations | ' | ||||||||||||||||
The key components of (loss)/income from discontinued operations were as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net revenues | $ | 559,191 | $ | 1,183,672 | $ | 1,790,628 | $ | 4,339,942 | |||||||||
Cost of revenues | 559,191 | 931,183 | 1,722,005 | 3,173,858 | |||||||||||||
Operating expenses | — | 97,053 | 229,745 | 452,003 | |||||||||||||
Income/(loss) before income taxes | — | 155,436 | (161,122 | ) | 714,081 | ||||||||||||
Allocated tax expense/(benefit) | 236 | — | (65,247 | ) | — | ||||||||||||
Operating (loss)/ income from discontinued operations | (236 | ) | 155,436 | (95,875 | ) | 714,081 | |||||||||||
(Loss)/gain on sale, net of $0.1 million, and $1.2 million, of related income taxes, respectively | (129,417 | ) | — | 3,738,697 | — | ||||||||||||
(Loss)/income from discontinued operations, net of income taxes | $ | (129,653 | ) | $ | 155,436 | $ | 3,642,822 | $ | 714,081 | ||||||||
Inventory_Tables
Inventory (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Components of Inventory | ' | ||||||||
Components of inventory are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Finished goods | $ | 733,475 | $ | 195,578 | |||||
Work-in-process | 448,704 | 252,227 | |||||||
Parts | 2,705,235 | 2,975,297 | |||||||
3,887,414 | 3,423,102 | ||||||||
Less: Inventory reserves | 111,906 | 86,186 | |||||||
Total inventory, net | $ | 3,775,508 | $ | 3,336,916 | |||||
Capital_Stock_and_Additional_P1
Capital Stock and Additional Paid-in Capital (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Equity Transactions | ' | ||||||||||||||||||||
The following details our equity transactions during the nine months ended September 30, 2013: | |||||||||||||||||||||
Preferred Stock | Common Stock | Additional | |||||||||||||||||||
Paid-in | |||||||||||||||||||||
Capital | |||||||||||||||||||||
Shares | $ | Shares | $ | $ | |||||||||||||||||
Balances, December 31, 2012 | 1,321,514 | 1,322 | 14,009,280 | 14,245 | 61,361,505 | ||||||||||||||||
Exercise of stock options | — | — | 125,842 | 125 | 81,204 | ||||||||||||||||
Share-based compensation | — | — | 337,500 | 338 | 896,216 | ||||||||||||||||
Stock dividends to Carilion Clinic(1) | — | — | — | 60 | 76,100 | ||||||||||||||||
Other issuance of common stock (2) | — | — | 11,278 | 11 | 14,989 | ||||||||||||||||
Balances, September 30, 2013 | 1,321,514 | 1,322 | 14,483,900 | 14,779 | 62,430,014 | ||||||||||||||||
-1 | The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to September 30, 2013. For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through September 30, 2013, the Series A Preferred Stock issued to Carilion has accrued $684,009 in dividends. The accrued and unpaid dividends as of September 30, 2013 will be paid by the issuance of 294,702 shares of our common stock upon Carilion’s written request. | ||||||||||||||||||||
-2 | Represents shares of common stock issued to one director in lieu of cash fees for annual service. |
Operating_Segments_Tables
Operating Segments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Revenues and Operating Loss for Reportable Segments Not Including Discontinued Operations | ' | ||||||||||||||||
The table below presents revenues and operating loss for reportable segments not including discontinued operations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Revenues: | |||||||||||||||||
Technology development revenues | $ | 3,130,206 | $ | 3,691,154 | $ | 8,564,744 | $ | 11,528,700 | |||||||||
Products and licensing revenues | 2,587,763 | 3,155,953 | 7,623,203 | 8,715,630 | |||||||||||||
Total revenues | $ | 5,717,969 | $ | 6,847,107 | $ | 16,187,947 | $ | 20,244,330 | |||||||||
Technology development operating loss | $ | (259,483 | ) | $ | (501,213 | ) | $ | (1,863,668 | ) | $ | (1,376,129 | ) | |||||
Products and licensing operating (loss)/income | (312,385 | ) | 171,775 | (1,581,947 | ) | 23,378 | |||||||||||
Total operating loss | $ | (571,868 | ) | $ | (329,438 | ) | $ | (3,445,615 | ) | $ | (1,352,751 | ) | |||||
Depreciation, technology development | $ | 70,410 | $ | 108,575 | $ | 228,349 | $ | 237,313 | |||||||||
