Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 08, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
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 | 28,226,436 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 10,291,255 | $ 12,802,458 |
Accounts receivable, net | 13,150,291 | 14,297,725 |
Inventory | 9,540,754 | 8,370,235 |
Prepaid expenses and other current assets | 1,266,090 | 1,627,175 |
Total current assets | 34,248,390 | 37,097,593 |
Property and equipment, net | 6,882,576 | 6,780,838 |
Intangible assets, net | 8,003,009 | 8,681,263 |
Goodwill | 2,348,331 | 2,348,331 |
Other assets | 68,778 | 88,948 |
Total assets | 51,551,084 | 54,996,973 |
Current liabilities: | ||
Current portion of long-term debt obligations | 1,833,333 | 1,833,333 |
Current portion of capital lease obligations | 52,404 | 52,128 |
Accounts payable | 3,958,144 | 4,466,192 |
Accrued liabilities | 8,131,316 | 8,667,100 |
Deferred revenue | 946,146 | 949,603 |
Total current liabilities | 14,921,343 | 15,968,356 |
Long-term deferred rent | 1,337,893 | 1,403,957 |
Long-term debt obligations | 1,511,520 | 2,420,032 |
Long-term capital lease obligations | 89,054 | 114,940 |
Total liabilities | 17,859,810 | 19,907,285 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at June 30, 2017 and December 31, 2016 | 1,322 | 1,322 |
Common stock, par value $0.001, 100,000,000 shares authorized, 28,226,436 and 27,988,104 shares issued, 27,688,710 and 27,541,277 shares outstanding at June 30, 2017 and December 31, 2016 | 28,878 | 28,600 |
Treasury stock at cost, 537,727 and 446,827 shares at June 30, 2017 and December 31, 2016 | (661,253) | (517,987) |
Additional paid-in capital | 82,837,888 | 82,451,958 |
Accumulated deficit | (48,515,561) | (46,874,205) |
Total stockholders’ equity | 33,691,274 | 35,089,688 |
Total liabilities and stockholders’ equity | $ 51,551,084 | $ 54,996,973 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 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, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 28,226,436 | 27,988,104 |
Common stock, outstanding (in shares) | 27,688,710 | 27,541,277 |
Treasury Stock (in shares) | 537,727 | 446,827 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Technology development | $ 4,625,175 | $ 4,137,382 | $ 8,901,624 | $ 7,860,644 |
Products and licensing | 8,951,296 | 10,509,522 | 17,793,232 | 20,773,273 |
Total revenues | 13,576,471 | 14,646,904 | 26,694,856 | 28,633,917 |
Cost of revenues: | ||||
Technology development | 3,439,118 | 3,181,447 | 6,661,474 | 6,061,282 |
Products and licensing | 5,056,449 | 6,294,607 | 10,277,225 | 12,558,180 |
Total cost of revenues | 8,495,567 | 9,476,054 | 16,938,699 | 18,619,462 |
Gross profit | 5,080,904 | 5,170,850 | 9,756,157 | 10,014,455 |
Operating expense: | ||||
Selling, general and administrative | 3,936,207 | 4,581,776 | 8,431,911 | 9,227,060 |
Research, development and engineering | 1,263,911 | 1,240,655 | 2,708,738 | 2,791,146 |
Total operating expense | 5,200,118 | 5,822,431 | 11,140,649 | 12,018,206 |
Operating loss | (119,214) | (651,581) | (1,384,492) | (2,003,751) |
Other income/(expense): | ||||
Other expense | (1,225) | (39,489) | (869) | (35,545) |
Interest expense | (60,386) | (78,906) | (124,760) | (165,079) |
Total other expense | (61,611) | (118,395) | (125,629) | (200,624) |
Loss before income taxes | (180,825) | (769,976) | (1,510,121) | (2,204,375) |
Income tax expense | 40,937 | 1,000 | 67,627 | 26,175 |
Net loss | (221,762) | (770,976) | (1,577,748) | (2,230,550) |
Preferred stock dividend | 29,536 | 24,580 | 63,632 | 45,790 |
Net loss attributable to common stockholders | $ (251,298) | $ (795,556) | $ (1,641,380) | $ (2,276,340) |
Net loss per share attributable to common stockholders: | ||||
Basic and diluted (in dollars per share) | $ (0.01) | $ (0.03) | $ (0.06) | $ (0.08) |
Weighted average common shares and common equivalent shares outstanding: | ||||
Basic and diluted (in shares) | 27,600,147 | 27,557,960 | 27,570,919 | 27,517,792 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows provided by/(used in) operating activities | ||
Net loss | $ (1,577,748) | $ (2,230,550) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 1,753,748 | 1,861,603 |
Share-based compensation | 321,756 | 465,028 |
Bad debt expense | 40,753 | 50,515 |
Gain on disposal of fixed assets | 670 | 0 |
Change in assets and liabilities | ||
Accounts receivable | 1,106,681 | (167,749) |
Inventory | (1,170,519) | 474,072 |
Other current assets | 325,005 | (306,371) |
Accounts payable and accrued expenses | (1,109,870) | (1,076,784) |
Deferred revenue | (3,457) | (81,830) |
Net cash used in operating activities | (314,321) | (1,012,066) |
Cash flows provided by/(used in) investing activities | ||
Acquisition of property and equipment | (796,217) | (1,294,775) |
Intangible property costs | (318,942) | (244,198) |
Proceeds from sale of property and equipment | 3,000 | 0 |
Net cash used in investing activities | (1,112,159) | (1,538,973) |
Cash flows provided by/(used in) financing activities | ||
Payments on capital lease obligations | (25,611) | (32,149) |
Payments of debt obligations | (916,666) | (916,667) |
Repurchase of common stock | (143,266) | (156,386) |
Proceeds from the exercise of options | 820 | 0 |
Net cash used in financing activities | (1,084,723) | (1,105,202) |
Net decrease in cash and cash equivalents | (2,511,203) | (3,656,241) |
Cash and cash equivalents—beginning of period | 12,802,458 | 17,464,040 |
Cash and cash equivalents—end of period | 10,291,255 | 13,807,799 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 120,191 | 157,371 |
Cash paid for income taxes | 40,937 | 198,425 |
Non-cash investing and financing activities | ||
Dividend on preferred stock, 39,646 shares of common stock issuable for the six months ended June 30, 2017 and 2016 | 63,632 | 45,790 |
Capital expenditures funded by capital lease borrowings | $ 0 | $ 157,246 |
Consolidated Statements of Cas6
Consolidated Statements of Cash Flows (Parenthetical) - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Dividend on preferred stock, shares of common stock issuable (in shares) | 39,646 | 39,646 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
