Luna Innovations (LUNA) 10-Q 7 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 06, 2020
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Registrant Name	LUNA INNOVATIONS INC
Entity Central Index Key	0001239819
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,486,577

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 26,324	$ 25,006
Accounts receivable, net	15,519	16,269
Receivable from sale of HSOR business	0	2,501
Contract assets	2,612	2,759
Inventory, net	11,191	10,294
Prepaid expenses and other current assets	1,575	1,287
Total current assets	57,221	58,116
Property and equipment, net	3,306	3,466
Intangible assets, net	9,853	10,194
Goodwill	10,542	10,542
Long-term contract assets	486	449
Other assets	2,009	2,341
Deferred tax asset	1,542	1,416
Total assets	84,959	86,524
Current liabilities:
Accounts payable	2,490	2,787
Accrued liabilities	9,243	10,369
Contract liabilities	3,569	3,888
Total current liabilities	15,302	17,044
Other long-term liabilities	1,880	2,011
Total liabilities	17,182	19,055
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, par value $0.001, 100,000,000 shares authorized, 32,126,368 and 31,788,896 shares issued, 30,486,577 and 30,149,105 shares outstanding at March 31, 2020 and December 31, 2019, respectively	32	32
Treasury stock at cost, 1,639,791 shares at March 31, 2020 and December 31, 2019	(4,337)	(4,337)
Additional paid-in capital	89,446	88,022
Accumulated deficit	(17,364)	(16,248)
Total stockholders’ equity	67,777	67,469
Total liabilities and stockholders’ equity	$ 84,959	$ 86,524

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
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)	32,126,368	31,788,896
Common stock, outstanding (in shares)	30,486,577	30,149,105
Treasury Stock (in shares)	1,639,791	1,639,791

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 17,141	$ 14,833
Cost of revenues:
Total cost of revenues	8,777	8,065
Gross profit	8,364	6,768
Operating expense:
Selling, general and administrative	6,377	6,207
Research, development and engineering	1,597	1,458
Total operating expense	7,974	7,665
Operating income/(loss)	390	(897)
Other income/(expense):
Investment income	59	171
Other income/(expense)	9	(2)
Interest expense	0	(11)
Total other income	68	158
Income/(loss) from continuing operations before income taxes	458	(739)
Income tax expense/(benefit)	138	(1,865)
Net income from continuing operations	320	1,126
Loss from discontinued operations, net of income tax of $464	(1,436)	0
Net (loss)/income	(1,116)	1,126
Preferred stock dividend	0	83
Net (loss)/income attributable to common stockholders	$ (1,116)	$ 1,043
Net income per share from continuing operations:
Basic (in dollars per share)	$ 0.01	$ 0.04
Diluted (in dollars per share)	0.01	0.03
Net loss per share from discontinued operations:
Basic (in dollars per share)	(0.05)	0
Diluted (in dollars per share)	(0.04)	0
Net (loss)/income per share attributable to common stockholders:
Basic (in dollars per share)	(0.04)	0.04
Diluted (in dollars per share)	$ (0.03)	$ 0.03
Weighted average shares:
Basic (in shares)	30,380,345	28,039,080
Diluted (in shares)	32,549,487	33,479,935
Products and licensing
Revenues:
Total revenues	$ 10,326	$ 8,192
Cost of revenues:
Total cost of revenues	3,862	3,249
Technology development
Revenues:
Total revenues	6,815	6,641
Cost of revenues:
Total cost of revenues	$ 4,915	$ 4,816

Consolidated Statements of Op_2

Consolidated Statements of Operations (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Income Statement [Abstract]
Tax benefit from loss on sale of discontinued operations	$ 464

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows (used in)/provided by operating activities
Net (loss)/income	$ (1,116)	$ 1,126
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities
Depreciation and amortization	679	617
Share-based compensation	226	343
Bad debt expense	14	0
Loss from discontinued operations, net of tax	1,436	0
Deferred taxes	(127)	0
Tax benefit from release of valuation allowance	0	(1,889)
Change in assets and liabilities
Accounts receivable	737	1,053
Contract assets	111	(429)
Inventory	(897)	(528)
Other current assets	(287)	(41)
Accounts payable and accrued expenses	(760)	1,196
Contract liabilities	(318)	149
Net cash (used in)/provided by operating activities	(302)	1,597
Cash flows provided by/(used in) investing activities
Acquisition of property and equipment	(74)	(215)
Intangible property costs	(91)	(61)
Proceeds from sale of discontinued operations	600	0
Acquisition of General Photonics Corporation	0	(19,004)
Net cash provided by/(used in) investing activities	435	(19,280)
Cash flows provided by/(used in) financing activities
Payments on finance lease obligations	(13)	(7)
Payments of debt obligations	0	(375)
Proceeds from the exercise of options and warrants	1,198	185
Net cash provided by/(used in) financing activities	1,185	(197)
Net increase/(decrease) in cash and cash equivalents	1,318	(17,880)
Cash and cash equivalents—beginning of period	25,006	42,460
Cash and cash equivalents—end of period	26,324	24,580
Supplemental disclosure of cash flow information
Cash paid for interest	1	12
Cash paid for income taxes	0	0
Non-cash investing and financing activities
Contingent liability for business combination	0	900
Dividend on preferred stock, 19,823 shares of common stock issuable for the three months ended March 31, 2019	$ 0	$ 83

Consolidated Statements of Ca_2

Consolidated Statements of Cash Flows (Parenthetical)	3 Months Ended
	Mar. 31, 2019shares
Statement of Cash Flows [Abstract]
Dividend on preferred stock, shares of common stock issuable (in shares)	19,823

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
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 high performance fiber optic test, measurement and control products for the telecommunications and photonics industries and distributed fiber optic sensing products for industries utilizing composite and other advanced materials, such as the automotive, aerospace, energy and infrastructure industries. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by providing valuable information such as highly detailed stress, strain, and temperature measurements of a new design or manufacturing process. In addition, our distributed fiber optic sensing products are used to monitor the structural integrity or operational health of critical assets, including large civil structures such as bridges. Our communications test and control products accelerate the development of advanced fiber optic components and networks by providing fast and highly accurate characterization of components and networks. We also provide applied research services, typically under research programs funded by the U.S. government, in areas of advanced materials, sensing, and healthcare applications. Our business model is designed to accelerate the process of bringing new and innovative products to market. We use our in-house technical expertise across a range of technologies to perform applied research services for companies and for government funded projects. We continue to invest in product development and commercialization, which we anticipate will lead to increased product sales growth. Unaudited Interim Financial Information The accompanying unaudited consolidated interim 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 interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring accruals considered necessary to present fairly our financial position at March 31, 2020 , results of operations and changes in stockholders' equity for the three months ended March 31, 2020 and 2019 , and cash flows for the three months ended March 31, 2020 and 2019 . The results of operations for the three months ended March 31, 2020 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . The consolidated balance sheet as of December 31, 2019 was derived from our audited consolidated financial statements. The COVID-19 pandemic is expected to result in a global slowdown of economic activity. While the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use reasonably available information to assess certain accounting matters including, but not limited to, accounts receivable, inventory and the carrying value of goodwill and other long-lived tangible and intangible assets. While the assessments have not resulted in any material impacts to our financial statements as of March 31, 2020 , we believe the full impact of the pandemic remains uncertain and ongoing developments related to the pandemic may cause material impacts to our consolidated financial statements. 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, 2019 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020 . Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and reviewed for impairment as described above. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the Silicon Valley Bank ("SVB") debt facility including its interest rate of prime plus 1% , to be at market based upon similar instruments that would be available to us. Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) 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 effects of 2.2 million and 5.4 million common stock equivalents are included for the diluted per share data for the three months ended March 31, 2020 and 2019 , respectively. Stock options and deferred stock units credited to our directors under our non-employee deferred compensation plan are included in our common stock equivalents for the three months ended March 31, 2020 and 2019 . In addition, accrued stock dividends and preferred stock are also included for the three months ended March 31, 2019 . Recently Adopted Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04: Simplifying the Test for Goodwill Impairment ,” which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test which previously measured a goodwill impairment loss by comparing the implied fair value of a reporting segment's goodwill with the carrying amount. We adopted ASU 2017-04, effective January 1, 2020. As a result of adopting the new rules, we compare the estimated fair value of our reporting segments to their respective carrying values when evaluating the recoverability of goodwill. If the carrying value of a reporting segment exceeds its fair value, an impairment charge will be recognized for the amount by which its carrying value exceeds the reporting segment's fair value; however the loss recognized will not exceed the goodwill allocated to the reporting segment. The adoption of ASU 2017-04 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in ASC 820 by adding, changing, or removing certain disclosures. The ASU applies to all entities that are required under this guidance to provide disclosures about recurring or nonrecurring fair value measurements. We adopted these amendments, effective January 1, 2020. The adoption of ASU 2018-13 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We adopted ASU 2018-15, effective January 1, 2020. The adoption of ASU 2018-15 did not have a significant impact on our consolidated financial statements. Recently Issued Pronouncements, not yet adopted In December 2019, the FASB issued ASU 2019-12 Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles of the accounting for income taxes and also improves consistent application of and simplification of other areas when accounting for income taxes. The guidance is effective for us beginning in the first quarter of fiscal year 2021, while early adoption is permitted. We are currently in the process of evaluating the impact of adoption of ASU 2019-12, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13: Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements

Discontinued Operations

Discontinued Operations	3 Months Ended
	Mar. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued Operations On August 9, 2017, we completed the sale of 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 in cash was received, 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"). As of December 31, 2019 , $1.5 million of the escrow had been received with $2.5 million remaining in escrow pending resolution of a dispute. In March 2020, we settled the dispute resulting in us receiving $0.6 million and the buyer receiving $1.9 million . We have recorded a loss from discontinued operations of $1.4 million , net of tax benefit, for the three months ended March 31, 2020 , to reflect the settlement of the dispute. There were no results from discontinued operations for the three months ended March 31, 2019 . The following table presents a summary of the transactions related to the sale of the HSOR business in the three months ended March 31, 2020 : Three Months Ended March 31, 2020 (in thousands) Settlement of HSOR receivable $ 1,900 Loss on sale 1,900 Allocated income tax benefit (464 ) Loss from discontinued operations, net of related income tax $ 1,436

Intangible assets, net

Intangible assets, net	3 Months Ended
	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets, net	Intangible assets, net Intangible assets, net at March 31, 2020 and December 31, 2019 consisted of the following: March 31, 2020 December 31, 2019 (in thousands) Patent costs $ 5,383 $ 5,291 Developed technology 9,800 9,800 In-process research & development 1,580 1,580 Customer base 700 700 Trade names and trademarks 550 550 18,013 17,921 Accumulated amortization (8,159 ) (7,727 ) $ 9,853 $ 10,194 Amortization for the three months ended March 31, 2020 and 2019 was $0.4 million and $0.2 million , respectively. Estimated aggregate amortization, based on the net value of intangible assets at March 31, 2020 , for each of the next five years and beyond is as follows (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 1,265 2021 1,669 2022 1,519 2023 1,446 2024 1,256 2025 & beyond 2,698 Total $ 9,853

Goodwill

Goodwill	3 Months Ended
	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill Goodwill was approximately $10.5 million at March 31, 2020 and December 31, 2019 and has been allocated to the Products and Licensing segment.

Inventory, net

Inventory, net	3 Months Ended
	Mar. 31, 2020
Inventory Disclosure [Abstract]
Inventory, net	Inventory, net 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 net realizable value. Components of inventory were as follows: March 31, December 31, (in thousands) Finished goods $ 2,074 $ 1,695 Work-in-process 1,431 1,008 Raw materials 7,686 7,591 Total inventory, net $ 11,191 $ 10,294

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2020
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities Accrued liabilities at March 31, 2020 and December 31, 2019 consisted of the following: March 31, 2020 December 31, 2019 (in thousands) Accrued compensation $ 5,755 $ 6,416 Accrued professional fees 145 113 Accrued income tax 607 716 Current operating lease liability 1,055 1,283 Current finance lease liability 41 50 Royalties 76 365 Accrued liabilities - other 564 426 Contingent liability - General Photonics 1,000 1,000 Total accrued liabilities $ 9,243 $ 10,369

Debt

Debt	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Debt	Debt Silicon Valley Bank Facility We maintained a Loan and Security Agreement with SVB (the "Credit Facility") under which we had a term loan with an original borrowing amount of $6.0 million (the “Original Term Loan”). The Original Term Loan carried a floating annual interest rate equal to SVB’s prime rate then in effect plus 2% . The Original Term Loan matured and was repaid in May 2019. On October 10, 2019, we entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with SVB, which amended and restated in its entirety our previous Credit Facility. Under the Loan Agreement, SVB agreed to make advances available up to $10.0 million (the “Revolving Line”). If we borrow from the Revolving Line, such borrowing would carry a floating annual interest rate equal to the greater of (i) the Prime Rate (as defined in the Loan Agreement) then in effect plus 1% or (ii) 6% . Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date (defined below), reborrowed. The Revolving Line terminates on October 10, 2020 (the “Revolving Line Maturity Date”), unless earlier terminated by us. As of March 31, 2020 , no amounts have been borrowed under this Loan Agreement. Amounts due under the Loan Agreement are secured by our assets, including all personal property, inventory and bank accounts; however, intellectual property is not secured under the Loan Agreement. The inventory used to secure the amount due does not include demo or loaner equipment with an aggregate book value up to $1.0 million . The Loan Agreement requires us to observe a number of financial and operational covenants, including maintenance of a specified Liquidity Coverage Ratio (as defined in the Loan Agreement), protection and registration of intellectual property rights and customary negative covenants. 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 March 31, 2020 , there were no events of default on the Credit Facility. Interest expense, net for the three months ended March 31, 2019 consisted of the following: Three Months Ended March 31, (in thousands) 2019 Interest expense on Term Loans $ 7 Amortization of debt issuance costs 3 Other interest expense 1 Total interest expense, net $ 11

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases	Leases We recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating or finance leases with terms greater than twelve months. We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Most of our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent. We also have finance leases for equipment which have remaining terms ranging from 1 to 4 years. These lease agreements are for general office equipment with a 5 -year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statements of operations. The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. Our lease components included in the consolidated balance sheet were as follows: Lease component Classification March 31, 2020 December 31, 2019 (in thousands) Assets ROU assets - operating lease Other assets $ 1,917 $ 2,236 ROU assets - finance lease Other assets 57 70 Total ROU assets $ 1,974 $ 2,306 Liabilities Current operating lease liability Accrued liabilities $ 1,055 $ 1,283 Current finance lease liability Accrued liabilities 41 50 Long-term operating lease liability Other liabilities 1,860 1,988 Long-term finance lease liability Other liabilities 20 23 Total lease liabilities $ 2,976 $ 3,344 Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following: Three Months Ended March 31, (in thousands) 2020 2019 Operating lease costs $ 412 $ 404 Variable rent costs (39 ) (36 ) Total rent expense $ 373 $ 368 Future minimum lease payments under non-cancelable operating leases were as follows as of March 31, 2020 (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 1,468 2021 641 2022 545 2023 545 2024 544 Total future minimum lease payments 3,743 Less: Interest 828 Total operating lease liabilities $ 2,915 Current operating lease liability $ 1,055 Long-term operating lease liability 1,860 Total operating lease liabilities $ 2,915 Future minimum lease payments under non-cancelable finance leases were as follows as of March 31, 2020 (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 56 2021 11 2022 10 2023 5 Total future minimum lease payments 82 Less: Interest 21 Total finance lease liabilities $ 61 Current finance lease liability $ 41 Long-term finance lease liability 20 Total finance lease liabilities $ 61 Other information related to leases is as follows: Three Months Ended March 31, (in thousands, except weighted-average data) 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 14 $ 13 Interest on lease liabilities 1 2 Total finance lease cost $ 15 $ 15 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 378 $ 404 Finance cash flows from finance leases $ 13 $ 7 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 15 Weighted-average remaining lease term (years) - operating leases 3.7 4.0 Weighted-average remaining lease term (years) - finance leases 1.9 2.7 Weighted-average discount rate - operating leases 7 % 7 % Weighted-average discount rate - finance leases 7 % 7 % At March 31, 2020 , we had no operating or finance leases that have not yet commenced.
Leases	Leases We recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating or finance leases with terms greater than twelve months. We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Most of our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent. We also have finance leases for equipment which have remaining terms ranging from 1 to 4 years. These lease agreements are for general office equipment with a 5 -year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statements of operations. The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. Our lease components included in the consolidated balance sheet were as follows: Lease component Classification March 31, 2020 December 31, 2019 (in thousands) Assets ROU assets - operating lease Other assets $ 1,917 $ 2,236 ROU assets - finance lease Other assets 57 70 Total ROU assets $ 1,974 $ 2,306 Liabilities Current operating lease liability Accrued liabilities $ 1,055 $ 1,283 Current finance lease liability Accrued liabilities 41 50 Long-term operating lease liability Other liabilities 1,860 1,988 Long-term finance lease liability Other liabilities 20 23 Total lease liabilities $ 2,976 $ 3,344 Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following: Three Months Ended March 31, (in thousands) 2020 2019 Operating lease costs $ 412 $ 404 Variable rent costs (39 ) (36 ) Total rent expense $ 373 $ 368 Future minimum lease payments under non-cancelable operating leases were as follows as of March 31, 2020 (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 1,468 2021 641 2022 545 2023 545 2024 544 Total future minimum lease payments 3,743 Less: Interest 828 Total operating lease liabilities $ 2,915 Current operating lease liability $ 1,055 Long-term operating lease liability 1,860 Total operating lease liabilities $ 2,915 Future minimum lease payments under non-cancelable finance leases were as follows as of March 31, 2020 (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 56 2021 11 2022 10 2023 5 Total future minimum lease payments 82 Less: Interest 21 Total finance lease liabilities $ 61 Current finance lease liability $ 41 Long-term finance lease liability 20 Total finance lease liabilities $ 61 Other information related to leases is as follows: Three Months Ended March 31, (in thousands, except weighted-average data) 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 14 $ 13 Interest on lease liabilities 1 2 Total finance lease cost $ 15 $ 15 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 378 $ 404 Finance cash flows from finance leases $ 13 $ 7 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 15 Weighted-average remaining lease term (years) - operating leases 3.7 4.0 Weighted-average remaining lease term (years) - finance leases 1.9 2.7 Weighted-average discount rate - operating leases 7 % 7 % Weighted-average discount rate - finance leases 7 % 7 % At March 31, 2020 , we had no operating or finance leases that have not yet commenced.