Depreciation, products and licensing | $ | 59,307 | $ | 49,038 | $ | 205,647 | $ | 179,407 | |||||||||
Amortization, technology development | $ | 49,936 | $ | 29,300 | $ | 145,944 | $ | 115,690 | |||||||||
Amortization, products and licensing | $ | 42,478 | $ | 40,457 | $ | 131,435 | $ | 87,461 | |||||||||
Assets for Reportable Segments | ' | ||||||||||||||||
The table below presents assets for reportable segments: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Total segment assets: | |||||||||||||||||
Technology development | $ | 10,903,743 | $ | 13,342,725 | |||||||||||||
Products and licensing | 9,819,724 | 7,115,043 | |||||||||||||||
Total | $ | 20,723,467 | $ | 20,457,768 | |||||||||||||
Property plant and equipment, and intangible assets, Technology development | $ | 1,306,086 | $ | 1,868,235 | |||||||||||||
Property plant and equipment, and intangible assets, Products and licensing | $ | 1,176,239 | $ | 996,242 |
Basis_of_Presentation_and_Sign3
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Number of operating segments | 2 | ' | ' | ' | ' | ' | ' |
Expected dividend yield of stock options | 0.00% | ' | ' | ' | ' | ' | ' |
Outstanding stock options | 5,322,686 | ' | 5,422,130 | ' | ' | ' | ' |
Outstanding stock options, weighted average remaining contractual term | '6 years 1 month 6 days | ' | ' | ' | ' | ' | ' |
Exercisable stock options | 3,862,724 | ' | 3,775,388 | ' | ' | ' | ' |
Exercisable stock options, weighted average remaining contractual term | '5 years 2 months 12 days | ' | ' | ' | ' | ' | ' |
Stock-based compensation | $896,554 | $1,411,672 | ' | $300,000 | $500,000 | $900,000 | $1,400,000 |
Stock-based compensation expense expected to recognize | $1,800,000 | ' | ' | ' | ' | ' | ' |
Weighted average remaining service | '1 year 7 months 6 days | ' | ' | ' | ' | ' | ' |
Per_Share_Net_Loss_from_Contin
Per Share Net Loss from Continuing Operations and Net (Loss)/Income Attributable to Common Stockholders (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Numerator: | ' | ' | ' | ' |
Net loss from continuing operations | ($484,259) | ($375,645) | ($2,423,219) | ($1,511,558) |
Basic net (loss)/income per common share, continuing operations | ($0.03) | ($0.03) | ($0.17) | ($0.11) |
Diluted net (loss)/income per common share, continuing operations | ($0.03) | ($0.03) | ($0.17) | ($0.11) |
Numerator: | ' | ' | ' | ' |
Net (loss)/income attributable to stockholders | ($640,078) | ($254,304) | $1,143,442 | ($892,451) |
Denominator: | ' | ' | ' | ' |
Basic weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 |
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | ' | ' | 730,702 | ' |
Diluted weighted average common shares outstanding | 14,441,707 | 16,312,622 | 16,593,102 | 16,269,306 |
Convertible preferred stock | ' | ' | 1,321,514 | ' |
Preferred stock dividends | ' | ' | 255,056 | ' |
Diluted weighted average common shares outstanding | 14,441,707 | 13,939,938 | 16,593,102 | 13,903,809 |
Basic net (loss)/income per common share | ($0.04) | ($0.02) | $0.08 | ($0.06) |
Diluted net (loss)/income per common share | ($0.04) | ($0.02) | $0.07 | ($0.06) |
Continuing Operations | ' | ' | ' | ' |
Denominator: | ' | ' | ' | ' |
Basic weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 |
Diluted weighted average common shares outstanding | 14,441,707 | 13,939,938 | 14,285,829 | 13,903,809 |
Outstanding Stock Options | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 5,688,686 | 5,663,511 | 4,957,984 | 5,663,511 |
Outstanding Stock Options | Continuing Operations | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 5,688,686 | 5,663,511 | 5,688,686 | 5,663,511 |
Convertible preferred stock | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 1,321,514 | 1,321,514 | ' | 1,321,514 |
Convertible preferred stock | Continuing Operations | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 |
Preferred stock dividends | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 274,879 | 195,587 | ' | 175,764 |
