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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2019	Mar. 11, 2020	Jun. 28, 2019
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Registrant Name	LUNA INNOVATIONS INC
Entity Central Index Key	0001239819
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,391,879
Entity Public Float			$ 100.4

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 25,005,917	$ 42,460,267
Accounts receivable, net	16,268,645	13,037,068
Receivable from sale of HSOR business	2,501,386	2,500,000
Contract assets	2,758,946	2,422,495
Inventory, net	10,294,431	6,873,742
Prepaid expenses and other current assets	1,286,968	935,185
Total current assets	58,116,293	68,228,757
Property and equipment, net	3,465,612	3,627,886
Intangible assets, net	10,194,477	3,302,270
Goodwill	10,541,676	101,008
Long term contract assets	449,260	336,820
Other assets	2,341,179	1,995
Deferred tax asset	1,415,563	0
Total assets	86,524,060	75,598,736
Current liabilities:
Current portion of long-term debt obligations	0	619,315
Current portion of capital lease obligations		40,586
Accounts payable	2,786,825	2,395,984
Accrued liabilities	10,369,545	6,597,458
Contract liabilities	3,887,685	2,486,111
Total current liabilities	17,044,055	12,139,454
Long-term portion of deferred rent		1,035,974
Other long-term liabilities	2,011,487
Long-term capital lease obligations		68,978
Total liabilities	19,055,542	13,244,406
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, par value $0.001, 1,321,514 shares authorized, 0 and 1,321,514 shares issued and outstanding at December 31, 2019 and 2018, respectively	0	1,322
Common stock, par value $0.001, 100,000,000 shares authorized, 31,788,896 and 29,209,506 shares issued, 30,149,105 and 27,956,401 shares outstanding at December 31, 2019 and 2018, respectively	31,849	30,120
Treasury stock at cost, 1,639,791 and 1,253,105 shares at December 31, 2019 and 2018, respectively	(4,337,107)	(2,116,640)
Additional paid-in capital	88,021,903	85,744,750
Accumulated deficit	(16,248,127)	(21,305,222)
Total stockholders’ equity	67,468,518	62,354,330
Total liabilities and stockholders’ equity	$ 86,524,060	$ 75,598,736

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock authorized (in shares)	1,321,514	1,321,514
Preferred stock issued (in shares)	0	1,321,514
Preferred stock outstanding (in shares)	0	1,321,514
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	100,000,000	100,000,000
Common stock issued (in shares)	31,788,896	29,209,506
Common stock outstanding (in shares)	30,149,105	27,956,401
Treasury stock (in shares)	1,639,791	1,253,105

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Total revenues	$ 70,515,715	$ 42,917,245
Cost of revenues:
Total cost of revenues	35,333,333	23,479,345
Gross profit	35,182,382	19,437,900
Operating expense:
Selling, general and administrative	24,371,349	14,794,205
Research, development and engineering	7,496,012	3,766,160
Total operating expense	31,867,361	18,560,365
Operating income	3,315,021	877,535
Other income/(expense):
Other expense, net	(4,504)	(17,143)
Investment income	393,556	549,580
Interest expense, net	(15,878)	(124,344)
Total other income	373,174	408,093
Income from continuing operations before income taxes	3,688,195	1,285,628
Income tax benefit/(expense)	1,654,350	(47,818)
Net income from continuing operations	5,342,545	1,237,810
Operating income from discontinued operations, net of income tax expenses ($183,921)		1,170,634
Gain on sale, net of income tax expenses ($1,572,244)	0	8,595,798
Net income from discontinued operations	0	9,766,431
Net income	5,342,545	11,004,241
Less: Preferred stock dividend	285,450	257,302
Net income attributable to common stockholders	$ 5,057,095	$ 10,746,939
Net income per share from continuing operations:
Basic (in dollars per share)	$ 0.19	$ 0.04
Diluted (in dollars per share)	0.17	0.04
Net income per share from discontinued operations:
Basic (in dollars per share)	0.00	0.35
Diluted (in dollars per share)	0.00	0.30
Net income per share attributable to common stockholders:
Basic (in dollars per share)	0.18	0.39
Diluted (in dollars per share)	$ 0.16	$ 0.33
Weighted average shares:
Basic (in shares)	28,688,867	27,596,401
Diluted (in shares)	31,840,584	32,452,228
Products and licensing
Cost of revenues:
Total cost of revenues	$ 16,684,172	$ 8,078,870
Technology development
Cost of revenues:
Total cost of revenues	$ 18,649,161	$ 15,400,475

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical)	Dec. 31, 2018 USD ($)
Income Statement [Abstract]
Allocated tax expense	$ 183,921
Tax effect on gain from sale of discontinued operations	$ 1,572,244

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

Total

Preferred Stock

Common Stock

Treasury Stock

Additional Paid in Capital

Accumulated Deficit

Beginning balance (in shares) at Dec. 31, 2017

1,321,514

27,283,918

(1,070,904)