Capital Stock and Share-Based C

Capital Stock and Share-Based Compensation	3 Months Ended
	Mar. 31, 2020
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 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. Stock Options A summary of the stock option activity for the three months ended March 31, 2020 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) (in thousands, except share, per share and weighted-average data) Balance, January 1, 2020 3,160,397 $1.18 - $7.37 $ 2.72 $ 14,460 1,835,799 $ 2.28 $ 9,198 Granted 20,000 $7.59 $ 7.59 Exercised (316,504 ) $1.27 - $4.43 $ 3.79 Canceled (12,660 ) 3.37 $ 3.37 Balance, March 31, 2020 2,851,233 $1.18 - $7.59 $ 2.63 $ 10,142 1,632,952 $ 2.06 $ 6,691 (1) The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only. The aggregate intrinsic value is based on the closing price of our common stock on the Nasdaq Capital Market, as applicable, on the respective dates. At March 31, 2020 , the outstanding stock options to purchase an aggregate of 2.9 million shares had a weighted-average remaining contractual term of 6.3 years, and the exercisable stock options to purchase an aggregate of 1.6 million shares had a weighted-average remaining contractual term of 4.5 years. The fair value of shares underlying vested options was $10.0 million at March 31, 2020 . The fair value of shares underlying options exercised during the three months ended March 31, 2020 was $2.4 million . For the three months ended March 31, 2020 and 2019 we recognized $0.2 million and $0.3 million in share-based compensation expense, respectively, which is included in our selling, general and administrative expense in the accompanying consolidated interim financial statements. We expect to recognize $2.7 million in share-based compensation expense over the weighted-average remaining service period of 2.7 years for stock options outstanding as of March 31, 2020 . Restricted Stock and Restricted Stock Units Historically, we have granted shares of restricted stock to certain employees that have vested in three equal annual installments on the anniversary dates of their grant. However, beginning in 2019, we altered our approach for these grants to replace the grant of restricted stock subject to time-based vesting with the grant of a combination of restricted stock units ("RSUs") subject to time-based vesting and performance-based vesting. Each RSU represents the contingent right to receive a single share of our common stock upon the vesting of the award. For the three months ended March 31, 2020 , we granted an aggregate of 138,650 RSUs to certain employees. Of the RSUs granted during the three months ended March 31, 2020 , 76,700 of such RSUs are subject to time-based vesting and are scheduled to vest in three equal annual installments on the anniversary dates of the grant. The remaining 61,950 RSUs are performance-based awards that will vest based on our achievement of long-term performance goals, in particular, based on our levels of 2022 revenue and operating income. The 61,950 shares issuable upon vesting of the performance-based RSUs represent the maximum payout under our performance-based awards, based upon 150% of our target performance for 2022 revenue and operating income (the payout of such awards based on target performance for 2022 revenue and operating income would be 41,300 shares). In the case of the time-based and performance-based RSUs, vesting is also subject to the employee's continuous service with us through vesting. During the three months ended March 31, 2020 , no shares of restricted stock vested. In addition, in conjunction with our 2018 and 2019 Annual Meetings of Stockholders, we granted RSUs to certain members of our Board of Directors in respect of the annual equity compensation under our non-employee director compensation policy (other members of our Board of Directors elected to receive their annual equity compensation for Board service in the form of stock units under our Deferred Compensation Plan as described below). RSUs granted to our non-employee Directors vest at the earlier of the one -year anniversary of their grant or the next annual stockholders' meeting. During the three months ended March 31, 2020 , 55,668 RSUs vested. The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs: (in thousands, except share and per share data) Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair Value of Unvested Shares Balance, January 1, 2020 502,102 $ 3.32 $ 1,665 Granted 138,650 6.43 892 Vested (55,668 ) 3.27 (182 ) Balance, March 31, 2020 585,084 $ 4.06 $ 2,375 Non-employee Director Deferred Compensation Plan We maintain a non-employee director deferred compensation plan (the “Deferred Compensation Plan”) that permits our non-employee directors to defer receipt of certain of the compensation that they receive for serving on our board and board committees. The Deferred Compensation Plan has historically permitted the participants to elect to defer cash fees to which they were entitled for board and committee service. For participating directors, in lieu of payment of cash fees, we credit their accounts under the Deferred Compensation Plan with a number of stock units based on the trading price of our common stock as of the date of the deferral. These stock units vest immediately, although the participating directors do not receive the shares represented by such units until a future qualifying event. Pursuant to our Deferred Compensation Plan, non-employee directors can elect to defer the receipt of some or all of the equity compensation that they receive for board and committee service. Stock units representing this equity compensation vest at the earlier of the one-year anniversary of their grant or the next annual stockholders' meeting. The following is a summary of our stock unit activity under the Deferred Compensation Plan for the three months ended March 31, 2020 : (in thousands, except share and weighted-average data) Number of Stock Units Weighted Average Grant Date Fair Value per Share Intrinsic Value Outstanding Balance, January 1, 2020 629,003 $ 2.09 $ 4,585 Granted 7,114 7.38 44 Balance, March 31, 2020 636,117 $ 2.15 $ 3,912 As of March 31, 2020 , 37,546 of the outstanding stock units had not yet vested. The following table details our equity transactions during the three months ended March 31, 2020 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ $ $ (in thousands, except share data) Balance, January 1, 2020, as previously reported — $ — 30,149,105 $ 32 1,639,791 $ (4,337 ) $ 88,022 $ (16,248 ) $ 67,469 Exercise of stock options — — 316,504 — — — 1,198 — 1,198 Share-based compensation — — 55,668 — — — 501 — 502 Net income — — — — — — — (1,116 ) (1,116 ) Forfeitures of restricted stock — — (34,700 ) — — — (275 ) — (276 ) Balance, March 31, 2020 — $ — 30,486,577 $ 32 1,639,791 $ (4,337 ) $ 89,446 $ (17,364 ) $ 67,777 The following table details our equity transactions during the three months ended March 31, 2019 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ $ $ (in thousands, except share data) Balance, January 1, 2019, as previously reported 1,321,514 $ 1 27,956,401 $ 30 1,253,105 $ (2,117 ) $ 85,745 $ (21,305 ) $ 62,354 Exercise of stock options — — 189,312 — — — 185 — 185 Share-based compensation — — — — — — 343 — 343 Stock dividends to Carilion Clinic — — — — — — 83 (83 ) — Net income — — — — — — — 1,126 1,126 Balance, March 31, 2019 1,321,514 $ 1 28,145,713 $ 30 1,253,105 $ (2,117 ) $ 86,356 $ (20,262 ) $ 64,008

