Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 30, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
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 | ' | 14,735,401 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $10,886,015 | $7,778,541 |
Accounts receivable, net | 10,512,087 | 5,408,281 |
Inventory, net | 3,294,498 | 3,346,177 |
Prepaid expenses | 542,788 | 708,974 |
Other current assets | 70,208 | 70,208 |
Total current assets | 25,305,596 | 17,312,181 |
Property and equipment, net | 1,960,095 | 2,060,709 |
Intangible assets, net | 223,366 | 288,475 |
Other assets | 23,918 | 42,710 |
Total assets | 27,512,975 | 19,704,075 |
Current Liabilities: | ' | ' |
Current portion of long-term debt obligation | 1,500,000 | 1,500,000 |
Current portion of capital lease obligation | 67,621 | 66,617 |
Accounts payable | 1,257,633 | 1,401,764 |
Accrued liabilities | 3,061,184 | 3,546,585 |
Deferred credits | 552,831 | 691,424 |
Total current liabilities | 6,439,269 | 7,206,390 |
Long-term debt obligation | ' | 625,000 |
Long-term lease obligation | 93,021 | 110,307 |
Total liabilities | 6,782,290 | 7,941,697 |
Commitments and contingencies | ' | ' |
Stockholders’ equity: | ' | ' |
Preferred stock, par value $ 0.001, 1,321,514 shares authorized, issued and outstanding at March 31, 2014 and December 31, 2013 | 1,322 | 1,322 |
Common stock, par value $ 0.001, 100,000,000 shares authorized, 14,731,652 and 14,527,335 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 15,066 | 14,842 |
Additional paid-in capital | 63,213,966 | 62,756,571 |
Accumulated deficit | -42,499,669 | -51,010,357 |
Total stockholders’ equity | 20,730,685 | 11,762,378 |
Total liabilities and stockholders’ equity | $27,512,975 | $19,704,075 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,321,514 | 1,321,514 |
Preferred stock, shares issued | 1,321,514 | 1,321,514 |
Preferred stock, shares outstanding | 1,321,514 | 1,321,514 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 14,731,652 | 14,527,335 |
Common stock, shares outstanding | 14,731,652 | 14,527,335 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Revenues: | ' | ' |
Technology development revenues | $2,675,452 | $2,627,241 |
Products and licensing revenues | 1,796,429 | 1,478,127 |
Total revenues | 4,471,881 | 4,105,368 |
Cost of revenues: | ' | ' |
Technology development costs | 2,025,155 | 2,184,914 |
Products and licensing costs | 894,640 | 785,728 |
Total cost of revenues | 2,919,795 | 2,970,642 |
Gross Profit | 1,552,086 | 1,134,726 |
Operating expense: | ' | ' |
Selling, general and administrative | 2,755,078 | 2,663,108 |
Research, development and engineering | 749,154 | 712,952 |
Total operating expense | 3,504,232 | 3,376,060 |
Operating loss | -1,952,146 | -2,241,334 |
Other (expense)/income: | ' | ' |
Other income, net | 82,106 | 98,154 |
Interest expense | -32,365 | -58,179 |
Total other income | 49,741 | 39,975 |
Loss from continuing operations before income taxes | -1,902,405 | -2,201,359 |
Income tax benefit | -769,190 | -882,427 |
Net loss from continuing operations | -1,133,215 | -1,318,932 |
Income from discontinued operations, net of income taxes | 9,673,439 | 4,104,529 |
Net income | 8,540,224 | 2,785,597 |
Preferred stock dividend | 29,536 | 23,629 |
Net income attributable to common stockholders | $8,510,688 | $2,761,968 |
Net loss per share from continuing operations: | ' | ' |
Basic (in dollars per share) | ($0.08) | ($0.09) |
Diluted (in dollars per share) | ($0.08) | ($0.09) |
Net income per share from discontinued operations: | ' | ' |
Basic (in dollars per share) | $0.66 | $0.29 |
Diluted (in dollars per share) | $0.56 | $0.25 |
Net income per share attributable to common stockholders: | ' | ' |
Basic (in dollars per share) | $0.58 | $0.20 |
Diluted (in dollars per share) | $0.49 | $0.17 |
Weighted average common shares and common equivalent shares outstanding: | ' | ' |
Basic (in shares) | 14,653,262 | 14,011,814 |
Diluted (in shares) | 17,424,769 | 16,615,574 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Cash flows used in operating activities | ' | ' |
Net income | $8,540,224 | $2,785,597 |
Adjustments to reconcile net income to net cash used in operating activities | ' | ' |
Depreciation and amortization | 202,305 | 228,267 |
Share-based compensation | 230,939 | 313,516 |
Gain on sale of discontinued operations, net of income taxes | -9,701,515 | -4,046,497 |
Tax benefit from utilization of net operating loss carryforward | -787,318 | -843,785 |
Change in assets and liabilities: | ' | ' |
Accounts receivable | 896,194 | 2,039,952 |
Inventory | 13,314 | -185,004 |
Other current assets | 112,286 | -127,333 |
Other assets | 18,792 | 53,792 |
Accounts payable and accrued expenses | -821,763 | -231,430 |
Deferred credits | -138,593 | -259,427 |
Net cash used in operating activities | -1,435,135 | -272,352 |
Cash flows provided by investing activities | ' | ' |
Acquisition of property and equipment | -67,944 | -50,255 |
Intangible property costs | -126,091 | -11,777 |
Proceeds from sale of discontinued operations, net of fees | 4,958,891 | 4,522,460 |
Net cash provided by investing activities | 4,764,856 | 4,460,428 |
Cash flows used in financing activities | ' | ' |
Payments on capital lease obligations | -16,282 | -13,221 |
Payment of debt obligations | -375,000 | -250,000 |
Proceeds from the exercise of options and warrants | 169,035 | 1,682 |
Net cash used in financing activities | -222,247 | -261,539 |
Net increase in cash and cash equivalents | 3,107,474 | 3,926,537 |
Cash and cash equivalents—beginning of period | 7,778,541 | 6,340,461 |
Cash and cash equivalents—end of period | 10,886,015 | 10,266,998 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid for interest | 30,000 | 35,063 |
Dividend on preferred stock, 19,823 shares of common stock issuable for the quarter ended March 31, 2014 and 2013 | 29,536 | 23,629 |
Cash paid for income taxes | $0 | $14,010 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Parenthetical) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Statement of Cash Flows [Abstract] | ' | ' |
