Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 12, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | LUNA | |
Entity Registrant Name | LUNA INNOVATIONS INC | |
Entity Central Index Key | 1,239,819 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 27,558,569 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 7,512,513 | $ 14,116,969 |
Accounts receivable, net | 9,330,045 | 5,689,615 |
Inventory, net | 9,955,920 | 3,364,233 |
Prepaid expenses and other current assets | 1,933,984 | 715,302 |
Total current assets | 28,732,462 | 23,886,119 |
Property and equipment, net | 6,719,424 | 3,497,057 |
Intangible assets, net | 11,528,262 | 199,277 |
Goodwill | 614,184 | 0 |
Other assets | 88,948 | 1,995 |
Total assets | 47,683,280 | 27,584,448 |
Current liabilities: | ||
Current portion of long-term debt obligation | 1,500,000 | 625,000 |
Current portion of capital lease obligation | 61,552 | 70,725 |
Accounts payable | 4,074,732 | 1,447,177 |
Accrued liabilities | 6,179,975 | 5,468,849 |
Deferred revenue | 706,892 | 861,081 |
Total current liabilities | 12,523,151 | 8,472,832 |
Long-term deferred rent | 1,507,814 | 1,570,377 |
Long-term debt | 4,375,000 | 0 |
Long-term capital lease obligation | 45,922 | 39,582 |
Total liabilities | $ 18,451,887 | $ 10,082,791 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $ 0.001, 1,321,514 shares authorized, issued and outstanding at December 31, 2014 and June 30, 2015 | $ 1,322 | $ 1,322 |
Common stock, par value $ 0.001, 100,000,000 shares authorized, 15,110,924 and 27,558,569 shares issued, 15,088,199 and 27,505,919 shares outstanding at December 31, 2014 and June 30, 2015 | 28,052 | 15,541 |
Less treasury stock at cost, 22,725 and 52,650 shares at December 31, 2014 and June 30, 2015 | (65,334) | (32,221) |
Additional paid-in capital | 80,734,306 | 64,147,666 |
Accumulated deficit | (51,466,953) | (46,630,651) |
Total stockholders’ equity | 29,231,393 | 17,501,657 |
Total liabilities and stockholders’ equity | $ 47,683,280 | $ 27,584,448 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
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) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,558,569 | 15,110,924 |
Common stock, shares outstanding | 27,505,919 | 15,088,199 |
Treasury stock, shares | 52,650 | 22,725 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Technology development | $ 3,728,271 | $ 3,219,435 | $ 6,603,786 | $ 5,894,887 |
Products and licensing | 6,297,475 | 2,008,862 | 8,761,062 | 3,805,291 |
Total revenues | 10,025,746 | 5,228,297 | 15,364,848 | 9,700,178 |
Cost of revenues: | ||||
Technology development | 2,576,145 | 2,388,801 | 4,659,769 | 4,413,956 |
Products and licensing | 3,252,627 | 851,490 | 4,219,317 | 1,746,130 |
Total cost of revenues | 5,828,772 | 3,240,291 | 8,879,086 | 6,160,086 |
Gross profit | 4,196,974 | 1,988,006 | 6,485,762 | 3,540,092 |
Operating expense: | ||||
Selling, general and administrative | 5,518,656 | 2,466,626 | 10,087,609 | 5,221,704 |
Research, development and engineering | 801,221 | 484,509 | 1,136,111 | 1,233,663 |
Total operating expense | 6,319,877 | 2,951,135 | 11,223,720 | 6,455,367 |
Operating loss | (2,122,903) | (963,129) | (4,737,958) | (2,915,275) |
Other income/(expense): | ||||
Other income, net | 4,264 | 29,325 | 4,109 | 111,431 |
Interest expense | (49,966) | (27,302) | (59,103) | (59,667) |
Total other income/(expense) | (45,702) | 2,023 | (54,994) | 51,764 |
Loss from continuing operations, before income taxes | (2,168,605) | (961,106) | (4,792,952) | (2,863,511) |
Income tax (benefit)/expense | 0 | (375,983) | 2,808 | (1,145,173) |
Net loss from continuing operations | (2,168,605) | (585,123) | (4,795,760) | (1,718,338) |
(Loss)/income from discontinued operations, net of income taxes of $0.4 million, $0, $1.3 million, and $0 | 0 | (330,716) | 0 | 9,342,723 |
Net (loss)/income | (2,168,605) | (915,839) | (4,795,760) | 7,624,385 |
Preferred stock dividend | 20,021 | 27,334 | 46,581 | 56,870 |
Net (loss)/income attributable to common stockholders | $ (2,188,626) | $ (943,173) | $ (4,842,341) | $ 7,567,515 |
Net loss per share from continuing operations: | ||||
Basic and diluted (in dollars per share) | $ (0.10) | $ (0.04) | $ (0.26) | $ (0.12) |
Net (loss)/income per share from discontinued operations: | ||||
Basic and diluted (in dollars per share) | 0 | (0.02) | 0 | 0.63 |
Net (loss)/income per share attributable to common stockholders: | ||||
Basic and diluted (in dollars per share) | $ (0.10) | $ (0.06) | $ (0.26) | $ 0.51 |
Weighted average common shares and common equivalent shares outstanding: | ||||
Basic and diluted (in dollars per share) | 21,997,768 | 14,817,084 | 18,577,006 | 14,722,474 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Income tax, discontinued operation | $ 0 | $ 0.4 | $ 0 | $ 1.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows used in operating activities | ||
Net income/(loss) | $ (4,795,760) | $ 7,624,385 |
Adjustments to reconcile net income/(loss) to net cash used in operating activities | ||
Depreciation and amortization | 824,251 | 336,564 |
Share-based compensation | 571,439 | 488,593 |
Bad debt expense | 10,375 | 0 |
Gain on sale of discontinued operations, net of income taxes | 0 | (9,370,799) |
Tax benefit from utilization of net operating loss | 0 | (1,163,301) |
Change in assets and liabilities | ||
Accounts receivable | (335,811) | (73,857) |
Inventory | (1,345,687) | (6,796) |
Other current assets | (358,794) | 72,141 |
Other assets | 0 | 37,584 |
Accounts payable and accrued expenses | (1,271,686) | (761,149) |
Deferred revenue | (154,189) | (299,712) |
Net cash used in operating activities | (6,855,862) | (3,116,347) |
Cash flows provided by investing activities | ||
Acquisition of property and equipment | (50,175) | (135,136) |
Intangible property costs | (123,578) | (138,118) |
Proceeds from sale of discontinued operations, net of fees | 0 | 10,927,268 |
Cash acquired in business combination | 374,517 | 0 |
Net cash provided by investing activities | 200,764 | 10,654,014 |
Cash flows provided by/(used in) financing activities | ||
Payments on capital lease obligations | (36,406) | (32,810) |
Payment of debt obligations | (5,962,355) | (750,000) |
Purchase of treasury stock | (33,113) | (32,221) |
Borrowings under term loan | 6,000,000 | 0 |
Proceeds from the exercise of options | 82,516 | 173,796 |
Net cash (used in)/provided by financing activities | 50,642 | (641,235) |
Net increase/(decrease) in cash and cash equivalents | (6,604,456) | 6,896,432 |
Cash and cash equivalents—beginning of period | 14,116,969 | 7,778,541 |
Cash and cash equivalents—end of period | 7,512,513 | 14,674,973 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 31,474 | 54,688 |
Dividend on preferred stock, 39,646 shares of common stock issuable for the six months ended June 30, 2014 and 2015 | 46,581 | 56,870 |
Cash paid for income taxes | $ 2,808 | $ 0 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - shares | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Cash Flows [Abstract] | ||
Dividend on preferred stock, shares of common stock issuable | 39,646 | 39,646 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