Preferred stock dividends | Continuing Operations | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 274,879 | 195,587 | 255,056 | 175,764 |
Restricted Stock | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 261,257 | 169,515 | ' | 169,515 |
Restricted Stock | Continuing Operations | ' | ' | ' | ' |
Numerator: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | 261,257 | 169,515 | 219,759 | 169,515 |
Assumptions_Used_to_Estimate_F
Assumptions Used to Estimate Fair Values of Option Granted (Detail) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Risk-free interest rate, minimum | 1.27% | 1.18% |
Risk-free interest rate, maximum | 2.34% | 1.49% |
Expected life of options (in years) | '7 years 6 months | '7 years 6 months |
Expected stock price volatility | 108.00% | 108.00% |
Summary_of_Activity_of_2003_st
Summary of Activity of 2003 stock Plan and 2006 Equity Incentive Plan (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | ||
Options Outstanding, Number of Shares | ' | |
Beginning Balance | 5,422,130 | |
Granted | 667,840 | |
Exercised | -93,719 | |
Canceled | -673,565 | |
Ending Balance | 5,322,686 | |
Options Outstanding, Price per Share Range | ' | |
Beginning Balance, lower limit | $0.35 | |
Beginning Balance, upper limit | $6.74 | |
Granted lower limit | $1.20 | |
Granted upper limit | $1.31 | |
Exercised lower limit | $0.35 | |
Exercised upper limit | $1.18 | |
Canceled lower limit | $0.35 | |
Canceled upper limit | $6.74 | |
Balance, lower limit | $0.35 | |
Balance, upper limit | $6.55 | |
Options Outstanding,Weighted Average Exercise Price | ' | |
Beginning balance | $2.19 | |
Granted | $1.29 | |
Exercised | $0.49 | |
Canceled | $2.24 | |
Ending balance | $2.09 | |
Options Outstanding, Aggregate Intrinsic Value beginning balance | $639,904 | [1] |
Options Outstanding, Aggregate Intrinsic Value ending balance | 757,365 | [1] |
Options Exercisable, beginning balance | 3,775,388 | |
Options Exercisable, ending balance | 3,862,724 | |
Options Exercisable, Weighted Average Exercise Price beginning balance | $2.37 | |
Options Exercisable, Weighted Average Exercise Price ending balance | $2.29 | |
Options Exercisable, Aggregate Intrinsic Value beginning balance | 604,292 | [1] |
Options Exercisable, Aggregate Intrinsic Value ending balance | $691,280 | [1] |
[1] | The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only. The aggregate intrinsic value is based on the closing price of our Common Stock on the NASDAQ Capital Market, as applicable, on the respective dates. |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | ||||
Mar. 01, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Feb. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Employee | Sales | Forecast Dec. 31, 2013 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price of SCC group to an unaffiliated third party | $6,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price receivable on sale of SCC group | 5,400,000 | ' | ' | ' | ' | ' | ' | ' | 110,000 |
Escrow deposits related to SCC group sales | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Escrow release period | '18 months | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs incurred related to SCC sales | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Subslease income | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Employee of SCC transferred to purchaser | 20 | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets related to disposal group | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' |
Long-term assets related to disposal group | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' |
SCC group accounted percentage of revenue to total revenue | ' | ' | ' | ' | ' | ' | ' | 18.50% | ' |
SCC group accounted percentage of cost of revenue accounted to revenue cost | ' | ' | ' | ' | ' | 20.70% | ' | ' | ' |
Gain on sale, net of income taxes | ' | ($129,417) | ' | $3,738,697 | ' | ' | ' | ' | ' |
Net income per share from discontinued operations, diluted | ' | ($0.01) | $0.01 | $0.22 | $0.04 | ' | ' | ' | ' |
Components_of_Loss_Income_from