Dividend on preferred stock, shares of common stock issuable | 19,823 | 19,823 |
Basis_of_Presentation_and_Sign
Basis of Presentation and Significant Accounting Policies | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | ' | |||||||||||||||||||||||
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 sensing, test and measurement products and are focused on bringing new and innovative technology solutions to measure, monitor, protect and improve critical processes in the aerospace, automotive, energy, composite, telecommunications 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 three months ended March 31, 2014 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 2014 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 5below, 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 March 31, 2014, results of operations for the three months ended March 31, 2014 and 2013, and cash flows for the three months ended March 31, 2014 and 2013. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | ||||||||||||||||||||||||
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, 2013, included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 10, 2014 and amended on April 15, 2014. 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. | ||||||||||||||||||||||||
Net Loss Per Share from Continuing Operations and Net Income Attributable to Common Stockholders | ||||||||||||||||||||||||
Net loss per share from continuing | Net income attributable to common stockholders per share | |||||||||||||||||||||||
operations | ||||||||||||||||||||||||
For the three months ended March 31, | For the three months ended March 31, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net loss from continuing operations | $ | (1,133,215 | ) | $ | (1,318,932 | ) | ||||||||||||||||||
Net income attributable to stockholders | $ | 8,510,688 | 2,761,968 | |||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Basic weighted average common shares outstanding | 14,653,262 | 14,011,814 | 14,653,262 | 14,011,814 | ||||||||||||||||||||
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | — | — | 1,115,645 | 1,047,013 | ||||||||||||||||||||
Convertible preferred stock | — | — | 1,321,514 | 1,321,514 | ||||||||||||||||||||
Preferred stock dividends | — | — | 334,348 | 235,233 | ||||||||||||||||||||
Diluted weighted average common shares outstanding | 14,653,262 | 14,011,814 | 17,424,769 | 16,615,574 | ||||||||||||||||||||
Basic net loss per share from continuing operations | $ | (0.08 | ) | $ | (0.09 | ) | ||||||||||||||||||
Diluted net loss per share from continuing operations | $ | (0.08 | ) | $ | (0.09 | ) | ||||||||||||||||||
Basic net income per share attributable to common stockholders | $ | 0.58 | $ | 0.2 | ||||||||||||||||||||
Diluted net income per share attributable to common stockholders | $ | 0.49 | $ | 0.17 | ||||||||||||||||||||
Weighted-average anti-dilutive shares related to: | ||||||||||||||||||||||||
Outstanding stock options | 4,440,731 | 5,422,130 | 3,593,929 | 4,786,630 | ||||||||||||||||||||
Convertible preferred stock | 1,321,514 | 1,321,514 | — | — | ||||||||||||||||||||
Preferred stock dividends | 314,525 | 195,587 | — | — | ||||||||||||||||||||
Restricted stock | 268,843 | 169,515 | — | — | ||||||||||||||||||||
Carilion warrants | 366,000 | 366,000 | 366,000 | 366,000 | ||||||||||||||||||||
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 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, the weighted-average anti-dilutive shares comprise shares that would have been dilutive had we had net income from continuing operations (e.g., convertible preferred stock, preferred stock dividends, restricted stock, warrants 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. | ||||||||||||||||||||||||
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 three months ended March 31, 2014 and 2013 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: | ||||||||||||||||||||||||
Three months ended March 31, 2014 | Three months ended March 31, 2013 | |||||||||||||||||||||||
Risk-free interest rate | 2.14% | 1.27% | ||||||||||||||||||||||
Expected life of options (in years) | 7.5 | 7.5 | ||||||||||||||||||||||
Expected stock price volatility | 106% | 108% | ||||||||||||||||||||||
A summary of the activity for our 2003 Stock Plan and 2006 Equity Incentive Plan is presented below for the three months ended March 31, 2014: | ||||||||||||||||||||||||
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, 2014 | 5,279,229 | $0.35 - $6.55 | $ | 2.11 | $ | 784,154 | 4,012,378 | $ | 2.28 | $ | 697,826 | |||||||||||||
Granted | 10,000 | $1.53 | $ | 1.53 | ||||||||||||||||||||
Exercised | (204,317 | ) | $0.35 - $1.27 | $ | 0.83 | |||||||||||||||||||
Canceled | (202,845 | ) | $0.82 - $2.46 | $ | 1.39 | |||||||||||||||||||
Balance, March 31, 2014 | 4,882,067 | $0.35 - $6.55 | $ | 2.19 | $ | 733,958 | 3,983,733 | $ | 2.29 | $ | 652,065 | |||||||||||||
-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 March 31, 2014, the outstanding stock options to purchase an aggregate of 4.9 million shares had a weighted average remaining contractual term of 5.5 years, and the exercisable stock options to purchase an aggregate of 4.0 million shares had a weighted average remaining contractual term of 4.9 years. | ||||||||||||||||||||||||
For the three months ended March 31, 2014 and 2013, we recognized $0.2 million and $0.3 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 $1.4 million in share-based compensation expense over the weighted average remaining service period of 1.3 years for stock options outstanding as of March 31, 2014. | ||||||||||||||||||||||||
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. |
Discontinued_Operations
Discontinued Operations | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||
Discontinued Operations | ' | ||||||||
