Luna Innovations (LUNA) 10-Q 10 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 09, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
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		27,692,776

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 13,807,799	$ 17,464,040
Accounts receivable, net	11,151,791	11,034,557
Inventory	8,389,095	8,863,167
Prepaid expenses and other current assets	1,694,810	1,388,439
Total current assets	35,043,495	38,750,203
Property and equipment, net	7,362,464	6,614,238
Intangible assets, net	9,490,702	10,404,312
Goodwill	2,348,331	2,274,112
Other assets	88,948	88,948
Total assets	54,333,940	58,131,813
Current liabilities:
Current portion of long-term debt obligations	1,833,333	1,833,333
Current portion of capital lease obligations	50,335	31,459
Accounts payable	3,889,383	4,054,425
Accrued liabilities	7,524,569	8,304,686
Deferred revenue	1,027,929	1,109,759
Total current liabilities	14,325,549	15,333,662
Long-term deferred rent	1,481,824	1,564,229
Long-term debt obligations	3,375,000	4,291,667
Long-term capital lease obligations	141,457	35,237
Total liabilities	19,323,830	21,224,795
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at June 30, 2016 and December 31, 2015	1,322	1,322
Common stock, par value $0.001, 100,000,000 shares authorized, 27,988,103 and 27,644,832 shares issued, 27,692,776 and 27,477,181 shares outstanding at June 30, 2016 and December 31, 2015	28,241	28,178
Treasury stock at cost, 300,327 and 167,652 shares at June 30, 2016 and December 31, 2015	(341,320)	(184,934)
Additional paid-in capital	81,997,662	81,461,907
Accumulated deficit	(46,675,795)	(44,399,455)
Total stockholders’ equity	35,010,110	36,907,018
Total liabilities and stockholders’ equity	$ 54,333,940	$ 58,131,813

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
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, issued (in shares)	1,321,514	1,321,514
Preferred stock, outstanding (in shares)	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	27,988,103	27,644,832
Common stock, shares outstanding	27,692,776	27,477,181
Treasury Stock, shares	300,327	167,652

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Technology development	$ 4,137,382	$ 3,728,271	$ 7,860,644	$ 6,603,786
Products and licensing	10,509,522	6,297,475	20,773,273	8,761,062
Total revenues	14,646,904	10,025,746	28,633,917	15,364,848
Cost of revenues:
Technology development	3,181,447	2,576,145	6,061,282	4,659,769
Products and licensing	6,294,607	3,252,627	12,558,180	4,219,317
Total cost of revenues	9,476,054	5,828,772	18,619,462	8,879,086
Gross profit	5,170,850	4,196,974	10,014,455	6,485,762
Operating expense:
Selling, general and administrative	4,581,776	5,518,656	9,227,060	10,087,609
Research, development and engineering	1,240,655	801,221	2,791,146	1,136,111
Total operating expense	5,822,431	6,319,877	12,018,206	11,223,720
Operating loss	(651,581)	(2,122,903)	(2,003,751)	(4,737,958)
Other income (expense):
Other (expense) income, net	(39,489)	4,264	(35,545)	4,109
Interest expense	(78,906)	(49,966)	(165,079)	(59,103)
Total other expense	(118,395)	(45,702)	(200,624)	(54,994)
Loss before income taxes	(769,976)	(2,168,605)	(2,204,375)	(4,792,952)
Income tax expense	1,000	0	26,175	2,808
Net loss	(770,976)	(2,168,605)	(2,230,550)	(4,795,760)
Preferred stock dividend	24,580	20,021	45,790	46,581
Net loss attributable to common stockholders	$ (795,556)	$ (2,188,626)	$ (2,276,340)	$ (4,842,341)
Net loss per share attributable to common stockholders:
Basic and diluted (in dollars per share)	$ (0.03)	$ (0.10)	$ (0.08)	$ (0.26)
Weighted average common shares and common equivalent shares outstanding:
Basic and diluted (in shares)	27,557,960	21,997,768	27,517,792	18,577,006

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows used in operating activities
Net loss	$ (2,230,550)	$ (4,795,760)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,861,603	824,251
Share-based compensation	465,028	571,439
Bad debt expense	50,515	10,375
Change in assets and liabilities
Accounts receivable	(167,749)	(335,811)
Inventory	474,072	(1,345,687)
Other current assets	(306,371)	(358,794)
Accounts payable and accrued expenses	(1,076,784)	(1,271,686)
Deferred revenue	(81,830)	(154,189)
Net cash used in operating activities	(1,012,066)	(6,855,862)
Cash flows (used in) provided by investing activities
Acquisition of property and equipment	(1,294,775)	(50,175)
Intangible property costs	(244,198)	(123,578)
Cash acquired in business combination	0	374,517
Net cash (used in) provided by investing activities	(1,538,973)	200,764
Cash flows (used in) provided by financing activities
Payments on capital lease obligations	(32,149)	(36,406)
Payments of debt obligations	(916,667)	(5,962,355)
Repurchase of common stock	(156,386)	(33,113)
Proceeds from term loan	0	6,000,000
Proceeds from the exercise of options	0	82,516
Net cash (used in) provided by financing activities	(1,105,202)	50,642
Net decrease in cash and cash equivalents	(3,656,241)	(6,604,456)
Cash and cash equivalents—beginning of period	17,464,040	14,116,969
Cash and cash equivalents—end of period	13,807,799	7,512,513
Supplemental disclosure of cash flow information
Cash paid for interest	157,371	31,474
Cash paid for income taxes	198,425	2,808
Non-cash investing and financing activities
Shares of common stock issued for business combination	0	11,872,557
Dividend on preferred stock, 39,646 shares of common stock issuable for the six months ended June 30, 2016 and 2015, respectively	45,790	46,581
Capital expenditures funded by capital lease borrowings	$ 157,246	$ 0