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition Our operations are divided into two operating segments—“Products and Licensing” and “Technology Development”. The Products and Licensing segment derives its revenues from product sales, funded product development and technology licenses. 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. Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic locations, customer-type, contract type, timing of recognition, and major categories for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The details are listed in the table below for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Products and Licensing Technology Development Total Products and Licensing Technology Development Total (unaudited) Total Revenue by Geographic Location United States $ 4,624 $ 6,815 $ 11,439 $ 3,920 $ 6,641 $ 10,561 Asia 3,756 — 3,756 2,406 — 2,406 Europe 1,713 — 1,713 1,655 — 1,655 Canada, Central and South America 206 — 206 181 — 181 All Others 27 — 27 30 — 30 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Major Customer Type Sales to the U.S. government $ 116 $ 6,688 $ 6,804 $ 785 $ 6,476 $ 7,261 U.S. direct commercial sales and other 4,508 127 4,635 3,135 165 3,300 Foreign commercial sales & other 5,702 — 5,702 4,272 — 4,272 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Contract Type Fixed-price contracts $ 10,326 $ 3,768 $ 14,094 $ 8,192 $ 3,663 $ 11,855 Cost-type contracts — 3,047 3,047 — 2,978 2,978 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 10,241 $ — $ 10,241 $ 7,595 $ — $ 7,595 Goods/services transferred over time 85 6,815 6,900 597 6,641 7,238 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Major Products/Services Technology development $ — $ 6,815 $ 6,815 $ — $ 6,641 $ 6,641 Test, measurement and sensing systems 9,761 — 9,761 7,343 — 7,343 Other 565 — 565 849 — 849 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Contract Balances Our contract assets consist of unbilled amounts for technology development contracts as well as custom product contracts. Also included in contract assets are royalty revenue and carrying amounts of right of returned inventory. Long-term contract assets include the fee withholding on cost reimbursable contracts that will not be billed within a year. Contract liabilities include excess billings, subcontractor accruals, warranty expense, extended warranty revenue, right of return refund, and customer deposits. For the three months ended March 31, 2020 , net contract assets/(liabilities) decreased $0.2 million , due primarily to a slight decrease in contract assets in addition to a larger decrease in contract liabilities. The decrease in contract assets is a result of our Fixed-Price contracts that have reached milestones as designated in their respective contracts. The following table shows the components of our contract balances as of March 31, 2020 and December 31, 2019 : (in thousands) March 31, 2020 December 31, 2019 Contract assets $ 3,098 $ 3,208 Contract liabilities 3,569 3,888 Net contract liabilities $ (471 ) $ (680 ) Performance Obligations Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our Products and Licensing segment's unfulfilled performance obligations was $14.3 million at March 31, 2020 . We expect to satisfy 57% of the performance obligations in 2020, 17% in 2021 and the remainder by 2024. The approximate value of our Technology Development segment's unfulfilled performance obligations was $29.0 million at March 31, 2020 . We expect to satisfy 58% of the performance obligations in 2020, 33% in 2021 and the remainder by 2022.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes We and our subsidiaries file U.S. Federal income tax returns and income tax returns in various state, local and foreign jurisdictions. For the three months ended March 31, 2020 , our effective income tax rate was 30.24% compared to 252.30% for the three months ended March 31, 2019 . Our effective income tax rate has fluctuated primarily because there was a valuation allowance release in 2019 . The effective tax rate for 2020 differs from the Federal statutory rate of 21% , primarily as a result of state taxes and permanent differences related to equity compensation. The effective tax rate for 2019 differs from the Federal statutory rate of 21% , primarily as a result of the partial release of the valuation allowance related to the net operating loss carryforwards expected to be used to offset taxable income in the period and certain discrete items. We consider both positive and negative evidence when evaluating the recoverability of our deferred tax assets ("DTAs"). The assessment is required to determine whether based on all available evidence, it is more likely than not (i.e. greater than a 50% probability) that all or some portion of the DTAs will be realized in the future. As of March 31, 2020 , our valuation allowance was $0.4 million that relate to our dormant entities. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). The CARES Act includes significant business tax provisions that, among other things, include the removal of certain limitations on utilization of net operating losses, increase the loss carryback period for certain losses to five years, and increase the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. We do not expect the CARES Act to have a significant impact on our tax obligations.

Reportable Segments

Reportable Segments	3 Months Ended
	Mar. 31, 2020
Segment Reporting [Abstract]
Reportable Segments	Reportable Segments Through March 31, 2020 , 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 13, 2020 ). The table below presents revenues and operating income/(loss) for reportable segments: Three Months Ended March 31, 2020 2019 (in thousands) (unaudited) Revenues: Products and licensing $ 10,326 $ 8,192 Technology development 6,815 6,641 Total revenues $ 17,141 $ 14,833 Products and licensing operating income/(loss) $ 19 $ (961 ) Technology development operating income 371 64 Total operating income/(loss) $ 390 $ (897 ) Depreciation, products and licensing $ 135 $ 159 Depreciation, technology development $ 111 $ 98 Amortization, products and licensing $ 404 $ 332 Amortization, technology development $ 29 $ 28 The table below presents assets for reportable segments: March 31, December 31, (in thousands) (unaudited) Total segment assets: Products and licensing $ 46,440 $ 48,724 Technology development 38,519 37,800 Total assets $ 84,959 $ 86,524 Property plant and equipment, and intangible assets, products and licensing $ 21,690 $ 22,122 Property plant and equipment, and intangible assets, technology development $ 2,011 $ 2,080 The U.S. government accounted for 40% and 49% of total consolidated revenues for the three months ended March 31, 2020 and 2019 , respectively. International revenues (customers outside the United States) accounted for 33% and 29% of total consolidated revenues for the three months ended March 31, 2020 and 2019 , respectively. Customers in China represented 11% of total revenues in the three months ended March 31, 2020 , while no other single country, outside of the United States, represented more than 10% of total revenues in the three months ended March 31, 2020 and 2019 .

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies 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 December 2018, we received a notice of claim (the "Claim") from Macom Technology Solutions, Inc. ("Macom"), who acquired our HSOR business in August 2017 pursuant to an asset purchase agreement. Under the asset purchase agreement, we agreed to indemnify Macom for certain matters, including, among other things, the collection of accounts receivable from certain major customers, and placed $4.0 million of the purchase price into an escrow account for the potential settlement of any valid indemnity claims. As of December 31, 2019 , $1.5 million of the escrow had been received with $2.5 million remaining in escrow pending resolution of the dispute. In March 2020, we settled the dispute resulting in us receiving $0.6 million and Macom receiving $1.9 million . We have recorded a loss from discontinued operations of $1.4 million , net of income tax benefit, to reflect the settlement of the dispute. On July 31, 2018, we sold the assets associated with our Opto components business to an unaffiliated third party. The asset purchase agreement provides for additional consideration of up to $1.0 million contingent upon the achievement of a specified revenue level by the sold business during the 18 months following the sale. In addition, the asset purchase agreement provides for a potential adjustment to the consideration paid, either positive or negative, to the extent that working capital transferred to the buyer is greater or less than a specified target amount. We did not receive any of the additional $1.0 million of consideration because the minimum revenue targets were not achieved. On March 1, 2019, we acquired all of the outstanding stock of General Photonics Corporation ("GP"), a leading provider of innovative components, modules and test equipment focused on the generation, measurement and control of polarized light critical in fiber optic-based applications for aggregate consideration of $19.0 million with an earn-out provision of up to $1.0 million . Of the purchase price, $17.1 million was paid at closing and $1.9 million was placed into escrow for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations. As of March 31, 2020 , we expect to pay, and have included in our accrued liabilities, $1.0 million in additional cash consideration as a result of the successful completion of the earn-out provision. We executed non-cancelable purchase orders totaling $1.9 million in the third quarter of 2019 for multiple shipments of tunable lasers to be delivered over an 18 -month period. At March 31, 2020 , approximately $0.8 million of these commitments remained and are expected to be delivered by December 31, 2020 . 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.

