Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 14, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-52008 | ||
Entity Registrant Name | LUNA INNOVATIONS INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 54-1560050 | ||
Entity Address, Address Line One | 301 1st St SW | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | Roanoke | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 24011 | ||
City Area Code | 540 | ||
Local Phone Number | 769-8400 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | LUNA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 182.2 | ||
Entity Common Stock, Shares Outstanding | 33,420,773 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCESpecified portions of the registrant’s Proxy Statement with respect to its 2023 Annual Meeting of stockholders, anticipated to be filed within 120 days after the end of its fiscal year ended December 31, 2022, are incorporated by reference into Part III of this annual report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001239819 | ||
ICFR Auditor Attestation Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Richmond, Virginia |
Auditor Firm ID | 42 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 6,024 | $ 17,128 |
Accounts receivable, net | 33,249 | 20,913 |
Contract assets | 7,691 | 5,166 |
Inventory | 36,582 | 22,493 |
Prepaid expenses and other current assets | 4,328 | 3,793 |
Assets held for sale | 0 | 12,952 |
Total current assets | 87,874 | 82,445 |
Property and equipment, net | 4,893 | 2,988 |
Intangible assets, net | 18,750 | 17,177 |
Goodwill | 26,927 | 18,984 |
Operating lease right-of-use asset | 4,661 | 5,075 |
Other non-current assets | 3,255 | 247 |
Deferred tax assets | 4,647 | 3,321 |
Total assets | 151,007 | 130,237 |
Current liabilities: | ||
Current portion of long-term debt obligations | 2,500 | 4,167 |
Accounts payable | 8,109 | 2,809 |
Accrued and other current liabilities | 16,694 | 9,258 |
Contract liabilities | 4,089 | 4,649 |
Current portion of operating lease liability | 2,239 | 2,101 |
Current liabilities held for sale | 0 | 9,703 |
Total current liabilities | 33,631 | 32,687 |
Long-term debt obligations | 20,726 | 11,673 |
Long-term portion of operating lease liability | 2,804 | 3,509 |
Other long-term liabilities | 444 | 445 |
Total liabilities | 57,605 | 48,314 |
Commitments and contingencies (Note 15) | ||
Stockholders’ equity: | ||
Common stock, par value $0.001, 100,000,000 shares authorized, 34,901,954 and 33,855,725 shares issued, 33,105,080 and 32,116,270 shares outstanding at December 31, 2022 and 2021, respectively | 35 | 34 |
Treasury stock at cost, 1,796,862 and 1,744,206 shares at December 31, 2022 and 2021, respectively | (5,607) | (5,248) |
Additional paid-in capital | 104,893 | 98,745 |
Accumulated deficit | (2,296) | (11,575) |
Accumulated other comprehensive loss | (3,623) | (33) |
Total stockholders’ equity | 93,402 | 81,923 |
Total liabilities and stockholders’ equity | $ 151,007 | $ 130,237 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock issued (in shares) | 34,901,954 | 33,855,725 |
Common stock outstanding (in shares) | 33,105,080 | 32,116,270 |
Treasury stock (in shares) | 1,796,862 | 1,744,206 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 109,497 | $ 87,513 |
Cost of revenue (exclusive of amortization) | 43,000 | 35,957 |
Gross profit | 66,497 | 51,556 |
Operating expense: | ||
Selling, general and administrative | 57,544 | 43,956 |
Research, development and engineering | 10,837 | 10,190 |
Total operating expense | 68,381 | 54,146 |
Operating loss | (1,884) | (2,590) |
Other income/(expense): | ||
Other income, net | 216 | 0 |
Investment income | 46 | 0 |
Interest expense | (898) | (479) |
Total other expense | (636) | (479) |
Loss from continuing operations before income taxes | (2,520) | (3,069) |
Income tax benefit | 220 | 1,980 |
Net loss from continuing operations | (2,300) | (1,089) |
Operating income from discontinued operations, net of income tax expenses of $516 and $584 | 1,730 | 2,471 |
Gain on sale of discontinued operations, net of income tax expenses of $3,189 | 9,849 | 0 |
Income from discontinued operations, net of income taxes | 11,579 | 2,471 |
Net income | $ 9,279 | $ 1,382 |
Net loss per share from continuing operations: | ||
Basic (in dollars per share) | $ (0.07) | $ (0.03) |
Diluted (in dollars per share) | (0.07) | (0.03) |
Net income per share from discontinued operations: | ||
Basic (in dollars per share) | 0.36 | 0.08 |
Diluted (in dollars per share) | 0.36 | 0.08 |
Net income per share attributable to common stockholders: | ||
Basic (in dollars per share) | 0.28 | 0.04 |
Diluted (in dollars per share) | $ 0.28 | $ 0.04 |
Weighted average shares: | ||
Basic (in shares) | 32,591,973 | 31,658,085 |
Diluted (in shares) | 32,591,973 | 31,658,085 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Income tax expense | $ 516 | $ 584 |
Tax effect | $ 3,189 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 9,279 | $ 1,382 |
Other comprehensive (loss)/income | (3,590) | 215 |
Total other comprehensive income | $ 5,689 | $ 1,597 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Common stock, beginning balance (in shares) at Dec. 31, 2020 | 31,024,537 | |||||
Beginning balance treasury stock (in shares) at Dec. 31, 2020 | 1,699,975 | |||||
Beginning balance at Dec. 31, 2020 | $ 74,442 | $ 33 | $ (4,789) | $ 92,403 | $ (12,957) | $ (248) |
Increase (Decrease) in Stockholders' Equity | ||||||
ESPP issuance (in shares) | 818,267 | 818,267 | ||||
Exercise of stock option | $ 2,257 | $ 1 | 2,256 | |||
Stock-based compensation (in shares) | 169,793 | |||||
Stock-based compensation | 2,955 | 2,955 | ||||
ESPP issuance (in shares) | 147,724 | |||||
ESPP issuance | 1,131 | 1,131 | ||||
Purchase of treasury stock (in shares) | (44,051) | 44,051 | ||||
Purchase of treasury stock | (459) | $ (459) | ||||
Net income | 1,382 | 1,382 | ||||
Foreign currency translation adjustment | $ 215 | 215 | ||||
Common stock, ending balance (in shares) at Dec. 31, 2021 | 32,116,270 | 32,116,270 | ||||
Ending balance treasury stock (in shares) at Dec. 31, 2021 | 1,744,206 | 1,744,026 | ||||
Ending balance at Dec. 31, 2021 | $ 81,923 | $ 34 | $ (5,248) | 98,745 | (11,575) | (33) |
Increase (Decrease) in Stockholders' Equity | ||||||
ESPP issuance (in shares) | 577,129 | 577,129 | ||||
Exercise of stock option | $ 1,588 | $ 1 | 1,587 | |||
Stock-based compensation (in shares) | 278,677 | |||||
Stock-based compensation | 3,617 | 3,617 | ||||
ESPP issuance (in shares) | 185,840 | |||||
ESPP issuance | 944 | 944 | ||||
Purchase of treasury stock (in shares) | (52,836) | 52,836 | ||||
Purchase of treasury stock | (359) | $ (359) | ||||
Net income | 9,279 | 9,279 | ||||
Foreign currency translation adjustment | $ (3,590) | (3,590) | ||||
Common stock, ending balance (in shares) at Dec. 31, 2022 | 33,105,080 | 33,105,080 | ||||
Ending balance treasury stock (in shares) at Dec. 31, 2022 | 1,796,862 | 1,796,862 | ||||
Ending balance at Dec. 31, 2022 | $ 93,402 | $ 35 | $ (5,607) | $ 104,893 | $ (2,296) | $ (3,623) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows (used in)/provided by operating activities: | ||
Net income | $ 9,279 | $ 1,382 |
Adjustments to reconcile net income to net cash (used in)/provided by operating activities: | ||
Depreciation and amortization | 5,449 | 4,628 |
Stock-based compensation | 4,232 | 2,955 |
Loss on disposal of property and equipment | 53 | 0 |
Gain from discontinued operations, net of tax | (9,849) | 0 |
Deferred tax benefit | (2,363) | (1,501) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (9,151) | 113 |
Contract assets | (5,008) | (1,672) |
Inventory | (10,028) | 939 |
Prepaid expenses and other current assets | (386) | 582 |
Other long-term assets | 1,108 | 0 |
Accounts payable and accrued liabilities | 6,122 | (3,213) |
Contract liabilities | 1,973 | 186 |
Other long-term liabilities | 2 | 84 |
Net cash (used in)/provided by operating activities | (8,567) | 4,483 |
Cash flows used in investing activities: | ||
Acquisition, net of cash acquired | (22,085) | 0 |
Acquisition of property and equipment | (2,888) | (1,412) |
Purchase of intangibles | (50) | (356) |
Proceeds from sale of discontinued operations | 13,968 | 0 |
Net cash used in investing activities | (11,055) | (1,768) |
Cash flows provided by/(used in) financing activities: | ||
Proceeds from debt obligations | 24,150 | 0 |
Payments on debt obligations | (16,763) | (4,144) |
Payments on finance lease obligations | (48) | (48) |
Repurchase of common stock | (359) | (459) |
Proceeds from ESPP | 944 | 1,131 |
Proceeds from the exercise of options | 1,588 | 2,256 |
Net cash provided by/(used in) financing activities | 9,512 | (1,264) |
Net change in cash and cash equivalents | (10,110) | 1,451 |
Effect of exchange rate changes on cash and cash equivalents | (994) | 311 |
Cash and cash equivalents—beginning of period | 17,128 | 15,366 |
Cash and cash equivalents—end of period | 6,024 | 17,128 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 805 | 458 |
Net cash received for income taxes | $ 39 | $ 113 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Luna Innovations Incorporated ("we," "our" or the "Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries, and distributed fiber optic sensing solutions that measure, or "sense" the structures for industries ranging from aerospace, automotive, oil and gas, security and infrastructure. Our communications test and control products help customers test their fiber optic networks and assemblies with speed and precision in both lab and production environments. Our test and measurement products accelerate the development of high speed fiber optic components like photonic integrated circuits, coherent receivers and short-run fiber networks. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by measuring stress, strain, and temperature at a high resolution for new designs or manufacturing processes. Our distributed fiber optic sensing products ensure the safety and structural integrity or operational health of critical assets in the field, by monitoring stress, strain, temperature, and vibration in large civil and industrial infrastructure such as bridges, roads, pipelines and borders. We manufacture and sell "terahertz" (THz) products for layer thickness measurements for materials like plastics, rubber, and paint. Our THz products are used in the aerospace and automotive/EV sector. We also provide applied research services, primarily under federally funded development programs, that leverage our sensing and instrumentation technologies to meet the specific needs and applications of our customers. Consolidation Policy Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include our accounts and the accounts of our wholly-owned subsidiaries. We eliminate from our financial results all intercompany transactions. Use of Estimates The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may differ from such estimates and assumptions. Revenue Recognition Products and Services Revenues from product sales are generated by the sale of commercial products and services under various sales programs to the end user and through distribution channels. We sell fiber optic test and sensing systems to end users for use in numerous fiber optic-based measurement applications. Revenues are recorded net of applicable sales taxes collected from customers and payable to state or local governmental entities. We evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. We recognize revenue when the performance obligation has been satisfied by transferring control of the product or service to the customer. For tangible products that contain software that is essential to the tangible product’s functionality, we consider the product and software to be a single performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation based on their relative stand-alone selling prices. In such circumstances, we use the observable price of goods or services which are sold separately in similar circumstances to similar customers. If these prices are not observable, then we will estimate the stand-alone selling price using information that is reasonably available. For the majority of our standard products and services, price list and discount structures related to customer type are available. Shipping and handling activities primarily occur after a customer obtains control and are considered fulfillment costs rather than separate performance obligations. For standard products, we recognize revenue at a point in time when control passes to the customer. Absent substantial product acceptance clauses, this is based on the shipping terms. In instances where acceptance of the product is specified by the customer, revenue for the product and any related installation services is deferred until such required acceptance criteria have been met. For custom products that require engineering and development based on customer requirements, we will recognize revenue over time using the input method based on cost incurred to date. For extended warranties and product rentals, revenue is recognized over time using the output method based on the time elapsed for the warranty or service period. In the case of warranties, we record a contract liability for amounts billed but that are not recognized until subsequent periods. For monitoring services where we are performing monitoring of an asset the customer controls, revenue is recognized over time based on the duration of the underlying contract. Research and Development Contracts We perform research and development for U.S. Federal government agencies, educational institutions and commercial organizations. We account for a research contract when a contract has been executed, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of the contract price is considered probable. Revenue is earned under cost reimbursable, time and materials and fixed price contracts. Direct contract costs are expensed as incurred. Our contracts with agencies of the U.S. government are subject to periodic funding by the respective contracting agency. Funding for a contract may be provided in full at inception of the contract or ratably throughout the contract as the services are provided. In evaluating the probability of funding for purposes of assessing collectability of the contract price, we consider our previous experience with our customers, communication with our customers regarding funding status and our knowledge of available funding for the contract or program. If funding is not assessed as probable it is not included in the transaction price and the related revenue is not recorded until it is determined that it is probable we will collect the consideration for the related goods or services. Under the typical payment terms of our U.S. government contracts, the customer pays us either performance-based payments ("PBPs") or progress payments. PBPs, which are typically used in firm fixed price contracts, are interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments, which are typically used in our cost type contracts, are interim payments based on costs incurred as the work progresses. For our U.S. government cost-type contracts, the customer generally pays us during the performance period for 80% to 90% of our actual costs incurred. Because the customer retains a small portion of the contract price until completion of the contract and audit of allowable costs, cost type contracts generally result in revenue recognized in excess of billings which we present as contract assets on the balance sheet. Amounts billed and due from our customers are classified as receivables on the balance sheet. For non-U.S. government contracts, we typically receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. We recognize a liability for these advance payments and PBPs paid in advance which are in excess of the revenue recognized and present these amounts as contract liabilities on the balance sheet. To determine the proper revenue recognition method for research and development contracts, we evaluate whether two or more contracts should be combined and accounted for as one single modified contract and whether the combined or single contract should be accounted for as more than one performance obligation. For instances where a contract has options that were bid with the initial contract and awarded at a later date, we combine the options with the original contract when options are awarded. For most of our contracts, the customer contracts for research with multiple milestones that are interdependent. Consequently, the entire contract is accounted for as one performance obligation. The effect of the combined or modified contract on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. Contract revenue recognition is measured over time as we perform because of continuous transfer of control to the customer. For U.S. government contracts which are typically subject to the Federal Acquisition Regulation, this continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay us for cost incurred plus a reasonable profit and take control of any work in process. From time to time, as part of normal management processes, facts may change, causing revisions to estimated total costs or revenues expected. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known. Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. We generally use the input method, more specifically the cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer, which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The underlying bases for estimating our contract research revenues are measurable expenses, such as labor, subcontractor costs and materials, and data that are updated on a regular basis for purposes of preparing our cost estimates. Our research contracts generally have a period of performance of six months to three years, and our estimates of contract costs have historically been consistent with actual results. Revisions in these estimates between accounting periods to reflect changing facts and circumstances have not had a material impact on our operating results, and we do not expect future changes in these estimates to be material. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known. Under cost reimbursable contracts, we are reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fixed fee representing the profit negotiated between us and the contracting agency. Revenue from cost reimbursable contracts is recognized as costs are incurred plus an estimate of applicable fees earned. We consider fixed fees under cost reimbursable contracts to be earned in proportion to the allowable costs incurred in performance of the contract. Revenue from time and materials contracts is recognized based on direct labor hours expended at contract billing rates plus other billable direct costs. Fixed price contracts may include either a product delivery or specific service performance throughout a period. For fixed price contracts that provide for the development and delivery of a specific prototype or product, revenue is recognized over time using the input method based upon the percentage of completion of costs incurred to date versus total estimated costs. Whether certain costs under government contracts are allowable is subject to audit by the government. Certain indirect costs are charged to contracts using provisional or estimated indirect rates, which are subject to later revision based on government audits of those costs. Management is of the opinion that costs subsequently disallowed, if any, would not likely have a significant impact on revenues recognized for those contracts. Allowance for Uncollectible Receivables Accounts receivable are recorded at their face amount, less an allowance for doubtful accounts. We review the status of our uncollected receivables on a regular basis. In determining the need for an allowance for uncollectible receivables, we consider our customers’ financial stability, past payment history and other factors that bear on the ultimate collection of such amounts. The allowance was $0.8 million and $0.9 million at December 31, 2022 and 2021, respectively. Cash and Cash Equivalents We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. To date, we have not incurred losses related to cash and cash equivalents. Our foreign currency risk on cash and cash equivalents held outside of the US is not material. At December 31, 2022 there were no cash equivalents invested in U.S. Treasury obligations. At December 31, 2021, $1.0 million was invested in U.S. Treasury obligations through a sweep account with our bank. The full value of amounts invested through the sweep account are convertible to cash on a daily basis. Our cash transactions are processed through reputable commercial banks. We regularly maintain cash balances with financial institutions which exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. At December 31, 2022 and 2021, we had approximately $1.6 million and $9.5 million, respectively, in excess of FDIC insured limits. Fair Value Measurements Our financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. Valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its interest rate of SOFR plus a margin ranging from 1.75% to 2.50%, to be at market based upon similar instruments that would be available to us. Property and Equipment, net Property and equipment, net, are stated at cost less accumulated depreciation. We record depreciation using the straight-line method over the following estimated useful lives: Equipment 3 – 7 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Lesser of lease term or life of improvements Intangible Assets, net Intangible assets consist of patents related to certain intellectual property that we have developed or acquired, and identifiable intangible assets recognized in connection with our acquisition of LIOS Technologies Inc. ("Lios") in March 2022 and other companies prior to 2022. We amortize our identified intangible assets over their estimated useful lives ranging between one Goodwill is tested annually for impairment as of the first day of our fourth quarter (October 1st) and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Goodwill is tested for impairment at the reporting unit level. As of December 31, 2022, we had one reporting unit which contained goodwill. When changes occur in the composition of one or more reporting units, goodwill is reassigned to the reporting units affected based on their relative fair value. Our goodwill impairment evaluation consisted of a qualitative assessment. A qualitative assessment can be performed to determine whether it is more likely than not the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, we compare the fair value of each reporting unit to its carrying value using a quantitative assessment. If the fair value of the reporting unit exceeds its carrying value, goodwill is considered not impaired. If the fair value of the reporting unit is less than the carrying value, the difference is recorded as an impairment loss. For the quantitative assessment, the fair value of each reporting unit is estimated using a combination of an income approach using a discounted cash flow ("DCF") analysis and a market-based valuation approach based on comparable public company trading values. Determining the fair value of a reporting unit requires the exercise of significant management judgment, including the amount and timing of projected future revenues, earnings and cash flows after considering factors such as recent operating performance, general market and industry conditions, existing and expected future contracts, changes in working capital and long-term business plans and growth initiatives. The carrying value of each reporting unit includes the assets and liabilities employed in its operations and goodwill. We have not recorded any goodwill impairment for the years ended December 31, 2022 and 2021. Research, Development and Engineering Research, development and engineering expense not related to contract performance is expensed as incurred. We expensed $10.8 million and $10.2 million of non-contract related research, development and engineering expense for the years ended December 31, 2022 and 2021, respectively. Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets fail the recovery test, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell. 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. Net Income per Share Basic per share data is computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income attributable to common stockholders 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 common shares 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. There were no adjustments for common stock equivalents for the diluted per share data for the years ended December 31, 2022 and 2021. The following shares have been excluded from the computation of diluted weighted average shares outstanding because the effect would be anti-dilutive: Years ended December 31, 2022 2021 Stock options 680,000 1,234,000 Restricted stock units 1,124,000 814,000 Stock-Based Compensation We have two stock-based compensation plans, which are described further in Note 12. We recognize compensation expense based upon the fair value of the underlying equity award as of the date of grant. We have elected to use the Black-Scholes option pricing model to value any stock options granted. Restricted stock and restricted stock units awarded are valued at the closing price of our common stock on the date of the award. We recognize stock-based compensation for such awards on a straight-line basis over the requisite service period of the awards taking into account the effects of the expected exercise. We reduce stock-based compensation expense for the value of any forfeitures of unvested awards as such forfeitures occur. Income Taxes We account for income taxes using the liability method. Deferred tax assets or liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates, which will be in effect when the differences reverse. A valuation allowance against net deferred tax assets is provided unless we conclude it is more likely than not that the deferred tax assets will be realized. We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We evaluate our ability to benefit from all deferred tax assets and establish valuation allowances for amounts we believe are not more-likely-than-not to be realizable. For uncertain tax positions, we use a more-likely-than-not threshold, greater than 50%, based on the technical merits of the income tax position taken. Income tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit recognized in the financial statements. Penalties, if probable and reasonably estimable, and interest expense related to uncertain tax positions are recognized as a component of the tax provision. Foreign Currency For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Revenues and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings. Business Combinations We account for business combinations under the acquisition method of accounting, in accordance with ASC 805 - Business Combinations . Under ASC 805, 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 acquisition consideration over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. Determining the fair value of acquired intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including the discount rate, revenue growth rates, projected gross margins, estimated research and development expenses, and operating profit margins. Recently Issued Pronouncements In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We do not expect the adoption of this new accounting pronouncement to have a significant impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08 Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which improves the accounting acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. We early adopted ASU 2021-08 during the year ended December 31, 2022 in conjunction with a business combination. The adaptation did not have a material impact on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On March 8, 2022, we completed the sale of substantially all of our equity interests in our Luna Labs business to certain members of Luna Labs’ senior management team and a group of outside investors for an initial purchase price of $20.4 million before working capital and escrow adjustments and transaction expenses. Total consideration included $13.0 million of cash received at closing, $2.5 million in the form of a convertible note, $1.7 million in the form of 60-day promissory notes and an earn out potential of $1.0 million in future payments from Luna Labs upon the achievement by Luna Labs of certain financial goals. The full amount of the 60-day promissory notes has been collected as of December 31, 2022. The convertible note is included in the other non-current assets line item of the consolidated balance sheet. During the fourth quarter of 2022, it was determined that the earn out potential was not achieved. The gain on the transaction was $9.8 million, net of taxes of $3.2 million. We have separately reported the financial results of Luna Labs as discontinued operations in our consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively, and presented the related assets and liabilities as held for sale in the consolidated balance sheet as of December 31, 2021. These changes have been applied to all periods presented. The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Luna Labs segment that will be eliminated from continuing operations. Previously reported expenses for the Luna Labs segment have been restated to exclude certain allocated expenses that are not directly attributable to the Luna Labs segment. The key components from discontinued operations related to the Luna Labs segment are as follows (in thousands) : Years ended December 31, 2022 2021 Revenues $ 6,473 $ 23,722 Cost of revenues 3,692 19,009 Gross profit 2,781 4,713 Selling, general and administrative expenses 535 1,634 Research, development & engineering expenses — 24 Operating income 2,246 3,055 Income tax expense 516 584 Net income from discontinued operations, net of tax $ 1,730 $ 2,471 Assets and liabilities of discontinued operations classified as held for sale in the consolidated balance sheets as of December 31, 2021 consist of the following (in thousands) : December 31, 2021 Accounts receivable, net $ 2,967 Inventory, net 282 Contract assets 4,051 Prepaid expenses and other current assets 132 Property and equipment, net 330 Intangible assets, net 165 Operating lease right-of-use asset 4,884 Other non-current assets 141 Assets held for sale $ 12,952 Accounts payable 1,042 Accrued and other current liabilities 821 Contract liabilities 2,626 Current portion of operating lease liability 388 Long-term portion of operating lease liability 4,826 Liabilities associated with assets held for sale $ 9,703 The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. The following table presents cash flow and non-cash information related to discontinued operations for the years ended December 31, 2022 and 2021 (in thousands) : Years ended December 31, 2022 2021 Depreciation and amortization $ 23 $ 112 Share-based compensation 177 129 Acquisition of property and equipment 34 — |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition | Business Acquisition On March 10, 2022, we entered into and closed a Share Purchase Agreement (the “Share Purchase Agreement”) with NKT Photonics A/S ("NKT Photonics") to purchase all of the shares of NKT Photonics GmbH and LIOS Technologies Inc. (collectively "Lios") for aggregate consideration of $22.1 million (€20.0 million). Subsequent to the acquisition, the name of the Lios parent company was changed to Luna Innovations Germany GmbH. Lios is a provider of distributed fiber optic monitoring solutions for power cable, pipelines, oilfield services, security, highways, railways and industrial fire detection systems. The acquisition of Lios provides us with long range, fully distributed temperature and strain sensing capabilities, intellectual property, products and expertise that are highly complementary to Luna, which we believe will accelerate our technology and overall growth roadmap. The Share Purchase Agreement contains customary representations and warranties and indemnities. During the fourth quarter of 2022, we completed the purchase accounting for Lios after recording a number of measurement period adjustments since the initial purchase price allocation reported in our first quarter Form 10-Q. These adjustments to the fair values of assets and liabilities resulted in a cumulative decrease in goodwill of $1.5 million as of December 31, 2022. The following table summarizes the allocation of the purchase consideration for the acquisition of Lios: (in thousands) Accounts receivable $ 3,069 Inventory 5,176 Prepaid expenses and other current assets 96 Property and equipment 858 Intangible assets 6,437 Goodwill 8,788 Operating lease right-of-use asset 512 Accounts payable and accrued expenses (903) Accrued and other current liabilities (1,073) Contract liabilities (314) Current portion of operating lease liability (322) Long-term portion of operating lease liability (191) Other long-term liabilities (48) Total purchase consideration $ 22,085 The identifiable intangible assets and their estimated useful lives were as follows: Estimated Useful Life (in thousands) Developed technology 6 years $ 1,998 Customer relationships 8 years 3,662 Trade names and trademarks 7 years 333 Backlog 1 year 444 $ 6,437 Lios's developed technology primarily consists of its distributed fiber optic monitoring solutions that provide a wide range of applications using fully distributed temperature and strain sensing. The developed technologies were valued using the "relief from royalty method" under the income approach. A discount rate of 14.5% was used to