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 are a leader in advanced optical technology, providing unique capabilities in high speed optoelectronics and high performance fiber optic test products for the telecommunications industry and distributed fiber optic sensing for the aerospace and automotive industries. We are organized into two reportable 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, 2017 , results of operations for the three and six months ended June 30, 2017 and 2016 , and cash flows for the six months ended June 30, 2017 and 2016 . The results of operations for the three and six months ended June 30, 2017 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . 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, 2016 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 20, 2017. 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 5.0 million and 5.8 million common stock equivalents (which include outstanding warrants, preferred stock and stock options) are not included for the three months ended June 30, 2017 and 2016 , respectively, as they are anti-dilutive to earnings per share due to our net loss. The effect of 4.6 million and 5.7 million common stock equivalents are not included for the six months ended June 30, 2017 and 2016 , respectively, as they are considered anti-dilutive to earnings per share due to our net loss. Recently Issued Accounting Pronouncements Effective January 1, 2017, we adopted Accounting Standards Update ("ASU") No. 2016-09, Improvements to Employee Share-Based Payment Accountin g. These 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. The adoption of ASU No. 2016-09 did not have a significant impact on our financial condition, results of operations or cash flows. Effective January 1, 2017, we adopted 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 adoption of ASU No. 2015-17 did not have a significant impact on our consolidated financial statements. In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This update simplifies the subsequent measurement of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The accounting standard will be effective for reporting periods beginning after December 15, 2019. We do not expect ASU 2017-04 will have a material impact on our financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how cash receipts and cash payments are presented in the statement of cash flows. ASU 2016-15 is effective for public entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments should be applied retrospectively to all periods presented. We do not expect ASU 2016-15 will have a material impact on our financial statements. In April 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 606, and issued 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 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. |
Subsequent Event- Sale of High
Subsequent Event- Sale of High Speed Optical Receivers Business | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event- Sale of High Speed Optical Receivers Business | Subsequent Event- Sale of High Speed Optical Receivers Business On August 9, 2017 , we sold the assets and operations related to our high speed optical receivers ("HSOR") business, which was part of our Products and Licensing segment, to an unaffiliated third party for an initial purchase price of $33.5 million , of which $29.5 million was received at closing and $4.0 million was placed into escrow until December 15, 2018 for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations (the "Transaction"). The purchase price is subject to adjustment in the future based upon a determination of final working capital, as defined in the asset purchase agreement. The HSOR business was a component of the operations of Advanced Photonix, Inc., which we acquired in May 2015. As part of the Transaction, the buyer is also expected to hire approximately 49 of our employees who were engaged in the development, manufacture, and sale of HSOR products in addition to certain corporate administrative functions. The buyer will provide certain transition services to us with respect to infrastructure and administration for which we will pay $0.3 million per month for a period of five months following the date of the Transaction. As the HSOR assets were not considered "held for sale" as of June 30, 2017, such assets are included within the assets held and used in our consolidated balance sheets as of June 30, 2017 and December 31, 2016. The following schedule sets forth the carrying amounts of major classes of assets and liabilities associated with the Transaction as of June 30, 2017 and December 31, 2016. June 30, 2017 December 31, 2016 Current assets (unaudited) Accounts receivable $ 4,263,448 $ 4,028,713 Inventory 2,262,316 1,521,398 Prepaid expenses and other current assets 122,599 251,516 Total current assets 6,648,363 5,801,627 Property and equipment, net 3,667,273 3,298,110 Intangible assets, net 4,673,792 5,314,045 Goodwill 2,348,331 2,348,331 Other assets 50,754 50,754 Total assets of the disposal group $ 17,388,513 $ 16,812,867 Current liabilities Accounts payable $ 1,149,062 $ 1,511,450 Accrued compensation 313,725 504,719 Other accrued liabilities 468,124 248,837 Total current liabilities 1,930,911 2,265,006 Deferred rent 77,719 84,555 Total liabilities of the disposal group $ 2,008,630 $ 2,349,561 The following schedule sets forth the revenues and expenses associated with the HSOR operations as well as the employees and other costs expected to be assumed by the buyer for the three and six months ended June 30, 2017 and 2016. Although these costs are expected to be assumed by the buyer, we may subsequently replace certain of these resources in support of our remaining operations. Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) Revenues $ 2,283,440 $ 4,745,999 $ 5,314,927 $ 9,744,708 Cost of revenues 1,568,746 3,202,491 3,801,363 6,505,287 Gross profit 714,694 1,543,508 1,513,564 3,239,421 Operating expense Research, development and engineering 445,020 362,999 961,077 813,396 Selling, general and administrative 656,323 1,035,066 1,487,378 2,017,071 Total operating expense 1,101,343 1,398,065 2,448,455 2,830,467 Operating (loss)/income (386,649 ) 145,443 (934,891 ) 408,954 Other (income)/expense — (3,548 ) 35,036 (Loss)/income before income taxes (386,649 ) 148,991 (934,891 ) 373,918 Income tax benefit/(expense) — 56,557 — 141,939 (Loss)/income attributable to disposal group $ (386,649 ) $ 92,434 $ (934,891 ) $ 231,979 |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2017 | |
