Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | LUNA INNOVATIONS INC | |
Entity Central Index Key | 0001239819 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-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 | 30,165,771 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 21,414,272 | $ 42,460,267 |
Accounts receivable, net | 16,796,252 | 13,037,068 |
Receivable from sale of HSOR business | 2,500,941 | 2,500,000 |
Contract assets | 3,441,771 | 2,422,495 |
Inventory | 9,644,864 | 6,873,742 |
Prepaid expenses and other current assets | 1,119,622 | 935,185 |
Total current assets | 54,917,722 | 68,228,757 |
Long-term contract assets | 423,830 | 336,820 |
Property and equipment, net | 3,626,833 | 3,627,886 |
Intangible assets, net | 10,570,347 | 3,302,270 |
Goodwill | 10,345,250 | 101,008 |
Other assets, net | 3,003,813 | 1,995 |
Total assets | 82,887,795 | 75,598,736 |
Current liabilities: | ||
Current portion of long-term debt obligations | 0 | 619,315 |
Current portion of capital lease obligations | 0 | 40,586 |
Accounts payable | 2,636,783 | 2,395,984 |
Accrued liabilities | 9,694,722 | 6,597,458 |
Contract liabilities | 3,389,417 | 2,486,111 |
Total current liabilities | 15,720,922 | 12,139,454 |
Long-term deferred rent | 0 | 1,035,974 |
Other long-term liabilities | 2,257,958 | 0 |
Long-term capital lease obligations | 0 | 68,978 |
Total liabilities | 17,978,880 | 13,244,406 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.001, 1,321,514 shares authorized, 0 and 1,321,514 issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 0 | 1,322 |
Common stock, par value $0.001, 100,000,000 shares authorized, 31,798,062 and 29,209,506 shares issued, 30,158,271 and 27,956,401 shares outstanding at September 30, 2019 and December 31, 2018, respectively | 31,998 | 30,120 |
Treasury stock at cost, 1,639,791 and 1,253,105 shares at September 30, 2019 and December 31, 2018, respectively | (4,337,107) | (2,116,640) |
Additional paid-in capital | 87,608,274 | 85,744,750 |
Accumulated deficit | (18,394,250) | (21,305,222) |
Total stockholders’ equity | 64,908,915 | 62,354,330 |
Total liabilities and stockholders’ equity | $ 82,887,795 | $ 75,598,736 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 1,321,514 | 1,321,514 |
Preferred stock, issued (in shares) | 0 | 1,321,514 |
Preferred stock, outstanding (in shares) | 0 | 1,321,514 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 31,798,062 | 29,209,506 |
Common stock, outstanding (in shares) | 30,158,271 | 27,956,401 |
Treasury Stock (in shares) | 1,639,791 | 1,253,105 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 18,421,010 | $ 10,687,026 | $ 51,035,897 | $ 29,378,922 |
Cost of revenues: | ||||
Total cost of revenues | 9,135,836 | 5,998,415 | 26,232,117 | 16,513,298 |
Gross profit | 9,285,174 | 4,688,611 | 24,803,780 | 12,865,624 |
Operating expense: | ||||
Selling, general and administrative | 5,753,649 | 3,233,485 | 17,964,524 | 9,898,064 |
Research, development and engineering | 2,047,524 | 873,629 | 5,240,759 | 2,513,497 |
Total operating expense | 7,801,173 | 4,107,114 | 23,205,283 | 12,411,561 |
Operating income | 1,484,001 | 581,497 | 1,598,497 | 454,063 |
Other income/(expense): | ||||
Investment income | 72,728 | 171,896 | 324,139 | 350,976 |
Other income/(expense) | 278 | 8,319 | (4,459) | (16,001) |
Interest expense | (2,032) | (28,029) | (14,806) | (103,208) |
Total other income | 70,974 | 152,186 | 304,874 | 231,767 |
Income from continuing operations before income taxes | 1,554,975 | 733,683 | 1,903,371 | 685,830 |
Income tax expense/(benefit) | 324,723 | (559,093) | (1,293,051) | (674,329) |
Net income from continuing operations | 1,230,252 | 1,292,776 | 3,196,422 | 1,360,159 |
(Loss)/income from discontinued operations, net of income tax of $216,813 and $235,312 for the three and nine months ended September 30, 2018, respectively | 0 | (56,418) | 0 | 1,132,436 |
Gain on sale, net of income taxes of $1,866,232 and $1,508,373 for the three and nine months ended September 30, 2018, respectively | 0 | 7,612,044 | 0 | 7,571,810 |
Net income from discontinued operations | 0 | 7,555,626 | 0 | 8,704,246 |
Net income | 1,230,252 | 8,848,402 | 3,196,422 | 10,064,405 |
Preferred stock dividend | 112,846 | 63,235 | 285,450 | 190,895 |
Net income attributable to common stockholders | $ 1,117,406 | $ 8,785,167 | $ 2,910,972 | $ 9,873,510 |
Net income per share from continuing operations: | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.11 | $ 0.05 |
Diluted (in dollars per share) | 0.04 | 0.04 | 0.10 | 0.04 |
Net income per share from discontinued operations: | ||||
Basic (in dollars per share) | 0 | 0.27 | 0 | 0.32 |
Diluted (in dollars per share) | 0 | 0.23 | 0 | 0.27 |
Net income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | 0.04 | 0.31 | 0.10 | 0.36 |
Diluted (in dollars per share) | $ 0.03 | $ 0.27 | $ 0.09 | $ 0.30 |
Weighted average common shares and common equivalent shares outstanding: | ||||
Basic (in shares) | 28,291,297 | 27,901,631 | 28,193,330 | 27,547,955 |
Diluted (in shares) | 32,115,847 | 33,055,881 | 31,768,575 | 32,721,860 |
Products and licensing | ||||
Revenues: | ||||
Total revenues | $ 11,926,178 | $ 5,371,165 | $ 31,459,323 | $ 13,960,003 |
Cost of revenues: | ||||
Total cost of revenues | 4,561,801 | 2,079,749 | 12,357,961 | 5,381,333 |
Technology development | ||||
Revenues: | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Cost of revenues: | ||||
Total cost of revenues | $ 4,574,035 | $ 3,918,666 | $ 13,874,156 | $ 11,131,965 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2018 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||
Allocated tax expense | $ 235,312 | |
Gain on sale, tax | $ 1,866,232 | $ 1,508,373 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows provided by/(used in) operating activities | ||
Net income | $ 3,196,422 | $ 10,064,405 |
Adjustments to reconcile net income to net cash provided by/(used in) operating activities | ||
Depreciation and amortization | 1,834,594 | 898,215 |
Share-based compensation | 1,140,202 | 345,582 |
Bad debt expense | 0 | 6,000 |
Gain on disposal of fixed assets | 0 | (1,000) |
Gain on sale of discontinued operations | 0 | (7,571,810) |
Tax benefit from release of valuation allowance | (1,889,266) | 0 |
Change in assets and liabilities | ||
Accounts receivable | (2,238,234) | (4,056,716) |
Contract assets | (1,106,286) | (957,012) |
Inventory | (73,122) | (992,075) |
Other current assets | (74,321) | 482,155 |
Other long term assets | (338,347) | 0 |
Accounts payable and accrued expenses | (113,414) | 243,965 |
Contract liabilities | 746,732 | (1,906,117) |
Net cash provided by/(used in) operating activities | 1,084,960 | (3,444,408) |
Cash flows (used in)/provided by investing activities | ||
Acquisition of property and equipment | (500,562) | (272,039) |
Intangible property costs | (192,203) | (277,068) |
Proceeds from sale of property and equipment | 0 | 1,000 |
Proceeds from sales of discontinued operations | 0 | 14,775,541 |
Acquisition of General Photonics Corporation | (19,004,250) | 0 |
Net cash (used in)/provided by investing activities | (19,697,015) | 14,227,434 |
Cash flows used in financing activities | ||
Payments on finance lease obligations | (26,901) | (33,064) |
Payments of debt obligations | (625,000) | (1,375,000) |
Repurchase of common stock | (2,220,467) | (466,894) |
Proceeds from the exercise of options and warrants | 438,428 | 1,255,118 |
Net cash used in financing activities | (2,433,940) | (619,840) |
Net (decrease)/increase in cash and cash equivalents | (21,045,995) | 10,163,186 |
Cash and cash equivalents—beginning of period | 42,460,267 | 36,981,533 |
Cash and cash equivalents—end of period | 21,414,272 | 47,144,719 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 16,928 | 97,867 |
Cash paid for income taxes | 735,000 | 7,686 |
Non-cash investing and financing activities | ||
Contingent liability for business combination | 940,000 | 0 |
Dividend on preferred stock, 59,469 shares of common stock issuable for each of the nine months ended September 30, 2019 and 2018 | $ 285,450 | $ 190,895 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Dividend on preferred stock, shares of common stock issuable (in shares) | 59,469 | 59,469 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
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 products for the telecommunications industry 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 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 September 30, 2019 , results of operations and changes in stockholders' equity for the three and nine months ended September 30, 2019 and 2018 , and cash flows for the nine months ended September 30, 2019 and 2018 . The results of operations for the three and nine months ended September 30, 2019 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . The consolidated balance sheet as of December 31, 2018 was derived from our audited 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, 2018 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2019 . Business Combinations We apply the provisions of Accounting Standards Codification ("ASC") 805, Business Combinations , in the accounting for acquisitions. ASC 805 requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include: future expected cash flows from product sales; customer contracts and acquired technologies; expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, 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 all significant inputs and significant value drivers are observable in active markets • Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of our debt as of December 31, 2018 approximates fair value, as we consider the floating interest rate on our credit facilities with Silicon Valley Bank ("SVB") to be at market for similar instruments. Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived asset groups measured at fair value for an impairment assessment. In general, non-financial assets including intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. Net Income Per Share Basic per share data is computed by dividing our net income by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income 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 3.8 million and 5.2 million common stock equivalents (which include outstanding warrants, preferred stock and stock options) are included for the diluted per share data for three months ended September 30, 2019 and 2018 , respectively. The effects of 3.6 million and 5.2 million common stock equivalents are included for the diluted per share data for the nine months ended September 30, 2019 and 2018 , respectively. Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued a new standard related to Leases, Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) and subsequent amendments, which replaced existing U.S. GAAP and requires lessees to recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating leases for greater transparency. We, using a modified retrospective adoption approach, are required to recognize and measure leases existing at the beginning of the adoption period, with certain practical expedients available. We adopted the standard effective January 1, 2019. The standard allows a number of optional practical expedients to use for transition. We chose the certain practical expedients allowed under the transition guidance which permitted us to not to reassess any existing or expired contracts to determine if they contain embedded leases, to not reassess our lease classification on existing leases, to account for lease and non-lease components as a single lease component for equipment leases, and whether initial direct costs previously capitalized would qualify for capitalization under FASB ASC 842. The new standard also provides practical expedients and recognition exemptions for an entity's ongoing accounting policy elections. We have elected the short-term lease recognition for all leases that qualify, which means that we do not recognize a ROU asset and lease liability for any lease with a term of twelve months or less. The most significant impact of adopting the standard was the recognition of ROU assets and lease liabilities for operating leases on our consolidated balance sheet but it did not have an impact on our consolidated statements of operations or consolidated statements of cash flows. The cumulative effect of the changes made to our January 1, 2019 unaudited consolidated balance sheet as a result of the adoption of ASC 842 are as follows: Balance at Adjustment for Adjusted balance at December 31, 2018 ASC 842 January 1, 2019 Assets: Property and equipment, net 3,627,886 (90,494 ) 3,537,392 Other assets, net 1,995 3,536,133 3,538,128 Liabilities: Accrued liabilities 6,597,458 1,242,669 7,840,127 Current portion of capital lease obligations 40,586 (40,586 ) — Long-term deferred rent 1,035,974 (1,035,974 ) — Long-term operating lease liability — 3,271,705 3,271,705 Long-term capital lease obligations 68,978 (68,978 ) — Long-term finance lease liability — 76,803 76,803 Effective January 1, 2018, we adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how cash receipts and cash payments are presented in the statement of cash flows. The adoption of ASU No. 2016-15 did not 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 . The ASU requires companies to measure credit losses by using a methodology that reflects the expected credit losses based on historical information current economic conditions, and reasonable and supportable information. The new standard is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We do not expect the adoption of ASU 2016-13 will have a significant impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02: Income Statement – Reporting Comprehensive Income (Topic 220) . Under current accounting guidance, the income tax effects for changes in income tax rates and certain other transactions are recognized in income from continuing operations resulting in income tax effects recognized in accumulated other comprehensive income that do not reflect the current tax rate of the entity (“stranded tax effects”). The new guidance allows us the option to reclassify these stranded tax effects to accumulated deficit that relate to the change in the federal tax rate resulting from the passage of the Tax Cuts and Jobs Act. We adopted ASU 2018-02, effective January 1, 2019. ASU 2018-02 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. These amendments are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. We do not expect ASU 2018-13 will have a material impact on our consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations On October 15, 2018, we acquired substantially all of the assets, other than cash, of the United States operations of Micron Optics, Inc. ("MOI") for cash consideration of $5.5 million . For the three months ended September 30, 2019 , we recognized revenue of $2.7 million and operating income of $0.4 million associated with the acquired operations of MOI, and for the nine months ended September 30, 2019 , we recognized revenue of $8.1 million and operating income of $1.8 million associated with the acquired operations of MOI. On March 1, 2019, we acquired the outstanding stock of General Photonics Corporation ("GP") for cash consideration of $19.0 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. Additionally, we may become obligated to pay additional cash consideration of up to $1.0 million if certain revenue targets for the GP historical business are met for the twelve month period following the closing. We currently estimate the fair value of the contingent obligation to be $0.9 million , which is shown in accrued liabilities on the consolidated balance sheet. The fair value of the contingent obligation was determined using the present value of estimated likely future payments. For the three months ended September 30, 2019 , we recognized revenue of $3.2 million and operating income of $0.3 million associated with the acquired operations of GP, and we recognized revenue of $7.1 million and operating income of $0.5 million associated with the acquired operations of GP for the period from the closing of the acquisition through September 30, 2019 . Operating income for the three months ended September 30, 2019 included $0.6 million in amortization expense for the acquired intangibles and step-up in value of acquired inventory associated with the acquisition of GP, and operating income included $1.4 million in such amortization expense for the period from the closing of the acquisition through September 30, 2019 . Operating income for the nine months ended September 30, 2019 also included $0.9 million of costs associated with the acquisition of GP. There were no costs associated with the acquisition of GP included in operating income for the three months ended September 30, 2019 . The amortization expense for the acquired intangibles as well as the costs associated with the acquisition of GP are included in the cost of goods sold and selling, general and administrative expenses in our consolidated statements of operations. These acquisitions have been accounted for under the acquisition method of accounting in accordance with ASC 805. Under the acquisition method of accounting, the total estimated purchase consideration is allocated to the acquired tangible and intangible assets and assumed liabilities based on their estimated fair values as of the acquisition date. Any excess of the fair value of the acquisition consideration over the identifiable assets acquired and liabilities assumed is recognized as goodwill. We have completed our allocation of the purchase consideration for MOI. We have completed a preliminary allocation of the purchase consideration for GP with the assistance of a third-party valuation expert. The following table summarizes the allocation of the purchase consideration of each acquisition. The allocation of the purchase consideration for GP is subject to revision as the work of the valuation expert is finalized or additional information becomes known in the future. MOI GP Accounts receivable $ 1,742,693 $ 1,520,950 Inventory 1,435,606 2,698,000 Other current assets 69,951 763,873 Property and equipment 996,460 286,000 Identifiable intangible assets 1,650,000 8,200,000 Goodwill 29,760 10,315,490 Accounts payable and accrued expenses (379,737 ) (3,840,063 ) Total purchase consideration $ 5,544,733 $ 19,944,250 The preliminary identifiable intangible assets and their estimated useful lives were as follows: Estimated Estimated Fair Value Useful Life MOI GP Developed technology 5 - 8 years $ 1,200,000 $ 7,200,000 In process research and development 7 years 200,000 — Trade names and trademarks 3 years 150,000 400,000 Customer base 7 - 15 years 100,000 600,000 $ 1,650,000 $ 8,200,000 Developed technologies acquired primarily consist of MOI's technologies related to fiber optic sensing instruments, modules, and components and GP's technologies relating to the measurement and control of the polarization of light. The developed technologies were valued using the "multi-period excess earnings" method, under the income approach. The multi-period excess earnings method reflects the present value of the projected cash flows that are expected by the developed technologies less charges representing the contribution of other assets to those cash flows. Discount rates of 24.5% and 17% were used to discount the cash flows of MOI and GP, respectively, to present value. In process research and development represents the fair value of an incomplete MOI research and development project that had not reached technological feasibility as of the closing date of the acquisition. In the fourth quarter of 2019, the fair value of this project at the closing date of the acquisition will begin being amortized following the project's completion. The fair value of in process research and development was determined using the multi-period excess earnings method. A discount rate of 29.5% was used to discount the cash flows to the present value. Customer base represents the fair value of projected cash flows that will be derived from the sale of products to existing customers of MOI and GP as of the respective closing dates of their acquisitions. Customer relationships were valued using the "distributor" method, under the income approach. Under this premise, the margin of a distributor within the industry is deemed to be the margin attributable to customer relationships. This isolates the cash flows attributable to the customer relationships for which a market participant would be willing to pay. Discount rates of 24.5% and 16% were used to discount cash flows of MOI and GP, respectively, to present value. Trade names and trademarks are considered a type of guarantee of a certain level of quality or performance represented by the MOI and GP brands. Trade names and trademarks were valued using the "relief from royalty" method of the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of this asset. Discount rates of 17% and 16% were used to discount the cash flows of MOI and GP, respectively, to the present value. Goodwill represents the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed in connection with the acquisition. Goodwill generated from our business acquisitions was primarily attributable to expected synergies from future growth. Pro forma consolidated results of operations The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions of MOI and GP had been completed on January 1, 2018. The pro forma information includes adjustments to depreciation expense for property and equipment acquired, to amortize expense for the intangible assets acquired, and to eliminate the acquisition transaction expenses recognized in each period. Transaction-related expenses associated with the acquisition and excluded from pro forma income from continuing operations were $0.9 million for the nine months ended September 30, 2019 . There were no transaction-related expenses associated with the acquisition for the nine months ended September 30, 2018 . The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations or the combined business had the acquisitions of MOI and GP actually occurred on January 1, 2018, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenue $ 18,421,010 $ 16,102,426 $ 53,097,083 $ 43,553,934 Income from continuing operations $ 1,540,863 $ 1,702,156 $ 5,029,586 $ 1,567,552 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On July 31, 2018 , we sold the assets and operations related to our optoelectronic components and subassemblies ("Opto") business, which was part of our Products and Licensing segment, to an unaffiliated third party for an initial purchase price up to $18.5 million , of which $17.5 million was received at closing and has been properly recorded in the financial statements with the remaining purchase price adjustment up to $1.0 million which is contingent upon the attainment of specified revenue targets during the eighteen months following the closing of the sale. The Opto business was a component of the operations of Advanced Photonix, Inc., which we acquired in May 2015, and represented all of our operations in our Camarillo, California and Montreal, Quebec facilities. We have reported the results of operations of the Opto business as discontinued operations in our consolidated interim financial statements. We allocated a portion of the consolidated tax expense to discontinued operations based on the ratio of the discontinued business's loss before allocations. The key components of net income from discontinued operations were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (unaudited) (unaudited) Net revenues $ — $ 1,089,681 $ — $ 8,363,606 Cost of revenues — 648,652 — 5,294,268 Operating expenses — 271,262 — 1,714,920 Other income — (9,372 ) — 13,330 Income before income taxes — 160,395 — 1,367,748 Allocated tax expense — 216,813 — 235,312 Operating (loss)/income from discontinued operations — (56,418 ) — 1,132,436 Gain on sale, net of related income taxes — 7,612,044 — 7,571,810 Net income from discontinued operations $ — $ 7,555,626 $ — $ 8,704,246 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets Intangible assets, net at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (unaudited) Patent costs $ 3,955,374 $ 4,991,460 Developed technology 9,800,000 2,600,000 In-process research & development 1,580,000 200,000 Customer base 700,000 100,000 Trade names and trademarks 550,000 150,000 16,585,374 8,041,460 Accumulated amortization (6,015,027 ) (4,739,190 ) $ 10,570,347 $ 3,302,270 Amortization for the three and nine months ended September 30, 2019 was $0.4 million and $1.1 million , respectively. Estimated aggregate amortization, based on the net value of intangible assets at September 30, 2019 , for each of the next five years and beyond is as follows: Year Ending December 31, Remainder of 2019 $ 406,749 2020 1,626,995 2021 1,618,649 2022 1,465,880 2023 1,390,621 2024 & beyond 4,061,453 Total $ 10,570,347 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying value of goodwill during the nine months ended September 30, 2019 were as follows: Balance as of December 31, 2018 $ 101,008 Goodwill resulting from business combination - GP 10,315,490 Measurement Period Adjustment - MOI (71,248 ) Balance as of September 30, 2019 $ 10,345,250 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of finished goods, work-in-process and raw materials valued at the lower of cost (determined on the first-in, first-out basis) or net realizable value. We write down inventory for estimated obsolescence or unmarketable inventory in an amount equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions. Components of inventory were as follows: September 30, December 31, (unaudited) Finished goods $ 1,376,797 $ 1,339,832 Work-in-process 1,002,702 643,420 Raw materials 7,265,365 4,890,490 Total inventory $ 9,644,864 $ 6,873,742 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (unaudited) Accrued compensation $ 5,520,291 $ 4,467,587 Income tax payable 1,072,216 236,636 Accrued professional fees 116,656 198,062 Deferred Rent — 146,542 Current operating lease liability 1,394,761 — Current finance lease liability 51,637 — Royalties 265,770 302,428 Accrued liabilities - other 333,391 404,752 Customer deposits — 298,468 Contingent liability - GP 940,000 — Working capital adjustment - MOI — 542,983 Total accrued liabilities $ 9,694,722 $ 6,597,458 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Silicon Valley Bank Facility We maintain 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. We amended and restated the Credit Facility on October 10, 2019 , as described in Note 15 - Subsequent Event. The following table presents a summary of debt outstanding as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (unaudited) Silicon Valley Bank Term Loan $ — $ 625,000 Less: unamortized debt issuance costs — 5,685 Less: current portion — 619,315 Total long-term debt $ — $ — |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases 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. As of September 30, 2019 , our lease components included in the consolidated balance sheet were as follows: Lease component Classification September 30, 2019 Assets ROU assets - operating lease Other assets $ 2,545,616 ROU assets - finance lease Other assets 83,813 Total ROU assets $ 2,629,429 Liabilities Current operating lease liability Accrued liabilities $ 1,394,761 Current finance lease liability Accrued liabilities 51,637 Long-term operating lease liability Other liabilities 2,223,623 Long-term finance lease liability Other liabilities 34,335 Total lease liabilities $ 3,704,356 Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Operating lease costs $ 407,365 $ 1,214,484 Variable rent costs (36,794 ) (109,748 ) Total rent expense $ 370,571 $ 1,104,736 Future minimum lease payments under non-cancelable leases were as follows as of September 30, 2019 : September 30, 2019 2019 - remaining 3 months $ 407,992 2020 1,467,701 2021 640,800 2022 544,704 2023 544,704 2024 and beyond 544,704 Total future minimum lease payments 4,150,605 Less: Interest 532,221 Total operating lease liabilities $ 3,618,384 Current operating lease liability $ 1,394,761 Long-term operating lease liability 2,223,623 Total operating lease liabilities $ 3,618,384 Other information related to leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 10,902 $ 32,867 Interest on lease liabilities 1,649 3,880 Total finance lease cost $ 12,551 $ 36,747 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 407,365 $ 1,214,484 Finance cash flows from finance leases $ 13,249 $ 28,803 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 14,541 Weighted-average remaining lease term (years) - operating leases 3.8 3.8 Weighted-average remaining lease term (years) - finance leases 2.2 2.2 Weighted-average discount rate - operating leases 7 % 7 % Weighted-average discount rate - finance leases 7 % 7 % At September 30, 2019 , we had no operating or finance leases that have not yet commenced. |