discount the cash flows to the present value. Trade names and trademarks are considered a type of guarantee of a certain level of recognizability, quality or performance represented by the Lios brand. Trade names and trademarks were valued using the "relief from royalty" method under the income approach. A discount rate of 14.5% was used to discount the cash flows to the present value. Backlog arises from unfulfilled purchase or sales order contracts. The value of Lios's backlog as of the acquisition date was calculated using the "multi-period excess earnings" method under the income approach. A discount rate of 13.5% was used to discount the cash flows attributable solely to the backlog to the present value. Customer relationships represent the fair value of either (i) the avoidance of cost associated with the creation of a new customer relationship or (ii) the projected cash flows that will be derived from the sale of products to existing customers as of the acquisition date. Lios's customer relationships were valued using the "multi-period excess earnings" method under the income approach. A discount rate of 15.5% was used to discount these cash flows 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 acquisition was primarily attributable to expected synergies from future customer and sales growth. We do not expect this goodwill to be deductible for tax purposes. We incurred $1.1 million of acquisition-related costs that have been included in selling, general and administrative expenses for the year ended December 31, 2022. |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net, consists of the following: December 31, (in thousands) 2022 2021 Billed $ 33,542 $ 21,790 Other 487 48 34,029 21,838 Less: allowance for doubtful accounts (780) (925) Accounts receivable, net $ 33,249 $ 20,913 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Components of inventory are as follows: December 31, (in thousands) 2022 2021 Finished goods $ 9,930 $ 10,087 Work-in-process 3,113 2,318 Raw materials 23,539 10,088 Inventory $ 36,582 $ 22,493 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net, consists of the following: December 31, (in thousands) 2022 2021 Building $ 219 $ 226 Equipment 15,801 10,255 Furniture and fixtures 1,017 1,316 Software 126 72 Leasehold improvements 2,466 2,292 Construction in process 1,383 646 21,012 14,807 Less—accumulated depreciation (16,119) (11,819) Property and equipment, net $ 4,893 $ 2,988 |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Intangible Assets, net Intangible assets, net consist of the following: December 31, (in thousands) Estimated Life 2022 2021 Patent costs 1 - 18 years $ 9,086 $ 9,230 Developed technology 6 - 10 years 15,924 14,440 In-process research and development N/A 2,631 2,732 Customer relationships 5 - 8 years 4,117 700 Trade names 7 - 15 years 880 550 Backlog 1 - 3 years 331 — 32,969 27,652 Patent costs (4,128) (3,254) Developed technology (6,830) (5,043) In-process research and development (1,763) (1,476) Customer relationships (574) (170) Trade names (586) (532) Backlog (338) — Accumulated amortization (14,219) (10,475) Intangible assets, net $ 18,750 $ 17,177 Amortization for the years ended December 31, 2022 and 2021 was approximately $3.7 million and $3.1 million, respectively, and is included primarily in selling, general and administrative expense in our consolidated statements of operations. Estimated aggregate amortization, based on the net value of intangible assets at December 31, 2022, for each of the next five years and beyond is as follows: (in thousands) Year Ending December 31, 2023 $ 3,800 2024 3,270 2025 2,942 2026 2,801 2027 2,023 2028 and beyond 3,914 $ 18,750 We did not recognize any intangible asset impairment charges during the years ended December 31, 2022 or 2021. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The change in the carrying value of goodwill during the years ended December 31, 2022 and December 31, 2021 were as follows: (in thousands) Balance as of December 31, 2020 $ 18,121 Measurement period adjustment 929 Foreign currency translation (66) Balance as of December 31, 2021 18,984 Goodwill resulting from business acquisition 8,788 Foreign currency translation (845) Balance as of December 31, 2022 $ 26,927 After completing a qualitative assessment of our goodwill during the fourth quarter of 2022, we concluded the carrying value of goodwill was not impaired as of December 31, 2022. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: December 31, (in thousands) 2022 2021 Accrued compensation $ 8,962 $ 6,798 Contingent consideration — 225 Accrued professional fees 720 503 Accrued income tax 3,788 328 Current portion of finance lease liability 50 48 Accrued interest 64 17 Accrued liabilities-other 3,110 1,339 Total accrued liabilities $ 16,694 $ 9,258 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consists of the following: Years ended December 31, (in thousands) 2022 2021 Term Loan (net of debt issuance costs of $74, 6.65% at December 31, 2022) $ 18,926 $ 8,290 Revolving Loan (6.65% at December 31, 2022) 4,300 7,550 23,226 15,840 Less: Current portion of long-term debt obligations (2,500) (4,167) Long-term debt obligations $ 20,726 $ 11,673 PNC Bank Facility On June 21, 2022 (the “Effective Date”), we entered into a Loan Modification Agreement (the “Second Amendment”) in respect of our Loan Agreement, dated as of December 1, 2020 (the “Original Loan Agreement” and as amended by that certain First Amendment to Loan Agreement, dated as of March 10, 2022, and the Second Amendment, the “Loan Agreement”) with PNC Bank, National Association, as lender (the “Lender”) and certain of our domestic subsidiaries as guarantors, to, among other things, extend the maturity date of the Term Loan and Revolving Line (each as defined below) to June 21, 2027 and increase the total commitments to us. The Loan Agreement provides a $15.0 million revolving credit facility (the “Revolving Line”) and a $20 million term loan facility (the “Term Loan”). On the Effective Date, we borrowed the full amount of the Term Loan from the Lender according to a term note (the “Term Note”), a portion of the proceeds of which were used to refinance the remaining principal amount of the $12.5 million in term loans issued under the Original Loan Agreement, and the remainder of which were used to pay down approximately $13.7 million of the $15.0 million in revolving loans outstanding under the Revolving Line (the “Revolving Loan”) according to a revolving line of credit note (the “Revolving Line of Credit Note”). We may repay and reborrow advances under the Revolving Line from time to time according to the Revolving Line of Credit Note. The Term Loan matures on June 21, 2027, which was extended from December 1, 2023 as part of the loan modification. The Term Loan amortizes at a rate equal to 10% for the first year, 15% for years two and three and 20% in years four and five, in each case payable on a quarterly basis. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest will be due and payable on June 21, 2027. The Term Loan bears interest at a floating per annum rate equal to the sum of (a) the daily simple secured overnight finance rate ("Daily Simple SOFR"), plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.50% per annum, depending on our Net Leverage Ratio (as defined in the Loan Agreement). We may prepay the Term Loan without penalty or premium. The Revolving Line expires on June 21, 2027, which was extended from December 1, 2023 as part of the loan modification. Borrowings under the Revolving Line bear interest at a floating per annum rate equal to the sum of (a) the Daily Simple SOFR, plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.50% per annum, depending on our Net Leverage Ratio. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest is due and payable on June 21, 2027. The unused portion of the Revolving Line accrues a fee equal to 0.20% per annum multiplied by the quarterly average unused amount. The unused Revolving Line totaled $10.7 million at December 31, 2022. The Loan Agreement includes a number of affirmative and restrictive covenants applicable to us and our subsidiaries, including, among others, financial covenants regarding minimum net leverage and fixed charge coverage (beginning in the third quarter ended September 30, 2022), affirmative covenants regarding delivery of financial statements, payment of taxes, and maintenance of government compliance, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. We were in compliance with these covenants as of December 31, 2022. Upon the occurrence of certain events, including failure to satisfy our payment obligations under the Loan Agreement, failure to adhere to the financial covenants, the breach of certain of our other covenants under the Loan Agreement, cross defaults to other indebtedness or material agreements, judgment defaults and defaults related to failure to maintain governmental approvals, the Lender will have the right, among other remedies, to declare all principal and interest immediately due and payable, and to exercise secured party remedies. Maturities on debt are as follows ( in thousands) : Year Ending December 31, Amount 2023 $ 2,500 2024 3,000 2025 3,500 2026 4,000 2027 10,300 Total maturities $ 23,300 Less: deferred issuance costs (74) Total $ 23,226 Interest expense, net for the years ended December 31, 2022 and 2021 consisted of the following: Years ended December 31, (in thousands) 2022 2021 Interest expense on Term Loans $ 642 $ 247 Interest expense on Revolving Line of Credit 210 164 Amortization of debt issuance costs 43 44 Other interest expense 5 27 Interest income (2) (3) Total interest expense, net $ 898 $ 479 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent. We also have finance leases for equipment which have remaining terms ranging from 1 to 4 years. These lease agreements are for general office equipment with a 5-year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statement of operations. The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. As of December 31, 2022, we had no operating or finance leases that have not yet commenced. Rent expense is recognized on a straight-line basis over the life of the lease. For the year ended December 31, 2022 and 2021, rent expense consisted of operating lease costs that totaled $2.5 million and $2.1 million, respectively. Future minimum lease payments under non-cancelable operating and finance leases were as follows as of December 31, 2022: (in thousands) Year Ending December 31, Operating Leases Finance Leases 2023 $ 2,484 $ 53 2024 1,735 52 2025 1,027 48 2026 140 — 2027 — — 2028 and beyond — — Total future minimum lease payments 5,386 153 Less: Interest 343 5 Total lease liabilities $ 5,043 $ 148 Current lease liability $ 2,239 $ 50 Long-term lease liability 2,804 98 Total lease liabilities $ 5,043 $ 148 Other information related to leases is as follows: Year Ended (in thousands, except weighted-average data) December 31, 2022 December 31, 2021 Finance lease cost: Amortization of right-of-use assets $ 53 $ 48 Interest on lease liabilities (4) (4) Total finance lease cost $ 49 $ 44 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,064 $ 2,115 Finance cash flows from finance leases $ 48 $ 48 Right-of-use assets obtained in exchange for new operating lease liabilities $ 782 $ 865 Weighted-average remaining lease term (years) - operating leases 6.0 8.0 Weighted-average remaining lease term (years) - finance leases 3.2 3.9 Weighted-average discount rate - operating leases 8 % 9 % Weighted-average discount rate - finance leases 3 % 3 % |
Leases | Leases We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent. We also have finance leases for equipment which have remaining terms ranging from 1 to 4 years. These lease agreements are for general office equipment with a 5-year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statement of operations. The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. As of December 31, 2022, we had no operating or finance leases that have not yet commenced. Rent expense is recognized on a straight-line basis over the life of the lease. For the year ended December 31, 2022 and 2021, rent expense consisted of operating lease costs that totaled $2.5 million and $2.1 million, respectively. Future minimum lease payments under non-cancelable operating and finance leases were as follows as of December 31, 2022: (in thousands) Year Ending December 31, Operating Leases Finance Leases 2023 $ 2,484 $ 53 2024 1,735 52 2025 1,027 48 2026 140 — 2027 — — 2028 and beyond — — Total future minimum lease payments 5,386 153 Less: Interest 343 5 Total lease liabilities $ 5,043 $ 148 Current lease liability $ 2,239 $ 50 Long-term lease liability 2,804 98 Total lease liabilities $ 5,043 $ 148 Other information related to leases is as follows: Year Ended (in thousands, except weighted-average data) December 31, 2022 December 31, 2021 Finance lease cost: Amortization of right-of-use assets $ 53 $ 48 Interest on lease liabilities (4) (4) Total finance lease cost $ 49 $ 44 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,064 $ 2,115 Finance cash flows from finance leases $ 48 $ 48 Right-of-use assets obtained in exchange for new operating lease liabilities $ 782 $ 865 Weighted-average remaining lease term (years) - operating leases 6.0 8.0 Weighted-average remaining lease term (years) - finance leases 3.2 3.9 Weighted-average discount rate - operating leases 8 % 9 % Weighted-average discount rate - finance leases 3 % 3 % |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Equity Incentive Plans In April 2016, we adopted our 2016 Equity Incentive Plan (the "2016 Plan") as a successor to the 2006 Plan. Under the 2016 Plan, our Board of Directors is authorized to grant both incentive and non-statutory stock options to purchase common stock and restricted stock awards to our employees, directors, and consultants. The 2016 Plan provides for the issuance of 3,500,000 shares plus any amounts forfeited from grants under the 2006 Plan after the expiration date of the 2006 Plan. Options generally have a life of 10 years and exercise price equal to or greater than the fair market value of the Common Stock as determined by the Board of Directors. Vesting typically occurs over a four-year period. The following table sets forth the activity of the options to purchase common stock under the 2006 Plan and the 2016 Plan. The prices represent the closing price of our Common Stock on the Nasdaq Capital Market on the respective dates. Options Outstanding Options Exercisable Number of Price per Weighted Aggregate Number of Weighted Aggregate (in thousands, except share, per share and weighted-average data) Balance at December 31, 2020 2,329,416 $1.18 - 7.59 $ 2.76 $ 16,574 1,408,119 $ 2.26 $ 10,734 Forfeited (58,860) $3.37 - 11.40 5.91 Exercised (818,267) $1.18 - 7.59 2.73 Granted 80,735 $11.00 - 11.94 9.13 Balance at December 31, 2021 1,533,024 $1.18 - 11.40 $ 3.00 $ 8,439 1,050,177 $ 2.45 $ 6,314 Forfeited (96,858) $3.04 - $11.40 6.03 Exercised (577,129) $1.27 - $7.37 2.48 Balance at December 31, 2022 859,037 $1.27 - 11.40 $ 3.01 $ 5,040 797,529 $ 2.74 $ 4,856 (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 fair value of each option granted is estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: Years ended December 31, 2021 Risk-free interest rate range 0.975% Expected life of option-years 7 Expected stock price volatility 55% 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. Expected volatility is based upon the average historical volatility of our common stock over the period commensurate with the expected term of the related instrument. The expected life and estimated post-employment termination behavior is based upon historical experience of homogeneous groups, executives and non-executives, within our company. We do not currently pay dividends on our common stock nor do we expect to in the foreseeable future. Options Outstanding Options Exercisable Range of Options Weighted Weighted Options Weighted Weighted Year ended December 31, 2021 $1.18 - 11.40 1,533,024 4.73 $3.00 1,050,177 3.95 $2.45 Year ended December 31, 2022 $1.27 - 11.40 859,037 4.00 $3.01 797,529 3.76 $2.74 (in thousands) Total Intrinsic Value of Total Fair Value of Year ended December 31, 2021 $ 6,288 $ 2,571 Year ended December 31, 2022 $ 2,173 $ 2,189 For the year ended December 31, 2021, the weighted average grant date fair value of options granted was $11.30 per share. We estimate the fair value of options at the grant date using the Black-Scholes model. For all stock options granted through December 31, 2021, the weighted average remaining service period is 7.0 years. There were no new stock options granted during the year ended December 31, 2022. Unamortized stock option expense at December 31, 2022 that will be amortized over the weighted-average remaining service period of 0.6 years totaled $0.2 million. 