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 $ 2,630,986 $ 1,993,543 Work-in-process 1,445,377 1,098,173 Raw materials 5,464,391 5,278,519 Total inventory $ 9,540,754 $ 8,370,235 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities at June 30, 2017 and December 31, 2016 consisted of the following: June 30, 2017 December 31, 2016 (unaudited) Accrued compensation $ 4,779,817 $ 5,442,723 Claims reserve 1,727,123 1,577,123 Accrued sub-contracts 464,961 483,477 Accrued professional fees 57,153 67,719 Deferred rent 154,396 155,138 Royalties 160,801 345,895 Warranty reserve 419,196 185,125 Accrued liabilities - other 367,869 409,900 Total accrued liabilities $ 8,131,316 $ 8,667,100 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Silicon Valley Bank Facility We currently have a Loan and Security Agreement with SVB (the "Credit Facility") under which, as amended on May 8, 2015, we have a term loan with an original borrowing amount of $6.0 million (the “Original Term Loan”). The Original Term Loan is repayable in 48 monthly installments of $125,000 , plus accrued interest payable monthly in arrears, and unless earlier terminated, is scheduled to mature in May 2020. The Original Term Loan carries a floating annual interest rate equal to SVB’s prime rate then in effect plus 2% . We may prepay amounts due under the Original Term Loan at any time, subject to an early termination fee of up to 2% of the amount of prepayment. In September 2015, we entered into the Waiver and Seventh Loan Modification Agreement, which provided an additional $1 million of available financing for purchases of equipment through December 31, 2015, which we fully borrowed in December 2015 (the "Second Term Loan" and, together with the Original Term Loan, the "Term Loans"). The Second Term Loan also bears interest at a floating prime rate plus 2% and is to be repaid in 35 monthly installments of $27,778 plus accrued interest. The Credit Facility requires us to maintain a minimum cash balance of $5.0 million and 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 of the Term Loans. 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, 2017 , 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, 2017 , there were no events of default on the Credit Facility. The aggregate balance under the Term Loans at June 30, 2017 and December 31, 2016 , was $3.4 million and $4.3 million , respectively. The effective rate of our Term Loan at June 30, 2017 was 6.25% . The following table presents a summary of debt outstanding as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (unaudited) Silicon Valley Bank Term Loan $ 3,375,000 $ 4,291,666 Less: unamortized debt issuance costs 30,147 38,301 Less: current portion 1,833,333 1,833,333 Total long-term debt $ 1,511,520 $ 2,420,032 The schedule of remaining principal payments under our Term Loans as of June 30, 2017 was as follows: 2017 $ 916,667 2018 1,833,333 2019 625,000 $ 3,375,000 |
Capital Stock and Share-Based C
Capital Stock and Share-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
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. 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. A summary of the stock option activity for the six months ended June 30, 2017 is presented below: 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, 2017 2,857,114 $0.61 - $6.83 $ 1.89 $ 107,063 2,367,630 $ 1.93 $ 101,071 Granted 80,000 $1.51 - $1.54 $ 1.53 Exercised (1,000 ) $0.82 $ 0.82 Canceled (117,623 ) $1.40 - $3.69 $ 2.26 Balance, June 30, 2017 2,818,491 $0.61 - $6.83 $ 1.86 $ 356,221 2,584,839 $ 1.90 $ 334,031 (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, 2017 , the outstanding stock options to purchase an aggregate of 2.8 million shares had a weighted-average remaining contractual term of 4.8 years , and the exercisable stock options to purchase an aggregate of 2.6 million shares had a weighted-average remaining contractual term of 4.5 years. For the six months ended June 30, 2017 and 2016 we recognized $0.3 million and $0.5 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 $0.2 million in share-based compensation expense over the weighted-average remaining service period of 1.7 years for stock options outstanding as of June 30, 2017 . The following table summarizes the value of our unvested restricted stock awards: Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Value of Unvested Shares Balance, January 1, 2017 743,042 $ 1.20 $ 888,764 Granted 289,000 $ 1.54 445,060 Vested (355,542 ) $ 1.21 (431,854 ) Repurchased $ — — Forfeitures (51,667 ) $ 1.14 (58,917 ) Balance, June 30, 2017 624,833 $ 1.35 $ 843,053 Restricted Stock Units We issue restricted stock units ("RSUs"), to our non-employee directors for service on our board of directors. Under our non-employee director compensation policy, continuing non-employee directors receive an annual RSU grant at the time of our annual meeting of stockholders, which grant vests on the earlier of the one year anniversary of the grant or the following annual meeting of stockholders. Under our non-employee director deferred compensation plan, as amended (the "NEDCP") non-employee directors may also elect to receive their annual cash retainers for board and committee service in RSUs which are issued quarterly and vest immediately upon their issuance, subject to deferred settlement in accordance with the NEDCP. The following is a summary of our RSU activity for the six months ended June 30, 2017 : Number of RSUs Intrinsic Value Issued Unvested Weighted Average Grant Date Fair Value per Share Outstanding Unvested Balance, January 1, 2017 528,510 86,956 $1.29 $ 776,910 $ 127,825 Granted 165,143 129,865 $1.56 Vested — (86,956 ) $1.15 Forfeitures — — $0.00 Converted — — $0.00 Balances, June 30, 2017 693,653 129,865 $1.36 $ 1,047,416 $ 196,096 The following details our equity transactions during the six months ended June 30, 2017 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Shares $ Shares $ Shares $ $ Balance, January 1, 2017 1,321,514 1,322 27,541,277 28,600 446,827 (517,987 ) 82,451,958 Exercise of stock options — — 1,000 1 — — 819 Share-based compensation — — 289,000 289 — — 321,467 Non-cash compensation — — — — — — — Stock dividends to Carilion Clinic (1) — — — 40 — — 63,592 Forfeitures of restricted stock grants — — (51,667 ) (52 ) — — 52 Repurchase of common stock — — (90,900 ) — 90,900 (143,266 ) — Balances, June 30, 2017 1,321,514 1,322 27,688,710 28,878 537,727 (661,253 ) 82,837,888 (1) The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2017 . For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2017 , the Series A Preferred Stock issued to Carilion has accrued $1,077,074 in dividends. The accrued and unpaid dividends as of June 30, 2017 will be paid by the issuance of 592,047 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 $2.0 million 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. We did not repurchase any shares during the six months ended June 30, 2017 . As of May 31, 2017, we had repurchased a total of 205,500 shares for an aggregate purchase price of $0.2 million , after which the stock repurchase program expired. We currently maintain these repurchased shares as treasury stock. |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2017 | |
