Rubicon Technology (RBCN) 10-Q 10 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 06, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	RBCN
Entity Registrant Name	RUBICON TECHNOLOGY, INC.
Entity Central Index Key	1,410,172
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		26,722,958

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 21,290	$ 21,216
Restricted cash	186	170
Short-term investments	3,115	8,895
Accounts receivable, net	1,938	1,738
Inventories	20,853	21,333
Other inventory supplies	5,502	5,717
Prepaid expenses and other current assets	806	1,188
Total current assets	53,690	60,257
Property and equipment, net	56,476	57,569
Other assets	1,171	1,416
Total assets	111,337	119,242
Liabilities and stockholders' equity
Accounts payable	3,474	3,256
Accrued payroll	236	164
Accrued and other current liabilities	336	1,328
Corporate income and franchise taxes	59	207
Accrued real estate taxes	296	238
Short-term loan payable	1,500	1,500
Advance payments	16	9
Total current liabilities	5,917	6,702
Deferred tax liability	395	554
Total liabilities	$ 6,312	$ 7,256
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value, 5,000,000 undesignated shares authorized, no shares issued or outstanding
Common stock, $0.001 par value, 40,000,000 shares authorized and 28,497,802 and 28,007,811 shares issued; 26,722,958 and 26,232,967 shares outstanding	$ 29	$ 28
Additional paid-in capital	373,933	373,565
Treasury stock, at cost, 1,774,844 shares	(12,148)	(12,148)
Accumulated other comprehensive loss	(30)	(33)
Accumulated deficit	(256,759)	(249,426)
Total stockholders' equity	105,025	111,986
Total liabilities and stockholders' equity	$ 111,337	$ 119,242

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	28,497,802	28,007,811
Common stock, shares outstanding	26,722,958	26,232,967
Treasury stock, shares	1,774,844	1,774,844

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Revenue	$ 4,287	$ 8,910
Cost of goods sold	9,706	14,019
Gross loss	(5,419)	(5,109)
Operating expenses:
General and administrative	1,767	2,068
Sales and marketing	391	338
Research and development	579	433
Loss from operations	(8,156)	(7,948)
Other income (expense):
Interest income	24	16
Interest expense	(35)	(23)
Realized gain (loss) on foreign currency translation	683	(357)
Total other income (expense)	672	(364)
Loss before income taxes	(7,484)	(8,312)
Income tax benefit (expense)	151	(36)
Net loss	$ (7,333)	$ (8,348)
Net loss per common share
Basic	$ (0.28)	$ (0.32)
Diluted	$ (0.28)	$ (0.32)
Weighted average common shares outstanding used in computing net loss per common share basic and diluted	26,226,614	26,129,276

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (7,333)	$ (8,348)
Other comprehensive income (loss):
Unrealized gain on investments, net of tax	5	6
Unrealized loss on currency translation	(2)
Other comprehensive income	3	6
Comprehensive loss	$ (7,330)	$ (8,342)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net loss	$ (7,333)	$ (8,348)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,642	3,317
Stock-based compensation	370	334
Deferred taxes	(159)	29
Changes in operating assets and liabilities:
Accounts receivable	(199)	770
Inventories	1,219	647
Other inventory supplies	328	100
Prepaid expenses and other assets	647	332
Accounts payable	123	(1,050)
Accrued payroll	64	(258)
Corporate income and franchise taxes	(148)	(189)
Advanced payments	7	(4)
Accrued and other current liabilities	(948)	313
Net cash used in operating activities	(4,387)	(4,007)
Cash flows from investing activities
Purchases of property and equipment	(549)	(234)
Purchases of investments		(307)
Proceeds from sale of investments	5,785	5,000
Net cash provided by investing activities	5,236	4,459
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards	(1)	(8)
Restricted cash	(16)	4
Net cash used in financing activities	(17)	(4)
Net effect of currency translation	(758)	326
Net increase in cash and cash equivalents	74	774
Cash and cash equivalents, beginning of period	21,216	24,353
Cash and cash equivalents, end of period	$ 21,290	$ 25,127