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 year ended December 31, 2022, we granted an aggregate of 930,661 RSUs to certain employees. Of the RSUs granted during 2022, 816,740 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 113,921 RSUs are performance-based awards that will vest based on our achievement of long-term performance goals, in particular, based on our levels of 2023 revenue and operating income. The 113,921 shares issuable upon vesting of the performance-based RSUs represent the probable payout under our performance-based awards, based upon 100% of our target performance for 2023 revenue and operating income. 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. In 2022, 169,576 shares of restricted stock and 52,174 RSUs granted to employees vested. In addition, in conjunction with our 2020, 2021 and 2022 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. In 2022 and 2021, we granted 11,819 and 3,384, respectively, RSUs to non-employee members of our Board of Directors in respect of the annual equity compensation under our non-employee director compensation policy. In 2022 and 2021, 3,384 and 10,652 RSUs granted to directors, respectively, vested. The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs in 2022 and 2021: (in thousands, except share and weighted-average share data) Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair Value of Unvested Shares Balance at January 1, 2020 429,467 $ 4.48 $ 1,924 Granted 281,384 10.71 3,014 Vested (234,367) 4.22 (989) Forfeitures (7,500) 11.94 (90) Balance at December 31, 2021 468,984 $ 8.58 $ 3,859 Granted 930,661 6.17 5,742 Vested (225,134) 6.96 (1,567) Forfeitures (111,588) 9.54 (1,065) Balance at December 31, 2022 1,062,923 $ 6.72 $ 6,969 We recognized $4.2 million and $3.0 million in stock-based compensation expense, which is recorded in selling, general and administrative expense on the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Unamortized RSUs expense at December 31, 2022 that will be amortized over the weighted-average remaining service period of 2.1 years totaled $5.1 million. Employee Stock Purchase Plan On April 7, 2020, our board of directors approved, and on May 11, 2020, our stockholders approved, the Luna Innovations Incorporated 2020 Employee Stock Purchase Plan (the "2020 ESPP"). The 2020 ESPP grants our eligible employees a purchase right to purchase up to that number of shares of common stock purchasable either with a percentage or with a maximum dollar amount, as designed by the Board of Directors, during the period that begins on the offering date and ends on the date stated in the offering. The maximum number of shares of common stock that may be issued under the 2020 ESPP is 1,200,000 shares. The 2020 ESPP is considered a compensatory plan and the fair value of the discount and the look-back period will be estimated using the Black-Scholes option pricing model and expense will be recognized over the six-month withholding period prior to the purchase date. For the years ended December 31, 2022 and 2021, we recognized $0.3 million and $0.4 million in share-based compensation expense related to the 2020 ESPP, respectively, which is included in our selling, general and administrative expense in the accompanying consolidated statements of operations. 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 compensation that they receive for serving on our board and board committees. The Deferred Compensation Plan has historically permitted the participants to elect to defer cash fees to which they were entitled for board and committee service. For participating directors, in lieu of payment of cash fees, we credit their accounts under the Deferred Compensation Plan with a number of stock units based on the trading price of our common stock as of the date of the deferral. These stock units vest immediately, although the participating directors do not receive the shares represented by such units until a future qualifying event. Pursuant to our Deferred Compensation Plan, non-employee directors can also elect to defer the receipt of some or all of the equity compensation that they receive for board and committee service. Stock units representing this equity compensation vest at the earlier of the one-year anniversary of their grant or the next annual stockholders' meeting. The following is a summary of our stock unit activity under the Deferred Compensation Plan for 2022 and 2021: (in thousands, except stock units and weighted-average share data) Number of Stock Units Weighted Average Grant Date Fair Value per Share Intrinsic Value Outstanding Balance, December 31, 2020 635,383 2.41 $ 6,278 Granted 40,576 10.6 Issued (47,377) 2.4 Balance, December 31, 2021 628,582 3.06 $ 5,334 Granted 118,175 5.64 Issued (47,377) 1.15 Balance, December 31, 2022 699,380 3.61 $ 6,148 As of December 31, 2022, 68,476 outstanding stock units had not yet vested. Stock Repurchases We have historically repurchased shares of our common stock during previous stock repurchase programs. We currently maintain all repurchased shares under those stock repurchase programs as treasury stock. In addition, we repurchased 52,836 and 44,051 shares of our common stock at an aggregate cost of $0.4 million and $0.5 million, or an average price of $6.79 and $10.41 per share, in connection with the net settlement of shares issued as a result of the vesting of restricted stock units in 2022 and 2021, respectively. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic location, customer type, contract type, timing of recognition, and major categories, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. We disaggregate revenue on the basis of where the physical goods are shipped. We also classify revenue by the customer type of entity for which it does business, which is an indicator of the diversity of our client base. We attribute revenues generated from being a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Disaggregation by contract mix provides insight in terms of the degree of performance risk that we have assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as we are required to deliver a scope of work or level of effort for a negotiated fixed price. Cost-based contracts are considered to provide the lowest amount of performance risk since we are generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements. By classifying revenue by major product and service, we attribute revenue from a client to the major product or service that we believe to be the client's primary market. The details are listed in the table below for the years ended December 31, 2022 and 2021: Years ended December 31, (in thousands) 2022 2021 Total Revenue by Geographic Location United States $ 48,256 $ 45,334 Asia 22,327 17,183 Europe 29,340 16,928 Canada, Central and South America 8,516 8,068 All others 1,058 — Total $ 109,497 $ 87,513 Total Revenue by Major Customer Type Sales to the U.S. government $ 8,700 $ 9,525 U.S. direct commercial sales and other 39,556 35,410 Foreign commercial sales & other 61,241 42,578 Total $ 109,497 $ 87,513 Total Revenue by Contract Type Fixed-price contracts $ 105,919 $ 84,490 Cost-type contracts 3,578 3,023 Total $ 109,497 $ 87,513 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 91,982 $ 69,522 Goods/services transferred over time 17,515 17,991 Total $ 109,497 $ 87,513 Total Revenue by Major Products/Services Technology development $ 7,608 $ 7,136 Test, measurement and sensing systems 99,419 78,528 Other 2,470 1,849 Total $ 109,497 $ 87,513 Contract Balances Our contract assets consist of unbilled amounts for research contracts as well as custom product contracts. Contract liabilities include excess billings, subcontractor accruals, and customer deposits. During the year ended December 31, 2022, we recognized $2.7 million of revenue that was included in contract liabilities as of December 31, 2021. As of December 31, 2022, contract assets reflect $1.9 million of additional revenue following the approval of our 2021 Incurred Cost Submission (ICS) from the Defense Contract Management Agency (DCMA). A portion of the corresponding revenue related to our former Luna Labs segment is classified as discontinued operations. The following table shows the components of our contract balances as of December 31, 2022 and 2021: December 31, (in thousands) 2022 2021 Contract assets $ 7,691 $ 5,166 Contract liabilities (4,089) (4,649) Net contract assets/(liabilities) $ 3,602 $ 517 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 unfulfilled performance obligations was $52.9 million at December 31, 2022. We expect to satisfy 64% of the performance obligations in 2023, 33% in 2024 and the remainder by 2025. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit from continuing operations consisted of the following for the periods indicated: Years ended December 31, (in thousands) 2022 2021 Current: Federal $ 1,701 $ 28 State 470 (40) Foreign — 118 Current $ 2,171 $ 106 Deferred: Federal (1,985) (1,692) State (355) (390) Foreign $ (51) $ (4) Deferred $ (2,391) $ (2,086) Income tax benefit $ (220) $ (1,980) Deferred tax assets and liabilities consist of the following components: Years ended December 31, (in thousands) 2022 2021 Deferred income tax assets: Bad debt and inventory reserve $ 303 $ 405 UNICAP 598 130 Deferred revenue 210 156 ASC842 lease accounting (DTA) 1,243 1,236 Net operating loss carryforwards 8,225 6,984 Accrued liabilities 779 559 Stock-based compensation 1,247 899 R&D credit carryforward — 500 Section 174 capitalization 2,081 — Other, net — 360 Total deferred income tax assets before valuation allowance 14,686 11,229 Less: Valuation allowance (3,593) (3,806) Total deferred income tax assets 11,093 7,423 Deferred income tax liabilities: ASC842 lease accounting (DTL) (1,152) (1,090) Depreciation and amortization (3,762) (3,012) Deferred gain (548) — Investment in partnership (67) — Other, net (917) — Total deferred income tax liabilities $ (6,446) $ (4,102) Net deferred tax assets $ 4,647 $ 3,321 The benefit from income taxes from continuing operations differs from the amount computed by applying the federal statutory income tax rate to our (loss)/income from continuing operations before income taxes as follows for the periods indicated: Years ended December 31, 2022 2021 Income tax expense at federal statutory rate 21.00 % 21.00 % Effect of foreign operations 3.06 28.79 State taxes, net of federal tax effects (0.64) 9.48 Change in valuation allowance (23.55) (24.66) Provision to return adjustments (0.88) (0.04) Meals and entertainment (0.60) (0.11) Other permanent differences (3.92) (14.71) Equity compensation 3.08 34.43 Current year R&D credit 14.86 8.80 Prior year R&D credit (2.18) 1.52 Foreign derived intangible income benefit 8.82 3.31 Reserve for uncertain tax positions (1.90) (2.73) Other (8.41) (0.56) Income tax benefit 8.74 % 64.52 % The realization of our deferred income tax assets is dependent upon sufficient taxable income in future periods. In assessing whether deferred tax assets may be realized, we consider whether it is more likely than not that some portion, or all, of the deferred tax asset will be realized. We consider scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies that we can implement in making our assessment. We continue to be in a three year cumulative net income position, and based on all available positive and negative evidence, we believe the net deferred tax asset will be fully realizable. In March 2022, we acquired the stock of Lios, which included a German entity and a US entity, both of which had deferred tax assets that were recorded as of the acquisition date. Based on all available evidence, including cumulative history of losses, we have realized deferred tax assets only to the extent they are supported by the reversal of existing temporary differences. Due to taxable temporary differences exceeding the NOLs in existence at the acquisition date, no valuation allowance was recorded at the acquisition date for the German entity. Subsequent to the acquisition, a valuation allowance was recorded in the amount of $0.2 million to income tax benefit for the year ended December 31, 2022. A valuation allowance of $0.5 million was recorded on the opening balance sheet for the US entity. In December 2020, Luna acquired the stock of OptaSense Holdings Limited and its wholly owned subsidiaries ("OptaSense"), which included a UK entity and US entity. Both of these entities had deferred tax assets that were recorded as of the acquisition date. Based on all available evidence, including cumulative history of losses, we have realized deferred tax assets only to the extent they are supported by the reversal of existing temporary differences. This results in a valuation allowance of $2.5 million and $3.8 million as of December 31, 2022 and 2021 respectively. As of December 31, 2022, we have net operating loss ("NOL") carryforwards of approximately $31.9 million, of which approximately $21.0 million is in foreign jurisdictions. These NOLs were primarily from past acquisitions. A portion of these NOLs begin to expire in 2025. The domestic NOLs are subject to limitation under IRC Section 382. The following table summarizes the activity related to our gross unrecognized tax benefits: Years ended December 31, (in thousands) 2022 2021 Unrecognized tax benefits, beginning of period $ 295 $ 211 Increases related to current period tax positions 56 75 Increases related to prior period tax positions — 9 Decreases related to prior period tax positions (8) — Unrecognized tax benefits, end of period $ 343 $ 295 As of December 31, 2022 we had $0.3 million of unrecognized tax benefits. If these amounts are recognized in future periods, it would impact the effective tax rate on income from continuing operations for the years in which they are recognized. Interest and penalties released related to uncertain tax positions was immaterial for the year ended December 31, 2022. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment. The accrued interest and penalties as of December 31, 2022, is recorded in other long-term liabilities on the consolidated balance sheets. Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The U.S. federal statute of limitations remains open for the year 2018 and onward. U.S. state jurisdictions have statutes of limitation generally ranging from three to seven years. Our Optasense companies have open years for audit including UK - 2018 and forward; US - 2018 and forward; and Canada 2017 and forward. Given that certain subsidiaries have federal or state net operating loss carryforwards, the statute for examination by the taxing authorities will typically remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above. We currently have no income tax returns under examination, we do not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. We consider undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the U.S. No taxes have been recorded with respect to our indefinitely reinvested earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, we may be subject to additional foreign withholding |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and other contingencies From time to time, we may become involved in litigation in relation to claims arising from our operations in the normal course of business. While management currently believes it is not reasonably possible the amount of ultimate liability, if any, with respect to these actions will have a material adverse effect on our financial position, results of operations or liquidity, the ultimate outcome of any litigation is uncertain. We have made, and will continue to make, efforts to comply with current and future environmental laws. We anticipate that we could incur additional capital and operating costs in the future to comply with existing environmental laws and new requirements arising from new or amended statutes and regulations. In addition, because the applicable regulatory agencies have not yet promulgated final standards for some existing environmental programs, we cannot at this time reasonably estimate the cost for compliance with these additional requirements. The amount of any such compliance costs could be material. We cannot predict the impact that future regulations will impose upon our business. Obligation under Operating Leases See Note 11 - Leases for discussion of our lease obligations. Purchase Commitments We executed multiple non-cancelable purchase orders totaling $4.8 million in the second quarter of 2022 and a non-cancelable purchase order totaling $4.6 million in the fourth quarter of 2022 for multiple shipments of tunable lasers and components to be delivered over an 9-15-month period. At December 31, 2022, approximately $6.6 million of these commitments remained and are expected to be delivered by December 30, 2024. Guarantees As of December 31, 2022, we had a total of $0.3 million in performance bond guarantees outstanding in favor of certain third parties to ensure performance of its obligations under certain customer contracts and lease arrangements. These guarantees expire at various dates through September 2027. To date, we have not incurred any charges associated with non-performance covered by such guarantees and have not accrued any liabilities as of December 31, 2022. |