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. Following our merger with Advanced Photonix, Inc. ("API"), we also package optoelectronic semiconductors into high speed optical receivers (HSOR products), custom optoelectronic subsystems (Optosolutions products) and Terahertz (THz products) instrumentation. We are organized into two business segments, 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 beginning in 2005. We have historically managed our liquidity through cost reduction initiatives, debt financings, capital market transactions and asset sales. Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) for interim financial statements 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 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 June 30, 2015 , results of operations for the three and six months ended June 30, 2014 and 2015 , and cash flows for the six months ended June 30, 2014 and 2015 . The results of operations for the three and six months ended June 30, 2015 include the results of API, Inc. from the date of the closing of our merger with API (See Note 2, below), and are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 . 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, 2014 , included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 16, 2015. Business Combinations We apply the provisions of Accounting Standards Codification 805, Business Combinations ("ASC 805"), in the accounting for acquisitions. ASC 805 requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our Consolidated Statements of Operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include: future expected cash flows from product sales; customer contracts and acquired technologies; expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and reviewed for impairment as described above. 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 ("SVB") 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. Net Loss Per Share Basic per share data is computed by dividing loss from continuing operations by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing income from continuing operations, if applicable, by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method. The effect of 6.5 million and 6.4 million common stock equivalents (which include outstanding warrants, preferred stock and stock options) are not included for the quarters ended June 30, 2014 and 2015, respectively, as they are antidilutive to earnings per share due to our net loss from continuing operations. The effect of 6.5 million and 5.9 million common stock equivalents are not included for the six months ended June 30, 2014 and 2015, respectively, as they are considered anti-dilutive. Recently Issued Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance which requires debt issuance costs to be presented on the balance sheet as a direct deduction from the associated debt liability. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2015. Early adoption is permitted. We do not expect the adoption of this standard to have a significant impact on our consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”. ASU No. 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU No. 2014-09 is currently scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. ASU No. 2014-09 provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. On July 9, 2015, the FASB approved a deferral of the effective date of ASU 2014-09 by one year; however, early adoption as of the original effective date will be permitted. We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements. |
Merger With API
Merger With API | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Merger With API | Merger With API On May 8, 2015, we completed our merger with API (the "Merger") pursuant to the Agreement and Plan of Merger (the "Merger Agreement") for a total purchase consideration of $ 15.9 million . In accordance with the terms of the Merger Agreement, API shareholders received 0 .31782 shares of our common stock for each share of API common stock they owned. The Merger has been accounted for under the acquisition method of accounting in accordance with ASC 805, with Luna treated as the accounting acquirer. We incurred $ 1.7 million and $ 3.5 million in Merger-related costs for the three and six months ended June 30, 2015, respectively, which are included within selling, general and administrative expenses in the Consolidated Statement of Operations. The total purchase consideration of $ 15.9 million consists of the following: Purchase Consideration Fair value of Luna common stock issued to API shareholders $ 15,671,775 Fair value of vested API options assumed by Luna 187,879 Total purchase consideration $ 15,859,654 Under the acquisition method of accounting, the total estimated purchase consideration is allocated to the acquired tangible and intangible assets and assumed liabilities based on their estimated fair values as of the acquisition date. Any excess of the fair value of assets acquired and liabilities assumed over the fair value of the acquisition consideration is recognized as a gain by the acquirer. We have completed a preliminary allocation of the purchase consideration with the assistance of a third-party valuation expert. The following allocation of the purchase consideration is subject to revision as additional information becomes known in the future. Preliminary Allocation of Purchase Consideration Cash $ 374,517 Accounts receivable 3,314,994 Inventory 5,246,000 Other current assets 859,888 Property and equipment 3,601,850 Identifiable intangible assets 11,600,000 Goodwill 614,184 Other assets 86,953 Accounts payable and accrued expenses (4,592,804 ) Debt (5,212,355 ) Other liabilities (33,573 ) Total purchase consideration $ 15,859,654 The preliminary identifiable intangible assets acquired and their estimated lives are as follows: Estimated Fair Value Estimated Useful Life Developed technology $ 4,500,000 2-10 years In-process research and development 3,900,000 3-10 years Customer base 1,300,000 9-11 years Trade names 1,500,000 10 years Backlog 400,000 1 year $ 11,600,000 Trade names and trademarks are considered a type of guarantee of a certain level of quality or performance represented by the API brand. Trade names and trademarks were valued using the "relief-from-royalty" method of income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of this asset. A discount rate of 24.5% was used to discount the cash flows to the present value. Developed technologies acquired primarily consist of API's existing technologies related to high speed optical receivers, optoelectronic systems, modules and components, and Terahertz solutions. The developed technologies of API were valued using both the "relief-from-royalty" method and the "multi-period excess earnings" method, under the income approach. This multi-period excess earnings method reflects the present value of the projected cash flows that are expected to be generated by the developed technologies less charges representing the contribution of other assets to those cash flows. A discount rate of 32.5% was used to discount the cash flows to the present value. In-process research and development represents the estimated fair values of incomplete API research and development projects that had not reached technological feasibility as of the closing date of the Merger. In the future, the fair value of each project at the date of the closing of the Merger will be either amortized or impaired depending on whether the projects are completed or abandoned. The fair value of in-process research and development was determined using the multi-period excess earnings method. A discount rate of 37.5% was used to discount the cash flows to the present value. Customer backlog represents the fair value of projected cash flows that will be derived from the sale of products under existing contracts and customer orders as of the closing date of the Merger. The fair value of the customer backlog was determined using the multi-period excess earnings method. A discount rate of 21.5% was used to discount the cash flows to the present value. Customer relationships represent the fair value of projected cash flows that will be derived from the sale of products to API's existing customers as of the closing date of the Merger. Customer relationships were valued utilizing both a multi-period excess earnings method and the "distributor" method, under the income approach. Under this premise, the margin of a distributor within the industry is deemed to be the margin attributable to customer relationships. This isolates the cash flows attributable to the customer relationships that a market participant would be willing to pay for. A discount rate of 32.5% was used to discount the cash flows to the present value. Pro forma consolidated results of operations The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the Merger had been completed on January 1, 