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	1. BASIS OF PRESENTATION Interim financial data The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements and should be read in conjunction with Rubicon Technology, Inc.’s (the “Company”) annual report filed on Form 10-K as amended for the fiscal year ended December 31, 2015. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the results of operations have been included. Consolidated operating results for the three month period ended March 31, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Worldwide LLC, Rubicon Sapphire Technology (Malaysia) SDN BHD, Rubicon Technology Hong Kong Limited and Rubicon Technology Korea Yuhan Hosea. All intercompany transactions and balances have been eliminated in consolidation. Foreign currency translation and transactions Rubicon Worldwide LLC, Rubicon Technology Hong Kong Limited and Rubicon Technology Korea Yuhan Hosea’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective periods. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Worldwide LLC, Rubicon Technology Hong Kong Limited and Rubicon Technology Korea Yuhan Hosea are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. The Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. The Company records these gains and losses in other income (expense). Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than the functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net loss for the period. The Company records these gains and losses in other income (expense). Investments The Company invests available cash primarily in investment grade commercial paper, corporate notes, FDIC guaranteed certificates of deposit, common stock, and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive loss. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statement of Operations. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations, are classified as short-term. The Company reviews its available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. As of March 31, 2016, no impairment was recorded. Accounts receivable The majority of the Company’s accounts receivable is due from manufacturers serving the LED and optical systems and specialty electronics devices industries. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible, and payments subsequently received on such receivables are recorded as a reduction to bad debt expense. The following table shows the activity of the allowance for doubtful accounts: March 31, December 31, (in thousands) Beginning balance $ 389 $ 140 Charges to costs and expenses (54 ) 235 Accounts charged off, less recoveries — 14 Ending balance $ 335 $ 389 Inventories Inventories are valued at the lower of cost or market. Raw materials cost is determined using the first-in, first-out method, and work-in-process and finished goods costs are determined on a weighted-average cost basis which includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other information. At times in 2016 and 2015, the Company accepted sales orders for core and wafer products at prices lower than cost. Based on these sales prices, the Company recorded for the three months ended March 31, 2016 and 2015, a lower of cost or market adjustment which reduced inventory and increased cost of goods sold by $544,000 and $252,000, respectively. Inventories are composed of the following: March 31, December 31, (in thousands) Raw materials $ 6,943 $ 7,346 Work in progress 10,745 9,920 Finished goods 3,165 4,067 $ 20,853 $ 21,333 The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventory has remained consistent for all periods presented. Property and equipment Property and equipment consisted of the following: March 31, December 31, (in thousands) Land and land improvements $ 4,133 $ 4,133 Buildings 26,103 26,097 Machinery, equipment and tooling 50,969 50,364 Leasehold improvements 7,141 7,141 Furniture and fixtures 816 816 Information systems 1,121 1,105 Construction in progress 1,249 1,327 Total cost 91,532 90,983 Accumulated depreciation and amortization (35,056 ) (33,414 ) Property and equipment, net $ 56,476 $ 57,569 Long-Lived assets The Company reviews property and equipment for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur, the Company will recognize an impairment loss if the undiscounted future cash flows expected to be generated by the assets are less than the carrying value of the related asset. The impairment loss would adjust the asset to its fair value. In evaluating the recoverability of long-lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment. Asset recoverability is first measured by comparing the assets’ carrying amount to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. In response to the Company’s current period operating losses combined with our history of continuing operating losses, the Company evaluates the recoverability of certain property and equipment. In the third quarter of 2015, the overall outlook for the sapphire market continued to be volatile as industry analysts reported significant worldwide over capacity and pricing of sapphire products reached historical lows. Based on the Company’s quarterly assessment using the most recent projections, impairment to these assets was indicated as of September 30, 2015, as the recoverable amount of undiscounted cash flows did not exceed the carrying amount of these assets and the Company recorded an asset impairment charge on machinery, equipment and facilities. At March 31, 2016, the Company reviewed the current fair market value and concluded no additional adjustments were needed. The Company will continue to assess our long-lived assets to ensure the carrying amount of these assets is still appropriate given any changes in the marketplace and other factors used in determining the current fair market value. Revenue recognition Revenues recognized include product sales and billings for costs and fees for government contracts. Product Sales The Company recognizes revenue from product sales when earned. Revenue is recognized when, and if, evidence of an arrangement is obtained and the other criteria to support revenue recognition are met, including: • Persuasive evidence of an arrangement exists • Title has passed and the product has been delivered • The price is fixed or determinable • Collection of the resulting receivable is reasonably assured. Government Contracts The Company recognizes research and development revenue in the period during which the related costs are incurred over the contractually defined period. In July 2012, the Company signed a contract with the Air Force Research Laboratory to produce large-area sapphire windows on a cost plus fixed fee basis. The Company records research and development revenue on a gross basis as costs are incurred plus a portion of the fixed fee. For the three months ended March 31, 2016 and 2015, $97,000 and $141,000 of revenue was recognized, respectively. To date, the Company has recorded $4.1 million in revenue and the total value of the contract is $4.7 million. The Company does not provide maintenance or other services and it does not have sales that involve multiple elements or deliverables. Net income per common share Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares any outstanding stock options and warrants based on the treasury stock method. Diluted net loss per share is the same as basic net loss per share for the three months ended March 31, 2016 and 2015 because the effects of potentially dilutive securities are anti-dilutive. As of March 31, 2016, diluted shares outstanding were the same as basic shares outstanding as the exercise price of outstanding stock options exceeded the weighted-average trading share price and there were no outstanding warrants. At March 31, 2015, the Company had the following anti-dilutive securities outstanding which were excluded from the calculation of diluted net loss per share: 2015 Warrants 38,219 Stock options 21,952 60,171 Other comprehensive loss Comprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive loss includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the three months ended March 31, 2016 and 2015, other comprehensive loss included the unrealized loss on investments and foreign currency translation adjustments. The following table summarizes the components of comprehensive loss: March 31, December 31, (in thousands) Unrealized loss on investments $ (12 ) $ (17 ) Unrealized loss on currency translation (18 ) (16 ) Ending Balance $ (30 ) $ (33 ) Recent accounting pronouncement In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15 (“ASU 2014-15”), Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In July 2015, the FASB issued ASU No. 2015-11 (“ASU 2015-11”), Inventory (Topic 330): Simplifying the Measurement of Inventory. In January 2016, the FASB issued ASU 2016-01 (“ASU 2016-01”), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for fiscal years beginning after December 15, 2017. The Company is evaluating the impact, if any, of adopting ASU 2016-01 on its financial statements. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) which modifies the lease recognition requirements and requires entities to recognize the assets and liabilities arising from leases on the balance sheet. ASU 2016-02 requires entities to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact, if any, of adopting ASU 2016-02 on its financial statements. In March 2016, FASB issued ASU No. 2016-09 (“ASU 2016-09”), Compensation - Stock Compensation Topic 718): Improvements to Employee Share-Based Payment Accounting

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Segment Information	3. SEGMENT INFORMATION The Company evaluates operations as one reportable segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker. Revenue is attributed by geographic region based on ship-to location of the Company’s customers. The following table summarizes revenue by geographic region: Three months ended 2016 2015 (in thousands) Germany $ 1,538 $ 510 United States 1,111 1,523 Korea 422 725 Australia 412 215 Taiwan 383 1,701 China 2 3,351 Other 419 885 Revenue $ 4,287 $ 8,910 The following table summarizes revenue by product type: Three months ended 2016 2015 (in thousands) Core $ 441 $ 5,109 Wafer 2,345 1,891 Optical 1,404 1,769 Research & Development 97 141 Revenue $ 4,287 $ 8,910 The following table summarizes assets by geographic region: March 31, December 31, (in thousands) United States $ 82,145 $ 88,916 Malaysia 29,146 30,276 Other 46 50 Total Assets $ 111,337 $ 119,242