Consolidated Statements of Cas6

Consolidated Statements of Cash Flows (Parenthetical) - shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
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, 2016
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”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We develop, manufacture and market fiber optic sensing, test & 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") in 2015 (See Note 2), we also package optoelectronic semiconductors into high speed optical receivers ("HSOR" products), custom optoelectronic subsystems and Terahertz 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 operations beginning in 2005. We have historically managed our liquidity through cost reduction initiatives, debt financings, capital markets transactions and the sale of assets. 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, as amended. 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, 2016 , results of operations for the three and six months ended June 30, 2016 and 2015 , and cash flows for the six months ended June 30, 2016 and 2015 . The results of operations for the three and six months ended June 30, 2016 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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, 2015 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 29, 2016. 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. Any and all adjustments have been made as of the reporting period reflected in this report. 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. 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 for similar instruments. 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 our net loss by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income, 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 5.8 million and 6.4 million common stock equivalents (which include outstanding warrants, preferred stock and stock options) are not included for the three months ended June 30, 2016 and 2015 , respectively, as they are anti-dilutive to earnings per share due to our net loss. The effect of 5.7 million and 5.9 million common stock equivalents are not included for the six months ended June 30, 2016 and 2015 , respectively, as they are considered anti-dilutive to earnings per share due to our net loss. Recently Issued Accounting Pronouncements In April 2016, the Financial Accounting Standards Board ("FASB") amended the FASB Accounting Standards Codification and created a new Topic 606, and issued Accounting Standards Update ("ASU") No. 2016-10, Revenue from contracts with customers: Identifying Performance Obligations and Licensing . This amendment prescribes that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance throughout the Industry Topics of the Accounting Standards Codification, and is effective for annual and interim reporting periods beginning after December 15, 2017. We are currently determining the transition method and assessing the impact the amendments may have on our financial condition, results of operations or cash flows as a result of adopting this standard. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accountin g. The amendments apply to several aspects of accounting for share-based compensation including the recognition of excess tax benefits and deficiencies and their related presentation in the statement of cash flows as well as accounting for forfeitures. ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods and allows for prospective, retrospective or modified retrospective adoption, depending on the area covered in the update, with early adoption permitted. We are currently determining the transition method and assessing the impact the amendments may have on our financial condition, results of operations or cash flows as a result of adopting this standard. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires a lessee to recognize in its statement of financial position an asset and liability for most leases with a term greater than 12 months. Lessees should recognize a liability to make lease payments and a right-of-use asset representing the lessee's right to use the underlying asset for the lease term. The amendment is effective for fiscal years ending after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which simplifies the presentation of deferred taxes by requiring that deferred tax assets and liabilities be classified as noncurrent in any classified balance sheet rather than being separated into current and non-current amounts. The amendment is effective for reporting periods beginning after December 15, 2016. We do not expect the adoption of this standard to have a significant impact on our consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustments , which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendment is effective for fiscal years beginning after December 15, 2015 and requires acquirer to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, an entity is to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. We adopted this standard for periods beginning January 1, 2016 and did not experience a significant impact on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest, 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 adopted this standard for periods beginning January 1, 2016 and did not experience a significant impact on our consolidated financial statements.

Merger with API

Merger with API	6 Months Ended
	Jun. 30, 2016
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. Merger-related costs are included within selling, general and administrative expenses in the Consolidated Statement of Operations. We did not incur Merger-related costs for the three and six months ended June 30, 2016. The total purchase consideration of $ 15.9 million consisted 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 completed an allocation of the purchase consideration with the assistance of a third-party valuation expert, as represented in the table below. Allocation of Purchase Consideration Cash $ 374,517 Accounts receivable 3,314,994 Inventory 5,246,000 Other current assets 541,726 Property and equipment 3,601,850 Identifiable intangible assets 11,100,000 Goodwill 2,348,331 Other assets 86,953 Accounts payable and accrued expenses (5,508,789 ) Debt (5,212,355 ) Other liabilities (33,573 ) Total purchase consideration $ 15,859,654 The identifiable intangible assets acquired and their estimated lives were as follows: Estimated Fair Value Estimated Useful Life Developed technology $ 4,500,000 2-10 years In-process research and development 3,900,000 Indefinite Customer base 1,300,000 9-11 years Trade names 1,000,000 10 years Backlog 400,000 1 year $ 11,100,000 Developed technologies acquired primarily consist of API's existing technologies related to HSOR products, 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. On September 1, 2015, technologies associated with $1.6 million of in-process research and development were placed into service. 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 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. Trade names and trademarks are considered a type of guarantee of a certain level of quality or performance represented by the Picometrix 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. 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. Goodwill Goodwill represents the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed in connection with the Merger. During 2015 and the first six months of 2016, we recognized various measurement period adjustments to the value of assets acquired and liabilities assumed in the Merger. These adjustments primarily related to the estimated value of trade names acquired, certain deferred compensation and claims reserve liabilities assumed, with an offsetting increase to the recorded value of goodwill. Goodwill as of January 1, 2014 $ — Goodwill recorded at acquisition date of API 614,184 Measurement period adjustments 1,659,928 Goodwill as of December 31, 2015 $ 2,274,112 Measurement period adjustments 74,219 Goodwill as of June 30, 2016 $ 2,348,331 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, 2015. The pro forma information includes adjustments to depreciation expense for property and equipment acquired, amortization expense for the intangible assets acquired, interest expense for the new debt facility, and elimination of the Merger-related transaction expenses recognized in each period. The pro forma data is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the Merger actually occurred on January 1, 2015 or 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. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (unaudited) (unaudited) Revenue $ 14,647 $ 12,444 $ 28,634 $ 24,232 Net loss $ (739 ) $ (1,818 ) $ (2,116 ) $ (3,889 )