Employee Profit Sharing Plan
Employee Profit Sharing Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Profit Sharing Plan | Employee Profit Sharing Plan We maintain a salary reduction/profit-sharing plan under provisions of Section 401(k) of the Internal Revenue Code. The plan is offered to all permanent employees. We contribute 30% of the salary deferral elected by each employee up to a maximum deferral of 10% of annual salary. We contributed approximately $0.6 million and $0.7 million to the plan for the years ended December 31, 2022 and December 31, 2021, respectively. |
Relationship with Major Custome
Relationship with Major Customers | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Relationship with Major Customers | Relationship with Major CustomersDuring the years ended December 31, 2022 and 2021, approximately 8% and 11%, respectively, of our consolidated revenues were attributable to contracts with the U.S. government. At December 31, 2022 and 2021, receivables with respect to contracts with the U.S. government represented 4% and 6% of total trade receivables, respectively. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Schedule II Luna Innovations Incorporated Valuation and Qualifying Accounts Column A Column B Column C Column D Column E (in thousands) Balance Additions Deductions Balance at Year Ended December 31, 2021 Reserves deducted from assets to which they apply: Deferred tax valuation allowance $ 2,850 $ 2,815 $ (1,859) $ 3,806 Allowances for doubtful accounts $ 886 $ 880 $ (841) $ 925 $ 3,736 $ 3,695 $ (2,700) $ 4,731 Year Ended December 31, 2022 Reserves deducted from assets to which they apply: Deferred tax valuation allowance $ 3,806 $ 554 $ (767) $ 3,593 Allowances for doubtful accounts $ 925 $ 564 $ (709) $ 780 $ 4,731 $ 1,118 $ (1,476) $ 4,373 All other schedules are omitted as the required information is inapplicable or the information is presented in the Consolidated Financial Statements and notes thereto in Item 8 of Part II of this Annual Report on Form 10-K. ◦ Exhibits. The exhibits filed as part of this report are listed under “Exhibits” at subsection (b) of this Item 15. (b) Exhibits |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Luna Innovations Incorporated ("we," "our" or the "Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries, and distributed fiber optic sensing solutions that measure, or "sense" the structures for industries ranging from aerospace, automotive, oil and gas, security and infrastructure. Our communications test and control products help customers test their fiber optic networks and assemblies with speed and precision in both lab and production environments. Our test and measurement products accelerate the development of high speed fiber optic components like photonic integrated circuits, coherent receivers and short-run fiber networks. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by measuring stress, strain, and temperature at a high resolution for new designs or manufacturing processes. Our distributed fiber optic sensing products ensure the safety and structural integrity or operational health of critical assets in the field, by monitoring stress, strain, temperature, and vibration in large civil and industrial infrastructure such as bridges, roads, pipelines and borders. We manufacture and sell "terahertz" (THz) products for layer thickness measurements for materials like plastics, rubber, and paint. Our THz products are used in the aerospace and automotive/EV sector. We also provide applied research services, primarily under federally funded development programs, that leverage our sensing and instrumentation technologies to meet the specific needs and applications of our customers. |
Consolidation Policy | Consolidation PolicyOur consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include our accounts and the accounts of our wholly-owned subsidiaries. We eliminate from our financial results all intercompany transactions. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may differ from such estimates and assumptions. |
Revenue Recognition | Revenue Recognition Products and Services Revenues from product sales are generated by the sale of commercial products and services under various sales programs to the end user and through distribution channels. We sell fiber optic test and sensing systems to end users for use in numerous fiber optic-based measurement applications. Revenues are recorded net of applicable sales taxes collected from customers and payable to state or local governmental entities. We evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. We recognize revenue when the performance obligation has been satisfied by transferring control of the product or service to the customer. For tangible products that contain software that is essential to the tangible product’s functionality, we consider the product and software to be a single performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation based on their relative stand-alone selling prices. In such circumstances, we use the observable price of goods or services which are sold separately in similar circumstances to similar customers. If these prices are not observable, then we will estimate the stand-alone selling price using information that is reasonably available. For the majority of our standard products and services, price list and discount structures related to customer type are available. Shipping and handling activities primarily occur after a customer obtains control and are considered fulfillment costs rather than separate performance obligations. For standard products, we recognize revenue at a point in time when control passes to the customer. Absent substantial product acceptance clauses, this is based on the shipping terms. In instances where acceptance of the product is specified by the customer, revenue for the product and any related installation services is deferred until such required acceptance criteria have been met. For custom products that require engineering and development based on customer requirements, we will recognize revenue over time using the input method based on cost incurred to date. For extended warranties and product rentals, revenue is recognized over time using the output method based on the time elapsed for the warranty or service period. In the case of warranties, we record a contract liability for amounts billed but that are not recognized until subsequent periods. For monitoring services where we are performing monitoring of an asset the customer controls, revenue is recognized over time based on the duration of the underlying contract. Research and Development Contracts We perform research and development for U.S. Federal government agencies, educational institutions and commercial organizations. We account for a research contract when a contract has been executed, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of the contract price is considered probable. Revenue is earned under cost reimbursable, time and materials and fixed price contracts. Direct contract costs are expensed as incurred. Our contracts with agencies of the U.S. government are subject to periodic funding by the respective contracting agency. Funding for a contract may be provided in full at inception of the contract or ratably throughout the contract as the services are provided. In evaluating the probability of funding for purposes of assessing collectability of the contract price, we consider our previous experience with our customers, communication with our customers regarding funding status and our knowledge of available funding for the contract or program. If funding is not assessed as probable it is not included in the transaction price and the related revenue is not recorded until it is determined that it is probable we will collect the consideration for the related goods or services. Under the typical payment terms of our U.S. government contracts, the customer pays us either performance-based payments ("PBPs") or progress payments. PBPs, which are typically used in firm fixed price contracts, are interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments, which are typically used in our cost type contracts, are interim payments based on costs incurred as the work progresses. For our U.S. government cost-type contracts, the customer generally pays us during the performance period for 80% to 90% of our actual costs incurred. Because the customer retains a small portion of the contract price until completion of the contract and audit of allowable costs, cost type contracts generally result in revenue recognized in excess of billings which we present as contract assets on the balance sheet. Amounts billed and due from our customers are classified as receivables on the balance sheet. For non-U.S. government contracts, we typically receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. We recognize a liability for these advance payments and PBPs paid in advance which are in excess of the revenue recognized and present these amounts as contract liabilities on the balance sheet. To determine the proper revenue recognition method for research and development contracts, we evaluate whether two or more contracts should be combined and accounted for as one single modified contract and whether the combined or single contract should be accounted for as more than one performance obligation. For instances where a contract has options that were bid with the initial contract and awarded at a later date, we combine the options with the original contract when options are awarded. For most of our contracts, the customer contracts for research with multiple milestones that are interdependent. Consequently, the entire contract is accounted for as one performance obligation. The effect of the combined or modified contract on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. Contract revenue recognition is measured over time as we perform because of continuous transfer of control to the customer. For U.S. government contracts which are typically subject to the Federal Acquisition Regulation, this continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay us for cost incurred plus a reasonable profit and take control of any work in process. From time to time, as part of normal management processes, facts may change, causing revisions to estimated total costs or revenues expected. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known. Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. We generally use the input method, more specifically the cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer, which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The underlying bases for estimating our contract research revenues are measurable expenses, such as labor, subcontractor costs and materials, and data that are updated on a regular basis for purposes of preparing our cost estimates. Our research contracts generally have a period of performance of six months to three years, and our estimates of contract costs have historically been consistent with actual results. Revisions in these estimates between accounting periods to reflect changing facts and circumstances have not had a material impact on our operating results, and we do not expect future changes in these estimates to be material. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known. Under cost reimbursable contracts, we are reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fixed fee representing the profit negotiated between us and the contracting agency. Revenue from cost reimbursable contracts is recognized as costs are incurred plus an estimate of applicable fees earned. We consider fixed fees under cost reimbursable contracts to be earned in proportion to the allowable costs incurred in performance of the contract. Revenue from time and materials contracts is recognized based on direct labor hours expended at contract billing rates plus other billable direct costs. Fixed price contracts may include either a product delivery or specific service performance throughout a period. For fixed price contracts that provide for the development and delivery of a specific prototype or product, revenue is recognized over time using the input method based upon the percentage of completion of costs incurred to date versus total estimated costs. Whether certain costs under government contracts are allowable is subject to audit by the government. Certain indirect costs are charged to contracts using provisional or estimated indirect rates, which are subject to later revision based on government audits of those costs. Management is of the opinion that costs subsequently disallowed, if any, would not likely have a significant impact on revenues recognized for those contracts. |
Allowance for Uncollectible Receivables | Allowance for Uncollectible ReceivablesAccounts receivable are recorded at their face amount, less an allowance for doubtful accounts. We review the status of our uncollected receivables on a regular basis. In determining the need for an allowance for uncollectible receivables, we consider our customers’ financial stability, past payment history and other factors that bear on the ultimate collection of such amounts. |
Cash and Cash Equivalents | Cash and Cash EquivalentsWe consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. To date, we have not incurred losses related to cash and cash equivalents. Our foreign currency risk on cash and cash equivalents held outside of the US is not material. At December 31, 2022 there were no cash equivalents invested in U.S. Treasury obligations. At December 31, 2021, $1.0 million was invested in U.S. Treasury obligations through a sweep account with our bank. The full value of amounts invested through the sweep account are convertible to cash on a daily basis. Our cash transactions are processed through reputable commercial banks. We regularly maintain cash balances with financial institutions which exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. |
Fair Value Measurements | Fair Value Measurements Our financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. Valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1—Quoted prices for identical instruments in active markets. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. • Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt |
Property and Equipment, net | Property and Equipment, net Property and equipment, net, are stated at cost less accumulated depreciation. We record depreciation using the straight-line method over the following estimated useful lives: Equipment 3 – 7 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Lesser of lease term or life of improvements |
Intangible Assets, net | Intangible Assets, netIntangible assets consist of patents related to certain intellectual property that we have developed or acquired, and identifiable intangible assets recognized in connection with our acquisition of LIOS Technologies Inc. ("Lios") in March 2022 and other companies prior to 2022. We amortize our identified intangible assets over their estimated useful lives ranging between one |
Goodwill | Goodwill is tested annually for impairment as of the first day of our fourth quarter (October 1st) and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Goodwill is tested for impairment at the reporting unit level. As of December 31, 2022, we had one reporting unit which contained goodwill. When changes occur in the composition of one or more reporting units, goodwill is reassigned to the reporting units affected based on their relative fair value. Our goodwill impairment evaluation consisted of a qualitative assessment. A qualitative assessment can be performed to determine whether it is more likely than not the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, we compare the fair value of each reporting unit to its carrying value using a quantitative assessment. If the fair value of the reporting unit exceeds its carrying value, goodwill is considered not impaired. If the fair value of the reporting unit is less than the carrying value, the difference is recorded as an impairment loss. For the quantitative assessment, the fair value of each reporting unit is estimated using a combination of an income approach using a discounted cash flow ("DCF") analysis and a market-based valuation approach based on comparable public company trading values. Determining the fair value of a reporting unit requires the exercise of significant management judgment, including the amount and timing of projected future revenues, earnings and cash flows after considering factors such as recent operating performance, general market and industry conditions, existing and expected future contracts, changes in working capital and long-term business plans and growth initiatives. The carrying value of each reporting unit includes the assets and liabilities employed in its operations and goodwill. We have not recorded any goodwill impairment for the years ended December 31, 2022 and 2021. |