Investments

Investments	3 Months Ended
	Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Investments	4. INVESTMENTS The Company invests available cash primarily in investment grade commercial paper, corporate notes, FDIC guaranteed certificates of deposits, common stock, and government securities. The Company’s short-term investments balance of $3.1 million as of March 31, 2016, is comprised of corporate notes and bonds of $1.9 million and FDIC guaranteed certificates of deposit of $1.2 million. The Company’s investments are classified as available-for-sale securities and are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive loss. The following table presents the amortized cost and gross unrealized gains and losses on all securities at March 31, 2016: Amortized Gross Gross Fair (in thousands) Short-term Investments: FDIC Guaranteed certificates of deposit $ 1,200 $ — $ — $ 1,200 Corporate notes/bonds 1,915 — — 1,915 Total short-term investments $ 3,115 $ — $ — $ 3,115 The following table presents the amortized cost and gross unrealized gains and losses on all securities at December 31, 2015: Amortized Gross Gross Fair (in thousands) Short-term Investments: FDIC Guaranteed certificates of deposit $ 1,920 $ — $ — $ 1,920 Corporate Notes/Bonds 6,980 — 5 6,975 Total short-term investments $ 8,900 $ — $ 5 $ 8,895 The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard below describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s fixed income available-for-sale securities consist of high quality, investment grade commercial paper, corporate notes, FDIC guaranteed certificates of deposit, common stock, and government securities. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash Equivalents: Money market funds $ 16,505 $ — $ — $ 16,505 Investments: Available-for-sales securities—current FDIC Guaranteed certificates of deposit — 1,200 — 1,200 Corporate notes/bonds — 1,915 — 1,915 Total $ 16,505 $ 3,115 $ — $ 19,620 The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total (in thousands) Cash Equivalents: Money market funds $ 17,702 $ — $ — $ 17,702 Investments: Available-for-sales securities—current: FDIC Guaranteed certificates of deposit — 1,920 — 1,920 Corporate notes/bonds — 6,975 — 6,975 Total $ 17,702 $ 8,895 $ — $ 26,597 In addition to the debt securities noted above, the Company had approximately $4.8 million and $3.5 million of time deposits included in cash and cash equivalents as of March 31, 2016 and December 31, 2015, respectively.

Significant Customers

Significant Customers	3 Months Ended
	Mar. 31, 2016
Text Block [Abstract]
Significant Customers	5. SIGNIFICANT CUSTOMERS For the three months ended March 31, 2016, the Company had one customer individually that accounted for approximately 35% of revenue. For the three months ended March 31, 2015, the Company had one customer individually that accounted for approximately 29% of revenue. Customers individually representing more than 10% of trade receivables accounted for approximately 51% and 57% of accounts receivable as of March 31, 2016 and December 31, 2015, respectively. The Company grants credit to customers based on an evaluation of their financial condition. Losses from credit sales are provided for in the financial statements.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Stockholders' Equity	6. STOCKHOLDERS’ EQUITY Common Stock As of March 31, 2016, the Company had reserved 3,183,945 shares of common stock for issuance upon the exercise of outstanding common stock options and vesting of restricted stock units. Also, 361,733 shares of the Company’s common stock were reserved for future grants of stock options and restricted stock units (or other similar equity instruments) under the Company’s 2007 Stock Incentive Plan (the “2007 Plan”) as of March 31, 2016. Warrants For the three months ended March 31, 2016, 24,380 warrants expired and the Company has no common stock warrants outstanding.

Stock Incentive Plans

Stock Incentive Plans	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Incentive Plans	7. STOCK INCENTIVE PLANS The Company sponsored a stock option plan, the Rubicon Technology Inc. 2001 Equity Plan as amended (the “2001 Plan”), which allowed for the granting of incentive and nonqualified stock options for the purchase of common stock. The maximum number of shares that may be awarded or sold under the 2001 Plan was 1,449,667 shares. Each option entitles the holder to purchase one share of common stock at the specified option exercise price. The exercise price of each incentive stock option granted must not be less than the fair market value on the grant date. At the discretion of management and with the approval of the Board of Directors, the Company granted options under the 2001 Plan. Management and the Board of Directors determined vesting periods and expiration dates at the time of the grant. On August 2, 2011, the plan expired. In August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan as amended and restated effective March 23, 2011 (the “2007 Plan”), which allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and bonus shares. The Board of Directors has appointed the Board’s Compensation Committee to administer the plan. The Compensation Committee determines the type of award to be granted, the fair market value, the number of shares covered by the award, and the time when the award vests and may be exercised. The Company uses the Black-Scholes option pricing model to value stock options issued after January 1, 2006. For options granted in 2016, the Company uses five year historical data to determine its volatility assumptions and expected term. The assumed risk-free rates were based on U.S. Treasury rates in effect at the time of grant with a term consistent with the expected option lives. The forfeiture rate is based on past history of forfeited options. The expense is being allocated using the straight-line method. For the three months ended March 31, 2016 and 2015, the Company recorded $161,000 and $200,000, respectively, of stock option compensation expense. As of March 31, 2016, the Company had $1.2 million of total unrecognized compensation cost related to non-vested stock option awards granted under the Company’s stock-based plans that it expects to recognize over a weighted-average period of 2.74 years. The Company accounts for options issued prior to January 1, 2006 under the intrinsic value method. The following table summarizes the activity of the stock incentive and equity plans as of March 31, 2016 and changes during the three months then ended: Shares Number of Weighted- Number of Number of At January 1, 2016 732,270 2,851,568 $ 7.07 201,455 454,021 Granted (529,498 ) 42,000 1.11 487,498 — Exercised/Issued — — — — (3,702 ) Cancelled/forfeited 158,961 (126,609 ) 11.26 — (33,333 ) At March 31, 2016 361,733 2,766,959 $ 6.78 688,953 416,986 The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock. Based on the fair market value of the common stock at March 31, 2016 and 2015, there was no intrinsic value for options outstanding. The weighted average fair value per share of options granted for the three months ended March 31, 2016 was $1.11 and the fair value of each option grant was estimated at the date of grant using the Black-Scholes option pricing model using an expected term of 5.1 years, risk-free interest rate of 1.31%, expected volatility of 65% and no dividend yield. The Company used an expected forfeiture rate of 23.1%. A summary of the Company’s non-vested options during the three month period ended March 31, 2016 is presented below: Options Weighted- Non-vested at January 1, 2016 1,251,961 $ 2.23 Granted 42,000 1.11 Vested (41,500 ) 5.22 Forfeited (58,012 ) 1.74 Non-vested at March 31, 2016 1,194,449 $ 2.08 For the three months ended March 31, 2016 and 2015, the Company recorded $71,000 and $61,000, respectively, of restricted stock unit (“RSU”) expense. As of March 31, 2016, there was $591,000 of unrecognized compensation cost related to the non-vested RSUs. This cost is expected to be recognized over a weighted-average period of 2.19 years. A summary of the Company’s restricted stock units is as follows: RSUs Weighted average price at Aggregate intrinsic Non-vested restricted stock units as of January 1, 2016 454,021 $ 1.92 Granted — — Vested (3,702 ) 3.94 Cancelled (33,333 ) 4.50 Non-vested at March 31, 2016 416,986 $ 1.70 $ 304,400 For the three months ended March 31, 2016 and 2015, the Company recorded $138,000 and $73,000, respectively, of stock compensation expense related to restricted stock. An analysis of restricted stock issued is as follows: Non-vested restricted stock as of January 1, 2016 15,200 Granted 487,498 Vested (15,200 ) Non-vested restricted stock as of March 31, 2016 487,498