Inventory

Inventory	6 Months Ended
	Jun. 30, 2016
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 were as follows: June 30, December 31, (unaudited) Finished goods $ 3,837,604 $ 1,938,466 Work-in-process 1,304,509 1,227,270 Raw materials 3,246,982 5,697,431 Total inventory $ 8,389,095 $ 8,863,167

Accrued Liabilities

Accrued Liabilities	6 Months Ended
	Jun. 30, 2016
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities Accrued liabilities at June 30, 2016 and December 31, 2015 consisted of the following: June 30, 2016 December 31, 2015 (unaudited) Accrued compensation $ 4,508,246 $ 4,719,533 Claims reserve 1,577,123 1,752,904 Accrued sub-contracts 421,199 351,847 Accrued professional fees 101,419 133,847 Accrued income tax — 160,438 Deferred rent 153,946 137,889 Royalties 152,763 351,003 Warranty reserve 179,925 173,687 Accrued liabilities - other 429,948 523,538 Total accrued liabilities $ 7,524,569 $ 8,304,686

Debt

Debt	6 Months Ended
	Jun. 30, 2016
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 above, 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% . 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. In September 2015, we entered into the Waiver and Seventh Loan Modification Agreement, which provides an additional $1 million of available financing for purchases of equipment through December 31, 2015, provides a waiver of any breach of the minimum liquidity covenant in periods prior to the amendment, and requires us to maintain at each month end a ratio of cash plus 60% of accounts receivable greater than or equal to 1.5 times the outstanding principal balance of the Term Loan. In addition, the Waiver and Seventh Loan Modification requires us to achieve a minimum Adjusted EBITDA, as defined therein, on a quarterly basis. The Credit Facility also requires us to observe a number of additional operational covenants, including protection and registration of intellectual property rights, and certain customary negative covenants. As of June 30, 2016 , we were in compliance with all covenants under the Credit Facility. Amounts due under the Credit Facility are secured by substantially all of our assets, including intellectual property, personal property and bank accounts. 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, 2016 , there were no events of default on the Credit Facility. As of June 30, 2016 , we have drawn all of the additional $1.0 million of available financing. The balance under the Term Loan at June 30, 2016 and December 31, 2015 , was $5.2 million and $6.1 million , respectively. The effective rate of our Term Loan at June 30, 2016 was 5.5% . The following table presents a summary of debt outstanding as of June 30, 2016 and December 31, 2015 : June 30, 2016 December 31, 2015 (unaudited) Silicon Valley Bank Term Loan $ 5,208,333 $ 6,125,000 Less: current portion 1,833,333 1,833,333 Total long-term debt $ 3,375,000 $ 4,291,667 The schedule of remaining principal payments under our term loan is as follows: 2016 916,661 2017 1,833,336 2018 1,833,336 2019 625,000 $ 5,208,333

Capital Stock and Share-Based C

Capital Stock and Share-Based Compensation	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
Capital Stock and Share-Based Compensation	Capital Stock and 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-Merton option pricing model to value any option or warrant awards granted. We recognize share-based compensation for such awards on a straight-line basis over the requisite 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, 2016 and 2015 was estimated as of the grant date using the Black-Scholes-Merton option pricing model with the following assumptions: Six Months Ended June 30, 2016 2015 Risk-free interest rate 1.5% 1.88% Expected life of options (in years) 7.5 7.5 Expected stock price volatility 73% 103% Executive turnover rates —% —% Non-executive turnover rates 14% 40% Expected dividend yield —% —% A summary of the activity for our 2003 Stock Plan, 2006 Equity Incentive Plan and 2016 Equity Incentive Plan is presented below for the six months ended June 30, 2016 : Options Outstanding Options Exercisable Number of Shares Price per Share Weighted Average Exercise Price Aggregate Intrinsic Value (1) Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Balance, January 1, 2016 3,800,728 $0.61 - $8.43 $ 2.17 $ 111,314 3,045,150 $ 2.39 $ 103,603 Granted 20,000 $ 1.15 $ 1.15 Canceled (525,726 ) $1.18 - $7.30 $ 2.35 Balance, June 30, 2016 3,295,002 $0.61 - $7.30 $ 2.14 $ 64,918 2,891,233 $ 1.93 $ 62,644 (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, 2016 , the outstanding stock options to purchase an aggregate of 3.3 million shares had a weighted-average remaining contractual term of 5.2 years , and the exercisable stock options to purchase an aggregate of 2.9 million shares had a weighted-average remaining contractual term of 4.9 years. For the six months ended June 30, 2016 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 $0.5 million in share-based compensation expense over the weighted-average remaining service period of 1.0 years for stock options outstanding as of June 30, 2016 . The following table summarizes the unvested value of our restricted stock awards: Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Value of Unvested Shares Balance at January 1, 2016 $ 669,625 $ 1.23 $ 823,639 Granted 319,000 $ 1.15 572,700 Vested (303,246 ) $ 1.25 (379,058 ) Repurchased (73,675 ) $ 1.14 (83,990 ) Balance at June 30, 2016 $ 611,704 $ 1.18 $ 933,291 The following details our equity transactions during the six months ended June 30, 2016 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Shares $ Shares $ Shares $ $ Balance at January 1, 2016 1,321,514 1,322 27,477,181 28,178 167,652 (184,934 ) 81,461,907 Share-based compensation — — — — — — 465,028 Non-cash compensation — — — 24 — — 24,976 Stock dividends to Carilion Clinic (1) — — — 39 — — 45,751 Repurchase of common stock — — — — 132,675 (156,386 ) — Balance at June 30, 2016 1,321,514 1,322 27,477,181 28,241 300,327 (341,320 ) 81,997,662 (1) The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2016 . For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2016 , the Series A Preferred Stock issued to Carilion has accrued $1,003,954 in dividends. The accrued and unpaid dividends as of June 30, 2016 will be paid by the issuance of 512,755 shares of our common stock upon Carilion’s written request. Stock Repurchase Program In May 2016, our board of directors authorized us to repurchase up to $2,000,000 of our common stock through May 31, 2017. Our stock repurchase program does not obligate us to acquire any specific number of shares. Under the program, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The following chart details our share repurchases during each month since the adoption of the stock repurchase program: Total Number of Shares Repurchased Average Price Paid per Share April 2016 — — May 2016 — — June 2016 59,000 $ 1.22 We currently maintain these repurchased shares as treasury stock.