2014. The pro forma information includes adjustments to depreciation expense for property and equipment acquired, to amortization expense for the intangible assets acquired, to interest expense for the new debt facility, and to eliminate the Merger transaction expenses recognized in each period. The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations of the combined business had the Merger actually occurred on January 1, 2014 or of the results of future operations of the combined business. For instance, planned or expected operational synergies following the Merger are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below (amounts in $000s). Three Months Ended June 30, Six Months Ended June 30, 2014 2015 2014 2015 (unaudited) (unaudited) Revenue $ 12,891 $ 12,444 $ 24,340 $ 24,232 Loss from continuing operations $ (1,239 ) $ (1,818 ) $ (3,860 ) $ (3,889 ) |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 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 $12.0 million in cash has been received, up to $8.0 million is payable to us in the future upon the accomplishment by the buyer of certain technical specifications, and up to $10.0 million is payable to us 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 of our employees, many of whom were historically engaged in this development project. In connection with this sale, we incurred $1.3 million in transaction costs that included various charges related to investment banker and legal fees and a 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 $0.3 million on January 20, 2014. We have reported the results of operations of 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 or loss before allocations. The key components of income from discontinued operations were as follows: Three Months Ended Six Months Ended June 30, 2014 June 30, 2015 June 30, 2014 June 30, 2015 (unaudited) (unaudited) Net revenues $ — $ — $ — $ — Cost of revenues — — 46,204 — Operating expenses — — — — Loss before income taxes — — (46,204 ) — Allocated tax benefit — — (18,128 ) — Operating loss from discontinued operations — — (28,076 ) — (Loss)/gain on sale, net of $0.4 million, $0, $1.3 million, and $0 of related income taxes, respectively (330,716 ) — 9,370,799 — Income from discontinued operations, net of income taxes $ (330,716 ) $ — $ 9,342,723 $ — |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of finished goods, work-in-process and raw materials valued at the lower of cost (determined on the first-in, first-out basis) or market. We write down inventory for estimated obsolescence or unmarketable inventory in an amount 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: December 31, June 30, (unaudited) Finished goods $ 580,184 $ 2,557,060 Work-in-process 262,025 1,468,907 Raw materials 2,522,024 5,929,953 Total inventory $ 3,364,233 $ 9,955,920 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities at December 31, 2014 and June 30, 2015 consist of the following: December 31, 2014 June 30, 2015 (unaudited) Accrued compensation $ 2,362,608 $ 2,675,952 Claims reserve 1,502,904 1,752,903 Accrued sub-contracts 244,218 226,800 Accrued professional fees 177,712 93,240 Accrued income tax 166,550 157,402 Deferred rent 182,340 134,641 Royalties 392,945 256,158 Warranty reserve 69,264 151,485 Accrued liabilities - other 370,308 731,394 Total accrued liabilities $ 5,468,849 $ 6,179,975 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Silicon Valley Bank Facility We currently have a Loan and Security Agreement with SVB under which we have a term loan with an original borrowing amount of $6.0 million (the “Term Loan” or “Credit Facility”). Prior to the amendment to the Credit Facility in connection with our Merger with API as described below, the Term Loan was to be repaid by us in 48 monthly installments, plus accrued interest payable monthly in arrears, and unless earlier terminated, was scheduled to mature on May 1, 2015. The Term Loan carried a floating annual interest rate equal to SVB’s prime rate then in effect plus 2% . Amounts due under the Credit Facility are secured by substantially all of our assets, including intellectual property, personal property and bank accounts. On May 8, 2015, we entered into the Sixth Loan Modification Agreement with SVB, under which we executed a new term loan in the principal amount of $6.0 million and used the proceeds principally to repay the previously outstanding indebtedness of API and other transaction related costs. The term loan bears interest at a floating rate of prime plus 2% and is to be repaid in 48 monthly installments of $125,000 plus accrued interest. The term loan includes a minimum liquidity covenant whereby we are required to maintain at each month end a ratio of cash plus 50% of accounts receivable greater than or equal to 1.75 times the outstanding principal balance of the loan. The Credit Facility also requires us to observe a number of operational covenants, including protection and registration of intellectual property rights, and certain customary negative covenants. As of June 30, 2015 , we were in compliance with all covenants under the Credit Facility. In addition, the Credit Facility contains 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 Facility and foreclose on the collateral. Furthermore, an event of default under the Credit Facility would result in an increase in the interest rate on any amounts outstanding. As of June 30, 2015 , there were no events of default on the Credit Facility. The balance under the Term Loan at December 31, 2014 and June 30, 2015, was $0.6 million and $5.9 million , respectively. The effective rate of our Term Loan at June 30, 2015 was 5.25% . The following table presents a summary of debt outstanding as of December 31, 2014 and June 30, 2015 : December 31, 2014 June 30, 2015 (unaudited) Silicon Valley Bank Term Loan $ 625,000 $ 5,875,000 Less: current portion 625,000 1,500,000 Total long-term debt $ — $ 4,375,000 The schedule of remaining principal payments under our term loan is as follows: 2015 $ 750,000 2016 1,500,000 2017 1,500,000 2018 1,500,000 2019 625,000 $ 5,875,000 |
Capital Stock and Additional Pa
Capital Stock and Additional Paid-in Capital | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Capital Stock and Additional Paid-in Capital | Capital Stock and Additional Paid-in Capital 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-Merton 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 six months ended June 30, 2014 and 2015 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: Six Months Ended June 30, 2014 2015 Risk-free interest rate 2.14% 1.88% Expected life of options (in years) 7.5 7.5 Expected stock price volatility 106% 103% Executive turnover rates —% —% Non-executive turnover rates 33.6% 40.0% Expected dividend yield —% —% A summary of the activity for our 2003 Stock Plan and 2006 Equity Incentive Plan is presented below for the six months ended June 30, 2015 : Options Outstanding Options Exercisable Number of Shares Price per Share Range Weighted Average Exercise Price Aggregate Intrinsic Value (1) Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Balance, January 1, 2015 4,289,631 $0.35 - $6.55 $ 1.93 $ 512,901 3,111,199 $ 2.11 $ 453,032 Granted 35,500 $1.27 - $1.45 $ 1.43 Issued in exchange for API options 471,138 $1.38 - $9.03 $ 4.83 Exercised 230,672 $0.35 - $1.74 $ 1.34 Canceled 241,416 $0.35 - $7.30 $ 2.78 Balance, June 30, 2015 4,324,181 $0.61 - $9.03 $ 2.31 $ 166,493 3,473,370 $ 2.52 $ 155,476 (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 June 30, 2015 , the outstanding stock options to purchase an aggregate of 4.3 million shares had a weighted-average remaining contractual term of 5.7 years , and the exercisable stock options to purchase an aggregate of 3.5 million shares had a weighted-average remaining contractual term of 5.0 years. For the three months ended June 30, 2014 and 2015 , we recognized $0.5 million and $0.6 million in share-based compensation expense, respectively, which is included in our selling, general and administrative expense