Beginning balance at Dec. 31, 2017

$ 49,891,809

$ 1,322

$ 29,186

$ (1,649,746)

$ 83,563,208

$ (32,052,161)

Increase (Decrease) in Stockholders' Equity

Exercise of stock options and warrants (in shares)

442,425

Exercise of stock options and warrants

1,097,033

$ 441

1,096,592

Stock-based compensation (in shares)

282,394

Stock-based compensation

628,139

$ 282

627,857

Non cash compensation (in shares)

129,865

Non-cash compensation

200,002

$ 131

199,871

Stock dividends

^[1]

$ 80

257,222

(257,302)

Purchase of treasury stock (in shares)

(182,201)

182,201

Purchase of treasury stock

(466,894)

$ (466,894)

Net income

11,004,241

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

1,321,514

27,956,401

(1,253,105)

Ending balance at Dec. 31, 2018

62,354,330

$ 1,322

$ 30,120

$ (2,116,640)

85,744,750

(21,305,222)

Increase (Decrease) in Stockholders' Equity

Exercise of stock options and warrants (in shares)

487,802

Exercise of stock options and warrants

447,954

$ 488

447,466

Stock-based compensation (in shares)

16,286

Stock-based compensation

1,544,156

$ 16

1,544,140

Stock dividends (in shares)

^[1]

770,454

Stock dividends

^[1]

$ 60

285,390

(285,450)

Preferred stock to common stock conversion (in shares)

(1,321,514)

1,321,514

Preferred stock to common stock conversion

$ (1,322)

$ 1,322

Forfeitures of restricted stock grants (in shares)

(16,666)

Forfeitures of restricted stock grants

$ (157)

157

Purchase of treasury stock (in shares)

(386,686)

386,686

Purchase of treasury stock

(2,220,467)

$ (2,220,467)

Net income

5,342,545

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

30,149,105

(1,639,791)

Ending balance at Dec. 31, 2019

$ 67,468,518

$ 0

$ 31,849

$ (4,337,107)

$ 88,021,903

$ (16,248,127)

[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 ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Cash flows provided by/(used in) operating activities:
Net income	$ 5,342,545	$ 11,004,241
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization	2,503,291	1,218,559
Stock-based compensation	1,544,156	627,856
Loss on disposal of fixed assets	0	(1,000)
Gain on sale of discontinued operations, net of income taxes	0	(8,595,798)
Tax benefit from release of valuation allowance	(3,349,032)	0
Bad debt	538,298	6,000
Changes in operating assets and liabilities:
Accounts receivable	(2,248,925)	(6,240,377)
Contract assets	(448,891)	(761,714)
Inventory	(722,690)	(967,797)
Other assets	(242,112)	1,849,629
Other long-term assets	44,976	0
Accounts payable and accrued expenses	591,585	(461,927)
Contract liabilities	1,245,000	(986,498)
Net cash provided by/(used in) operating activities	4,798,201	(3,308,826)
Cash flows (used in)/provided by investing activities:
Acquisition of property and equipment	(540,635)	(386,890)
Proceeds from sale of property and equipment	0	1,000
Intangible property costs	(270,106)	(374,766)
Acquisition of Micron Optics, net	0	(5,001,750)
Acquisition of General Photonics Corporation, net	(19,004,250)	0
Proceeds from sale of discontinued operations, net	0	15,799,529
Net cash (used in)/provided by investing activities	(19,814,991)	10,037,123
Cash flows used in financing activities:
Payments on debt obligations	(625,000)	(1,833,333)
Payments on finance lease obligations	(40,047)	(46,653)
Purchase of treasury stock	(2,220,467)	(466,894)
Proceeds from the exercise of options and warrants	447,954	1,097,316
Net cash used in financing activities	(2,437,560)	(1,249,564)
Net change in cash and cash equivalents	(17,454,350)	5,478,733
Cash and cash equivalents—beginning of period	42,460,267	36,981,534
Cash and cash equivalents—end of period	25,005,917	42,460,267
Supplemental disclosure of cash flow information
Cash paid for interest	18,359	117,616
Cash paid for income taxes	1,160,276	1,828,203
Non-cash investing and financing activity:
Contingent liability for business combination	900,000	0
Common stock issued pursuant to restricted stock vesting	0	200,202
Dividend on preferred stock	$ 285,450	$ 257,302

Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

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 products for industries utilizing composite and other advanced materials, such as the automotive, aerospace, energy and infrastructure industries.

Consolidation Policy

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

Use of Estimates

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

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

Revenue Recognition

Products and Licensing 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 Products and Licensing 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.

Technology Development 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 and $0.3 million at each of December 31, 2019 and 2018, respectively.

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. Cash equivalents at December 31, 2019 and 2018 included $19.8 million and $38.3 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, 2019 and 2018, we had approximately $5.0 million and $4.0 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 Silicon Valley Bank ("SVB") debt facility including its interest rate of prime plus 1%, to be at market based upon similar instruments that would be available to us.