Components of (Loss) Income from Discontinued Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Components Of Discontinued Operations [Line Items] | ' | ' | ' | ' |
Net revenues | $559,191 | $1,183,672 | $1,790,628 | $4,339,942 |
Cost of revenues | 559,191 | 931,183 | 1,722,005 | 3,173,858 |
Operating expenses | ' | 97,053 | 229,745 | 452,003 |
Income/(loss) before income taxes | ' | 155,436 | -161,122 | 714,081 |
Allocated tax expense/(benefit) | 236 | ' | -65,247 | ' |
Operating (loss)/ income from discontinued operations | -236 | 155,436 | -95,875 | 714,081 |
(Loss)/gain on sale, net of $0.1 million, and $1.2 million, of related income taxes, respectively | -129,417 | ' | 3,738,697 | ' |
(Loss)/income from discontinued operations, net of income taxes | ($129,653) | $155,436 | $3,642,822 | $714,081 |
Components_of_Loss_Income_from1
Components of (Loss) Income from Discontinued Operations (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Components Of Discontinued Operations [Line Items] | ' | ' |
Gain on sale, related income taxes | $0.10 | $1.20 |
Components_of_Inventory_Detail
Components of Inventory (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Inventory [Line Items] | ' | ' |
Finished goods | $733,475 | $195,578 |
Work-in-process | 448,704 | 252,227 |
Parts | 2,705,235 | 2,975,297 |
Inventory, Gross, Total | 3,887,414 | 3,423,102 |
Less: Inventory reserves | 111,906 | 86,186 |
Total inventory, net | $3,775,508 | $3,336,916 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Mar. 21, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Term Loan | |||
Fourth Loan Modification Agreement | Silicon Valley Bank Term Loan | Silicon Valley Bank Term Loan | Installment | ||||
Second and Third Amendment | Second and Third Amendment | ||||||
Monthly Payment | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Debt, face amount | ' | ' | ' | ' | ' | ' | $6,000,000 |
Debt, number of monthly payment | ' | ' | ' | ' | ' | ' | 48 |
Debt, frequency of periodic payment | ' | ' | ' | ' | ' | ' | 'Monthly |
Debt, additional interest above prime rate | ' | ' | ' | ' | 1.25% | ' | 2.00% |
Credit facility, maximum borrowing capacity | ' | ' | ' | ' | 1,000,000 | ' | ' |
Credit facility, interest rate description | ' | ' | ' | ' | 'The interest rate on the Line of Credit is SVB's prime rate plus 1.25%, payable monthly in arrears, and we are required to pay an unused Line of Credit fee of one-quarter of one percent (0.25%), payable monthly. | ' | ' |
Unused Line of Credit fee percentage | ' | ' | ' | ' | ' | 0.25% | ' |
Termination fee | ' | ' | ' | ' | 10,000 | ' | ' |
Frequency of commitment fee payment | ' | ' | ' | ' | ' | 'Monthly | ' |
Credit facility, maturity date | ' | ' | ' | ' | 17-May-14 | ' | ' |
Maintaining minimum cash balance as per covenant | ' | ' | ' | 5,000,000 | ' | ' | ' |
Credit facility, covenant compliance | ' | ' | 'As of September 30, 2013, we were in compliance with all covenants under the Credit Facilities. | ' | ' | ' | ' |
Long-term debt obligation | ' | ' | ' | ' | ' | ' | 2,500,000 |
Long-term debt obligation, excluding current maturities | 1,000,000 | 2,125,000 | ' | ' | ' | ' | 1,000,000 |
Current portion of long term debt obligation | 1,500,000 | 1,500,000 | ' | ' | ' | ' | 1,500,000 |
Line of Credit, outstanding amount | 0 | ' | ' | ' | ' | ' | ' |
Credit facility, available borrowing capacity | $1,000,000 | ' | ' | ' | ' | ' | ' |
Equity_Transactions_Detail
Equity Transactions (Detail) (USD $) | 9 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | ||||
Preferred stock dividends | Preferred stock dividends | Common Stock | Additional Paid-in Capital | |||||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | |||
Beginning Balances (in shares) | ' | 1,321,514 | 1,321,514 | 14,009,280 | ' | |||
Beginning Balances | $11,272,192 | $1,322 | $1,322 | $14,245 | $61,361,505 | |||
Exercise of stock options (in shares) | 93,719 | ' | ' | 125,842 | ' | |||
Exercise of stock options | ' | ' | ' | 125 | 81,204 | |||
Share-based compensation (in shares) | ' | ' | ' | 337,500 | ' | |||