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 $110,000 on December 31, 2013. During December 2013, an additional $475,000 in purchase price was released to us from escrow and another $125,000 is in escrow and may be released 18 months after the closing of the transaction, subject to any indemnification claims of the acquirer. In connection with the sale, we incurred approximately $0.9 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 May1, 2014 for a total of $0.1 million during the three months ended March 31, 2014. 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.We recorded an aggregate after-tax gain on the sale of SCC of $3.3 million or $0.20 per diluted share in our results of operations for the year ended December 31, 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. Through December 31, 2013, we 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 recorded these amounts as revenues, with an offsetting amount as cost of revenues, within (loss)/income from discontinued operations. | |||||||||
On January 21, 2014, we completed the sale of our medical shape sensing business, which was part of our Products and Licensing segment, to an unaffiliated third party for a gross sales price of up to $30.0 million, of which $6.0 million was paid at closing and a second $6.0 million in cash was received on April 22, 2014, plus up to $8.0 million upon the accomplishment by the buyer of certain technical specifications and up to $10.0 million in potential future royalties. We had been engaged since 2007 in various development projects developing a fiber optic-based shape sensing and position tracking system to be integrated in the buyer's products. Also as part of the transaction, the buyer has hired certain employees of Luna, many of whom were historically engaged in this development project. In connection with this sale, we incurred approximately $1.1 million in transaction costs that included various charges related to investment banker and legal fees, along with discretionary bonus to a former employee who was hired by the buyer. Included in the transaction were current and long term assets with a net book value of approximately $0.3 million on January 20, 2014. Our medical shape sensing business accounted for12% of our revenues, and 10% of our costs of revenues for the year ended December 31, 2013. We recorded an aggregate after-tax gain on the sale of medical shape sensing business of $9.7 million or $0.56 per diluted share in our first quarter 2014 results. | |||||||||
We have reported the results of operations of SCC and our medical shape sensing business 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 groups' income before allocations. | |||||||||
The key components of income from discontinued operations were as follows: | |||||||||
Three Months Ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Net revenues | $ | — | $ | 1,033,124 | |||||
Cost of revenues | 46,204 | 706,705 | |||||||
Operating expenses | — | 229,745 | |||||||
(Loss)/Income before income taxes | (46,204 | ) | 96,674 | ||||||
Allocated tax (benefit)/expense | (18,128 | ) | 38,642 | ||||||
Operating (loss)/ income from discontinued operations | (28,076 | ) | 58,032 | ||||||
Gain on sale, net of $1.0 million, and $0.9 million, of related income taxes, respectively | 9,701,515 | 4,046,497 | |||||||
Income from discontinued operations, net of income taxes | $ | 9,673,439 | $ | 4,104,529 | |||||
Inventory
Inventory | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory | ' | |||||||
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: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 666,980 | $ | 719,574 | ||||
Work-in-process | 454,261 | 361,754 | ||||||
Parts | 2,377,325 | 2,339,595 | ||||||
3,498,566 | 3,420,923 | |||||||
Less: Inventory reserves | 204,068 | 74,746 | ||||||
Total inventory, net | $ | 3,294,498 | $ | 3,346,177 | ||||
Accrued_Liabilities
Accrued Liabilities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
Accrued Liabilities | ||||||||
31-Mar-14 | 31-Dec-13 | |||||||
Accrued compensation | $ | 1,743,898 | $ | 2,205,612 | ||||
Accrued sub-contracts | 348,348 | 297,510 | ||||||
Accrued professional fees | 211,035 | 279,991 | ||||||
Accrued income tax | 182,340 | 13,143 | ||||||
Deferred rent | 96,662 | 102,569 | ||||||
Royalties | 64,453 | 290,025 | ||||||
Warranty reserve | 56,188 | 56,700 | ||||||
Accrued liabilities - other | 358,260 | 301,035 | ||||||
Total Accrued Liabilities | $ | 3,061,184 | $ | 3,546,585 | ||||
Debt
Debt | 3 Months Ended |
Mar. 31, 2014 | |
Debt Disclosure [Abstract] | ' |
Debt | ' |
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. We are currently discussing extending this maturity date. | |
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. Effective on January 21, 2014, in connection with our sale of assets to Intuitive, this covenant was modified to reduce the required minimum cash balance to $3.5 million. 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 March 31, 2014, 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 March 31, 2014, there were no events of default on our Credit Facilities. | |
The balance under the Term Loan at March 31, 2014 was $1.8 million of which $0.3 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 March 31, 2014. |
Capital_Stock_and_Additional_P
Capital Stock and Additional Paid-in Capital | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Capital Stock and Additional Paid-in Capital | ' | ||||||||||||||
Capital Stock and Additional Paid-in Capital | |||||||||||||||
The following details our equity transactions during the three months ended March 31, 2014: | |||||||||||||||
Preferred Stock | Common Stock | Additional | |||||||||||||
Paid-in | |||||||||||||||
Capital | |||||||||||||||
Shares | $ | Shares | $ | $ | |||||||||||
Balances, December 31, 2013 | 1,321,514 | 1,322 | 14,527,335 | 14,842 | 62,756,571 | ||||||||||
Exercise of stock options | — | — | 204,317 | 204 | 168,831 | ||||||||||
Share-based compensation (1) | — | — | — | — | 259,048 | ||||||||||
Stock dividends to Carilion Clinic(2) | — | — | — | 20 | 29,516 | ||||||||||
Balances, March 31, 2014 | 1,321,514 | 1,322 | 14,731,652 | 15,066 | 63,213,966 | ||||||||||