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, 2017 , 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 20, 2017). The table below presents revenues and operating loss for reportable segments: Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) Revenues: Technology development $ 4,625,175 $ 4,137,382 $ 8,901,624 $ 7,860,644 Products and licensing 8,951,296 10,509,522 17,793,232 20,773,273 Total revenues $ 13,576,471 $ 14,646,904 $ 26,694,856 $ 28,633,917 Technology development operating income/(loss) $ 60,659 $ 313,208 $ (304,901 ) $ (177,108 ) Products and licensing operating loss (179,873 ) (964,789 ) (1,079,591 ) (1,826,643 ) Total operating loss $ (119,214 ) $ (651,581 ) $ (1,384,492 ) $ (2,003,751 ) Depreciation, technology development $ 88,698 $ 91,127 $ 176,918 $ 186,784 Depreciation, products and licensing $ 240,504 $ 263,514 $ 571,480 $ 517,011 Amortization, technology development $ 26,169 $ 44,501 $ 66,605 $ 117,838 Amortization, products and licensing $ 437,612 $ 522,660 $ 930,590 $ 1,039,969 The table below presents assets for reportable segments: June 30, December 31, (unaudited) Total segment assets: Technology development $ 16,608,820 $ 16,923,090 Products and licensing 34,942,264 38,073,883 Total assets $ 51,551,084 $ 54,996,973 Property plant and equipment, and intangible assets, technology development $ 2,462,428 $ 2,602,803 Property plant and equipment, and intangible assets, products and licensing $ 14,771,488 $ 15,207,630 There are no material inter-segment revenues for any period presented. The U.S. government accounted for 38% and 28% of total consolidated revenues for the three months ended June 30, 2017 and 2016 , respectively, and for 36% and 28% of total consolidated revenues for the six months ended June 30, 2017 and 2016 , respectively. International revenues (customers outside the United States) accounted for 28% and 29% of total consolidated revenues for the three months ended June 30, 2017 and 2016 , respectively, and 27% and 32% of the total consolidated revenues for the six months ended June 30, 2017 and 2016 , respectively. Revenues from customers in China represented 7% and 19% of total revenues for the three months ended June 30, 2017 and 2016 , respectively, and 10% and 19% for the six months ended June 30, 2017 and 2016 , respectively. No other single country, outside of the United States, represented more than 10% of total revenues in the three and six months ended June 30, 2017 and 2016. In addition, we had one commercial customer whose revenues accounted for 0% and 14% of our total consolidated revenues for the three months ended June 30, 2017 and 2016 , respectively, and 5% and 15% for the six months ended June 30, 2017 and 2016 , respectively. |
Contingencies and Guarantees
Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2017 | |
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 ("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 ("ABSCA"). In January 2017, a hearing was held before the ASBCA. No ruling has yet been issued with respect to our appeal. In April 2017, we made a settlement offer of $150,000 to the DCMA, and we have accrued that amount in our financial statements as of June 30, 2017 . The DCMA notified us in May 2017 that it has declined our settlement offer. The appeals process remains ongoing. In the third quarter of 2016 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, 2017 , approximately $0.5 million of this commitment remained. In addition, as of June 30, 2017 , we had $0.7 million in outstanding purchase orders for multiple shipments of certain amplifiers utilized in our integrated coherent receiver products. 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, 2017 | |
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 are a leader in advanced optical technology, providing unique capabilities in high speed optoelectronics and high performance fiber optic test products for the telecommunications industry and distributed fiber optic sensing for the aerospace and automotive industries. We are organized into two reportable 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, 2017 , results of operations for the three and six months ended June 30, 2017 and 2016 , and cash flows for the six months ended June 30, 2017 and 2016 . The results of operations for the three and six months ended June 30, 2017 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . 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, 2016 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 20, 2017. |
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 Effective January 1, 2017, we adopted Accounting Standards Update ("ASU") No. 2016-09, Improvements to Employee Share-Based Payment Accountin g. These 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. The adoption of ASU No. 2016-09 did not have a significant impact on our financial condition, results of operations or cash flows. Effective January 1, 2017, we adopted 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 adoption of ASU No. 2015-17 did not have a significant impact on our consolidated financial statements. In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This update simplifies the subsequent measurement of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The accounting standard will be effective for reporting periods beginning after December 15, 2019. We do not expect ASU 2017-04 will have a material impact on our financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how cash receipts and cash payments are presented in the statement of cash flows. ASU 2016-15 is effective for public entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments should be applied retrospectively to all periods presented. We do not expect ASU 2016-15 will have a material impact on our financial statements. In April 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 606, and issued 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 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. |