Leases | Leases 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. As of September 30, 2019 , our lease components included in the consolidated balance sheet were as follows: Lease component Classification September 30, 2019 Assets ROU assets - operating lease Other assets $ 2,545,616 ROU assets - finance lease Other assets 83,813 Total ROU assets $ 2,629,429 Liabilities Current operating lease liability Accrued liabilities $ 1,394,761 Current finance lease liability Accrued liabilities 51,637 Long-term operating lease liability Other liabilities 2,223,623 Long-term finance lease liability Other liabilities 34,335 Total lease liabilities $ 3,704,356 Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Operating lease costs $ 407,365 $ 1,214,484 Variable rent costs (36,794 ) (109,748 ) Total rent expense $ 370,571 $ 1,104,736 Future minimum lease payments under non-cancelable leases were as follows as of September 30, 2019 : September 30, 2019 2019 - remaining 3 months $ 407,992 2020 1,467,701 2021 640,800 2022 544,704 2023 544,704 2024 and beyond 544,704 Total future minimum lease payments 4,150,605 Less: Interest 532,221 Total operating lease liabilities $ 3,618,384 Current operating lease liability $ 1,394,761 Long-term operating lease liability 2,223,623 Total operating lease liabilities $ 3,618,384 Other information related to leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 10,902 $ 32,867 Interest on lease liabilities 1,649 3,880 Total finance lease cost $ 12,551 $ 36,747 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 407,365 $ 1,214,484 Finance cash flows from finance leases $ 13,249 $ 28,803 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 14,541 Weighted-average remaining lease term (years) - operating leases 3.8 3.8 Weighted-average remaining lease term (years) - finance leases 2.2 2.2 Weighted-average discount rate - operating leases 7 % 7 % Weighted-average discount rate - finance leases 7 % 7 % At September 30, 2019 , we had no operating or finance leases that have not yet commenced. |
Capital Stock and Share-Based C
Capital Stock and Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, 2019 is presented below: Options Outstanding Options Exercisable Number of Shares Price per Share Weighted Average Exercise Price Aggregate Intrinsic Value (1) Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Balance, January 1, 2019 3,108,868 $0.61 - $6.55 $ 2.26 $ 3,669,794 1,986,740 $ 1.81 $ 3,314,494 Granted 565,070 $3.21 - $3.37 Exercised (551,334 ) $0.61 - $1.81 Canceled (13,507 ) $1.47 - $3.37 Balance, September 30, 2019 3,109,097 $1.18 - $4.75 $ 2.62 $ 9,847,522 1,734,345 $ 2.22 $ 6,186,154 (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 September 30, 2019 , the outstanding stock options to purchase an aggregate of 3.1 million shares had a weighted-average remaining contractual term of 6.4 years, and the exercisable stock options to purchase an aggregate of 1.7 million shares had a weighted-average remaining contractual term of 4.3 years. The fair value of shares underlying vested options was $10.0 million at September 30, 2019 . The fair value of shares underlying options exercised during the nine months ended September 30, 2019 was $2.3 million . For the nine months ended September 30, 2019 and 2018 we recognized $1.1 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 $2.8 million in share-based compensation expense over the weighted-average remaining service period of 3.0 years for stock options outstanding as of September 30, 2019 . 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 nine months ended September 30, 2019 , we granted an aggregate of 230,000 RSUs to certain employees. Of the RSUs granted during the nine months ended September 30, 2019 , 167,000 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 63,000 RSUs are performance-based awards that will vest based on our achievement of long-term performance goals, in particular, based on our levels of 2021 revenue and operating income. The 63,000 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 2021 revenue and operating income (the payout of such awards based on target performance for 2021 revenue and operating income would be 42,000 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 nine months ended September 30, 2019 , 177,665 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. For the nine months ended September 30, 2019 , we granted 11,600 RSUs to certain non-employee members of our Board of Directors in respect of the annual equity grants pursuant to our non-employee director compensation policy. During the nine months ended September 30, 2019 , 16,286 RSUs vested. The following table summarizes the value of our unvested restricted stock awards and RSUs: Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair Value of Unvested Shares Balance, January 1, 2019 458,620 $ 2.56 $ 1,172,456 Granted 241,600 3.04 733,429 Vested (193,951 ) 2.32 (450,935 ) Forfeitures — — — Balance, September 30, 2019 506,269 $ 2.87 $ 1,454,950 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. In December 2017, we amended and restated our Deferred Compensation Plan to also permit participating non-employee directors to elect, beginning in 2018, 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 nine months ended September 30, 2019 : Number of Stock Units Weighted Average Grant Date Fair Value per Share Intrinsic Value Outstanding Balance, January 1, 2019 507,290 $1.53 $ 1,699,422 Granted 112,503 4.30 Forfeitures — — Converted — — Balance, September 30, 2019 619,793 $2.03 $ 3,588,601 As of September 30, 2019 , 37,546 of the outstanding stock units had not yet vested. The following tables detail our equity transactions during the nine months ended September 30, 2019 and 2018 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ Balance at January 1, 2019, as previously reported 1,321,514 1,322 27,956,401 30,120 1,253,105 (2,116,640 ) 85,744,750 (21,305,222 ) 62,354,330 Exercise of stock options — — 189,312 189 — — 184,769 — 184,958 Share-based compensation — — — — — — 342,765 — 342,765 Stock dividends to Carilion Clinic (1) — — — 20 — — 83,038 (83,058 ) — Net income — — — — — — — 1,125,879 1,125,879 Balance, March 31 2019 1,321,514 1,322 28,145,713 30,329 1,253,105 (2,116,640 ) 86,355,322 (20,262,401 ) 64,007,932 Exercise of stock options — — 207,786 208 — — 182,317 — 182,525 Share-based compensation — — — — — — 377,884 — 377,884 Stock dividends to Carilion Clinic (1) — — — 20 — — 89,383 (89,403 ) — Net income — — — — — — — 840,292 840,292 Purchase of treasury stock — — (52,733 ) — 52,733 (220,470 ) — — (220,470 ) Balance, June 30 2019 1,321,514 1,322 28,300,766 30,557 1,305,838 (2,337,110 ) 87,004,906 (19,511,512 ) 65,188,163 Exercise of stock options — — 83,204 83 — — 70,863 — 70,946 Share-based compensation — — 16,286 16 — — 419,535 — 419,551 Stock dividends to Carilion Clinic (1) — — 770,454 20 — — 112,970 (112,990 ) — Preferred stock to common stock conversion (1,321,514 ) (1,322 ) 1,321,514 1,322 — — — — — Net income — — — — — — — 1,230,252 1,230,252 Purchase of treasury stock — — (333,953 ) — 333,953 (1,999,997 ) — — (1,999,997 ) Balance, September 30 2019 — — 30,158,271 31,998 1,639,791 (4,337,107 ) 87,608,274 (18,394,250 ) 64,908,915 Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ Balance at January 1, 2018, as previously reported 1,321,514 1,322 27,283,918 29,186 1,070,904 (1,649,746 ) 83,563,208 (32,406,189 ) 49,537,781 Impact of change in accounting policy — — — — — — — 354,028 354,028 As adjusted balance at January 1, 2018 1,321,514 1,322 27,283,918 29,186 1,070,904 (1,649,746 ) 83,563,208 (32,052,161 ) 49,891,809 Exercise of stock options — — 10,727 11 — — 22,277 — 22,288 Share-based compensation — — — — — — 94,606 — 94,606 Stock dividends to Carilion Clinic (1) — — — 20 — — 64,405 (64,425 ) — Net income — — — — — — — 148,676 148,676 Purchase of treasury stock — — (132,450 ) — 132,450 (306,041 ) — — (306,041 ) Balance, March 31 2018 1,321,514 1,322 27,162,195 29,217 1,203,354 (1,955,787 ) 83,744,496 (31,967,910 ) 49,851,338 Exercise of stock options — — 250,115 250 — — 617,259 — 617,509 Share-based compensation — — 280,000 280 — — 117,543 — 117,823 Non-cash compensation — — 129,865 130 — — 199,871 — 200,001 Stock dividends to Carilion Clinic (1) — — — 20 — — 63,216 (63,236 ) — Net income — — — — — — — 1,067,327 1,067,327 Purchase of treasury stock — — (49,751 ) — 49,751 (160,853 ) — — (160,853 ) Balance, June 30 2018 1,321,514 1,322 27,772,424 29,897 1,253,105 (2,116,640 ) 84,742,385 (30,963,819 ) 51,693,145 Exercise of stock options — — 181,583 181 — — 414,876 — 415,057 Share-based compensation — — (17,606 ) (18 ) — — 133,433 — 133,415 Non-cash compensation — — — 1 — — 1 — 2 Stock dividends to Carilion Clinic (1) — — — 20 — — 63,214 (63,234 ) — Net income — — — — — — — 8,848,402 8,848,402 Balance, September 30 2018 1,321,514 1,322 27,936,401 30,081 1,253,105 (2,116,640 ) 85,353,909 (22,178,651 ) 61,090,021 (1) For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through September 30, 2019 , the Series A Preferred Stock issued to Carilion accrued $1,703,084 in dividends. In September 2019, Carilion elected to convert the preferred stock into an equal number of shares of our common stock. In addition, we issued 770,454 shares of our common stock in satisfaction of the accrued dividends earned on the preferred stock prior to its conversion. Stock Repurchase Program In September 2017, our board of directors authorized us to repurchase up to $2.0 million of our common stock through September 19, 2018 (the "prior stock repurchase program"). Our prior stock repurchase program did not obligate us to acquire any specific number of shares. Under the prior stock repurchase program, shares could be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. As of September 19, 2018, we had repurchased a total of 565,629 shares for an aggregate purchase price of $1.1 million under the prior stock repurchase program, after which the prior stock repurchase program expired. We currently maintain all repurchased shares under the prior stock repurchase program as treasury stock. In August 2019, our board of directors authorized a new stock repurchase program which allowed us to repurchase up to $2.0 million of our common stock through August 2020. As of September 30, 2019 , we had repurchased a total of 333,953 shares for an aggregate purchase price of $2.0 million under this new stock repurchase program, and accordingly the program expired. We currently maintain all repurchased shares under this new stock repurchase program as treasury stock. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 (unaudited) (unaudited) Technology Development Products and Licensing Total Technology Development Products and Licensing Total Total Revenue by Geographic Location United States $ 6,494,832 $ 5,924,077 $ 12,418,909 $ 5,315,861 $ 3,251,602 $ 8,567,463 Asia — 3,728,671 3,728,671 — 1,143,767 1,143,767 Europe — 1,912,652 1,912,652 — 899,683 899,683 Canada, Central and South America — 218,846 218,846 — 1,330 1,330 All Others — 141,932 141,932 — 74,783 74,783 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Major Customer Type Sales to the U.S. government $ 6,411,899 $ 1,260,475 $ 7,672,374 $ 5,216,389 $ 977,076 $ 6,193,465 U.S. direct commercial sales and other 82,933 4,663,602 4,746,535 99,472 2,250,656 2,350,128 Foreign commercial sales & other — 6,002,101 6,002,101 — 2,143,433 2,143,433 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Contract Type Fixed-price contracts $ 3,487,522 $ 11,926,178 $ 15,413,700 $ 2,004,166 $ 5,371,165 $ 7,375,331 Cost-type contracts 3,007,310 — 3,007,310 3,311,695 — 3,311,695 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Timing of Recognition Goods transferred at a point in time $ — $ 11,669,034 $ 11,669,034 $ — $ 5,190,830 $ 5,190,830 Goods/services transferred over time 6,494,832 257,144 6,751,976 5,315,861 180,335 5,496,196 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Major Products/Services Technology development $ 6,494,832 $ — $ 6,494,832 $ 5,315,861 $ — $ 5,315,861 Optical test and measurement systems — 11,266,322 11,266,322 — 4,469,677 4,469,677 Other — 659,856 659,856 — 901,488 901,488 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 (unaudited) (unaudited) Technology Development Products and Licensing Total Technology Development Products and Licensing Total Total Revenue by Geographic Location United States $ 19,576,574 $ 15,450,256 $ 35,026,830 $ 15,418,919 $ 7,961,048 $ 23,379,967 Asia — 9,450,775 9,450,775 — 3,280,348 3,280,348 Europe — 5,343,251 5,343,251 — 2,542,017 2,542,017 Canada, Central and South America — 936,426 936,426 — 99,807 99,807 All Others — 278,615 278,615 — 76,783 76,783 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Major Customer Type Sales to the U.S. government $ 19,180,408 $ 2,457,677 $ 21,638,085 $ 15,284,661 $ 1,364,755 $ 16,649,416 U.S. direct commercial sales and other 396,166 12,992,580 13,388,746 134,258 6,583,006 6,717,264 Foreign commercial sales & other — 16,009,066 16,009,066 — 6,012,242 6,012,242 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Contract Type Fixed-price contracts $ 10,654,247 $ 31,459,323 $ 42,113,570 $ 6,611,758 $ 13,960,003 $ 20,571,761 Cost-type contracts 8,922,327 — 8,922,327 8,807,161 — 8,807,161 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Timing of Recognition Goods transferred at a point in time $ — $ 30,302,926 $ 30,302,926 $ — $ 13,505,897 $ 13,505,897 Goods/services transferred over time 19,576,574 1,156,397 20,732,971 15,418,919 454,106 15,873,025 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Major Products/Services Technology development $ 19,576,574 $ — $ 19,576,574 $ 15,418,919 $ — $ 15,418,919 Optical test and measurement systems — 29,323,169 29,323,169 — 12,129,197 12,129,197 Other — 2,136,154 2,136,154 — 1,830,806 1,830,806 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 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. The net contract assets (liabilities) increased $0.2 million , due primarily to increased contract assets in addition to a slight decrease in contract liabilities. The increase in contract assets is a result of the increased number of government research programs in addition to an increase in the number of our Fixed-Price contracts that have not reached milestones as designated in their respective contracts. The following table shows the components of our contract balances as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Contract assets $ 3,865,601 $ 2,759,315 Contract liabilities (3,389,417 ) (2,486,111 ) Net contract assets $ 476,184 $ 273,204 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 $14.6 million at September 30, 2019 . We expect to satisfy 27% of the performance obligations in 2019, 31% in 2020 and the remainder by 2023. The approximate value of our Technology Development segment's unfulfilled performance obligations was $34.8 million at September 30, 2019 . We expect to satisfy 22% of the performance obligations in 2019, 55% in 2020 and the remainder by 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
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. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including the variability in accurately predicting our pre-tax and taxable income and the mix of jurisdictions to which they relate, changes in how we do business, changes in our stock price, tax law developments (including changes in statues, regulations, case law, and administrative practices), and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. For the nine months ended September 30, 2019 , our effective income tax rate was (67.93)% . We expect our effective tax rate for 2019 to continue to differ from the Federal statutory rate of 21%, partly because of the partial release of the valuation allowance due to the acquisition of GP in the first quarter of 2019, and partly because of the net operating loss carryforwards expected to be used to offset taxable income. 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 September 30, 2019 , our valuation allowance was $0.9 million . |
Reportable Segments
Reportable Segments | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments | Segments Through September 30, 2019 , 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 15, 2019). The table below presents revenues and operating income/(loss) for reportable segments: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (unaudited) (unaudited) Revenues: Products and licensing $ 11,926,178 $ 5,371,165 $ 31,459,323 $ 13,960,003 Technology development 6,494,832 5,315,861 19,576,574 15,418,919 Total revenues $ 18,421,010 $ 10,687,026 $ 51,035,897 $ 29,378,922 Products and licensing operating income/(loss) $ 706,185 $ 240,645 $ 233,177 $ (410,477 ) Technology development operating income 777,816 340,852 1,365,320 864,540 Total operating income $ 1,484,001 $ 581,497 $ 1,598,497 $ 454,063 Depreciation, products and licensing $ 133,142 $ 42,559 $ 417,633 $ 192,058 Depreciation, technology development $ 98,393 $ 95,673 $ 287,901 $ 283,550 Amortization, products and licensing $ 422,391 $ 56,062 $ 1,054,234 $ 300,837 Amortization, technology development $ 15,060 $ 43,708 $ 74,826 $ 121,770 The table below presents assets for reportable segments: September 30, December 31, (unaudited) Total segment assets: Products and licensing $ 45,702,864 $ 40,775,211 Technology development 37,184,931 34,823,525 Total assets $ 82,887,795 $ 75,598,736 Property plant and equipment, and intangible assets, products and licensing $ 22,380,346 $ 4,927,453 Property plant and equipment, and intangible assets, technology development $ 2,162,084 $ 2,103,711 The U.S. government accounted for 42% and 58% of total consolidated revenues for the three months ended September 30, 2019 and 2018 , respectively and for 42% and 57% of total consolidated revenues for the nine months ended September 30, 2019 and 2018 , respectively. International revenues (customers outside the United States) accounted for 33% and 20% of total consolidated revenues for the three months ended September 30, 2019 and 2018 , respectively, and 31% and 20% of the total consolidated revenues for the nine months ended September 30, 2019 and 2018 , respectively. Customers in China represented 11% of total revenues in the three and nine months ended September 30, 2019 , while no other single country, outside of the United States, represented more than 10% of total revenues in the three and nine months ended September 30, 2019 and 2018 . |
Contingencies and Guarantees
Contingencies and Guarantees | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Guarantees | Contingencies and Guarantees We are from time to time involved in certain legal proceedings in the ordinary course of conducting our business. While the ultimate liability pursuant to these actions cannot currently be determined, we believe it is not reasonably possible that these legal proceedings will have a material adverse effect on our financial position or results of operations. In March 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. The notice of claim received from Macom totaled $2.0 million under various indemnity provisions. We have disputed Macom's assertion of right to payment for the matters described in the Claim. It is uncertain what amount, if any, will be owed in settlement of the Claim. As of September 30, 2019 , $1.5 million of the escrow balance had been received with the remaining $2.5 million in the escrow account pending resolution 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. There have been no amounts recorded in reference to the above matter in the financial statements as of September 30, 2019 . It is uncertain what amount, if any, will be received or paid with respect to each of these potential adjustments. On March 1, 2019, we acquired the outstanding stock of GP for cash consideration of $19.0 million . Additionally, we can become obligated to pay additional cash consideration of up to $1.0 million if certain revenue targets for the GP historical business are met for the twelve month period following the closing. At September 30, 2019 , a liability of $0.9 million has been recorded in the financial statements in reference to the above matter. We executed a non-cancelable purchase order totaling $1.1 million in the first quarter of 2018 and a non-cancelable purchase order 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 September 30, 2019 , approximately $1.9 million of these commitments remained and is 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 | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event 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 Loan and Security Agreement dated as of February 18, 2010, as amended (See Note 8). 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. No amounts have been borrowed under this Loan Agreement. Amounts due under the Loan Agreement are secured by our assets, including all personal property and bank accounts; however, intellectual property is not secured under the Loan Agreement. 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. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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 products for the telecommunications industry 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 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 September 30, 2019 , results of operations and changes in stockholders' equity for the three and nine months ended September 30, 2019 and 2018 , and cash flows for the nine months ended September 30, 2019 and 2018 . The results of operations for the three and nine months ended September 30, 2019 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . The consolidated balance sheet as of December 31, 2018 was derived from our audited 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, 2018 , included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2019 . |
Business Combinations | Business Combinations We apply the provisions of Accounting Standards Codification ("ASC") 805, Business Combinations , in the accounting for acquisitions. ASC 805 requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include: future expected cash flows from product sales; customer contracts and acquired technologies; expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, 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 all significant inputs and significant value drivers are observable in active markets • Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of our debt as of December 31, 2018 approximates fair value, as we consider the floating interest rate on our credit facilities with Silicon Valley Bank ("SVB") to be at market for similar instruments. Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. This includes items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived asset groups measured at fair value for an impairment assessment. In general, non-financial assets including intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. |
Net Income Per Share | Net Income Per Share Basic per share data is computed by dividing our net income by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued a new standard related to Leases, Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) and subsequent amendments, which replaced existing U.S. GAAP and requires lessees to recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating leases for greater transparency. We, using a modified retrospective adoption approach, are required to recognize and measure leases existing at the beginning of the adoption period, with certain practical expedients available. We adopted the standard effective January 1, 2019. The standard allows a number of optional practical expedients to use for transition. We chose the certain practical expedients allowed under the transition guidance which permitted us to not to reassess any existing or expired contracts to determine if they contain embedded leases, to not reassess our lease classification on existing leases, to account for lease and non-lease components as a single lease component for equipment leases, and whether initial direct costs previously capitalized would qualify for capitalization under FASB ASC 842. The new standard also provides practical expedients and recognition exemptions for an entity's ongoing accounting policy elections. We have elected the short-term lease recognition for all leases that qualify, which means that we do not recognize a ROU asset and lease liability for any lease with a term of twelve months or less. The most significant impact of adopting the standard was the recognition of ROU assets and lease liabilities for operating leases on our consolidated balance sheet but it did not have an impact on our consolidated statements of operations or consolidated statements of cash flows. The cumulative effect of the changes made to our January 1, 2019 unaudited consolidated balance sheet as a result of the adoption of ASC 842 are as follows: Balance at Adjustment for Adjusted balance at December 31, 2018 ASC 842 January 1, 2019 Assets: Property and equipment, net 3,627,886 (90,494 ) 3,537,392 Other assets, net 1,995 3,536,133 3,538,128 Liabilities: Accrued liabilities 6,597,458 1,242,669 7,840,127 Current portion of capital lease obligations 40,586 (40,586 ) — Long-term deferred rent 1,035,974 (1,035,974 ) — Long-term operating lease liability — 3,271,705 3,271,705 Long-term capital lease obligations 68,978 (68,978 ) — Long-term finance lease liability — 76,803 76,803 Effective January 1, 2018, we adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how cash receipts and cash payments are presented in the statement of cash flows. The adoption of ASU No. 2016-15 did not 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 . The ASU requires companies to measure credit losses by using a methodology that reflects the expected credit losses based on historical information current economic conditions, and reasonable and supportable information. The new standard is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We do not expect the adoption of ASU 2016-13 will have a significant impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02: Income Statement – Reporting Comprehensive Income (Topic 220) . Under current accounting guidance, the income tax effects for changes in income tax rates and certain other transactions are recognized in income from continuing operations resulting in income tax effects recognized in accumulated other comprehensive income that do not reflect the current tax rate of the entity (“stranded tax effects”). The new guidance allows us the option to reclassify these stranded tax effects to accumulated deficit that relate to the change in the federal tax rate resulting from the passage of the Tax Cuts and Jobs Act. We adopted ASU 2018-02, effective January 1, 2019. ASU 2018-02 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. These amendments are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. We do not expect ASU 2018-13 will have a material impact on our consolidated financial statements. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of the Cumulative Effect of Adoption of Topic 842 | The cumulative effect of the changes made to our January 1, 2019 unaudited consolidated balance sheet as a result of the adoption of ASC 842 are as follows: Balance at Adjustment for Adjusted balance at December 31, 2018 ASC 842 January 1, 2019 Assets: Property and equipment, net 3,627,886 (90,494 ) 3,537,392 Other assets, net 1,995 3,536,133 3,538,128 Liabilities: Accrued liabilities 6,597,458 1,242,669 7,840,127 Current portion of capital lease obligations 40,586 (40,586 ) — Long-term deferred rent 1,035,974 (1,035,974 ) — Long-term operating lease liability — 3,271,705 3,271,705 Long-term capital lease obligations 68,978 (68,978 ) — Long-term finance lease liability — 76,803 76,803 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Allocation of Purchase Consideration | The following table summarizes the allocation of the purchase consideration of each acquisition. The allocation of the purchase consideration for GP is subject to revision as the work of the valuation expert is finalized or additional information becomes known in the future. MOI GP Accounts receivable $ 1,742,693 $ 1,520,950 Inventory 1,435,606 2,698,000 Other current assets 69,951 763,873 Property and equipment 996,460 286,000 Identifiable intangible assets 1,650,000 8,200,000 Goodwill 29,760 10,315,490 Accounts payable and accrued expenses (379,737 ) (3,840,063 ) Total purchase consideration $ 5,544,733 $ 19,944,250 |
Schedule of Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives | The preliminary identifiable intangible assets and their estimated useful lives were as follows: Estimated Estimated Fair Value Useful Life MOI GP Developed technology 5 - 8 years $ 1,200,000 $ 7,200,000 In process research and development 7 years 200,000 — Trade names and trademarks 3 years 150,000 400,000 Customer base 7 - 15 years 100,000 600,000 $ 1,650,000 $ 8,200,000 |
Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions of MOI and GP had been completed on January 1, 2018. The pro forma information includes adjustments to depreciation expense for property and equipment acquired, to amortize expense for the intangible assets acquired, and to eliminate the acquisition transaction expenses recognized in each period. Transaction-related expenses associated with the acquisition and excluded from pro forma income from continuing operations were $0.9 million for the nine months ended September 30, 2019 . There were no transaction-related expenses associated with the acquisition for the nine months ended September 30, 2018 . The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations or the combined business had the acquisitions of MOI and GP actually occurred on January 1, 2018, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenue $ 18,421,010 $ 16,102,426 $ 53,097,083 $ 43,553,934 Income from continuing operations $ 1,540,863 $ 1,702,156 $ 5,029,586 $ 1,567,552 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The key components of net income from discontinued operations were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (unaudited) (unaudited) Net revenues $ — $ 1,089,681 $ — $ 8,363,606 Cost of revenues — 648,652 — 5,294,268 Operating expenses — 271,262 — 1,714,920 Other income — (9,372 ) — 13,330 Income before income taxes — 160,395 — 1,367,748 Allocated tax expense — 216,813 — 235,312 Operating (loss)/income from discontinued operations — (56,418 ) — 1,132,436 Gain on sale, net of related income taxes — 7,612,044 — 7,571,810 Net income from discontinued operations $ — $ 7,555,626 $ — $ 8,704,246 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets, net at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (unaudited) Patent costs $ 3,955,374 $ 4,991,460 Developed technology 9,800,000 2,600,000 In-process research & development 1,580,000 200,000 Customer base 700,000 100,000 Trade names and trademarks 550,000 150,000 16,585,374 8,041,460 Accumulated amortization (6,015,027 ) (4,739,190 ) $ 10,570,347 $ 3,302,270 |
Estimated Aggregate Amortization Based on Net Value of Intangible Assets | Amortization for the three and nine months ended September 30, 2019 was $0.4 million and $1.1 million , respectively. Estimated aggregate amortization, based on the net value of intangible assets at September 30, 2019 , for each of the next five years and beyond is as follows: Year Ending December 31, Remainder of 2019 $ 406,749 2020 1,626,995 2021 1,618,649 2022 1,465,880 2023 1,390,621 2024 & beyond 4,061,453 Total $ 10,570,347 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying value of goodwill during the nine months ended September 30, 2019 were as follows: Balance as of December 31, 2018 $ 101,008 Goodwill resulting from business combination - GP 10,315,490 Measurement Period Adjustment - MOI (71,248 ) Balance as of September 30, 2019 $ 10,345,250 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Components of inventory were as follows: September 30, December 31, (unaudited) Finished goods $ 1,376,797 $ 1,339,832 Work-in-process 1,002,702 643,420 Raw materials 7,265,365 4,890,490 Total inventory $ 9,644,864 $ 6,873,742 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (unaudited) Accrued compensation $ 5,520,291 $ 4,467,587 Income tax payable 1,072,216 236,636 Accrued professional fees 116,656 198,062 Deferred Rent — 146,542 Current operating lease liability 1,394,761 — Current finance lease liability 51,637 — Royalties 265,770 302,428 Accrued liabilities - other 333,391 404,752 Customer deposits — 298,468 Contingent liability - GP 940,000 — Working capital adjustment - MOI — 542,983 Total accrued liabilities $ 9,694,722 $ 6,597,458 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt Outstanding | The following table presents a summary of debt outstanding as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (unaudited) Silicon Valley Bank Term Loan $ — $ 625,000 Less: unamortized debt issuance costs — 5,685 Less: current portion — 619,315 Total long-term debt $ — $ — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of lease components | As of September 30, 2019 , our lease components included in the consolidated balance sheet were as follows: Lease component Classification September 30, 2019 Assets ROU assets - operating lease Other assets $ 2,545,616 ROU assets - finance lease Other assets 83,813 Total ROU assets $ 2,629,429 Liabilities Current operating lease liability Accrued liabilities $ 1,394,761 Current finance lease liability Accrued liabilities 51,637 Long-term operating lease liability Other liabilities 2,223,623 Long-term finance lease liability Other liabilities 34,335 Total lease liabilities $ 3,704,356 |
Schedule of rent expense | Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Operating lease costs $ 407,365 $ 1,214,484 Variable rent costs (36,794 ) (109,748 ) Total rent expense $ 370,571 $ 1,104,736 |
Schedule of future minimum lease payments | Future minimum lease payments under non-cancelable leases were as follows as of September 30, 2019 : September 30, 2019 2019 - remaining 3 months $ 407,992 2020 1,467,701 2021 640,800 2022 544,704 2023 544,704 2024 and beyond 544,704 Total future minimum lease payments 4,150,605 Less: Interest 532,221 Total operating lease liabilities $ 3,618,384 Current operating lease liability $ 1,394,761 Long-term operating lease liability 2,223,623 Total operating lease liabilities $ 3,618,384 |
Schedule of other information related to leases | Other information related to leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 10,902 $ 32,867 Interest on lease liabilities 1,649 3,880 Total finance lease cost $ 12,551 $ 36,747 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 407,365 $ 1,214,484 Finance cash flows from finance leases $ 13,249 $ 28,803 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 14,541 Weighted-average remaining lease term (years) - operating leases 3.8 3.8 Weighted-average remaining lease term (years) - finance leases 2.2 2.2 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) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Summary of Stock Option Activity | A summary of the stock option activity for the nine months ended September 30, 2019 is presented below: Options Outstanding Options Exercisable Number of Shares Price per Share Weighted Average Exercise Price Aggregate Intrinsic Value (1) Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (1) Balance, January 1, 2019 3,108,868 $0.61 - $6.55 $ 2.26 $ 3,669,794 1,986,740 $ 1.81 $ 3,314,494 Granted 565,070 $3.21 - $3.37 Exercised (551,334 ) $0.61 - $1.81 Canceled (13,507 ) $1.47 - $3.37 Balance, September 30, 2019 3,109,097 $1.18 - $4.75 $ 2.62 $ 9,847,522 1,734,345 $ 2.22 $ 6,186,154 (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 nine months ended September 30, 2019 : Number of Stock Units Weighted Average Grant Date Fair Value per Share Intrinsic Value Outstanding Balance, January 1, 2019 507,290 $1.53 $ 1,699,422 Granted 112,503 4.30 Forfeitures — — Converted — — Balance, September 30, 2019 619,793 $2.03 $ 3,588,601 The following table summarizes the value of our unvested restricted stock awards and RSUs: Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair Value of Unvested Shares Balance, January 1, 2019 458,620 $ 2.56 $ 1,172,456 Granted 241,600 3.04 733,429 Vested (193,951 ) 2.32 (450,935 ) Forfeitures — — — Balance, September 30, 2019 506,269 $ 2.87 $ 1,454,950 |
Details of Equity Transactions | The following tables detail our equity transactions during the nine months ended September 30, 2019 and 2018 : Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ Balance at January 1, 2019, as previously reported 1,321,514 1,322 27,956,401 30,120 1,253,105 (2,116,640 ) 85,744,750 (21,305,222 ) 62,354,330 Exercise of stock options — — 189,312 189 — — 184,769 — 184,958 Share-based compensation — — — — — — 342,765 — 342,765 Stock dividends to Carilion Clinic (1) — — — 20 — — 83,038 (83,058 ) — Net income — — — — — — — 1,125,879 1,125,879 Balance, March 31 2019 1,321,514 1,322 28,145,713 30,329 1,253,105 (2,116,640 ) 86,355,322 (20,262,401 ) 64,007,932 Exercise of stock options — — 207,786 208 — — 182,317 — 182,525 Share-based compensation — — — — — — 377,884 — 377,884 Stock dividends to Carilion Clinic (1) — — — 20 — — 89,383 (89,403 ) — Net income — — — — — — — 840,292 840,292 Purchase of treasury stock — — (52,733 ) — 52,733 (220,470 ) — — (220,470 ) Balance, June 30 2019 1,321,514 1,322 28,300,766 30,557 1,305,838 (2,337,110 ) 87,004,906 (19,511,512 ) 65,188,163 Exercise of stock options — — 83,204 83 — — 70,863 — 70,946 Share-based compensation — — 16,286 16 — — 419,535 — 419,551 Stock dividends to Carilion Clinic (1) — — 770,454 20 — — 112,970 (112,990 ) — Preferred stock to common stock conversion (1,321,514 ) (1,322 ) 1,321,514 1,322 — — — — — Net income — — — — — — — 1,230,252 1,230,252 Purchase of treasury stock — — (333,953 ) — 333,953 (1,999,997 ) — — (1,999,997 ) Balance, September 30 2019 — — 30,158,271 31,998 1,639,791 (4,337,107 ) 87,608,274 (18,394,250 ) 64,908,915 Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shares $ Shares $ Shares $ $ Balance at January 1, 2018, as previously reported 1,321,514 1,322 27,283,918 29,186 1,070,904 (1,649,746 ) 83,563,208 (32,406,189 ) 49,537,781 Impact of change in accounting policy — — — — — — — 354,028 354,028 As adjusted balance at January 1, 2018 1,321,514 1,322 27,283,918 29,186 1,070,904 (1,649,746 ) 83,563,208 (32,052,161 ) 49,891,809 Exercise of stock options — — 10,727 11 — — 22,277 — 22,288 Share-based compensation — — — — — — 94,606 — 94,606 Stock dividends to Carilion Clinic (1) — — — 20 — — 64,405 (64,425 ) — Net income — — — — — — — 148,676 148,676 Purchase of treasury stock — — (132,450 ) — 132,450 (306,041 ) — — (306,041 ) Balance, March 31 2018 1,321,514 1,322 27,162,195 29,217 1,203,354 (1,955,787 ) 83,744,496 (31,967,910 ) 49,851,338 Exercise of stock options — — 250,115 250 — — 617,259 — 617,509 Share-based compensation — — 280,000 280 — — 117,543 — 117,823 Non-cash compensation — — 129,865 130 — — 199,871 — 200,001 Stock dividends to Carilion Clinic (1) — — — 20 — — 63,216 (63,236 ) — Net income — — — — — — — 1,067,327 1,067,327 Purchase of treasury stock — — (49,751 ) — 49,751 (160,853 ) — — (160,853 ) Balance, June 30 2018 1,321,514 1,322 27,772,424 29,897 1,253,105 (2,116,640 ) 84,742,385 (30,963,819 ) 51,693,145 Exercise of stock options — — 181,583 181 — — 414,876 — 415,057 Share-based compensation — — (17,606 ) (18 ) — — 133,433 — 133,415 Non-cash compensation — — — 1 — — 1 — 2 Stock dividends to Carilion Clinic (1) — — — 20 — — 63,214 (63,234 ) — Net income — — — — — — — 8,848,402 8,848,402 Balance, September 30 2018 1,321,514 1,322 27,936,401 30,081 1,253,105 (2,116,640 ) 85,353,909 (22,178,651 ) 61,090,021 (1) For the period from January 12, 2010, the original issue date of the Series A Preferred Stock, through September 30, 2019 , the Series A Preferred Stock issued to Carilion accrued $1,703,084 in dividends. In September 2019, Carilion elected to convert the preferred stock into an equal number of shares of our common stock. In addition, we issued 770,454 shares of our common stock in satisfaction of the accrued dividends earned on the preferred stock prior to its conversion. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The details are listed in the table below for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 (unaudited) (unaudited) Technology Development Products and Licensing Total Technology Development Products and Licensing Total Total Revenue by Geographic Location United States $ 6,494,832 $ 5,924,077 $ 12,418,909 $ 5,315,861 $ 3,251,602 $ 8,567,463 Asia — 3,728,671 3,728,671 — 1,143,767 1,143,767 Europe — 1,912,652 1,912,652 — 899,683 899,683 Canada, Central and South America — 218,846 218,846 — 1,330 1,330 All Others — 141,932 141,932 — 74,783 74,783 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Major Customer Type Sales to the U.S. government $ 6,411,899 $ 1,260,475 $ 7,672,374 $ 5,216,389 $ 977,076 $ 6,193,465 U.S. direct commercial sales and other 82,933 4,663,602 4,746,535 99,472 2,250,656 2,350,128 Foreign commercial sales & other — 6,002,101 6,002,101 — 2,143,433 2,143,433 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Contract Type Fixed-price contracts $ 3,487,522 $ 11,926,178 $ 15,413,700 $ 2,004,166 $ 5,371,165 $ 7,375,331 Cost-type contracts 3,007,310 — 3,007,310 3,311,695 — 3,311,695 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Timing of Recognition Goods transferred at a point in time $ — $ 11,669,034 $ 11,669,034 $ — $ 5,190,830 $ 5,190,830 Goods/services transferred over time 6,494,832 257,144 6,751,976 5,315,861 180,335 5,496,196 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Total Revenue by Major Products/Services Technology development $ 6,494,832 $ — $ 6,494,832 $ 5,315,861 $ — $ 5,315,861 Optical test and measurement systems — 11,266,322 11,266,322 — 4,469,677 4,469,677 Other — 659,856 659,856 — 901,488 901,488 Total $ 6,494,832 $ 11,926,178 $ 18,421,010 $ 5,315,861 $ 5,371,165 $ 10,687,026 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 (unaudited) (unaudited) Technology Development Products and Licensing Total Technology Development Products and Licensing Total Total Revenue by Geographic Location United States $ 19,576,574 $ 15,450,256 $ 35,026,830 $ 15,418,919 $ 7,961,048 $ 23,379,967 Asia — 9,450,775 9,450,775 — 3,280,348 3,280,348 Europe — 5,343,251 5,343,251 — 2,542,017 2,542,017 Canada, Central and South America — 936,426 936,426 — 99,807 99,807 All Others — 278,615 278,615 — 76,783 76,783 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Major Customer Type Sales to the U.S. government $ 19,180,408 $ 2,457,677 $ 21,638,085 $ 15,284,661 $ 1,364,755 $ 16,649,416 U.S. direct commercial sales and other 396,166 12,992,580 13,388,746 134,258 6,583,006 6,717,264 Foreign commercial sales & other — 16,009,066 16,009,066 — 6,012,242 6,012,242 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Contract Type Fixed-price contracts $ 10,654,247 $ 31,459,323 $ 42,113,570 $ 6,611,758 $ 13,960,003 $ 20,571,761 Cost-type contracts 8,922,327 — 8,922,327 8,807,161 — 8,807,161 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Timing of Recognition Goods transferred at a point in time $ — $ 30,302,926 $ 30,302,926 $ — $ 13,505,897 $ 13,505,897 Goods/services transferred over time 19,576,574 1,156,397 20,732,971 15,418,919 454,106 15,873,025 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 Total Revenue by Major Products/Services Technology development $ 19,576,574 $ — $ 19,576,574 $ 15,418,919 $ — $ 15,418,919 Optical test and measurement systems — 29,323,169 29,323,169 — 12,129,197 12,129,197 Other — 2,136,154 2,136,154 — 1,830,806 1,830,806 Total $ 19,576,574 $ 31,459,323 $ 51,035,897 $ 15,418,919 $ 13,960,003 $ 29,378,922 |
Schedule of components of contract balances | The following table shows the components of our contract balances as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Contract assets $ 3,865,601 $ 2,759,315 Contract liabilities (3,389,417 ) (2,486,111 ) Net contract assets $ 476,184 $ 273,204 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenues, Operating Income (Loss) and Assets for Reportable Segments | The table below presents revenues and operating income/(loss) for reportable segments: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (unaudited) (unaudited) Revenues: Products and licensing $ 11,926,178 $ 5,371,165 $ 31,459,323 $ 13,960,003 Technology development 6,494,832 5,315,861 19,576,574 15,418,919 Total revenues $ 18,421,010 $ 10,687,026 $ 51,035,897 $ 29,378,922 Products and licensing operating income/(loss) $ 706,185 $ 240,645 $ 233,177 $ (410,477 ) Technology development operating income 777,816 340,852 1,365,320 864,540 Total operating income $ 1,484,001 $ 581,497 $ 1,598,497 $ 454,063 Depreciation, products and licensing $ 133,142 $ 42,559 $ 417,633 $ 192,058 Depreciation, technology development $ 98,393 $ 95,673 $ 287,901 $ 283,550 Amortization, products and licensing $ 422,391 $ 56,062 $ 1,054,234 $ 300,837 Amortization, technology development $ 15,060 $ 43,708 $ 74,826 $ 121,770 The table below presents assets for reportable segments: September 30, December 31, (unaudited) Total segment assets: Products and licensing $ 45,702,864 $ 40,775,211 Technology development 37,184,931 34,823,525 Total assets $ 82,887,795 $ 75,598,736 Property plant and equipment, and intangible assets, products and licensing $ 22,380,346 $ 4,927,453 Property plant and equipment, and intangible assets, technology development $ 2,162,084 $ 2,103,711 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Common stock equivalents included in diluted per share data (in shares) | 3.8 | 5.2 | 3.6 | 5.2 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Schedule of the Cumulative Effect of Adoption of Topic 842 (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets: | |||
Property and equipment, net | $ 3,626,833 | $ 3,537,392 | $ 3,627,886 |
Other assets, net | 3,003,813 | 3,538,128 | 1,995 |
Liabilities: | |||
Accrued liabilities | 9,694,722 | 7,840,127 | 6,597,458 |
Current portion of capital lease obligations | 0 | 0 | 40,586 |
Long-term deferred rent | 0 | 0 | 1,035,974 |
Long-term operating lease liability | 2,223,623 | 3,271,705 | |
Long-term capital lease obligations | 0 | 0 | $ 68,978 |
Long-term finance lease liability | $ 83,813 | 76,803 | |
Accounting Standards Update 2016-02 | |||
Assets: | |||
Property and equipment, net | (90,494) | ||
Other assets, net | 3,536,133 | ||
Liabilities: | |||
Accrued liabilities | 1,242,669 | ||
Current portion of capital lease obligations | (40,586) | ||
Long-term deferred rent | (1,035,974) | ||
Long-term operating lease liability | 3,271,705 | ||
Long-term capital lease obligations | (68,978) | ||
Long-term finance lease liability | $ 76,803 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) | Mar. 01, 2019 | Oct. 15, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 19,004,250 | $ 0 | |||||
Revenue | $ 18,421,010 | $ 16,102,426 | 53,097,083 | 43,553,934 | |||
Income from continuing operations | 1,540,863 | 1,702,156 | 5,029,586 | 1,567,552 | |||
Amortization expense | 400,000 | 1,100,000 | |||||
Micron Optics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 5,500,000 | ||||||
Revenue | 2,700,000 | ||||||
Income from continuing operations | 400,000 | ||||||
Revenue recognized since acquisition | 8,100,000 | ||||||
Income (loss) since acquisition | 1,800,000 | ||||||
General Photonics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 19,000,000 | ||||||
Revenue | 3,200,000 | ||||||
Income from continuing operations | 300,000 | ||||||
Revenue recognized since acquisition | 7,100,000 | ||||||
Income (loss) since acquisition | 500,000 | ||||||
Cash paid at closing | 17,100,000 | ||||||
Amount at closing placed in escrow | 1,900,000 | ||||||
Potential maximum obligation of contingent consideration | $ 1,000,000 | ||||||
Contingent obligation | 900,000 | $ 900,000 | 900,000 | ||||
Amortization expense | $ 600,000 | $ 1,400,000 | |||||
Acquisition costs | $ 0 | $ 900,000 | $ 0 | ||||
Developed technology | Micron Optics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 24.50% | ||||||
Developed technology | General Photonics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 17.00% | ||||||
In process research and development | Micron Optics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 29.50% | ||||||
Trade names and trademarks | Micron Optics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 17.00% | ||||||
Trade names and trademarks | General Photonics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 16.00% | ||||||
Customer base | Micron Optics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 24.50% | ||||||
Customer base | General Photonics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 16.00% |
Business Combinations - Allocat
Business Combinations - Allocation of Purchase Consideration (Details) - USD ($) | Sep. 30, 2019 | Mar. 01, 2019 | Dec. 31, 2018 | Oct. 15, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 10,345,250 | $ 101,008 | ||
Micron Optics, Inc. | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 1,742,693 | |||
Inventory | 1,435,606 | |||
Other current assets | 69,951 | |||
Property and equipment | 996,460 | |||
Identifiable intangible assets | 1,650,000 | |||
Goodwill | 29,760 | |||
Accounts payable and accrued expenses | (379,737) | |||
Total purchase consideration | $ 5,544,733 | |||
General Photonics, Inc. | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 1,520,950 | |||
Inventory | 2,698,000 | |||
Other current assets | 763,873 | |||
Property and equipment | 286,000 | |||
Identifiable intangible assets | 8,200,000 | |||
Goodwill | 10,315,490 | |||
Accounts payable and accrued expenses | (3,840,063) | |||
Total purchase consideration | $ 19,944,250 |
Business Combinations - Schedul
Business Combinations - Schedule of Preliminary Identifiable Intangible Assets Acquired (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Mar. 01, 2019 | Oct. 15, 2018 | |
Micron Optics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 1,650,000 | ||
General Photonics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 8,200,000 | ||
Developed technology | Micron Optics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 1,200,000 | ||
Developed technology | General Photonics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 7,200,000 | ||
In process research and development | |||
Business Acquisition [Line Items] | |||
Acquired assets expected useful lives | 7 years | ||
In process research and development | Micron Optics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 200,000 | ||
In process research and development | General Photonics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 0 | ||
Trade names and trademarks | |||
Business Acquisition [Line Items] | |||
Acquired assets expected useful lives | 3 years | ||
Trade names and trademarks | Micron Optics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 150,000 | ||
Trade names and trademarks | General Photonics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 400,000 | ||
Customer base | Micron Optics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 100,000 | ||
Customer base | General Photonics, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 600,000 | ||
Minimum | Developed technology | |||
Business Acquisition [Line Items] | |||
Acquired assets expected useful lives | 5 years | ||
Minimum | Customer base | |||
Business Acquisition [Line Items] | |||
Acquired assets expected useful lives | 7 years | ||
Maximum | Developed technology | |||
Business Acquisition [Line Items] | |||
Acquired assets expected useful lives | 8 years | ||
Maximum | Customer base | |||
Business Acquisition [Line Items] | |||
Acquired assets expected useful lives | 15 years |
Business Combinations - Unaudit
Business Combinations - Unaudited Pro Forma Financial Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||||
Revenue | $ 18,421,010 | $ 16,102,426 | $ 53,097,083 | $ 43,553,934 |
Income from continuing operations | $ 1,540,863 | $ 1,702,156 | $ 5,029,586 | $ 1,567,552 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) | Jul. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sales of discontinued operations | $ 0 | $ 14,775,541 | |
Optoelectronic Components and Subassemblies | Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Initial purchase price | $ 18,500,000 | ||
Proceeds from sales of discontinued operations | 17,500,000 | ||
Contingent consideration on discontinued operation | $ 1,000,000 |
Discontinued Operations - Compo
Discontinued Operations - Components of Income from Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net revenues | $ 0 | $ 1,089,681 | $ 0 | $ 8,363,606 |
Cost of revenues | 0 | 648,652 | 0 | 5,294,268 |
Operating expenses | 0 | 271,262 | 0 | 1,714,920 |
Other income | 0 | 0 | 13,330 | |
Other income | (9,372) | |||
Income before income taxes | 0 | 160,395 | 0 | 1,367,748 |