Research, Development and Engineering | Research, Development and EngineeringResearch, development and engineering expense not related to contract performance is expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets fail the recovery test, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell. |
Inventory | InventoryInventory 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. |
Net Income per Share | Net Income per ShareBasic per share data is computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income attributable to common stockholders 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 common shares 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. |
Stock-Based Compensation | Stock-Based Compensation We have two stock-based compensation plans, which are described further in Note 12. We recognize compensation expense based upon the fair value of the underlying equity award as of the date of grant. We have elected to use the Black-Scholes option pricing model to value any stock options granted. Restricted stock and restricted stock units awarded are valued at the closing price of our common stock on the date of the award. We recognize stock-based compensation for such awards on a straight-line basis over the requisite service period of the awards taking into account the effects of the expected exercise. We reduce stock-based compensation expense for the value of any forfeitures of unvested awards as such forfeitures occur. |
Income Taxes | Income Taxes We account for income taxes using the liability method. Deferred tax assets or liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates, which will be in effect when the differences reverse. A valuation allowance against net deferred tax assets is provided unless we conclude it is more likely than not that the deferred tax assets will be realized. We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We evaluate our ability to benefit from all deferred tax assets and establish valuation allowances for amounts we believe are not more-likely-than-not to be realizable. For uncertain tax positions, we use a more-likely-than-not threshold, greater than 50%, based on the technical merits of the income tax position taken. Income tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit recognized in the financial statements. Penalties, if probable and reasonably estimable, and interest expense related to uncertain tax positions are recognized as a component of the tax provision. |
Foreign Currency | Foreign CurrencyFor our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Revenues and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings. |
Business Combinations | Business Combinations We account for business combinations under the acquisition method of accounting, in accordance with ASC 805 - Business Combinations . Under ASC 805, 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 acquisition consideration over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. Determining the fair value of acquired intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including the discount rate, revenue growth rates, projected gross margins, estimated research and development expenses, and operating profit margins. |
Recently Issued Pronouncements adopted | Recently Issued Pronouncements In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We do not expect the adoption of this new accounting pronouncement to have a significant impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08 Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which improves the accounting acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. We early adopted ASU 2021-08 during the year ended December 31, 2022 in conjunction with a business combination. The adaptation did not have a material impact on our consolidated financial statements. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and Equipment Estimated Useful Lives | We record depreciation using the straight-line method over the following estimated useful lives: Equipment 3 – 7 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Lesser of lease term or life of improvements |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares have been excluded from the computation of diluted weighted average shares outstanding because the effect would be anti-dilutive: Years ended December 31, 2022 2021 Stock options 680,000 1,234,000 Restricted stock units 1,124,000 814,000 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The key components from discontinued operations related to the Luna Labs segment are as follows (in thousands) : Years ended December 31, 2022 2021 Revenues $ 6,473 $ 23,722 Cost of revenues 3,692 19,009 Gross profit 2,781 4,713 Selling, general and administrative expenses 535 1,634 Research, development & engineering expenses — 24 Operating income 2,246 3,055 Income tax expense 516 584 Net income from discontinued operations, net of tax $ 1,730 $ 2,471 Assets and liabilities of discontinued operations classified as held for sale in the consolidated balance sheets as of December 31, 2021 consist of the following (in thousands) : December 31, 2021 Accounts receivable, net $ 2,967 Inventory, net 282 Contract assets 4,051 Prepaid expenses and other current assets 132 Property and equipment, net 330 Intangible assets, net 165 Operating lease right-of-use asset 4,884 Other non-current assets 141 Assets held for sale $ 12,952 Accounts payable 1,042 Accrued and other current liabilities 821 Contract liabilities 2,626 Current portion of operating lease liability 388 Long-term portion of operating lease liability 4,826 Liabilities associated with assets held for sale $ 9,703 (in thousands) : Years ended December 31, 2022 2021 Depreciation and amortization $ 23 $ 112 Share-based compensation 177 129 Acquisition of property and equipment 34 — |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Allocation of the Purchase Consideration | The following table summarizes the allocation of the purchase consideration for the acquisition of Lios: (in thousands) Accounts receivable $ 3,069 Inventory 5,176 Prepaid expenses and other current assets 96 Property and equipment 858 Intangible assets 6,437 Goodwill 8,788 Operating lease right-of-use asset 512 Accounts payable and accrued expenses (903) Accrued and other current liabilities (1,073) Contract liabilities (314) Current portion of operating lease liability (322) Long-term portion of operating lease liability (191) Other long-term liabilities (48) Total purchase consideration $ 22,085 |
Schedule of Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives | The identifiable intangible assets and their estimated useful lives were as follows: Estimated Useful Life (in thousands) Developed technology 6 years $ 1,998 Customer relationships 8 years 3,662 Trade names and trademarks 7 years 333 Backlog 1 year 444 $ 6,437 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Components of Accounts Receivable, Net | Accounts receivable, net, consists of the following: December 31, (in thousands) 2022 2021 Billed $ 33,542 $ 21,790 Other 487 48 34,029 21,838 Less: allowance for doubtful accounts (780) (925) Accounts receivable, net $ 33,249 $ 20,913 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Components of inventory are as follows: December 31, (in thousands) 2022 2021 Finished goods $ 9,930 $ 10,087 Work-in-process 3,113 2,318 Raw materials 23,539 10,088 Inventory $ 36,582 $ 22,493 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and equipment, net, consists of the following: December 31, (in thousands) 2022 2021 Building $ 219 $ 226 Equipment 15,801 10,255 Furniture and fixtures 1,017 1,316 Software 126 72 Leasehold improvements 2,466 2,292 Construction in process 1,383 646 21,012 14,807 Less—accumulated depreciation (16,119) (11,819) Property and equipment, net $ 4,893 $ 2,988 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets, net consist of the following: December 31, (in thousands) Estimated Life 2022 2021 Patent costs 1 - 18 years $ 9,086 $ 9,230 Developed technology 6 - 10 years 15,924 14,440 In-process research and development N/A 2,631 2,732 Customer relationships 5 - 8 years 4,117 700 Trade names 7 - 15 years 880 550 Backlog 1 - 3 years 331 — 32,969 27,652 Patent costs (4,128) (3,254) Developed technology (6,830) (5,043) In-process research and development (1,763) (1,476) Customer relationships (574) (170) Trade names (586) (532) Backlog (338) — Accumulated amortization (14,219) (10,475) Intangible assets, net $ 18,750 $ 17,177 |
Estimated Aggregate Amortization Based on Net Value of Intangible Assets | Estimated aggregate amortization, based on the net value of intangible assets at December 31, 2022, for each of the next five years and beyond is as follows: (in thousands) Year Ending December 31, 2023 $ 3,800 2024 3,270 2025 2,942 2026 2,801 2027 2,023 2028 and beyond 3,914 $ 18,750 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying value of goodwill during the years ended December 31, 2022 and December 31, 2021 were as follows: (in thousands) Balance as of December 31, 2020 $ 18,121 Measurement period adjustment 929 Foreign currency translation (66) Balance as of December 31, 2021 18,984 Goodwill resulting from business acquisition 8,788 Foreign currency translation (845) Balance as of December 31, 2022 $ 26,927 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: December 31, (in thousands) 2022 2021 Accrued compensation $ 8,962 $ 6,798 Contingent consideration — 225 Accrued professional fees 720 503 Accrued income tax 3,788 328 Current portion of finance lease liability 50 48 Accrued interest 64 17 Accrued liabilities-other 3,110 1,339 Total accrued liabilities $ 16,694 $ 9,258 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of the following: Years ended December 31, (in thousands) 2022 2021 Term Loan (net of debt issuance costs of $74, 6.65% at December 31, 2022) $ 18,926 $ 8,290 Revolving Loan (6.65% at December 31, 2022) 4,300 7,550 23,226 15,840 Less: Current portion of long-term debt obligations (2,500) (4,167) Long-term debt obligations $ 20,726 $ 11,673 |
Schedule of Maturities of Long-term Debt | Maturities on debt are as follows ( in thousands) : Year Ending December 31, Amount 2023 $ 2,500 2024 3,000 2025 3,500 2026 4,000 2027 10,300 Total maturities $ 23,300 Less: deferred issuance costs (74) Total $ 23,226 |
Schedule of Interest Expense | Interest expense, net for the years ended December 31, 2022 and 2021 consisted of the following: Years ended December 31, (in thousands) 2022 2021 Interest expense on Term Loans $ 642 $ 247 Interest expense on Revolving Line of Credit 210 164 Amortization of debt issuance costs 43 44 Other interest expense 5 27 Interest income (2) (3) Total interest expense, net $ 898 $ 479 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancelable operating and finance leases were as follows as of December 31, 2022: (in thousands) Year Ending December 31, Operating Leases Finance Leases 2023 $ 2,484 $ 53 2024 1,735 52 2025 1,027 48 2026 140 — 2027 — — 2028 and beyond — — Total future minimum lease payments 5,386 153 Less: Interest 343 5 Total lease liabilities $ 5,043 $ 148 Current lease liability $ 2,239 $ 50 Long-term lease liability 2,804 98 Total lease liabilities $ 5,043 $ 148 |
Schedule of Other Information Related to Leases | Other information related to leases is as follows: Year Ended (in thousands, except weighted-average data) December 31, 2022 December 31, 2021 Finance lease cost: Amortization of right-of-use assets $ 53 $ 48 Interest on lease liabilities (4) (4) Total finance lease cost $ 49 $ 44 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,064 $ 2,115 Finance cash flows from finance leases $ 48 $ 48 Right-of-use assets obtained in exchange for new operating lease liabilities $ 782 $ 865 Weighted-average remaining lease term (years) - operating leases 6.0 8.0 Weighted-average remaining lease term (years) - finance leases 3.2 3.9 Weighted-average discount rate - operating leases 8 % 9 % Weighted-average discount rate - finance leases 3 % 3 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Activity of Stock Options | The following table sets forth the activity of the options to purchase common stock under the 2006 Plan and the 2016 Plan. The prices represent the closing price of our Common Stock on the Nasdaq Capital Market on the respective dates. Options Outstanding Options Exercisable Number of Price per Weighted Aggregate Number of Weighted Aggregate (in thousands, except share, per share and weighted-average data) Balance at December 31, 2020 2,329,416 $1.18 - 7.59 $ 2.76 $ 16,574 1,408,119 $ 2.26 $ 10,734 Forfeited (58,860) $3.37 - 11.40 5.91 Exercised (818,267) $1.18 - 7.59 2.73 Granted 80,735 $11.00 - 11.94 9.13 Balance at December 31, 2021 1,533,024 $1.18 - 11.40 $ 3.00 $ 8,439 1,050,177 $ 2.45 $ 6,314 Forfeited (96,858) $3.04 - $11.40 6.03 Exercised (577,129) $1.27 - $7.37 2.48 Balance at December 31, 2022 859,037 $1.27 - 11.40 $ 3.01 $ 5,040 797,529 $ 2.74 $ 4,856 |
Assumptions Used to Estimate Fair Value of Option Granted | The fair value of each option granted is estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions: Years ended December 31, 2021 Risk-free interest rate range 0.975% Expected life of option-years 7 Expected stock price volatility 55% |
Activity of Stock Option by Exercise Price Range | Options Outstanding Options Exercisable Range of Options Weighted Weighted Options Weighted Weighted Year ended December 31, 2021 $1.18 - 11.40 1,533,024 4.73 $3.00 1,050,177 3.95 $2.45 Year ended December 31, 2022 $1.27 - 11.40 859,037 4.00 $3.01 797,529 3.76 $2.74 (in thousands) Total Intrinsic Value of Total Fair Value of Year ended December 31, 2021 $ 6,288 $ 2,571 Year ended December 31, 2022 $ 2,173 $ 2,189 |
Activity of Restricted Stock | The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs in 2022 and 2021: (in thousands, except share and weighted-average share data) Number of Unvested Shares Weighted Average Grant Date Fair Value Aggregate Grant Date Fair Value of Unvested Shares Balance at January 1, 2020 429,467 $ 4.48 $ 1,924 Granted 281,384 10.71 3,014 Vested (234,367) 4.22 (989) Forfeitures (7,500) 11.94 (90) Balance at December 31, 2021 468,984 $ 8.58 $ 3,859 Granted 930,661 6.17 5,742 Vested (225,134) 6.96 (1,567) Forfeitures (111,588) 9.54 (1,065) Balance at December 31, 2022 1,062,923 $ 6.72 $ 6,969 |
Activity of Restricted Stock Units | The following is a summary of our stock unit activity under the Deferred Compensation Plan for 2022 and 2021: (in thousands, except stock units and weighted-average share data) Number of Stock Units Weighted Average Grant Date Fair Value per Share Intrinsic Value Outstanding Balance, December 31, 2020 635,383 2.41 $ 6,278 Granted 40,576 10.6 Issued (47,377) 2.4 Balance, December 31, 2021 628,582 3.06 $ 5,334 Granted 118,175 5.64 Issued (47,377) 1.15 Balance, December 31, 2022 699,380 3.61 $ 6,148 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The details are listed in the table below for the years ended December 31, 2022 and 2021: Years ended December 31, (in thousands) 2022 2021 Total Revenue by Geographic Location United States $ 48,256 $ 45,334 Asia 22,327 17,183 Europe 29,340 16,928 Canada, Central and South America 8,516 8,068 All others 1,058 — Total $ 109,497 $ 87,513 Total Revenue by Major Customer Type Sales to the U.S. government $ 8,700 $ 9,525 U.S. direct commercial sales and other 39,556 35,410 Foreign commercial sales & other 61,241 42,578 Total $ 109,497 $ 87,513 Total Revenue by Contract Type Fixed-price contracts $ 105,919 $ 84,490 Cost-type contracts 3,578 3,023 Total $ 109,497 $ 87,513 Total Revenue by Timing of Recognition Goods transferred at a point in time $ 91,982 $ 69,522 Goods/services transferred over time 17,515 17,991 Total $ 109,497 $ 87,513 Total Revenue by Major Products/Services Technology development $ 7,608 $ 7,136 Test, measurement and sensing systems 99,419 78,528 Other 2,470 1,849 Total $ 109,497 $ 87,513 |