-1 | Share-based compensation includes the acceleration of stock options for a former employee included in the sale of our medical shape sensing business to Intuitive. | ||||||||||||||
-2 | The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to March 31, 2014. For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through March 31, 2014, the Series A Preferred Stock issued to Carilion has accrued $739,711 in dividends. The accrued and unpaid dividends as of March 31, 2014 will be paid by the issuance of 334,348 shares of our common stock upon Carilion’s written request. |
Operating_Segments
Operating Segments | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Operating Segments | ' | |||||||
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. | ||||||||
The Products and Licensing segment derives its revenue from product sales, funded product development and technology licenses. This segment previously included our medical shape sensing business, which was sold on January 21, 2014, and the amounts below do not include the revenue, expenses and assets of our medical shape sensing business. | ||||||||
Through March 31, 2014, 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 April 10, 2014 and amended on April 15, 2014). | ||||||||
The table below presents revenues and operating loss for reportable segments not including discontinued operations: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(unaudited) | ||||||||
Revenues: | ||||||||
Technology development revenues | $ | 2,675,452 | $ | 2,627,241 | ||||
Products and licensing revenues | 1,796,429 | 1,478,127 | ||||||
Total revenues | $ | 4,471,881 | $ | 4,105,368 | ||||
Technology development operating loss | $ | (1,527,646 | ) | $ | (951,763 | ) | ||
Products and licensing operating loss | (424,500 | ) | (1,289,571 | ) | ||||
Total operating loss | $ | (1,952,146 | ) | $ | (2,241,334 | ) | ||
Depreciation, technology development | $ | 56,743 | $ | 101,566 | ||||
Depreciation, products and licensing | $ | 38,100 | $ | 57,142 | ||||
Amortization, technology development | $ | 64,293 | $ | 44,514 | ||||
Amortization, products and licensing | $ | 43,169 | $ | 25,045 | ||||
The table below presents assets for reportable segments: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Total segment assets: | ||||||||
Technology development | $ | 16,460,555 | $ | 10,208,433 | ||||
Products and licensing | 11,052,420 | 9,495,642 | ||||||
Total | $ | 27,512,975 | $ | 19,704,075 | ||||
Property plant and equipment, and intangible assets, technology development | $ | 1,306,328 | $ | 1,217,083 | ||||
Property plant and equipment, and intangible assets, products and licensing | $ | 877,133 | $ | 1,132,101 | ||||
There are no material inter-segment revenues for any period presented. | ||||||||
The United States Government accounted for approximately 62% and 66% of total consolidated revenues for the three months ended March 31, 2014 and 2013, respectively. | ||||||||
International revenues (customers outside the United States) accounted for approximately 19% and 26% of total consolidated revenues for the three months ended March 31, 2014 and 2013, respectively. |
Contingencies_and_Guarantees
Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies and Guarantees | ' |
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 the fourth quarter of 2013 we executed two non-cancelable purchase orders totaling $1.4 million for multiple shipments of tunable lasers to be delivered over an 18-month period beginning in 2013. At March 31, 2014, approximately $1.0 million of this commitment remained. | |
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) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
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 sensing, test and measurement products and are focused on bringing new and innovative technology solutions to measure, monitor, protect and improve critical processes in the aerospace, automotive, energy, composite, telecommunications 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 three months ended March 31, 2014 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 2014 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 5below, 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 March 31, 2014, results of operations for the three months ended March 31, 2014 and 2013, and cash flows for the three months ended March 31, 2014 and 2013. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |||||||||||||||||
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, 2013, included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 10, 2014 and amended on April 15, 2014. 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. | |||||||||||||||||
Net Loss Per Share from Continuing Operations and Net Income Attributable to Common Stockholders | ' | ||||||||||||||||
Per Share from Continuing Operations and Net Income Attributable to Common Stockholders | |||||||||||||||||
Net loss per share from continuing | Net income attributable to common stockholders per share | ||||||||||||||||
operations | |||||||||||||||||
For the three months ended March 31, | For the three months ended March 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator: | |||||||||||||||||
Net loss from continuing operations | $ | (1,133,215 | ) | $ | (1,318,932 | ) | |||||||||||
Net income attributable to stockholders | $ | 8,510,688 | 2,761,968 | ||||||||||||||
Denominator: | |||||||||||||||||
Basic weighted average common shares outstanding | 14,653,262 | 14,011,814 | 14,653,262 | 14,011,814 | |||||||||||||
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | — | — | 1,115,645 | 1,047,013 | |||||||||||||
Convertible preferred stock | — | — | 1,321,514 | 1,321,514 | |||||||||||||
Preferred stock dividends | — | — | 334,348 | 235,233 | |||||||||||||
Diluted weighted average common shares outstanding | 14,653,262 | 14,011,814 | 17,424,769 | 16,615,574 | |||||||||||||
Basic net loss per share from continuing operations | $ | (0.08 | ) | $ | (0.09 | ) | |||||||||||
Diluted net loss per share from continuing operations | $ | (0.08 | ) | $ | (0.09 | ) | |||||||||||