Allocated tax expense | 0 | 216,813 | 0 | 235,312 |
Operating (loss)/income from discontinued operations | 0 | (56,418) | 0 | 1,132,436 |
Gain on sale, net of related income taxes | 0 | 7,612,044 | 0 | 7,571,810 |
Net income from discontinued operations | $ 0 | $ 7,555,626 | $ 0 | $ 8,704,246 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 16,585,374 | $ 8,041,460 | |
Accumulated amortization | (6,015,027) | (4,739,190) | |
Intangible assets, net | 10,570,347 | $ 3,302,270 | 3,302,270 |
Patent costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 3,955,374 | 4,991,460 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 9,800,000 | 2,600,000 | |
In-process research & development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 1,580,000 | 200,000 | |
Customer base | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 700,000 | 100,000 | |
Trade names and trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 550,000 | $ 150,000 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Aggregate Amortization (Details) | Sep. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2019 | $ 406,749 |
2020 | 1,626,995 |
2021 | 1,618,649 |
2022 | 1,465,880 |
2023 | 1,390,621 |
2024 & beyond | 4,061,453 |
Total | $ 10,570,347 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 0.4 | $ 1.1 |
Goodwill (Details)
Goodwill (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | $ 101,008 |
Goodwill resulting from business combination - GP | 10,315,490 |
Measurement Period Adjustment - MOI | (71,248) |
Balance as of September 30, 2019 | $ 10,345,250 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,376,797 | $ 1,339,832 |
Work-in-process | 1,002,702 | 643,420 |
Raw materials | 7,265,365 | 4,890,490 |
Total inventory | $ 9,644,864 | $ 6,873,742 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accrued compensation | $ 5,520,291 | $ 4,467,587 | |
Income tax payable | 1,072,216 | 236,636 | |
Accrued professional fees | 116,656 | 198,062 | |
Deferred Rent | 146,542 | ||
Current operating lease liability | 1,394,761 | ||
Current finance lease liability | 51,637 | ||
Royalties | 265,770 | 302,428 | |
Accrued liabilities - other | 333,391 | 404,752 | |
Customer deposits | 298,468 | ||
Contingent liability - GP | 940,000 | ||
Working capital adjustment - MOI | 0 | 542,983 | |
Total accrued liabilities | $ 9,694,722 | $ 7,840,127 | $ 6,597,458 |
Debt - Additional Information (
Debt - Additional Information (Details) - Term Loan - Silicon Valley Bank | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Debt Instrument [Line Items] | |
Debt, face amount | $ 6,000,000 |
Prime Rate | |
Debt Instrument [Line Items] | |
Debt, additional interest above prime rate | 2.00% |
Debt - Summary of Debt Outstand
Debt - Summary of Debt Outstanding (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Silicon Valley Bank Term Loan | $ 0 | $ 625,000 |
Less: unamortized debt issuance costs | 0 | 5,685 |
Less: current portion | 0 | 619,315 |
Long-term ROU lease liability - Finance lease | $ 0 | $ 0 |
Leases - Additional Information
Leases - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019 | |
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 ($) | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
ROU assets - operating lease | $ 2,545,616 | |
ROU assets - finance lease | 83,813 | $ 76,803 |
Total ROU assets | 2,629,429 | |
Current operating lease liability | 1,394,761 | |
Current finance lease liability | 51,637 | |
Long-term operating lease liability | 2,223,623 | $ 3,271,705 |
Long-term finance lease liability | 34,335 | |
Total lease liabilities | $ 3,704,356 |
Leases - Rent Expense (Details)
Leases - Rent Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease costs | $ 407,365 | $ 1,214,484 |
Variable rent costs | (36,794) | (109,748) |
Total rent expense | $ 370,571 | $ 1,104,736 |
Leases - Future Lease Payments
Leases - Future Lease Payments (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 - remaining 3 months | $ 407,992 | |
2020 | 1,467,701 | |
2021 | 640,800 | |
2022 | 544,704 | |
2023 | 544,704 | |
2024 and beyond | 544,704 | |
Total future minimum lease payments | 4,150,605 | |
Less: Interest | 532,221 | |
Total operating lease liabilities | 3,618,384 | |
Current operating lease liability | 1,394,761 | |
Long-term operating lease liability | $ 2,223,623 | $ 3,271,705 |
Leases - Other Lease Informatio
Leases - Other Lease Information (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 10,902 | $ 32,867 |
Interest on lease liabilities | 1,649 | 3,880 |
Total finance lease cost | 12,551 | 36,747 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 407,365 | 1,214,484 |
Finance cash flows from finance leases | 13,249 | 28,803 |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ 0 | $ 14,541 |
Weighted-average remaining lease term (years) - operating leases | 3 years 9 months 27 days | 3 years 9 months 27 days |
Weighted-average remaining lease term (years) - finance leases | 2 years 2 months 27 days | 2 years 2 months 27 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) | Sep. 19, 2018USD ($)shares | Sep. 30, 2019USD ($)installmentshares | Sep. 30, 2018USD ($) | Aug. 31, 2019USD ($) | Dec. 31, 2018shares | Sep. 30, 2017USD ($) |
Equity [Abstract] | ||||||
Expected dividend yield | 0.00% | |||||
Aggregate outstanding stock options (in shares) | 3,109,097 | 3,108,868 | ||||
Outstanding stock options, weighted average remaining contractual term | 6 years 5 months | |||||
Exercisable stock options (in shares) | 1,734,345 | 1,986,740 | ||||
Exercisable stock options, weighted average remaining contractual term | 4 years 3 months | |||||
Fair value of shares vested | $ | $ 10,000,000 | |||||
Fair value of options exercised during period | $ | 2,300,000 | |||||
Share-based compensation | $ | 1,140,202 | $ 345,582 | ||||
Stock-based compensation expense not yet recognized | $ | $ 2,800,000 | |||||
Weighted average remaining service period | 3 years 12 days | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued (in shares) | 241,600 | |||||
Shares not yet vested (in shares) | 506,269 | 458,620 | ||||
Shares vested (in shares) | 193,951 | |||||
Amount authorized under share repurchase program | $ | $ 2,000,000 | $ 2,000,000 | ||||
Shares repurchased and maintained as treasury stock (in shares) | 565,629 | 333,953 | ||||
Value of shares repurchased and maintained as treasury stock | $ | $ 1,100,000 | $ 2,000,000 | ||||
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) | 230,000 | |||||
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] | ||||||
Shares not yet vested (in shares) | 167,000 | |||||
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) | 63,000 | |||||
Target performance as as percent of revenue and operating income | 150.00% | |||||
Payout of shares upon achievement of target performance | 42,000 | |||||
Shares vested (in shares) | 177,665 | |||||
Directors | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued (in shares) | 11,600 | |||||
Shares vested (in shares) | 16,286 | |||||
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) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Options Outstanding, Number of Shares | ||
Beginning Balance (shares) | shares | 3,108,868 | |
Granted (in shares) | shares | 565,070 | |
Exercised (in shares) | shares | (551,334) | |
Canceled (in shares) | shares | (13,507) | |
Ending Balance (shares) | shares | 3,109,097 | 3,108,868 |
Price per Share Range | ||
Outstanding, lower limit (in dollars per share) | $ 1.18 | $ 0.61 |
Outstanding, upper limit (in dollars per share) | 4.75 | 6.55 |
Granted, lower limit (in dollars per share) | 3.21 | |
Granted, upper limit (in dollars per share) | 3.37 | |
Exercised, lower limit (in dollars per share) | 0.61 | |
Exercised, upper limit (in dollars per share) | 1.81 | |
Canceled, lower limit (in dollars per share) | 1.47 | |
Canceled, upper limit (in dollars per share) | 3.37 | |
Options Outstanding, Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | 2.26 | |
Granted (in dollars per share) | ||
Exercised (in dollars per share) | ||
Canceled (in dollars per share) | ||
Ending balance (in dollars per share) | $ 2.62 | $ 2.26 |
Additional Disclosures | ||
Options outstanding, aggregate intrinsic value | $ | $ 9,847,522 | $ 3,669,794 |
Exercisable stock options (in shares) | shares | 1,734,345 | 1,986,740 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 2.22 | $ 1.81 |
Options exercisable, aggregate intrinsic value | $ | $ 6,186,154 | $ 3,314,494 |
Capital Stock and Share-Based_5
Capital Stock and Share-Based Compensation - Summary of Restricted Awards (Details) | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Number of Unvested Shares | |
Beginning balance (in shares) | shares | 458,620 |
Granted (in shares) | shares | 241,600 |
Vested (in shares) | shares | (193,951) |
Forfeitures (in shares) | shares | 0 |
Ending balance (in shares) | shares | 506,269 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in usd per share) | $ / shares | $ 2.56 |
Granted (in usd per share) | $ / shares | 3.04 |
Vested (in usd per share) | $ / shares | 2.32 |
Forfeitures (in usd per share) | $ / shares | 0 |
Ending balance (in usd per share) | $ / shares | $ 2.87 |
Aggregate Grant Date Fair Value of Unvested Shares | |
Aggregate grant date fair value of shares, Beginning balance | $ | $ 1,172,456 |
Aggregate grant date fair value of shares, Granted | $ | 733,429 |
Aggregate grant date fair value of shares, Vested | $ | (450,935) |
Aggregate grant date fair value of shares, Forfeitures | $ | 0 |
Aggregate grant date fair value of shares, Ending balance | $ | $ 1,454,950 |
Capital Stock and Share-Based_6
Capital Stock and Share-Based Compensation - Summary of Restricted Stock Units (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in usd per share) | $ 2.56 | |
Granted (in usd per share) | 3.04 | |
Forfeitures (in usd per share) | 0 | |
Ending balance (in usd per share) | $ 2.87 | |
Intrinsic value, outstanding | $ 1,454,950 | $ 1,172,456 |
Restricted Stock Units (RSUs) | Employee Director Compensation Plan | ||
Number of Stock Units | ||
Beginning balance (in shares) | 507,290 | |
Granted (in shares) | 112,503 | |
Forfeitures (in shares) | 0 | |
Converted (in shares) | 0 | |
Ending balance (in shares) | 619,793 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in usd per share) | $ 1.53 | |
Granted (in usd per share) | 4.30 | |
Forfeitures (in usd per share) | 0 | |
Converted (in usd per share) | 0 | |
Ending balance (in usd per share) | $ 2.03 | |
Intrinsic value, outstanding | $ 3,588,601 | $ 1,699,422 |
Capital Stock and Share-Based_7
Capital Stock and Share-Based Compensation - Equity Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2018 | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Preferred stock beginning balance (in shares) | 1,321,514 | 1,321,514 | |||||||
Common stock beginning balance (in shares) | 27,956,401 | 27,956,401 | |||||||
Treasury stock beginning balance (in shares) | 1,253,105 | 1,253,105 | |||||||
Stockholder's equity beginning balance | $ 65,188,163 | $ 64,007,932 | $ 62,354,330 | $ 51,693,145 | $ 49,851,338 | $ 49,891,809 | $ 62,354,330 | $ 49,537,781 | |
Impact of change in accounting policy | $ 354,028 | ||||||||
Exercise of stock options (in shares) | 551,334 | ||||||||
Exercise of stock options | 70,946 | 182,525 | 184,958 | 415,057 | 617,509 | 22,288 | |||
Share-based compensation | 419,551 | 377,884 | 342,765 | 133,415 | 117,823 | 94,606 | |||
Non-cash compensation | 2 | 200,001 | |||||||
Stock dividends to Carilion Clinic | 0 | 0 | 0 | 0 | 0 | 0 | |||
Net income | 1,230,252 | 840,292 | 1,125,879 | 8,848,402 | 1,067,327 | 148,676 | $ 3,196,422 | 10,064,405 | |
Purchase of treasury stock | $ (1,999,997) | (220,470) | (160,853) | (306,041) | |||||
Preferred stock ending balance (in shares) | 0 | 0 | |||||||
Common stock ending balance (in shares) | 30,158,271 | 30,158,271 | |||||||
Treasury stock ending balance (in shares) | 1,639,791 | 1,639,791 | |||||||
Stockholder's equity ending balance | $ 64,908,915 | $ 65,188,163 | $ 64,007,932 | $ 61,090,021 | $ 51,693,145 | $ 49,851,338 | $ 64,908,915 | $ 61,090,021 | |
Stock dividends for preferred shareholders (in shares) | 770,454 | ||||||||
Carilion Clinic | Series A Preferred Stock | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Accrued dividends | $ 1,703,084 | $ 1,703,084 | |||||||
Preferred Stock | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Preferred stock beginning balance (in shares) | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | |
Stockholder's equity beginning balance | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | |
Preferred stock to common stock conversion (in shares) | (1,321,514) | ||||||||
Preferred stock to common stock conversion | $ (1,322) | ||||||||
Preferred stock ending balance (in shares) | 0 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 1,321,514 | 0 | 1,321,514 | |
Stockholder's equity ending balance | $ 0 | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | $ 1,322 | $ 0 | $ 1,322 | |
Common Stock | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Common stock beginning balance (in shares) | 28,300,766 | 28,145,713 | 27,956,401 | 27,772,424 | 27,162,195 | 27,283,918 | 27,956,401 | 27,283,918 | |
Stockholder's equity beginning balance | $ 30,557 | $ 30,329 | $ 30,120 | $ 29,897 | $ 29,217 | $ 29,186 | $ 30,120 | $ 29,186 | |
Exercise of stock options (in shares) | 83,204 | 207,786 | 189,312 | 181,583 | 250,115 | 10,727 | |||
Exercise of stock options | $ 83 | $ 208 | $ 189 | $ 181 | $ 250 | $ 11 | |||
Share-based compensation (in shares) | 16,286 | (17,606) | 280,000 | ||||||
Share-based compensation | $ 16 | $ (18) | $ 280 | ||||||