Subsequent Event

Subsequent Event	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event On April 28, 2020, we were granted a loan (the “Loan”) from SVB in the aggregate amount of $4.5 million , pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. On May 4, 2020, we returned the full amount of the proceeds of the loan to SVB. The decision to return the proceeds was based on the revised guidance issued by the U.S. Department of Treasury and the Small Business Administration subsequent to our application for the PPP Loan.

Basis of Presentation and Sig_2

Basis of Presentation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
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 high performance fiber optic test, measurement and control products for the telecommunications and photonics industries and distributed fiber optic sensing products for industries utilizing composite and other advanced materials, such as the automotive, aerospace, energy and infrastructure industries. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by providing valuable information such as highly detailed stress, strain, and temperature measurements of a new design or manufacturing process. In addition, our distributed fiber optic sensing products are used to monitor the structural integrity or operational health of critical assets, including large civil structures such as bridges. Our communications test and control products accelerate the development of advanced fiber optic components and networks by providing fast and highly accurate characterization of components and networks. We also provide applied research services, typically under research programs funded by the U.S. government, in areas of advanced materials, sensing, and healthcare applications. Our business model is designed to accelerate the process of bringing new and innovative products to market. We use our in-house technical expertise across a range of technologies to perform applied research services for companies and for government funded projects. We continue to invest in product development and commercialization, which we anticipate will lead to increased product sales growth.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying unaudited consolidated interim 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 interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring accruals considered necessary to present fairly our financial position at March 31, 2020 , results of operations and changes in stockholders' equity for the three months ended March 31, 2020 and 2019 , and cash flows for the three months ended March 31, 2020 and 2019 . The results of operations for the three months ended March 31, 2020 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . The consolidated balance sheet as of December 31, 2019 was derived from our audited consolidated financial statements. The COVID-19 pandemic is expected to result in a global slowdown of economic activity. While the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use reasonably available information to assess certain accounting matters including, but not limited to, accounts receivable, inventory and the carrying value of goodwill and other long-lived tangible and intangible assets. While the assessments have not resulted in any material impacts to our financial statements as of March 31, 2020 , we believe the full impact of the pandemic remains uncertain and ongoing developments related to the pandemic may cause material impacts to our consolidated financial statements. 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, 2019 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020 .
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and reviewed for impairment as described above.
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the Silicon Valley Bank ("SVB") debt facility including its interest rate of prime plus 1% , to be at market based upon similar instruments that would be available to us.
Net Income/(Loss) Per Share	Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) 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 Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04: Simplifying the Test for Goodwill Impairment ,” which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test which previously measured a goodwill impairment loss by comparing the implied fair value of a reporting segment's goodwill with the carrying amount. We adopted ASU 2017-04, effective January 1, 2020. As a result of adopting the new rules, we compare the estimated fair value of our reporting segments to their respective carrying values when evaluating the recoverability of goodwill. If the carrying value of a reporting segment exceeds its fair value, an impairment charge will be recognized for the amount by which its carrying value exceeds the reporting segment's fair value; however the loss recognized will not exceed the goodwill allocated to the reporting segment. The adoption of ASU 2017-04 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in ASC 820 by adding, changing, or removing certain disclosures. The ASU applies to all entities that are required under this guidance to provide disclosures about recurring or nonrecurring fair value measurements. We adopted these amendments, effective January 1, 2020. The adoption of ASU 2018-13 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We adopted ASU 2018-15, effective January 1, 2020. The adoption of ASU 2018-15 did not have a significant impact on our consolidated financial statements. Recently Issued Pronouncements, not yet adopted In December 2019, the FASB issued ASU 2019-12 Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles of the accounting for income taxes and also improves consistent application of and simplification of other areas when accounting for income taxes. The guidance is effective for us beginning in the first quarter of fiscal year 2021, while early adoption is permitted. We are currently in the process of evaluating the impact of adoption of ASU 2019-12, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13: Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements

Discontinued Operations (Tables

Discontinued Operations (Tables)	3 Months Ended
	Mar. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]
Components of Discontinued Operations	The following table presents a summary of the transactions related to the sale of the HSOR business in the three months ended March 31, 2020 : Three Months Ended March 31, 2020 (in thousands) Settlement of HSOR receivable $ 1,900 Loss on sale 1,900 Allocated income tax benefit (464 ) Loss from discontinued operations, net of related income tax $ 1,436

Intangible assets, net (Tables)

Intangible assets, net (Tables)	3 Months Ended
	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Intangible Assets	Intangible assets, net at March 31, 2020 and December 31, 2019 consisted of the following: March 31, 2020 December 31, 2019 (in thousands) Patent costs $ 5,383 $ 5,291 Developed technology 9,800 9,800 In-process research & development 1,580 1,580 Customer base 700 700 Trade names and trademarks 550 550 18,013 17,921 Accumulated amortization (8,159 ) (7,727 ) $ 9,853 $ 10,194
Estimated Aggregate Amortization Based on Net Value of Intangible Assets	Amortization for the three months ended March 31, 2020 and 2019 was $0.4 million and $0.2 million , respectively. Estimated aggregate amortization, based on the net value of intangible assets at March 31, 2020 , for each of the next five years and beyond is as follows (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 1,265 2021 1,669 2022 1,519 2023 1,446 2024 1,256 2025 & beyond 2,698 Total $ 9,853

Inventory, net (Tables)

Inventory, net (Tables)	3 Months Ended
	Mar. 31, 2020
Inventory Disclosure [Abstract]
Components of Inventory	Components of inventory were as follows: March 31, December 31, (in thousands) Finished goods $ 2,074 $ 1,695 Work-in-process 1,431 1,008 Raw materials 7,686 7,591 Total inventory, net $ 11,191 $ 10,294

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2020
Payables and Accruals [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities at March 31, 2020 and December 31, 2019 consisted of the following: March 31, 2020 December 31, 2019 (in thousands) Accrued compensation $ 5,755 $ 6,416 Accrued professional fees 145 113 Accrued income tax 607 716 Current operating lease liability 1,055 1,283 Current finance lease liability 41 50 Royalties 76 365 Accrued liabilities - other 564 426 Contingent liability - General Photonics 1,000 1,000 Total accrued liabilities $ 9,243 $ 10,369

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Summary of Debt Interest Expense	Interest expense, net for the three months ended March 31, 2019 consisted of the following: Three Months Ended March 31, (in thousands) 2019 Interest expense on Term Loans $ 7 Amortization of debt issuance costs 3 Other interest expense 1 Total interest expense, net $ 11

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Schedule of lease components	ur lease components included in the consolidated balance sheet were as follows: Lease component Classification March 31, 2020 December 31, 2019 (in thousands) Assets ROU assets - operating lease Other assets $ 1,917 $ 2,236 ROU assets - finance lease Other assets 57 70 Total ROU assets $ 1,974 $ 2,306 Liabilities Current operating lease liability Accrued liabilities $ 1,055 $ 1,283 Current finance lease liability Accrued liabilities 41 50 Long-term operating lease liability Other liabilities 1,860 1,988 Long-term finance lease liability Other liabilities 20 23 Total lease liabilities $ 2,976 $ 3,344
Schedule of future operating lease payments	Future minimum lease payments under non-cancelable operating leases were as follows as of March 31, 2020 (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 1,468 2021 641 2022 545 2023 545 2024 544 Total future minimum lease payments 3,743 Less: Interest 828 Total operating lease liabilities $ 2,915 Current operating lease liability $ 1,055 Long-term operating lease liability 1,860 Total operating lease liabilities $ 2,915
Schedule of future finance lease payments	Future minimum lease payments under non-cancelable finance leases were as follows as of March 31, 2020 (amounts in thousands): Year Ending December 31, 2020 - remaining 9 months $ 56 2021 11 2022 10 2023 5 Total future minimum lease payments 82 Less: Interest 21 Total finance lease liabilities $ 61 Current finance lease liability $ 41 Long-term finance lease liability 20 Total finance lease liabilities $ 61
Schedule of other information related to leases	Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following: Three Months Ended March 31, (in thousands) 2020 2019 Operating lease costs $ 412 $ 404 Variable rent costs (39 ) (36 ) Total rent expense $ 373 $ 368 Other information related to leases is as follows: Three Months Ended March 31, (in thousands, except weighted-average data) 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 14 $ 13 Interest on lease liabilities 1 2 Total finance lease cost $ 15 $ 15 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 378 $ 404 Finance cash flows from finance leases $ 13 $ 7 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 15 Weighted-average remaining lease term (years) - operating leases 3.7 4.0 Weighted-average remaining lease term (years) - finance leases 1.9 2.7 Weighted-average discount rate - operating leases 7 % 7 % Weighted-average discount rate - finance leases 7 % 7 %