in the accompanying consolidated financial statements. We expect to recognize $1.1 million in share-based compensation expense over the weighted-average remaining service period of 1.1 years for stock options outstanding as of June 30, 2015 . The following table summarizes our restricted stock awards: Number of Vested Shares Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Value of Vested Shares Aggregate Value of Unvested Shares Balance at January 1, 2015 128,663 528,000 $ 1.36 $ 183,115 $ 707,700 Granted — 334,000 1.12 — 374,080 Vested 132,000 (132,000 ) 1.34 176,925 (176,925 ) Repurchased (29,925 ) — 1.33 (39,800 ) — Forfeitures — (25,876 ) 1.35 — (35,019 ) Balance at June 30, 2015 230,738 704,124 $ 1.27 $ 320,240 $ 869,836 The following details our equity transactions during the six months ended June 30, 2015 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Shares $ Shares $ Shares $ $ Balance at January 1, 2015 1,321,514 1,322 15,088,199 15,541 22,725 (32,221 ) 64,147,666 Exercise of stock options — — 233,704 233 — — 82,283 Share-based compensation — — 337,335 367 — — 480,230 Non-cash compensation — — — — — — 129,803 Stock dividends to Carilion Clinic(1) — — — 39 — — 46,542 Issuance of stock to former API shareholders — — 11,872,557 11,872 — — 15,659,903 Options issued in exchange for API options — — — — — — 187,879 Forfeitures of restricted stock grants — — (25,876 ) — — — — Purchase of treasury stock — — — — 29,925 (33,113 ) — Balance at June 30, 2015 1,321,514 1,322 27,505,919 28,052 52,650 (65,334 ) 80,734,306 (1) The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2015 . For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2015 , the Series A Preferred Stock issued to Carilion has accrued $918,935 in dividends. The accrued and unpaid dividends as of June 30, 2015 will be paid by the issuance of 432,383 shares of our common stock upon Carilion’s written request. |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2015 | |
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 revenues primarily from services. The Products and Licensing segment derives its revenues 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 revenues, expenses and assets of our medical shape sensing business. Through June 30, 2015 , our Chief Executive Officer and his direct reports collectively represented our chief operating decision makers, and they evaluated segment performance based primarily on revenues 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 SEC on March 16, 2015). The table below presents revenues and operating loss for reportable segments not including discontinued operations: Three Months Ended Six Months Ended 2014 2015 2014 2015 (unaudited) (unaudited) Revenues: Technology development revenues $ 3,219,435 $ 3,728,271 $ 5,894,887 $ 6,603,786 Products and licensing revenues 2,008,862 6,297,475 3,805,291 8,761,062 Total revenues $ 5,228,297 $ 10,025,746 $ 9,700,178 $ 15,364,848 Technology development operating loss $ (1,007,494 ) $ (1,096,127 ) $ (2,535,140 ) $ (2,947,684 ) Products and licensing operating loss 44,365 (1,026,776 ) (380,135 ) (1,790,274 ) Total operating loss $ (963,129 ) $ (2,122,903 ) $ (2,915,275 ) $ (4,737,958 ) Depreciation, technology development $ 53,992 $ 104,217 $ 110,735 $ 203,854 Depreciation, products and licensing $ 33,690 $ 189,276 $ 71,790 $ 225,803 Amortization, technology development $ 28,681 $ 37,434 $ 92,974 $ 57,222 Amortization, products and licensing $ 17,896 $ 328,242 $ 61,065 $ 337,371 The table below presents assets for reportable segments: December 31, June 30, (unaudited) Total segment assets: Technology development $ 16,503,316 $ 13,264,452 Products and licensing 11,081,132 34,418,828 Total $ 27,584,448 $ 47,683,280 Property plant and equipment, and intangible assets, technology development $ 2,122,157 $ 4,377,690 Property plant and equipment, and intangible assets, products and licensing $ 1,574,177 $ 14,484,178 There are no material inter-segment revenues for any period presented. The U.S. government accounted for approximately 37% and 63% of total consolidated revenues for the three months ended June 30, 2015 and 2014 , respectively and approximately 45% and 61% for the six months ended June 30, 2015 and 2014, respectively. International revenues (customers outside the United States) accounted for approximately 17% and 16% of total consolidated revenues for the three months ended June 30, 2015 and 2014 , respectively and approximately 16% and 17% for the six months ended June 30, 2015 and 2014, respectively. |
Contingencies and Guarantees
Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2015 | |
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 September 2014, we received a preliminary audit report from the Defense Contract Audit Agency (the "DCAA"), with respect to our 2007 incurred cost submission and questioning $0.8 million of claimed costs that the DCAA believes are expressly unallowable under the Federal Acquisition Regulations and, therefore, subject to potential penalty. In June 2015, we received from the Defense Contract Management Agency (the "DCMA") a final determination and demand for payment of penalties, interest, and over billing in the aggregate amount of $1.1 million . In July 2015, we filed an appeal with the Armed Services Board of Contract Appeals. Because of the early stage of the appeal process, we are unable to estimate the amount of loss, if any, that may be realized. In April 2015, we executed two non-cancelable purchase orders totaling $1.4 million for multiple shipments of tunable lasers to be delivered over the following 18 -month period. At June 30, 2015 , approximately $1.3 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. |
Correction of Error Related To
Correction of Error Related To Disallowed Costs For Cost Reimbursement Type Contracts (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Correction of Immaterial Error Related To Disallowed Costs For Cost Reimbursement Type Contracts | Correction of Immaterial Error Related To Disallowed Costs For Cost Reimbursement Type Contracts As described in Note 9, in June 2015, we received a letter of final determination from the DCMA regarding the allowability of certain costs we included in our billings under cost-plus type research contracts during 2007. Following the company's identification of the inclusion of unallowable costs for periods subsequent to 2007, we recalculated our billing rates to exclude those costs and have begun submitting updated analyses for those subsequent years to DCMA. We currently estimate that our allowed billings under cost-plus type contracts for those subsequent periods will be reduced by approximately $1.5 million compared to amounts actually billed due to the exclusion of those unallowable costs for the years 2007 through 2010. We do not estimate such exclusion to have a significant impact on the aggregate allowed billing amounts subsequent to 2010. We have deemed the correction of the error associated with our estimated over-billing for prior periods to be immaterial to previously issued financial statements and, in accordance with SEC Accounting Bulletin Topic 1N- Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , we have reflected such correction as an adjustment to beginning accrued liabilities and retained earnings of $1.5 million as of January 1, 2014. As of January 1, 2014 As Originally Reported As Corrected Accrued liabilities $ 3,546,585 $ 5,049,489 Accumulated deficit $ (51,010,357 ) $ (52,513,261 ) Our allowable billing rates have currently been approved by DCMA through 2008. Allowable amounts billed for subsequent periods may be revised in the future as audits for those periods are completed and final billing rates determined by DCMA for those periods. |
Basis of Presentation and Sig18
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
