0001239819-21-000027 | 10-K | XBRL Viewer

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Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2020	Mar. 10, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	000-52008
Entity Registrant Name	LUNA INNOVATIONS INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1560050
Entity Address, Address Line One	301 1st St SW
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Roanoke
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	24011
City Area Code	540
Local Phone Number	769-8400
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	LUNA
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 176.8
Entity Common Stock, Shares Outstanding		31,397,642
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Specified portions of the registrant’s Proxy Statement with respect to its 2021 Annual Meeting of stockholders, anticipated to be filed within 120 days after the end of its fiscal year ended December 31, 2020, are incorporated by reference into Part III of this annual report on Form 10-K.
Amendment Flag	false
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Entity Central Index Key	0001239819

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 15,366	$ 25,006
Accounts receivable, net	24,951	16,269
Receivable from sale of HSOR business	0	2,501
Contract assets	7,046	2,759
Inventory	23,597	10,294
Prepaid expenses and other current assets	4,509	1,287
Total current assets	75,469	58,116
Property and equipment, net	3,308	3,466
Intangible assets, net	20,109	10,194
Goodwill	18,121	10,542
Long-term contract assets	471	449
Operating lease ROU asset	11,281	2,236
Finance lease ROU asset	244	70
Other assets	39	35
Deferred tax asset	1,960	1,416
Total assets	131,002	86,524
Current liabilities:
Current portion of long-term debt obligations	4,167	0
Accounts payable	4,393	2,787
Accrued liabilities	12,159	9,036
Contract liabilities	7,095	3,888
Current operating lease liability	2,223	1,283
Current lease liability	48	50
Total current liabilities	30,085	17,044
Long-term debt obligations	15,817	0
Long-term portion of operating lease ROU liability	10,248	1,988
Long-term portion of finance lease ROU liability	196	23
Other long-term liabilities	214	0
Total liabilities	56,560	19,055
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, par value $0.001, 100,000,000 shares authorized, 32,724,512 and 31,788,896 shares issued, 31,024,537 and 30,149,105 shares outstanding at December 31, 2020 and 2019, respectively	33	32
Treasury stock at cost, 1,699,975 and 1,639,791 shares at December 31, 2020 and 2019, respectively	(4,789)	(4,337)
Additional paid-in capital	92,403	88,022
Accumulated deficit	(12,957)	(16,248)
Accumulated other comprehensive loss	(248)	0
Total stockholders’ equity	74,442	67,469
Total liabilities and stockholders’ equity	$ 131,002	$ 86,524

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	100,000,000	100,000,000
Common stock issued (in shares)	32,724,512	31,788,896
Common stock outstanding (in shares)	31,024,537	30,149,105
Treasury stock (in shares)	1,699,975	1,639,791

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenues:
Total revenues	$ 82,681	$ 70,516
Cost of revenues:
Total cost of revenues	40,493	35,333
Gross profit	42,188	35,183
Operating expense:
Selling, general and administrative	27,644	23,344
Research, development and engineering	6,713	7,496
Acquisition related expense	2,204	1,027
Loss on sale and disposal of property and equipment	644	0
Total operating expense	37,205	31,867
Operating income	4,983	3,316
Other income/(expense):
Other income/(expense), net	50	(5)
Investment income	67	394
Interest expense, net	(25)	(16)
Total other income	92	373
Income from continuing operations before income taxes	5,075	3,689
Income tax (expense)/benefit	(348)	1,654
Net income from continuing operations	4,727	5,343
Loss from discontinued operations, net of income tax of $464	(1,436)	0
Net income	3,291	5,343
Less: Preferred stock dividend	0	286
Net income attributable to common stockholders	$ 3,291	$ 5,057
Net income per share from continuing operations:
Basic (in dollars per share)	$ 0.15	$ 0.19
Diluted (in dollars per share)	0.15	0.17
Net loss per share from discontinued operations:
Basic (in dollars per share)	(0.05)	0
Diluted (in dollars per share)	(0.04)	0
Net income per share attributable to common stockholders:
Basic (in dollars per share)	0.11	0.18
Diluted (in dollars per share)	$ 0.10	$ 0.16
Weighted average shares:
Basic (in shares)	30,669,874	28,688,867
Diluted (in shares)	32,578,757	31,840,584
Lightwave
Revenues:
Total revenues	$ 59,115	$ 49,117
Cost of revenues:
Total cost of revenues	23,306	20,157
Operating expense:
Operating income	4,914	2,261
Luna Labs
Revenues:
Total revenues	23,566	21,399
Cost of revenues:
Total cost of revenues	17,187	15,176
Operating expense:
Operating income	$ 69	$ 1,055

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Income Statement [Abstract]
Tax effect	$ 464

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 3,291	$ 5,057
Other comprehensive loss	(248)	0
Total other comprehensive income	$ 3,043	$ 5,057

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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+ Details

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($)
$ in Thousands

Total

Preferred Stock

Common Stock

Treasury Stock

Additional Paid in Capital

Accumulated Deficit

Accumulated Other Comprehensive Loss

Beginning balance (in shares) at Dec. 31, 2018

1,321,514

27,956,401

1,253,105

Beginning balance at Dec. 31, 2018

$ 62,354

$ 1

$ 30

$ (2,117)

$ 85,745

$ (21,305)

Increase (Decrease) in Stockholders' Equity

Exercise of stock options (in shares)

487,802

Exercise of stock option

448

$ 1

447

Stock-based compensation (in shares)

16,286

Stock-based compensation

1,544

Stock dividends (in shares)

^[1]

770,454

Stock dividends

^[1]

286

(286)

Preferred stock to common stock conversion (in shares)

(1,321,514)

1,321,514

Preferred stock to common stock conversion

$ (1)

$ 1

Forfeitures of restricted stock grants (in shares)

(16,666)

Forfeitures of restricted stock

Purchase of treasury stock (in shares)

386,686

Purchase of treasury stock

(2,220)

$ (2,220)

Net income

5,343

Ending balance (in shares) at Dec. 31, 2019

30,149,105

1,639,791

Ending balance at Dec. 31, 2019

67,469

$ 0

$ 32

$ (4,337)

88,022

(16,248)

Increase (Decrease) in Stockholders' Equity

Exercise of stock options (in shares)

792,466

Exercise of stock option

2,276

$ 1

2,275

Stock-based compensation (in shares)

83,935

Stock-based compensation

2,134

Deferred compensation issuance (in shares)

47,377

Deferred compensation issuance

ESPP issuance (in shares)

93,368

ESPP Issuance

456

Forfeitures of restricted stock grants (in shares)

(81,530)

Forfeitures of restricted stock

(562)

Purchase of treasury stock (in shares)

60,184

Purchase of treasury stock

(452)

$ (452)

Net income

3,291

Foreign currency translation adjustment

(248)

Ending balance (in shares) at Dec. 31, 2020

31,024,537

1,699,975

Ending balance at Dec. 31, 2020

$ 74,442

$ 0

$ 33

$ (4,789)

$ 92,403

$ (12,957)

$ (248)

[1]	The stock dividends payable in connection with the Series A Convertible Preferred Stock were issued at the request of Carilion. See Note 11 - Stockholders' Equity for more information.

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows provided by operating activities:
Net income	$ 3,291	$ 5,343
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,970	2,503
Stock-based compensation	2,134	1,544
Loss on sale and disposal of property and equipment	644	0
Loss from discontinued operations, net of tax	1,436	0
Deferred tax asset	(522)	0
Tax benefit from release of valuation allowance	0	(3,349)
Bad debt expense	127	538
Changes in operating assets and liabilities:
Accounts receivable	(3,292)	(2,249)
Contract assets	(1,504)	(449)
Inventory	(1,550)	(723)
Prepaid expenses and other current assets	(2,203)	(242)
Other long-term assets	(3)	45
Accounts payable and accrued liabilities	1,143	592
Contract liabilities	(29)	1,245
Other long-term liabilities	214	0
Net cash provided by operating activities	2,856	4,798
Cash flows used in investing activities:
Acquisitions, net of cash acquired	(34,102)	(19,004)
Acquisition of property and equipment	(681)	(541)
Proceeds from sale of property and equipment	403	0
Intangible property costs	(379)	(270)
Proceeds from sale of discontinued operations	600	0
Net cash used in investing activities	(34,159)	(19,815)
Cash flows provided by/(used in) financing activities:
Proceeds from debt obligations	19,984	0
Payments on debt obligations	0	(625)
Payments on finance lease obligations	(53)	(40)
Purchase of common stock	(452)	(2,220)
Proceeds from ESPP	456	0
Proceeds from the exercise of options and warrants	1,714	448
Net cash provided by/(used in) financing activities	21,649	(2,437)
Net change in cash and cash equivalents	(9,654)	(17,454)
Effect of exchange rate changes on cash and cash equivalents	14	0
Cash and cash equivalents—beginning of period	25,006	42,460
Cash and cash equivalents—end of period	15,366	25,006
Supplemental disclosure of cash flow information
Cash paid for interest	4	18
Cash paid for income taxes	1,244	1,160
Cash received for income tax refunds	0	0
Supplemental disclosure for non-cash transactions
Contingent liability for business combination	225	1,000
Dividend on preferred stock	$ 0	$ 286

Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Summary of Significant Accounting Policies

Luna Innovations Incorporated (“we” or the "Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries; and distributed fiber optic sensing solutions that measure, or “sense,” the structures for industries ranging from aerospace, automotive, energy, oil and gas, security and infrastructure.

Consolidation Policy

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include our accounts and the accounts of our wholly owned subsidiaries. We eliminate from our financial results all intercompany transactions.

Use of Estimates

The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes.

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may differ from such estimates and assumptions.

Revenue Recognition

Lightwave Revenues

Revenues from product sales are generated by the sale of commercial products and services under various sales programs to the end user and through distribution channels. We sell fiber optic test and sensing systems to end users for use in numerous fiber optic-based measurement applications. Revenues are recorded net of applicable sales taxes collected from customers and payable to state or local governmental entities.

For Lightwave contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. We recognize revenue when the performance obligation has been satisfied by transferring the control of the product or service to the customer. For tangible products that contain software that is essential to the tangible product’s functionality, we consider the product and software to be a single performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation based on their relative stand-alone selling prices. In such circumstances, we use the observable price of goods or services which are sold separately in similar circumstances to similar customers. If these prices are not observable, then we will estimate the stand-alone selling price using information that is reasonably available. For the majority of our standard products and services, price list and discount structures related to customer type are available. For products and services that do not have price list and discount structures, we may use one or more of the following: (i) adjusted market assessment approach, (ii) expected cost-plus a margin approach, and (iii) residual approach. The adjusted market approach requires us to evaluate the market in which we sell goods or services and estimate the price that a customer in that market would be willing to pay for those goods or services. The expected cost plus margin approach requires us to forecast our expected costs of satisfying the performance obligation and then add a reasonable margin for that good or service. The residual approach decreases the total transaction price by the sum of the observable standalone selling prices if either the company sells the same good or services to different customers for a broad range of amounts or the company has not established a price for the good or service and that good or service has not been sold on a standalone basis. Shipping and handling activities primarily occur after a customer obtains control and are considered fulfillment cost rather than separate performance obligations. Similarly, sales and similar taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer are excluded from the measurement of the transaction price.

For standard products, we recognize revenue at a point in time when control passes to the customer. Absent substantial product acceptance clauses, this is based on the shipping terms. For custom products that require engineering and development based on customer requirements, we will recognize revenue over time using the output method for any items shipped and any finished goods or work in process that is produced for balances of open sales orders. For any finished goods or work in process

that has been produced for the balance of open sales orders we recognize revenue by applying the average selling price for such open order to the lesser of the on-hand balance in finished goods or open sales order quantity which we present as a contract asset on the balance sheet. Cost of sales is recognized based on the standard cost of the finished goods and work in process associated with this revenue and inventory balances are reduced accordingly. For extended warranties and product rentals, revenue is recognized over time using the output method based on the time elapsed for the warranty or service period. In the case of warranties, we record a contract liability for amounts billed but that are not recognized until subsequent periods. A separate contract liability is recorded for the cost associated with warranty repairs based on our estimate of future expense. For testing services where we are performing testing on an asset the customer controls, revenue is recognized over time by the output method using the performance to date. For training where the customer is receiving the benefit of training as it is occurring and for repairs to a customer-controlled asset, revenue is recognized over time by the output method using the performance to date. For royalty revenue, we apply the practical expedient “royalty exception” recognizing revenue based on the royalty agreement which specifies an amount based on sales or minimum amount, whichever is greater.

In some product rental contracts, a customer may be offered a discount on the purchase of an item that would provide for a material right. When a material right has been provided to a customer, a separate performance obligation is established, and a portion of the rental revenue will be deferred until the future product is purchased or the option expires. This deferred revenue is recognized as a contract liability on the balance sheet.

Luna Labs Revenues

We perform research and development for U.S. Federal government agencies, educational institutions and commercial organizations. We account for a research contract when a contract has been executed, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of the contract price is considered probable. Revenue is earned under cost reimbursable, time and materials and fixed price contracts. Direct contract costs are expensed as incurred.

Our contracts with agencies of the U.S. government are subject to periodic funding by the respective contracting agency. Funding for a contract may be provided in full at inception of the contract or ratably throughout the contract as the services are provided. In evaluating the probability of funding for purposes of assessing collectability of the contract price, we consider our previous experience with our customers, communication with our customers regarding funding status and our knowledge of available funding for the contract or program. If funding is not assessed as probable, revenue recognition is deferred until realization is reasonably assured.

Under the typical payment terms of our U.S. government contracts, the customer pays us either performance-based payments ("PBPs") or progress payments. PBPs, which are typically used in the firm fixed price contracts, are interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments, which are typically used in our cost type contracts, are interim payments based on costs incurred as the work progresses. For our U.S. government cost-type contracts, the customer generally pays us during the performance period for 80% to 90% of our actual costs incurred. Because the customer retains a small portion of the contract price until completion of the contract and audit of allowable costs, cost type contracts generally result in revenue recognized in excess of billings which we present as contract assets on the balance sheet. Amounts billed and due from our customers are classified as receivables on the balance sheet. For non-U.S. government contracts, we typically receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. We recognize a liability for these advance payments and PBPs paid in advance which are in excess of the revenue recognized and present these amounts as contract liabilities on the balance sheet.

To determine the proper revenue recognition method for research and development contracts, we evaluate whether two or more contracts should be combined and accounted for as one single modified contract and whether the combined or single contract should be accounted for as more than one performance obligation. For instances where a contract has options that were bid with the initial contract and awarded at a later date, we combine the options with the original contract when options are awarded. For most of our contracts, the customer contracts for research with multiple milestones that are interdependent. Consequently, the entire contract is accounted for as one performance obligation. The effect of the combined or modified contract on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

Contract revenue recognition is measured over time as we perform because of continuous transfer of control to the customer. For U.S. government contracts which are typically subject to the Federal Acquisition Regulation, this continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the

contract for convenience, pay us for cost incurred plus a reasonable profit and take control of any work in process. From time to time, as part of normal management processes, facts may change, causing revisions to estimated total costs or revenues expected. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known.

