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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2020	Aug. 04, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
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 First Street 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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,798,535
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001239819
Current Fiscal Year End Date	--12-31

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 26,506	$ 25,006
Accounts receivable, net	16,435	16,269
Receivable from sale of HSOR business	0	2,501
Contract assets	3,220	2,759
Inventory, net	11,231	10,294
Prepaid expenses and other current assets	1,691	1,287
Total current assets	59,083	58,116
Property and equipment, net	3,078	3,466
Intangible assets, net	9,544	10,194
Goodwill	10,542	10,542
Long-term contract assets	496	449
Other assets	7,053	2,341
Deferred tax asset	1,426	1,416
Total assets	91,222	86,524
Current liabilities:
Accounts payable	2,763	2,787
Accrued liabilities	8,150	10,369
Contract liabilities	3,368	3,888
Total current liabilities	14,281	17,044
Other long-term liabilities	7,140	2,011
Total liabilities	21,421	19,055
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, par value $0.001, 100,000,000 shares authorized, 32,470,276 and 31,788,896 shares issued, 30,797,535 and 30,149,105 shares outstanding at June 30, 2020 and December 31, 2019, respectively	32	32
Treasury stock at cost, 1,672,741 and 1,639,791 shares at June 30, 2020 and December 31, 2019, respectively	(4,541)	(4,337)
Additional paid-in capital	90,305	88,022
Accumulated deficit	(15,995)	(16,248)
Total stockholders’ equity	69,801	67,469
Total liabilities and stockholders’ equity	$ 91,222	$ 86,524

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	32,470,276	31,788,896
Common stock, outstanding (in shares)	30,797,535	30,149,105
Treasury stock (in shares)	1,672,741	1,639,791

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Total revenues	$ 18,576	$ 17,814	$ 35,717	$ 32,647
Cost of revenues:
Total cost of revenues	9,059	9,062	17,836	17,127
Gross profit	9,517	8,752	17,881	15,520
Operating expense:
Selling, general and administrative	6,202	6,003	12,579	12,229
Research, development and engineering	1,505	1,735	3,102	3,193
Total operating expense	7,707	7,738	15,681	15,422
Operating income	1,810	1,014	2,200	98
Other income/(expense):
Investment income	4	77	64	268
Other (expense)/income	(4)	(3)	5	(4)
Interest expense	(1)	0	(1)	(13)
Total other (expense)/income	(1)	74	68	251
Income from continuing operations before income taxes	1,809	1,088	2,268	349
Income tax expense/(benefit)	440	247	579	(1,618)
Net income from continuing operations	1,369	841	1,689	1,967
Loss from discontinued operations, net of income tax of $464	0	0	(1,436)	0
Net income	1,369	841	253	1,967
Preferred stock dividend	0	90	0	173
Net income attributable to common stockholders	$ 1,369	$ 751	$ 253	$ 1,794
Net income per share from continuing operations:
Basic (in dollars per share)	$ 0.04	$ 0.03	$ 0.06	$ 0.07
Diluted (in dollars per share)	0.04	0.02	0.05	0.06
Net loss per share from discontinued operations:
Basic (in dollars per share)	0	0	(0.05)	0
Diluted (in dollars per share)	0	0	(0.04)	0
Net income per share attributable to common stockholders:
Basic (in dollars per share)	0.04	0.03	0.01	0.06
Diluted (in dollars per share)	$ 0.04	$ 0.02	$ 0.01	$ 0.05
Weighted average shares:
Basic (in shares)	30,589,249	28,246,840	30,484,797	28,143,534
Diluted (in shares)	32,466,122	33,650,790	32,494,950	33,588,951
Lightwave
Revenues:
Total revenues	$ 12,933	$ 12,523	$ 24,487	$ 22,041
Cost of revenues:
Total cost of revenues	5,181	5,334	10,066	9,613
Operating expense:
Operating income	1,168	491	1,145	(490)
Luna Labs
Revenues:
Total revenues	5,643	5,291	11,230	10,606
Cost of revenues:
Total cost of revenues	3,878	3,728	7,770	7,514
Operating expense:
Operating income	$ 642	$ 523	$ 1,055	$ 588

Consolidated Statements of Operations (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Income Statement [Abstract]
Tax benefit from loss on sale of discontinued operations	$ 464

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows provided by operating activities
Net income	$ 253	$ 1,967
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,363	1,166
Share-based compensation	843	721
Bad debt expense	(26)	0
Loss on disposal of fixed assets	4	0
Loss from discontinued operations, net of tax	1,436	0
Deferred taxes	(10)	0
Change in assets and liabilities
Accounts receivable	(139)	713
Contract assets	(508)	(721)
Inventory	(937)	(161)
Other current assets	(404)	(18)
Accounts payable and accrued expenses	(1,286)	(2,314)
Contract liabilities	(520)	(235)
Net cash provided by operating activities	69	1,118
Cash flows provided by/(used in) investing activities
Acquisition of property and equipment	(111)	(406)
Intangible property costs	(192)	(137)
Proceeds from sale of property and equipment	1	0
Proceeds from sale of discontinued operations	600	0
Acquisition of General Photonics Corporation	0	(19,004)
Net cash provided by/(used in) investing activities	298	(19,547)
Cash flows provided by/(used in) financing activities
Payments on finance lease obligations	(26)	(15)
Payments of debt obligations	0	(625)
Repurchase of common stock	(204)	(220)
Proceeds from the exercise of options and warrants	1,363	367
Net cash provided by/(used in) financing activities	1,133	(493)
Net increase/(decrease) in cash and cash equivalents	1,500	(18,922)
Cash and cash equivalents—beginning of period	25,006	42,460
Cash and cash equivalents—end of period	26,506	23,538
Supplemental disclosure of cash flow information
Cash paid for interest	2	13
Cash paid for income taxes	29	687
Non-cash investing and financing activities
Contingent liability for business combination	0	915
Dividend on preferred stock, 39,646 shares of common stock issuable for the six months ended June 30, 2019	$ 0	$ 173

Consolidated Statements of Cash Flows (Parenthetical)	6 Months Ended
Consolidated Statements of Cash Flows (Parenthetical)	Jun. 30, 2019 shares
Statement of Cash Flows [Abstract]
Dividend on preferred stock, shares of common stock issuable (in shares)	39,646

Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	Basis of Presentation and Significant Accounting Policies Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries and distributed fiber optic sensing products for industries utilizing composite and other advanced materials, such as the automotive, aerospace, energy and infrastructure industries. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by providing valuable information such as highly detailed stress, strain, and temperature measurements of a new design or manufacturing process. In addition, our distributed fiber optic sensing products are used to monitor the structural integrity or operational health of critical assets, including large civil structures such as bridges. Our communications test and control products accelerate the development of advanced fiber optic components and networks by providing fast and highly accurate characterization of components and networks. We also provide applied research services, typically under research programs funded by the U.S. government, in areas of advanced materials, sensing, and healthcare applications. Our business model is designed to accelerate the process of bringing new and innovative products to market. We use our in-house technical expertise across a range of technologies to perform applied research services for companies and for government funded projects. We continue to invest in product development and commercialization, which we anticipate will lead to increased product sales growth. Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring accruals considered necessary to present fairly our financial position at June 30, 2020, results of operations and changes in stockholders' equity for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months ended June 30, 2020 and 2019. The results of operations for the three and six months ended June 30, 2020, are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The consolidated balance sheet as of December 31, 2019 was derived from our audited consolidated financial statements. The COVID-19 pandemic has resulted in a global slowdown of economic activity. While the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use reasonably available information to assess certain accounting matters including, but not limited to, accounts receivable, inventory and the carrying value of goodwill and other long-lived tangible and intangible assets. While the assessments have not resulted in any material impacts to our financial statements as of June 30, 2020, we believe the full impact of the pandemic remains uncertain and ongoing developments related to the pandemic may cause material impacts to our consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2019, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and reviewed for impairment as described above. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: •Level 1—Quoted prices for identical instruments in active markets. •Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. •Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the Silicon Valley Bank ("SVB") debt facility including its interest rate of prime plus 1%, to be at market based upon similar instruments that would be available to us. Reportable Segments We have two operating and reportable segments: Lightwave and Luna Labs. During the three months ended June 30, 2020, we changed our reportable segments to Lightwave and Luna Labs to align with how our Chief Operating Decision Maker (CODM) evaluates segment performance and allocates resources to the segments. Prior to the three months ended June 30, 2020, we reported under two different reporting segments, Products and Licensing and Technology Development. We have reflected these new segment measures beginning in the three months ended June 30, 2020 and prior periods have been restated for comparability. The Lightwave segment develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. The Luna Labs segment performs applied research principally in the areas of sensing and instrumentation, advanced materials and health sciences. Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method. The effects of 1.9 million and 5.4 million common stock equivalents are included for the diluted per share data for the three months ended June 30, 2020 and 2019, respectively. The effects of 2.0 million and 5.4 million common stock equivalents are included for the diluted per share data for the six months ended June 30, 2020 and 2019, respectively. Stock options and deferred stock units credited to our directors under our non-employee deferred compensation plan are included in our common stock equivalents for the three and six months ended June 30, 2020 and 2019. In addition, accrued stock dividends and preferred stock are also included for the three and six months ended June 30, 2019. Recently Adopted Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04 Simplifying the Test for Goodwill Impairment,” which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test which previously measured a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount. We adopted ASU 2017-04, effective January 1, 2020. As a result of adopting the new rules, we compare the estimated fair value of our reporting segments to their respective carrying values when evaluating the recoverability of goodwill. If the carrying value of a reporting unit exceeds its fair value, an impairment charge will be recognized for the amount by which its carrying value exceeds the reporting unit's fair value; however, the loss recognized will not exceed the goodwill allocated to the reporting unit. The adoption of ASU 2017-04 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in ASC 820 by adding, changing, or removing certain disclosures. The ASU applies to all entities that are required under this guidance to provide disclosures about recurring or nonrecurring fair value measurements. We adopted these amendments, effective January 1, 2020. The adoption of ASU 2018-13 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We adopted ASU 2018-15, effective January 1, 2020. The adoption of ASU 2018-15 did not have a significant impact on our consolidated financial statements. Recently Issued Pronouncements, not yet adopted In December 2019, the FASB issued ASU 2019-12 Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles of the accounting for income taxes and also improves consistent application of and simplification of other areas when accounting for income taxes. The guidance is effective for us beginning in the first quarter of fiscal year 2021, while early adoption is permitted. We are currently in the process of evaluating the impact of adoption of ASU 2019-12, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements

Discontinued Operations

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

On August 9, 2017, we completed the sale of our high speed optical receivers ("HSOR") business, which was part of our Lightwave segment (and which was previously included in our Products and Licensing segment in prior periods), to an unaffiliated third party for an initial purchase price of $33.5 million, of which $29.5 million in cash was received, and $4.0 million was placed into escrow until December 15, 2018 for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations (the "Transaction"). As of December 31, 2019, $1.5 million of the escrow had been received with $2.5 million remaining in escrow pending resolution of a dispute. In March 2020, we settled the dispute resulting in us receiving $0.6 million and the buyer receiving $1.9 million. We have recorded a loss from discontinued operations of $1.4 million, net of tax benefit, for the six months ended June 30, 2020, to reflect the settlement of the dispute. There were no results from discontinued operations for the three months ended June 30, 2020 and 2019 or for the six months ended June 30, 2019.