Basic net income per share attributable to common stockholders | $ | 0.58 | $ | 0.2 | |||||||||||||
Diluted net income per share attributable to common stockholders | $ | 0.49 | $ | 0.17 | |||||||||||||
Weighted-average anti-dilutive shares related to: | |||||||||||||||||
Outstanding stock options | 4,440,731 | 5,422,130 | 3,593,929 | 4,786,630 | |||||||||||||
Convertible preferred stock | 1,321,514 | 1,321,514 | — | — | |||||||||||||
Preferred stock dividends | 314,525 | 195,587 | — | — | |||||||||||||
Restricted stock | 268,843 | 169,515 | — | — | |||||||||||||
Carilion warrants | 366,000 | 366,000 | 366,000 | 366,000 | |||||||||||||
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 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, the weighted-average anti-dilutive shares comprise shares that would have been dilutive had we had net income from continuing operations (e.g., convertible preferred stock, preferred stock dividends, restricted stock, warrants 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. | |||||||||||||||||
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. | |||||||||||||||||
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. |
Basis_of_Presentation_and_Sign2
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||||||||
Per Share Net Loss from Continuing Operations and Net Income Attributable to Common Stockholders | ' | |||||||||||||||||||||||
Per Share from Continuing Operations and Net Income Attributable to Common Stockholders | ||||||||||||||||||||||||
Net loss per share from continuing | Net income attributable to common stockholders per share | |||||||||||||||||||||||
operations | ||||||||||||||||||||||||
For the three months ended March 31, | For the three months ended March 31, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net loss from continuing operations | $ | (1,133,215 | ) | $ | (1,318,932 | ) | ||||||||||||||||||
Net income attributable to stockholders | $ | 8,510,688 | 2,761,968 | |||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Basic weighted average common shares outstanding | 14,653,262 | 14,011,814 | 14,653,262 | 14,011,814 | ||||||||||||||||||||
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards | — | — | 1,115,645 | 1,047,013 | ||||||||||||||||||||
Convertible preferred stock | — | — | 1,321,514 | 1,321,514 | ||||||||||||||||||||
Preferred stock dividends | — | — | 334,348 | 235,233 | ||||||||||||||||||||
Diluted weighted average common shares outstanding | 14,653,262 | 14,011,814 | 17,424,769 | 16,615,574 | ||||||||||||||||||||
Basic net loss per share from continuing operations | $ | (0.08 | ) | $ | (0.09 | ) | ||||||||||||||||||
Diluted net loss per share from continuing operations | $ | (0.08 | ) | $ | (0.09 | ) | ||||||||||||||||||
Basic net income per share attributable to common stockholders | $ | 0.58 | $ | 0.2 | ||||||||||||||||||||
Diluted net income per share attributable to common stockholders | $ | 0.49 | $ | 0.17 | ||||||||||||||||||||
Weighted-average anti-dilutive shares related to: | ||||||||||||||||||||||||
Outstanding stock options | 4,440,731 | 5,422,130 | 3,593,929 | 4,786,630 | ||||||||||||||||||||
Convertible preferred stock | 1,321,514 | 1,321,514 | — | — | ||||||||||||||||||||
Preferred stock dividends | 314,525 | 195,587 | — | — | ||||||||||||||||||||
Restricted stock | 268,843 | 169,515 | — | — | ||||||||||||||||||||
Carilion warrants | 366,000 | 366,000 | 366,000 | 366,000 | ||||||||||||||||||||
Assumptions Used to Estimate Fair Value of Option Granted | ' | |||||||||||||||||||||||
The fair value of each option granted during the three months ended March 31, 2014 and 2013 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: | ||||||||||||||||||||||||
Three months ended March 31, 2014 | Three months ended March 31, 2013 | |||||||||||||||||||||||
Risk-free interest rate | 2.14% | 1.27% | ||||||||||||||||||||||
Expected life of options (in years) | 7.5 | 7.5 | ||||||||||||||||||||||
Expected stock price volatility | 106% | 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 three months ended March 31, 2014: | ||||||||||||||||||||||||
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, 2014 | 5,279,229 | $0.35 - $6.55 | $ | 2.11 | $ | 784,154 | 4,012,378 | $ | 2.28 | $ | 697,826 | |||||||||||||
Granted | 10,000 | $1.53 | $ | 1.53 | ||||||||||||||||||||
Exercised | (204,317 | ) | $0.35 - $1.27 | $ | 0.83 | |||||||||||||||||||
Canceled | (202,845 | ) | $0.82 - $2.46 | $ | 1.39 | |||||||||||||||||||
Balance, March 31, 2014 | 4,882,067 | $0.35 - $6.55 | $ | 2.19 | $ | 733,958 | 3,983,733 | $ | 2.29 | $ | 652,065 | |||||||||||||
-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) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||
Components of (Loss)/Income from Discontinued Operations | ' | ||||||||
The key components of income from discontinued operations were as follows: | |||||||||
Three Months Ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Net revenues | $ | — | $ | 1,033,124 | |||||
Cost of revenues | 46,204 | 706,705 | |||||||
Operating expenses | — | 229,745 | |||||||
(Loss)/Income before income taxes | (46,204 | ) | 96,674 | ||||||
Allocated tax (benefit)/expense | (18,128 | ) | 38,642 | ||||||
Operating (loss)/ income from discontinued operations | (28,076 | ) | 58,032 | ||||||
Gain on sale, net of $1.0 million, and $0.9 million, of related income taxes, respectively | 9,701,515 | 4,046,497 | |||||||
Income from discontinued operations, net of income taxes | $ | 9,673,439 | $ | 4,104,529 | |||||
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Components of Inventory | ' | |||||||
Components of inventory are as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 666,980 | $ | 719,574 | ||||
Work-in-process | 454,261 | 361,754 | ||||||
Parts | 2,377,325 | 2,339,595 | ||||||
3,498,566 | 3,420,923 | |||||||
Less: Inventory reserves | 204,068 | 74,746 | ||||||
Total inventory, net | $ | 3,294,498 | $ | 3,346,177 | ||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule of Accrued Liabilities | ' | |||||||
31-Mar-14 | 31-Dec-13 | |||||||