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	8. COMMITMENTS AND CONTINGENCIES Purchase Commitments The Company has entered into agreements for electricity and to purchase equipment and components to construct furnaces. These agreements will result in the Company purchasing electricity, equipment or components for a total cost of approximately $5.2 million with deliveries occurring through 2017. Litigation From time to time, the Company experiences routine litigation in the normal course of its business. The management of the Company does not believe any pending litigation, other than as set forth below, will have a material adverse effect on the financial condition or results of operations of the Company. On April 30, 2015, Firerock Global Opportunity Fund LP filed a complaint in the Northern District of Illinois asserting federal securities claims against the Company, certain officers, its directors and the underwriters in the Company’s March 2014 stock offering. The complaint sought as a remedy either money damages or rescission of the March offering, plus attorneys’ fees. On October 29, 2015, after mediation and subsequent discussions, the parties reached a settlement agreement in principle. On January 27, 2016, the United States District Court for the Northern District of Illinois granted a motion for preliminary approval of the agreement. The settlement agreement includes a release of all defendants, and dismissal of the case against all defendants with prejudice. The Company recorded for the twelve months ended December 31, 2015 an expense of $1.1 million of which $900,000 is the amount the Company contributed to the settlement and paid on February 17, 2016. The remaining costs of the settlement are expected to be covered by insurance. On November 19, 2015, the Carolyn Piper Smithhisler Living Trust, derivatively on behalf of Rubicon Technology, Inc., filed a complaint in the Eighteenth Judicial Circuit of Illinois against the Company’s Board of Directors and certain senior officers seeking to remedy alleged breaches of fiduciary duties and other violations of the law, failure to implement an effective system of internal controls, and failure to oversee the public statements made by the Company and certain individual defendants. The complaint sought as a remedy to recover damages against the individual defendants for the benefit of the Company and to require the Company to reform and improve its corporate governance and internal procedures plus attorneys’ fees. After extensive discussions, the parties informed the court on May 2, 2016 that they had reached a settlement agreement in principle. The proposed settlement provides for the Company to adopt certain governance changes and to pay certain amounts. The Company’s insurance carriers are expected to cover substantially all of the settlement payments and expenses. The proposed settlement is subject to a court approval process.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income Taxes	9. INCOME TAXES The Company is subject to income taxes in the U.S. and Malaysia. On a quarterly basis, the Company assesses the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment and multiple factors, both positive and negative, are considered. For the period ended March 31, 2016, a valuation allowance has been included in the 2016 forecasted effective tax rate. The Company is in a cumulative loss position for the past three years, which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Under the accounting standards objective verifiable evidence is given greater weight than subjective evidence such as the Company’s projections for future growth. Based on an evaluation in accordance with the accounting standards, as of December 31, 2015, a valuation allowance has been recorded against the net U.S. deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all the available evidence. At March 31, 2016 the Company continues to be in a three year cumulative loss position, therefore, until an appropriate level of profitability is attained, the Company expects to maintain a full valuation allowance on its U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysia tax benefits or tax expense recorded on the Company’s Consolidated Statement of Operations will be offset with a corresponding valuation allowance until such time that the Company changes its determination related to the realization of deferred tax assets. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The tax provision for the three months ended March 31, 2016 is based on an estimated combined statutory effective tax rate. The Company recorded for the three months ended March 31, 2016 a tax benefit of $151,000 for an effective tax rate of 2.0%. For the three months ended March 31, 2016 the difference between the Company’s effective tax rate and the U.S. federal 35% statutory rate and state 6.2% (net of federal benefit) statutory rate was primarily related to U.S. and Malaysia valuation allowances and Malaysia foreign tax rate differential.