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. Following our merger with Advanced Photonix, Inc. ("API"), we also package optoelectronic semiconductors into high speed optical receivers (HSOR products), custom optoelectronic subsystems (Optosolutions products) and Terahertz (THz products) instrumentation. We are organized into two business segments, 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 beginning in 2005. We have historically managed our liquidity through cost reduction initiatives, debt financings, capital market transactions and asset sales. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) for interim financial statements 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 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 June 30, 2015 , results of operations for the three and six months ended June 30, 2014 and 2015 , and cash flows for the six months ended June 30, 2014 and 2015 . The results of operations for the three and six months ended June 30, 2015 include the results of API, Inc. from the date of the closing of our merger with API (See Note 2, below), and are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 . 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, 2014 , included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 16, 2015. |
Business Combinations | Business Combinations We apply the provisions of Accounting Standards Codification 805, Business Combinations ("ASC 805"), in the accounting for acquisitions. ASC 805 requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our Consolidated Statements of Operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies, and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include: future expected cash flows from product sales; customer contracts and acquired technologies; expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and reviewed for impairment as described above. |
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 ("SVB") 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. |
Net Loss Per Share | Net Loss Per Share Basic per share data is computed by dividing loss from continuing operations by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing income from continuing operations, if applicable, by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance which requires debt issuance costs to be presented on the balance sheet as a direct deduction from the associated debt liability. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2015. Early adoption is permitted. We do not expect the adoption of this standard to have a significant impact on our consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”. ASU No. 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU No. 2014-09 is currently scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. ASU No. 2014-09 provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. On July 9, 2015, the FASB approved a deferral of the effective date of ASU 2014-09 by one year; however, early adoption as of the original effective date will be permitted. We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements. |
Merger With API (Tables)
Merger With API (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Total Purchase Consideration | The total purchase consideration of $ 15.9 million consists of the following: Purchase Consideration Fair value of Luna common stock issued to API shareholders $ 15,671,775 Fair value of vested API options assumed by Luna 187,879 Total purchase consideration $ 15,859,654 |
Preliminary Allocation of the Purchase Consideration | The following allocation of the purchase consideration is subject to revision as additional information becomes known in the future. Preliminary Allocation of Purchase Consideration Cash $ 374,517 Accounts receivable 3,314,994 Inventory 5,246,000 Other current assets 859,888 Property and equipment 3,601,850 Identifiable intangible assets 11,600,000 Goodwill 614,184 Other assets 86,953 Accounts payable and accrued expenses (4,592,804 ) Debt (5,212,355 ) Other liabilities (33,573 ) Total purchase consideration $ 15,859,654 |
Schedule of Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives | The preliminary identifiable intangible assets acquired and their estimated lives are as follows: Estimated Fair Value Estimated Useful Life Developed technology $ 4,500,000 2-10 years In-process research and development 3,900,000 3-10 years Customer base 1,300,000 9-11 years Trade names 1,500,000 10 years Backlog 400,000 1 year $ 11,600,000 |
Business Acquisition, Pro Forma Information | The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations of the combined business had the Merger actually occurred on January 1, 2014 or of the results of future operations of the combined business. For instance, planned or expected operational synergies following the Merger are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below (amounts in $000s). Three Months Ended June 30, Six Months Ended June 30, 2014 2015 2014 2015 (unaudited) (unaudited) Revenue $ 12,891 $ 12,444 $ 24,340 $ 24,232 Loss from continuing operations $ (1,239 ) $ (1,818 ) $ (3,860 ) $ (3,889 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Income from Discontinued Operations | The key components of income from discontinued operations were as follows: Three Months Ended Six Months Ended June 30, 2014 June 30, 2015 June 30, 2014 June 30, 2015 (unaudited) (unaudited) Net revenues $ — $ — $ — $ — Cost of revenues — — 46,204 — Operating expenses — — — — Loss before income taxes — — (46,204 ) — Allocated tax benefit — — (18,128 ) — Operating loss from discontinued operations — — (28,076 ) — (Loss)/gain on sale, net of $0.4 million, $0, $1.3 million, and $0 of related income taxes, respectively (330,716 ) — 9,370,799 — Income from discontinued operations, net of income taxes $ (330,716 ) $ — $ 9,342,723 $ — |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Components of inventory are as follows: December 31, June 30, (unaudited) Finished goods $ 580,184 $ 2,557,060 Work-in-process 262,025 1,468,907 Raw materials 2,522,024 5,929,953 Total inventory $ 3,364,233 $ 9,955,920 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities at December 31, 2014 and June 30, 2015 consist of the following: December 31, 2014 June 30, 2015 (unaudited) Accrued compensation $ 2,362,608 $ 2,675,952 Claims reserve 1,502,904 1,752,903 Accrued sub-contracts 244,218 226,800 Accrued professional fees 177,712 93,240 Accrued income tax 166,550 157,402 Deferred rent 182,340 134,641 Royalties 392,945 256,158 Warranty reserve 69,264 151,485 Accrued liabilities - other 370,308 731,394 Total accrued liabilities $ 5,468,849 $ 6,179,975 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Debt Outstanding | The following table presents a summary of debt outstanding as of December 31, 2014 and June 30, 2015 : December 31, 2014 June 30, 2015 (unaudited) Silicon Valley Bank Term Loan $ 625,000 $ 5,875,000 Less: current portion 625,000 1,500,000 Total long-term debt $ — $ 4,375,000 |
Schedule of Remaining Principal Payments Under the Term Loan | The schedule of remaining principal payments under our term loan is as follows: 2015 $ 750,000 2016 1,500,000 2017 1,500,000 2018 1,500,000 2019 625,000 $ 5,875,000 |
Capital Stock and Additional 24
Capital Stock and Additional Paid-in Capital (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Assumptions Used to Estimate Fair Value of Option Granted | The fair value of each option granted during the six months ended June 30, 2014 and 2015 was estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: Six Months Ended June 30, 2014 2015 Risk-free interest rate 2.14% 1.88% Expected life of options (in years) 7.5 7.5 Expected stock price volatility 106% 103% Executive turnover rates —% —% Non-executive turnover rates 33.6% 40.0% Expected dividend yield —% —% |
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 six months ended June 30, 2015 : Options Outstanding Options Exercisable Number of Shares Price per Share Range Weighted Average Exercise Price Aggregate Intrinsic Value (1) Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Balance, January 1, 2015 4,289,631 $0.35 - $6.55 $ 1.93 $ 512,901 3,111,199 $ 2.11 $ 453,032 Granted 35,500 $1.27 - $1.45 $ 1.43 Issued in exchange for API options 471,138 $1.38 - $9.03 $ 4.83 Exercised 230,672 $0.35 - $1.74 $ 1.34 Canceled 241,416 $0.35 - $7.30 $ 2.78 Balance, June 30, 2015 4,324,181 $0.61 - $9.03 $ 2.31 $ 166,493 3,473,370 $ 2.52 $ 155,476 (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. |