Operating Segments

Operating Segments	6 Months Ended
	Jun. 30, 2016
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. Through June 30, 2016 , 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 29, 2016). The table below presents revenues and operating loss for reportable segments: Three Months Ended Six Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Revenues: Technology development $ 4,137,382 $ 3,728,271 $ 7,860,644 $ 6,603,786 Products and licensing 10,509,522 6,297,475 20,773,273 8,761,062 Total revenues $ 14,646,904 $ 10,025,746 $ 28,633,917 $ 15,364,848 Technology development operating income (loss) $ 313,208 $ (1,096,127 ) $ (177,108 ) $ (2,947,684 ) Products and licensing operating loss (964,789 ) (1,026,776 ) (1,826,643 ) (1,790,274 ) Total operating loss $ (651,581 ) $ (2,122,903 ) $ (2,003,751 ) $ (4,737,958 ) Depreciation, technology development $ 91,127 $ 104,217 $ 186,784 $ 203,854 Depreciation, products and licensing $ 263,514 $ 189,276 $ 517,011 $ 225,803 Amortization, technology development $ 44,501 $ 37,434 $ 117,838 $ 57,222 Amortization, products and licensing $ 522,660 $ 328,242 $ 1,039,969 $ 337,371 The table below presents assets for reportable segments: June 30, December 31, (unaudited) Total segment assets: Technology development $ 16,672,200 $ 21,203,211 Products and licensing 37,587,521 36,928,602 Total assets $ 54,333,940 $ 58,131,813 Property plant and equipment, and intangible assets, technology development $ 2,798,472 $ 2,917,448 Property plant and equipment, and intangible assets, products and licensing $ 16,328,806 $ 16,375,215 There are no material inter-segment revenues for any period presented. The U.S. government accounted for 28% and 37% of total consolidated revenues for the three months ended June 30, 2016 and 2015 , respectively, and for 28% and 45% of total consolidated revenues for the six months ended June 30, 2016 and 2015, respectively. International revenues (customers outside the United States) accounted for approximately 29% and 17% of total consolidated revenues for the three months ended June 30, 2016 and 2015 , respectively, and approximately 32% and 16% of total consolidated revenues for the six months ended June 30, 2016 and 2015, respectively. Revenues from customers in China represented approximately 19% and 20% of total revenues for the three and six months ended June 30, 2016, respectively. No single country, outside of the United States, represented more than 10% of total revenues in the three and six months ended June 30, 2015.

Contingencies and Guarantees

Contingencies and Guarantees	6 Months Ended
	Jun. 30, 2016
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 it is not reasonably possible that these legal proceedings will 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 the second quarter of 2015 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. At June 30, 2016 , approximately $0.1 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 Sig15

Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We develop, manufacture and market fiber optic sensing, test & 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") in 2015 (See Note 2), we also package optoelectronic semiconductors into high speed optical receivers ("HSOR" products), custom optoelectronic subsystems and Terahertz 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 operations beginning in 2005. We have historically managed our liquidity through cost reduction initiatives, debt financings, capital markets transactions and the sale of assets.
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, as amended. 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, 2016 , results of operations for the three and six months ended June 30, 2016 and 2015 , and cash flows for the six months ended June 30, 2016 and 2015 . The results of operations for the three and six months ended June 30, 2016 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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, 2015 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 29, 2016.
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. Any and all adjustments have been made as of the reporting period reflected in this report. 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.
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 for similar instruments. 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 our net loss by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income, 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 2016, the Financial Accounting Standards Board ("FASB") amended the FASB Accounting Standards Codification and created a new Topic 606, and issued Accounting Standards Update ("ASU") No. 2016-10, Revenue from contracts with customers: Identifying Performance Obligations and Licensing . This amendment prescribes that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance throughout the Industry Topics of the Accounting Standards Codification, and is effective for annual and interim reporting periods beginning after December 15, 2017. We are currently determining the transition method and assessing the impact the amendments may have on our financial condition, results of operations or cash flows as a result of adopting this standard. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accountin g. The amendments apply to several aspects of accounting for share-based compensation including the recognition of excess tax benefits and deficiencies and their related presentation in the statement of cash flows as well as accounting for forfeitures. ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods and allows for prospective, retrospective or modified retrospective adoption, depending on the area covered in the update, with early adoption permitted. We are currently determining the transition method and assessing the impact the amendments may have on our financial condition, results of operations or cash flows as a result of adopting this standard. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires a lessee to recognize in its statement of financial position an asset and liability for most leases with a term greater than 12 months. Lessees should recognize a liability to make lease payments and a right-of-use asset representing the lessee's right to use the underlying asset for the lease term. The amendment is effective for fiscal years ending after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which simplifies the presentation of deferred taxes by requiring that deferred tax assets and liabilities be classified as noncurrent in any classified balance sheet rather than being separated into current and non-current amounts. The amendment is effective for reporting periods beginning after December 15, 2016. We do not expect the adoption of this standard to have a significant impact on our consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustments , which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendment is effective for fiscal years beginning after December 15, 2015 and requires acquirer to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, an entity is to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. We adopted this standard for periods beginning January 1, 2016 and did not experience a significant impact on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest, 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 adopted this standard for periods beginning January 1, 2016 and did not experience a significant impact on our consolidated financial statements.