Because of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. We generally use the input method, more specifically the cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer, which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The underlying bases for estimating our contract research revenues are measurable expenses, such as labor, subcontractor costs and materials, and data that are updated on a regular basis for purposes of preparing our cost estimates. Our research contracts generally have a period of performance of six months to three years, and our estimates of contract costs have historically been consistent with actual results. Revisions in these estimates between accounting periods to reflect changing facts and circumstances have not had a material impact on our operating results, and we do not expect future changes in these estimates to be material. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known.

Under cost reimbursable contracts, we are reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fixed fee representing the profit negotiated between us and the contracting agency. Revenue from cost reimbursable contracts is recognized as costs are incurred plus an estimate of applicable fees earned. We consider fixed fees under cost reimbursable contracts to be earned in proportion to the allowable costs incurred in performance of the contract.

Revenue from time and materials contracts is recognized based on direct labor hours expended at contract billing rates plus other billable direct costs.

Fixed price contracts may include either a product delivery or specific service performance throughout a period. For fixed price contracts that are based on the proportional performance method and involve a specified number of deliverables, we recognize revenue based on the proportion of the cost of the deliverables compared to the cost of all deliverables included in the contract as this method more accurately measures performance under these arrangements. For fixed price contracts that provide for the development and delivery of a specific prototype or product, revenue is recognized based upon the percentage of completion method.

Whether certain costs under government contracts are allowable is subject to audit by the government. Certain indirect costs are charged to contracts using provisional or estimated indirect rates, which are subject to later revision based on government audits of those costs. Management is of the opinion that costs subsequently disallowed, if any, would not likely have a significant impact on revenues recognized for those contracts.

Allowance for Uncollectible Receivables

Accounts receivable are recorded at their face amount, less an allowance for doubtful accounts. We review the status of our uncollected receivables on a regular basis. In determining the need for an allowance for uncollectible receivables, we consider our customers’ financial stability, past payment history and other factors that bare on the ultimate collection of such amounts. The allowance was $0.9 million at each of December 31, 2020 and 2019.

Cash Equivalents

We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. To date, we have not incurred losses related to cash and cash equivalents. Our foreign currency risk on cash and cash equivalents held outside of the US is not material. Cash equivalents at December 31, 2020 and 2019 included $3.1 million and $19.8 million, respectively, invested in U.S. Treasury obligations through a sweep account with our bank. The full value of amounts invested through the sweep account are convertible to cash on a daily basis. Our cash transactions are processed through reputable commercial banks. We regularly maintain cash balances with financial institutions which exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. At December 31, 2020 and 2019, we had approximately $7.5 million and $5.0 million, respectively, in excess of FDIC insured limits.

Fair Value Measurements

Our financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. Valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy:

•Level 1—Quoted prices for identical instruments in active markets.

•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable.

•Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its interest rate of LIBOR plus a margin ranging from 1.75% to 2.25%, to be at market based upon similar instruments that would be available to us.

Property and Equipment, net

Property and equipment, net, are stated at cost less accumulated depreciation. We record depreciation using the straight-line method over the following estimated useful lives:


Equipment			3 – 7 years
Furniture and fixtures			7 years
Software			3 years
Leasehold improvements			Lesser of lease term or life of improvements

Intangible Assets

Intangible assets consist of patents related to certain intellectual property that we have developed or acquired, and identifiable intangible assets recognized in connection with our acquisition of OptaSense Holdings Ltd. ("OptaSense") and General Photonics, Inc. ("GP"). We amortize our identified intangible assets over their estimated useful lives ranging between one and fifteen years and analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether their carrying value has been impaired.

Goodwill

Goodwill is tested annually for impairment in the fourth quarter (October 1st) and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Goodwill is tested for impairment at the reporting unit level. A qualitative assessment can be performed to determine whether it is more likely than not the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, we compare the fair value of each reporting unit to its carrying value using a quantitative assessment. If the fair value of the reporting unit exceeds its carrying value, goodwill is considered not impaired. If the fair value of the reporting unit is less than the carrying value, the difference is recorded as an impairment loss.

For the quantitative assessment, we estimate the fair value of each reporting unit using a combination of an income approach using a discounted cash flow ("DCF") analysis and a market-based valuation approach based on comparable public company trading values. Determining the fair value of a reporting unit requires the exercise of significant management judgments, including the amount and timing of projected future revenues, earnings and cash flows after considering factors such as recent operating performance, general market and industry conditions, existing and expected future contracts, changes in working capital and long-term business plans and growth initiatives. The carrying value of each reporting unit includes the assets and liabilities employed in its operations and goodwill. There are no significant allocations of amounts held at the corporate level to the reporting units.

Research, Development and Engineering

Research, development and engineering expense not related to contract performance are expensed as incurred. We expensed $6.7 million and $7.5 million of non-contract related research, development and engineering expense for the year ended December 31, 2020 and 2019, respectively.

Impairment of Long-Lived Assets

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell.

Inventory

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

Net Income per Share

Basic per share data is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income attributable to common stockholders by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential common shares had been issued using the treasury stock method. Diluted per share data would also include the potential common share equivalents relating to convertible securities by application of the if-converted method.

The effect of 1.9 million and 3.2 million common stock equivalents are included for the diluted per share data for the years ended December 31, 2020 and 2019, respectively. Accrued stock dividends and stock options are included in our common stock equivalents for the year ended December 31, 2020, while preferred stock is also included for the year ended December 31, 2019.

Stock-Based Compensation

We have two stock-based compensation plans, which are described further in Note 11. We recognize compensation expense based upon the fair value of the underlying equity award as of the date of grant. We have elected to use the Black-Scholes option pricing model to value any stock options granted. Restricted stock and restricted stock units awarded are valued at the closing price of our common stock on the date of the award. We recognize stock-based compensation for such awards on a straight-line method over the requisite service period of the awards taking into account the effects of the expected exercise. We reduce stock-based compensation expense for the value of any forfeitures of unvested awards as such forfeitures occur.

Income Taxes

We account for income taxes using the liability method. Deferred tax assets or liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates, which will be in effect when the differences reverse. A valuation allowance against net deferred tax assets is provided unless we conclude it is more likely than not that the deferred tax assets will be realized.

We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We evaluate our ability to benefit from all deferred tax assets and establish valuation allowances for amounts we believe are not more-likely-than-not to be realizable. For uncertain tax positions, we use a more-likely-than-not threshold, greater than 50%, based on the technical merits of the income tax position taken. Income tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit recognized in the financial statements. Penalties, if probable and reasonably estimable, and interest expense related to uncertain tax positions are recognized as a component of the tax provision.

Foreign Currency

For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings.

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 units 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 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.

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 do not expect the adoption of these new accounting rules to have a significant impact on our consolidated financial statements.

Business Acquisitions

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Business Acquisitions

OptaSense Holdings Limited

On December 3, 2020, we entered into and closed a Share Purchase Agreement (the “Share Purchase Agreement”) with QinetiQ Holdings Limited (“QinetiQ”) for the purchase of all of the shares of OptaSense, a recognized market leader in fiber optic distributed monitoring solutions for pipelines, oilfield services, security, highways and railways, as well as power and utilities monitoring systems. Pursuant to the Share Purchase Agreement, we acquired all outstanding shares of OptaSense for aggregate consideration of $38.9 million (£29.0 million) subject to adjustment as described in the Share Purchase Agreement (the “Transaction”). The acquisition of OptaSense provides us with important distributed acoustic sensing ("DAS") intellectual

property and products. OptaSense's technology and products and geographic footprint are highly complementary to Luna, which we believe will accelerate our technology and overall growth roadmap.

The Share Purchase Agreement and a Tax Deed entered into between QinetiQ and us (the “Tax Deed”) in connection with the Share Purchase Agreement contain customary representations and warranties and indemnities. In addition, at closing of the acquisition, we obtained a warranty and indemnity insurance policy from Liberty Mutual Insurance Europe SE (LMIE) in connection with the Share Purchase Agreement and the Tax Deed.

In addition, for a period of two years after closing, QinetiQ has agreed not, directly or indirectly, alone or jointly with any other person, to compete or engage in any competing business with us in countries in which OptaSense operates and not to solicit our customers, employees or suppliers, subject to specified exceptions. QinetiQ has also agreed to provide specified transitional services for a period of six months after closing.

For the period from the closing of the OptaSense acquisition through December 31, 2020, we recognized revenue of $1.5 million and an operating loss of $0.9 million. OptaSense's operating loss for the period from the closing of the acquisition through December 31, 2020 included $0.1 million in amortization expense for the acquired intangibles and step-up in value of acquired inventory. The amortization expense for the acquired intangibles as well as the costs associated with the acquisition of GP are included in the cost of goods sold and selling, general and administrative expense in our consolidated statements of operations.

New Ridge Technologies

On October 29, 2020, we acquired New Ridge Technologies, a small company that develops and manufactures fiber optic test and measurement equipment and advanced fiber optic subsystems primarily for telecommunication and radio-over-fiber applications. The company's acquired operations will be integrated into, and reported as a part of, our Lightwave segment. This acquisition supports our growth strategy in the communications test arena. The total consideration was $0.6 million which consisted of $0.4 million paid at closing and $0.2 million of contingent consideration related to an earn-out provision. We recorded $0.02 million of goodwill upon the completion of the purchase consideration allocation. Depending on the achievement of certain metrics during the two years following closing, we may pay the seller up to $0.2 million in contingent consideration related to the earn-out provision.

General Photonics Corporation

On March 1, 2019, we acquired the outstanding stock of GP for cash consideration of $19.0 million. Of the purchase price, $17.1 million was paid at closing and $1.9 million was placed into escrow for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations. Additionally, we may become obligated to pay additional cash consideration of up to $1.0 million if certain revenue targets for the GP historical business are met for the twelve-month period following the closing. We estimated the fair value of the contingent obligation to be $1.0 million, which is shown in accrued liabilities on the consolidated balance sheet and was subsequently paid during the year ended December 31, 2020. The fair value of the contingent obligation was determined using the present value of estimated likely future payments.

For the period from the closing of the GP acquisition through December 31, 2019, we recognized revenue of $10.5 million and operating income of $1.4 million. Operating income for the period from the closing of the acquisition through December 31, 2019 included $1.6 million in amortization expense for the acquired intangibles and step-up in value of acquired inventory associated with the acquisition of GP. Operating income for the year ended December 31, 2019 also included $0.9 million of costs associated with the acquisition of GP. The amortization expense for the acquired intangibles as well as the costs associated with the acquisition of GP are included in the cost of goods sold and selling, general and administrative expense in our consolidated statements of operations.

These acquisitions have been accounted for under the acquisition method of accounting in accordance with ASC 805 - Business Combinations. Under ASC 805, the total estimated purchase consideration is allocated to the acquired tangible and intangible assets and assumed liabilities based on their estimated fair values as of the acquisition date. Any excess of the fair value of the acquisition consideration over the identifiable assets acquired and liabilities assumed is recognized as goodwill. The allocation of the purchase consideration for the OptaSense acquisition is preliminary.

The following table summarizes the allocation of the purchase consideration of each acquisition (excluding cash of $5.2 million and $3.8 million, respectively):


(in thousands)	OptaSense (2020)		GP (2019)
Accounts receivable	$	5,553	$	1,521
Contract assets	2,823		—
Inventory	11,483		2,698
Other current assets	1,026		764
Property and equipment	1,247		286
Identifiable intangible assets	11,263		8,200
Goodwill	7,619		10,512
Right of use asset	2,082		—
Other long-term assets	22		—
Accounts payable and accrued expenses	(4,089)		(4,076)
Contract liabilities	(3,259)		—
Other current liabilities	(747)		—
Long-term operating lease liability	(1,335)		—
Total purchase consideration	$	33,688	$	19,905

The identifiable intangible assets and their estimated useful lives were as follows:


	Estimated	Estimated Fair Value
(in thousands)	Useful Life	OptaSense		GP
Developed technology	8 - 10 years	$	7,379	$	7,200
Trade names and trademarks	3 - 15 years	2,580		400
Backlog	3 years	699		—
Customer relationships	5 - 15 years	605		600
		$	11,263	$	8,200

OptaSense's developed technology primarily consists of its DAS product solutions that deliver superior measurements for a wide range of applications from advanced industrial monitoring through high performance geophysical measurements. GP's developed technologies acquired primarily consisted of its technologies relating to the measurement and control of the polarization of light. The developed technologies were valued using the "multi-period excess earnings" method, under the income approach. The multi-period excess earnings method reflects the present value of the projected cash flows that are expected by the developed technologies less charges representing the contribution of other assets to those cash flows. Discount rates of 17.5% and 17% were used to discount these cash flows of OptaSense and GP, respectively, to the present value.

Trade names and trademarks are considered a type of guarantee of a certain level of recognizability, quality or performance represented by the OptaSense and GP brands. Trade names and trademarks were valued using the "relief from royalty" method under the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of these assets. Discount rates of 17.5% and 16% were used to discount these cash flows of OptaSense and GP, respectively, to the present value.

Backlog arises from unfulfilled purchase or sales order contracts. The value of OptaSense's backlog as of the acquisition date was calculated using the income approach. A discount rate of 16.5% was used to discount the cash flows attributable solely to the backlog to the present value.

Customer relationships represent the fair value of either (i) the avoidance of cost associated with the creation of a new customer relationship or (ii) the projected cash flows that will be derived from the sale of products to existing customers as of the acquisition date. OptaSense's customer relationships were valued using the cost approach based on the expected time to re-build the customer base. GP's customer relationships were valued using the "distributor" method, under the income approach.

Under this premise, the margin of a distributor within the industry is deemed to be the margin attributable to customer relationships. This isolates the cash flows attributable to the customer relationships for which a market participant would be willing to pay. Discount rates of 17.5% and 16% were used to discount these cash flows for OptaSense and GP, respectively, to the present value.

Goodwill represents the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed in connection with the acquisition. Goodwill generated from our business acquisitions was primarily attributable to expected synergies from future customer and sales growth.

Pro forma consolidated results of operations

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions of OptaSense and GP had been completed on January 1, 2019. The pro forma information includes adjustments to depreciation expense for property and equipment acquired and amortization expense for the intangible assets acquired and the elimination of transaction expenses recognized in each period. Transaction-related expenses associated with the acquisition of OptaSense and excluded from pro forma income from continuing operations were $2.2 million for the year ended December 31, 2020. Transaction-related expenses associated with the acquisition of GP and excluded from pro forma income from continuing operations were $1.0 million for the year ended December 31, 2019.