Subsequent Event- Sale of Hi16
Subsequent Event- Sale of High Speed Optical Receivers Business (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Schedule of disposal group information | The following schedule sets forth the revenues and expenses associated with the HSOR operations as well as the employees and other costs expected to be assumed by the buyer for the three and six months ended June 30, 2017 and 2016. Although these costs are expected to be assumed by the buyer, we may subsequently replace certain of these resources in support of our remaining operations. Three Months Ended Six Months Ended 2017 2016 2017 2016 (unaudited) (unaudited) Revenues $ 2,283,440 $ 4,745,999 $ 5,314,927 $ 9,744,708 Cost of revenues 1,568,746 3,202,491 3,801,363 6,505,287 Gross profit 714,694 1,543,508 1,513,564 3,239,421 Operating expense Research, development and engineering 445,020 362,999 961,077 813,396 Selling, general and administrative 656,323 1,035,066 1,487,378 2,017,071 Total operating expense 1,101,343 1,398,065 2,448,455 2,830,467 Operating (loss)/income (386,649 ) 145,443 (934,891 ) 408,954 Other (income)/expense — (3,548 ) 35,036 (Loss)/income before income taxes (386,649 ) 148,991 (934,891 ) 373,918 Income tax benefit/(expense) — 56,557 — 141,939 (Loss)/income attributable to disposal group $ (386,649 ) $ 92,434 $ (934,891 ) $ 231,979 The following schedule sets forth the carrying amounts of major classes of assets and liabilities associated with the Transaction as of June 30, 2017 and December 31, 2016. June 30, 2017 December 31, 2016 Current assets (unaudited) Accounts receivable $ 4,263,448 $ 4,028,713 Inventory 2,262,316 1,521,398 Prepaid expenses and other current assets 122,599 251,516 Total current assets 6,648,363 5,801,627 Property and equipment, net 3,667,273 3,298,110 Intangible assets, net 4,673,792 5,314,045 Goodwill 2,348,331 2,348,331 Other assets 50,754 50,754 Total assets of the disposal group $ 17,388,513 $ 16,812,867 Current liabilities Accounts payable $ 1,149,062 $ 1,511,450 Accrued compensation 313,725 504,719 Other accrued liabilities 468,124 248,837 Total current liabilities 1,930,911 2,265,006 Deferred rent 77,719 84,555 Total liabilities of the disposal group $ 2,008,630 $ 2,349,561 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Components of inventory were as follows: June 30, December 31, (unaudited) Finished goods $ 2,630,986 $ 1,993,543 Work-in-process 1,445,377 1,098,173 Raw materials 5,464,391 5,278,519 Total inventory $ 9,540,754 $ 8,370,235 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities at June 30, 2017 and December 31, 2016 consisted of the following: June 30, 2017 December 31, 2016 (unaudited) Accrued compensation $ 4,779,817 $ 5,442,723 Claims reserve 1,727,123 1,577,123 Accrued sub-contracts 464,961 483,477 Accrued professional fees 57,153 67,719 Deferred rent 154,396 155,138 Royalties 160,801 345,895 Warranty reserve 419,196 185,125 Accrued liabilities - other 367,869 409,900 Total accrued liabilities $ 8,131,316 $ 8,667,100 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Debt Outstanding | The following table presents a summary of debt outstanding as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (unaudited) Silicon Valley Bank Term Loan $ 3,375,000 $ 4,291,666 Less: unamortized debt issuance costs 30,147 38,301 Less: current portion 1,833,333 1,833,333 Total long-term debt $ 1,511,520 $ 2,420,032 |
Schedule of Remaining Principal Payments Under the Term Loan | The schedule of remaining principal payments under our Term Loans as of June 30, 2017 was as follows: 2017 $ 916,667 2018 1,833,333 2019 625,000 $ 3,375,000 |
Capital Stock and Share-Based20
Capital Stock and Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Summary of Stock Option Activity | A summary of the stock option activity for the six months ended June 30, 2017 is presented below: 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, 2017 2,857,114 $0.61 - $6.83 $ 1.89 $ 107,063 2,367,630 $ 1.93 $ 101,071 Granted 80,000 $1.51 - $1.54 $ 1.53 Exercised (1,000 ) $0.82 $ 0.82 Canceled (117,623 ) $1.40 - $3.69 $ 2.26 Balance, June 30, 2017 2,818,491 $0.61 - $6.83 $ 1.86 $ 356,221 2,584,839 $ 1.90 $ 334,031 (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 and Units | The following is a summary of our RSU activity for the six months ended June 30, 2017 : Number of RSUs Intrinsic Value Issued Unvested Weighted Average Grant Date Fair Value per Share Outstanding Unvested Balance, January 1, 2017 528,510 86,956 $1.29 $ 776,910 $ 127,825 Granted 165,143 129,865 $1.56 Vested — (86,956 ) $1.15 Forfeitures — — $0.00 Converted — — $0.00 Balances, June 30, 2017 693,653 129,865 $1.36 $ 1,047,416 $ 196,096 The following table summarizes the value of our unvested restricted stock awards: Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Value of Unvested Shares Balance, January 1, 2017 743,042 $ 1.20 $ 888,764 Granted 289,000 $ 1.54 445,060 Vested (355,542 ) $ 1.21 (431,854 ) Repurchased $ — — Forfeitures (51,667 ) $ 1.14 (58,917 ) Balance, June 30, 2017 624,833 $ 1.35 $ 843,053 |