Merger with API Merger with API

Merger with API Merger with API (Tables)	6 Months Ended
	Jun. 30, 2016
Business Combinations [Abstract]
Schedule of Total Purchase Consideration	The total purchase consideration of $ 15.9 million consisted 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
Schedule of Preliminary Allocation of the Purchase Consideration	We completed an allocation of the purchase consideration with the assistance of a third-party valuation expert, as represented in the table below. Allocation of Purchase Consideration Cash $ 374,517 Accounts receivable 3,314,994 Inventory 5,246,000 Other current assets 541,726 Property and equipment 3,601,850 Identifiable intangible assets 11,100,000 Goodwill 2,348,331 Other assets 86,953 Accounts payable and accrued expenses (5,508,789 ) 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 identifiable intangible assets acquired and their estimated lives were as follows: Estimated Fair Value Estimated Useful Life Developed technology $ 4,500,000 2-10 years In-process research and development 3,900,000 Indefinite Customer base 1,300,000 9-11 years Trade names 1,000,000 10 years Backlog 400,000 1 year $ 11,100,000
Schedule of Goodwill	Goodwill represents the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed in connection with the Merger. During 2015 and the first six months of 2016, we recognized various measurement period adjustments to the value of assets acquired and liabilities assumed in the Merger. These adjustments primarily related to the estimated value of trade names acquired, certain deferred compensation and claims reserve liabilities assumed, with an offsetting increase to the recorded value of goodwill. Goodwill as of January 1, 2014 $ — Goodwill recorded at acquisition date of API 614,184 Measurement period adjustments 1,659,928 Goodwill as of December 31, 2015 $ 2,274,112 Measurement period adjustments 74,219 Goodwill as of June 30, 2016 $ 2,348,331
Schedule of Business Acquisition, Pro Forma Information	The pro forma data is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the Merger actually occurred on January 1, 2015 or 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. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (unaudited) (unaudited) Revenue $ 14,647 $ 12,444 $ 28,634 $ 24,232 Net loss $ (739 ) $ (1,818 ) $ (2,116 ) $ (3,889 )

Inventory (Tables)

Inventory (Tables)	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Components of Inventory	Components of inventory were as follows: June 30, December 31, (unaudited) Finished goods $ 3,837,604 $ 1,938,466 Work-in-process 1,304,509 1,227,270 Raw materials 3,246,982 5,697,431 Total inventory $ 8,389,095 $ 8,863,167

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2016
Payables and Accruals [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities at June 30, 2016 and December 31, 2015 consisted of the following: June 30, 2016 December 31, 2015 (unaudited) Accrued compensation $ 4,508,246 $ 4,719,533 Claims reserve 1,577,123 1,752,904 Accrued sub-contracts 421,199 351,847 Accrued professional fees 101,419 133,847 Accrued income tax — 160,438 Deferred rent 153,946 137,889 Royalties 152,763 351,003 Warranty reserve 179,925 173,687 Accrued liabilities - other 429,948 523,538 Total accrued liabilities $ 7,524,569 $ 8,304,686

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Summary of Debt Outstanding	The following table presents a summary of debt outstanding as of June 30, 2016 and December 31, 2015 : June 30, 2016 December 31, 2015 (unaudited) Silicon Valley Bank Term Loan $ 5,208,333 $ 6,125,000 Less: current portion 1,833,333 1,833,333 Total long-term debt $ 3,375,000 $ 4,291,667
Schedule of Remaining Principal Payments Under the Term Loan	The schedule of remaining principal payments under our term loan is as follows: 2016 916,661 2017 1,833,336 2018 1,833,336 2019 625,000 $ 5,208,333

Capital Stock and Share-Based20

Capital Stock and Share-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2016
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, 2016 and 2015 was estimated as of the grant date using the Black-Scholes-Merton option pricing model with the following assumptions: Six Months Ended June 30, 2016 2015 Risk-free interest rate 1.5% 1.88% Expected life of options (in years) 7.5 7.5 Expected stock price volatility 73% 103% Executive turnover rates —% —% Non-executive turnover rates 14% 40% 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, 2006 Equity Incentive Plan and 2016 Equity Incentive Plan is presented below for the six months ended June 30, 2016 : Options Outstanding Options Exercisable Number of Shares Price per Share Weighted Average Exercise Price Aggregate Intrinsic Value (1) Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Balance, January 1, 2016 3,800,728 $0.61 - $8.43 $ 2.17 $ 111,314 3,045,150 $ 2.39 $ 103,603 Granted 20,000 $ 1.15 $ 1.15 Canceled (525,726 ) $1.18 - $7.30 $ 2.35 Balance, June 30, 2016 3,295,002 $0.61 - $7.30 $ 2.14 $ 64,918 2,891,233 $ 1.93 $ 62,644 (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 the unvested value of our restricted stock awards: Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Value of Unvested Shares Balance at January 1, 2016 $ 669,625 $ 1.23 $ 823,639 Granted 319,000 $ 1.15 572,700 Vested (303,246 ) $ 1.25 (379,058 ) Repurchased (73,675 ) $ 1.14 (83,990 ) Balance at June 30, 2016 $ 611,704 $ 1.18 $ 933,291
Equity Transactions	The following details our equity transactions during the six months ended June 30, 2016 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Shares $ Shares $ Shares $ $ Balance at January 1, 2016 1,321,514 1,322 27,477,181 28,178 167,652 (184,934 ) 81,461,907 Share-based compensation — — — — — — 465,028 Non-cash compensation — — — 24 — — 24,976 Stock dividends to Carilion Clinic (1) — — — 39 — — 45,751 Repurchase of common stock — — — — 132,675 (156,386 ) — Balance at June 30, 2016 1,321,514 1,322 27,477,181 28,241 300,327 (341,320 ) 81,997,662 (1) The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2016 . For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2016 , the Series A Preferred Stock issued to Carilion has accrued $1,003,954 in dividends. The accrued and unpaid dividends as of June 30, 2016 will be paid by the issuance of 512,755 shares of our common stock upon Carilion’s written request.
Stock Repurchase Program	The following chart details our share repurchases during each month since the adoption of the stock repurchase program: Total Number of Shares Repurchased Average Price Paid per Share April 2016 — — May 2016 — — June 2016 59,000 $ 1.22