The following table presents a summary of the transactions related to the sale of the HSOR business for the six months ended June 30, 2020:


	Six Months Ended June 30, 2020
(in thousands)
Settlement of HSOR receivable	$	1,900

Loss on sale	1,900





Allocated income tax benefit	(464)
Loss from discontinued operations, net of related income tax	$	1,436

Intangible assets, net

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets, net

Intangible assets, net at June 30, 2020 and December 31, 2019 consisted of the following:


	June 30, 2020		December 31, 2019
(in thousands)
Patent costs	$	5,484	$	5,291
Developed technology	9,800		$	9,800
In-process research & development	1,580		$	1,580
Customer base	700		$	700
Trade names and trademarks	550		$	550
	18,114		$	17,921
Accumulated amortization	(8,570)		$	(7,727)
	$	9,544	$	10,194

Amortization for the three and six months ended June 30, 2020 was $0.4 million and $0.9 million, respectively. Estimated aggregate amortization, based on the net value of intangible assets at June 30, 2020, for each of the next five years and beyond is as follows (amounts in thousands):


Year Ending December 31,
2020 - remaining 6 months	$	845
2021	1,679
2022	1,529
2023	1,456
2024	1,266
2025 & beyond	2,769
Total	$	9,544

Goodwill	6 Months Ended
Goodwill	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill Goodwill was approximately $10.5 million at June 30, 2020 and December 31, 2019 and has been allocated to the Lightwave segment.

Inventory, net

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventory, net

Inventory consists of finished goods, work-in-process and raw materials valued at the lower of cost (determined on the first-in, first-out basis) or net realizable value.

Components of inventory were as follows:


	June 30, 2020		December 31, 2019
(in thousands)
Finished goods	$	2,195	$	1,695
Work-in-process	1,423		1,008
Raw materials	7,613		7,591


Total inventory, net	$	11,231	$	10,294

Accrued Liabilities

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities at June 30, 2020 and December 31, 2019 consisted of the following:


	June 30, 2020		December 31, 2019
(in thousands)
Accrued compensation	$	5,360	$	6,416




Accrued professional fees	153		113
Accrued income tax	956		716

Current operating lease liability	868		1,283
Current finance lease liability	29		50
Royalties	147		365



Accrued liabilities - other	637		426

Contingent liability - General Photonics	—		1,000

Total accrued liabilities	$	8,150	$	10,369

Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt

Silicon Valley Bank Facility

We maintained a Loan and Security Agreement with SVB (the "Credit Facility") under which we had a term loan with an original borrowing amount of $6.0 million (the “Original Term Loan”). The Original Term Loan carried a floating annual interest rate equal to SVB’s prime rate then in effect plus 2%. The Original Term Loan matured and was repaid in May 2019.

On October 10, 2019, we entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with SVB, which amended and restated in its entirety our previous Credit Facility. Under the Loan Agreement, SVB agreed to make advances available up to $10.0 million (the “Revolving Line”). If we borrow from the Revolving Line, such borrowing would carry a floating annual interest rate equal to the greater of (i) the Prime Rate (as defined in the Loan Agreement) then in effect plus 1% or (ii) 6%. Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date (defined below), reborrowed. The Revolving Line terminates on October 10, 2020 (the “Revolving Line Maturity Date”), unless earlier terminated by us. As of June 30, 2020, no amounts have been borrowed under this Loan Agreement.

Amounts due under the Loan Agreement are secured by our assets, including all personal property, inventory and bank accounts; however, intellectual property is not secured under the Loan Agreement. The inventory used to secure the amount due does not include demo or loaner equipment with an aggregate book value up to $1.0 million. The Loan Agreement requires us to observe a number of financial and operational covenants, including maintenance of a specified Liquidity Coverage Ratio (as defined in the Loan Agreement), protection and registration of intellectual property rights and customary negative covenants. If any event of default occurs SVB may declare due immediately all borrowings under the Credit Facility and foreclose on the collateral. Furthermore, an event of default under the Credit Facility would result in an increase in the interest rate on any amounts outstanding. As of June 30, 2020, there were no events of default on the Credit Facility.

On April 28, 2020, we were granted a loan (the "Loan") from SVB in the aggregate amount of $4.5 million, pursuant to the Paycheck Protection Program (the "PPP") under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

On May 4, 2020, we returned the full amount of the proceeds of the Loan to SVB. The decision to return the proceeds was based on the revised guidance issued by the U.S. Department of Treasury and the Small Business Administration subsequent to our application for the Loan.

Interest expense, net for the three and six months ended June 30, 2020 and 2019 consisted of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Interest expense on Term Loans	$	—	$	1	$	—	$	8
Amortization of debt issuance costs	—		(2)		—		1
Other interest expense	1		1		1		4
Total interest expense, net	$	1	$	—	$	1	$	13

Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

We recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating or finance leases with terms greater than twelve months.

We have operating leases for our facilities, which have remaining terms ranging from 1 to 10 years. Most of our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed to by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent.

We also have finance leases for equipment which have remaining terms ranging from 1 to 4 years. These lease agreements are for general office equipment with a 5-year useful life. These lease agreements do not have an option to extend the lease beyond the stated terms nor do they have an early termination clause. These lease agreements do not have any variable payment provisions included. The finance lease costs consist of interest expense and amortization, and are included primarily in selling, general and administrative expense in our consolidated statements of operations.

The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities.

Our lease components included in the consolidated balance sheets were as follows:


Lease component	Classification	June 30, 2020		December 31, 2019
(in thousands)
Assets
ROU assets - operating lease	Other assets	$	6,975	$	2,236
ROU assets - finance lease	Other assets	43		70
Total ROU assets		$	7,018	$	2,306

Liabilities
Current operating lease liability	Accrued liabilities	$	868	$	1,283
Current finance lease liability	Accrued liabilities	29		50
Long-term operating lease liability	Other liabilities	7,122		1,988
Long-term finance lease liability	Other liabilities	18		23
Total lease liabilities		$	8,037	$	3,344

Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Operating lease costs	$	367	$	405	$	779	$	808
Variable rent costs	25		(48)		(14)		(73)
Total rent expense	$	392	$	357	$	765	$	735

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2020 (amounts in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2020 - remaining 6 months	$	707	$	28
2021	1,308		11
2022	1,232		10
2023	1,252		5
2024	1,273		—
2025 and beyond	4,634		—
Total future minimum lease payments	10,406		54
Less: interest	2,416		7
Total operating lease liabilities	$	7,990	$	47

Current operating lease liability	$	868	$	29
Long-term operating lease liability	7,122		18
Total operating lease liabilities	$	7,990	$	47

Other information related to leases is as follows:


	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands, except weighted-average data)	2020			2019			2020			2019
Finance lease cost:
Amortization of right-of-use assets	$	14		$	10		$	27		$	22
Interest on lease liabilities	1			—			2			2
Total finance lease cost	$	15		$	10		$	29		$	24

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	367		$	405		$	744		$	808
Finance cash flows from finance leases	$	13		$	9		$	26		$	15
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,531		$	—		$	5,531		$	—
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—		$	15
Weighted-average remaining lease term (years) - operating leases	8.3			3.9			3.7			3.9
Weighted-average remaining lease term (years) - finance leases	1.9			3.9			1.9			3.9
Weighted-average discount rate - operating leases	6		%	7		%	6		%	7		%
Weighted-average discount rate - finance leases	7		%	7		%	7		%	7		%

At June 30, 2020, we had no additional operating or finance leases that had not yet commenced. As of the date of filing of this report, we have an additional operating lease not yet commenced with a potential lease liability of $1.3 million and a term of 3 years.

Leases

We recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating or finance leases with terms greater than twelve months.

Our lease components included in the consolidated balance sheets were as follows:


Lease component	Classification	June 30, 2020		December 31, 2019
(in thousands)
Assets
ROU assets - operating lease	Other assets	$	6,975	$	2,236
ROU assets - finance lease	Other assets	43		70
Total ROU assets		$	7,018	$	2,306

Liabilities
Current operating lease liability	Accrued liabilities	$	868	$	1,283
Current finance lease liability	Accrued liabilities	29		50
Long-term operating lease liability	Other liabilities	7,122		1,988
Long-term finance lease liability	Other liabilities	18		23
Total lease liabilities		$	8,037	$	3,344

Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Operating lease costs	$	367	$	405	$	779	$	808
Variable rent costs	25		(48)		(14)		(73)
Total rent expense	$	392	$	357	$	765	$	735

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2020 (amounts in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2020 - remaining 6 months	$	707	$	28
2021	1,308		11
2022	1,232		10
2023	1,252		5
2024	1,273		—
2025 and beyond	4,634		—
Total future minimum lease payments	10,406		54
Less: interest	2,416		7
Total operating lease liabilities	$	7,990	$	47

Current operating lease liability	$	868	$	29
Long-term operating lease liability	7,122		18
Total operating lease liabilities	$	7,990	$	47

Other information related to leases is as follows:


	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands, except weighted-average data)	2020			2019			2020			2019
Finance lease cost:
Amortization of right-of-use assets	$	14		$	10		$	27		$	22
Interest on lease liabilities	1			—			2			2
Total finance lease cost	$	15		$	10		$	29		$	24

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	367		$	405		$	744		$	808
Finance cash flows from finance leases	$	13		$	9		$	26		$	15
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,531		$	—		$	5,531		$	—
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—		$	15
Weighted-average remaining lease term (years) - operating leases	8.3			3.9			3.7			3.9
Weighted-average remaining lease term (years) - finance leases	1.9			3.9			1.9			3.9
Weighted-average discount rate - operating leases	6		%	7		%	6		%	7		%
Weighted-average discount rate - finance leases	7		%	7		%	7		%	7		%

Capital Stock and Share-Based Compensation

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Capital Stock and Share-Based Compensation

We recognize share-based compensation expense based upon the fair value of the underlying equity award on the date of the grant. For restricted stock awards and restricted stock units, we recognize expense based upon the price of our underlying stock at the date of the grant. We have elected to use the Black-Scholes-Merton option pricing model to value any option or warrant awards granted. We recognize share-based compensation for such awards on a straight-line basis over the requisite service period of the awards. The risk-free interest rate is based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. The expected life is based upon historical experience of homogeneous groups within our company. We also assume an expected dividend yield of zero for all periods, as we have never paid a dividend on our common stock and do not have any plans to do so in the future.