Credit Facility

Credit Facility	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Credit Facility	10. CREDIT FACILITY On January 2, 2013, the Company entered into a three-year term agreement with a bank to provide the Company with a senior secured credit facility of up to $25.0 million. The agreement provides for the Company to borrow up to 80% of eligible accounts receivable and up to 35% of domestically held raw material and finished goods inventory. Advances against inventory are limited to 40% of the aggregate outstanding on the revolving line of credit and $10.0 million in aggregate. The Company has the option to borrow at an interest rate of LIBOR plus 2.75% or the Wall Street Journal prime rate plus 0.50%. If the Company maintains liquidity of $20.0 million or greater with the lending institution, then the borrowing interest rate options are LIBOR plus 2.25% or the Wall Street Journal prime rate. There is an unused revolving line facility fee of 0.375% per annum. The facility is secured by a first priority interest in substantially all of the Company’s personal property, excluding intellectual property. The Company is required to maintain an adjusted quick ratio of 1.40 to 1.00, maintain operating and other deposit accounts with the bank or bank’s affiliates of 25% of the Company’s total worldwide cash, securities and investments, and the Company can pay dividends or repurchase capital stock only with the bank’s consent during the three year term. In August 2015, the Company entered into an amendment agreement with the bank to extend the senior secured facility through January 2, 2018. Under the amended agreement, advances against inventory are limited to the lesser of 45% of the aggregate outstanding principal on the revolving line of credit and $10.0 million and the rate on facility fee on the unused portion of the revolving line was adjusted to 0.50% per annum. All other terms and conditions remain the same. As of March 31, 2016 the Company had borrowed $1.5 million against this facility electing a borrowing rate of LIBOR plus 2.25% and had additional available borrowing capacity of $1.1 million under this facility. The agreement contains a subjective acceleration clause and requires the Company to maintain a lockbox. As a result, the Company has classified the debt as a current liability on its balance sheet. For three months ended March 31, 2016, the Company recorded interest expense of $35,000 which includes $31,000 of interest expense charged on the unused portion of the facility. For three months ended March 31, 2015, the Company did not draw on this facility and the Company recorded $23,000 of interest expense charged on the unused portion of the facility.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Principles of consolidation	Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Worldwide LLC, Rubicon Sapphire Technology (Malaysia) SDN BHD, Rubicon Technology Hong Kong Limited and Rubicon Technology Korea Yuhan Hosea. All intercompany transactions and balances have been eliminated in consolidation.
Foreign currency translation and transactions	Foreign currency translation and transactions Rubicon Worldwide LLC, Rubicon Technology Hong Kong Limited and Rubicon Technology Korea Yuhan Hosea’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective periods. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Worldwide LLC, Rubicon Technology Hong Kong Limited and Rubicon Technology Korea Yuhan Hosea are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. The Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. The Company records these gains and losses in other income (expense). Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than the functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net loss for the period. The Company records these gains and losses in other income (expense).
Investments	Investments The Company invests available cash primarily in investment grade commercial paper, corporate notes, FDIC guaranteed certificates of deposit, common stock, and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive loss. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statement of Operations. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations, are classified as short-term. The Company reviews its available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. As of March 31, 2016, no impairment was recorded.
Accounts receivable	Accounts receivable The majority of the Company’s accounts receivable is due from manufacturers serving the LED and optical systems and specialty electronics devices industries. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible, and payments subsequently received on such receivables are recorded as a reduction to bad debt expense. The following table shows the activity of the allowance for doubtful accounts: March 31, December 31, (in thousands) Beginning balance $ 389 $ 140 Charges to costs and expenses (54 ) 235 Accounts charged off, less recoveries — 14 Ending balance $ 335 $ 389
Inventories	Inventories Inventories are valued at the lower of cost or market. Raw materials cost is determined using the first-in, first-out method, and work-in-process and finished goods costs are determined on a weighted-average cost basis which includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other information. At times in 2016 and 2015, the Company accepted sales orders for core and wafer products at prices lower than cost. Based on these sales prices, the Company recorded for the three months ended March 31, 2016 and 2015, a lower of cost or market adjustment which reduced inventory and increased cost of goods sold by $544,000 and $252,000, respectively. Inventories are composed of the following: March 31, December 31, (in thousands) Raw materials $ 6,943 $ 7,346 Work in progress 10,745 9,920 Finished goods 3,165 4,067 $ 20,853 $ 21,333 The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventory has remained consistent for all periods presented.
Property and equipment	Property and equipment Property and equipment consisted of the following: March 31, December 31, (in thousands) Land and land improvements $ 4,133 $ 4,133 Buildings 26,103 26,097 Machinery, equipment and tooling 50,969 50,364 Leasehold improvements 7,141 7,141 Furniture and fixtures 816 816 Information systems 1,121 1,105 Construction in progress 1,249 1,327 Total cost 91,532 90,983 Accumulated depreciation and amortization (35,056 ) (33,414 ) Property and equipment, net $ 56,476 $ 57,569
Long-Lived assets	Long-Lived assets The Company reviews property and equipment for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur, the Company will recognize an impairment loss if the undiscounted future cash flows expected to be generated by the assets are less than the carrying value of the related asset. The impairment loss would adjust the asset to its fair value. In evaluating the recoverability of long-lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment. Asset recoverability is first measured by comparing the assets’ carrying amount to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. In response to the Company’s current period operating losses combined with our history of continuing operating losses, the Company evaluates the recoverability of certain property and equipment. In the third quarter of 2015, the overall outlook for the sapphire market continued to be volatile as industry analysts reported significant worldwide over capacity and pricing of sapphire products reached historical lows. Based on the Company’s quarterly assessment using the most recent projections, impairment to these assets was indicated as of September 30, 2015, as the recoverable amount of undiscounted cash flows did not exceed the carrying amount of these assets and the Company recorded an asset impairment charge on machinery, equipment and facilities. At March 31, 2016, the Company reviewed the current fair market value and concluded no additional adjustments were needed. The Company will continue to assess our long-lived assets to ensure the carrying amount of these assets is still appropriate given any changes in the marketplace and other factors used in determining the current fair market value.
Revenue recognition	Revenue recognition Revenues recognized include product sales and billings for costs and fees for government contracts. Product Sales The Company recognizes revenue from product sales when earned. Revenue is recognized when, and if, evidence of an arrangement is obtained and the other criteria to support revenue recognition are met, including: • Persuasive evidence of an arrangement exists • Title has passed and the product has been delivered • The price is fixed or determinable • Collection of the resulting receivable is reasonably assured. Government Contracts The Company recognizes research and development revenue in the period during which the related costs are incurred over the contractually defined period. In July 2012, the Company signed a contract with the Air Force Research Laboratory to produce large-area sapphire windows on a cost plus fixed fee basis. The Company records research and development revenue on a gross basis as costs are incurred plus a portion of the fixed fee. For the three months ended March 31, 2016 and 2015, $97,000 and $141,000 of revenue was recognized, respectively. To date, the Company has recorded $4.1 million in revenue and the total value of the contract is $4.7 million. The Company does not provide maintenance or other services and it does not have sales that involve multiple elements or deliverables.
Net income per common share	Net income per common share Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares any outstanding stock options and warrants based on the treasury stock method. Diluted net loss per share is the same as basic net loss per share for the three months ended March 31, 2016 and 2015 because the effects of potentially dilutive securities are anti-dilutive. As of March 31, 2016, diluted shares outstanding were the same as basic shares outstanding as the exercise price of outstanding stock options exceeded the weighted-average trading share price and there were no outstanding warrants. At March 31, 2015, the Company had the following anti-dilutive securities outstanding which were excluded from the calculation of diluted net loss per share: 2015 Warrants 38,219 Stock options 21,952 60,171
Other comprehensive loss	Other comprehensive loss Comprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive loss includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the three months ended March 31, 2016 and 2015, other comprehensive loss included the unrealized loss on investments and foreign currency translation adjustments. The following table summarizes the components of comprehensive loss: March 31, December 31, (in thousands) Unrealized loss on investments $ (12 ) $ (17 ) Unrealized loss on currency translation (18 ) (16 ) Ending Balance $ (30 ) $ (33 )
Recent accounting pronouncements	Recent accounting pronouncement In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15 (“ASU 2014-15”), Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In July 2015, the FASB issued ASU No. 2015-11 (“ASU 2015-11”), Inventory (Topic 330): Simplifying the Measurement of Inventory. In January 2016, the FASB issued ASU 2016-01 (“ASU 2016-01”), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for fiscal years beginning after December 15, 2017. The Company is evaluating the impact, if any, of adopting ASU 2016-01 on its financial statements. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) which modifies the lease recognition requirements and requires entities to recognize the assets and liabilities arising from leases on the balance sheet. ASU 2016-02 requires entities to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact, if any, of adopting ASU 2016-02 on its financial statements. In March 2016, FASB issued ASU No. 2016-09 (“ASU 2016-09”), Compensation - Stock Compensation Topic 718): Improvements to Employee Share-Based Payment Accounting