Details of Equity Transactions | The following details our equity transactions during the six months ended June 30, 2017 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Shares $ Shares $ Shares $ $ Balance, January 1, 2017 1,321,514 1,322 27,541,277 28,600 446,827 (517,987 ) 82,451,958 Exercise of stock options — — 1,000 1 — — 819 Share-based compensation — — 289,000 289 — — 321,467 Non-cash compensation — — — — — — — Stock dividends to Carilion Clinic (1) — — — 40 — — 63,592 Forfeitures of restricted stock grants — — (51,667 ) (52 ) — — 52 Repurchase of common stock — — (90,900 ) — 90,900 (143,266 ) — Balances, June 30, 2017 1,321,514 1,322 27,688,710 28,878 537,727 (661,253 ) 82,837,888 (1) The stock dividends payable in connection with Carilion Clinic’s Series A Preferred Stock will be issued subsequent to June 30, 2017 . For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through June 30, 2017 , the Series A Preferred Stock issued to Carilion has accrued $1,077,074 in dividends. The accrued and unpaid dividends as of June 30, 2017 will be paid by the issuance of 592,047 shares of our common stock upon Carilion’s written request. |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 2017 2016 2017 2016 (unaudited) (unaudited) Revenues: Technology development $ 4,625,175 $ 4,137,382 $ 8,901,624 $ 7,860,644 Products and licensing 8,951,296 10,509,522 17,793,232 20,773,273 Total revenues $ 13,576,471 $ 14,646,904 $ 26,694,856 $ 28,633,917 Technology development operating income/(loss) $ 60,659 $ 313,208 $ (304,901 ) $ (177,108 ) Products and licensing operating loss (179,873 ) (964,789 ) (1,079,591 ) (1,826,643 ) Total operating loss $ (119,214 ) $ (651,581 ) $ (1,384,492 ) $ (2,003,751 ) Depreciation, technology development $ 88,698 $ 91,127 $ 176,918 $ 186,784 Depreciation, products and licensing $ 240,504 $ 263,514 $ 571,480 $ 517,011 Amortization, technology development $ 26,169 $ 44,501 $ 66,605 $ 117,838 Amortization, products and licensing $ 437,612 $ 522,660 $ 930,590 $ 1,039,969 The table below presents assets for reportable segments: June 30, December 31, (unaudited) Total segment assets: Technology development $ 16,608,820 $ 16,923,090 Products and licensing 34,942,264 38,073,883 Total assets $ 51,551,084 $ 54,996,973 Property plant and equipment, and intangible assets, technology development $ 2,462,428 $ 2,602,803 Property plant and equipment, and intangible assets, products and licensing $ 14,771,488 $ 15,207,630 |
Basis of Presentation and Sig22
Basis of Presentation and Significant Accounting Policies (Details) shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017shares | Jun. 30, 2016shares | Jun. 30, 2017segmentshares | Jun. 30, 2016shares | |
Accounting Policies [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Antidilutive securities excluded from computation of net loss per share (in shares) | shares | 5 | 5.8 | 4.6 | 5.7 |
Subsequent Event- Sale of Hi23
Subsequent Event- Sale of High Speed Optical Receivers Business (Details) - High Speed Optical Receivers Business - Disposed of by Sale | Aug. 09, 2017USD ($)employee | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Current assets | ||||||
Accounts receivable | $ 4,263,448 | $ 4,263,448 | $ 4,028,713 | |||
Inventory | 2,262,316 | 2,262,316 | 1,521,398 | |||
Prepaid expenses and other current assets | 122,599 | 122,599 | 251,516 | |||
Total current assets | 6,648,363 | 6,648,363 | 5,801,627 | |||
Property and equipment, net | 3,667,273 | 3,667,273 | 3,298,110 | |||
Intangible assets, net | 4,673,792 | 4,673,792 | 5,314,045 | |||
Goodwill | 2,348,331 | 2,348,331 | 2,348,331 | |||
Other assets | 50,754 | 50,754 | 50,754 | |||
Total assets of the disposal group | 17,388,513 | 17,388,513 | 16,812,867 | |||
Current liabilities | ||||||
Accounts payable | 1,149,062 | 1,149,062 | 1,511,450 | |||
Accrued compensation | 313,725 | 313,725 | 504,719 | |||
Other accrued liabilities | 468,124 | 468,124 | 248,837 | |||
Total current liabilities | 1,930,911 | 1,930,911 | 2,265,006 | |||
Deferred rent | 77,719 | 77,719 | 84,555 | |||
Total liabilities of the disposal group | 2,008,630 | 2,008,630 | $ 2,349,561 | |||
Revenues | 2,283,440 | $ 4,745,999 | 5,314,927 | $ 9,744,708 | ||
Cost of revenues | 1,568,746 | 3,202,491 | 3,801,363 | 6,505,287 | ||
Gross profit | 714,694 | 1,543,508 | 1,513,564 | 3,239,421 | ||
Operating expense | ||||||
Research, development and engineering | 445,020 | 362,999 | 961,077 | 813,396 | ||
Selling, general and administrative | 656,323 | 1,035,066 | 1,487,378 | 2,017,071 | ||
Total operating expense | 1,101,343 | 1,398,065 | 2,448,455 | 2,830,467 | ||
Operating (loss)/income | (386,649) | 145,443 | (934,891) | 408,954 | ||
Other (income)/expense | 0 | 35,036 | ||||
Other (income)/expense | (3,548) | |||||
(Loss)/income before income taxes | (386,649) | 148,991 | (934,891) | 373,918 | ||
Income tax benefit/(expense) | 0 | 56,557 | 0 | 141,939 | ||
(Loss)/income attributable to disposal group | $ (386,649) | $ 92,434 | $ (934,891) | $ 231,979 | ||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Sale price of disposal | $ 33,500,000 | |||||
Proceeds from sale of business | 29,500,000 | |||||
Placed in escrow | $ 4,000,000 | |||||
Number of employees expected to be hired by buyer | employee | 49 | |||||
Transition costs, monthly payment | $ 300,000 | |||||
Transition period | 5 months |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 2,630,986 | $ 1,993,543 |
Work-in-process | 1,445,377 | 1,098,173 |
Raw materials | 5,464,391 | 5,278,519 |
Total inventory | $ 9,540,754 | $ 8,370,235 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 4,779,817 | $ 5,442,723 |
Claims reserve | 1,727,123 | 1,577,123 |
Accrued sub-contracts | 464,961 | 483,477 |
Accrued professional fees | 57,153 | 67,719 |
Deferred rent | 154,396 | 155,138 |
Royalties | 160,801 | 345,895 |
Warranty reserve | 419,196 | 185,125 |
Accrued liabilities - other | 367,869 | 409,900 |
Total accrued liabilities | $ 8,131,316 | $ 8,667,100 |
Debt - Additional Information (
Debt - Additional Information (Details) | May 08, 2015USD ($)installment | Sep. 30, 2015USD ($)installment | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||
Aggregate term loan balance | $ 3,375,000 | $ 4,291,666 | ||
Term Loan | Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Debt, face amount | $ 6,000,000 | |||
Debt, number of monthly payment | installment | 48 | |||
Early termination fee | 2.00% | |||
Effective interest rate | 6.25% | |||
Term Loan | Silicon Valley Bank | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Debt, additional interest above prime rate | 2.00% | |||
Term Loan | Silicon Valley Bank | Sixth Loan Modification Agreement | ||||
Debt Instrument [Line Items] | ||||
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 | |||
Debt, number of monthly payment | installment | 35 | |||
Debt, monthly principal payments | $ 27,778 | |||
Debt, additional interest above prime rate | 2.00% | |||
Minimum cash balance | $ 5,000,000 | |||
Liquidity covenant component, accounts receivable percentage | 60.00% | |||
Liquidity covenant component, outstanding principal loan balance multiplier | 1.5 |
Debt - Summary of Debt Outstand