Summary of Restricted Stock Awards | The following table summarizes our restricted stock awards: Number of Vested Shares Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Value of Vested Shares Aggregate Value of Unvested Shares Balance at January 1, 2015 128,663 528,000 $ 1.36 $ 183,115 $ 707,700 Granted — 334,000 1.12 — 374,080 Vested 132,000 (132,000 ) 1.34 176,925 (176,925 ) Repurchased (29,925 ) — 1.33 (39,800 ) — Forfeitures — (25,876 ) 1.35 — (35,019 ) Balance at June 30, 2015 230,738 704,124 $ 1.27 $ 320,240 $ 869,836 |
Equity Transactions | The following details our equity transactions during the six months ended June 30, 2015 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Shares $ Shares $ Shares $ $ Balance at January 1, 2015 1,321,514 1,322 15,088,199 15,541 22,725 (32,221 ) 64,147,666 Exercise of stock options — — 233,704 233 — — 82,283 Share-based compensation — — 337,335 367 — — 480,230 Non-cash compensation — — — — — — 129,803 Stock dividends to Carilion Clinic(1) — — — 39 — — 46,542 Issuance of stock to former API shareholders — — 11,872,557 11,872 — — 15,659,903 Options issued in exchange for API options — — — — — — 187,879 Forfeitures of restricted stock grants — — (25,876 ) — — — — Purchase of treasury stock — — — — 29,925 (33,113 ) — Balance at June 30, 2015 1,321,514 1,322 27,505,919 28,052 52,650 (65,334 ) 80,734,306 (1) The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2015 . For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2015 , the Series A Preferred Stock issued to Carilion has accrued $918,935 in dividends. The accrued and unpaid dividends as of June 30, 2015 will be paid by the issuance of 432,383 shares of our common stock upon Carilion’s written request. |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of revenues, operating loss and assets for reportable segments | The table below presents revenues and operating loss for reportable segments not including discontinued operations: Three Months Ended Six Months Ended 2014 2015 2014 2015 (unaudited) (unaudited) Revenues: Technology development revenues $ 3,219,435 $ 3,728,271 $ 5,894,887 $ 6,603,786 Products and licensing revenues 2,008,862 6,297,475 3,805,291 8,761,062 Total revenues $ 5,228,297 $ 10,025,746 $ 9,700,178 $ 15,364,848 Technology development operating loss $ (1,007,494 ) $ (1,096,127 ) $ (2,535,140 ) $ (2,947,684 ) Products and licensing operating loss 44,365 (1,026,776 ) (380,135 ) (1,790,274 ) Total operating loss $ (963,129 ) $ (2,122,903 ) $ (2,915,275 ) $ (4,737,958 ) Depreciation, technology development $ 53,992 $ 104,217 $ 110,735 $ 203,854 Depreciation, products and licensing $ 33,690 $ 189,276 $ 71,790 $ 225,803 Amortization, technology development $ 28,681 $ 37,434 $ 92,974 $ 57,222 Amortization, products and licensing $ 17,896 $ 328,242 $ 61,065 $ 337,371 The table below presents assets for reportable segments: December 31, June 30, (unaudited) Total segment assets: Technology development $ 16,503,316 $ 13,264,452 Products and licensing 11,081,132 34,418,828 Total $ 27,584,448 $ 47,683,280 Property plant and equipment, and intangible assets, technology development $ 2,122,157 $ 4,377,690 Property plant and equipment, and intangible assets, products and licensing $ 1,574,177 $ 14,484,178 |
Correction of Error Related T26
Correction of Error Related To Disallowed Costs For Cost Reimbursement Type Contracts (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | We have deemed the correction of the error associated with our estimated over-billing for prior periods to be immaterial to previously issued financial statements and, in accordance with SEC Accounting Bulletin Topic 1N- Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , we have reflected such correction as an adjustment to beginning accrued liabilities and retained earnings of $1.5 million as of January 1, 2014. As of January 1, 2014 As Originally Reported As Corrected Accrued liabilities $ 3,546,585 $ 5,049,489 Accumulated deficit $ (51,010,357 ) $ (52,513,261 ) |
Basis of Presentation and Sig27
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015shares | Jun. 30, 2014shares | Jun. 30, 2015Segmentshares | Jun. 30, 2014shares | |
Accounting Policies [Abstract] | ||||
Number of operating segments | 2 | |||
Antidilutive securities excluded from computation of net loss per share (shares) | shares | 6.4 | 6.5 | 5.9 | 6.5 |
Merger With API - Narrative (De
Merger With API - Narrative (Details) - API - USD ($) | May. 08, 2015 | Jun. 30, 2015 | Jun. 30, 2015 |
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 15,859,654 | ||
Number of company shares received by API stockholders for every API stock owned | 0.31782 | ||
Merger-related costs | $ 1,700,000 | $ 3,500,000 | |
Trade names | |||
Business Acquisition [Line Items] | |||
Discount rate used to estimate fair value of acquired intangible assets | 24.50% | ||
Developed technology | |||
Business Acquisition [Line Items] | |||
Discount rate used to estimate fair value of acquired intangible assets | 32.50% | ||
In-process research and development | |||
Business Acquisition [Line Items] | |||
Discount rate used to estimate fair value of acquired intangible assets | 37.50% | ||
Backlog | |||
Business Acquisition [Line Items] | |||
Discount rate used to estimate fair value of acquired intangible assets | 21.50% | ||
Customer base | |||
Business Acquisition [Line Items] | |||
Discount rate used to estimate fair value of acquired intangible assets | 32.50% |
Merger With API - Schedule of T
Merger With API - Schedule of Total Purchase Consideration (Details) - API | May. 08, 2015USD ($) |
Business Acquisition [Line Items] | |
Fair value of Luna common stock issued to API shareholders | $ 15,671,775 |
Fair value of vested API options assumed by Luna | 187,879 |
Total purchase consideration | $ 15,859,654 |
Merger With API - Allocation of
Merger With API - Allocation of Purchase Consideration (Details) - USD ($) | Jun. 30, 2015 | May. 08, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 614,184 | $ 0 | |
API | |||
Business Acquisition [Line Items] | |||
Cash | $ 374,517 | ||
Accounts receivable | 3,314,994 | ||
Inventory | 5,246,000 | ||
Other current assets | 859,888 | ||
Property and equipment | 3,601,850 | ||
Identifiable intangible assets | 11,600,000 | ||
Goodwill | 614,184 | ||
Other assets | 86,953 | ||
Accounts payable and accrued expenses | (4,592,804) | ||
Debt | (5,212,355) | ||
Other liabilities | (33,573) | ||
Total purchase consideration | $ 15,859,654 |
Merger With API - Preliminary I
Merger With API - Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives (Details) - May. 08, 2015 - API - USD ($) $ in Thousands | Total |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Identifiable intangible assets acquired, estimated fair value | $ 11,600 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Identifiable intangible assets acquired, estimated fair value | $ 4,500 |
Developed technology | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 2 years |
Developed technology | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
In-process research and development | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Identifiable intangible assets acquired, estimated fair value | $ 3,900 |
In-process research and development | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
In-process research and development | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Customer base | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Identifiable intangible assets acquired, estimated fair value | $ 1,300 |
Customer base | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 9 years |
Customer base | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 11 years |
Trade names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Identifiable intangible assets acquired, estimated fair value | $ 1,500 |