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Activity of Allowance for Doubtful Accounts	The following table shows the activity of the allowance for doubtful accounts: March 31, December 31, (in thousands) Beginning balance $ 389 $ 140 Charges to costs and expenses (54 ) 235 Accounts charged off, less recoveries — 14 Ending balance $ 335 $ 389
Inventories	Inventories are composed of the following: March 31, December 31, (in thousands) Raw materials $ 6,943 $ 7,346 Work in progress 10,745 9,920 Finished goods 3,165 4,067 $ 20,853 $ 21,333
Property and Equipment	Property and equipment consisted of the following: March 31, December 31, (in thousands) Land and land improvements $ 4,133 $ 4,133 Buildings 26,103 26,097 Machinery, equipment and tooling 50,969 50,364 Leasehold improvements 7,141 7,141 Furniture and fixtures 816 816 Information systems 1,121 1,105 Construction in progress 1,249 1,327 Total cost 91,532 90,983 Accumulated depreciation and amortization (35,056 ) (33,414 ) Property and equipment, net $ 56,476 $ 57,569
Anti-Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share	At March 31, 2015, the Company had the following anti-dilutive securities outstanding which were excluded from the calculation of diluted net loss per share: 2015 Warrants 38,219 Stock options 21,952 60,171
Components of Comprehensive Loss	The following table summarizes the components of comprehensive loss: March 31, December 31, (in thousands) Unrealized loss on investments $ (12 ) $ (17 ) Unrealized loss on currency translation (18 ) (16 ) Ending Balance $ (30 ) $ (33 )

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Summary of Revenue by Geographic Region	The following table summarizes revenue by geographic region: Three months ended 2016 2015 (in thousands) Germany $ 1,538 $ 510 United States 1,111 1,523 Korea 422 725 Australia 412 215 Taiwan 383 1,701 China 2 3,351 Other 419 885 Revenue $ 4,287 $ 8,910
Summary of Revenue by Product Type	The following table summarizes revenue by product type: Three months ended 2016 2015 (in thousands) Core $ 441 $ 5,109 Wafer 2,345 1,891 Optical 1,404 1,769 Research & Development 97 141 Revenue $ 4,287 $ 8,910
Summary of Assets by Geographic Region	The following table summarizes assets by geographic region: March 31, December 31, (in thousands) United States $ 82,145 $ 88,916 Malaysia 29,146 30,276 Other 46 50 Total Assets $ 111,337 $ 119,242

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Amortized Cost and Gross Unrealized Gains and Losses on All Securities	The following table presents the amortized cost and gross unrealized gains and losses on all securities at March 31, 2016: Amortized Gross Gross Fair (in thousands) Short-term Investments: FDIC Guaranteed certificates of deposit $ 1,200 $ — $ — $ 1,200 Corporate notes/bonds 1,915 — — 1,915 Total short-term investments $ 3,115 $ — $ — $ 3,115 The following table presents the amortized cost and gross unrealized gains and losses on all securities at December 31, 2015: Amortized Gross Gross Fair (in thousands) Short-term Investments: FDIC Guaranteed certificates of deposit $ 1,920 $ — $ — $ 1,920 Corporate Notes/Bonds 6,980 — 5 6,975 Total short-term investments $ 8,900 $ — $ 5 $ 8,895
Summarized Financial Assets Measured at Fair Value on Recurring Basis	The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2016: Level 1 Level 2 Level 3 Total (in thousands) Cash Equivalents: Money market funds $ 16,505 $ — $ — $ 16,505 Investments: Available-for-sales securities—current FDIC Guaranteed certificates of deposit — 1,200 — 1,200 Corporate notes/bonds — 1,915 — 1,915 Total $ 16,505 $ 3,115 $ — $ 19,620 The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total (in thousands) Cash Equivalents: Money market funds $ 17,702 $ — $ — $ 17,702 Investments: Available-for-sales securities—current: FDIC Guaranteed certificates of deposit — 1,920 — 1,920 Corporate notes/bonds — 6,975 — 6,975 Total $ 17,702 $ 8,895 $ — $ 26,597

Stock Incentive Plans (Tables)