Accrued compensation | $ | 1,743,898 | $ | 2,205,612 | ||||
Accrued sub-contracts | 348,348 | 297,510 | ||||||
Accrued professional fees | 211,035 | 279,991 | ||||||
Accrued income tax | 182,340 | 13,143 | ||||||
Deferred rent | 96,662 | 102,569 | ||||||
Royalties | 64,453 | 290,025 | ||||||
Warranty reserve | 56,188 | 56,700 | ||||||
Accrued liabilities - other | 358,260 | 301,035 | ||||||
Total Accrued Liabilities | $ | 3,061,184 | $ | 3,546,585 | ||||
Capital_Stock_and_Additional_P1
Capital Stock and Additional Paid-in Capital (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Equity Transactions | ' | ||||||||||||||
The following details our equity transactions during the three months ended March 31, 2014: | |||||||||||||||
Preferred Stock | Common Stock | Additional | |||||||||||||
Paid-in | |||||||||||||||
Capital | |||||||||||||||
Shares | $ | Shares | $ | $ | |||||||||||
Balances, December 31, 2013 | 1,321,514 | 1,322 | 14,527,335 | 14,842 | 62,756,571 | ||||||||||
Exercise of stock options | — | — | 204,317 | 204 | 168,831 | ||||||||||
Share-based compensation (1) | — | — | — | — | 259,048 | ||||||||||
Stock dividends to Carilion Clinic(2) | — | — | — | 20 | 29,516 | ||||||||||
Balances, March 31, 2014 | 1,321,514 | 1,322 | 14,731,652 | 15,066 | 63,213,966 | ||||||||||
-1 | Share-based compensation includes the acceleration of stock options for a former employee included in the sale of our medical shape sensing business to Intuitive. | ||||||||||||||
-2 | The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to March 31, 2014. For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through March 31, 2014, the Series A Preferred Stock issued to Carilion has accrued $739,711 in dividends. The accrued and unpaid dividends as of March 31, 2014 will be paid by the issuance of 334,348 shares of our common stock upon Carilion’s written request. |
Operating_Segments_Tables
Operating Segments (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
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 | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(unaudited) | ||||||||
Revenues: | ||||||||
Technology development revenues | $ | 2,675,452 | $ | 2,627,241 | ||||
Products and licensing revenues | 1,796,429 | 1,478,127 | ||||||
Total revenues | $ | 4,471,881 | $ | 4,105,368 | ||||
Technology development operating loss | $ | (1,527,646 | ) | $ | (951,763 | ) | ||
Products and licensing operating loss | (424,500 | ) | (1,289,571 | ) | ||||
Total operating loss | $ | (1,952,146 | ) | $ | (2,241,334 | ) | ||
Depreciation, technology development | $ | 56,743 | $ | 101,566 | ||||
Depreciation, products and licensing | $ | 38,100 | $ | 57,142 | ||||
Amortization, technology development | $ | 64,293 | $ | 44,514 | ||||
Amortization, products and licensing | $ | 43,169 | $ | 25,045 | ||||
Assets for Reportable Segments | ' | |||||||
The table below presents assets for reportable segments: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Total segment assets: | ||||||||
Technology development | $ | 16,460,555 | $ | 10,208,433 | ||||
Products and licensing | 11,052,420 | 9,495,642 | ||||||
Total | $ | 27,512,975 | $ | 19,704,075 | ||||
Property plant and equipment, and intangible assets, technology development | $ | 1,306,328 | $ | 1,217,083 | ||||
Property plant and equipment, and intangible assets, products and licensing | $ | 877,133 | $ | 1,132,101 | ||||
Basis_of_Presentation_and_Sign3
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Segment | |||
Significant Accounting Policies [Line Items] | ' | ' | ' |
Number of operating segments | 2 | ' | ' |
Expected dividend yield of stock options | 0.00% | 0.00% | ' |
Outstanding stock options (in shares) | 4,882,067 | ' | 5,279,229 |
Outstanding stock options, weighted average remaining contractual term | '5 years 6 months | ' | ' |
Exercisable stock options (in shares) | 3,983,733 | ' | 4,012,378 |
Exercisable stock options, weighted average remaining contractual term | '4 years 10 months 24 days | ' | ' |
Stock-based compensation | $230,939 | $313,516 | ' |
Stock-based compensation expense expected to recognize | 1,400,000 | ' | ' |
Weighted average remaining service | '1 year 3 months 7 days | ' | ' |
Selling, General and Administrative Expenses | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Stock-based compensation | $200,000 | $300,000 | ' |
Basis_of_Presentation_and_Sign4
Basis of Presentation and Significant Accounting Policies - Per Share Net Loss from Continuing Operations and Net (Loss)/Income Attributable to Common Stockholders (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Numerator: | ' | ' |
Net loss from continuing operations | ($1,133,215) | ($1,318,932) |
Net income attributable to stockholders | $8,510,688 | $2,761,968 |
Denominator: | ' | ' |
Basic weighted average common shares outstanding | 14,653,262 | 14,011,814 |
Weighted average common stock equivalents from assumed exercise of stock options and restricted stock awards (in shares) | 1,115,645 | 1,047,013 |
Convertible preferred stock (in shares) | 1,321,514 | 1,321,514 |
Preferred stock dividends (in shares) | 334,348 | 235,233 |
Diluted weighted average common shares outstanding | 17,424,769 | 16,615,574 |
Diluted weighted average common shares outstanding | 17,424,769 | 16,615,574 |
Basic net loss per share from continuing operations (in dollars per share) | ($0.08) | ($0.09) |
Diluted net loss per share from continuing operations (in dollars per share) | ($0.08) | ($0.09) |
Basic net income per share attributable to stockholders (in dollars per share) | $0.58 | $0.20 |
Diluted net income per share attributable to stockholders (in dollars per share) | $0.49 | $0.17 |
Continuing Operations | ' | ' |
Denominator: | ' | ' |
Basic weighted average common shares outstanding | 14,653,262 | 14,011,814 |
Diluted weighted average common shares outstanding | 14,653,262 | 14,011,814 |
Outstanding Stock Options | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,593,929 | 4,786,630 |
Outstanding Stock Options | Continuing Operations | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,440,731 | 5,422,130 |