Stock Options

A summary of the stock option activity for the six months ended June 30, 2020 is presented below:


	Options Outstanding											Options Exercisable
	Number of Shares	Price per Share Range	Weighted Average Exercise Price		Aggregate Intrinsic Value (1)		Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value (1)
(in thousands, except share, per share and weighted-average data)

Balance, January 1, 2020	3,160,397	$1.18 - $7.37	$	2.72	$	14,460	1,835,799	$	2.28	$	9,198
Granted	20,000	$7.59	$	7.59

Exercised	(662,965)	$1.27 - $4.43	$	2.90
Canceled	(99,187)	$1.38 - $4.75	$	3.35
Balance, June 30, 2020	2,418,245	$1.18 - $7.59	$	2.68	$	7,767	1,309,606	$	2.07	$	4,953

(1)The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only. The aggregate intrinsic value is based on the closing price of our common stock on the Nasdaq Capital Market, as applicable, on the respective dates.

At June 30, 2020, the outstanding stock options to purchase an aggregate of 2.4 million shares had a weighted-average remaining contractual term of 6.4 years, and the exercisable stock options to purchase an aggregate of 1.3 million shares had a weighted-average remaining contractual term of 4.7 years. The fair value of shares underlying vested options was $7.6 million at June 30, 2020. The fair value of shares underlying options exercised during the six months ended June 30, 2020 was $4.3 million.

For the six months ended June 30, 2020 and 2019 we recognized $1.0 million and $0.7 million in share-based compensation expense, respectively, which is included in our selling, general and administrative expense in the accompanying consolidated interim financial statements. We expect to recognize $2.4 million in share-based compensation expense over the weighted-average remaining service period of 2.5 years for stock options outstanding as of June 30, 2020.

Restricted Stock and Restricted Stock Units

Historically, we have granted shares of restricted stock to certain employees that have vested in three equal annual installments on the anniversary dates of their grant. However, beginning in 2019, we altered our approach for these grants to replace the grant of restricted stock subject to time-based vesting with the grant of a combination of restricted stock units ("RSUs") subject to time-based vesting and performance-based vesting. Each RSU represents the contingent right to receive a single share of our common stock upon the vesting of the award. For the six months ended June 30, 2020, we granted an aggregate of 138,650 RSUs to certain employees. Of the RSUs granted during the six months ended June 30, 2020, 76,700 of such RSUs are subject to time-based vesting and are scheduled to vest in three equal annual installments on the anniversary dates of the grant. The remaining 61,950 RSUs are performance-based awards that will vest based on our achievement of long-term performance goals, in particular, based on our levels of 2022 revenue and operating income. The 61,950 shares issuable upon vesting of the performance-based RSUs represent the maximum payout under our performance-based awards, based upon 150% of our target performance for 2022 revenue and operating income (the payout of such awards based on target performance for 2022 revenue and operating income would be 41,300 shares). In the case of the time-based and performance-based RSUs, vesting is also subject to the employee's continuous service with us through vesting. During the six months ended June 30, 2020, 137,999 shares of restricted stock vested and 55,668 shares of RSUs issued to employees vested.

In addition, in conjunction with our 2018, 2019, and 2020 Annual Meetings of Stockholders, we granted RSUs to certain members of our Board of Directors in respect of the annual equity compensation under our non-employee director compensation policy (other members of our Board of Directors elected to receive their annual equity compensation for Board service in the form of stock units under our Deferred Compensation Plan as described below). RSUs granted to our non-employee Directors vest at the earlier of the one-year anniversary of their grant or the next annual stockholders' meeting. For the six months ended June 30, 2020, we granted 10,652 RSUs to certain non-employee members of our Board of Directors in respect of the annual equity grants pursuant to our non-employee director compensation policy. During the six months ended June 30, 2020, 11,600 RSUs issued pursuant to our non-employee director compensation policy vested.

Unamortized restricted stock and RSUs expense at June 30, 2020 that will amortize over the weighted-average remaining service period of 1.5 years totaled $1.8 million.

The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs:


(in thousands, except share and weighted-average share data)	Number of Unvested Shares	Weighted Average Grant Date Fair Value		Aggregate Grant Date Fair Value of Unvested Shares
Balance, January 1, 2020	502,102	$	3.32	$	1,665
Granted	149,302	6.48		967
Vested	(205,267)	2.86		(587)


Balance, June 30, 2020	446,137	$	4.58	$	2,045

Non-employee Director Deferred Compensation Plan

We maintain a non-employee director deferred compensation plan (the “Deferred Compensation Plan”) that permits our non-employee directors to defer receipt of certain of the compensation that they receive for serving on our board and board committees. The Deferred Compensation Plan has historically permitted the participants to elect to defer cash fees to which they were entitled for board and committee service. For participating directors, in lieu of payment of cash fees, we credit their accounts under the Deferred Compensation Plan with a number of stock units based on the trading price of our common stock as of the date of the deferral. These stock units vest immediately, although the participating directors do not receive the shares represented by such units until a future qualifying event.

Pursuant to our Deferred Compensation Plan, non-employee directors can 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 the six months ended June 30, 2020:


(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, January 1, 2020	629,003	$	2.09	$	4,585
Granted	39,863	6.87		233

Issued	(47,377)	1.65		—
Balance, June 30, 2020	621,489	$	2.33	$	3,629

As of June 30, 2020, 24,855 of the outstanding stock units had not yet vested.

The following table details our equity transactions during the six months ended June 30, 2020:


	Preferred Stock				Common Stock					Treasury Stock						Additional Paid-in Capital	Accumulated Deficit	Total
	Shares	$		Shares	$		Shares	$		$		$		$
(in thousands, except share data)
Balance, January 1, 2020, as previously reported	—	$	—	30,149,105	$	32	1,639,791	$	(4,337)	$	88,022	$	(16,248)	$	67,469
Exercise of stock options	—	—		316,504	—		—	—		1,198		—		1,198
Share-based compensation	—	—		55,668	—		—	—		501		—		502


Net income	—	—		—	—		—	—		—		(1,116)		(1,116)
Forfeitures of restricted stock	—	—		(34,700)	—		—	—		(275)		—		(276)

Balance, March 31, 2020	—	$	—	30,486,577	$	32	1,639,791	$	(4,337)	$	89,446	$	(17,364)	$	67,777
Exercise of stock options	—	—		346,461	—		—	—		726		—		726
Share-based compensation	—	—		11,600	—		—	—		465		—		465

Deferred compensation issuance	—	—		47,377	—		—	—		78		—		78
Net income	—	—		—	—		—	—		—		1,369		1,369
Forfeitures of restricted stock	—	—		(61,530)	—		—	—		(410)		—		(410)
Purchase of treasury stock	—	—		(32,950)	—		32,950	(204)		—		—		(204)
Balance, June 30 2020	—	$	—	30,797,535	$	32	1,672,741	$	(4,541)	$	90,305	$	(15,995)	$	69,801

The following table details our equity transactions during the six months ended June 30, 2019:


	Preferred Stock				Common Stock					Treasury Stock						Additional Paid-in Capital	Accumulated Deficit	Total
	Shares	$		Shares	$		Shares	$		$		$		$
(in thousands, except share data)
Balance, January 1, 2019, as previously reported	1,321,514	$	1	27,956,401	$	30	1,253,105	$	(2,117)	$	85,745	$	(21,305)	$	62,354
Exercise of stock options	—	—		189,312	—		—	—		185		—		185
Share-based compensation	—	—		—	—		—	—		343		—		343

Stock dividends to Carilion Clinic	—	—		—	—		—	—		83		(83)		—


Net income	—	—		—	—		—	—		—		1,126		1,126


Balance, March 31, 2019	1,321,514	$	1	28,145,713	$	30	1,253,105	$	(2,117)	$	86,356	$	(20,262)	$	64,008
Exercise of stock options	—	—		207,786	—		—	—		182		—		182
Share-based compensation	—	—		—	—		—	—		378		—		378

Stock dividends to Carilion Clinic	—	—		—	—		—	—		90		(90)		—
Net income	—	—		—	—		—	—		—		841		841
Purchase of treasury stock	—	—		(52,733)	—		52,733	(220)		—		—		(220)
Balance, June 30 2019	1,321,514	$	1	28,300,766	$	30	1,305,838	$	(2,337)	$	87,006	$	(19,511)	$	65,189

Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic locations, customer type, contract type, timing of recognition, and major categories for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. 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 three and six months ended June 30, 2020 and 2019:


		Three Months Ended June 30,
					2020									2019
(in thousands)				Lightwave			Luna Labs			Total			Lightwave			Luna Labs			Total
		(unaudited)
Total Revenue by Geographic Location
	United States	$	7,041		$	5,643		$	12,684		$	6,788		$	5,291		$	12,079
	Asia	3,568			—			3,568			3,316			—			3,316
	Europe	1,854			—			1,854			1,775			—			1,775
	Canada, Central and South America	258			—			258			537			—			537
	All Others	212			—			212			107			—			107
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Major Customer Type
	Sales to the U.S. government	$	1,727		$	5,101		$	6,828		$	1,858		$	4,847		$	6,705
	U.S. direct commercial sales and other	5,314			542			5,856			4,930			444			5,374
	Foreign commercial sales & other	5,892			—			5,892			5,735			—			5,735
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Contract Type
	Fixed-price contracts	$	12,160		$	2,963		$	15,123		$	11,848		$	3,029		$	14,877
	Cost-type contracts	773			2,680			3,453			675			2,262			2,937
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	11,275		$	354		$	11,629		$	10,741		$	3,029		$	13,769
	Goods/services transferred over time	1,658			5,289			6,947			1,782			2,262			4,045
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Major Products/Services
	Technology development	$	1,527		$	5,289		$	6,815		$	1,480		$	4,961		$	6,441
	Test, measurement and sensing systems	11,275			—			11,275			10,746			—			10,746