The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations or the combined business had the acquisitions of OptaSense and GP occurred on January 1, 2019, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below.


	For the years ended
	December 31, 2020		December 31, 2019
	OptaSense		OptaSense		GP
(in thousands)	(unaudited)		(unaudited)		(unaudited)
Revenue	$	103,971	$	101,390	$	72,577

Income from continuing operations	$	1,364	$	487	$	6,913

Accounts Receivable, net

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Accounts Receivable, net

Accounts receivable, net, consist of the following:


	December 31,
(in thousands)	2020		2019
Billed	$	25,418	$	17,194

Other	419		5
	25,837		17,199
Less: allowance for doubtful accounts	(886)		(930)
Accounts receivable, net	$	24,951	$	16,269

Inventory

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Inventory

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

Components of inventory are as follows:


	December 31,
(in thousands)	2020		2019
Finished goods	$	11,547	$	1,695
Work-in-process	1,425		1,008
Raw materials	10,625		7,591
Inventory	$	23,597	$	10,294

Property and Equipment, net

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, net

Property and equipment, net, consists of the following:


	December 31,
(in thousands)	2020		2019
Building	$	—	$	70
Equipment	4,844		9,564
Furniture and fixtures	353		685
Software	106		1,178
Leasehold improvements	2,416		5,288
Construction in process	185		—
	7,904		16,785
Less—accumulated depreciation	(4,596)		(13,319)
Property and equipment, net	$	3,308	$	3,466

Depreciation for the years ended December 31, 2020 and 2019 was approximately $1.1 million and $1.0 million, respectively, and is included primarily in selling, general and administrative expense in our consolidated statements of operations.

Intangible Assets, net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible Assets, net

Intangible assets, net consist of the following:


		December 31,
(in thousands)	Estimated Life	2020		2019
Patent costs	1 - 18 years	$	5,702	$	5,291
Developed technology	5 - 10 years	17,344		9,800
In-process research and development	N/A	1,580		1,580
Customer base	5 - 7 years	1,302		700
Trade names	3 - 15 years	3,122		550
Backlog	3 years	696		—
		29,746		17,921
Accumulated amortization		(9,637)		(7,727)
Intangible assets, net		$	20,109	$	10,194

Amortization for the years ended December 31, 2020 and 2019 was approximately $1.8 million and $1.6 million, respectively, and is included primarily in selling, general and administrative expense in our consolidated statements of operations.

Estimated aggregate amortization, based on the net value of intangible assets at December 31, 2020, for each of the next five years and beyond is as follows (in thousands):


Year Ending December 31,
2021	$	2,978
2022	2,906
2023	2,807
2024	2,316
2025	2,306
2026 and beyond	6,796
	$	20,109

We did not recognize any intangible asset impairment charges during the years ended December 31, 2020 or 2019.

Goodwill

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

As of December 31, 2020 and December 31, 2019, goodwill has been allocated to our Lightwave segment. The changes in the carrying value of goodwill during the years ended December 31, 2020 and December 31, 2019 were as follows (in thousands):


Balance as of December 31, 2018	$	101
Goodwill resulting from business acquisition	10,512
Measurement period adjustment	(71)
Balance as of December 31, 2019	10,542
Goodwill resulting from business acquisitions	7,637
Foreign currency translation	(58)
Balance as of December 31, 2020	$	18,121

After completing a qualitative assessment of our goodwill during the fourth quarter of 2020, we concluded the carrying value of goodwill was not impaired as of December 31, 2020.

Accrued Liabilities

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consist of the following:


	December 31,
(in thousands)	2020		2019
Accrued compensation	$	9,103	$	6,416


Contingent consideration	225		1,000
Accrued professional fees	825		113
Accrued income tax	281		716
Accrued interest	42		—


Accrued royalties	456		365

Accrued liabilities-other	1,227		426


Total accrued liabilities	$	12,159	$	9,036

Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Long-term debt consists of the following:


	Years ended December 31,
(in thousands)		2020		2019
Term Loan (net of debt issuance costs of $66, 2.48% at December 31, 2020)		$	12,434	$	—
Revolving Loan (2.48% at December 31, 2020)		7,550		—
		19,984		—
Less: Current portion of long-term debt obligations		(4,167)		—
Long-term debt obligations		$	15,817	$	—

PNC Bank Facility

On December 1, 2020 (the “Effective Date”), we entered into a Loan Agreement (the “Loan Agreement”) with PNC Bank, National Association, as lender (the “Lender”) and our domestic subsidiaries as guarantors. The Loan Agreement provides a $12.5 million term loan facility (the “Term Loan”) and a $15.0 million revolving credit facility (the “Revolving Line”), which includes a $3.0 million letter of credit sublimit. On the Effective Date, we borrowed the full amount of the Term Loan from the Lender pursuant to a term note (the “Term Note”) and a $7.6 million revolving loan (the “Revolving Loan”) pursuant to a revolving line of credit note (the “Revolving Line of Credit Note”). We may repay and reborrow advances under the Revolving Line from time to time pursuant to the Revolving Line of Credit Note.

The Term Loan matures on December 1, 2023. The Term Loan is due and payable in 12 equal quarterly payments of principal and interest. The Term Loan bears interest at a floating per annum rate equal to the sum of (a) LIBOR plus (b) a margin ranging from 1.75% to 2.25% depending on the Net Leverage Ratio (as defined in the Loan Agreement). We may prepay the Term Loan without penalty or premium.

The Revolving Line expires on December 1, 2023. Borrowings under the Revolving Line will bear interest at a floating per annum rate equal to the sum of (a) LIBOR plus (b) a margin ranging from 1.75% to 2.25% depending on the Net Leverage Ratio. Accrued interest will be due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest will be due and payable on December 1, 2023. The unused portion of the Revolving Line will accrue a fee equal to 0.20% per annum multiplied by the quarterly average unused amount.

Provided our obligations under the Loan Agreement have been satisfied, we may terminate the Loan Agreement at any time upon three business days’ advance written notice to the Lender.

The Loan Agreement includes a number of affirmative and restrictive covenants applicable to us and our subsidiaries, including, among others, financial covenants regarding minimum net leverage and fixed charge coverage, affirmative covenants regarding delivery of financial statements, payment of taxes, and maintenance of government compliance, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. We were in compliance with these covenants as of December 31, 2020.

Upon the occurrence of certain events, including failure to satisfy our payment obligations under the Loan Agreement, failure to adhere to the financial covenants, the breach of certain of our other covenants under the Loan Agreement, cross defaults to other indebtedness or material agreements, judgment defaults and defaults related to failure to maintain governmental approvals, the Lender will have the right, among other remedies, to declare all principal and interest immediately due and payable, and to exercise secured party remedies.

Silicon Valley Bank Facility

We maintained a Loan and Security Agreement (the "Credit Facility") with Silicon Valley Bank ("SVB") 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 8, 2020, we entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) with SVB, which amended and restated in its entirety our previous Loan and Security Agreement dated as of October 10, 2019, as amended. Under the A&R Loan Agreement, SVB agreed to make advances available up to $10.0 million

(the “A&R Revolving Line”). If we borrow from the A&R 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 .50% or (ii) 4.75%. Amounts borrowed under the A&R Revolving Line may be repaid and, prior to the A&R Revolving Line Maturity Date (defined below), reborrowed. The Revolving Line terminates on October 10, 2021 (the “A&R Revolving Line Maturity Date”), unless earlier terminated by us.

Amounts due under the A&R Loan Agreement are secured by our assets, including all personal property and bank accounts; however, intellectual property is not secured under the Loan Agreement. The Loan Agreement requires us to observe a number of financial and operational covenants, including maintenance of a specified Liquidity Coverage Ratio (as defined in the A&R Loan Agreement), protection and registration of intellectual property rights and customary negative covenants. As of December 31, 2020, there were no events of default on the Credit Facility.

On December 1, 2020, we terminated the A&R Loan Agreement, dated October 8, 2020. As of the time of termination, there were no amounts outstanding under the A&R Loan Agreement.

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 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.

Maturities on debt are as follows (in thousands):


Year Ending December 31,	Amount
2021	$	4,167
2022	4,167
2023	11,650
Total	$	19,984

Interest expense, net for the years ended December 31, 2020 and 2019 consisted of the following:


	Years ended December 31,
(in thousands)		2020		2019
Interest expense on Term Loans		$	26	$	8
Interest expense on Revolving Line of Credit		16		—
Amortization of debt issuance costs		2		6
Other interest expense		5		2
Interest income		(24)		—
Total interest expense, net		$	25	$	16

Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

We have operating leases for our facilities, which have remaining terms ranging from 1 to 5 years. Our leases do not have an option to extend the lease period beyond the stated term unless the new term is agreed by both parties. They also do not have an early termination clause included. Our operating lease agreements do not contain any material restrictive covenants. Some of our operating lease agreements contain variable payment provisions that provide for rental increases based on consumer price indices. The change in rent expense resulting from changes in these indices are included within variable rent.

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

The discount rate for both our operating and finance leases was not readily determinable in the specific lease agreements. As a result, our incremental borrowing rate was used as the discount rate when establishing the ROU assets and corresponding lease liabilities. As of December 31, 2020, we had no operating or finance leases that have not yet commenced.

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


	Year Ended
(in thousands)	December 31, 2020		December 31, 2019
Operating lease costs	$	1,647	$	1,622
Variable rent costs	133		(147)
Total rent expense	$	1,780	$	1,475

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of December 31, 2020 (in thousands):


Year Ending December 31,	Operating Leases		Finance Leases
2021	$	2,953	$	53
2022	2,674		53
2023	2,390		53
2024	1,897		52
2025	1,226		48
2026 and beyond	3,882		—
Total future minimum lease payments	15,022		259
Less: Interest	2,551		15
Total lease liabilities	$	12,471	$	244

Current lease liability	$	2,223	$	48
Long-term lease liability	10,248		196
Total lease liabilities	$	12,471	$	244

Other information related to leases is as follows:


	Year Ended
(in thousands, except weighted-average data)	December 31, 2020			December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	48		$	46
Interest on lease liabilities	4			5
Total finance lease cost	$	52		$	51

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,647		$	1,622
Finance cash flows from finance leases	$	53		$	40
Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,740		$	—
Right-of-use assets obtained in exchange for new finance lease liabilities	$	247		$	15
Weighted-average remaining lease term (years) - operating leases	6.3			3.7
Weighted-average remaining lease term (years) - finance leases	4.9			2.1
Weighted-average discount rate - operating leases	5		%	7		%
Weighted-average discount rate - finance leases	2		%	7		%

Leases

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


	Year Ended
(in thousands)	December 31, 2020		December 31, 2019
Operating lease costs	$	1,647	$	1,622
Variable rent costs	133		(147)
Total rent expense	$	1,780	$	1,475

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of December 31, 2020 (in thousands):


Year Ending December 31,	Operating Leases		Finance Leases
2021	$	2,953	$	53
2022	2,674		53
2023	2,390		53
2024	1,897		52
2025	1,226		48
2026 and beyond	3,882		—
Total future minimum lease payments	15,022		259
Less: Interest	2,551		15
Total lease liabilities	$	12,471	$	244

Current lease liability	$	2,223	$	48
Long-term lease liability	10,248		196
Total lease liabilities	$	12,471	$	244

Other information related to leases is as follows:


	Year Ended
(in thousands, except weighted-average data)	December 31, 2020			December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	48		$	46
Interest on lease liabilities	4			5
Total finance lease cost	$	52		$	51

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,647		$	1,622
Finance cash flows from finance leases	$	53		$	40
Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,740		$	—
Right-of-use assets obtained in exchange for new finance lease liabilities	$	247		$	15
Weighted-average remaining lease term (years) - operating leases	6.3			3.7
Weighted-average remaining lease term (years) - finance leases	4.9			2.1
Weighted-average discount rate - operating leases	5		%	7		%
Weighted-average discount rate - finance leases	2		%	7		%

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Series A Convertible Preferred Stock

In January 2010, we entered into a transaction with Carilion, in which Carilion agreed to exchange all of its Senior Convertible Promissory Notes with an original principal amount of $5.0 million plus all accrued but unpaid interest, totaling $1.2 million, for 1,321,514 shares of our newly designated Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock is non-voting, carries a dividend of 6% payable in shares of common stock and maintains a liquidation preference up to $6.2 million. In September 2019, Carilion elected to convert the 1,321,514 shares of preferred stock into an equal number of shares of our common stock. In addition, we issued 770,454 shares of our common stock in satisfaction of the accrued dividends earned on the preferred stock prior to its conversion.

Equity Incentive Plans

In April 2016, we adopted our 2016 Equity Incentive Plan (the "2016 Plan") as a successor to the 2006 Plan. Under the 2016 Plan, our Board of Directors is authorized to grant both incentive and non-statutory stock options to purchase common stock and restricted stock awards to our employees, directors, and consultants. The 2016 Plan provides for the issuance of 3,500,000 shares plus any amounts forfeited from grants under the 2006 Plan after the expiration date of the 2006 Plan. Options generally have a life of 10 years and exercise price equal to or greater than the fair market value of the Common Stock as determined by the Board of Directors. Vesting typically occurs over a four-year period.

The following table sets forth the activity of the options to purchase common stock under the 2006 Plan and the 2016 Plan. The prices represent the closing price of our Common Stock on the Nasdaq Capital Market on the respective dates.


	Options Outstanding						Options Exercisable
	Number of 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 at January 1, 2019	3,108,868	$0.61 - 6.55	$	2.26	$	3,670	1,986,740	$	1.81	$	3,314
Forfeited	(14,707)	$1.47 - 3.37	2.51
Exercised	(558,834)	$0.61 - 1.81	1.21
Granted	625,070	$3.21 - 7.37	3.63
Balance at December 31, 2019	3,160,397	$1.18 - 7.37	$	2.72	$	14,460	1,835,799	$	2.28	$	9,198
Forfeited	(108,515)	$1.27 - 7.59	3.66
Exercised	(792,466)	$1.21 - 4.43	2.80
Granted	70,000	$6.27 - 7.59	6.65
Balance at December 31, 2020	2,329,416	$1.18 - 7.59	$	2.76	$	16,574	1,408,119	$	2.26	$	10,734

(1)The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only.

The fair value of each option granted is estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions:


	Years ended December 31,
	2020	2019
Risk-free interest rate range	0.7%	2.494%
Expected life of option-years	7	7
Expected stock price volatility	63%	67%


Expected dividend yield	—%	—%

The risk-free interest rate is based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. Expected volatility is based upon the average historical volatility of our common stock over the period commensurate with the expected term of the related instrument. The expected life and estimated post-employment termination behavior is based upon historical experience of homogeneous groups, executives and non-executes, within our company. We do not currently pay dividends on our common stock nor do we expect to in the foreseeable future.