Convertible preferred stock | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Convertible preferred stock | Continuing Operations | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,321,514 | 1,321,514 |
Preferred Stock | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Preferred Stock | Continuing Operations | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 314,525 | 195,587 |
Restricted Stock | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Restricted Stock | Continuing Operations | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 268,843 | 169,515 |
Carilion Warrants | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 366,000 | 366,000 |
Carilion Warrants | Continuing Operations | ' | ' |
Denominator: | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | 366,000 | 366,000 |
Basis_of_Presentation_and_Sign5
Basis of Presentation and Significant Accounting Policies - Assumptions Used to Estimate Fair Values of Option Granted (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Accounting Policies [Abstract] | ' | ' |
Risk-free interest rate | 2.14% | 1.27% |
Expected life of options (in years) | '7 years 6 months | '7 years 6 months |
Expected stock price volatility | 106.00% | 108.00% |
Basis_of_Presentation_and_Sign6
Basis of Presentation and Significant Accounting Policies - Summary of Activity of 2003 stock Plan and 2006 Equity Incentive Plan (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Options Outstanding, Number of Shares | ' |
Beginning Balance (in shares) | 5,279,229 |
Granted (in shares) | 10,000 |
Exercised (in shares) | -204,317 |
Canceled (in shares) | -202,845 |
Ending Balance (in shares) | 4,882,067 |
Options Outstanding, Price per Share Range | ' |
Beginning Balance, lower limit (in dollars per share) | $0.35 |
Beginning Balance, upper limit (in dollars per share) | $6.55 |
Granted, lower limit (in dollars per share) | $1.53 |
Exercised, lower limit (in dollars per share) | $0.35 |
Exercised, upper limit (in dollars per share) | $1.27 |
Canceled, lower limit (in dollars per share) | $0.82 |
Canceled, upper limit (in dollars per share) | $2.46 |
Balance, lower limit (in dollars per share) | $0.35 |
Balance, upper limit (in dollars per share) | $6.55 |
Options Outstanding, Weighted Average Exercise Price | ' |
Beginning Balance (in dollars per share) | $2.11 |
Granted (in dollars per share) | $1.53 |
Exercised (in dollars per share) | $0.83 |
Canceled (in dollars per share) | $1.39 |
Ending Balance (in dollars per share) | $2.19 |
Options Outstanding, Aggregate Intrinsic Value, Beginning Balance | $784,154 |
Options Outstanding, Aggregate Intrinsic Value, Ending Balance | 733,958 |
Options Exercisable, Beginning Balance (in shares) | 4,012,378 |
Options Exercisable, Ending Balance (in shares) | 3,983,733 |
Options Exercisable, Weighted Average Exercise Price, Beginning Balance (in dollars per share) | $2.28 |
Options Exercisable, Weighted Average Exercise Price, Ending Balance (in dollars per share) | $2.29 |
Options Exercisable, Aggregate Intrinsic Value, Beginning Balance | 697,826 |
Options Exercisable, Aggregate Intrinsic Value, Ending Balance | $652,065 |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 01, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2013 | Jan. 21, 2014 | Apr. 22, 2014 | |
Revenues | Cost of Revenues | Secure Computing and Communications Group (SCC) | Secure Computing and Communications Group (SCC) | Secure Computing and Communications Group (SCC) | Secure Computing and Communications Group (SCC) | Secure Computing and Communications Group (SCC) | Medical Shape Sensing Business | Medical Shape Sensing Business | |||
Employee | Subsequent Event | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price to an unaffiliated third party | ' | ' | ' | ' | $6,100,000 | ' | ' | ' | ' | $30,000,000 | ' |
Purchase price receivable on sale of disposal group | ' | ' | ' | ' | 5,400,000 | 110,000 | ' | 110,000 | ' | ' | ' |
Purchase price received from escrow | ' | ' | ' | ' | ' | 475,000 | ' | ' | ' | ' | ' |
Escrow deposits related to disposal group sales | ' | ' | ' | ' | ' | 125,000 | ' | ' | ' | ' | ' |
Escrow release period | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' |
Transaction costs incurred related to disposal group sales | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | 1,100,000 | ' |
Sublease income | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' |
Employees of disposal group transferred to purchaser | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' |
Current assets related to disposal group | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' |
Long-term assets related to disposal group | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | 300,000 | ' |
Gain on sale, net of income taxes | 9,701,515 | 4,046,497 | ' | ' | ' | ' | ' | 3,300,000 | ' | ' | ' |
Net income per share from discontinued operations, diluted (in dollars per share) | $0.56 | $0.25 | ' | ' | ' | ' | ' | $0.20 | ' | ' | ' |
Cash consideration received at closing | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' |
Cash consideration received within 90 days of closing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 |
Cash consideration received in future tied to achievement of technical specifications | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' |
Cash consideration received in future, potential future royalties | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,000,000 | ' |
Disposal group accounted percentage of revenue and cost of revenue | ' | ' | 12.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' |
Discontinued_Operations_Compon
Discontinued Operations - Components of (Loss) Income from Discontinued Operations (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Discontinued Operations and Disposal Groups [Abstract] | ' | ' |
Net revenues | $0 | $1,033,124 |
Cost of revenues | 46,204 | 706,705 |
Operating expenses | 0 | 229,745 |
(Loss)/Income before income taxes | -46,204 | 96,674 |