	Other	131			354			486			297			330			627
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


		Six Months Ended June 30,
					2020									2019
(in thousands)				Lightwave			Luna Labs			Total			Lightwave			Luna Labs			Total
		(unaudited)
Total Revenue by Geographic Location
	United States	$	12,894		$	11,230		$	24,124		$	12,034		$	10,606		$	22,640
	Asia	7,324			—			7,324			5,722			—			5,722
	Europe	3,567			—			3,567			3,431			—			3,431
	Canada, Central and South America	463			—			463			717			—			717
	All Others	239			—			239			137			—			137
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Major Customer Type
	Sales to the U.S. government	$	3,520		$	10,112		$	13,632		$	4,187		$	9,779		$	13,966
	U.S. direct commercial sales and other	9,373			1,118			10,491			7,847			827			8,674
	Foreign commercial sales & other	11,594			—			11,594			10,007			—			10,007
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Contract Type
	Fixed-price contracts	$	22,950		$	6,267		$	29,217		$	20,656		$	6,076		$	26,732
	Cost-type contracts	1,537			4,963			6,500			1,385			4,530			5,915
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	21,036		$	835		$	21,871		$	18,079		$	587		$	18,666
	Goods/services transferred over time	3,451			10,395			13,846			3,962			10,019			13,981
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Major Products/Services
	Technology development	$	3,235		$	10,395		$	13,630		$	3,063		$	10,019		$	13,082
	Test, measurement and sensing systems	21,036			—			21,036			18,089			—			18,089

	Other	216			835			1,051			889			587			1,476
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647

Contract Balances

Our contract assets consist of unbilled amounts for technology development contracts as well as custom product contracts. Also included in contract assets are royalty revenue and carrying amounts of right of return inventory. Long-term contract assets include the fee withholding on cost reimbursable contracts that will not be billed within a year. Contract liabilities include excess billings, subcontractor accruals, warranty expense, extended warranty revenue, right of return refund, and customer deposits. For the six months ended June 30, 2020, net contract assets/(liabilities) increased $1.0 million, due primarily to an increase in our Fixed-Price contracts that have not yet reached milestones as designated in their respective contracts but for which revenue has been recognized.

The following table shows the components of our contract balances as of June 30, 2020 and December 31, 2019:


(in thousands)	June 30, 2020		December 31, 2019
Contract assets	$	3,716	$	3,208
Contract liabilities	3,368		3,888
Net contract liabilities	$	348	$	(680)

Performance Obligations

Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our Lightwave segment's unfulfilled performance obligations was $21.3 million at June 30, 2020. We expect to satisfy 46% of the performance obligations in 2020, 30% in 2021 and the remainder by 2024. The approximate value of our Luna Labs segment's unfulfilled performance obligations was $21.0 million at June 30, 2020. We expect to satisfy 46% of the performance obligations in 2020, 42% in 2021 and the remainder by 2022.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Subparagraph (e)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes We and our subsidiaries file U.S. Federal income tax returns and income tax returns in various state, local and foreign jurisdictions. For the six months ended June 30, 2020, our effective income tax rate was 25.54% compared to (464.35)% for the six months ended June 30, 2019. Our effective income tax rate has fluctuated primarily because there was a valuation allowance release in 2019, as a result of the acquisition of GP. The effective tax rate for 2020 differs from the Federal statutory rate of 21%, primarily as a result of state taxes and permanent differences related to equity compensation. The effective tax rate for 2019 differs from the Federal statutory rate of 21%, primarily as a result of the partial release of the valuation allowance related to the net operating loss carryforwards expected to be used to offset taxable income in the period and certain discrete items. We consider both positive and negative evidence when evaluating the recoverability of our deferred tax assets ("DTAs"). The assessment is required to determine whether based on all available evidence, it is more likely than not (i.e. greater than a 50% probability) that all or some portion of the DTAs will be realized in the future. As of June 30, 2020, our valuation allowance was $0.4 million related to our dormant entities. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). The CARES Act includes significant business tax provisions that, among other things, include the removal of certain limitations on utilization of net operating losses, increase the loss carryback period for certain losses to five years, and increase the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. We do not expect the CARES Act to have a significant impact on our tax obligations.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Reportable Segments

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Reportable Segments

We have two operating and reportable segments: Lightwave and Luna Labs.

During the three months ended June 30, 2020, we changed our reportable segments to Lightwave and Luna Labs to align with how our Chief Operating Decision Maker (CODM) evaluates segment performance and allocates resources to the segments. Prior to the three months ended June 30, 2020, we reported under two different reporting segments. We have reflected these new segment measures beginning in the three months ended June 30, 2020 and prior periods have been restated for comparability.

The Lightwave segment develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. The Luna Labs segment performs applied research principally in the areas of sensing and instrumentation, advanced materials and health sciences.

Through June 30, 2020, our Chief Executive Officer and his direct reports (collectively represented our CODM), evaluated segment performance based primarily on revenues and operating income or loss. The accounting policies of our segments are the same as those described in the summary of significant accounting policies (see Note 1 to our Financial Statements, “Organization and Summary of Significant Accounting Policies,” presented in our Annual Report on Form 10-K as filed with the SEC on March 13, 2020).

The table below presents revenues and operating income/(loss) for reportable segments:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
(in thousands)	(unaudited)						(unaudited)
Revenues:
Lightwave	$	12,933	$	12,523	$	24,487	$	22,041
Luna Labs	5,643		5,291		11,230		10,606
Total revenues	$	18,576	$	17,814	$	35,717	$	32,647
Lightwave operating income/(loss)	$	1,168	$	491	$	1,145	$	(490)
Luna Labs operating income	642		523		1,055		588
Total operating income	$	1,810	$	1,014	$	2,200	$	98
Depreciation, Lightwave	$	217	$	126	$	417	$	284
Depreciation, Luna Labs	$	27	$	91	$	74	$	190
Amortization, Lightwave	$	408	$	404	$	813	$	632
Amortization, Luna Labs	$	32	$	32	$	59	$	60

The table below presents assets for reportable segments:


	June 30, 2020		December 31, 2019
(in thousands)	(unaudited)
Total segment assets:
Lightwave	$	68,584	$	48,724
Luna Labs	22,637		37,800
Total assets	$	91,222	$	86,524
Property plant and equipment, and intangible assets, Lightwave	$	22,182	$	22,122
Property plant and equipment, and intangible assets, Luna Labs	$	982	$	2,080

The U.S. government accounted for 37% and 38% of total consolidated revenues for the three months ended June 30, 2020 and 2019, respectively, and 38% and 43% of total consolidated revenues for the six months ended June 30, 2020 and 2019, respectively.International revenues (customers outside the United States) accounted for 32% of total consolidated revenues for both the three months ended June 30, 2020 and 2019 and 32% and 31% of total consolidated revenues for the six months ended June 30, 2020 and 2019, respectively. Customers in China represented 11% of total revenues in both the three and six months ended June 30, 2020, while no other single country, outside of the United States, represented more than 10% of total revenues in the three and six months ended June 30, 2019.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies We are from time to time involved in certain legal proceedings in the ordinary course of conducting our business. While the ultimate liability pursuant to these actions cannot currently be determined, we believe it is not reasonably possible that these legal proceedings will have a material adverse effect on our financial position or results of operations. In December 2018, we received a notice of claim (the "Claim") from Macom Technology Solutions, Inc. ("Macom"), who acquired our HSOR business in August 2017 pursuant to an asset purchase agreement. Under the asset purchase agreement, we agreed to indemnify Macom for certain matters, including, among other things, the collection of accounts receivable from certain major customers, and placed $4.0 million of the purchase price into an escrow account for the potential settlement of any valid indemnity claims. As of December 31, 2019, $1.5 million of the escrow had been received with $2.5 million remaining in escrow pending resolution of the dispute. In March 2020, we settled the dispute resulting in us receiving $0.6 million and Macom receiving $1.9 million. We have recorded a loss from discontinued operations of $1.4 million, net of income tax benefit, to reflect the settlement of the dispute. On July 31, 2018, we sold the assets associated with our Opto components business to an unaffiliated third party. The asset purchase agreement provides for additional consideration of up to $1.0 million contingent upon the achievement of a specified revenue level by the sold business during the 18 months following the sale. In addition, the asset purchase agreement provides for a potential adjustment to the consideration paid, either positive or negative, to the extent that working capital transferred to the buyer is greater or less than a specified target amount. We did not receive any of the additional $1.0 million of consideration because the minimum revenue targets were not achieved. On March 1, 2019, we acquired all of the outstanding stock of General Photonics Corporation ("GP"), a leading provider of innovative components, modules and test equipment focused on the generation, measurement and control of polarized light critical in fiber optic-based applications for aggregate consideration of $19.0 million with an earn-out provision of up to $1.0 million. Of the purchase price, $17.1 million was paid at closing and $1.9 million was placed into escrow for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations. As of June 30, 2020, the $1.0 million in additional cash consideration has been paid as a result of the successful completion of the earn-out provision. We executed non-cancelable purchase orders totaling $1.9 million in the third quarter of 2019 for multiple shipments of tunable lasers to be delivered over an 18-month period. At June 30, 2020, approximately $0.3 million of these commitments remained and are expected to be delivered by December 31, 2020. We have entered into indemnification agreements with our officers and directors, to the extent permitted by law, pursuant to which we have agreed to reimburse the officers and directors for legal expenses in the event of litigation and regulatory matters. The terms of these indemnification agreements provide for no limitation to the maximum potential future payments. We have a directors and officers insurance policy that may, in certain instances, mitigate the potential liability and payments.

Subsequent Event	6 Months Ended
Subsequent Event	Jun. 30, 2020
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event 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 first offering period under the 2020 ESPP commenced on July 1, 2020. 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, 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.

Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries and distributed fiber optic sensing products for industries utilizing composite and other advanced materials, such as the automotive, aerospace, energy and infrastructure industries. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by providing valuable information such as highly detailed stress, strain, and temperature measurements of a new design or manufacturing process. In addition, our distributed fiber optic sensing products are used to monitor the structural integrity or operational health of critical assets, including large civil structures such as bridges. Our communications test and control products accelerate the development of advanced fiber optic components and networks by providing fast and highly accurate characterization of components and networks. We also provide applied research services, typically under research programs funded by the U.S. government, in areas of advanced materials, sensing, and healthcare applications. Our business model is designed to accelerate the process of bringing new and innovative products to market. We use our in-house technical expertise across a range of technologies to perform applied research services for companies and for government funded projects. We continue to invest in product development and commercialization, which we anticipate will lead to increased product sales growth.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring accruals considered necessary to present fairly our financial position at June 30, 2020, results of operations and changes in stockholders' equity for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months ended June 30, 2020 and 2019. The results of operations for the three and six months ended June 30, 2020, are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The consolidated balance sheet as of December 31, 2019 was derived from our audited consolidated financial statements. The COVID-19 pandemic has resulted in a global slowdown of economic activity. While the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use reasonably available information to assess certain accounting matters including, but not limited to, accounts receivable, inventory and the carrying value of goodwill and other long-lived tangible and intangible assets. While the assessments have not resulted in any material impacts to our financial statements as of June 30, 2020, we believe the full impact of the pandemic remains uncertain and ongoing developments related to the pandemic may cause material impacts to our consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2019, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and reviewed for impairment as described above.
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: •Level 1—Quoted prices for identical instruments in active markets. •Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. •Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the Silicon Valley Bank ("SVB") debt facility including its interest rate of prime plus 1%, to be at market based upon similar instruments that would be available to us.
Reportable Segments	Reportable Segments We have two operating and reportable segments: Lightwave and Luna Labs. During the three months ended June 30, 2020, we changed our reportable segments to Lightwave and Luna Labs to align with how our Chief Operating Decision Maker (CODM) evaluates segment performance and allocates resources to the segments. Prior to the three months ended June 30, 2020, we reported under two different reporting segments, Products and Licensing and Technology Development. We have reflected these new segment measures beginning in the three months ended June 30, 2020 and prior periods have been restated for comparability. The Lightwave segment develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. The Luna Labs segment performs applied research principally in the areas of sensing and instrumentation, advanced materials and health sciences.
Net Income/(Loss) Per Share	Net Income/(Loss) Per ShareBasic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method.
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04 Simplifying the Test for Goodwill Impairment,” which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test which previously measured a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount. We adopted ASU 2017-04, effective January 1, 2020. As a result of adopting the new rules, we compare the estimated fair value of our reporting segments to their respective carrying values when evaluating the recoverability of goodwill. If the carrying value of a reporting unit exceeds its fair value, an impairment charge will be recognized for the amount by which its carrying value exceeds the reporting unit's fair value; however, the loss recognized will not exceed the goodwill allocated to the reporting unit. The adoption of ASU 2017-04 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in ASC 820 by adding, changing, or removing certain disclosures. The ASU applies to all entities that are required under this guidance to provide disclosures about recurring or nonrecurring fair value measurements. We adopted these amendments, effective January 1, 2020. The adoption of ASU 2018-13 did not have a significant impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We adopted ASU 2018-15, effective January 1, 2020. The adoption of ASU 2018-15 did not have a significant impact on our consolidated financial statements. Recently Issued Pronouncements, not yet adopted In December 2019, the FASB issued ASU 2019-12 Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles of the accounting for income taxes and also improves consistent application of and simplification of other areas when accounting for income taxes. The guidance is effective for us beginning in the first quarter of fiscal year 2021, while early adoption is permitted. We are currently in the process of evaluating the impact of adoption of ASU 2019-12, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements

- Definition

Disclosure of accounting policy for segment reporting.

+ References + Details

Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Components of Discontinued Operations

The following table presents a summary of the transactions related to the sale of the HSOR business for the six months ended June 30, 2020:


	Six Months Ended June 30, 2020
(in thousands)
Settlement of HSOR receivable	$	1,900

Loss on sale	1,900





Allocated income tax benefit	(464)
Loss from discontinued operations, net of related income tax	$	1,436

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

Intangible assets, net (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible assets, net at June 30, 2020 and December 31, 2019 consisted of the following:


	June 30, 2020		December 31, 2019
(in thousands)
Patent costs	$	5,484	$	5,291
Developed technology	9,800		$	9,800
In-process research & development	1,580		$	1,580
Customer base	700		$	700
Trade names and trademarks	550		$	550
	18,114		$	17,921
Accumulated amortization	(8,570)		$	(7,727)
	$	9,544	$	10,194

Estimated Aggregate Amortization Based on Net Value of Intangible Assets


Year Ending December 31,
2020 - remaining 6 months	$	845
2021	1,679
2022	1,529
2023	1,456
2024	1,266
2025 & beyond	2,769
Total	$	9,544

Inventory, net (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Components of Inventory

Components of inventory were as follows:


	June 30, 2020		December 31, 2019
(in thousands)
Finished goods	$	2,195	$	1,695
Work-in-process	1,423		1,008
Raw materials	7,613		7,591


Total inventory, net	$	11,231	$	10,294

Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities at June 30, 2020 and December 31, 2019 consisted of the following:


	June 30, 2020		December 31, 2019
(in thousands)
Accrued compensation	$	5,360	$	6,416




Accrued professional fees	153		113
Accrued income tax	956		716

Current operating lease liability	868		1,283
Current finance lease liability	29		50
Royalties	147		365



Accrued liabilities - other	637		426

Contingent liability - General Photonics	—		1,000

Total accrued liabilities	$	8,150	$	10,369

Debt (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Summary of Debt Interest Expense

Interest expense, net for the three and six months ended June 30, 2020 and 2019 consisted of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Interest expense on Term Loans	$	—	$	1	$	—	$	8
Amortization of debt issuance costs	—		(2)		—		1
Other interest expense	1		1		1		4
Total interest expense, net	$	1	$	—	$	1	$	13

Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Schedule of lease components

Our lease components included in the consolidated balance sheets were as follows:


Lease component	Classification	June 30, 2020		December 31, 2019
(in thousands)
Assets
ROU assets - operating lease	Other assets	$	6,975	$	2,236
ROU assets - finance lease	Other assets	43		70
Total ROU assets		$	7,018	$	2,306

Liabilities
Current operating lease liability	Accrued liabilities	$	868	$	1,283
Current finance lease liability	Accrued liabilities	29		50
Long-term operating lease liability	Other liabilities	7,122		1,988
Long-term finance lease liability	Other liabilities	18		23
Total lease liabilities		$	8,037	$	3,344

Schedule of other information related to leases

Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
Operating lease costs	$	367	$	405	$	779	$	808
Variable rent costs	25		(48)		(14)		(73)
Total rent expense	$	392	$	357	$	765	$	735

Other information related to leases is as follows:


	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands, except weighted-average data)	2020			2019			2020			2019
Finance lease cost:
Amortization of right-of-use assets	$	14		$	10		$	27		$	22
Interest on lease liabilities	1			—			2			2
Total finance lease cost	$	15		$	10		$	29		$	24

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	367		$	405		$	744		$	808
Finance cash flows from finance leases	$	13		$	9		$	26		$	15
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,531		$	—		$	5,531		$	—
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—		$	15
Weighted-average remaining lease term (years) - operating leases	8.3			3.9			3.7			3.9
Weighted-average remaining lease term (years) - finance leases	1.9			3.9			1.9			3.9
Weighted-average discount rate - operating leases	6		%	7		%	6		%	7		%
Weighted-average discount rate - finance leases	7		%	7		%	7		%	7		%

Schedule of future operating lease payments

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2020 (amounts in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2020 - remaining 6 months	$	707	$	28
2021	1,308		11
2022	1,232		10
2023	1,252		5
2024	1,273		—
2025 and beyond	4,634		—
Total future minimum lease payments	10,406		54
Less: interest	2,416		7
Total operating lease liabilities	$	7,990	$	47

Current operating lease liability	$	868	$	29
Long-term operating lease liability	7,122		18
Total operating lease liabilities	$	7,990	$	47

Schedule of future finance lease payments

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2020 (amounts in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2020 - remaining 6 months	$	707	$	28
2021	1,308		11
2022	1,232		10
2023	1,252		5
2024	1,273		—
2025 and beyond	4,634		—
Total future minimum lease payments	10,406		54
Less: interest	2,416		7
Total operating lease liabilities	$	7,990	$	47

Current operating lease liability	$	868	$	29
Long-term operating lease liability	7,122		18
Total operating lease liabilities	$	7,990	$	47

Capital Stock and Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Summary of Stock Option Activity

A summary of the stock option activity for the six months ended June 30, 2020 is presented below:


	Options Outstanding											Options Exercisable
	Number of Shares	Price per Share Range	Weighted Average Exercise Price		Aggregate Intrinsic Value (1)		Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value (1)
(in thousands, except share, per share and weighted-average data)

Balance, January 1, 2020	3,160,397	$1.18 - $7.37	$	2.72	$	14,460	1,835,799	$	2.28	$	9,198
Granted	20,000	$7.59	$	7.59

Exercised	(662,965)	$1.27 - $4.43	$	2.90
Canceled	(99,187)	$1.38 - $4.75	$	3.35
Balance, June 30, 2020	2,418,245	$1.18 - $7.59	$	2.68	$	7,767	1,309,606	$	2.07	$	4,953

Summary of Restricted Stock Awards and Units

The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs:


(in thousands, except share and weighted-average share data)	Number of Unvested Shares	Weighted Average Grant Date Fair Value		Aggregate Grant Date Fair Value of Unvested Shares
Balance, January 1, 2020	502,102	$	3.32	$	1,665
Granted	149,302	6.48		967
Vested	(205,267)	2.86		(587)


Balance, June 30, 2020	446,137	$	4.58	$	2,045

The following is a summary of our stock unit activity under the Deferred Compensation Plan for the six months ended June 30, 2020:


(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, January 1, 2020	629,003	$	2.09	$	4,585
Granted	39,863	6.87		233

Issued	(47,377)	1.65		—
Balance, June 30, 2020	621,489	$	2.33	$	3,629

Details of Equity Transactions

The following table details our equity transactions during the six months ended June 30, 2020:


	Preferred Stock				Common Stock					Treasury Stock						Additional Paid-in Capital	Accumulated Deficit	Total
	Shares	$		Shares	$		Shares	$		$		$		$
(in thousands, except share data)
Balance, January 1, 2020, as previously reported	—	$	—	30,149,105	$	32	1,639,791	$	(4,337)	$	88,022	$	(16,248)	$	67,469
Exercise of stock options	—	—		316,504	—		—	—		1,198		—		1,198
Share-based compensation	—	—		55,668	—		—	—		501		—		502


Net income	—	—		—	—		—	—		—		(1,116)		(1,116)
Forfeitures of restricted stock	—	—		(34,700)	—		—	—		(275)		—		(276)

Balance, March 31, 2020	—	$	—	30,486,577	$	32	1,639,791	$	(4,337)	$	89,446	$	(17,364)	$	67,777
Exercise of stock options	—	—		346,461	—		—	—		726		—		726
Share-based compensation	—	—		11,600	—		—	—		465		—		465

Deferred compensation issuance	—	—		47,377	—		—	—		78		—		78
Net income	—	—		—	—		—	—		—		1,369		1,369
Forfeitures of restricted stock	—	—		(61,530)	—		—	—		(410)		—		(410)
Purchase of treasury stock	—	—		(32,950)	—		32,950	(204)		—		—		(204)
Balance, June 30 2020	—	$	—	30,797,535	$	32	1,672,741	$	(4,541)	$	90,305	$	(15,995)	$	69,801

The following table details our equity transactions during the six months ended June 30, 2019:


	Preferred Stock				Common Stock					Treasury Stock						Additional Paid-in Capital	Accumulated Deficit	Total
	Shares	$		Shares	$		Shares	$		$		$		$
(in thousands, except share data)
Balance, January 1, 2019, as previously reported	1,321,514	$	1	27,956,401	$	30	1,253,105	$	(2,117)	$	85,745	$	(21,305)	$	62,354
Exercise of stock options	—	—		189,312	—		—	—		185		—		185
Share-based compensation	—	—		—	—		—	—		343		—		343

Stock dividends to Carilion Clinic	—	—		—	—		—	—		83		(83)		—


Net income	—	—		—	—		—	—		—		1,126		1,126


Balance, March 31, 2019	1,321,514	$	1	28,145,713	$	30	1,253,105	$	(2,117)	$	86,356	$	(20,262)	$	64,008
Exercise of stock options	—	—		207,786	—		—	—		182		—		182
Share-based compensation	—	—		—	—		—	—		378		—		378

Stock dividends to Carilion Clinic	—	—		—	—		—	—		90		(90)		—
Net income	—	—		—	—		—	—		—		841		841
Purchase of treasury stock	—	—		(52,733)	—		52,733	(220)		—		—		(220)
Balance, June 30 2019	1,321,514	$	1	28,300,766	$	30	1,305,838	$	(2,337)	$	87,006	$	(19,511)	$	65,189

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The details are listed in the table below for the three and six months ended June 30, 2020 and 2019:


		Three Months Ended June 30,
					2020									2019
(in thousands)				Lightwave			Luna Labs			Total			Lightwave			Luna Labs			Total
		(unaudited)
Total Revenue by Geographic Location
	United States	$	7,041		$	5,643		$	12,684		$	6,788		$	5,291		$	12,079
	Asia	3,568			—			3,568			3,316			—			3,316
	Europe	1,854			—			1,854			1,775			—			1,775
	Canada, Central and South America	258			—			258			537			—			537
	All Others	212			—			212			107			—			107
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Major Customer Type
	Sales to the U.S. government	$	1,727		$	5,101		$	6,828		$	1,858		$	4,847		$	6,705
	U.S. direct commercial sales and other	5,314			542			5,856			4,930			444			5,374
	Foreign commercial sales & other	5,892			—			5,892			5,735			—			5,735
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Contract Type
	Fixed-price contracts	$	12,160		$	2,963		$	15,123		$	11,848		$	3,029		$	14,877
	Cost-type contracts	773			2,680			3,453			675			2,262			2,937
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	11,275		$	354		$	11,629		$	10,741		$	3,029		$	13,769
	Goods/services transferred over time	1,658			5,289			6,947			1,782			2,262			4,045
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


Total Revenue by Major Products/Services
	Technology development	$	1,527		$	5,289		$	6,815		$	1,480		$	4,961		$	6,441
	Test, measurement and sensing systems	11,275			—			11,275			10,746			—			10,746

	Other	131			354			486			297			330			627
	Total	$	12,933		$	5,643		$	18,576		$	12,523		$	5,291		$	17,814


		Six Months Ended June 30,
					2020									2019
(in thousands)				Lightwave			Luna Labs			Total			Lightwave			Luna Labs			Total
		(unaudited)
Total Revenue by Geographic Location
	United States	$	12,894		$	11,230		$	24,124		$	12,034		$	10,606		$	22,640
	Asia	7,324			—			7,324			5,722			—			5,722
	Europe	3,567			—			3,567			3,431			—			3,431
	Canada, Central and South America	463			—			463			717			—			717
	All Others	239			—			239			137			—			137
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Major Customer Type
	Sales to the U.S. government	$	3,520		$	10,112		$	13,632		$	4,187		$	9,779		$	13,966
	U.S. direct commercial sales and other	9,373			1,118			10,491			7,847			827			8,674
	Foreign commercial sales & other	11,594			—			11,594			10,007			—			10,007
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Contract Type
	Fixed-price contracts	$	22,950		$	6,267		$	29,217		$	20,656		$	6,076		$	26,732
	Cost-type contracts	1,537			4,963			6,500			1,385			4,530			5,915
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	21,036		$	835		$	21,871		$	18,079		$	587		$	18,666
	Goods/services transferred over time	3,451			10,395			13,846			3,962			10,019			13,981
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647


Total Revenue by Major Products/Services
	Technology development	$	3,235		$	10,395		$	13,630		$	3,063		$	10,019		$	13,082
	Test, measurement and sensing systems	21,036			—			21,036			18,089			—			18,089

	Other	216			835			1,051			889			587			1,476
	Total	$	24,487		$	11,230		$	35,717		$	22,041		$	10,606		$	32,647

Schedule of components of contract balances

The following table shows the components of our contract balances as of June 30, 2020 and December 31, 2019:


(in thousands)	June 30, 2020		December 31, 2019
Contract assets	$	3,716	$	3,208
Contract liabilities	3,368		3,888
Net contract liabilities	$	348	$	(680)

Reportable Segments (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Revenues, Operating Income (Loss) and Assets for Reportable Segments

The table below presents revenues and operating income/(loss) for reportable segments:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
(in thousands)	(unaudited)						(unaudited)
Revenues:
Lightwave	$	12,933	$	12,523	$	24,487	$	22,041
Luna Labs	5,643		5,291		11,230		10,606
Total revenues	$	18,576	$	17,814	$	35,717	$	32,647
Lightwave operating income/(loss)	$	1,168	$	491	$	1,145	$	(490)
Luna Labs operating income	642		523		1,055		588
Total operating income	$	1,810	$	1,014	$	2,200	$	98
Depreciation, Lightwave	$	217	$	126	$	417	$	284
Depreciation, Luna Labs	$	27	$	91	$	74	$	190
Amortization, Lightwave	$	408	$	404	$	813	$	632
Amortization, Luna Labs	$	32	$	32	$	59	$	60

The table below presents assets for reportable segments:


	June 30, 2020		December 31, 2019
(in thousands)	(unaudited)
Total segment assets:
Lightwave	$	68,584	$	48,724
Luna Labs	22,637		37,800
Total assets	$	91,222	$	86,524
Property plant and equipment, and intangible assets, Lightwave	$	22,182	$	22,122
Property plant and equipment, and intangible assets, Luna Labs	$	982	$	2,080

Basis of Presentation and Significant Accounting Policies (Details) shares in Millions		3 Months Ended		6 Months Ended		12 Months Ended
	Oct. 10, 2019	Jun. 30, 2020 shares	Jun. 30, 2019 shares	Jun. 30, 2020 segment shares	Jun. 30, 2019 shares	Dec. 31, 2019 segment
Debt Instrument [Line Items]
Number of operating segments				2
Number of reportable segments				2		2
Common stock equivalents included in diluted per share data (in shares) \| shares		1.9	5.4	2.0	5.4
Revolving Credit Facility \| Prime Rate \| Silicon Valley Bank
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%			1.00%

Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended		12 Months Ended
	Aug. 09, 2017	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of discontinued operations			$ 600	$ 0
High Speed Optical Receivers Business \| Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received	$ 33,500
Proceeds from sale of discontinued operations	29,500
Escrow deposits related to indemnity claims	$ 4,000				$ 2,500
Amount of the escrow balance received		$ 600			$ 1,500
Loss on sale of discontinued operations			$ 1,436
High Speed Optical Receivers Business \| Disposed of by Sale \| Macom
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amount of the escrow balance received		$ 1,900

- Definition

Amount after tax of income (loss) from a discontinued operation including the portion attributable to the noncontrolling interest. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(12))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 205
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-Section 45
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Section 50
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-Subparagraph (b)(2)
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
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-URI http://asc.fasb.org/extlink&oid=109222160&loc=d3e1012-107759

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109227538&loc=d3e44648-109337

+ Details

Discontinued Operations - Components of Income from Discontinued Operations (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Allocated income tax benefit	$ (464)
High Speed Optical Receivers Business \| Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on sale	1,900
Allocated income tax benefit	(464)
Loss from discontinued operations, net of related income tax	$ 1,436

- Definition

+ References

+ Details

Intangible assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 18,114		$ 17,921
Accumulated amortization	(8,570)		(7,727)
Intangible assets, net	9,544	$ 10,194	10,194
Patent costs
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	5,484		5,291
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	9,800		9,800
In-process research & development
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	1,580		1,580
Customer base
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	700		700
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 550		$ 550

Intangible assets, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.4	$ 0.9

Intangible assets, net - Estimated Aggregate Amortization (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2020 - remaining 6 months	$ 845
2021	1,679
2022	1,529
2023	1,456
2024	1,266
2025 & beyond	2,769
Total	$ 9,544

Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 10,542	$ 10,542

Inventory, net (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 2,195	$ 1,695
Work-in-process	1,423	1,008
Raw materials	7,613	7,591
Total inventory, net	$ 11,231	$ 10,294

Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued compensation	$ 5,360	$ 6,416
Accrued professional fees	153	113
Accrued income tax	956	716
Current operating lease liability	868	1,283
Current finance lease liability	29	50
Royalties	147	365
Accrued liabilities - other	637	426
Contingent liability - General Photonics	0	1,000
Total accrued liabilities	$ 8,150	$ 10,369

Debt - Additional Information (Details) - USD ($)		1 Months Ended	6 Months Ended
Debt - Additional Information (Details) - USD ($)	Oct. 10, 2019	May 31, 2019	Jun. 30, 2020	Apr. 28, 2020
Unsecured debt \| PPP
Debt Instrument [Line Items]
Debt, face amount				$ 4,500,000
Silicon Valley Bank
Debt Instrument [Line Items]
Line of credit facility	$ 10,000,000.0
Silicon Valley Bank \| Term Loan
Debt Instrument [Line Items]
Debt, face amount		$ 6,000,000.0
Silicon Valley Bank \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, commitment fee percentage	6.00%
Borrowings outstanding			$ 0
Collateral amount			$ 1,000,000.0
Silicon Valley Bank \| Prime Rate \| Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.00%
Silicon Valley Bank \| Prime Rate \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%		1.00%

Debt - Summary of Interest Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Debt Disclosure [Abstract]
Interest expense on Term Loans	$ 0	$ 1	$ 0	$ 8
Amortization of debt issuance costs	0	(2)	0	1
Other interest expense	1	1	1	4
Total interest expense, net	$ 1	$ 0	$ 1	$ 13

Leases - Additional Information (Details) $ in Millions	6 Months Ended
Leases - Additional Information (Details) $ in Millions	Jun. 30, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Leases not yet commenced, liability	$ 1.3
Term of leases not yet commenced	3 years
Office equipment
Lessee, Lease, Description [Line Items]
Useful life	5 years
Minimum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	1 year
Finance leases contract terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	10 years
Finance leases contract terms	4 years

Leases - Lease Components (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Leases [Abstract]
ROU assets - operating lease	$ 6,975	$ 2,236
ROU assets - finance lease	43	70
Total ROU assets	7,018	2,306
Current operating lease liability	868	1,283
Current finance lease liability	29	50
Long-term operating lease liability	7,122	1,988
Long-term finance lease liability	18	23
Total lease liabilities	$ 8,037	$ 3,344
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets	us-gaap:OtherAssets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent

Leases - Rent Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Rent Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Operating lease costs	$ 367	$ 405	$ 779	$ 808
Variable rent costs	25	(48)	(14)	(73)
Total rent expense	$ 392	$ 357	$ 765	$ 735

Leases - Future Operating and Finance Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Operating Leases
2020 - remaining 6 months	$ 707
2021	1,308
2022	1,232
2023	1,252
2024	1,273
2025 and beyond	4,634
Total future minimum lease payments	10,406
Less: interest	2,416
Total operating lease liabilities	7,990
Current operating lease liability	868	$ 1,283
Long-term operating lease liability	7,122	1,988
Total operating lease liabilities	7,990
Finance Leases
2020 - remaining 6 months	28
2021	11
2022	10
2023	5
2024	0
2025 and beyond	0
Total future minimum lease payments	54
Less: interest	7
Total operating lease liabilities	47
Current finance lease liability	29	50
Long-term finance lease liability	18	$ 23
Total operating lease liabilities	$ 47

Leases - Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$ 14	$ 10	$ 27	$ 22
Interest on lease liabilities	1	0	2	2
Total finance lease cost	15	10	29	24
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	367	405	744	808
Payments on finance lease obligations	13	9	26	15
Right-of-use assets obtained in exchange for new operating lease liabilities	5,531	0	5,531	0
Right-of-use assets obtained in exchange for new finance lease liabilities	$ 0	$ 0	$ 0	$ 15
Weighted-average remaining lease term (years) - operating leases	8 years 3 months 18 days	3 years 10 months 24 days	3 years 8 months 12 days	3 years 10 months 24 days
Weighted-average remaining lease term (years) - finance leases	1 year 10 months 24 days	3 years 10 months 24 days	1 year 10 months 24 days	3 years 10 months 24 days
Weighted-average discount rate - operating leases	6.00%	7.00%	6.00%	7.00%
Weighted-average discount rate - finance leases	7.00%	7.00%	7.00%	7.00%

Capital Stock and Share-Based Compensation - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) installment shares	Jun. 30, 2019 USD ($)	Dec. 31, 2019 shares
Equity [Abstract]
Expected dividend yield	0.00%
Aggregate outstanding stock options (in shares)	2,418,245		3,160,397
Outstanding stock options, weighted average remaining contractual term	6 years 4 months 24 days
Exercisable stock options (in shares)	1,309,606		1,835,799
Exercisable stock options, weighted average remaining contractual term	4 years 8 months 12 days
Fair value of shares vested \| $	$ 7.6
Fair value of options exercised during period \| $	4.3
Stock-based compensation expense \| $	1.0	$ 0.7
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense not yet recognized \| $	$ 2.4
Weighted average remaining service period	2 years 6 months
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense not yet recognized \| $	$ 1.8
Weighted average remaining service period	1 year 6 months
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense not yet recognized \| $	$ 1.8
Weighted average remaining service period	1 year 6 months
Employees \| Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested (in shares)	137,999
Employees \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting installments \| installment	3
Shares issued (in shares)	138,650
Shares vested (in shares)	55,668
Employees \| Restricted Stock Units (RSUs) \| Vest in three equal annual installments on the anniversary dates of grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting installments \| installment	3
Shares not yet vested (in shares)	76,700
Employees \| Restricted Stock Units (RSUs) \| Vest based on levels of 2201 revenue and operating income
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares not yet vested (in shares)	61,950
Target performance as as percent of revenue and operating income	150.00%
Payout of shares upon achievement of target performance (in shares)	41,300
Directors \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares)	10,652
Shares vested (in shares)	11,600
Vesting period, earlier of grant anniversary, or annual stockholders' meeting	1 year
Employee Director Compensation Plan \| Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares not yet vested (in shares)	24,855

Capital Stock and Share-Based Compensation - Summary of Activity of Equity Incentive Plans (Details) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares
Options Outstanding, Number of Shares
Beginning Balance (shares) \| shares	3,160,397
Granted (in shares) \| shares	20,000
Exercised (in shares) \| shares	(662,965)
Canceled (in shares) \| shares	(99,187)
Ending Balance (shares) \| shares	2,418,245	3,160,397
Price per Share Range
Outstanding, lower limit (in dollars per share)	$ 1.18	$ 1.18
Outstanding, upper limit (in dollars per share)	7.59	7.37
Granted (in dollars per share)	7.59
Exercised, lower limit (in dollars per share)	1.27
Exercised, upper limit (in dollars per share)	4.43
Canceled, lower limit (in dollars per share)	1.38
Canceled, upper limit (in dollars per share)	4.75
Options Outstanding, Weighted Average Exercise Price
Beginning balance (in dollars per share)	2.72
Granted (in dollars per share)	7.59
Exercised (in dollars per share)	2.90
Canceled (in dollars per share)	3.35
Ending balance (in dollars per share)	$ 2.68	$ 2.72
Additional Disclosures
Options outstanding, aggregate intrinsic value \| $	$ 7,767	$ 14,460
Exercisable stock options (in shares) \| shares	1,309,606	1,835,799
Options exercisable, weighted average exercise price (in dollars per share)	$ 2.07	$ 2.28
Options exercisable, aggregate intrinsic value \| $	$ 4,953	$ 9,198

Capital Stock and Share-Based Compensation - Summary of Restricted Awards (Details) - Restricted Stock and RSUs $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Number of Unvested Shares
Beginning balance (in shares) \| shares	502,102
Granted (in shares) \| shares	149,302
Vested (in shares) \| shares	(205,267)
Ending balance (in shares) \| shares	446,137
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share) \| $ / shares	$ 3.32
Granted (in usd per share) \| $ / shares	6.48
Vested (in usd per share) \| $ / shares	2.86
Ending balance (in usd per share) \| $ / shares	$ 4.58
Aggregate Grant Date Fair Value of Unvested Shares
Aggregate Grant Date Fair Value of Unvested Shares, Beginning balance \| $	$ 1,665
Granted \| $	967
Aggregate grant date fair value of shares, Vested \| $	(587)
Aggregate Grant Date Fair Value of Unvested Shares, Ending balance \| $	$ 2,045

Capital Stock and Share-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - Employee Director Compensation Plan $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Number of Stock Units
Beginning balance (in shares) \| shares	629,003
Granted (in shares) \| shares	39,863
Issued (in shares) \| shares	(47,377)
Ending balance (in shares) \| shares	621,489
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share) \| $ / shares	$ 2.09
Granted (in usd per share) \| $ / shares	6.87
Issued (in dollars per share) \| $ / shares	1.65
Ending balance (in usd per share) \| $ / shares	$ 2.33
Intrinsic Value Outstanding
Aggregate Grant Date Fair Value of Unvested Shares, Beginning balance \| $	$ 4,585
Granted \| $	233
Issued \| $	0
Aggregate Grant Date Fair Value of Unvested Shares, Ending balance \| $	$ 3,629