		Options Outstanding			Options Exercisable
	Range of Exercise Prices	Options Outstanding	Weighted Average Remaining Life in Years	Weighted Average Exercise Price	Options Exercisable	Weighted Average Remaining Life in Years	Weighted Average Exercise Price of Options Exercisable
Year ended December 31, 2019	$1.18 - 7.37	3,160,397	6.24	$2.72	1,835,799	4.30	$2.28
Year ended December 31, 2020	$1.18 - 7.59	2,329,416	6.04	$2.76	1,408,119	4.73	$2.26


(in thousands)	Total Intrinsic Value of Options Exercised		Total Fair Value of Options Vested
Year ended December 31, 2019	$	1,642	$	3,268
Year ended December 31, 2020	$	3,322	$	3,178

For the years ended December 31, 2020 and 2019, the weighted average grant date fair value of options granted was $6.65 and $3.63 per share, respectively. We estimate the fair value of options at the grant date using the Black-Scholes model. For all stock options granted through December 31, 2020, the weighted average remaining service period is 6.0 years.

Unamortized stock option expense at December 31, 2020 that will be amortized over the weighted-average remaining service period of 2.0 years totaled $2.1 million.

Restricted Stock and Restricted Stock Units

Historically, we have granted shares of restricted stock to certain employees that have vested in three equal annual installments on the anniversary dates of their grant. However, beginning in 2019, we altered our approach for these grants to replace the grant of restricted stock subject to time-based vesting with the grant of a combination of restricted stock units ("RSUs") subject to time-based vesting and performance-based vesting. Each RSU represents the contingent right to receive a single share of our common stock upon the vesting of the award. For the year ended December 31, 2020, we granted an aggregate of 138,650 RSUs to certain employees. Of the RSUs granted during 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. In 2020, 137,997 shares of restricted stock and 72,335 RSUs granted 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. In 2020 and 2019, we granted 10,652 and 11,600, respectively, RSUs to non-employee members of our Board of Directors in respect of the annual equity compensation under our non-employee director compensation policy. In 2020 and 2019, 11,600 and 16,286 RSUs, respectively, vested.

The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs in 2020 and 2019:


(in thousands, except share and weighted-average share data)	Number of Unvested Shares	Weighted Average Grant Date Fair Value		Aggregate Grant Date Fair Value of Unvested Shares
Balance at January 1, 2019	458,620	$	2.56	$	1,172
Granted	291,600	3.75		1,094
Vested	(210,624)	2.33		(491)
Forfeitures	(37,499)	2.96		(111)
Balance at December 31, 2019	502,097	$	3.31	$	1,664
Granted	149,302	6.48		967
Vested	(221,932)	3.19		(708)

Balance at December 31, 2020	429,467	$	4.48	$	1,923

We recognized $2.1 million and $1.5 million in stock-based compensation expense, which is recorded in selling, general and administrative expense on the consolidated statement of operations for the years ended December 31, 2020 and 2019, respectively.

Unamortized restricted stock and RSUs expense at December 31, 2020 that will be amortized over the weighted-average remaining service period of 1.7 years totaled $1.2 million.

Employee Stock Purchase Plan

On April 7, 2020, our board of directors approved, and on May 11, 2020, our stockholders approved, the Luna Innovations Incorporated 2020 Employee Stock Purchase Plan (the "2020 ESPP"). The 2020 ESPP grants our eligible employees a purchase right to purchase up to that number of shares of common stock purchasable either with a percentage or with a maximum dollar amount, as designed by the Board of Directors, during the period that begins on the offering date and ends on the date stated in the offering. The maximum number of shares of common stock that may be issued under the 2020 ESPP is 1,200,000 shares. The 2020 ESPP is considered a compensatory plan and the fair value of the discount and the look-back period will be estimated using the Black-Scholes option pricing model and expense will be recognized over the six-month withholding period prior to the purchase date. For the year ended December 31, 2020, we recognized $0.2 million in share-based compensation expense related to the 2020 ESPP, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations.

Non-employee Director Deferred Compensation Plan

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

Pursuant to our Deferred Compensation Plan, non-employee directors can also elect to defer the receipt of some or all of the equity compensation that they receive for board and committee service. Stock units representing this equity compensation vest at the earlier of the one-year anniversary of their grant or the next annual stockholders' meeting.

The following is a summary of our stock unit activity under the Deferred Compensation Plan for 2020 and 2019:


(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, 2019	507,290	$	1.40	$	1,699
Granted	121,713	4.41


Balance, December 31, 2019	629,003	2.09		4,585
Granted	53,757	6.62

Issued	(47,377)	1.65
Balance, December 31, 2020	635,383	$	2.41	$	6,278

As of December 31, 2020, 24,855 outstanding stock units had not yet vested.

Stock Repurchase Program

In August 2019, our board of directors authorized a stock repurchase program which allowed us to repurchase up to $2.0 million of our common stock through August 2020. As of December 31, 2020, we had repurchased a total of 333,953 shares for an aggregate purchase price of $2.0 million under this stock repurchase program, all of which had been repurchased before the program expired in September 2019. We currently maintain all repurchased shares under this stock repurchase program as treasury stock.

Revenue Recognition

12 Months Ended

Dec. 31, 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 years ended December 31, 2020 and 2019:


		Years ended December 31,
		2020						2019
(in thousands)		Lightwave		Luna Labs		Total		Lightwave		Luna Labs		Total
Total Revenue by Geographic Location
	United States	$	33,706	$	23,201	$	56,907	$	26,409	$	21,399	$	47,808
	Asia	16,181		4		16,185		13,669		—		13,669
	Europe	7,144		350		7,494		7,277		—		7,277
	Canada, Central and South America	2,084		11		2,095		1,432		—		1,432
	All Others	—		—		—		330		—		330
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Major Customer Type
	Sales to the U.S. government	$	8,196	$	21,111	$	29,307	$	8,223	$	19,757	$	27,980
	U.S. direct commercial sales and other	25,487		2,455		27,942		18,186		1,642		19,828
	Foreign commercial sales & other	25,432		—		25,432		22,708		—		22,708
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Contract Type
	Fixed-price contracts	$	56,266	$	13,457	$	69,723	$	45,995	$	11,792	$	57,787
	Cost-type contracts	2,849		10,109		12,958		3,122		9,607		12,729
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	50,347	$	2,007	$	52,354	$	41,768	$	1,362	$	43,130
	Goods/services transferred over time	8,768		21,559		30,327		7,349		20,037		27,386
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Major Products/Services
	Technology development	$	7,211	$	21,559	$	28,770	$	5,987	$	20,037	$	26,024
	Test, measurement and sensing systems	50,881		—		50,881		41,788		—		41,788

	Other	1,023		2,007		3,030		1,342		1,362		2,704
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Contract Balances

Our contract assets consist of unbilled amounts for technology development contracts as well as custom product contracts. Also included in contract assets are royalty revenue and carrying amounts of right of returned inventory. Long-term contract assets include the fee withholding on cost reimbursable contracts that will not be billed within a year. Contract liabilities

include excess billings, subcontractor accruals, warranty expense, extended warranty revenue, right of return refund, and customer deposits. The net contract assets/(liabilities) changed by $1.1 million primarily due to an increased number of government research programs, primarily fixed-price contracts, that have not reached milestones as designated in their respective contracts, but revenue has been recognized based on costs incurred.

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


	December 31,
(in thousands)	2020		2019
Contract assets	$	7,517	$	3,208
Contract liabilities	(7,095)		(3,888)
Net contract assets/(liabilities)	$	422	$	(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 $35.9 million at December 31, 2020. We expect to satisfy 77% of the performance obligations in 2021, 15% in 2022 and the remainder by 2025. The approximate value of our Luna Labs segment's unfulfilled performance obligations was $19.0 million at December 31, 2020. We expect to satisfy 70% of the performance obligations in 2021, 27% in 2022 and the remainder by 2023.

- 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

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-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 10
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 13
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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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
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-Publisher FASB
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-Subparagraph (a)
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-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 12
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-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income tax expense/(benefit) from continuing operations consisted of the following for the periods indicated:


	Years ended December 31,
(in thousands)	2020		2019
Current:
Federal	$	89	$	1,467
State	460		228
Foreign	27		—
	$	576	$	1,695
Deferred:
Federal	(70)		(2,849)
State	(161)		(500)
Foreign	$	3	$	—
	$	(228)	$	(3,349)
Income tax expense/(benefit)	$	348	$	(1,654)

Deferred tax assets and liabilities consist of the following components:


	Years ended December 31,
(in thousands)	2020		2019
Bad debt and inventory reserve	$	430	$	376
UNICAP	113		5
Deferred revenue	111		130
ASC842 Lease Accounting (DTA)	(2,610)		797
ASC842 Lease Accounting (DTL)	2,852		(545)
Depreciation and amortization	(3,361)		(2,042)
Net operating loss carryforwards	5,767		1,680
Accrued liabilities	679		594
Stock-based compensation	829		780
Total	$	4,810	$	1,775
Valuation allowance	(2,850)		(360)
Net deferred tax asset	$	1,960	$	1,415

The expense/(benefit) from income taxes from continuing operations differs from the amount computed by applying the federal statutory income tax rate to our loss from continuing operations before income taxes as follows for the periods indicated:


	Years ended December 31,
	2020		2019
Income tax expense at federal statutory rate	21.00	%	21.00	%
Effect of foreign operations	0.23		—
State taxes, net of federal tax effects	3.99		(8.67)
Change in valuation allowance	3.44		(67.39)
Provision to return adjustments	(0.33)		7.26
Meals and entertainment	0.13		0.50
Other permanent differences	8.81		4.20
Equity compensation	(7.25)		(1.75)
Current year R&D credit	(10.60)		—
Prior year R&D credit	(17.87)		—
Reserve for uncertain tax positions	4.20		—
Other	1.10		—
Income tax expense/(benefit)	6.85	%	(44.85)	%

The realization of our deferred income tax assets is dependent upon sufficient taxable income in future periods. In assessing whether deferred tax assets may be realized, we consider whether it is more likely than not that some portion, or all, of the deferred tax asset will be realized. We consider scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies that we can implement in making our assessment. We have net operating loss ("NOL") carryforwards of approximately $5.2 million for a previously acquired company expiring at varying dates through 2033. Our NOL carryovers will be subject to a Section 382 limitation based on a 2015 ownership change, and there have been no subsequent ownership changes. We continue to be in a three year cumulative net income position, and based on all available positive and negative evidence, we believe our net deferred tax asset will be fully realizable.

Our OptaSense acquisition included a UK entity and a US entity which have deferred tax assets. Based on all available evidence, including cumulative history of losses, we have realized deferred tax assets only to the extent they are supported by the reversal of existing temporary differences. As a result, we have recorded a valuation allowance of $2.9 million as of December 31, 2020.

The following table summarizes the activity related to our gross unrecognized tax benefits:


	Years ended December 31,
(in thousands)	2020		2019
Unrecognized tax benefits, beginning of period	$	—	$	—
Increases related to current period tax positions	81		—
Increases related to prior period tax positions	130		—
Unrecognized tax benefits, end of period	$	211	$	—

As of December 31, 2020, we had $0.2 million of unrecognized tax benefits. If these amounts are recognized in future periods, it would affect the effective tax rate on income from continuing operations for the years in which they are recognized. Interest and penalties released related to uncertain tax positions were not material for the year ended December 31, 2020. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment. The amount of accrued interest and penalties as of December 31, 2020 is recorded in other long-term liabilities on the consolidated balance sheets. Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. We do not believe there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

We file numerous consolidated and separate income tax returns in the US federal jurisdiction and in many state and foreign jurisdictions. The U.S. federal statute of limitations remains open for the year 2017 and onward. U.S. state jurisdictions have statutes of limitation generally ranging from three to seven years. Our OptaSense companies have open years for audit including UK - 2017 and forward; US - 2017 and forward; and Canada - 2016 and forward. Given that certain subsidiaries have federal or state net operating loss carryforwards, the statute for examination by the taxing authorities will typically remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above. We currently have no income tax returns under examination,

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. In December 2020, the Consolidated Appropriations Act, 2021 (“CAA”) was signed into law. The CAA included additional funding through tax credits as part of its economic package for 2021. We evaluated these items in its tax computation as of December 31, 2020 and determined that the items do not have a material impact on our financial statements as of December 31, 2020.

- 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

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Litigation and other contingencies From time to time, we may become involved in litigation in relation to claims arising out of our operations in the normal course of business. While management currently believes it is not reasonably possible the amount of ultimate liability, if any, with respect to these actions will have a material adverse effect on our financial position, results of operations or liquidity, the ultimate outcome of any litigation is uncertain. 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 balance had been received with the remaining $2.5 million in the escrow account pending resolution of our dispute of indemnity claims received from Macom. In March 2020, we settled the dispute resulting in us receiving $0.6 million and Macom receiving $1.9 million. For the year ended December 31, 2020, 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 optoelectronic components and sub-assemblies ("Opto") 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. We did not receive any of the additional $1.0 million of consideration because the minimum revenue targets were not achieved. We have made, and will continue to make, efforts to comply with current and future environmental laws. We anticipate that we could incur additional capital and operating costs in the future to comply with existing environmental laws and new requirements arising from new or amended statutes and regulations. In addition, because the applicable regulatory agencies have not yet promulgated final standards for some existing environmental programs, we cannot at this time reasonably estimate the cost for compliance with these additional requirements. The amount of any such compliance costs could be material. We cannot predict the impact that future regulations will impose upon our business. Obligation under Operating Leases See Note 10 - Leases for discussion of our lease obligations. Purchase Commitment We executed a non-cancelable purchase order totaling $1.4 million in the third quarter of 2020 and a non-cancelable purchase order totaling $1.6 million in the fourth quarter of 2020 for multiple shipments of tunable lasers to be delivered over an 12-month period. At December 31, 2020, approximately $2.9 million of these commitments remained and is expected to be delivered by October 31, 2021. Guarantees As of December 31, 2020, we had a total of $1.2 million in performance bond guarantees outstanding in favor of certain third parties to ensure performance of its obligations under certain customer contracts and lease arrangements. These guarantees expire at various dates through September 2022. To date, we have not incurred any charges associated with non-performance covered by such guarantees and have not accrued any liabilities as of December 31, 2020.

Employee Profit Sharing Plan	12 Months Ended
Employee Profit Sharing Plan	Dec. 31, 2020
Retirement Benefits [Abstract]
Employee Profit Sharing Plan	Employee Profit Sharing Plan We maintain a salary reduction/profit-sharing plan under provisions of Section 401(k) of the Internal Revenue Code. The plan is offered to all permanent employees. We contribute 30% of the salary deferral elected by each employee up to a maximum deferral of 10% of annual salary. We contributed approximately $0.5 million and $0.4 million to the plan for the years ended December 31, 2020 and December 31, 2019, respectively.