Allocated tax (benefit)/expense | -18,128 | 38,642 |
Operating (loss)/ income from discontinued operations | -28,076 | 58,032 |
Gain on sale, net of $1.0 million, and $0.9 million, of related income taxes, respectively | 9,701,515 | 4,046,497 |
Income from discontinued operations, net of income taxes | $9,673,439 | $4,104,529 |
Discontinued_Operations_Compon1
Discontinued Operations - Components of (Loss) Income from Discontinued Operations (Parenthetical) (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Discontinued Operations and Disposal Groups [Abstract] | ' | ' |
Gain on sale, related income taxes | $1.10 | $0.90 |
Inventory_Components_of_Invent
Inventory - Components of Inventory (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Finished goods | $666,980 | $719,574 |
Work-in-process | 454,261 | 361,754 |
Parts | 2,377,325 | 2,339,595 |
Total inventory, gross | 3,498,566 | 3,420,923 |
Less: Inventory reserves | 204,068 | 74,746 |
Total inventory, net | $3,294,498 | $3,346,177 |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ' | ' |
Accrued compensation | $1,743,898 | $2,205,612 |
Accrued sub-contracts | 348,348 | 297,510 |
Accrued professional fees | 211,035 | 279,991 |
Accrued income tax | 182,340 | 13,143 |
Deferred rent | 96,662 | 102,569 |
Royalties | 64,453 | 290,025 |
Warranty reserve | 56,188 | 56,700 |
Accrued liabilities - other | 358,260 | 301,035 |
Total Accrued Liabilities | $3,061,184 | $3,546,585 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jan. 21, 2014 | Mar. 21, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Term Loan | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | |||
Installment | Fourth Loan Modification Agreement | Fourth Loan Modification Agreement | Silicon Valley Bank Term Loan | Silicon Valley Bank Term Loan | |||
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 | ' | ' | 2.00% | ' | ' | 1.25% | ' |
Credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | 1,000,000 | ' |
Unused Line of Credit fee percentage | ' | ' | ' | ' | ' | ' | 0.25% |
Frequency of commitment fee payment | ' | ' | ' | ' | ' | ' | 'monthly |
Termination fee | ' | ' | ' | ' | ' | 10,000 | ' |
Credit facility, maturity date | ' | ' | ' | ' | ' | 17-May-14 | ' |
Maintaining minimum cash balance as per covenant | ' | ' | ' | 3,500,000 | 5,000,000 | ' | ' |
Long-term debt obligation | ' | ' | 1,800,000 | ' | ' | ' | ' |
Long-term debt obligation, excluding current maturities | ' | 625,000 | 300,000 | ' | ' | ' | ' |
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 $) | 3 Months Ended | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | |
Preferred Stock | Preferred Stock | Common Stock | Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Beginning Balances (in shares) | ' | 1,321,514 | 1,321,514 | 14,527,335 | ' |
Beginning Balances | $11,762,378 | $1,322 | $1,322 | $14,842 | $62,756,571 |
Exercise of stock options (in shares) | 204,317 | ' | ' | 204,317 | ' |
Exercise of stock options | ' | ' | ' | 204 | 168,831 |
Share-based compensation (1) | ' | ' | ' | ' | 259,048 |
Stock dividends to Carilion Clinic | ' | ' | ' | 20 | 29,516 |
Ending Balances (in shares) | ' | 1,321,514 | 1,321,514 | 14,731,652 | ' |
Ending Balances | $20,730,685 | $1,322 | $1,322 | $15,066 | $63,213,966 |
Equity_Transactions_Parentheti
Equity Transactions (Parenthetical) (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Stockholders Equity Note [Line Items] | ' |
Accrued dividends | 739,711 |
Carilion Clinic | Series A Preferred Stock | ' |
Stockholders Equity Note [Line Items] | ' |
Stock dividends for preferred shareholders | 334,348 |
Operating_Segments_Additional_
Operating Segments - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Segment | Sales | International | International | United States Government | United States Government | |
Sales | Sales | Sales | Sales | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' |
Number of operating segments | 2 | ' | ' | ' | ' | ' |
Percentage of total consolidated revenues by customer | ' | 12.00% | ' | ' | 62.00% | 66.00% |
Percentage of total consolidated revenues | ' | ' | 19.00% | 26.00% | ' | ' |
Operating_Segments_Revenues_an
Operating Segments - Revenues and Operating Loss for Reportable Segments Not Including Discontinued Operations (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Segment Reporting Information [Line Items] | ' | ' |
Technology development revenues | $2,675,452 | $2,627,241 |
Products and licensing revenues | 1,796,429 | 1,478,127 |
Total revenues | 4,471,881 | 4,105,368 |
Total operating loss | -1,952,146 | -2,241,334 |
Technology Development | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total operating loss | -1,527,646 | -951,763 |
Depreciation | 56,743 | 101,566 |
Amortization | 64,293 | 44,514 |
Products and Licensing | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total operating loss | -424,500 | -1,289,571 |
Depreciation | 38,100 | 57,142 |
Amortization | $43,169 | $25,045 |
Operating_Segments_Assets_for_
Operating Segments - Assets for Reportable Segments (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Assets | $27,512,975 | $19,704,075 |
Property plant and equipment, and intangible assets | 1,960,095 | 2,060,709 |
Technology Development | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Assets | 16,460,555 | 10,208,433 |
Property plant and equipment, and intangible assets | 1,306,328 | 1,217,083 |
Products and Licensing | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Assets | 11,052,420 | 9,495,642 |
Property plant and equipment, and intangible assets | $877,133 | $1,132,101 |
Contingencies_and_Guarantees_A
Contingencies and Guarantees - Additional information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Mar. 31, 2014 |
purchase_order | ||
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Number of non-cancelable purchase orders executed | 2 | ' |
Non-cancelable purchase order commitment | $1.40 | ' |
Non-cancelable purchase order delivery period | '18 months | ' |
Non-cancelable purchase order commitment remained | ' | $1 |