Capital Stock and Share-Based_2

Capital Stock and Share-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2020
Equity [Abstract]
Summary of Stock Option Activity	A summary of the stock option activity for the three months ended March 31, 2020 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) (in thousands, except share, per share and weighted-average data) Balance, January 1, 2020 3,160,397 $1.18 - $7.37 $ 2.72 $ 14,460 1,835,799 $ 2.28 $ 9,198 Granted 20,000 $7.59 $ 7.59 Exercised (316,504 ) $1.27 - $4.43 $ 3.79 Canceled (12,660 ) 3.37 $ 3.37 Balance, March 31, 2020 2,851,233 $1.18 - $7.59 $ 2.63 $ 10,142 1,632,952 $ 2.06 $ 6,691 (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 stock unit activity under the Deferred Compensation Plan for the three months ended March 31, 2020 : (in thousands, except share and weighted-average data) Number of Stock Units Weighted Average Grant Date Fair Value per Share Intrinsic Value Outstanding Balance, January 1, 2020 629,003 $ 2.09 $ 4,585 Granted 7,114 7.38 44 Balance, March 31, 2020 636,117 $ 2.15 $ 3,912 The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs: (in thousands, except share and per share data) Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair Value of Unvested Shares Balance, January 1, 2020 502,102 $ 3.32 $ 1,665 Granted 138,650 6.43 892 Vested (55,668 ) 3.27 (182 ) Balance, March 31, 2020 585,084 $ 4.06 $ 2,375
Details of Equity Transactions	The following table details our equity transactions during the three months ended March 31, 2020 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ $ $ (in thousands, except share data) Balance, January 1, 2020, as previously reported — $ — 30,149,105 $ 32 1,639,791 $ (4,337 ) $ 88,022 $ (16,248 ) $ 67,469 Exercise of stock options — — 316,504 — — — 1,198 — 1,198 Share-based compensation — — 55,668 — — — 501 — 502 Net income — — — — — — — (1,116 ) (1,116 ) Forfeitures of restricted stock — — (34,700 ) — — — (275 ) — (276 ) Balance, March 31, 2020 — $ — 30,486,577 $ 32 1,639,791 $ (4,337 ) $ 89,446 $ (17,364 ) $ 67,777 The following table details our equity transactions during the three months ended March 31, 2019 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ $ $ (in thousands, except share data) Balance, January 1, 2019, as previously reported 1,321,514 $ 1 27,956,401 $ 30 1,253,105 $ (2,117 ) $ 85,745 $ (21,305 ) $ 62,354 Exercise of stock options — — 189,312 — — — 185 — 185 Share-based compensation — — — — — — 343 — 343 Stock dividends to Carilion Clinic — — — — — — 83 (83 ) — Net income — — — — — — — 1,126 1,126 Balance, March 31, 2019 1,321,514 $ 1 28,145,713 $ 30 1,253,105 $ (2,117 ) $ 86,356 $ (20,262 ) $ 64,008

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Schedule of Disaggregation of Revenue	The details are listed in the table below for the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 (in thousands) Products and Licensing Technology Development Total Products and Licensing Technology Development Total (unaudited) Total Revenue by Geographic Location United States $ 4,624 $ 6,815 $ 11,439 $ 3,920 $ 6,641 $ 10,561 Asia 3,756 — 3,756 2,406 — 2,406 Europe 1,713 — 1,713 1,655 — 1,655 Canada, Central and South America 206 — 206 181 — 181 All Others 27 — 27 30 — 30 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Major Customer Type Sales to the U.S. government $ 116 $ 6,688 $ 6,804 $ 785 $ 6,476 $ 7,261 U.S. direct commercial sales and other 4,508 127 4,635 3,135 165 3,300 Foreign commercial sales & other 5,702 — 5,702 4,272 — 4,272 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Contract Type Fixed-price contracts $ 10,326 $ 3,768 $ 14,094 $ 8,192 $ 3,663 $ 11,855 Cost-type contracts — 3,047 3,047 — 2,978 2,978 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 10,241 $ — $ 10,241 $ 7,595 $ — $ 7,595 Goods/services transferred over time 85 6,815 6,900 597 6,641 7,238 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833 Total Revenue by Major Products/Services Technology development $ — $ 6,815 $ 6,815 $ — $ 6,641 $ 6,641 Test, measurement and sensing systems 9,761 — 9,761 7,343 — 7,343 Other 565 — 565 849 — 849 Total $ 10,326 $ 6,815 $ 17,141 $ 8,192 $ 6,641 $ 14,833
Schedule of components of contract balances	The following table shows the components of our contract balances as of March 31, 2020 and December 31, 2019 : (in thousands) March 31, 2020 December 31, 2019 Contract assets $ 3,098 $ 3,208 Contract liabilities 3,569 3,888 Net contract liabilities $ (471 ) $ (680 )

Reportable Segments (Tables)

Reportable Segments (Tables)	3 Months Ended
	Mar. 31, 2020
Segment Reporting [Abstract]
Schedule of Revenues, Operating Income (Loss) and Assets for Reportable Segments	The table below presents assets for reportable segments: March 31, December 31, (in thousands) (unaudited) Total segment assets: Products and licensing $ 46,440 $ 48,724 Technology development 38,519 37,800 Total assets $ 84,959 $ 86,524 Property plant and equipment, and intangible assets, products and licensing $ 21,690 $ 22,122 Property plant and equipment, and intangible assets, technology development $ 2,011 $ 2,080 The table below presents revenues and operating income/(loss) for reportable segments: Three Months Ended March 31, 2020 2019 (in thousands) (unaudited) Revenues: Products and licensing $ 10,326 $ 8,192 Technology development 6,815 6,641 Total revenues $ 17,141 $ 14,833 Products and licensing operating income/(loss) $ 19 $ (961 ) Technology development operating income 371 64 Total operating income/(loss) $ 390 $ (897 ) Depreciation, products and licensing $ 135 $ 159 Depreciation, technology development $ 111 $ 98 Amortization, products and licensing $ 404 $ 332 Amortization, technology development $ 29 $ 28

Basis of Presentation and Sig_3

Basis of Presentation and Significant Accounting Policies (Details) - shares shares in Millions	Oct. 10, 2019	Mar. 31, 2020	Mar. 31, 2019
Debt Instrument [Line Items]
Common stock equivalents included in diluted per share data (in shares)		2.2	5.4
Revolving Credit Facility | Prime Rate | Silicon Valley Bank
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%	1.00%

Discontinued Operations - Addit

Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands	Aug. 09, 2017	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Jul. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of discontinued operations		$ 600	$ 0
High Speed Optical Receivers Business | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received	$ 33,500
Proceeds from sale of discontinued operations	29,500
Escrow deposits related to indemnity claims	$ 4,000			$ 2,500
Amount of the escrow balance received		600		$ 1,500
Loss on sale of discontinued operations		1,436
Optoelectronic Components and Subassemblies | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contingent consideration on discontinued operation					$ 1,000
Macom | High Speed Optical Receivers Business | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amount of the escrow balance received		$ 1,900

Discontinued Operations - Compo

Discontinued Operations - Components of Income from Discontinued Operations (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Allocated income tax benefit	$ (464)
High Speed Optical Receivers Business | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on sale	1,900
Allocated income tax benefit	(464)
Loss from discontinued operations, net of related income tax	$ 1,436

Intangible assets, net - Summar

Intangible assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 18,013		$ 17,921
Accumulated amortization	(8,159)		(7,727)
Intangible assets, net	9,853	$ 10,194	10,194
Patent costs
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	5,383		5,291
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	9,800		9,800
In-process research & development
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	1,580		1,580
Customer base
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	700		700
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 550		$ 550