Relationship with Major Customers	12 Months Ended
Relationship with Major Customers	Dec. 31, 2020
Risks and Uncertainties [Abstract]
Relationship with Major Customers	Relationship with Major CustomersDuring the years ended December 31, 2020 and 2019, approximately 35% and 40%, respectively, of our consolidated revenues were attributable to contracts with the U.S. government. At December 31, 2020 and 2019, receivables with respect to contracts with the U.S. government represented 14% and 12% of total trade receivables, respectively.

Financial Information About Segments

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Financial Information About Segments

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

During the year ended December 31, 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 year ended December 31, 2020, we reported under two different reporting segments. We have reflected these new segment measures beginning in the year ended December 31, 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 December 31, 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 in Note 1, “Organization and Summary of Significant Accounting Policies”.

Information about the results of operations for each segment is set forth in the table below. There were no significant inter-segment sales during the years ended December 31, 2020 and 2019.

During the years ended December 31, 2020 and 2019, 31% and 32%, respectively, of our total sales took place outside the United States. Customers in China represented 11% of total revenues for the year ended December 31, 2019, while no other single country, outside of the United States, represented more than 10% of total revenues for the year ended December 31, 2020.


	Years ended December 31,
(in thousands)		2020		2019
Lightwave revenue		$	59,115	$	49,117
Luna Labs revenue		23,566		21,399
Total revenue		$	82,681	$	70,516
Lightwave operating income		$	4,914	$	2,261
Luna Labs operating income		69		1,055
Total operating income		$	4,983	$	3,316
Depreciation, Lightwave		$	984	$	697
Depreciation, Luna Labs		$	143	$	252
Amortization, Lightwave		$	1,714	$	1,486
Amortization, Luna Labs		$	129	$	68

Additional segment information is as follows:


	December 31,
(in thousands)	2020		2019
Total segment assets:
Lightwave	$	110,446	$	70,276
Luna Labs	20,556		16,248
Total	$	131,002	$	86,524
Property plant and equipment and intangible assets, Lightwave	$	40,995	$	23,201
Property plant and equipment and intangible assets, Luna Labs	$	543	$	1,001

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 31
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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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
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Quarterly Results (unaudited)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (unaudited)

The following table sets forth our unaudited historical revenues, operating (loss)/income and net income by quarter during 2020 and 2019.


	Three Months Ended
(in thousands, except share and per share data)	March 31, 2020		June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2019		June 30, 2019		September 30, 2019		December 31, 2019
Revenues:
Lightwave	$	11,554	$	12,933	$	15,350	$	19,278	$	9,518	$	12,523	$	13,088	$	13,988
Luna Labs	5,587		5,643		5,700		6,637		5,315		5,291		5,301		5,492
Total revenues	17,141		18,576		21,050		25,915		14,833		17,814		18,389		19,480
Gross margin	8,364		9,517		10,949		13,358		6,768		8,752		9,275		10,388
Operating income/(loss)	390		1,810		2,252		530		(897)		1,014		1,482		1,718
Net income/(loss) from continuing operations	320		1,369		3,102		(64)		1,126		841		1,230		2,146
Loss from discontinued operations, net of income tax of $464	(1,436)		—		—		—		—		—		—		—
Net (loss)/income	(1,116)		1,369		3,102		(64)		1,126		841		1,230		2,146
Net (loss)/income attributable to common stockholders	$	(1,116)	$	1,369	$	3,102	$	(64)	$	1,043	$	751	$	1,117	$	2,146
Net income per share from continuing operations:
Basic	$	0.01	$	0.04	$	0.10	$	—	$	0.04	$	0.03	$	0.04	$	0.07
Diluted	$	0.01	$	0.04	$	0.10	$	—	$	0.03	$	0.02	$	0.04	$	0.07
Net loss per share from discontinued operations:
Basic	$	(0.05)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Diluted	$	(0.04)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Net (loss)/income attributable to common stockholders:
Basic	$	(0.04)	$	0.04	$	0.10	$	—	$	0.04	$	0.03	$	0.04	$	0.07
Diluted	$	(0.03)	$	0.04	$	0.10	$	—	$	0.03	$	0.02	$	0.03	$	0.07
Weighted average shares:
Basic	30,380,345		30,589,249		30,809,896		30,895,980		28,039,080		28,246,840		28,291,297		30,159,322
Diluted	32,549,487		32,466,122		32,411,086		32,831,255		33,479,935		33,650,790		32,115,847		32,211,847

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts

Schedule II

Luna Innovations Incorporated

Valuation and Qualifying Accounts


Column A	Column B		Column C		Column D		Column E
(in thousands)	Balance at beginning of Period		Additions		Deductions		Balance at end of period
Year Ended December 31, 2019
Reserves deducted from assets to which they apply:
Deferred tax valuation allowance	$	3,268	$	—	$	(2,908)	$	360
Allowances for doubtful accounts	285		645		—		930
	$	3,553	$	645	$	(2,908)	$	1,290
Year Ended December 31, 2020
Reserves deducted from assets to which they apply:
Deferred tax valuation allowance	$	360	$	2,850	$	(360)	$	2,850
Allowances for doubtful accounts	$	930	$	127	$	(171)	$	886
	$	1,290	$	2,977	$	(531)	$	3,736

All other schedules are omitted as the required information is inapplicable or the information is presented in the Consolidated Financial Statements and notes thereto in Item 8 of Part II of this Annual Report on Form 10-K.

◦Exhibits. The exhibits filed as part of this report are listed under “Exhibits” at subsection (b) of this Item 15.

a.Exhibits

Organization and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Consolidation Policy

Consolidation PolicyOur consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include our accounts and the accounts of our wholly owned subsidiaries. We eliminate from our financial results all intercompany transactions.

Use of Estimates

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may differ from such estimates and assumptions.

Revenue Recognition

Lightwave Revenues

Luna Labs Revenues

Revenue from time and materials contracts is recognized based on direct labor hours expended at contract billing rates plus other billable direct costs.

Allowance for Uncollectible Receivables

Allowance for Uncollectible ReceivablesAccounts receivable are recorded at their face amount, less an allowance for doubtful accounts. We review the status of our uncollected receivables on a regular basis. In determining the need for an allowance for uncollectible receivables, we consider our customers’ financial stability, past payment history and other factors that bare on the ultimate collection of such amounts.

Cash Equivalents

Cash EquivalentsWe consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. To date, we have not incurred losses related to cash and cash equivalents. Our foreign currency risk on cash and cash equivalents held outside of the US is not material. Cash equivalents at December 31, 2020 and 2019 included $3.1 million and $19.8 million, respectively, invested in U.S. Treasury obligations through a sweep account with our bank. The full value of amounts invested through the sweep account are convertible to cash on a daily basis. Our cash transactions are processed through reputable commercial banks. We regularly maintain cash balances with financial institutions which exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

Fair Value Measurements

•Level 1—Quoted prices for identical instruments in active markets.

•Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable.

Property and Equipment

Property and Equipment, net

Property and equipment, net, are stated at cost less accumulated depreciation. We record depreciation using the straight-line method over the following estimated useful lives:


Equipment			3 – 7 years
Furniture and fixtures			7 years
Software			3 years
Leasehold improvements			Lesser of lease term or life of improvements

Intangible Assets

Goodwill

Research, Development and Engineering

Research, Development and EngineeringResearch, development and engineering expense not related to contract performance are expensed as incurred.

Impairment of Long-Lived Assets

Inventory

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

Net Income per Share

Stock-Based Compensation

Income Taxes

Foreign Currency

Foreign CurrencyFor our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Pronouncements not yet adopted

Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Property and Equipment Estimated Useful Lives

We record depreciation using the straight-line method over the following estimated useful lives:


Equipment			3 – 7 years
Furniture and fixtures			7 years
Software			3 years
Leasehold improvements			Lesser of lease term or life of improvements

Business Acquisitions (Tables)

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Allocation of the Purchase Consideration

The following table summarizes the allocation of the purchase consideration of each acquisition (excluding cash of $5.2 million and $3.8 million, respectively):


(in thousands)	OptaSense (2020)		GP (2019)
Accounts receivable	$	5,553	$	1,521
Contract assets	2,823		—
Inventory	11,483		2,698
Other current assets	1,026		764
Property and equipment	1,247		286
Identifiable intangible assets	11,263		8,200
Goodwill	7,619		10,512
Right of use asset	2,082		—
Other long-term assets	22		—
Accounts payable and accrued expenses	(4,089)		(4,076)
Contract liabilities	(3,259)		—
Other current liabilities	(747)		—
Long-term operating lease liability	(1,335)		—
Total purchase consideration	$	33,688	$	19,905

Schedule of Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives

The identifiable intangible assets and their estimated useful lives were as follows:


	Estimated	Estimated Fair Value
(in thousands)	Useful Life	OptaSense		GP
Developed technology	8 - 10 years	$	7,379	$	7,200
Trade names and trademarks	3 - 15 years	2,580		400
Backlog	3 years	699		—
Customer relationships	5 - 15 years	605		600
		$	11,263	$	8,200

Unaudited Pro Forma Financial Information


	For the years ended
	December 31, 2020		December 31, 2019
	OptaSense		OptaSense		GP
(in thousands)	(unaudited)		(unaudited)		(unaudited)
Revenue	$	103,971	$	101,390	$	72,577

Income from continuing operations	$	1,364	$	487	$	6,913

Accounts Receivable, net (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Components of Accounts Receivable, net

Accounts receivable, net, consist of the following:


	December 31,
(in thousands)	2020		2019
Billed	$	25,418	$	17,194

Other	419		5
	25,837		17,199
Less: allowance for doubtful accounts	(886)		(930)
Accounts receivable, net	$	24,951	$	16,269

Inventory (Tables)

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Components of Inventory

Components of inventory are as follows:


	December 31,
(in thousands)	2020		2019
Finished goods	$	11,547	$	1,695
Work-in-process	1,425		1,008
Raw materials	10,625		7,591
Inventory	$	23,597	$	10,294

Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net, consists of the following:


	December 31,
(in thousands)	2020		2019
Building	$	—	$	70
Equipment	4,844		9,564
Furniture and fixtures	353		685
Software	106		1,178
Leasehold improvements	2,416		5,288
Construction in process	185		—
	7,904		16,785
Less—accumulated depreciation	(4,596)		(13,319)
Property and equipment, net	$	3,308	$	3,466

Intangible Assets, net (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible assets, net consist of the following:


		December 31,
(in thousands)	Estimated Life	2020		2019
Patent costs	1 - 18 years	$	5,702	$	5,291
Developed technology	5 - 10 years	17,344		9,800
In-process research and development	N/A	1,580		1,580
Customer base	5 - 7 years	1,302		700
Trade names	3 - 15 years	3,122		550
Backlog	3 years	696		—
		29,746		17,921
Accumulated amortization		(9,637)		(7,727)
Intangible assets, net		$	20,109	$	10,194

Estimated Aggregate Amortization Based on Net Value of Intangible Assets

Estimated aggregate amortization, based on the net value of intangible assets at December 31, 2020, for each of the next five years and beyond is as follows (in thousands):


Year Ending December 31,
2021	$	2,978
2022	2,906
2023	2,807
2024	2,316
2025	2,306
2026 and beyond	6,796
	$	20,109

Goodwill (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying value of goodwill during the years ended December 31, 2020 and December 31, 2019 were as follows (in thousands):


Balance as of December 31, 2018	$	101
Goodwill resulting from business acquisition	10,512
Measurement period adjustment	(71)
Balance as of December 31, 2019	10,542
Goodwill resulting from business acquisitions	7,637
Foreign currency translation	(58)
Balance as of December 31, 2020	$	18,121

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following:


	December 31,
(in thousands)	2020		2019
Accrued compensation	$	9,103	$	6,416


Contingent consideration	225		1,000
Accrued professional fees	825		113
Accrued income tax	281		716
Accrued interest	42		—


Accrued royalties	456		365

Accrued liabilities-other	1,227		426


Total accrued liabilities	$	12,159	$	9,036

Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt consists of the following:


	Years ended December 31,
(in thousands)		2020		2019
Term Loan (net of debt issuance costs of $66, 2.48% at December 31, 2020)		$	12,434	$	—
Revolving Loan (2.48% at December 31, 2020)		7,550		—
		19,984		—
Less: Current portion of long-term debt obligations		(4,167)		—
Long-term debt obligations		$	15,817	$	—

Schedule of Maturities of Long-term Debt

Maturities on debt are as follows (in thousands):


Year Ending December 31,	Amount
2021	$	4,167
2022	4,167
2023	11,650
Total	$	19,984

Schedule of Interest Expense

Interest expense, net for the years ended December 31, 2020 and 2019 consisted of the following:


	Years ended December 31,
(in thousands)		2020		2019
Interest expense on Term Loans		$	26	$	8
Interest expense on Revolving Line of Credit		16		—
Amortization of debt issuance costs		2		6
Other interest expense		5		2
Interest income		(24)		—
Total interest expense, net		$	25	$	16

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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-Section 45
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-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

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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
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-Topic 942
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-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
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-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

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:


	Year Ended
(in thousands)	December 31, 2020		December 31, 2019
Operating lease costs	$	1,647	$	1,622
Variable rent costs	133		(147)
Total rent expense	$	1,780	$	1,475

Other information related to leases is as follows:


	Year Ended
(in thousands, except weighted-average data)	December 31, 2020			December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	48		$	46
Interest on lease liabilities	4			5
Total finance lease cost	$	52		$	51

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,647		$	1,622
Finance cash flows from finance leases	$	53		$	40
Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,740		$	—
Right-of-use assets obtained in exchange for new finance lease liabilities	$	247		$	15
Weighted-average remaining lease term (years) - operating leases	6.3			3.7
Weighted-average remaining lease term (years) - finance leases	4.9			2.1
Weighted-average discount rate - operating leases	5		%	7		%
Weighted-average discount rate - finance leases	2		%	7		%

Schedule of Future Minimum Lease Payments

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of December 31, 2020 (in thousands):


Year Ending December 31,	Operating Leases		Finance Leases
2021	$	2,953	$	53
2022	2,674		53
2023	2,390		53
2024	1,897		52
2025	1,226		48
2026 and beyond	3,882		—
Total future minimum lease payments	15,022		259
Less: Interest	2,551		15
Total lease liabilities	$	12,471	$	244

Current lease liability	$	2,223	$	48
Long-term lease liability	10,248		196
Total lease liabilities	$	12,471	$	244

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Activity of Stock Options


	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 at January 1, 2019	3,108,868	$0.61 - 6.55	$	2.26	$	3,670	1,986,740	$	1.81	$	3,314
Forfeited	(14,707)	$1.47 - 3.37	2.51
Exercised	(558,834)	$0.61 - 1.81	1.21
Granted	625,070	$3.21 - 7.37	3.63
Balance at December 31, 2019	3,160,397	$1.18 - 7.37	$	2.72	$	14,460	1,835,799	$	2.28	$	9,198
Forfeited	(108,515)	$1.27 - 7.59	3.66
Exercised	(792,466)	$1.21 - 4.43	2.80
Granted	70,000	$6.27 - 7.59	6.65
Balance at December 31, 2020	2,329,416	$1.18 - 7.59	$	2.76	$	16,574	1,408,119	$	2.26	$	10,734

(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.