Capital Stock and Share-Based Compensation - Equity Transactions (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance	$ 67,777	$ 67,469	$ 64,008	$ 62,354	$ 67,469	$ 62,354
Exercise of stock options (in shares)					662,965
Exercise of stock options	726	1,198	182	185
Share-based compensation	465	502	378	343
Deferred compensation issuance	78
Stock dividends to Carilion Clinic			0	0
Net income	1,369	(1,116)	841	1,126	$ 253	1,967
Forfeitures of restricted stock	(410)	(276)
Purchase of treasury stock	(204)		(220)
Stockholder's equity ending balance	$ 69,801	$ 67,777	$ 65,189	$ 64,008	$ 69,801	$ 65,189
Preferred Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance (in shares)	0	0	1,321,514	1,321,514	0	1,321,514
Stockholder's equity beginning balance	$ 0	$ 0	$ 1	$ 1	$ 0	$ 1
Ending balance (in shares)	0	0	1,321,514	1,321,514	0	1,321,514
Stockholder's equity ending balance	$ 0	$ 0	$ 1	$ 1	$ 0	$ 1
Common Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance (in shares)	30,486,577	30,149,105	28,145,713	27,956,401	30,149,105	27,956,401
Stockholder's equity beginning balance	$ 32	$ 32	$ 30	$ 30	$ 32	$ 30
Exercise of stock options (in shares)	346,461	316,504	207,786	189,312
Share-based compensation (in shares)	11,600	55,668
Deferred compensation issuance (in shares)	47,377
Forfeitures of restricted stock (in shares)	(61,530)	(34,700)
Purchase of treasury stock (in shares)	(32,950)		(52,733)
Ending balance (in shares)	30,797,535	30,486,577	28,300,766	28,145,713	30,797,535	28,300,766
Stockholder's equity ending balance	$ 32	$ 32	$ 30	$ 30	$ 32	$ 30
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance (in shares)	1,639,791	1,639,791	1,253,105	1,253,105	1,639,791	1,253,105
Stockholder's equity beginning balance	$ (4,337)	$ (4,337)	$ (2,117)	$ (2,117)	$ (4,337)	$ (2,117)
Purchase of treasury stock (in shares)	32,950		52,733
Purchase of treasury stock	$ (204)		$ (220)
Ending balance (in shares)	1,672,741	1,639,791	1,305,838	1,253,105	1,672,741	1,305,838
Stockholder's equity ending balance	$ (4,541)	$ (4,337)	$ (2,337)	$ (2,117)	$ (4,541)	$ (2,337)
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance	89,446	88,022	86,356	85,745	88,022	85,745
Exercise of stock options	726	1,198	182	185
Share-based compensation	465	501	378	343
Deferred compensation issuance	78
Stock dividends to Carilion Clinic			90	83
Forfeitures of restricted stock	(410)	(275)
Stockholder's equity ending balance	90,305	89,446	87,006	86,356	90,305	87,006
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity
Stockholder's equity beginning balance	(17,364)	(16,248)	(20,262)	(21,305)	(16,248)	(21,305)
Stock dividends to Carilion Clinic			(90)	(83)
Net income	1,369	(1,116)	841	1,126
Stockholder's equity ending balance	$ (15,995)	$ (17,364)	$ (19,511)	$ (20,262)	$ (15,995)	$ (19,511)

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Total revenues	$ 18,576	$ 17,814	$ 35,717	$ 32,647
Technology development
Disaggregation of Revenue [Line Items]
Total revenues	6,815	6,441	13,630	13,082
Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues	11,275	10,746	21,036	18,089
Other
Disaggregation of Revenue [Line Items]
Total revenues	486	627	1,051	1,476
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	11,629	13,769	21,871	18,666
Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues	6,947	4,045	13,846	13,981
Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues	15,123	14,877	29,217	26,732
Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues	3,453	2,937	6,500	5,915
Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues	6,828	6,705	13,632	13,966
U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues	5,856	5,374	10,491	8,674
Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues	5,892	5,735	11,594	10,007
United States
Disaggregation of Revenue [Line Items]
Total revenues	12,684	12,079	24,124	22,640
Asia
Disaggregation of Revenue [Line Items]
Total revenues	3,568	3,316	7,324	5,722
Europe
Disaggregation of Revenue [Line Items]
Total revenues	1,854	1,775	3,567	3,431
Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues	258	537	463	717
All Others
Disaggregation of Revenue [Line Items]
Total revenues	212	107	239	137
Lightwave
Disaggregation of Revenue [Line Items]
Total revenues	12,933	12,523	24,487	22,041
Lightwave \| Technology development
Disaggregation of Revenue [Line Items]
Total revenues	1,527	1,480	3,235	3,063
Lightwave \| Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues	11,275	10,746	21,036	18,089
Lightwave \| Other
Disaggregation of Revenue [Line Items]
Total revenues	131	297	216	889
Lightwave \| Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	11,275	10,741	21,036	18,079
Lightwave \| Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues	1,658	1,782	3,451	3,962
Lightwave \| Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues	12,160	11,848	22,950	20,656
Lightwave \| Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues	773	675	1,537	1,385
Lightwave \| Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues	1,727	1,858	3,520	4,187
Lightwave \| U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues	5,314	4,930	9,373	7,847
Lightwave \| Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues	5,892	5,735	11,594	10,007
Lightwave \| United States
Disaggregation of Revenue [Line Items]
Total revenues	7,041	6,788	12,894	12,034
Lightwave \| Asia
Disaggregation of Revenue [Line Items]
Total revenues	3,568	3,316	7,324	5,722
Lightwave \| Europe
Disaggregation of Revenue [Line Items]
Total revenues	1,854	1,775	3,567	3,431
Lightwave \| Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues	258	537	463	717
Lightwave \| All Others
Disaggregation of Revenue [Line Items]
Total revenues	212	107	239	137
Luna Labs
Disaggregation of Revenue [Line Items]
Total revenues	5,643	5,291	11,230	10,606
Luna Labs \| Technology development
Disaggregation of Revenue [Line Items]
Total revenues	5,289	4,961	10,395	10,019
Luna Labs \| Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	0
Luna Labs \| Other
Disaggregation of Revenue [Line Items]
Total revenues	354	330	835	587
Luna Labs \| Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	354	3,029	835	587
Luna Labs \| Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues	5,289	2,262	10,395	10,019
Luna Labs \| Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues	2,963	3,029	6,267	6,076
Luna Labs \| Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues	2,680	2,262	4,963	4,530
Luna Labs \| Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues	5,101	4,847	10,112	9,779
Luna Labs \| U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues	542	444	1,118	827
Luna Labs \| Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	0
Luna Labs \| United States
Disaggregation of Revenue [Line Items]
Total revenues	5,643	5,291	11,230	10,606
Luna Labs \| Asia
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	0
Luna Labs \| Europe
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	0
Luna Labs \| Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	0
Luna Labs \| All Others
Disaggregation of Revenue [Line Items]
Total revenues	$ 0	$ 0	$ 0	$ 0

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Increase in net contract assets (liabilities)	$ 1,000
Contract assets	3,716	$ 3,208
Contract liabilities	3,368	3,888
Net contract liabilities	$ 348	$ (680)

Revenue Recognition - Performance Obligation Amount (Details) $ in Millions	Jun. 30, 2020 USD ($)
Lightwave
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 21.3
Lightwave \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	6 months
Remaining performance obligation, percentage	46.00%
Lightwave \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	1 year
Remaining performance obligation, percentage	30.00%
Luna Labs
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 21.0
Luna Labs \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	6 months
Remaining performance obligation, percentage	46.00%
Luna Labs \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	1 year
Remaining performance obligation, percentage	42.00%

Income Taxes (Details) - USD ($) $ in Millions	6 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	25.54%	(464.35%)
Valuation allowance	$ 0.4

Reportable Segments - Revenues and Operating Income (Loss) for Reportable Segments Not Including Discontinued Operations (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) segment	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) segment
Segment Reporting [Abstract]
Number of reportable segments \| segment			2		2
Number of operating segments \| segment			2
Revenues:
Total revenues	$ 18,576	$ 17,814	$ 35,717	$ 32,647
Total operating income (loss)	1,810	1,014	2,200	98
Amortization expense	400		900
Total segment assets:
Total assets	91,222		91,222		$ 86,524
Property plant and equipment, and intangible assets	3,078		3,078		3,466
Lightwave
Revenues:
Total revenues	12,933	12,523	24,487	22,041
Total operating income (loss)	1,168	491	1,145	(490)
Depreciation	217	126	417	284
Amortization expense	408	404	813	632
Total segment assets:
Total assets	68,584		68,584		48,724
Property plant and equipment, and intangible assets	22,182		22,182		22,122
Luna Labs
Revenues:
Total revenues	5,643	5,291	11,230	10,606
Total operating income (loss)	642	523	1,055	588
Depreciation	27	91	74	190
Amortization expense	32	$ 32	59	$ 60
Total segment assets:
Total assets	22,637		22,637		37,800
Property plant and equipment, and intangible assets	$ 982		$ 982		$ 2,080

Reportable Segments - Additional Information (Details)	3 Months Ended		6 Months Ended
Reportable Segments - Additional Information (Details)	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Outside of the United States
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer		10.00%		10.00%
Revenues \| Government Contracts Concentration Risk \| U.S. Government
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	37.00%	38.00%	38.00%	43.00%
Revenues \| Geographic Concentration Risk \| Outside of the United States
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	32.00%	32.00%	32.00%	31.00%
Revenues \| Geographic Concentration Risk \| China
Segment Reporting Information [Line Items]
Percentage of total consolidated revenues by customer	11.00%		11.00%

Commitments and Contingencies (Details) - USD ($) $ in Thousands			3 Months Ended	6 Months Ended		9 Months Ended	12 Months Ended
	Mar. 01, 2020	Jul. 31, 2018	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Sep. 30, 2019	Dec. 31, 2019	Aug. 31, 2017	Aug. 09, 2017
Loss Contingencies [Line Items]
Cash consideration				$ 0	$ 19,004
Tunable Lasers
Loss Contingencies [Line Items]
Non-cancelable purchase order delivery period						18 months
Non-cancelable purchase order commitment						$ 1,900
Non-cancelable purchase order commitment remaining				300
General Photonics, Inc.
Loss Contingencies [Line Items]
Cash consideration	$ 19,000
Potential maximum obligation of contingent consideration	1,000
Cash paid at closing	17,100
Amount at closing placed in escrow	$ 1,900
Contingent obligation				1,000
High Speed Optical Receivers Business \| Disposed of by Sale
Loss Contingencies [Line Items]
Escrow deposits related to indemnity claims							$ 2,500		$ 4,000
Amount of the escrow balance received			$ 600				$ 1,500
Loss on sale of discontinued operations				$ 1,436
High Speed Optical Receivers Business \| Disposed of by Sale \| Macom
Loss Contingencies [Line Items]
Amount of the escrow balance received			$ 1,900
Optoelectronic Components and Subassemblies \| Disposed of by Sale
Loss Contingencies [Line Items]
Contingent consideration on discontinued operation		$ 1,000
Non-cancelable purchase order delivery period		18 months
Macom \| High Speed Optical Receivers Business \| Disposed of by Sale
Loss Contingencies [Line Items]
Escrow deposits related to indemnity claims								$ 4,000

Subsequent Event (Details)	Jul. 01, 2020 shares
ESPP \| Subsequent Event [Member]
Subsequent Event [Line Items]
Number of shares authorized (in shares)	1,200,000