Stock Incentive Plans (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Activity of Stock Incentive and Equity Plans	The following table summarizes the activity of the stock incentive and equity plans as of March 31, 2016 and changes during the three months then ended: Shares Number of Weighted- Number of Number of At January 1, 2016 732,270 2,851,568 $ 7.07 201,455 454,021 Granted (529,498 ) 42,000 1.11 487,498 — Exercised/Issued — — — — (3,702 ) Cancelled/forfeited 158,961 (126,609 ) 11.26 — (33,333 ) At March 31, 2016 361,733 2,766,959 $ 6.78 688,953 416,986
Summary of Non-vested Options	A summary of the Company’s non-vested options during the three month period ended March 31, 2016 is presented below: Options Weighted- Non-vested at January 1, 2016 1,251,961 $ 2.23 Granted 42,000 1.11 Vested (41,500 ) 5.22 Forfeited (58,012 ) 1.74 Non-vested at March 31, 2016 1,194,449 $ 2.08
Restricted Stock Units [Member]
Analysis of Restricted Stock Units Issued	A summary of the Company’s restricted stock units is as follows: RSUs Weighted average price at Aggregate intrinsic Non-vested restricted stock units as of January 1, 2016 454,021 $ 1.92 Granted — — Vested (3,702 ) 3.94 Cancelled (33,333 ) 4.50 Non-vested at March 31, 2016 416,986 $ 1.70 $ 304,400
Restricted Stock [Member]
Analysis of Restricted Stock Units Issued	An analysis of restricted stock issued is as follows: Non-vested restricted stock as of January 1, 2016 15,200 Granted 487,498 Vested (15,200 ) Non-vested restricted stock as of March 31, 2016 487,498

Summary of Significant Accoun22

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	3 Months Ended		45 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016
Accounting Policies [Abstract]
Impairment of investments	$ 0
Based on these sales prices reduced inventory and increased cost of goods sold	544,000	$ 252,000
Revenue recorded from government contract	97,000	$ 141,000	$ 4,100,000
Total value of the contract	$ 4,700,000		$ 4,700,000
Period of contract	3 years
Number of outstanding warrants	0		0

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Activity of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning balance	$ 389	$ 140
Charges to costs and expenses	(54)	235
Accounts charged off, less recoveries		14
Ending balance	$ 335	$ 389

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Inventories (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory, Net [Abstract]
Raw materials	$ 6,943	$ 7,346
Work in progress	10,745	9,920
Finished goods	3,165	4,067
Inventories	$ 20,853	$ 21,333

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Property and Equipment (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Total cost	$ 91,532	$ 90,983
Accumulated depreciation and amortization	(35,056)	(33,414)
Property and equipment, net	56,476	57,569
Land and Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Total cost	4,133	4,133
Buildings [Member]
Property, Plant and Equipment [Line Items]
Total cost	26,103	26,097
Machinery, Equipment and Tooling [Member]
Property, Plant and Equipment [Line Items]
Total cost	50,969	50,364
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total cost	7,141	7,141
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total cost	816	816
Information Systems [Member]
Property, Plant and Equipment [Line Items]
Total cost	1,121	1,105
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 1,249	$ 1,327

Summary of Significant Accoun26

Summary of Significant Accounting Policies - Anti-Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Detail)	3 Months Ended
	Mar. 31, 2015shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	60,171
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	21,952
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	38,219

Summary of Significant Accoun27

Summary of Significant Accounting Policies - Components of Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized loss on investments	$ (12)	$ (17)
Unrealized loss on currency translation	(18)	(16)
Ending Balance	$ (30)	$ (33)

Segment Information - Additiona

Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016Segment
Segment Reporting [Abstract]
Number of reportable segment	1

Segment Information - Summary o

Segment Information - Summary of Revenue by Geographic Region (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 4,287	$ 8,910
Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	1,538	510
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	1,111	1,523
Korea [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	422	725
Australia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	412	215
Taiwan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	383	1,701
China [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	2	3,351
Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 419	$ 885

Segment Information - Summary30

Segment Information - Summary of Revenue by Product Type (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Product Information [Line Items]
Revenue	$ 4,287	$ 8,910
Core [Member]
Product Information [Line Items]
Revenue	441	5,109
Wafer [Member]
Product Information [Line Items]
Revenue	2,345	1,891
Optical [Member]
Product Information [Line Items]
Revenue	1,404	1,769
Research & Development [Member]
Product Information [Line Items]
Revenue	$ 97	$ 141

Segment Information - Summary31

Segment Information - Summary of Assets by Geographic Region (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	$ 111,337	$ 119,242
United States [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	82,145	88,916
Malaysia [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	29,146	30,276
Other [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	$ 46	$ 50

Investments - Additional Inform

Investments - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Short-term investments	$ 3,115	$ 8,895
Time deposits of cash and cash equivalents	4,800	$ 3,500
FDIC Guaranteed Certificates of Deposit [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Short-term investments	1,200
Corporate Notes/Bonds [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Short-term investments	$ 1,900

Investments - Amortized Cost an

Investments - Amortized Cost and Gross Unrealized Gains and Losses on All Securities (Detail) - Short-term Investments [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 3,115	$ 8,900
Gross Unrealized Gains	0	0
Gross Unrealized Losses		5
Fair Value	3,115	8,895
FDIC Guaranteed Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,200	1,920
Gross Unrealized Gains	0	0
Fair Value	1,200	1,920
Corporate Notes/Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,915	6,980
Gross Unrealized Gains	0	0
Gross Unrealized Losses		5
Fair Value	$ 1,915	$ 6,975

Investments - Summarized Financ

Investments - Summarized Financial Assets Measured at Fair Value on Recurring Basis (Detail) - Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	$ 19,620	$ 26,597
Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	16,505	17,702
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	3,115	8,895
Money Market Funds [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Cash Equivalents	16,505	17,702
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Cash Equivalents	16,505	17,702
FDIC Guaranteed Certificates of Deposit [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	1,200	1,920
FDIC Guaranteed Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	1,200	1,920
Corporate Notes/Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	1,915	6,975
Corporate Notes/Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Available-for-sales securities - current	$ 1,915	$ 6,975

Significant Customers - Additio

Significant Customers - Additional Information (Detail) - Customer	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Revenue, Major Customer [Line Items]
Number of significant customer	1	1
Trade receivables	10.00%
Accounts receivable	51.00%		57.00%
Customer One [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Revenue	35.00%	29.00%

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016shares
Stockholders' Equity Note [Abstract]
Common stock reserved for issuance upon exercise of outstanding common stock options and vesting of restricted stock units	3,183,945
Common stock reserved for future grants of stock options and restricted stock units	361,733
Outstanding warrants to purchase common stock	0
Number of warrants expired	24,380