Assumptions used to Estimate Fair Value of Option Granted

The fair value of each option granted is estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions:


	Years ended December 31,
	2020	2019
Risk-free interest rate range	0.7%	2.494%
Expected life of option-years	7	7
Expected stock price volatility	63%	67%


Expected dividend yield	—%	—%

Activity of Stock Option by Exercise Price Range


		Options Outstanding			Options Exercisable
	Range of Exercise Prices	Options Outstanding	Weighted Average Remaining Life in Years	Weighted Average Exercise Price	Options Exercisable	Weighted Average Remaining Life in Years	Weighted Average Exercise Price of Options Exercisable
Year ended December 31, 2019	$1.18 - 7.37	3,160,397	6.24	$2.72	1,835,799	4.30	$2.28
Year ended December 31, 2020	$1.18 - 7.59	2,329,416	6.04	$2.76	1,408,119	4.73	$2.26


(in thousands)	Total Intrinsic Value of Options Exercised		Total Fair Value of Options Vested
Year ended December 31, 2019	$	1,642	$	3,268
Year ended December 31, 2020	$	3,322	$	3,178

Activity of Restricted Stock

The following table summarizes the number of unvested shares underlying our restricted stock awards and RSUs and the value of our unvested restricted stock awards and RSUs in 2020 and 2019:


(in thousands, except share and weighted-average share data)	Number of Unvested Shares	Weighted Average Grant Date Fair Value		Aggregate Grant Date Fair Value of Unvested Shares
Balance at January 1, 2019	458,620	$	2.56	$	1,172
Granted	291,600	3.75		1,094
Vested	(210,624)	2.33		(491)
Forfeitures	(37,499)	2.96		(111)
Balance at December 31, 2019	502,097	$	3.31	$	1,664
Granted	149,302	6.48		967
Vested	(221,932)	3.19		(708)

Balance at December 31, 2020	429,467	$	4.48	$	1,923

Activity of Restricted Stock Units

The following is a summary of our stock unit activity under the Deferred Compensation Plan for 2020 and 2019:


(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, 2019	507,290	$	1.40	$	1,699
Granted	121,713	4.41


Balance, December 31, 2019	629,003	2.09		4,585
Granted	53,757	6.62

Issued	(47,377)	1.65
Balance, December 31, 2020	635,383	$	2.41	$	6,278

Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The details are listed in the table below for the years ended December 31, 2020 and 2019:


		Years ended December 31,
		2020						2019
(in thousands)		Lightwave		Luna Labs		Total		Lightwave		Luna Labs		Total
Total Revenue by Geographic Location
	United States	$	33,706	$	23,201	$	56,907	$	26,409	$	21,399	$	47,808
	Asia	16,181		4		16,185		13,669		—		13,669
	Europe	7,144		350		7,494		7,277		—		7,277
	Canada, Central and South America	2,084		11		2,095		1,432		—		1,432
	All Others	—		—		—		330		—		330
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Major Customer Type
	Sales to the U.S. government	$	8,196	$	21,111	$	29,307	$	8,223	$	19,757	$	27,980
	U.S. direct commercial sales and other	25,487		2,455		27,942		18,186		1,642		19,828
	Foreign commercial sales & other	25,432		—		25,432		22,708		—		22,708
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Contract Type
	Fixed-price contracts	$	56,266	$	13,457	$	69,723	$	45,995	$	11,792	$	57,787
	Cost-type contracts	2,849		10,109		12,958		3,122		9,607		12,729
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	50,347	$	2,007	$	52,354	$	41,768	$	1,362	$	43,130
	Goods/services transferred over time	8,768		21,559		30,327		7,349		20,037		27,386
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Total Revenue by Major Products/Services
	Technology development	$	7,211	$	21,559	$	28,770	$	5,987	$	20,037	$	26,024
	Test, measurement and sensing systems	50,881		—		50,881		41,788		—		41,788

	Other	1,023		2,007		3,030		1,342		1,362		2,704
	Total	$	59,115	$	23,566	$	82,681	$	49,117	$	21,399	$	70,516

Schedule of Components of Contract Balances

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


	December 31,
(in thousands)	2020		2019
Contract assets	$	7,517	$	3,208
Contract liabilities	(7,095)		(3,888)
Net contract assets/(liabilities)	$	422	$	(680)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

Income tax expense/(benefit) from continuing operations consisted of the following for the periods indicated:


	Years ended December 31,
(in thousands)	2020		2019
Current:
Federal	$	89	$	1,467
State	460		228
Foreign	27		—
	$	576	$	1,695
Deferred:
Federal	(70)		(2,849)
State	(161)		(500)
Foreign	$	3	$	—
	$	(228)	$	(3,349)
Income tax expense/(benefit)	$	348	$	(1,654)

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consist of the following components:


	Years ended December 31,
(in thousands)	2020		2019
Bad debt and inventory reserve	$	430	$	376
UNICAP	113		5
Deferred revenue	111		130
ASC842 Lease Accounting (DTA)	(2,610)		797
ASC842 Lease Accounting (DTL)	2,852		(545)
Depreciation and amortization	(3,361)		(2,042)
Net operating loss carryforwards	5,767		1,680
Accrued liabilities	679		594
Stock-based compensation	829		780
Total	$	4,810	$	1,775
Valuation allowance	(2,850)		(360)
Net deferred tax asset	$	1,960	$	1,415

Reconciliation of Income Tax Benefit (Expense)


	Years ended December 31,
	2020		2019
Income tax expense at federal statutory rate	21.00	%	21.00	%
Effect of foreign operations	0.23		—
State taxes, net of federal tax effects	3.99		(8.67)
Change in valuation allowance	3.44		(67.39)
Provision to return adjustments	(0.33)		7.26
Meals and entertainment	0.13		0.50
Other permanent differences	8.81		4.20
Equity compensation	(7.25)		(1.75)
Current year R&D credit	(10.60)		—
Prior year R&D credit	(17.87)		—
Reserve for uncertain tax positions	4.20		—
Other	1.10		—
Income tax expense/(benefit)	6.85	%	(44.85)	%

Summary of Unrecognized Tax Benefits

The following table summarizes the activity related to our gross unrecognized tax benefits:


	Years ended December 31,
(in thousands)	2020		2019
Unrecognized tax benefits, beginning of period	$	—	$	—
Increases related to current period tax positions	81		—
Increases related to prior period tax positions	130		—
Unrecognized tax benefits, end of period	$	211	$	—

Financial Information About Segments (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Information about Results of Operations for Each Segment


	Years ended December 31,
(in thousands)		2020		2019
Lightwave revenue		$	59,115	$	49,117
Luna Labs revenue		23,566		21,399
Total revenue		$	82,681	$	70,516
Lightwave operating income		$	4,914	$	2,261
Luna Labs operating income		69		1,055
Total operating income		$	4,983	$	3,316
Depreciation, Lightwave		$	984	$	697
Depreciation, Luna Labs		$	143	$	252
Amortization, Lightwave		$	1,714	$	1,486
Amortization, Luna Labs		$	129	$	68

Additional segment information is as follows:


	December 31,
(in thousands)	2020		2019
Total segment assets:
Lightwave	$	110,446	$	70,276
Luna Labs	20,556		16,248
Total	$	131,002	$	86,524
Property plant and equipment and intangible assets, Lightwave	$	40,995	$	23,201
Property plant and equipment and intangible assets, Luna Labs	$	543	$	1,001

Quarterly Results (unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The following table sets forth our unaudited historical revenues, operating (loss)/income and net income by quarter during 2020 and 2019.


	Three Months Ended
(in thousands, except share and per share data)	March 31, 2020		June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2019		June 30, 2019		September 30, 2019		December 31, 2019
Revenues:
Lightwave	$	11,554	$	12,933	$	15,350	$	19,278	$	9,518	$	12,523	$	13,088	$	13,988
Luna Labs	5,587		5,643		5,700		6,637		5,315		5,291		5,301		5,492
Total revenues	17,141		18,576		21,050		25,915		14,833		17,814		18,389		19,480
Gross margin	8,364		9,517		10,949		13,358		6,768		8,752		9,275		10,388
Operating income/(loss)	390		1,810		2,252		530		(897)		1,014		1,482		1,718
Net income/(loss) from continuing operations	320		1,369		3,102		(64)		1,126		841		1,230		2,146
Loss from discontinued operations, net of income tax of $464	(1,436)		—		—		—		—		—		—		—
Net (loss)/income	(1,116)		1,369		3,102		(64)		1,126		841		1,230		2,146
Net (loss)/income attributable to common stockholders	$	(1,116)	$	1,369	$	3,102	$	(64)	$	1,043	$	751	$	1,117	$	2,146
Net income per share from continuing operations:
Basic	$	0.01	$	0.04	$	0.10	$	—	$	0.04	$	0.03	$	0.04	$	0.07
Diluted	$	0.01	$	0.04	$	0.10	$	—	$	0.03	$	0.02	$	0.04	$	0.07
Net loss per share from discontinued operations:
Basic	$	(0.05)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Diluted	$	(0.04)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Net (loss)/income attributable to common stockholders:
Basic	$	(0.04)	$	0.04	$	0.10	$	—	$	0.04	$	0.03	$	0.04	$	0.07
Diluted	$	(0.03)	$	0.04	$	0.10	$	—	$	0.03	$	0.02	$	0.03	$	0.07
Weighted average shares:
Basic	30,380,345		30,589,249		30,809,896		30,895,980		28,039,080		28,246,840		28,291,297		30,159,322
Diluted	32,549,487		32,466,122		32,411,086		32,831,255		33,479,935		33,650,790		32,115,847		32,211,847

Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands, shares in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) plan shares	Dec. 31, 2019 USD ($) shares
Significant Accounting Policies [Line Items]
Allowance for uncollectible receivables	$ 886	$ 930
Cash in excess of FDIC insured limits	7,500	5,000
Research, development and engineering	$ 6,713	$ 7,496
Common stock equivalents included for diluted per share data (in shares) \| shares	1.9	3.2
Stock based compensation plan \| plan	2
Minimum
Significant Accounting Policies [Line Items]
Finite lived intangible asset, useful life	1 year
Maximum
Significant Accounting Policies [Line Items]
Finite lived intangible asset, useful life	15 years
U.S. Treasury Obligations
Significant Accounting Policies [Line Items]
Cash equivalents	$ 3,100	$ 19,800

Organization and Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2020
Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	3 years
Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	7 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	7 years
Software
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	3 years

Business Acquisitions - Additional Information (Details) $ in Thousands, £ in Millions					12 Months Ended
	Dec. 03, 2020 USD ($)	Dec. 03, 2020 GBP (£)	Oct. 29, 2020 USD ($)	Mar. 01, 2019 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Business Acquisition [Line Items]
Goodwill					$ 18,121	$ 10,542	$ 101
Amortization expense					1,800	1,600
Acquisition related expense					$ 2,204	1,027
Developed technology \| Maximum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					17.50%
Developed technology \| Minimum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					17.00%
Customer relationships \| Maximum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					17.50%
Customer relationships \| Minimum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					16.00%
Trade names and trademarks \| Maximum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					17.50%
Trade names and trademarks \| Minimum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					16.00%
Backlog
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets					16.50%
OptaSense (2020)
Business Acquisition [Line Items]
Aggregate consideration	$ 38,900	£ 29.0
Noncompete agreement term	2 years	2 years
Transitional services	6 months	6 months
Goodwill	$ 7,619
Income recognized since acquisition					$ 1,500
Revenue recognized since acquisition					900
Amortization expense					100
New Ride Technologies
Business Acquisition [Line Items]
Aggregate consideration			$ 600
Cash paid			400
Contingent consideration			200
Goodwill			20
Contingent consideration, high			$ 200
GP (2019)
Business Acquisition [Line Items]
Cash paid				$ 19,000
Contingent consideration				1,000
Goodwill				10,512
Cash paid at closing				17,100
Remaining purchase price placed in escrow				$ 1,900
Contingent liability, fair value					$ 1,000
Income recognized since acquisition						10,500
Revenue recognized since acquisition						1,400
Amortization expense						1,600
Acquisition costs, operating income						$ 900

Business Acquisitions - Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 03, 2020	Mar. 01, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Cash acquired	$ 5,200	$ 3,800
Goodwill	$ 18,121	$ 10,542			$ 101
OptaSense (2020)
Business Acquisition [Line Items]
Accounts receivable			$ 5,553
Contract assets			2,823
Inventory			11,483
Other current assets			1,026
Property and equipment			1,247
Identifiable intangible assets			11,263
Goodwill			7,619
Right of use asset			2,082
Other long-term assets			22
Accounts payable and accrued expenses			(4,089)
Contract liabilities			(3,259)
Other current liabilities			(747)
Long-term operating lease liability			(1,335)
Total purchase consideration			$ 33,688
GP (2019)
Business Acquisition [Line Items]
Accounts receivable				$ 1,521
Contract assets				0
Inventory				2,698
Other current assets				764
Property and equipment				286
Identifiable intangible assets				8,200
Goodwill				10,512
Right of use asset				0
Other long-term assets				0
Accounts payable and accrued expenses				(4,076)
Contract liabilities				0
Other current liabilities				0
Long-term operating lease liability				0
Total purchase consideration				$ 19,905

Business Acquisitions - Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives (Details) - USD ($) $ in Thousands	Oct. 15, 2018	Dec. 03, 2020	Mar. 01, 2019
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
GP (2019)
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets			$ 8,200
GP (2019) \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets			7,200
GP (2019) \| Trade names and trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets			400
GP (2019) \| Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets			0
GP (2019) \| Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets			$ 600
OptaSense (2020)
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		$ 11,263
OptaSense (2020) \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		7,379
OptaSense (2020) \| Trade names and trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		2,580
OptaSense (2020) \| Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		699
OptaSense (2020) \| Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		$ 605
Minimum \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	8 years
Minimum \| Trade names and trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
Minimum \| Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	5 years
Maximum \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	10 years
Maximum \| Trade names and trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	15 years
Maximum \| Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	15 years