Non-cash compensation (in shares) | 0 | 129,865 | |||||||
Non-cash compensation | $ 1 | $ 130 | |||||||
Stock dividends to Carilion Clinic (in shares) | 770,454 | ||||||||
Stock dividends to Carilion Clinic | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | |||
Preferred stock to common stock conversion (in shares) | 1,321,514 | ||||||||
Preferred stock to common stock conversion | $ 1,322 | ||||||||
Purchase of treasury stock (in shares) | (333,953) | (52,733) | (49,751) | (132,450) | |||||
Common stock ending balance (in shares) | 30,158,271 | 28,300,766 | 28,145,713 | 27,936,401 | 27,772,424 | 27,162,195 | 30,158,271 | 27,936,401 | |
Stockholder's equity ending balance | $ 31,998 | $ 30,557 | $ 30,329 | $ 30,081 | $ 29,897 | $ 29,217 | $ 31,998 | $ 30,081 | |
Treasury Stock | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Treasury stock beginning balance (in shares) | 1,305,838 | 1,253,105 | 1,253,105 | 1,253,105 | 1,203,354 | 1,070,904 | 1,253,105 | 1,070,904 | |
Stockholder's equity beginning balance | $ (2,337,110) | $ (2,116,640) | $ (2,116,640) | $ (2,116,640) | $ (1,955,787) | $ (1,649,746) | $ (2,116,640) | $ (1,649,746) | |
Purchase of treasury stock (in shares) | 333,953 | 52,733 | 49,751 | 132,450 | |||||
Purchase of treasury stock | $ (1,999,997) | $ (220,470) | $ (160,853) | $ (306,041) | |||||
Treasury stock ending balance (in shares) | 1,639,791 | 1,305,838 | 1,253,105 | 1,253,105 | 1,253,105 | 1,203,354 | 1,639,791 | 1,253,105 | |
Stockholder's equity ending balance | $ (4,337,107) | $ (2,337,110) | $ (2,116,640) | $ (2,116,640) | $ (2,116,640) | $ (1,955,787) | $ (4,337,107) | $ (2,116,640) | |
Additional Paid-in Capital | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stockholder's equity beginning balance | 87,004,906 | 86,355,322 | 85,744,750 | 84,742,385 | 83,744,496 | 83,563,208 | 85,744,750 | 83,563,208 | |
Exercise of stock options | 70,863 | 182,317 | 184,769 | 414,876 | 617,259 | 22,277 | |||
Share-based compensation | 419,535 | 377,884 | 342,765 | 133,433 | 117,543 | 94,606 | |||
Non-cash compensation | 1 | 199,871 | |||||||
Stock dividends to Carilion Clinic | 112,970 | 89,383 | 83,038 | 63,214 | 63,216 | 64,405 | |||
Stockholder's equity ending balance | 87,608,274 | 87,004,906 | 86,355,322 | 85,353,909 | 84,742,385 | 83,744,496 | 87,608,274 | 85,353,909 | |
Accumulated Deficit | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Stockholder's equity beginning balance | (19,511,512) | (20,262,401) | (21,305,222) | (30,963,819) | (31,967,910) | (32,052,161) | (21,305,222) | (32,406,189) | |
Impact of change in accounting policy | $ 354,028 | ||||||||
Stock dividends to Carilion Clinic | (112,990) | (89,403) | (83,058) | (63,234) | (63,236) | (64,425) | |||
Net income | 1,230,252 | 840,292 | 1,125,879 | 8,848,402 | 1,067,327 | 148,676 | |||
Stockholder's equity ending balance | $ (18,394,250) | $ (19,511,512) | $ (20,262,401) | $ (22,178,651) | $ (30,963,819) | $ (31,967,910) | $ (18,394,250) | $ (22,178,651) |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of operating segments | segment | 2 | |||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 18,421,010 | $ 10,687,026 | $ 51,035,897 | $ 29,378,922 |
Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,926,178 | 5,371,165 | 31,459,323 | 13,960,003 |
Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Technology development | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Technology development | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Optical test and measurement systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,266,322 | 4,469,677 | 29,323,169 | 12,129,197 |
Optical test and measurement systems | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Optical test and measurement systems | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,266,322 | 4,469,677 | 29,323,169 | 12,129,197 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 659,856 | 901,488 | 2,136,154 | 1,830,806 |
Other | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 659,856 | 901,488 | 2,136,154 | 1,830,806 |
Goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,669,034 | 5,190,830 | 30,302,926 | 13,505,897 |
Goods transferred at a point in time | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Goods transferred at a point in time | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,669,034 | 5,190,830 | 30,302,926 | 13,505,897 |
Goods/services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,751,976 | 5,496,196 | 20,732,971 | 15,873,025 |
Goods/services transferred over time | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Goods/services transferred over time | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 257,144 | 180,335 | 1,156,397 | 454,106 |
Fixed-price contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 15,413,700 | 7,375,331 | 42,113,570 | 20,571,761 |
Fixed-price contracts | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,487,522 | 2,004,166 | 10,654,247 | 6,611,758 |
Fixed-price contracts | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,926,178 | 5,371,165 | 31,459,323 | 13,960,003 |
Cost-type contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,007,310 | 3,311,695 | 8,922,327 | 8,807,161 |
Cost-type contracts | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,007,310 | 3,311,695 | 8,922,327 | 8,807,161 |
Cost-type contracts | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Sales to the U.S. government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 7,672,374 | 6,193,465 | 21,638,085 | 16,649,416 |
Sales to the U.S. government | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,411,899 | 5,216,389 | 19,180,408 | 15,284,661 |
Sales to the U.S. government | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,260,475 | 977,076 | 2,457,677 | 1,364,755 |
U.S. direct commercial sales and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,746,535 | 2,350,128 | 13,388,746 | 6,717,264 |
U.S. direct commercial sales and other | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 82,933 | 99,472 | 396,166 | 134,258 |
U.S. direct commercial sales and other | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,663,602 | 2,250,656 | 12,992,580 | 6,583,006 |
Foreign commercial sales & other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,002,101 | 2,143,433 | 16,009,066 | 6,012,242 |
Foreign commercial sales & other | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Foreign commercial sales & other | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,002,101 | 2,143,433 | 16,009,066 | 6,012,242 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 12,418,909 | 8,567,463 | 35,026,830 | 23,379,967 |
United States | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
United States | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,924,077 | 3,251,602 | 15,450,256 | 7,961,048 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,728,671 | 1,143,767 | 9,450,775 | 3,280,348 |
Asia | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Asia | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,728,671 | 1,143,767 | 9,450,775 | 3,280,348 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,912,652 | 899,683 | 5,343,251 | 2,542,017 |
Europe | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Europe | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,912,652 | 899,683 | 5,343,251 | 2,542,017 |
Canada, Central and South America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 218,846 | 1,330 | 936,426 | 99,807 |
Canada, Central and South America | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Canada, Central and South America | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 218,846 | 1,330 | 936,426 | 99,807 |
All Others | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 141,932 | 74,783 | 278,615 | 76,783 |
All Others | Technology development | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
All Others | Products and licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 141,932 | $ 74,783 | $ 278,615 | $ 76,783 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Increase in net contract assets (liablities) | $ 200,000 | |
Contract assets | 3,865,601 | $ 2,759,315 |
Contract liabilities | (3,389,417) | (2,486,111) |
Net contract assets | $ 476,184 | $ 273,204 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation Amount (Details) $ in Millions | Sep. 30, 2019USD ($) |
Technology development | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 34.8 |
Products and licensing | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 14.6 |
Revenue Recognition - Perform_2
Revenue Recognition - Performance Obligation Percent (Details) | Sep. 30, 2019 |
Technology development | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 0.00% |
Technology development | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 55.00% |
Products and licensing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 0.00% |
Products and licensing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 0.00% |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate | (67.93%) |
Valuation allowance | $ (0.9) |
Reportable Segments - Additiona
Reportable Segments - Additional Information (Details) - Revenues | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Government Contracts Concentration Risk | U.S. Government | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 42.00% | 58.00% | 42.00% | 57.00% |
Geographic Concentration Risk | Outside of the United States | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 33.00% | 20.00% | 31.00% | 20.00% |
Geographic Concentration Risk | China | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of total consolidated revenues by customer | 11.00% | 11.00% |
Reportable Segments - Revenues
Reportable Segments - Revenues and Operating Income (Loss) for Reportable Segments Not Including Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 18,421,010 | $ 10,687,026 | $ 51,035,897 | $ 29,378,922 |
Total operating income (loss) | 1,484,001 | 581,497 | 1,598,497 | 454,063 |
Amortization expense | 400,000 | 1,100,000 | ||
Products and licensing | ||||
Revenues: | ||||
Total revenues | 11,926,178 | 5,371,165 | 31,459,323 | 13,960,003 |
Depreciation | 133,142 | 42,559 | 417,633 | 192,058 |
Amortization expense | 422,391 | 56,062 | 1,054,234 | 300,837 |
Technology development | ||||
Revenues: | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Depreciation | 98,393 | 95,673 | 287,901 | 283,550 |
Amortization expense | 15,060 | 43,708 | 74,826 | 121,770 |
Operating Segments | ||||
Revenues: | ||||
Total revenues | 18,421,010 | 10,687,026 | 51,035,897 | 29,378,922 |
Total operating income (loss) | 1,484,001 | 581,497 | 1,598,497 | 454,063 |
Operating Segments | Products and licensing | ||||
Revenues: | ||||
Total revenues | 11,926,178 | 5,371,165 | 31,459,323 | 13,960,003 |
Total operating income (loss) | 706,185 | 240,645 | 233,177 | (410,477) |
Operating Segments | Technology development | ||||
Revenues: | ||||
Total revenues | 6,494,832 | 5,315,861 | 19,576,574 | 15,418,919 |
Total operating income (loss) | $ 777,816 | $ 340,852 | $ 1,365,320 | $ 864,540 |
Reportable Segments - Assets fo
Reportable Segments - Assets for Reportable Segments (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Total segment assets: | |||
Total assets | $ 82,887,795 | $ 75,598,736 | |
Property plant and equipment, and intangible assets | 3,626,833 | $ 3,537,392 | 3,627,886 |
Products and licensing | |||
Total segment assets: | |||
Total assets | 45,702,864 | 40,775,211 | |
Property plant and equipment, and intangible assets | 22,380,346 | 4,927,453 | |
Technology development | |||
Total segment assets: | |||
Total assets | 37,184,931 | 34,823,525 | |
Property plant and equipment, and intangible assets | $ 2,162,084 | $ 2,103,711 |
Contingencies and Guarantees (D
Contingencies and Guarantees (Details) - USD ($) | Mar. 01, 2019 | Jul. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Aug. 31, 2017 |
Loss Contingencies [Line Items] | ||||||
Cash consideration | $ 19,004,250 | $ 0 | ||||
Contingent liability for business combination | $ 940,000 | $ 0 | ||||
Tunable Lasers | ||||||
Loss Contingencies [Line Items] | ||||||
Non-cancelable purchase order delivery period | 18 months | |||||
Non-cancelable purchase order commitment | $ 1,900,000 | $ 1,100,000 | ||||
Non-cancelable purchase order commitment remaining | 1,900,000 | |||||
Macom | ||||||
Loss Contingencies [Line Items] | ||||||
Accounts receivable | $ 2,000,000 | |||||
Disposed of by Sale | High Speed Optical Receivers Business | Macom | ||||||
Loss Contingencies [Line Items] | ||||||
Escrow deposits related to indemnity claims | 2,500,000 | $ 4,000,000 | ||||
Amount of the escrow balance received | $ 1,500,000 | |||||
Disposed of by Sale | Optoelectronic Components and Subassemblies | ||||||
Loss Contingencies [Line Items] | ||||||
Contingent consideration on discontinued operation | $ 1,000,000 | |||||
Non-cancelable purchase order delivery period | 18 months | |||||
General Photonics, Inc. | ||||||
Loss Contingencies [Line Items] | ||||||
Cash consideration | $ 19,000,000 | |||||
Potential maximum obligation of contingent consideration | $ 1,000,000 |
Subsequent Event (Details)
Subsequent Event (Details) - Amended And Restated Loan And Security Agreement - Silicon Valley Bank - Revolving Credit Facility - Subsequent Event - USD ($) | Oct. 10, 2019 | Nov. 05, 2019 |
Subsequent Event [Line Items] | ||
Line of credit facility | $ 10,000,000 | |
Borrowings outstanding | $ 0 | |
Minimum | Prime Rate | ||
Subsequent Event [Line Items] | ||
Debt, additional interest above prime rate | 1.00% | |
Maximum | Prime Rate | ||
Subsequent Event [Line Items] | ||
Debt, additional interest above prime rate | 6.00% |