Schedule of Components of Contract Balances | The following table shows the components of our contract balances as of December 31, 2022 and 2021: December 31, (in thousands) 2022 2021 Contract assets $ 7,691 $ 5,166 Contract liabilities (4,089) (4,649) Net contract assets/(liabilities) $ 3,602 $ 517 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Benefit | Income tax benefit from continuing operations consisted of the following for the periods indicated: Years ended December 31, (in thousands) 2022 2021 Current: Federal $ 1,701 $ 28 State 470 (40) Foreign — 118 Current $ 2,171 $ 106 Deferred: Federal (1,985) (1,692) State (355) (390) Foreign $ (51) $ (4) Deferred $ (2,391) $ (2,086) Income tax benefit $ (220) $ (1,980) |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following components: Years ended December 31, (in thousands) 2022 2021 Deferred income tax assets: Bad debt and inventory reserve $ 303 $ 405 UNICAP 598 130 Deferred revenue 210 156 ASC842 lease accounting (DTA) 1,243 1,236 Net operating loss carryforwards 8,225 6,984 Accrued liabilities 779 559 Stock-based compensation 1,247 899 R&D credit carryforward — 500 Section 174 capitalization 2,081 — Other, net — 360 Total deferred income tax assets before valuation allowance 14,686 11,229 Less: Valuation allowance (3,593) (3,806) Total deferred income tax assets 11,093 7,423 Deferred income tax liabilities: ASC842 lease accounting (DTL) (1,152) (1,090) Depreciation and amortization (3,762) (3,012) Deferred gain (548) — Investment in partnership (67) — Other, net (917) — Total deferred income tax liabilities $ (6,446) $ (4,102) Net deferred tax assets $ 4,647 $ 3,321 |
Reconciliation of Income Tax Benefit (Expense) | The benefit from income taxes from continuing operations differs from the amount computed by applying the federal statutory income tax rate to our (loss)/income from continuing operations before income taxes as follows for the periods indicated: Years ended December 31, 2022 2021 Income tax expense at federal statutory rate 21.00 % 21.00 % Effect of foreign operations 3.06 28.79 State taxes, net of federal tax effects (0.64) 9.48 Change in valuation allowance (23.55) (24.66) Provision to return adjustments (0.88) (0.04) Meals and entertainment (0.60) (0.11) Other permanent differences (3.92) (14.71) Equity compensation 3.08 34.43 Current year R&D credit 14.86 8.80 Prior year R&D credit (2.18) 1.52 Foreign derived intangible income benefit 8.82 3.31 Reserve for uncertain tax positions (1.90) (2.73) Other (8.41) (0.56) Income tax benefit 8.74 % 64.52 % |
Summary of Unrecognized Tax Benefits | The following table summarizes the activity related to our gross unrecognized tax benefits: Years ended December 31, (in thousands) 2022 2021 Unrecognized tax benefits, beginning of period $ 295 $ 211 Increases related to current period tax positions 56 75 Increases related to prior period tax positions — 9 Decreases related to prior period tax positions (8) — Unrecognized tax benefits, end of period $ 343 $ 295 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Jun. 21, 2022 | Dec. 31, 2022 USD ($) plan reporting_unit | Dec. 31, 2021 USD ($) | |
Significant Accounting Policies [Line Items] | |||
Allowance for uncollectible receivables | $ 780,000 | $ 925,000 | |
Cash in excess of FDIC insured limits | $ 1,600,000 | 9,500,000 | |
Number of reporting units | reporting_unit | 1 | ||
Research, development and engineering | $ 10,837,000 | 10,190,000 | |
Stock based compensation plan | plan | 2 | ||
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Finite lived intangible asset, useful life | 1 year | ||
Minimum | SOFR | Term Loan | PNC Bank Facility | |||
Significant Accounting Policies [Line Items] | |||
Variable basis rate | 1.75% | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Finite lived intangible asset, useful life | 15 years | ||
Maximum | SOFR | Term Loan | PNC Bank Facility | |||
Significant Accounting Policies [Line Items] | |||
Variable basis rate | 2.50% | ||
U.S. Treasury Obligations | |||
Significant Accounting Policies [Line Items] | |||
Cash equivalents | $ 0 | $ 1,000,000 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 7 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 3 years |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock options | ||
Significant Accounting Policies [Line Items] | ||
Antidilutive shares (in shares) | 680,000 | 1,234,000 |
Restricted stock units | ||
Significant Accounting Policies [Line Items] | ||
Antidilutive shares (in shares) | 1,124,000 | 814,000 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of discontinued operations | $ 13,968 | $ 0 | |
Tax effect | 3,189 | ||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Luna Labs | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Initial purchase price | $ 20,400 | ||
Proceeds from sale of discontinued operations | 13,000 | ||
Contingent consideration | 1,000 | ||
Gain on disposal | 9,800 | ||
Tax effect | $ 3,200 | ||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Luna Labs | Notes Receivable | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Financing receivable | 2,500 | ||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Luna Labs | Note Receivable 2 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Financing receivable | $ 1,700 |
Discontinued Operations - Disco
Discontinued Operations - Discontinued Operations Related To Luna Lab Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income tax expense | $ 516 | $ 584 |
Discontinued Operations, Held-for-sale | Luna Labs | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | 6,473 | 23,722 |
Cost of revenues | 3,692 | 19,009 |
Gross profit | 2,781 | 4,713 |
Selling, general and administrative expenses | 535 | 1,634 |
Research, development & engineering expenses | 0 | 24 |
Operating income | 2,246 | 3,055 |
Income tax expense | 516 | 584 |
Net income from discontinued operations, net of tax | $ 1,730 | $ 2,471 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities Held For Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract] | ||
Liabilities associated with assets held for sale | $ 0 | $ 9,703 |
Luna Labs | Discontinued Operations, Held-for-sale | ||
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract] | ||
Accounts receivable, net | 2,967 | |
Inventory, net | 282 | |
Contract assets | 4,051 | |
Prepaid expenses and other current assets | 132 | |
Property and equipment, net | 330 | |
Intangible assets, net | 165 | |
Operating lease right-of-use asset | 4,884 | |
Other non-current assets | 141 | |
Assets held for sale | 12,952 | |
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract] | ||
Accounts payable | 1,042 | |
Accrued and other current liabilities | 821 | |
Contract liabilities | 2,626 | |
Current portion of operating lease liability | 388 | |
Long-term portion of operating lease liability | 4,826 | |
Liabilities associated with assets held for sale | $ 9,703 | $ 9,703 |
Discontinued Operations - Cash
Discontinued Operations - Cash Flow And Non-Cash Information (Details) - Luna Labs - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization | $ 23 | $ 112 |
Share-based compensation | 177 | 129 |
Acquisition of property and equipment | $ 34 | $ 0 |
Business Acquisition - Addition
Business Acquisition - Additional Information (Details) $ in Thousands, € in Millions | 12 Months Ended | |||
Mar. 10, 2022 USD ($) | Mar. 10, 2022 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||
Measurement period adjustment | $ 929 | |||
LIOS | ||||
Business Acquisition [Line Items] | ||||
Aggregate consideration | $ 22,100 | € 20 | ||
Measurement period adjustment | $ 1,500 | |||
LIOS | Selling, General and Administrative Expenses | ||||
Business Acquisition [Line Items] | ||||
Acquisition related expense | $ 1,100 | |||
LIOS | Developed technology | ||||
Business Acquisition [Line Items] | ||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 14.50% | 14.50% | ||
LIOS | Trade names and trademarks | ||||
Business Acquisition [Line Items] | ||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 14.50% | 14.50% | ||
LIOS | Backlog | ||||
Business Acquisition [Line Items] | ||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 13.50% | 13.50% | ||
LIOS | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Discount rate used to estimate fair value of acquired finite-lived intangible assets | 15.50% | 15.50% |
Business Acquisition - Allocati
Business Acquisition - Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 10, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 26,927 | $ 18,984 | $ 18,121 | |
LIOS | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 3,069 | |||
Inventory | 5,176 | |||
Prepaid expenses and other current assets | 96 | |||
Property and equipment | 858 | |||
Intangible assets | 6,437 | |||
Goodwill | 8,788 | |||
Operating lease right-of-use asset | 512 | |||
Accounts payable and accrued expenses | (903) | |||
Accrued and other current liabilities | (1,073) | |||
Contract liabilities | (314) | |||
Current portion of operating lease liability | (322) | |||
Long-term portion of operating lease liability | (191) | |||
Other long-term liabilities | (48) | |||
Total purchase consideration | $ 22,085 |
Business Acquisition - Schedule
Business Acquisition - Schedule of Preliminary Identifiable Intangible Assets Acquired (Details) - LIOS $ in Thousands | Mar. 10, 2022 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 6,437 |
Developed technology | |
Business Acquisition [Line Items] | |
Estimated useful life | 6 years |
Intangible assets | $ 1,998 |
Customer relationships | |
Business Acquisition [Line Items] | |
Estimated useful life | 8 years |
Intangible assets | $ 3,662 |
Trade names and trademarks | |
Business Acquisition [Line Items] | |
Estimated useful life | 7 years |
Intangible assets | $ 333 |
Backlog | |
Business Acquisition [Line Items] | |
Estimated useful life | 1 year |
Intangible assets | $ 444 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Billed | $ 33,542 | $ 21,790 |
Other | 487 | 48 |
Total, gross | 34,029 | 21,838 |
Less: allowance for doubtful accounts | (780) | (925) |
Accounts receivable, net | $ 33,249 | $ 20,913 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 9,930 | $ 10,087 |
Work-in-process | 3,113 | 2,318 |
Raw materials | 23,539 | 10,088 |
Inventory | $ 36,582 | $ 22,493 |
Property and Equipment, net - C
Property and Equipment, net - Components of Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 21,012 | $ 14,807 |
Less—accumulated depreciation | (16,119) | (11,819) |
Property and equipment, net | 4,893 | 2,988 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 219 | 226 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15,801 | 10,255 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,017 | 1,316 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 126 | 72 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,466 | 2,292 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,383 | $ 646 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 1.7 | $ 1.4 |
Intangible Assets, net - Summar
Intangible Assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | $ 32,969 | $ 27,652 |
Accumulated amortization | (14,219) | (10,475) |
Finite lived intangible assets, net | 18,750 | 17,177 |
Patent costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | 9,086 | 9,230 |
Accumulated amortization | (4,128) | (3,254) |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | 15,924 | 14,440 |
Accumulated amortization | (6,830) | (5,043) |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | 2,631 | 2,732 |
Accumulated amortization | (1,763) | (1,476) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | 4,117 | 700 |
Accumulated amortization | (574) | (170) |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | 880 | 550 |
Accumulated amortization | (586) | (532) |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets gross | 331 | 0 |
Accumulated amortization | $ (338) | $ 0 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 1 year | |
Minimum | Patent costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 1 year | |
Minimum | Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 6 years | |
Minimum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 5 years | |
Minimum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 7 years | |
Minimum | Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 1 year | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 15 years | |
Maximum | Patent costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 18 years | |
Maximum | Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 10 years | |
Maximum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 8 years | |
Maximum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 15 years | |
Maximum | Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, useful life | 3 years |
Intangible Assets, net - Additi
Intangible Assets, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 3.7 | $ 3.1 |
Intangible Assets, net - Estima
Intangible Assets, net - Estimated Aggregate Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 3,800 | |
2024 | 3,270 | |
2025 | 2,942 | |
2026 | 2,801 | |
2027 | 2,023 | |
2028 and beyond | 3,914 | |
Finite lived intangible assets, net | $ 18,750 | $ 17,177 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 18,984 | $ 18,121 |
Measurement period adjustment | 929 | |
Goodwill resulting from business acquisition | 8,788 | |
Foreign currency translation | (845) | (66) |
Ending balance | $ 26,927 | $ 18,984 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 8,962 | $ 6,798 |
Contingent consideration | 0 | 225 |
Accrued professional fees | 720 | 503 |
Accrued income tax | 3,788 | 328 |
Current portion of finance lease liability | 50 | 48 |
Accrued interest | 64 | 17 |
Accrued liabilities-other | 3,110 | 1,339 |
Total accrued liabilities | $ 16,694 | $ 9,258 |
Finance lease, liability, current, statement of financial position [Extensible List] | Total accrued liabilities | Total accrued liabilities |
Debt - Long Term Debt (Details)
Debt - Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Net of debt issuance costs | $ 74 | |
Total | 23,226 | $ 15,840 |
Current portion of long-term debt obligations | (2,500) | (4,167) |
Long-term debt obligations | 20,726 | 11,673 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Net of debt issuance costs | $ 74 | |
Debt instrument, stated percentage | 6.65% | |
Total | $ 18,926 | 8,290 |
Revolving Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage | 6.65% | |
Total | $ 4,300 | $ 7,550 |
Debt - Additional Information (
Debt - Additional Information (Details) - PNC Bank Facility - USD ($) | Jun. 21, 2022 | Dec. 31, 2022 |
Term Loan | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 20,000,000 | |
Line of credit facility, remaining borrowing capacity | $ 12,500,000 | |
Term Loan | Loan Modification Agreement | Period 1 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 10% | |
Term Loan | Loan Modification Agreement | Period 3 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 15% | |
Term Loan | Loan Modification Agreement | Period 2 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 15% | |
Term Loan | Loan Modification Agreement | Period 5 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 20% | |
Term Loan | Loan Modification Agreement | Period 4 | ||
Debt Instrument [Line Items] | ||
Debt instrument, amortization period, percentage | 20% | |
Term Loan | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 1.75% | |
Term Loan | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 2.50% | |
Term Loan | SOFR | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 0.10% | |
Term Loan | SOFR | Loan Modification Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 1.75% | |
Term Loan | SOFR | Loan Modification Agreement | Maximum | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 2.50% | |
Revolving Loan | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 15,000,000 | |
Line of credit facility, remaining borrowing capacity | $ 10,700,000 | |
Repayments of lines of credit | $ 13,700,000 | |
Commitment fee percentage | 0.20% | |
Revolving Loan | SOFR | Loan Modification Agreement | ||
Debt Instrument [Line Items] | ||
Variable basis rate | 0.10% |
Debt - Maturities (Details)
Debt - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 2,500 | |
2024 | 3,000 | |
2025 | 3,500 | |
2026 | 4,000 | |
2027 | 10,300 | |
Total maturities | 23,300 | |
Less: deferred issuance costs | (74) | |
Total | $ 23,226 | $ 15,840 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | $ 43 | $ 44 |
Other interest expense | 5 | 27 |
Interest income | (2) | (3) |
Total interest expense, net | 898 | 479 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Interest expense | 642 | 247 |
Revolving Loan | ||
Debt Instrument [Line Items] | ||
Interest expense | $ 210 | $ 164 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease, cost | $ 2.5 | $ 2.1 |
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 | |
Office Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Useful life | 5 years |
Leases - Future Lease Payments
Leases - Future Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 2,484 | |
2024 | 1,735 | |
2025 | 1,027 | |
2026 | 140 | |
2027 | 0 | |
2028 and beyond | 0 | |
Total future minimum lease payments | 5,386 | |
Less: Interest | 343 | |
Total lease liabilities | 5,043 | |
Current lease liability | 2,239 | $ 2,101 |
Long-term lease liability | 2,804 | 3,509 |
Total lease liabilities | 5,043 | |
Finance Leases | ||
2023 | 53 | |
2024 | 52 | |
2025 | 48 | |
2026 | 0 | |
2027 | 0 | |
2028 and beyond | 0 | |