Intangible assets, net - Estima

Intangible assets, net - Estimated Aggregate Amortization (Details) $ in Thousands	Mar. 31, 2020USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2020 - remaining 9 months	$ 1,265
2021	1,669
2022	1,519
2023	1,446
2024	1,256
2025 & beyond	2,698
Total	$ 9,853

Intangible assets, net - Additi

Intangible assets, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.4	$ 0.2

Goodwill (Details)

Goodwill (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 10,542	$ 10,542

Inventory, net (Details)

Inventory, net (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 2,074	$ 1,695
Work-in-process	1,431	1,008
Raw materials	7,686	7,591
Total inventory, net	$ 11,191	$ 10,294

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued compensation	$ 5,755	$ 6,416
Accrued professional fees	145	113
Accrued income tax	607	716
Current operating lease liability	1,055	1,283
Current finance lease liability	41	50
Royalties	76	365
Accrued liabilities - other	564	426
Contingent liability - General Photonics	1,000	1,000
Total accrued liabilities	$ 9,243	$ 10,369

Debt - Additional Information (

Debt - Additional Information (Details) - Silicon Valley Bank - USD ($)	Oct. 10, 2019	May 31, 2019	Mar. 31, 2020
Debt Instrument [Line Items]
Line of credit facility	$ 10,000,000
Term Loan
Debt Instrument [Line Items]
Debt, face amount		$ 6,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, commitment fee percentage	6.00%
Borrowings outstanding			$ 0
Collateral amount			$ 1,000,000
Prime Rate | Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.00%
Prime Rate | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%		1.00%

Debt - Summary of Interest Expe

Debt - Summary of Interest Expense, Net (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Debt Disclosure [Abstract]
Interest expense on Term Loans	$ 7
Amortization of debt issuance costs	3
Other interest expense	1
Total interest expense, net	$ 11

Leases - Additional Information

Leases - Additional Information (Details)	3 Months Ended
	Mar. 31, 2020
Office equipment
Lessee, Lease, Description [Line Items]
Useful life	5 years
Minimum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	1 year
Finance leases contract terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	5 years
Finance leases contract terms	4 years

Leases - Lease Components (Deta

Leases - Lease Components (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
ROU assets - operating lease	$ 1,917	$ 2,236
ROU assets - finance lease	57	70
Total ROU assets	1,974	2,306
Current operating lease liability	1,055	1,283
Current finance lease liability	41	50
Long-term operating lease liability	1,860	1,988
Long-term finance lease liability	20	23
Total lease liabilities	$ 2,976	$ 3,344

Leases - Rent Expense (Details)

Leases - Rent Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease costs	$ 412	$ 404
Variable rent costs	(39)	(36)
Total rent expense	$ 373	$ 368

Leases - Future Operating Lease

Leases - Future Operating Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
2020 - remaining 9 months	$ 1,468
2021	641
2022	545
2023	545
2024	544
Total future minimum lease payments	3,743
Less: Interest	828
Total operating lease liabilities	2,915
Current operating lease liability	1,055	$ 1,283
Long-term operating lease liability	1,860	$ 1,988
Total operating lease liabilities	$ 2,915

Leases - Future Finance Lease P

Leases - Future Finance Lease Payments (Details) (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
2020 - remaining 9 months	$ 56
2021	11
2022	10
2023	5
Total future minimum lease payments	82
Less: Interest	21
Total finance lease liabilities	61
Current finance lease liability	41	$ 50
Long-term finance lease liability	20	$ 23
Total finance lease liabilities	$ 61

Leases - Other Lease Informatio

Leases - Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$ 14	$ 13
Interest on lease liabilities	1	2
Total finance lease cost	15	15
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	378	404
Finance cash flows from finance leases	13	7
Right-of-use assets obtained in exchange for new finance lease liabilities	$ 0	$ 15
Weighted-average remaining lease term (years) - operating leases	3 years 8 months 12 days	4 years
Weighted-average remaining lease term (years) - finance leases	1 year 10 months 24 days	2 years 8 months 12 days
Weighted-average discount rate - operating leases	7.00%	7.00%
Weighted-average discount rate - finance leases	7.00%	7.00%

Capital Stock and Share-Based_3

Capital Stock and Share-Based Compensation - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)installmentshares	Mar. 31, 2019USD ($)	Dec. 31, 2019shares
Equity [Abstract]
Expected dividend yield	0.00%
Aggregate outstanding stock options (in shares)	2,851,233		3,160,397
Outstanding stock options, weighted average remaining contractual term	6 years 3 months
Exercisable stock options (in shares)	1,632,952		1,835,799
Exercisable stock options, weighted average remaining contractual term	4 years 6 months
Fair value of shares vested | $	$ 10,000
Fair value of options exercised during period | $	2,400
Share-based compensation | $	226	$ 343
Stock-based compensation expense not yet recognized | $	$ 2,700
Weighted average remaining service period	2 years 8 months
Employees | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting installments | installment	3
Shares issued (in shares)	138,650
Shares vested (in shares)	0
Employees | Restricted Stock Units (RSUs) | Vest in three equal annual installments on the anniversary dates of grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting installments | installment	3
Shares not yet vested (in shares)	76,700
Employees | Restricted Stock Units (RSUs) | Vest based on levels of 2201 revenue and operating income
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares not yet vested (in shares)	61,950
Target performance as as percent of revenue and operating income	150.00%
Payout of shares upon achievement of target performance (in shares)	41,300
Directors | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested (in shares)	55,668
Vesting period, earlier of grant anniversary, or annual stockholders' meeting	1 year
Employee Director Compensation Plan | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares not yet vested (in shares)	37,546

Capital Stock and Share-Based_4

Capital Stock and Share-Based Compensation - Summary of Activity of Equity Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Options Outstanding, Number of Shares
Beginning Balance (shares)	3,160,397
Granted (in shares)	20,000
Exercised (in shares)	(316,504)
Canceled (in shares)	(12,660)
Ending Balance (shares)	2,851,233	3,160,397
Price per Share Range
Outstanding, lower limit (in dollars per share)	$ 1.18	$ 1.18
Outstanding, upper limit (in dollars per share)	7.59	7.37
Granted (in dollars per share)	7.59
Exercised, lower limit (in dollars per share)	1.27
Exercised, upper limit (in dollars per share)	4.43
Canceled (in dollars per share)	3.37
Options Outstanding, Weighted Average Exercise Price
Beginning balance (in dollars per share)	2.72
Granted (in dollars per share)	7.59
Exercised (in dollars per share)	3.79
Canceled (in dollars per share)	3.37
Ending balance (in dollars per share)	$ 2.63	$ 2.72
Additional Disclosures
Options outstanding, aggregate intrinsic value	$ 10,142	$ 14,460
Exercisable stock options (in shares)	1,632,952	1,835,799
Options exercisable, weighted average exercise price (in dollars per share)	$ 2.06	$ 2.28
Options exercisable, aggregate intrinsic value	$ 6,691	$ 9,198

Capital Stock and Share-Based_5

Capital Stock and Share-Based Compensation - Summary of Restricted Awards (Details) - Restricted Stock and RSUs $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)$ / sharesshares
Number of Unvested Shares
Beginning balance (in shares) | shares	502,102
Granted (in shares) | shares	138,650
Vested (in shares) | shares	(55,668)
Ending balance (in shares) | shares	585,084
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 3.32
Granted (in usd per share) | $ / shares	6.43
Vested (in usd per share) | $ / shares	3.27
Ending balance (in usd per share) | $ / shares	$ 4.06
Aggregate Grant Date Fair Value of Unvested Shares
Aggregate grant date fair value of shares, Beginning balance | $	$ 1,665
Granted | $	892
Aggregate grant date fair value of shares, Vested | $	(182)
Aggregate grant date fair value of shares, Ending balance | $	$ 2,375

Capital Stock and Share-Based_6

Capital Stock and Share-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)$ / sharesshares
Weighted Average Grant Date Fair Value
Granted | $	$ 44
Employee Director Compensation Plan
Number of Stock Units
Beginning balance (in shares) | shares	629,003
Granted (in shares) | shares	7,114
Ending balance (in shares) | shares	636,117
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 2.09
Granted (in usd per share) | $ / shares	7.38
Ending balance (in usd per share) | $ / shares	$ 2.15
Aggregate grant date fair value of shares, Beginning balance | $	$ 4,585
Aggregate grant date fair value of shares, Ending balance | $	$ 3,912