Share-based compensation | ' | ' | ' | 338 | 896,216 | |||
Stock dividends to Carilion Clinic (in shares) | ' | ' | [1] | ' | ' | [1] | ' | |
Stock dividends to Carilion Clinic | ' | ' | ' | 60 | [1] | 76,100 | [1] | |
Other issuance of common stock (in shares) | ' | ' | ' | 11,278 | [2] | ' | ||
Other issuance of common stock | ' | ' | ' | 11 | [2] | 14,989 | [2] | |
Ending Balances (in shares) | ' | 1,321,514 | 1,321,514 | 14,483,900 | ' | |||
Ending Balances | $13,484,677 | $1,322 | $1,322 | $14,779 | $62,430,014 | |||
[1] | The stock dividends payable in connection with Carilion Clinic's Series A Preferred Stock will be issued subsequent to September 30, 2013. For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through September 30, 2013, the Series A Preferred Stock issued to Carilion has accrued $684,009 in dividends. The accrued and unpaid dividends as of September 30, 2013 will be paid by the issuance of 294,702 shares of our common stock upon Carilion's written request. | |||||||
[2] | Represents shares of common stock issued to one director in lieu of cash fees for annual service. |
Equity_Transactions_Parentheti
Equity Transactions (Parenthetical) (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders Equity Note [Line Items] | ' |
Accrued dividends | 684,009 |
Carilion Clinic | Series A Preferred Stock | ' |
Stockholders Equity Note [Line Items] | ' |
Stock dividends for preferred shareholders | 294,702 |
Operating_Segments_Additional_
Operating Segments - Additional Information (Detail) | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment | Sales | International | International | International | International | United States Government | United States Government | United States Government | United States Government | |
Sales | Sales | Sales | Sales | Sales | Sales | Sales | Sales | |||
Segment Reporting Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of operating segments | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of total consolidated revenues by customer | ' | 18.50% | ' | ' | ' | ' | 62.00% | 60.00% | 56.00% | 60.00% |
Percentage of total consolidated revenues | ' | ' | 16.00% | 18.00% | 23.00% | 16.00% | ' | ' | ' | ' |
Revenues_and_Operating_Loss_fo
Revenues and Operating Loss for Reportable Segments Not Including Discontinued Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Technology development revenues | $3,130,206 | $3,691,154 | $8,564,744 | $11,528,700 |
Products and licensing revenues | 2,587,763 | 3,155,953 | 7,623,203 | 8,715,630 |
Total revenues | 5,717,969 | 6,847,107 | 16,187,947 | 20,244,330 |
Operating loss | -571,868 | -329,438 | -3,445,615 | -1,352,751 |
Technology Development | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Operating loss | -259,483 | -501,213 | -1,863,668 | -1,376,129 |
Depreciation | 70,410 | 108,575 | 228,349 | 237,313 |
Amortization | 49,936 | 29,300 | 145,944 | 115,690 |
Products and Licensing | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Operating loss | -312,385 | 171,775 | -1,581,947 | 23,378 |
Depreciation | 59,307 | 49,038 | 205,647 | 179,407 |
Amortization | $42,478 | $40,457 | $131,435 | $87,461 |
Assets_for_Reportable_Segments
Assets for Reportable Segments (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Assets | $20,723,467 | $20,457,768 |
Property plant and equipment, and intangible assets | 2,155,032 | 2,426,638 |
Technology Development | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Assets | 10,903,743 | 13,342,725 |
Property plant and equipment, and intangible assets | 1,306,086 | 1,868,235 |
Products and Licensing | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Assets | 9,819,724 | 7,115,043 |
Property plant and equipment, and intangible assets | $1,176,239 | $996,242 |
Contingencies_and_Guarantees_A
Contingencies and Guarantees - Additional information (Detail) (USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2011 |
Commitments and Contingencies Disclosure [Line Items] | ' |
Non-cancelable purchase order commitment | $1.20 |
Non-cancelable purchase order delivery period | '12 months |