Operating Segments (Tables)

Operating Segments (Tables)	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Schedule of Revenues, Operating Loss and Assets for Reportable Segments	The table below presents revenues and operating loss for reportable segments: Three Months Ended Six Months Ended 2016 2015 2016 2015 (unaudited) (unaudited) Revenues: Technology development $ 4,137,382 $ 3,728,271 $ 7,860,644 $ 6,603,786 Products and licensing 10,509,522 6,297,475 20,773,273 8,761,062 Total revenues $ 14,646,904 $ 10,025,746 $ 28,633,917 $ 15,364,848 Technology development operating income (loss) $ 313,208 $ (1,096,127 ) $ (177,108 ) $ (2,947,684 ) Products and licensing operating loss (964,789 ) (1,026,776 ) (1,826,643 ) (1,790,274 ) Total operating loss $ (651,581 ) $ (2,122,903 ) $ (2,003,751 ) $ (4,737,958 ) Depreciation, technology development $ 91,127 $ 104,217 $ 186,784 $ 203,854 Depreciation, products and licensing $ 263,514 $ 189,276 $ 517,011 $ 225,803 Amortization, technology development $ 44,501 $ 37,434 $ 117,838 $ 57,222 Amortization, products and licensing $ 522,660 $ 328,242 $ 1,039,969 $ 337,371 The table below presents assets for reportable segments: June 30, December 31, (unaudited) Total segment assets: Technology development $ 16,672,200 $ 21,203,211 Products and licensing 37,587,521 36,928,602 Total assets $ 54,333,940 $ 58,131,813 Property plant and equipment, and intangible assets, technology development $ 2,798,472 $ 2,917,448 Property plant and equipment, and intangible assets, products and licensing $ 16,328,806 $ 16,375,215

Basis of Presentation and Sig22

Basis of Presentation and Significant Accounting Policies (Details) shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016shares	Jun. 30, 2015shares	Jun. 30, 2016segmentshares	Jun. 30, 2015shares
Accounting Policies [Abstract]
Number of operating segments | segment			2
Antidilutive securities excluded from computation of net loss per share (shares) | shares	5.8	6.4	5.7	5.9

Merger with API - Narrative (De

Merger with API - Narrative (Details) - API	May 08, 2015USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Sep. 01, 2015USD ($)
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		$ 0	$ 1,700,000	$ 0	$ 3,500,000
In-process research and development
Business Acquisition [Line Items]
In-process research and development technologies placed in service						$ 1,600,000
Discount rate used to estimate fair value of acquired indefinite-lived intangible assets	37.50%
Developed technology
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	32.50%
Customer base
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	32.50%
Trade names
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	24.50%
Backlog
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	21.50%

Merger with API - Schedule of T

Merger with API - Schedule of Total Purchase Consideration (Details) - API	May 08, 2015USD ($)
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

Merger with API - Allocation of

Merger with API - Allocation of Purchase Consideration (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015	May 08, 2015	Dec. 31, 2014
Allocation of Purchase Consideration
Goodwill	$ 2,348,331	$ 2,274,112
API
Allocation of Purchase Consideration
Cash			$ 374,517
Accounts receivable			3,314,994
Inventory			5,246,000
Other current assets			541,726
Property and equipment			3,601,850
Identifiable intangible assets			11,100,000
Goodwill	$ 2,348,331	$ 2,274,112	2,348,331	$ 0
Other assets			86,953
Accounts payable and accrued expenses			(5,508,789)
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) - API	May 08, 2015USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	$ 11,100,000
In-process research and development
Acquired Indefinite-lived Intangible Assets [Line Items]
Identifiable indefinite-lived intangible assets acquired	3,900,000
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable finite-lived intangible assets acquired	$ 4,500,000
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
Customer base
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable finite-lived intangible assets acquired	$ 1,300,000
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 finite-lived intangible assets acquired	$ 1,000,000
Estimated Useful Life	10 years
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable finite-lived intangible assets acquired	$ 400,000
Estimated Useful Life	1 year

Merger with API - Goodwill (Det

Merger with API - Goodwill (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Goodwill
Goodwill, beginning balance	$ 2,274,112
Goodwill, ending balance	2,348,331	$ 2,274,112
API
Goodwill
Goodwill, beginning balance	2,274,112	0
Goodwill recorded at acquisition date of API		614,184
Measurement period adjustments	74,219	1,659,928
Goodwill, ending balance	$ 2,348,331	$ 2,274,112

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, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Combinations [Abstract]
Revenue	$ 14,647	$ 12,444	$ 28,634	$ 24,232
Net loss	$ (739)	$ (1,818)	$ (2,116)	$ (3,889)

Inventory (Details)

Inventory (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Finished goods	$ 3,837,604	$ 1,938,466
Work-in-process	1,304,509	1,227,270
Raw materials	3,246,982	5,697,431
Total inventory	$ 8,389,095	$ 8,863,167

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accrued compensation	$ 4,508,246	$ 4,719,533
Claims reserve	1,577,123	1,752,904
Accrued sub-contracts	421,199	351,847
Accrued professional fees	101,419	133,847
Accrued income tax	0	160,438
Deferred rent	153,946	137,889
Royalties	152,763	351,003
Warranty reserve	179,925	173,687
Accrued liabilities - other	429,948	523,538
Total accrued liabilities	$ 7,524,569	$ 8,304,686