Total future minimum lease payments | 153 | |
Less: Interest | 5 | |
Total lease liabilities | 148 | |
Current portion of finance lease ROU liability | 50 | $ 48 |
Long-term lease liability | 98 | |
Total lease liabilities | $ 148 | |
Finance lease, liability, noncurrent, statement of financial position [Extensible List] | Other long-term liabilities |
Leases - Other Lease Informatio
Leases - Other Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finance lease cost: | ||
Finance lease ROU asset | $ 53 | $ 48 |
Interest on lease liabilities | (4) | (4) |
Total finance lease cost | 49 | 44 |
Other information: | ||
Operating cash flows from operating leases | 2,064 | 2,115 |
Finance cash flows from finance leases | 48 | 48 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 782 | $ 865 |
Weighted-average remaining lease term (years) - operating leases | 6 years | 8 years |
Weighted-average remaining lease term (years) - finance leases | 3 years 2 months 12 days | 3 years 10 months 24 days |
Weighted-average discount rate - operating leases | 8% | 9% |
Weighted-average discount rate - finance leases | 3% | 3% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Apr. 07, 2020 shares | Apr. 30, 2016 shares | Dec. 31, 2022 USD ($) installment shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 shares | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Stock based compensation expense | $ | $ 4.2 | $ 3 | |||
Stock options | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 4 years | ||||
Weighted average grant date fair value of options granted (in dollars per share) | $ / shares | $ 11.30 | ||||
Options outstanding, remaining contractual term | 7 years | ||||
Weighted average remaining service period related to compensation recognition | 7 months 6 days | ||||
Unamortized stock option expense to be recognized | $ | $ 0.2 | ||||
Restricted stock units | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Share-based compensation vesting installments | installment | 3 | ||||
Shares issued (in shares) | 816,740 | ||||
Share-based compensation, vested (in shares) | 113,921 | ||||
Share-based compensation, percentage | 100% | ||||
Restricted stock units | Employees | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Shares issued (in shares) | 930,661 | ||||
Restricted stock units | Employees | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Shares vested (in shares) | 169,576 | ||||
Restricted stock units | Member of Board of Directors | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 1 year | ||||
Shares issued (in shares) | 11,819 | 3,384 | |||
Shares vested (in shares) | 3,384 | 10,652 | |||
Restricted stock units | Employees | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Share-based compensation vesting installments | installment | 3 | ||||
Shares vested (in shares) | 52,174 | ||||
Restricted Stock and Restricted Stock Units | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Weighted average remaining service period related to compensation recognition | 2 years 1 month 6 days | ||||
Shares issued (in shares) | 930,661 | 281,384 | |||
Share-based compensation, vested (in shares) | 1,062,923 | 468,984 | 429,467 | ||
Shares vested (in shares) | 225,134 | 234,367 | |||
Unamortized restricted stock and restricted stock units expense to be recognized | $ | $ 5.1 | ||||
Employee Stock | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Shares authorized (in shares) | 1,200,000 | ||||
Withholding period | 6 months | ||||
2016 Equity Incentive Plan | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Shares available for future grant (in shares) | 3,500,000 | ||||
Stock option contractual term | 10 years | ||||
2020 Employee Stock Purchase Plan | Stock options | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Share-based compensation expense | $ | $ 0.3 | $ 0.4 | |||
Deferred Compensation Plan | Restricted stock units | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 1 year | ||||
Employee Director Compensation Plan | Restricted stock units | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Share-based compensation, vested (in shares) | 68,476 |
Stockholders' Equity - Activity
Stockholders' Equity - Activity of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Beginning balance (in shares) | 1,533,024 | 2,329,416 | |
Forfeited (in shares) | (96,858) | (58,860) | |
Exercised (in shares) | (577,129) | (818,267) | |
Granted (in shares) | 80,735 | ||
Ending balance (in shares) | 859,037 | 1,533,024 | 2,329,416 |
Price per Share Range | |||
Outstanding, lower limit (in dollars per share) | $ 1.27 | $ 1.18 | $ 1.18 |
Outstanding, upper limit (in dollars per share) | 11.40 | 11.40 | 7.59 |
Forfeited, lower limit (in dollars per share) | 3.04 | 3.37 | |
Forfeited, upper limit (in dollars per share) | 11.40 | 11.40 | |
Exercised, lower limit (in dollars per share) | 1.27 | 1.18 | |
Exercised, upper limit (in dollars per share) | 7.37 | 7.59 | |
Granted, lower limit (in dollars per share) | 11 | ||
Granted, upper limit (in dollars per share) | 11.94 | ||
Options Outstanding, Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | 3 | 2.76 | |
Forfeited (in dollars per share) | 6.03 | 5.91 | |
Exercised (in dollars per share) | 2.48 | 2.73 | |
Granted (in dollars per share) | 9.13 | ||
Ending balance (in dollars per share) | $ 3.01 | $ 3 | $ 2.76 |
Additional Disclosures | |||
Options outstanding, aggregate intrinsic value | $ 5,040 | $ 8,439 | $ 16,574 |
Exercisable stock options (in shares) | 797,529 | 1,050,177 | 1,408,119 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 2.74 | $ 2.45 | $ 2.26 |
Options exercisable, aggregate intrinsic value | $ 4,856 | $ 6,314 | $ 10,734 |
Stockholders' Equity - Assumpti
Stockholders' Equity - Assumptions Used to Estimate Fair Value of Options Granted (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Risk-free interest rate range | 0.975% |
Expected life of option-years | 7 years |
Expected stock price volatility | 55% |
Stockholders' Equity - Activi_2
Stockholders' Equity - Activity of Stock Option by Exercise Price Range (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Range of exercise prices, lower range (in dollars per share) | $ 1.27 | $ 1.18 | $ 1.18 |
Range of exercise prices, upper range (in dollars per share) | $ 11.40 | $ 11.40 | $ 7.59 |
Options outstanding (in shares) | 859,037 | 1,533,024 | 2,329,416 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 3.01 | $ 3 | $ 2.76 |
Options exercisable (in shares) | 797,529 | 1,050,177 | 1,408,119 |
Weighted average exercise price of options exercisable (in dollars per share) | $ 2.74 | $ 2.45 | $ 2.26 |
Total Intrinsic Value of Options Exercised | $ 2,173 | $ 6,288 | |
Total Fair Value of Options Vested | $ 2,189 | $ 2,571 | |
Exercise Price Range One | |||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Range of exercise prices, lower range (in dollars per share) | $ 1.18 | ||
Range of exercise prices, upper range (in dollars per share) | $ 11.40 | ||
Options outstanding (in shares) | 1,533,024 | ||
Options outstanding, weighted average remaining life in years | 4 years 8 months 23 days | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 3 | ||
Options exercisable (in shares) | 1,050,177 | ||
Options exercisable, weighted average remaining life in years | 3 years 11 months 12 days | ||
Weighted average exercise price of options exercisable (in dollars per share) | $ 2.45 | ||
Exercise Price Range Two | |||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Range of exercise prices, lower range (in dollars per share) | $ 1.27 | ||
Range of exercise prices, upper range (in dollars per share) | $ 11.40 | ||
Options outstanding (in shares) | 859,037 | ||
Options outstanding, weighted average remaining life in years | 4 years | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 3.01 | ||
Options exercisable (in shares) | 797,529 | ||
Options exercisable, weighted average remaining life in years | 3 years 9 months 3 days | ||
Weighted average exercise price of options exercisable (in dollars per share) | $ 2.74 |
Stockholders' Equity - Activi_3
Stockholders' Equity - Activity of Restricted Stock Issuances (Details) - Restricted Stock and Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Unvested Shares | ||
Beginning balance (in shares) | 468,984 | 429,467 |
Granted (in shares) | 930,661 | 281,384 |
Vested (in shares) | (225,134) | (234,367) |
Forfeitures (in shares) | (111,588) | (7,500) |
Ending balance (in shares) | 1,062,923 | 468,984 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 8.58 | $ 4.48 |
Granted (in dollars per share) | 6.17 | 10.71 |
Vested (in dollars per share) | 6.96 | 4.22 |
Forfeitures (in dollars per share) | 9.54 | 11.94 |
Ending balance (in dollars per share) | $ 6.72 | $ 8.58 |
Aggregate Grant Date Fair Value of Unvested Shares | ||
Aggregate grant date fair value of unvested shares, beginning balance | $ 3,859 | $ 1,924 |
Granted | 5,742 | 3,014 |
Vested | (1,567) | (989) |
Forfeitures | (1,065) | (90) |
Aggregate grant date fair value of unvested shares, ending balance | $ 6,969 | $ 3,859 |
Stockholders' Equity - Activi_4
Stockholders' Equity - Activity of Restricted Stock Units (Details) - Restricted stock units - Deferred Compensation Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Stock Units | ||
Beginning balance (in shares) | 628,582 | 635,383 |
Granted (in shares) | 118,175 | 40,576 |
Issued (in shares) | (47,377) | (47,377) |
Ending balance (in shares) | 699,380 | 628,582 |
Weighted Average Grant Date Fair Value per Share | ||
Beginning balance (in dollars per share) | $ 3.06 | $ 2.41 |
Granted (in dollars per share) | 5.64 | 10.6 |
Issued (in dollars per share) | 1.15 | 2.4 |
Ending balance (in dollars per share) | $ 3.61 | $ 3.06 |
Intrinsic Value Outstanding | ||
Aggregate grant date fair value of unvested shares, beginning balance | $ 5,334 | $ 6,278 |
Aggregate grant date fair value of unvested shares, ending balance | $ 6,148 | $ 5,334 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchases (Details) - Share Repurchase Program - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock repurchased during period, shares (in shares) | 52,836 | 44,051 |
Stock repurchased during period, value | $ 0.4 | $ 0.5 |
Sale of stock, price per share (in dollars per share) | $ 6.79 | $ 10.41 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 109,497 | $ 87,513 |
Technology development | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,608 | 7,136 |
Test, measurement and sensing systems | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 99,419 | 78,528 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,470 | 1,849 |
Goods transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 91,982 | 69,522 |
Goods/services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 17,515 | 17,991 |
Fixed-price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 105,919 | 84,490 |
Cost-type contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,578 | 3,023 |
Sales to the U.S. government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,700 | 9,525 |
U.S. direct commercial sales and other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 39,556 | 35,410 |
Foreign commercial sales & other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 61,241 | 42,578 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 48,256 | 45,334 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 22,327 | 17,183 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 29,340 | 16,928 |
Canada, Central and South America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,516 | 8,068 |
All others | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,058 | $ 0 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 2,700 | |
Increase in net contract assets (liabilities) | 1,900 | |
Contract assets | 7,691 | $ 5,166 |
Contract liabilities | (4,089) | (4,649) |
Net contract assets/(liabilities) | $ 3,602 | $ 517 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation amount | $ 52.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, period | 1 year |
Remaining performance obligation percentage | 64% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, period | 1 year |
Remaining performance obligation percentage | 33% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 1,701 | $ 28 |
State | 470 | (40) |
Foreign | 0 | 118 |
Current | 2,171 | 106 |
Deferred: | ||
Federal | (1,985) | (1,692) |
State | (355) | (390) |
Foreign | (51) | (4) |
Deferred | (2,391) | (2,086) |
Income tax benefit | $ (220) | $ (1,980) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets: | ||
Bad debt and inventory reserve | $ 303 | $ 405 |
UNICAP | 598 | 130 |
Deferred revenue | 210 | 156 |
ASC842 lease accounting (DTA) | 1,243 | 1,236 |
Net operating loss carryforwards | 8,225 | 6,984 |
Accrued liabilities | 779 | 559 |
Stock-based compensation | 1,247 | 899 |
R&D credit carryforward | 0 | 500 |
Section 174 capitalization | 2,081 | 0 |
Other, net | 0 | 360 |
Total deferred income tax assets before valuation allowance | 14,686 | 11,229 |
Less: Valuation allowance | (3,593) | (3,806) |
Total deferred income tax assets | 11,093 | 7,423 |
Deferred income tax liabilities: | ||
ASC842 lease accounting (DTL) | (1,152) | (1,090) |
Depreciation and amortization | (3,762) | (3,012) |
Deferred gain | (548) | 0 |
Investment in partnership | (67) | 0 |
Other, net | (917) | 0 |
Total deferred income tax liabilities | (6,446) | (4,102) |
Net deferred tax assets | $ 4,647 | $ 3,321 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax (Benefit) Expense (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense at federal statutory rate | 21% | 21% |
Effect of foreign operations | 3.06% | 28.79% |
State taxes, net of federal tax effects | (0.64%) | 9.48% |
Change in valuation allowance | (23.55%) | (24.66%) |
Provision to return adjustments | (0.88%) | (0.04%) |
Meals and entertainment | (0.60%) | (0.11%) |
Other permanent differences | (3.92%) | (14.71%) |
Equity compensation | 3.08% | 34.43% |
Current year R&D credit | 14.86% | 8.80% |
Prior year R&D credit | (2.18%) | 1.52% |
Foreign derived intangible income benefit | 8.82% | 3.31% |
Reserve for uncertain tax positions | (1.90%) | (2.73%) |
Other | (8.41%) | (0.56%) |
Income tax benefit | 8.74% | 64.52% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 31,900 | ||
Valuation allowance | 3,593 | $ 3,806 | |
Unrecognized tax benefits | 343 | 295 | $ 211 |
Foreign Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 21,000 | ||
LIOS | |||
Income Taxes [Line Items] | |||
Valuation allowance | 200 | ||
LIOS | United States | |||
Income Taxes [Line Items] | |||
Valuation allowance | 500 | ||
Optasense US | |||
Income Taxes [Line Items] | |||
Valuation allowance | $ 2,500 | $ 3,800 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning of period | $ 295 | $ 211 |
Increases related to current period tax positions | 56 | 75 |
Increases related to prior period tax positions | 0 | 9 |
Decreases related to prior period tax positions | (8) | 0 |
Unrecognized tax benefits, end of period | $ 343 | $ 295 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | |
Performance Guarantee | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Guarantor obligations | $ 0.3 | ||
Tunable Lasers | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Non-cancelable purchase order commitment | 4.6 | $ 4.8 | |
Non-cancelable purchase order commitment remained | $ 6.6 | ||
Tunable Lasers | Minimum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Non-cancelable purchase order delivery period (in months) | 9 months | ||
Tunable Lasers | Maximum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Non-cancelable purchase order delivery period (in months) | 15 months |
Employee Profit Sharing Plan (D
Employee Profit Sharing Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Percentage of employer's matching contributions to a defined contribution plan that vests | 30% | |
Percentage of employees' gross pay for which employer contributes a matching contribution | 10% | |
Contribution to employee compensation plan by employer | $ 0.6 | $ 0.7 |
Relationship with Major Custo_2
Relationship with Major Customers (Details) - Sales to the U.S. government - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Revenues | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 8% | 11% |
Billed Trade Receivables | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 4% | 6% |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 4,731 | $ 3,736 |
Additions | 1,118 | 3,695 |
Deductions | (1,476) | (2,700) |
Balance at end of period | 4,373 | 4,731 |
Deferred tax valuation allowance | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 3,806 | 2,850 |
Additions | 554 | 2,815 |
Deductions | (767) | (1,859) |
Balance at end of period | 3,593 | 3,806 |
Allowances for doubtful accounts | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 925 | 886 |
Additions | 564 | 880 |
Deductions | (709) | (841) |
Balance at end of period | $ 780 | $ 925 |