Stock Incentive Plans - Additio

Stock Incentive Plans - Additional Information (Detail) - USD ($)	Aug. 02, 2011	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of share of common stock purchased	1
Stock compensation expense		$ 161,000	$ 200,000
Unrecognized compensation expense related to non vested awards		$ 1,200,000
Stock-based plan expect to recognize weighted-average period		2 years 8 months 27 days
Historical stock price average, number of years considered		5 years
Intrinsic value of options outstanding		$ 0	0
Weighted average fair value options granted		$ 1.11
Expected term		5 years 1 month 6 days
Risk-free interest rate		1.31%
Expected volatility		65.00%
Dividend yield		0.00%
Expected forfeiture rate		23.10%
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense		$ 138,000	73,000
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense related to non vested awards		$ 591,000
Stock-based plan expect to recognize weighted-average period		2 years 2 months 9 days
Stock compensation expense		$ 71,000	$ 61,000
2001 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares awarded or sold	1,449,667
Plan expiration date		Aug. 2, 2011

Stock Incentive Plans - Summary

Stock Incentive Plans - Summary of Activity of Stock Incentive and Equity Plans (Detail)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Shares available for grant
Shares available for grant, Beginning balance	732,270
Shares available for grant, Granted	(529,498)
Shares available for grant, Exercised/Issued	0
Shares available for grant, Cancelled/forfeited	158,961
Shares available for grant, Ending balance	361,733
Number of options outstanding
Number of options outstanding, Beginning balance	2,851,568
Number of options outstanding, Granted	42,000
Number of options outstanding, Exercised/Issued	0
Number of options outstanding, Cancelled/forfeited	(126,609)
Number of options outstanding, Ending balance	2,766,959
Weighted - average option exercise price
Weighted - average option exercise price, Beginning balance | $ / shares	$ 7.07
Weighted - average option exercise price, Granted | $ / shares	1.11
Weighted - average option exercise price, Exercised/Issued | $ / shares	0
Weighted - average option exercise price, Cancelled/forfeited | $ / shares	11.26
Weighted - average option exercise price, Ending balance | $ / shares	$ 6.78
Number of restricted stock and board shares issued
Number of restricted stock and board shares issued, Beginning balance	201,455
Number of restricted stock and board shares issued, Granted	487,498
Number of restricted stock and board shares issued, Exercised/Issued	0
Number of restricted stock and board shares issued, Cancelled/forfeited	0
Number of restricted stock and board shares issued, Ending balance	688,953
Restricted Stock Units [Member]
Number of restricted stock units outstanding
Number of restricted stock units outstanding, Beginning balance	454,021
Number of restricted stock units outstanding, Granted	0
Number of restricted stock units outstanding, Exercised/Issued	(3,702)
Number of restricted stock units outstanding, Cancelled/forfeited	(33,333)
Number of restricted stock units outstanding, Ending balance	416,986

Stock Incentive Plans - Summa39

Stock Incentive Plans - Summary of Non-vested Options (Detail)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Options
Options, Granted | shares	42,000
Weighted-average exercise price
Weighted-average exercise price, Granted	$ 1.11
Weighted-average exercise price, Forfeited	$ 11.26
Non-vested Options [Member]
Options
Options, Non-vested, Beginning balance | shares	1,251,961
Options, Granted | shares	42,000
Options, Vested | shares	(41,500)
Options, Forfeited | shares	(58,012)
Options, Non-vested, Ending balance | shares	1,194,449
Weighted-average exercise price
Weighted-average exercise price, Beginning balance	$ 2.23
Weighted-average exercise price, Granted	1.11
Weighted-average exercise price, Vested	5.22
Weighted-average exercise price, Forfeited	1.74
Weighted-average exercise price, Ending balance	$ 2.08

Stock Incentive Plans - Summa40

Stock Incentive Plans - Summary of Restricted Stock Units (Detail) - Restricted Stock Units [Member]	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested restricted stock, Beginning balance | shares	454,021
Granted | shares	0
Vested | shares	(3,702)
Cancelled | shares	(33,333)
Non-vested restricted stock, Ending balance | shares	416,986
Weighted average price at time of grant, Beginning balance | $ / shares	$ 1.92
Weighted average price at time of grant, Granted | $ / shares	0
Weighted average price, Vested | $ / shares	3.94
Weighted-average exercise price, Cancelled | $ / shares	4.50
Weighted average price at time of grant, Ending balance | $ / shares	$ 1.70
Aggregate intrinsic value, Ending balance | $	$ 304,400

Stock Incentive Plans - Analysi

Stock Incentive Plans - Analysis of Restricted Stock Units and Restricted Stock Issued (Detail) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2016shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested restricted stock, Beginning balance	15,200
Granted	487,498
Vested	(15,200)
Non-vested restricted stock, Ending balance	487,498

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) - USD ($)	Feb. 17, 2016	Mar. 31, 2016	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Cost of purchasing equipment or components		$ 5,200,000
Settlement paid	$ 900,000
Settlement expenses			$ 1,100,000

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income tax benefit	$ 151	$ (36)
Effective income tax rate	2.00%
U.S. federal statutory rate	35.00%
State (net of federal benefit) statutory rate	6.20%

Credit Facility - Additional In

Credit Facility - Additional Information (Detail) - USD ($)	Jan. 02, 2013	Aug. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Debt Disclosure [Abstract]
Term agreement of senior secured credit facility	3 years
Amount of senior secured credit facility	$ 25,000,000
Percentage of eligible account receivable	80.00%
Percentage of domestically held raw material and finished goods inventory	35.00%
Percentage of advances against inventory	40.00%	45.00%
Amount of aggregate outstanding principal on the revolving line of credit	$ 10,000,000	$ 10,000,000
Option to borrow at an interest rate of LIBOR plus	2.75%
Option to borrow at an interest rate of Wall Street Journal prime rate plus	0.50%
Liquidity rate	$ 20,000,000
Borrowing interest rate options	2.25%		2.25%
Percentage of unused revolving line facility fee	0.375%	0.50%
Adjusted quick ratio	1.40
Percentage of maintain operating and other deposit accounts	25.00%
Interest expense			$ 35,000	$ 23,000
Borrowed amount			1,500,000
Interest expense charged on the unused portion of the facility			31,000
Additional available borrowing capacity			$ 1,100,000