Business Acquisitions - Pro Forma Consolidated Results of Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
GP (2019)
Acquired Finite-Lived Intangible Assets [Line Items]
Revenue		$ 72,577
Income from continuing operations		6,913
OptaSense (2020)
Acquired Finite-Lived Intangible Assets [Line Items]
Revenue	$ 103,971	101,390
Income from continuing operations	$ 1,364	$ 487

Accounts Receivable, net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Receivables [Abstract]
Billed	$ 25,418	$ 17,194
Other	419	5
Total, gross	25,837	17,199
Less: allowance for doubtful accounts	(886)	(930)
Accounts receivable, net	$ 24,951	$ 16,269

Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 11,547	$ 1,695
Work-in-process	1,425	1,008
Raw materials	10,625	7,591
Inventory	$ 23,597	$ 10,294

Property and Equipment, net - Components of Property and Equipment, net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Building	$ 0	$ 70
Equipment	4,844	9,564
Furniture and fixtures	353	685
Software	106	1,178
Leasehold improvements	2,416	5,288
Construction in process	185	0
Property, plant and equipment, gross, total	7,904	16,785
Less—accumulated depreciation	(4,596)	(13,319)
Property and equipment, net	$ 3,308	$ 3,466

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation	$ 1.1	$ 1.0

Intangible Assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 29,746	$ 17,921
Accumulated amortization	(9,637)	(7,727)
Intangible assets, net	20,109	10,194
Backlog
Finite-Lived Intangible Assets [Line Items]
In-process research and development	1,580	1,580
Patent costs
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets gross	5,702	5,291
Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets gross	17,344	9,800
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets gross	1,302	700
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets gross	$ 3,122	550
Backlog
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	3 years
Finite lived intangible assets gross	$ 696	$ 0
Minimum
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	1 year
Minimum \| Patent costs
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	1 year
Minimum \| Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	5 years
Minimum \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	5 years
Minimum \| Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	3 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	15 years
Maximum \| Patent costs
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	18 years
Maximum \| Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	10 years
Maximum \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	7 years
Maximum \| Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	15 years

Intangible Assets, net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1.8	$ 1.6

Intangible Assets, net - Estimated Aggregate Amortization (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2021	$ 2,978
2022	2,906
2023	2,807
2024	2,316
2025	2,306
2026 and beyond	6,796
Finite lived intangible assets, net	$ 20,109

Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
Goodwill (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Goodwill [Roll Forward]
Beginning Balance	$ 10,542	$ 101
Goodwill resulting from business acquisitions	7,637	10,512
Measurement period adjustment		(71)
Foreign currency translation	(58)
Ending Balance	$ 18,121	$ 10,542

Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued compensation	$ 9,103	$ 6,416
Contingent consideration	225	1,000
Accrued professional fees	825	113
Accrued income tax	281	716
Accrued interest	42	0
Accrued royalties	456	365
Accrued liabilities-other	1,227	426
Total accrued liabilities	$ 12,159	$ 9,036

Debt - Long Term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Total	$ 19,984	$ 0
Current portion of long-term debt obligations	(4,167)	0
Long-term debt obligations	15,817	0
Term Loan
Debt Instrument [Line Items]
Total	12,434	0
Net of debt issuance costs	$ 66
Debt instrument, stated percentage	2.48%
Revolving Loan
Debt Instrument [Line Items]
Total	$ 7,550	$ 0
Debt instrument, stated percentage	2.48%

Debt - Additional Information (Details)			1 Months Ended	12 Months Ended
Debt - Additional Information (Details)	Dec. 01, 2020 USD ($)	Oct. 10, 2019 USD ($)	May 31, 2019 USD ($)	Dec. 31, 2020 payment	Apr. 28, 2020 USD ($)
Unsecured Debt \| Payment Protection Plan
Debt Instrument [Line Items]
Debt, face amount					$ 4,500,000
Silicon Valley Bank
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,000,000.0
Silicon Valley Bank \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, commitment fee percentage		4.75%
Silicon Valley Bank \| Prime Rate \| Revolving Credit Facility
Debt Instrument [Line Items]
Variable basis rate		0.50%
Silicon Valley Bank \| Term Loan
Debt Instrument [Line Items]
Debt, face amount			$ 6,000,000.0
Silicon Valley Bank \| Term Loan \| Prime Rate
Debt Instrument [Line Items]
Variable basis rate			2.00%
PNC Bank Facility \| Term Loan
Debt Instrument [Line Items]
Number of quarterly payments \| payment				12
PNC Bank Facility \| Term Loan \| Loan Agreement
Debt Instrument [Line Items]
Debt, face amount	$ 12,500,000
PNC Bank Facility \| Term Loan \| LIBOR \| Minimum
Debt Instrument [Line Items]
Variable basis rate	1.75%
PNC Bank Facility \| Term Loan \| LIBOR \| Maximum
Debt Instrument [Line Items]
Variable basis rate	2.25%
PNC Bank Facility \| Revolving Loan
Debt Instrument [Line Items]
Line of credit facility, commitment fee percentage	0.20%
Termination notice				3 days
PNC Bank Facility \| Revolving Loan \| Loan Agreement
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 15,000,000.0
Draw on line of credit	$ 7,600,000
PNC Bank Facility \| Revolving Loan \| LIBOR \| Minimum
Debt Instrument [Line Items]
Variable basis rate	1.75%
PNC Bank Facility \| Revolving Loan \| LIBOR \| Maximum
Debt Instrument [Line Items]
Variable basis rate	2.25%
PNC Bank Facility \| Letter of Credit \| Loan Agreement
Debt Instrument [Line Items]
Debt, face amount	$ 3,000,000.0

Debt - Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
2021	$ 4,167
2022	4,167
2023	11,650
Total	$ 19,984	$ 0

Debt - Interest Expense (Details) - USD ($) $ in Thousands	12 Months Ended
Debt - Interest Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Amortization of debt issuance costs	$ 2	$ 6
Other interest expense	5	2
Interest income	(24)	0
Total interest expense, net	25	16
Term Loan
Debt Instrument [Line Items]
Interest expense on Revolving Line of Credit	26	8
Revolving Loan
Debt Instrument [Line Items]
Interest expense on Revolving Line of Credit	$ 16	$ 0

Leases - Additional Information (Details)	12 Months Ended
Leases - Additional Information (Details)	Dec. 31, 2020
Minimum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	1 year
Finance leases contract terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	5 years
Finance leases contract terms	4 years
Office Equipment
Lessee, Lease, Description [Line Items]
Useful life	5 years

Leases - Rent Expense (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Rent Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease costs	$ 1,647	$ 1,622
Variable rent costs	133	(147)
Total rent expense	$ 1,780	$ 1,475

Leases - Future Lease Payments (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Operating Leases
2021	$ 2,953,000
2022	2,674,000
2023	2,390,000
2024	1,897,000
2025	1,226,000
2026 and beyond	3,882,000
Total future minimum lease payments	15,022,000
Less: Interest	2,551,000
Total lease liabilities	12,471,000
Current lease liability	2,223,000	$ 1,283,000
Long-term lease liability	10,248,000	1,988,000
Finance Leases
2021	53,000
2022	53,000
2023	53,000
2024	52,000
2025	48,000
2026 and beyond	0
Total future minimum lease payments	259,000
Less: Interest	15,000
Total lease liabilities	244,000
Current lease liability	48,000	50,000
Long-term lease liability	$ 196,000	$ 23,000

Leases - Other Lease Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finance lease cost:
Finance lease ROU asset	$ 48	$ 46
Interest on lease liabilities	4	5
Total finance lease cost	52	51
Other information:
Operating cash flows from operating leases	1,647	1,622
Finance cash flows from finance leases	53	40
Right-of-use assets obtained in exchange for new operating lease liabilities	10,740	0
Right-of-use assets obtained in exchange for new finance lease liabilities	$ 247	$ 15
Weighted-average remaining lease term (years) - operating leases	6 years 3 months 18 days	3 years 8 months 12 days
Weighted-average remaining lease term (years) - finance leases	4 years 10 months 24 days	2 years 1 month 6 days
Weighted-average discount rate - operating leases	5.00%	7.00%
Weighted-average discount rate - finance leases	2.00%	7.00%

Stockholders' Equity - Additional Information (Details)

1 Months Ended

12 Months Ended

Apr. 30, 2016

Jan. 31, 2010

USD ($)

Dec. 31, 2020

USD ($)

installment

$ / shares

Dec. 31, 2019

USD ($)

$ / shares

Jul. 01, 2020

Dec. 31, 2018

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Stock based compensation expense | $

$ 2,100,000

$ 1,500,000

Share-based compensation expense | $

$ 200,000

Carilion Clinic

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Senior convertible promissory notes principal amount converted | $

$ 5,000,000.0

Accrued interest converted | $

$ 1,200,000

Percentage of dividend payable on series A convertible preferred stock

6.00%

Preferred stock liquidation preference value | $

$ 6,200,000

Carilion Clinic | Series A Convertible Preferred Stock

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Preferred stock issued in exchange of notes payable (in shares)

1,321,514

Stock Options

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Vesting period

4 years

Weighted average grant date fair value of options granted (in dollars per share) | $ / shares

$ 6.65

$ 3.63

Options outstanding, remaining contractual term

6 years

Weighted average remaining service period related to compensation recognition

2 years

Unamortized stock option expense to be recognized | $

$ 2,100,000

Restricted Stock

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Shares issued (in shares)

76,700

Share-based compensation vesting installments | installment

Share-based compensation, vested (in shares)

61,950

Share-based compensation, issuable upon vesting (in shares)

61,950

Share-based compensation, percentage

150.00%

Share-based compensation, revenue and operating Income (in shares)

41,300

Restricted Stock | Employees

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Shares issued (in shares)

138,650

Restricted Stock | Employees

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Shares vested (in shares)

137,997

Restricted Stock and Restricted Stock Units

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Weighted average remaining service period related to compensation recognition

1 year 8 months 12 days

Shares issued (in shares)

149,302

291,600

Share-based compensation, vested (in shares)

429,467

502,097

458,620

Shares vested (in shares)

221,932

210,624

Unamortized restricted stock and restricted stock units expense to be recognized | $

$ 1,200,000

Restricted Stock Units (RSUs) | Member of Board of Directors

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Vesting period

1 year

Shares issued (in shares)

10,652

11,600

Shares vested (in shares)

11,600

16,286

Restricted Stock Units (RSUs) | Employees

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Share-based compensation vesting installments | installment

Shares vested (in shares)

72,335

Employee Stock

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Shares authorized (in shares)

1,200,000

Withholding period

6 months

2016 Equity Incentive Plan

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Shares available for future grant (in shares)

3,500,000

Stock option contractual term

10 years

Deferred Compensation Plan | Restricted Stock Units (RSUs)

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Vesting period

1 year

Employee Director Compensation Plan | Restricted Stock Units (RSUs)

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Share-based compensation, vested (in shares)

24,855

Common Stock

Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]

Preferred stock to common stock conversion (in shares)

1,321,514

Shares of common stock dividends (in shares)

^[1]

(770,454)

[1]	The stock dividends payable in connection with the Series A Convertible Preferred Stock were issued at the request of Carilion. See Note 11 - Stockholders' Equity for more information.

Stockholders' Equity - Activity of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Options Outstanding, Number of Shares
Beginning balance (in shares)	3,160,397	3,108,868
Forfeited (in shares)	(108,515)	(14,707)
Exercised (in shares)	(792,466)	(558,834)
Granted (in shares)	70,000	625,070
Ending balance (in shares)	2,329,416	3,160,397	3,108,868
Price per Share Range
Outstanding, lower limit (in dollars per share)	$ 1.18	$ 1.18	$ 0.61
Outstanding, upper limit (in dollars per share)	7.59	7.37	6.55
Forfeited, lower limit (in dollars per share)	1.27	1.47
Forfeited, upper limit (in dollars per share)	7.59	3.37
Exercised, lower limit (in dollars per share)	1.21	0.61
Exercised, upper limit (in dollars per share)	4.43	1.81
Granted, lower limit (in dollars per share)	6.27	3.21
Granted, upper limit (in dollars per share)	7.59	7.37
Options Outstanding, Weighted Average Exercise Price
Beginning balance (in dollars per share)	2.72	2.26
Forfeited (in dollars per share)	3.66	2.51
Exercised (in dollars per share)	2.80	1.21
Granted (in dollars per share)	6.65	3.63
Ending balance (in dollars per share)	$ 2.76	$ 2.72	$ 2.26
Additional Disclosures
Options outstanding, aggregate intrinsic value	$ 16,574	$ 14,460	$ 3,670
Exercisable stock options (in shares)	1,408,119	1,835,799	1,986,740
Options exercisable, weighted average exercise price (in dollars per share)	$ 2.26	$ 2.28	$ 1.81
Options exercisable, aggregate intrinsic value	$ 10,734	$ 9,198	$ 3,314

Stockholders' Equity - Assumptions Used to Estimate Fair Value of Options Granted (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Risk-free interest rate range	0.70%	2.494%
Expected life of option-years	7 years	7 years
Expected stock price volatility	63.00%	67.00%
Expected dividend yield	0.00%	0.00%

Stockholders' Equity - Activity of Stock Option by Exercise Price Range (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	$ 1.18	$ 1.18	$ 0.61
Range of exercise prices, upper range (in dollars per share)	$ 7.59	$ 7.37	$ 6.55
Options outstanding (in shares)	2,329,416	3,160,397	3,108,868
Options outstanding, weighted average exercise price (in dollars per share)	$ 2.76	$ 2.72	$ 2.26
Options exercisable (in shares)	1,408,119	1,835,799	1,986,740
Weighted average exercise price of options exercisable (in dollars per share)	$ 2.26	$ 2.28	$ 1.81
Total Intrinsic Value of Options Exercised	$ 3,322	$ 1,642
Total Fair Value of Options Vested	$ 3,178	$ 3,268
Exercise Price Range One
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)		$ 1.18
Range of exercise prices, upper range (in dollars per share)		$ 7.37
Options outstanding (in shares)		3,160,397
Options outstanding, weighted average remaining life in years		6 years 2 months 26 days
Options outstanding, weighted average exercise price (in dollars per share)		$ 2.72
Options exercisable (in shares)		1,835,799
Options exercisable, weighted average remaining life in years		4 years 3 months 18 days
Weighted average exercise price of options exercisable (in dollars per share)		$ 2.28
Exercise Price Range Two
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	$ 1.18
Range of exercise prices, upper range (in dollars per share)	$ 7.59
Options outstanding (in shares)	2,329,416
Options outstanding, weighted average remaining life in years	6 years 14 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 2.76
Options exercisable (in shares)	1,408,119
Options exercisable, weighted average remaining life in years	4 years 8 months 23 days
Weighted average exercise price of options exercisable (in dollars per share)	$ 2.26