Debt - Additional Information (

Debt - Additional Information (Details)	May 08, 2015USD ($)installment	Jun. 30, 2016USD ($)installment	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)
Debt Instrument [Line Items]
Long-term debt		$ 5,208,333	$ 6,125,000
Term Loan | Silicon Valley Bank
Debt Instrument [Line Items]
Debt, face amount		$ 6,000,000
Debt, number of monthly payment | installment		48
Effective interest rate		5.50%
Term Loan | Silicon Valley Bank | Sixth Loan Modification Agreement
Debt Instrument [Line Items]
Debt, face amount	$ 6,000,000
Debt, number of monthly payment | installment	48
Debt, monthly principal payments	$ 125,000
Term Loan | Silicon Valley Bank | Seventh Loan Modification Agreement
Debt Instrument [Line Items]
Debt, face amount		$ 1,000,000		$ 1,000,000
Liquidity covenant component, accounts receivable percentage				60.00%
Liquidity covenant component, outstanding principal loan balance multiplier				1.5
Term Loan | Silicon Valley Bank | Prime Rate
Debt Instrument [Line Items]
Debt, additional interest above prime rate		2.00%
Term Loan | Silicon Valley Bank | Prime Rate | Sixth Loan Modification Agreement
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, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Silicon Valley Bank Term Loan	$ 5,208,333	$ 6,125,000
Less: current portion	1,833,333	1,833,333
Total long-term debt	$ 3,375,000	$ 4,291,667

Debt - Remaining Principal Paym

Debt - Remaining Principal Payments Under the Term Loan (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
2,016	$ 916,661
2,017	1,833,336
2,018	1,833,336
2,019	625,000
Silicon Valley Bank Term Loan	$ 5,208,333	$ 6,125,000

Capital Stock and Share-Based34

Capital Stock and Share-Based Compensation - Additional Information (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Equity [Abstract]
Expected dividend yield		0.00%	0.00%
Class of Stock [Line Items]
Aggregate outstanding stock options (in shares)		3,295,002		3,800,728
Exercisable stock options (in shares)		2,891,233		3,045,150
Outstanding stock options, weighted average remaining contractual term		5 years 2 months 12 days
Exercisable stock options, weighted average remaining contractual term		4 years 10 months 24 days
Share-based compensation	$ 300,000	$ 465,028	$ 571,439
Stock-based compensation expense not yet recognized		$ 500,000
Weighted average remaining service period		1 year
Selling, General and Administrative Expenses
Class of Stock [Line Items]
Share-based compensation		$ 500,000	$ 600,000

Capital Stock and Share-Based35

Capital Stock and Share-Based Compensation - Assumptions Used to Estimate Fair Values of Options Granted (Details)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Equity [Abstract]
Risk-free interest rate	1.50%	1.88%
Expected life of options	7 years 6 months	7 years 6 months
Expected stock price volatility	73.00%	103.00%
Executive turnover rates	0.00%	0.00%
Non-executive turnover rates	14.00%	40.00%
Expected dividend yield	0.00%	0.00%

Capital Stock and Share-Based36

Capital Stock and Share-Based Compensation - Summary of Activity of 2003 Stock Plan, 2006 Equity Incentive Plan and 2016 Equity Incentive Plan (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Options Outstanding, Number of Shares
Beginning Balance (shares)	3,800,728
Granted (in shares)	20,000
Canceled (in shares)	(525,726)
Ending Balance (shares)	3,295,002
Options Outstanding, Price per Share Range
Beginning balance, lower limit (in usd per share)	$ 0.61
Beginning balance, upper limit (in usd per share)	8.43
Granted (in usd per share)	1.15
Canceled lower limit (in usd per share)	1.18
Canceled upper limit (in usd per share)	7.30
Ending balance, lower limit (in usd per share)	0.61
Ending balance, upper limit (in usd per share)	7.30
Options Outstanding, Weighted Average Exercise Price
Beginning Balance (in usd per share)	2.17
Granted (in usd per share)	1.15
Canceled (in usd per share)	2.35
Ending Balance (in usd per share)	$ 2.14
Additional Disclosures
Options Outstanding, Aggregate Intrinsic Value	$ 64,918	$ 111,314
Options Exercisable, Number of Shares	2,891,233	3,045,150
Options Exercisable, Weighted Average Exercise Price (in usd per share)	$ 1.93	$ 2.39
Options Exercisable, Aggregate Intrinsic Value	$ 62,644	$ 103,603

Capital Stock and Share-Based37

Capital Stock and Share-Based Compensation - Summary of Restricted Stock Awards (Details)	6 Months Ended
	Jun. 30, 2016USD ($)$ / sharesshares
Number of Unvested Shares
Beginning balance (in shares) | shares	669,625
Granted (in shares) | shares	319,000
Vested (in shares) | shares	(303,246)
Repurchased (in shares) | shares	(73,675)
Ending balance (in shares) | shares	611,704
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 1.23
Granted (in usd per share) | $ / shares	1.15
Vested (in usd per share) | $ / shares	1.25
Repurchased (in usd per share) | $ / shares	1.14
Ending balance (in usd per share) | $ / shares	$ 1.18
Aggregate Value of Unvested Shares
Balance at January 1, 2016 | $	$ 823,639
Granted | $	572,700
Vested | $	(379,058)
Repurchased | $	(83,990)
Balance at June 30, 2016 | $	$ 933,291