Capital Stock and Share-Based_7

Capital Stock and Share-Based Compensation - Equity Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance	$ 67,469	$ 62,354
Exercise of stock options (in shares)	316,504
Exercise of stock options	$ 1,198	185
Share-based compensation	502	343
Stock dividends to Carilion Clinic		0
Net (loss)/income	(1,116)	1,126
Forfeitures of restricted stock	(276)
Stockholder's equity ending balance	$ 67,777	$ 64,008
Preferred Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance (in shares)	0	1,321,514
Stockholder's equity beginning balance	$ 0	$ 1
Stockholder's equity ending balance	$ 0	$ 1
Ending balance (in shares)	0	1,321,514
Common Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance (in shares)	30,149,105	27,956,401
Stockholder's equity beginning balance	$ 32	$ 30
Exercise of stock options (in shares)	316,504	189,312
Share-based compensation (in shares)	55,668
Forfeitures of restricted stock (in shares)	(34,700)
Stockholder's equity ending balance	$ 32	$ 30
Ending balance (in shares)	30,486,577	28,145,713
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance (in shares)	1,639,791	1,253,105
Stockholder's equity beginning balance	$ (4,337)	$ (2,117)
Stockholder's equity ending balance	$ (4,337)	$ (2,117)
Ending balance (in shares)	1,639,791	1,253,105
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance	$ 88,022	$ 85,745
Exercise of stock options	1,198	185
Share-based compensation	501	343
Stock dividends to Carilion Clinic		83
Forfeitures of restricted stock	(275)
Stockholder's equity ending balance	89,446	86,356
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance	(16,248)	(21,305)
Stock dividends to Carilion Clinic		(83)
Net (loss)/income	(1,116)	1,126
Stockholder's equity ending balance	$ (17,364)	$ (20,262)

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)segment	Mar. 31, 2019USD ($)
Revenue from Contract with Customer [Abstract]
Number of operating segments | segment	2
Disaggregation of Revenue [Line Items]
Total revenues	$ 17,141	$ 14,833
Technology development
Disaggregation of Revenue [Line Items]
Total revenues	6,815	6,641
Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues	9,761	7,343
Other
Disaggregation of Revenue [Line Items]
Total revenues	565	849
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	10,241	7,595
Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues	6,900	7,238
Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues	14,094	11,855
Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues	3,047	2,978
Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues	6,804	7,261
U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues	4,635	3,300
Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues	5,702	4,272
United States
Disaggregation of Revenue [Line Items]
Total revenues	11,439	10,561
Asia
Disaggregation of Revenue [Line Items]
Total revenues	3,756	2,406
Europe
Disaggregation of Revenue [Line Items]
Total revenues	1,713	1,655
Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues	206	181
All Others
Disaggregation of Revenue [Line Items]
Total revenues	27	30
Products and licensing
Disaggregation of Revenue [Line Items]
Total revenues	10,326	8,192
Products and licensing | Technology development
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Products and licensing | Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues	9,761	7,343
Products and licensing | Other
Disaggregation of Revenue [Line Items]
Total revenues	565	849
Products and licensing | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	10,241	7,595
Products and licensing | Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues	85	597
Products and licensing | Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues	10,326	8,192
Products and licensing | Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Products and licensing | Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues	116	785
Products and licensing | U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues	4,508	3,135
Products and licensing | Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues	5,702	4,272
Products and licensing | United States
Disaggregation of Revenue [Line Items]
Total revenues	4,624	3,920
Products and licensing | Asia
Disaggregation of Revenue [Line Items]
Total revenues	3,756	2,406
Products and licensing | Europe
Disaggregation of Revenue [Line Items]
Total revenues	1,713	1,655
Products and licensing | Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues	206	181
Products and licensing | All Others
Disaggregation of Revenue [Line Items]
Total revenues	27	30
Technology development
Disaggregation of Revenue [Line Items]
Total revenues	6,815	6,641
Technology development | Technology development
Disaggregation of Revenue [Line Items]
Total revenues	6,815	6,641
Technology development | Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | Other
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues	6,815	6,641
Technology development | Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues	3,768	3,663
Technology development | Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues	3,047	2,978
Technology development | Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues	6,688	6,476
Technology development | U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues	127	165
Technology development | Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | United States
Disaggregation of Revenue [Line Items]
Total revenues	6,815	6,641
Technology development | Asia
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | Europe
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues	0	0
Technology development | All Others
Disaggregation of Revenue [Line Items]
Total revenues	$ 0	$ 0

Revenue Recognition - Contract

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Increase in net contract assets (liabilities)	$ 200
Contract assets	3,098	$ 3,208
Contract liabilities	3,569	3,888
Net contract liabilities	(471)	$ (680)
Technology development
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	29,000
Products and licensing
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 14,300

Revenue Recognition - Performan

Revenue Recognition - Performance Obligation Amount (Details)	Mar. 31, 2020
Technology development | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction	9 months
Remaining performance obligation, percentage	58.00%
Technology development | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction	1 year
Remaining performance obligation, percentage	33.00%
Products and licensing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction	9 months
Remaining performance obligation, percentage	57.00%
Products and licensing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction	1 year
Remaining performance obligation, percentage	17.00%

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	30.24%	252.30%
Valuation allowance	$ 0.4

Reportable Segments - Additiona

Reportable Segments - Additional Information (Details) - Revenues	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Government Contracts Concentration Risk | U.S. Government
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	40.00%	49.00%
Geographic Concentration Risk | Outside of the United States
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	33.00%	29.00%
Geographic Concentration Risk | China
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	11.00%

Reportable Segments - Revenues

Reportable Segments - Revenues and Operating Income (Loss) for Reportable Segments Not Including Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenues:
Total revenues	$ 17,141	$ 14,833
Total operating income (loss)	390	(897)
Amortization expense	400	200
Total segment assets:
Total assets	84,959		$ 86,524
Property plant and equipment, and intangible assets	3,306		3,466
Products and licensing
Revenues:
Total revenues	10,326	8,192
Total operating income (loss)	19	(961)
Depreciation	135	159
Amortization expense	404	332
Total segment assets:
Total assets	46,440		48,724
Property plant and equipment, and intangible assets	21,690		22,122
Technology development
Revenues:
Total revenues	6,815	6,641
Total operating income (loss)	371	64
Depreciation	111	98
Amortization expense	29	$ 28
Total segment assets:
Total assets	38,519		37,800
Property plant and equipment, and intangible assets	$ 2,011		$ 2,080

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Mar. 01, 2020	Jul. 31, 2018	Mar. 31, 2020	Sep. 30, 2019	Mar. 31, 2019	Dec. 31, 2019	Aug. 31, 2017	Aug. 09, 2017
Loss Contingencies [Line Items]
Cash consideration			$ 0		$ 19,004
Tunable Lasers
Loss Contingencies [Line Items]
Non-cancelable purchase order delivery period				18 months
Non-cancelable purchase order commitment				$ 1,900
Non-cancelable purchase order commitment remaining			800
General Photonics, Inc.
Loss Contingencies [Line Items]
Cash consideration	$ 19,000
Potential maximum obligation of contingent consideration	1,000
Cash paid at closing	17,100
Amount at closing placed in escrow	$ 1,900
Contingent obligation			1,000
High Speed Optical Receivers Business | Disposed of by Sale
Loss Contingencies [Line Items]
Escrow deposits related to indemnity claims						$ 2,500		$ 4,000
Amount of the escrow balance received			600			$ 1,500
Loss on sale of discontinued operations			1,436
High Speed Optical Receivers Business | Disposed of by Sale | Macom
Loss Contingencies [Line Items]
Amount of the escrow balance received			$ 1,900
Optoelectronic Components and Subassemblies | Disposed of by Sale
Loss Contingencies [Line Items]
Contingent consideration on discontinued operation		$ 1,000
Non-cancelable purchase order delivery period		18 months
Macom | High Speed Optical Receivers Business | Disposed of by Sale
Loss Contingencies [Line Items]
Escrow deposits related to indemnity claims							$ 4,000

Subsequent Event (Details)

Subsequent Event (Details) $ in Millions	Apr. 28, 2020USD ($)
PPP Loan | Subsequent Event
Subsequent Event [Line Items]
Debt, face amount	$ 4.5