Stockholders' Equity - Activity of Restricted Stock Issuances (Details) - Restricted Stock and Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number of Unvested Shares
Beginning balance (in shares)	502,097	458,620
Granted (in shares)	149,302	291,600
Vested (in shares)	(221,932)	(210,624)
Forfeitures (in shares)		(37,499)
Ending balance (in shares)	429,467	502,097
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 3.31	$ 2.56
Granted (in dollars per share)	6.48	3.75
Vested (in dollars per share)	3.19	2.33
Forfeitures (in dollars per share)		2.96
Ending balance (in dollars per share)	$ 4.48	$ 3.31
Aggregate Grant Date Fair Value of Unvested Shares
Aggregate Grant Date Fair Value of Unvested Shares, Beginning balance	$ 1,664	$ 1,172
Granted	967	1,094
Vested	(708)	(491)
Forfeitures		(111)
Aggregate Grant Date Fair Value of Unvested Shares, Ending balance	$ 1,923	$ 1,664

Stockholders' Equity - Activity of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - Deferred Compensation Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number of Stock Units
Beginning balance (in shares)	629,003	507,290
Granted (in shares)	53,757	121,713
Issued (in shares)	(47,377)
Ending balance (in shares)	635,383	629,003
Weighted Average Grant Date Fair Value per Share
Beginning balance (in dollars per share)	$ 2.09	$ 1.40
Granted (in dollars per share)	6.62	4.41
Issued (in dollars per share)	1.65
Ending balance (in dollars per share)	$ 2.41	$ 2.09
Intrinsic Value Outstanding
Aggregate Grant Date Fair Value of Unvested Shares, Beginning balance	$ 4,585	$ 1,699
Aggregate Grant Date Fair Value of Unvested Shares, Ending balance	$ 6,278	$ 4,585

Stockholders' Equity - Share Repurchase Program (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Aug. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount of stock repurchased	$ 452,000	$ 2,220,000
Share Repurchase Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized share repurchase amount			$ 2,000,000.0
Purchase of treasury stock (in shares)	333,953
Amount of stock repurchased	$ 2,000,000.0

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Total revenues	$ 25,915	$ 21,050	$ 18,576	$ 17,141	$ 19,480	$ 18,389	$ 17,814	$ 14,833	$ 82,681	$ 70,516
Technology development
Disaggregation of Revenue [Line Items]
Total revenues									28,770	26,024
Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues									50,881	41,788
Other
Disaggregation of Revenue [Line Items]
Total revenues									3,030	2,704
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues									52,354	43,130
Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues									30,327	27,386
Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues									69,723	57,787
Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues									12,958	12,729
Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues									29,307	27,980
U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues									27,942	19,828
Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues									25,432	22,708
United States
Disaggregation of Revenue [Line Items]
Total revenues									56,907	47,808
Asia
Disaggregation of Revenue [Line Items]
Total revenues									16,185	13,669
Europe
Disaggregation of Revenue [Line Items]
Total revenues									7,494	7,277
Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues									2,095	1,432
All Others
Disaggregation of Revenue [Line Items]
Total revenues									0	330
Lightwave
Disaggregation of Revenue [Line Items]
Total revenues									59,115	49,117
Lightwave \| Technology development
Disaggregation of Revenue [Line Items]
Total revenues									7,211	5,987
Lightwave \| Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues									50,881	41,788
Lightwave \| Other
Disaggregation of Revenue [Line Items]
Total revenues									1,023	1,342
Lightwave \| Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues									50,347	41,768
Lightwave \| Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues									8,768	7,349
Lightwave \| Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues									56,266	45,995
Lightwave \| Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues									2,849	3,122
Lightwave \| Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues									8,196	8,223
Lightwave \| U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues									25,487	18,186
Lightwave \| Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues									25,432	22,708
Lightwave \| United States
Disaggregation of Revenue [Line Items]
Total revenues									33,706	26,409
Lightwave \| Asia
Disaggregation of Revenue [Line Items]
Total revenues									16,181	13,669
Lightwave \| Europe
Disaggregation of Revenue [Line Items]
Total revenues									7,144	7,277
Lightwave \| Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues									2,084	1,432
Lightwave \| All Others
Disaggregation of Revenue [Line Items]
Total revenues									0	330
Luna Labs
Disaggregation of Revenue [Line Items]
Total revenues									23,566	21,399
Luna Labs \| Technology development
Disaggregation of Revenue [Line Items]
Total revenues									21,559	20,037
Luna Labs \| Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Luna Labs \| Other
Disaggregation of Revenue [Line Items]
Total revenues									2,007	1,362
Luna Labs \| Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues									2,007	1,362
Luna Labs \| Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues									21,559	20,037
Luna Labs \| Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues									13,457	11,792
Luna Labs \| Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues									10,109	9,607
Luna Labs \| Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues									21,111	19,757
Luna Labs \| U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues									2,455	1,642
Luna Labs \| Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Luna Labs \| United States
Disaggregation of Revenue [Line Items]
Total revenues									23,201	21,399
Luna Labs \| Asia
Disaggregation of Revenue [Line Items]
Total revenues									4	0
Luna Labs \| Europe
Disaggregation of Revenue [Line Items]
Total revenues									350	0
Luna Labs \| Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues									11	0
Luna Labs \| All Others
Disaggregation of Revenue [Line Items]
Total revenues									$ 0	$ 0

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Increase in net contract assets (liabilities)	$ (1,100)
Contract assets	7,517	$ 3,208
Contract liabilities	(7,095)	(3,888)
Net contract assets/(liabilities)	$ 422	$ (680)

Revenue Recognition - Performance Obligations (Details) $ in Millions	Dec. 31, 2020 USD ($)
Lightwave
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation amount	$ 35.9
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	77.00%
Lightwave \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	1 year
Remaining performance obligation percentage	15.00%
Luna Labs
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation amount	$ 19.0
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	70.00%
Luna Labs \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	1 year
Remaining performance obligation percentage	27.00%

Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ 89	$ 1,467
State	460	228
Foreign	27	0
Current tax asset	576	1,695
Deferred:
Federal	(70)	(2,849)
State	(161)	(500)
Foreign	3	0
Deferred tax asset	(228)	(3,349)
Income tax expense/(benefit)	$ 348	$ (1,654)

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Bad debt and inventory reserve	$ 430	$ 376
UNICAP	113	5
Deferred revenue	111	130
ASC842 Lease Accounting (DTA)	(2,610)	797
ASC842 Lease Accounting (DTL)	2,852	(545)
Depreciation and amortization	(3,361)	(2,042)
Net operating loss carryforwards	5,767	1,680
Accrued liabilities	679	594
Stock-based compensation	829	780
Total	4,810	1,775
Valuation allowance	(2,850)	(360)
Net deferred tax asset	$ 1,960	$ 1,415

Income Taxes - Reconciliation of Income Tax (Benefit) Expense (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax expense at federal statutory rate	21.00%	21.00%
Effect of foreign operations	0.23%	0.00%
State taxes, net of federal tax effects	3.99%	(8.67%)
Change in valuation allowance	3.44%	(67.39%)
Provision to return adjustments	(0.33%)	7.26%
Meals and entertainment	0.13%	0.50%
Other permanent differences	8.81%	4.20%
Equity compensation	(7.25%)	(1.75%)
Current year R&D credit	(10.60%)	0.00%
Prior year R&D credit	(17.87%)	0.00%
Reserve for uncertain tax positions	4.20%	0.00%
Other	1.10%	0.00%
Income tax expense/(benefit)	6.85%	(44.85%)

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Taxes [Line Items]
Valuation allowance	$ 2,850	$ 360
Unrecognized tax benefits	211	$ 0	$ 0
API
Income Taxes [Line Items]
Net operating loss carryforwards	$ 5,200

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning of period	$ 0	$ 0
Increases related to current period tax positions	81	0
Increases related to prior period tax positions	130	0
Unrecognized tax benefits, end of period	$ 211	$ 0

Commitments and Contingencies - Additional Information (Details) $ in Thousands		1 Months Ended	3 Months Ended								12 Months Ended
	Jul. 31, 2018 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) purchase_order	Sep. 30, 2020 USD ($) purchase_order	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Aug. 31, 2017 USD ($)
Commitments and Contingencies Disclosure [Line Items]
Loss on sale of discontinued operations			$ 0	$ 0	$ 0	$ 1,436	$ 0	$ 0	$ 0	$ 0
Number of non-cancelable purchase orders executed \| purchase_order			1	1
Tunable Lasers
Commitments and Contingencies Disclosure [Line Items]
Non-cancelable purchase order delivery period (in months)								12 months
Non-cancelable purchase order commitment								$ 1,600					$ 1,400
Non-cancelable purchase order commitment remained			$ 2,900								$ 2,900
Disposed of by Sale \| HSOR
Commitments and Contingencies Disclosure [Line Items]
Amount of the escrow balance received		$ 600
Loss on sale of discontinued operations											$ 1,400
Disposed of by Sale \| HSOR \| Macom
Commitments and Contingencies Disclosure [Line Items]
Amount of the escrow balance received		$ 1,900
Disposed of by Sale \| HSOR \| Macom
Commitments and Contingencies Disclosure [Line Items]
Escrow deposits related to indemnity claims							$ 2,500					$ 2,500		$ 4,000
Amount of the escrow balance received												$ 1,500
Disposed of by Sale \| Opto
Commitments and Contingencies Disclosure [Line Items]
Contingent consideration	$ 1,000
Non-cancelable purchase order delivery period (in months)	18 months

Employee Profit Sharing Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Percentage of employer's matching contributions to a defined contribution plan that vests	30.00%
Percentage of employees' gross pay for which employer contributes a matching contribution	10.00%
Contribution to employee compensation plan by employer	$ 0.5	$ 0.4

- Definition

Amount of contribution received by defined benefit plan from employer which increases plan assets.

+ References + Details

Relationship with Major Customers (Details) - Sales to the U.S. government	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Consolidated Revenues
Concentration Risk [Line Items]
Concentration percentage	35.00%	40.00%
Billed Trade Receivables
Concentration Risk [Line Items]
Concentration percentage	14.00%	12.00%

Financial Information About Segments - Additional Information (Details) - segment	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Concentration Risk [Line Items]
Number of operating segments	2
Number of reportable segments	2	2
Revenues \| Geographic Concentration Risk \| Outside of the United States
Concentration Risk [Line Items]
Percentage of total revenues by customer	31.00%	32.00%
Revenues \| Geographic Concentration Risk \| China
Concentration Risk [Line Items]
Percentage of total revenues by customer		11.00%

Financial Information About Segments - Information About Results of Operations for Each Segment (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Total revenues	$ 25,915	$ 21,050	$ 18,576	$ 17,141	$ 19,480	$ 18,389	$ 17,814	$ 14,833	$ 82,681	$ 70,516
Operating income/(loss)	$ 530	$ 2,252	$ 1,810	$ 390	$ 1,718	$ 1,482	$ 1,014	$ (897)	4,983	3,316
Depreciation									1,100	1,000
Amortization									1,800	1,600
Lightwave
Segment Reporting Information [Line Items]
Total revenues									59,115	49,117
Operating income/(loss)									4,914	2,261
Depreciation									984	697
Amortization									1,714	1,486
Luna Labs
Segment Reporting Information [Line Items]
Total revenues									23,566	21,399
Operating income/(loss)									69	1,055
Depreciation									143	252
Amortization									$ 129	$ 68

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Financial Information About Segments - Segment Information (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 131,002	$ 86,524
Property plant and equipment, and intangible assets	3,308	3,466
Lightwave
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	110,446	70,276
Property plant and equipment, and intangible assets	40,995	23,201
Luna Labs
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	20,556	16,248
Property plant and equipment, and intangible assets	$ 543	$ 1,001

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Quarterly Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Revenues:
Total revenues	$ 25,915	$ 21,050	$ 18,576	$ 17,141	$ 19,480	$ 18,389	$ 17,814	$ 14,833	$ 82,681	$ 70,516
Gross margin	13,358	10,949	9,517	8,364	10,388	9,275	8,752	6,768	42,188	35,183
Operating income/(loss)	530	2,252	1,810	390	1,718	1,482	1,014	(897)	4,983	3,316
Net income/(loss) from continuing operations	(64)	3,102	1,369	320	2,146	1,230	841	1,126
Loss from discontinued operations, net of income tax of $464	0	0	0	(1,436)	0	0	0	0
Net income	(64)	3,102	1,369	(1,116)	2,146	1,230	841	1,126	3,291	5,343
Net (loss)/income attributable to common stockholders	$ (64)	$ 3,102	$ 1,369	$ (1,116)	$ 2,146	$ 1,117	$ 751	$ 1,043	$ 3,291	$ 5,057
Net income per share from continuing operations:
Basic (in dollars per share)	$ 0	$ 0.10	$ 0.04	$ 0.01	$ 0.07	$ 0.04	$ 0.03	$ 0.04	$ 0.15	$ 0.19
Diluted (in dollars per share)	0	0.10	0.04	0.01	0.07	0.04	0.02	0.03	0.15	0.17
Net loss per share from discontinued operations:
Basic (in dollars per share)	0	0	0	(0.05)	0	0	0	0	(0.05)	0
Diluted (in dollars per share)	0	0	0	(0.04)	0	0	0	0	(0.04)	0
Net (loss)/income attributable to common stockholders:
Basic (in dollars per share)	0	0.10	0.04	(0.04)	0.07	0.04	0.03	0.04	0.11	0.18
Diluted (in dollars per share)	$ 0	$ 0.10	$ 0.04	$ (0.03)	$ 0.07	$ 0.03	$ 0.02	$ 0.03	$ 0.10	$ 0.16
Weighted average shares:
Basic (in shares)	30,895,980	30,809,896	30,589,249	30,380,345	30,159,322	28,291,297	28,246,840	28,039,080	30,669,874	28,688,867
Diluted (in shares)	32,831,255	32,411,086	32,466,122	32,549,487	32,211,847	32,115,847	33,650,790	33,479,935	32,578,757	31,840,584
Tax effect									$ 464
Lightwave
Revenues:
Total revenues	$ 19,278	$ 15,350	$ 12,933	$ 11,554	$ 13,988	$ 13,088	$ 12,523	$ 9,518
Luna Labs
Revenues:
Total revenues	$ 6,637	$ 5,700	$ 5,643	$ 5,587	$ 5,492	$ 5,301	$ 5,291	$ 5,315

Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of Period	$ 1,290	$ 3,553
Additions	2,977	645
Deductions	(531)	(2,908)
Balance at end of period	3,736	1,290
Deferred tax valuation allowance
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of Period	360	3,268
Additions	2,850	0
Deductions	(360)	(2,908)
Balance at end of period	2,850	360
Allowances for doubtful accounts
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of Period	930	285
Additions	127	645
Deductions	(171)	0
Balance at end of period	$ 886	$ 930