Capital Stock and Share-Based38

Capital Stock and Share-Based Compensation - Equity Transactions (Details) - USD ($)	1 Months Ended			6 Months Ended
	Jun. 30, 2016	May 31, 2016	Apr. 30, 2016	Jun. 30, 2016
Increase (Decrease) in Stockholders' Equity
Preferred stock beginning balance (in shares)				1,321,514
Common stock beginning balance (in shares)				27,477,181
Treasury stock beginning balance (in shares)				167,652
Stockholder's equity beginning balance				$ 36,907,018
Repurchase of common stock (in shares)	59,000	0	0
Preferred stock ending balance (in shares)	1,321,514			1,321,514
Common stock ending balance (in shares)	27,692,776			27,692,776
Treasury stock ending balance (in shares)	300,327			300,327
Stockholder's equity ending balance	$ 35,010,110			$ 35,010,110
Preferred Stock
Increase (Decrease) in Stockholders' Equity
Preferred stock beginning balance (in shares)				1,321,514
Stockholder's equity beginning balance				$ 1,322
Share-based compensation (in shares)				0
Share-based compensation				$ 0
Non-cash compensation (in shares)				0
Non-cash compensation				$ 0
Stock dividends to Carilion Clinic (in shares)				0
Stock dividends to Carilion Clinic				$ 0
Repurchase of common stock (in shares)				0
Repurchase of common stock				$ 0
Preferred stock ending balance (in shares)	1,321,514			1,321,514
Stockholder's equity ending balance	$ 1,322			$ 1,322
Common Stock
Increase (Decrease) in Stockholders' Equity
Common stock beginning balance (in shares)				27,477,181
Stockholder's equity beginning balance				$ 28,178
Share-based compensation (in shares)				0
Share-based compensation				$ 0
Non-cash compensation (in shares)				0
Non-cash compensation				$ 24
Stock dividends to Carilion Clinic (in shares)				0
Stock dividends to Carilion Clinic				$ 39
Repurchase of common stock (in shares)				0
Repurchase of common stock				$ 0
Common stock ending balance (in shares)	27,477,181			27,477,181
Stockholder's equity ending balance	$ 28,241			$ 28,241
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Treasury stock beginning balance (in shares)				167,652
Stockholder's equity beginning balance				$ (184,934)
Share-based compensation (in shares)				0
Share-based compensation				$ 0
Non-cash compensation (in shares)				0
Non-cash compensation				$ 0
Stock dividends to Carilion Clinic (in shares)				0
Stock dividends to Carilion Clinic				$ 0
Repurchase of common stock (in shares)				132,675
Repurchase of common stock				$ (156,386)
Treasury stock ending balance (in shares)	300,327			300,327
Stockholder's equity ending balance	$ (341,320)			$ (341,320)
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance				81,461,907
Share-based compensation				465,028
Non-cash compensation				24,976
Stock dividends to Carilion Clinic				45,751
Repurchase of common stock				0
Stockholder's equity ending balance	$ 81,997,662			$ 81,997,662

Capital Stock and Share-Based39

Capital Stock and Share-Based Compensation - Equity Transactions (Additional Information) (Details) - Carilion Clinic - Series A Preferred Stock	6 Months Ended
	Jun. 30, 2016USD ($)shares
Class of Stock [Line Items]
Accrued dividends | $	$ 1,003,954
Stock dividends for preferred shareholders (in shares) | shares	512,755

Capital Stock and Share-Based40

Capital Stock and Share-Based Compensation - Stock Repurchase Program (Details) - USD ($)	1 Months Ended
	Jun. 30, 2016	May 31, 2016	Apr. 30, 2016
Equity [Abstract]
Stock Repurchase Program, Authorized Amount		$ 2,000,000
Total Number of Shares Repurchased	59,000	0	0
Average Price Paid per Share (in usd per share)	$ 1.22	$ 0	$ 0

Operating Segments - Additional

Operating Segments - Additional Information (Details) - segment	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting [Abstract]
Number of operating segments			2
Revenues | Government Contracts Concentration Risk | U.S. Government
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	28.00%	37.00%	28.00%	45.00%
Revenues | Geographic Concentration Risk | Outside of the United States
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	29.00%	17.00%	32.00%	16.00%
Revenues | Geographic Concentration Risk | China
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	19.00%		20.00%

Operating Segments - Revenues a

Operating Segments - Revenues and Operating Loss for Reportable Segments Not Including Discontinued Operations (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Technology development	$ 4,137,382	$ 3,728,271	$ 7,860,644	$ 6,603,786
Products and licensing	10,509,522	6,297,475	20,773,273	8,761,062
Total revenues	14,646,904	10,025,746	28,633,917	15,364,848
Segment Reporting Information [Line Items]
Total operating income (loss)	(651,581)	(2,122,903)	(2,003,751)	(4,737,958)
Technology development
Segment Reporting Information [Line Items]
Total operating income (loss)	313,208	(1,096,127)	(177,108)	(2,947,684)
Depreciation	91,127	104,217	186,784	203,854
Amortization	44,501	37,434	117,838	57,222
Products and licensing
Segment Reporting Information [Line Items]
Total operating income (loss)	(964,789)	(1,026,776)	(1,826,643)	(1,790,274)
Depreciation	263,514	189,276	517,011	225,803
Amortization	$ 522,660	$ 328,242	$ 1,039,969	$ 337,371

Operating Segments - Assets for

Operating Segments - Assets for Reportable Segments (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Total segment assets:
Total assets	$ 54,333,940	$ 58,131,813
Property plant and equipment, and intangible assets	7,362,464	6,614,238
Technology development
Total segment assets:
Total assets	16,672,200	21,203,211
Property plant and equipment, and intangible assets	2,798,472	2,917,448
Products and licensing
Total segment assets:
Total assets	37,587,521	36,928,602
Property plant and equipment, and intangible assets	$ 16,328,806	$ 16,375,215

Contingencies and Guarantees (D

Contingencies and Guarantees (Details) $ in Millions	3 Months Ended
	Jun. 30, 2015USD ($)purchase_order	Jun. 30, 2016USD ($)	Sep. 30, 2014USD ($)
Loss Contingencies [Line Items]
Number of non-cancelable purchase orders executed | purchase_order	2
Non-cancelable purchase order delivery period	18 months
Tunable Lasers
Loss Contingencies [Line Items]
Non-cancelable purchase order commitment	$ 1.4
Non-cancelable purchase order commitment remained		$ 0.1
Preliminary Audit Report | Defense Contract Audit Agency
Loss Contingencies [Line Items]
Claimed cost, subject to potential penalty	$ 1.1		$ 0.8