Debt - Summary of Debt Outstanding (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Silicon Valley Bank Term Loan | $ 3,375,000 | $ 4,291,666 |
Less: unamortized debt issuance costs | 30,147 | 38,301 |
Less: current portion | 1,833,333 | 1,833,333 |
Long-term debt obligations | $ 1,511,520 | $ 2,420,032 |
Debt - Remaining Principal Paym
Debt - Remaining Principal Payments Under the Term Loan (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,017 | $ 916,667 | |
2,018 | 1,833,333 | |
2,019 | 625,000 | |
Silicon Valley Bank Term Loan | $ 3,375,000 | $ 4,291,666 |
Capital Stock and Share-Based29
Capital Stock and Share-Based Compensation - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Equity [Abstract] | |||
Expected dividend yield | 0.00% | ||
Stock options granted (in shares) | 80,000 | ||
Aggregate outstanding stock options (in shares) | 2,818,491 | 2,857,114 | |
Outstanding stock options, weighted average remaining contractual term | 4 years 9 months 6 days | ||
Exercisable stock options (in shares) | 2,584,839 | 2,367,630 | |
Exercisable stock options, weighted average remaining contractual term | 4 years 6 months 6 days | ||
Share-based compensation | $ 321,756 | $ 465,028 | |
Stock-based compensation expense not yet recognized | $ 200,000 | ||
Weighted average remaining service period | 1 year 8 months |
Capital Stock and Share-Based30
Capital Stock and Share-Based Compensation - Summary of Activity of Equity Incentive Plans (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Options Outstanding, Number of Shares | ||
Beginning Balance (shares) | 2,857,114 | |
Granted (in shares) | 80,000 | |
Exercised (in shares) | (1,000) | |
Canceled (in shares) | (117,623) | |
Ending Balance (shares) | 2,818,491 | 2,857,114 |
Price per Share Range | ||
Outstanding, lower limit (in dollars per share) | $ 0.61 | $ 0.61 |
Outstanding, upper limit (in dollars per share) | 6.83 | 6.83 |
Granted, lower limit (in dollars per share) | 1.51 | |
Granted, upper limit (in dollars per share) | 1.54 | |
Exercised (in dollars per share) | 0.82 | |
Canceled, lower limit (in dollars per share) | 1.40 | |
Canceled, upper limit (in dollars per share) | 3.69 | |
Options Outstanding, Weighted Average Exercise Price | ||
Beginning Balance (in dollars per share) | 1.89 | |
Granted (in dollars per share) | 1.53 | |
Exercised (in dollars per share) | 0.82 | |
Canceled (in dollars per share) | 2.26 | |
Ending Balance (in dollars per share) | $ 1.86 | $ 1.89 |
Additional Disclosures | ||
Options Outstanding, Aggregate Intrinsic Value | $ 356,221 | $ 107,063 |
Options Exercisable, Number of Shares (in shares) | 2,584,839 | 2,367,630 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.90 | $ 1.93 |
Options Exercisable, Aggregate Intrinsic Value | $ 334,031 | $ 101,071 |
Capital Stock and Share-Based31
Capital Stock and Share-Based Compensation - Summary of Restricted Stock Awards (Details) | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Number of Unvested Shares | |
Beginning balance (in shares) | shares | 743,042 |
Granted (in shares) | shares | 289,000 |
Vested (in shares) | shares | (355,542) |
Repurchased (in shares) | shares | |
Forfeitures (in shares) | shares | (51,667) |
Ending balance (in shares) | shares | 624,833 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in usd per share) | $ / shares | $ 1.20 |
Granted (in usd per share) | $ / shares | 1.54 |
Vested (in usd per share) | $ / shares | 1.21 |
Repurchased (in usd per share) | $ / shares | 0 |
Forfeitures (in usd per share) | $ / shares | 1.14 |
Ending balance (in usd per share) | $ / shares | $ 1.35 |
Aggregate Value of Unvested Shares | |
Aggregate value of shares, Beginning balance | $ | $ 888,764 |
Aggregate value of shares, Granted | $ | 445,060 |
Aggregate value of shares, Vested | $ | (431,854) |
Aggregate value of shares, Repurchased | $ | 0 |
Aggregate value of shares, Forfeitures | $ | (58,917) |
Aggregate value of shares, Ending balance | $ | $ 843,053 |
Capital Stock and Share-Based32
Capital Stock and Share-Based Compensation - Summary of Restricted Stock Units (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Number of Unvested Shares | ||
Beginning balance (in shares) | 743,042 | |
Granted (in shares) | 289,000 | |
Vested (in shares) | (355,542) | |
Forfeitures (in shares) | (51,667) | |
Ending balance (in shares) | 624,833 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in usd per share) | $ 1.20 | |
Granted (in usd per share) | 1.54 | |
Vested (in usd per share) | 1.21 | |
Forfeitures (in usd per share) | 1.14 | |
Ending balance (in usd per share) | $ 1.35 | |
Intrinsic value, outstanding | $ 843,053 | $ 888,764 |
Restricted Stock Units (RSUs) | Employee Director Compensation Plan | ||
Number of RSUs | ||
Beginning balance (in shares) | 528,510 | |
Granted (in shares) | 165,143 | |
Vested (in shares) | 0 | |
Forfeitures (in shares) | 0 | |
Converted (in shares) | 0 | |
Ending balance (in shares) | 693,653 | |
Number of Unvested Shares | ||
Beginning balance (in shares) | 86,956 | |
Granted (in shares) | 129,865 | |
Vested (in shares) | (86,956) | |
Forfeitures (in shares) | 0 | |
Converted (in shares) | 0 | |
Ending balance (in shares) | 129,865 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in usd per share) | $ 1.29 | |
Granted (in usd per share) | 1.56 | |
Vested (in usd per share) | 1.15 | |
Forfeitures (in usd per share) | 0 | |
Converted (in usd per share) | 0 | |
Ending balance (in usd per share) | $ 1.36 | |
Intrinsic value, outstanding | $ 1,047,416 | 776,910 |
Intrinsic value, unvested | $ 196,096 | $ 127,825 |
Capital Stock and Share-Based33
Capital Stock and Share-Based Compensation - Equity Transactions (Details) - USD ($) | 6 Months Ended | 13 Months Ended |
Jun. 30, 2017 | May 31, 2017 | |
Increase (Decrease) in Stockholders' Equity | ||
Stockholder's equity beginning balance | $ 35,089,688 | |
Preferred stock beginning balance (in shares) | 1,321,514 | |
Common stock beginning balance (in shares) | 27,541,277 | |
Treasury stock beginning balance (in shares) | 446,827 | |
Exercise of stock options (in shares) | 1,000 | |
Forfeitures of restricted stock grants | $ 52 | |
Repurchase of common stock (in shares) | (205,500) | |
Preferred stock ending balance (in shares) | 1,321,514 | |
Common stock ending balance (in shares) | 27,688,710 | |
Treasury stock ending balance (in shares) | 537,727 | |
Stockholder's equity ending balance | $ 33,691,274 | |