Estimated Useful Life | 10 years |
Backlog | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Identifiable intangible assets acquired, estimated fair value | $ 400 |
Estimated Useful Life | 1 year |
Merger With API - Pro Forma Con
Merger With API - Pro Forma Consolidated Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Business Combinations [Abstract] | ||||
Revenue | $ 12,444 | $ 12,891 | $ 24,232 | $ 24,340 |
Loss from continuing operations | $ (1,818) | $ (1,239) | $ (3,889) | $ (3,860) |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - Discontinued Operations, Disposed of by Sale - Medical Shape Sensing Business - USD ($) | Jan. 21, 2014 | Jan. 20, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sale price to an unaffiliated third party | $ 30,000,000 | |
Cash consideration received at closing | 12,000,000 | |
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 | |
Transaction costs incurred related to disposal group sales | $ 1,300,000 | |
Long-term assets related to disposal group | $ 300,000 |
Discontinued Operations - Compo
Discontinued Operations - Components of Income from Discontinued Operations (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
(Loss)/gain on sale, net of $0.4 million, $0, $1.3 million, and $0 of related income taxes, respectively | $ 0 | $ 9,370,799 | ||
Income from discontinued operations, net of income taxes | $ 0 | $ (330,716) | 0 | 9,342,723 |
Discontinued Operations, Disposed of by Sale | Medical Shape Sensing Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Cost of revenues | 0 | 0 | 0 | 46,204 |
Operating expenses | 0 | 0 | 0 | 0 |
Loss before income taxes | 0 | 0 | 0 | (46,204) |
Allocated tax benefit | 0 | 0 | 0 | (18,128) |
Operating loss from discontinued operations | 0 | 0 | 0 | (28,076) |
(Loss)/gain on sale, net of $0.4 million, $0, $1.3 million, and $0 of related income taxes, respectively | 0 | (330,716) | 0 | 9,370,799 |
Income from discontinued operations, net of income taxes | $ 0 | $ (330,716) | $ 0 | $ 9,342,723 |
Discontinued Operations - Com35
Discontinued Operations - Components of (Loss) Income from Discontinued Operations (Additional Information) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Discontinued Operations, Disposed of by Sale | Medical Shape Sensing Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
(Loss)/Gain on sale, related income taxes | $ 0 | $ 0.4 | $ 0 | $ 1.3 |
Inventory (Detail)
Inventory (Detail) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 2,557,060 | $ 580,184 |
Work-in-process | 1,468,907 | 262,025 |
Raw materials | 5,929,953 | 2,522,024 |
Total inventory | $ 9,955,920 | $ 3,364,233 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | |||
Accrued compensation | $ 2,675,952 | $ 2,362,608 | |
Claims reserve | 1,752,903 | 1,502,904 | |
Accrued sub-contracts | 226,800 | 244,218 | |
Accrued professional fees | 93,240 | 177,712 | |
Accrued income tax | 157,402 | 166,550 | |
Deferred rent | 134,641 | 182,340 | |
Royalties | 256,158 | 392,945 | |
Warranty reserve | 151,485 | 69,264 | |
Accrued liabilities - other | 731,394 | 370,308 | |
Total accrued liabilities | $ 6,179,975 | $ 5,468,849 | $ 5,049,489 |
Debt - Additional Information (
Debt - Additional Information (Detail) | May. 08, 2015USD ($)Installment | May. 07, 2015USD ($)Installment | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 5,875,000 | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 5,900,000 | $ 600,000 | ||
Effective interest rate | 5.25% | |||
Term Loan | Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Debt, face amount | $ 6,000,000 | |||
Debt, number of monthly payment | Installment | 48 | |||
Debt, frequency of periodic payment | monthly | |||
Term Loan | Silicon Valley Bank | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Debt, additional interest above prime rate | 2.00% | |||
Sixth Loan Modification Agreement | Term Loan | Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Debt, face amount | $ 6,000,000 | |||
Debt, number of monthly payment | Installment | 48 | |||
Debt, frequency of periodic payment | monthly | |||
Debt, monthly principal payments | $ 125,000 | |||
Liquidity covenant component, accounts receivable percentage | 50.00% | |||
Liquidity covenant component, outstanding principal loan balance multiplier | 1.75 | |||
Sixth Loan Modification Agreement | Term Loan | Silicon Valley Bank | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Debt, additional interest above prime rate | 2.00% |
Debt - Summary of Debt Outstand
Debt - Summary of Debt Outstanding (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Silicon Valley Bank Term Loan | $ 5,875,000 | |
Less: current portion | 1,500,000 | $ 625,000 |
Total long-term debt | 4,375,000 | 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Silicon Valley Bank Term Loan | 5,900,000 | 600,000 |
Term Loan | Silicon Valley Bank Term Loan | ||
Debt Instrument [Line Items] | ||
Silicon Valley Bank Term Loan | $ 5,875,000 | $ 625,000 |
Debt - Remaining Principal Paym
Debt - Remaining Principal Payments Under the Term Loan (Details) | Jun. 30, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,015 | $ 750,000 |
2,016 | 1,500,000 |
2,017 | 1,500,000 |
2,018 | 1,500,000 |
2,019 | 625,000 |
Long-term debt | $ 5,875,000 |
Capital Stock and Additional 41
Capital Stock and Additional Paid-in Capital - Assumptions Used to Estimate Fair Values of Options Granted (Details) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Equity [Abstract] | ||
Risk-free interest rate | 1.88% | 2.14% |
Expected life of options (in years) | 7 years 6 months | 7 years 6 months |
Expected stock price volatility | 103.00% | 106.00% |
Executive turnover rates | 0.00% | 0.00% |
Non-executive turnover rates | 40.00% | 33.60% |
Expected dividend yield | 0.00% | 0.00% |
Capital Stock and Additional 42
Capital Stock and Additional Paid-in Capital - Summary of Activity of 2003 Stock Plan and 2006 Equity Incentive Plan (Details) - 6 months ended Jun. 30, 2015 - USD ($) | Total |
Options Outstanding, Number of Shares | |
Beginning Balance (shares) | 4,289,631 |
Granted | 35,500 |
Issued in exchange for API options | 471,138 |
Exercised | 230,672 |
Canceled | 241,416 |
Ending Balance (shares) | 4,324,181 |
Options Outstanding, Price per Share Range (usd per share) | |
Beginning balance, lower limit | $ 0.35 |
Beginning balance, upper limit | 6.55 |
Granted lower limit | 1.27 |
Granted upper limit | 1.45 |
Issuable from Assumed API options lower limit | 1.38 |
Issuable from Assumed API options upper limit | 9.03 |
Exercised lower limit | 0.35 |
Exercised upper limit | 1.74 |
Canceled lower limit | 0.35 |
Canceled upper limit | 7.30 |
Balance, lower limit | 0.61 |
Balance, upper limit | 9.03 |
Options Outstanding, Weighted Average Exercise Price (usd per share) | |
Beginning Balance (in dollars per share) | 1.93 |
Granted | 1.43 |
Issued in exchange for API options | 4.83 |
Exercised | 1.34 |
Canceled | 2.78 |
Ending Balance (in dollars per share) | $ 2.31 |
Options Outstanding, Aggregate Intrinsic Value, Beginning Balance | $ 512,901 |
Options Outstanding, Aggregate Intrinsic Value, Ending Balance | $ 166,493 |
Options Exercisable, Beginning Balance (in shares) | 3,111,199 |
Options Exercisable, Ending Balance (in shares) | 3,473,370 |
Options Exercisable, Weighted Average Exercise Price, Beginning Balance (in dollars per share) | $ 2.11 |
Options Exercisable, Weighted Average Exercise Price, Ending Balance (in dollars per share) | $ 2.52 |
Options Exercisable, Aggregate Intrinsic Value, Beginning Balance | $ 453,032 |
Options Exercisable, Aggregate Intrinsic Value, Ending Balance | $ 155,476 |
Capital Stock and Additional 43
Capital Stock and Additional Paid-in Capital - Summary of Restricted Stock Awards (Details) - 6 months ended Jun. 30, 2015 - USD ($) | Total |
Number of Vested Shares | |
Beginning balance | 128,663 |
Granted | 0 |
Vested | 132,000 |
Repurchased | (29,925) |
Forfeitures | 0 |
Ending balance | 230,738 |
Number of Unvested Shares | |
Beginning balance | 528,000 |