Carilion Clinic | Series A Preferred Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Accrued dividends | $ 1,077,074 | |
Stock dividends for preferred shareholders (in shares) | 592,047 | |
Preferred Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Stockholder's equity beginning balance | $ 1,322 | |
Preferred stock beginning balance (in shares) | 1,321,514 | |
Exercise of stock options | $ 0 | |
Exercise of stock options (in shares) | 0 | |
Share-based compensation | $ 0 | |
Share-based compensation (in shares) | 0 | |
Non-cash compensation | $ 0 | |
Non-cash compensation (in shares) | 0 | |
Stock dividends to Carilion Clinic | $ 0 | |
Stock dividends to Carilion Clinic (in shares) | 0 | |
Forfeitures of restricted stock grants | $ 0 | |
Forfeitures of restricted stock grants (in shares) | 0 | |
Repurchase of common stock | $ 0 | |
Repurchase of common stock (in shares) | 0 | |
Preferred stock ending balance (in shares) | 1,321,514 | |
Stockholder's equity ending balance | $ 1,322 | |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Stockholder's equity beginning balance | $ 28,600 | |
Common stock beginning balance (in shares) | 27,541,277 | |
Exercise of stock options | $ 1 | |
Exercise of stock options (in shares) | 1,000 | |
Share-based compensation | $ 289 | |
Share-based compensation (in shares) | 289,000 | |
Non-cash compensation | $ 0 | |
Non-cash compensation (in shares) | 0 | |
Stock dividends to Carilion Clinic | $ 40 | |
Stock dividends to Carilion Clinic (in shares) | 0 | |
Forfeitures of restricted stock grants | $ (52) | |
Forfeitures of restricted stock grants (in shares) | (51,667) | |
Repurchase of common stock | $ 0 | |
Repurchase of common stock (in shares) | (90,900) | |
Common stock ending balance (in shares) | 27,688,710 | |
Stockholder's equity ending balance | $ 28,878 | |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Stockholder's equity beginning balance | $ (517,987) | |
Treasury stock beginning balance (in shares) | 446,827 | |
Exercise of stock options | $ 0 | |
Exercise of stock options (in shares) | 0 | |
Share-based compensation | $ 0 | |
Share-based compensation (in shares) | 0 | |
Non-cash compensation | $ 0 | |
Non-cash compensation (in shares) | 0 | |
Stock dividends to Carilion Clinic | $ 0 | |
Stock dividends to Carilion Clinic (in shares) | 0 | |
Forfeitures of restricted stock grants | $ 0 | |
Forfeitures of restricted stock grants (in shares) | 0 | |
Repurchase of common stock | $ (143,266) | |
Repurchase of common stock (in shares) | 90,900 | |
Treasury stock ending balance (in shares) | 537,727 | |
Stockholder's equity ending balance | $ (661,253) | |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity | ||
Stockholder's equity beginning balance | 82,451,958 | |
Exercise of stock options | 819 | |
Share-based compensation | 321,467 | |
Non-cash compensation | 0 | |
Stock dividends to Carilion Clinic | 63,592 | |
Repurchase of common stock | 0 | |
Stockholder's equity ending balance | $ 82,837,888 |
Capital Stock and Share-Based34
Capital Stock and Share-Based Compensation - Stock Repurchase Program (Details) - USD ($) | 6 Months Ended | 13 Months Ended | |
Jun. 30, 2017 | May 31, 2017 | May 31, 2016 | |
Equity [Abstract] | |||
Authorized share repurchase amount | $ 2,000,000 | ||
Stock repurchased during period (in shares) | 0 | ||
Treasury shares repurchased (in shares) | 205,500 | ||
Amount of stock repurchased | $ 200,000 |
Operating Segments - Additional
Operating Segments - Additional Information (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
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 | 38.00% | 28.00% | 36.00% | 28.00% |
Revenues | Geographic Concentration Risk | Outside of the United States | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 28.00% | 29.00% | 27.00% | 32.00% |
Revenues | Geographic Concentration Risk | China | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 7.00% | 19.00% | 10.00% | 19.00% |
Revenues | Customer Concentration Risk | Major Customer One | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 0.00% | 14.00% | 5.00% | 15.00% |
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, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Technology development | $ 4,625,175 | $ 4,137,382 | $ 8,901,624 | $ 7,860,644 |
Products and licensing | 8,951,296 | 10,509,522 | 17,793,232 | 20,773,273 |
Total revenues | 13,576,471 | 14,646,904 | 26,694,856 | 28,633,917 |
Segment Reporting Information [Line Items] | ||||
Total operating income (loss) | (119,214) | (651,581) | (1,384,492) | (2,003,751) |
Technology development | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income (loss) | 60,659 | 313,208 | (304,901) | (177,108) |
Depreciation | 88,698 | 91,127 | 176,918 | 186,784 |
Amortization | 26,169 | 44,501 | 66,605 | 117,838 |
Products and licensing | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income (loss) | (179,873) | (964,789) | (1,079,591) | (1,826,643) |
Depreciation | 240,504 | 263,514 | 571,480 | 517,011 |
Amortization | $ 437,612 | $ 522,660 | $ 930,590 | $ 1,039,969 |
Operating Segments - Assets for
Operating Segments - Assets for Reportable Segments (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Total segment assets: | ||
Total assets | $ 51,551,084 | $ 54,996,973 |
Property plant and equipment, and intangible assets | 6,882,576 | 6,780,838 |
Technology development | ||
Total segment assets: | ||
Total assets | 16,608,820 | 16,923,090 |
Property plant and equipment, and intangible assets | 2,462,428 | 2,602,803 |
Products and licensing | ||
Total segment assets: | ||
Total assets | 34,942,264 | 38,073,883 |
Property plant and equipment, and intangible assets | $ 14,771,488 | $ 15,207,630 |
Contingencies and Guarantees (D
Contingencies and Guarantees (Details) | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2017USD ($) | Sep. 30, 2016USD ($)purchase_order | Jun. 30, 2017USD ($) | Jun. 30, 2015USD ($) | 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 | $ 1,400,000 | ||||
Non-cancelable purchase order commitment remaining | $ 500,000 | ||||
Amplifiers | |||||
Loss Contingencies [Line Items] | |||||
Non-cancelable purchase order commitment remaining | $ 700,000 | ||||
Preliminary Audit Report | Defense Contract Audit Agency | |||||
Loss Contingencies [Line Items] | |||||
Claimed cost, subject to potential penalty | $ 1,100,000 | $ 800,000 | |||
Litigation settlement, offered, amount | $ 150,000 |