Granted | 334,000 |
Vested | (132,000) |
Exercised | 0 |
Forfeitures | (25,876) |
Ending balance | 704,124 |
Weighted Average Grant Date Fair Value (in usd per share) | |
Beginning balance | $ 1.36 |
Granted | 1.12 |
Vested | 1.34 |
Exercised | 1.33 |
Forfeitures | 1.35 |
Ending balance | $ 1.27 |
Aggregate Value of Vested Shares | |
Beginning balance | $ 183,115 |
Granted | 0 |
Vested | 176,925 |
Exercised | (39,800) |
Forfeitures | 0 |
Ending balance | 320,240 |
Aggregate Value of Unvested Shares | |
Beginning balance | 707,700 |
Granted | 374,080 |
Vested | (176,925) |
Exercised | 0 |
Forfeitures | (35,019) |
Ending balance | $ 869,836 |
Capital Stock and Additional 44
Capital Stock and Additional Paid-in Capital - Equity Transactions (Detail) - 6 months ended Jun. 30, 2015 - USD ($) | Total | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balances, December 31, 2014 (in shares) | 1,321,514 | |
Balances, December 31, 2014 (in shares) | 15,088,199 | |
Balances, December 31, 2014 | $ 17,501,657 | |
Balances, December 31, 2014 (in shares) | 22,725 | |
Exercised | 230,672 | |
Options issued in exchange for API options | $ 187,879 | |
Balances, June 30, 2015 (in shares) | 1,321,514 | |
Balances, June 30, 2015 (in shares) | 27,505,919 | |
Balances, June 30, 2015 (in shares) | 52,650 | |
Balances, June 30, 2015 | $ 29,231,393 | |
Preferred Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balances, December 31, 2014 (in shares) | 1,321,514 | |
Balances, December 31, 2014 | $ 1,322 | |
Balances, June 30, 2015 (in shares) | 1,321,514 | |
Balances, June 30, 2015 | $ 1,322 | |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balances, December 31, 2014 (in shares) | 15,088,199 | |
Balances, December 31, 2014 | $ 15,541 | |
Exercised | 233,704 | |
Exercise of stock options | $ 233 | |
Share-based compensation (in shares) | 337,335 | |
Share-based compensation | $ 367 | |
Stock dividends to Carilion Clinic | [1] | $ 39 |
Issuance of stock to former API shareholders (in shares) | 11,872,557 | |
Issuance of stock to former API shareholders | $ 11,872 | |
Forfeitures of restricted stock grants | (25,876) | |
Balances, June 30, 2015 (in shares) | 27,505,919 | |
Balances, June 30, 2015 | $ 28,052 | |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balances, December 31, 2014 | $ (32,221) | |
Balances, December 31, 2014 (in shares) | 22,725 | |
Purchase of treasury stock (in shares) | 29,925 | |
Purchase of treasury stock | $ (33,113) | |
Balances, June 30, 2015 (in shares) | 52,650 | |
Balances, June 30, 2015 | $ (65,334) | |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balances, December 31, 2014 | 64,147,666 | |
Exercise of stock options | 82,283 | |
Share-based compensation | 480,230 | |
Non-cash compensation | 129,803 | |
Stock dividends to Carilion Clinic | [1] | 46,542 |
Issuance of stock to former API shareholders | 15,659,903 | |
Balances, June 30, 2015 | $ 80,734,306 | |
[1] | The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2015. For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2015, the Series A Preferred Stock issued to Carilion has accrued $918,935 in dividends. The accrued and unpaid dividends as of June 30, 2015 will be paid by the issuance of 432,383 shares of our common stock upon Carilion’s written request. |
Capital Stock and Additional 45
Capital Stock and Additional Paid-in Capital - Equity Transactions (Additional Information) (Detail) - Jun. 30, 2015 - USD ($) | Total |
Stockholders Equity Note [Line Items] | |
Accrued dividends | $ 918,935 |
Carilion Clinic | Series A Preferred Stock | |
Stockholders Equity Note [Line Items] | |
Stock dividends for preferred shareholders (shares) | 432,383 |
Capital Stock and Additional 46
Capital Stock and Additional Paid-in Capital - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Expected dividend yield | 0.00% | 0.00% | |
Aggregate outstanding stock options | 4,324,181 | 4,289,631 | |
Outstanding stock options, weighted average remaining contractual term | 5 years 8 months 4 days | ||
Exercisable stock options (in shares) | 3,473,370 | 3,111,199 | |
Exercisable stock options, weighted average remaining contractual term | 4 years 11 months 20 days | ||
Share-based compensation | $ 571,439 | $ 488,593 | |
Stock-based compensation expense not yet recognized | $ 1,100,000 | ||
Weighted average remaining service period | 1 year 25 days |
Operating Segments - Additional
Operating Segments - Additional Information (Detail) - Segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | 2 | |||
Sales | International | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues | 17.00% | 16.00% | 16.00% | 17.00% |
Sales | United States Government | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 37.00% | 63.00% | 45.00% | 61.00% |
Operating Segments - Revenues a
Operating Segments - Revenues and Operating Loss for Reportable Segments Not Including Discontinued Operations (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Technology development | $ 3,728,271 | $ 3,219,435 | $ 6,603,786 | $ 5,894,887 |
Products and licensing | 6,297,475 | 2,008,862 | 8,761,062 | 3,805,291 |
Total revenues | 10,025,746 | 5,228,297 | 15,364,848 | 9,700,178 |
Total operating loss | (2,122,903) | (963,129) | (4,737,958) | (2,915,275) |
Technology Development | ||||
Segment Reporting Information [Line Items] | ||||
Total operating loss | (1,096,127) | (1,007,494) | (2,947,684) | (2,535,140) |
Depreciation | 104,217 | 53,992 | 203,854 | 110,735 |
Amortization | 37,434 | 28,681 | 57,222 | 92,974 |
Products and Licensing | ||||
Segment Reporting Information [Line Items] | ||||
Total operating loss | (1,026,776) | 44,365 | (1,790,274) | (380,135) |
Depreciation | 189,276 | 33,690 | 225,803 | 71,790 |
Amortization | $ 328,242 | $ 17,896 | $ 337,371 | $ 61,065 |
Operating Segments - Assets for
Operating Segments - Assets for Reportable Segments (Detail) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 47,683,280 | $ 27,584,448 |
Property plant and equipment, and intangible assets | 6,719,424 | 3,497,057 |
Technology Development | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 13,264,452 | 16,503,316 |
Property plant and equipment, and intangible assets | 4,377,690 | 2,122,157 |
Products and Licensing | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 34,418,828 | 11,081,132 |
Property plant and equipment, and intangible assets | $ 14,484,178 | $ 1,574,177 |
Contingencies and Guarantees -
Contingencies and Guarantees - Additional information (Detail) $ in Millions | 1 Months Ended | ||
Apr. 30, 2015USD ($)purchase_order | Jun. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Loss Contingencies [Line Items] | |||
Number of non-cancelable purchase orders executed | purchase_order | 2 | ||
Non-cancelable purchase order commitment | $ 1.4 | ||
Non-cancelable purchase order delivery period | 18 months | ||
Non-cancelable purchase order commitment remained | $ 1.3 | ||
Defense Contract Audit Agency | Preliminary Audit Report | |||
Loss Contingencies [Line Items] | |||
Claimed cost, subject to potential penalty | $ 1.1 | $ 0.8 |
Correction of Error Related T51
Correction of Error Related To Disallowed Costs For Cost Reimbursement Type Contracts - Narrative (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Accrued liabilities | $ 6,179,975 | $ 5,468,849 | $ 5,049,489 |
Accumulated deficit | $ 51,466,953 | $ 46,630,651 | 52,513,261 |
Cost-Type Contracts, Change In Estimate | Restatement Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Accrued liabilities | 1,500,000 | ||
Accumulated deficit | $ 1,500,000 |
Correction of Error Related T52
Correction of Error Related To Disallowed Costs For Cost Reimbursement Type Contracts - Schedule of Error Corrections and Prior Period Adjustments (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Accrued liabilities | $ 6,179,975 | $ 5,468,849 | $ 5,049,489 |
Accumulated deficit | $ (51,466,953) | $ (46,630,651) | (52,513,261) |
Scenario, Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Accrued liabilities | 3,546,585 | ||
Accumulated deficit | $ (51,010,357) |