Property and Equipment, net

Property and equipment 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 merger with Advanced Photonix, Inc. ("API"), Micron Optics, Inc. ("MOI"), 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.

Based on our annual goodwill impairment analysis we performed in the fourth quarter of 2019, the fair value of our reporting units more likely than not exceed the carrying values.

Research, Development and Engineering

Research, development and engineering expense not related to contract performance are expensed as incurred. We expensed $7.5 million and $3.8 million of non-contract related research, development and engineering expense for the year ended December 31, 2019 and 2018, 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 3.2 million and 4.9 million common stock equivalents are included for the diluted per share data for the year ended December 31, 2019 and 2018, respectively. Accrued stock dividends and stock options are included in our common stock equivalents for the year ended December 31, 2019, while preferred stock is also included for the year ended December 31, 2018.

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.

Advertising

We expense the cost of advertising as incurred. Advertising expenses were $0.1 million for each of the years ended December 31, 2019 and 2018.

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, 51% or greater, 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.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued a new standard related to Leases, Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) and subsequent amendments, based on previously defined GAAP, and requires lessees to recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet for those leases classified as operating leases for greater transparency. We, using a modified retrospective adoption approach, are required to recognize and measure leases existing at the beginning of the adoption period, with certain practical expedients available.

We adopted the standard effective January 1, 2019. The standard allows a number of optional practical expedients to use for transition. We chose the certain practical expedients allowed under the transition guidance which permitted us to not to reassess any existing or expired contracts to determine if they contain embedded leases, to not reassess our lease classification on existing leases, to account for lease and non-lease components as a single lease component for equipment leases, and whether initial direct costs previously capitalized would qualify for capitalization under FASB ASC 842. The new standard also provides practical expedients and recognition exemptions for an entity's ongoing accounting policy elections. We have elected the short-term lease recognition for all leases that qualify, which means that we do not recognize a ROU asset and lease liability for any lease with a term of twelve months or less.

The most significant impact of adopting the standard was the recognition of ROU assets and lease liabilities for operating leases on our consolidated balance sheet but it did not have an impact on our consolidated statements of operations or consolidated statements of cash flows. Upon the adoption of the new lease standard on January 1, 2019, we recorded the following adjustments:



	Balance at		Adjustment for			Adjusted balance at
	December 31, 2018		ASC 842			January 1, 2019
Assets:
Property and equipment, net	$	3,627,886	$	(90,494	)	$	3,537,392
Other assets, net	1,995		3,536,133			3,538,128

Liabilities:
Accrued liabilities	6,597,458		1,242,669			7,840,127
Current portion of capital lease obligations	40,586		(40,586		)	—
Long-term deferred rent	1,035,974		(1,035,974		)	—
Long-term operating lease liability	—		3,271,705			3,271,705
Long-term capital lease obligations	68,978		(68,978		)	—
Long-term finance lease liability	—		76,803			76,803

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. The ASU requires companies to measure credit losses by using a methodology that reflects the expected credit losses based on historical information current economic conditions, and reasonable and supportable information. This standard was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We do not expect the adoption of ASU 2016-13 to have a significant impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04: Simplifying the Test for Goodwill Impairment,” which simplifies the test for goodwill impairment. The guidance is effective for us beginning in the first quarter of fiscal year 2020. Early adoption is permitted for interim or annual goodwill impairments tests after January 1, 2017. We have assessed the impact of adopting ASU 2017-04 and the adoption on January 1, 2020 should not have a significant impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in ASC 820 by adding, changing, or removing certain disclosures. The ASU applies to all entities that are required under this guidance to provide disclosures about recurring or nonrecurring fair value measurements. These amendments are effective for us beginning in the first quarter of fiscal year 2020. Early adoption is permitted. We have assessed the impact of adopting ASU 2018-13 and the adoption on January 1, 2020 should 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. The guidance is effective for us beginning in the first quarter of fiscal year 2020. Early adoption is permitted. We have assessed the impact of adopting ASU 2018-15 and the adoption on January 1, 2020 should not 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. Early adoption is permitted. We do not expect the adoption of ASU 2019-12 will have a significant impact on our consolidated financial statements.

Business Acquisitions

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Business Acquisitions

Micron Optics, Inc.

On October 15, 2018, we acquired substantially all of the assets, other than cash, of the United States operations of Micron Optics, Inc. ("MOI") for cash consideration of $5.5 million. For the year ended December 31, 2019, we recognized revenue of $10.8 million and operating income of $1.8 million associated with the acquired operations of MOI. For the period from the closing of the MOI acquisition through December 31, 2018, we recognized revenue of $2.6 million and operating income of $1.1 million.

General Photonics Corporation

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

For the 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. We have completed our allocation of the purchase consideration for the MOI and GP acquisitions.

The following table summarizes the allocation of the purchase consideration of each acquisition:



	MOI			GP
Accounts receivable	$	1,742,693		$	1,520,950
Inventory	1,435,606			2,698,000
Other current assets	69,951			763,873
Property and equipment	996,460			286,000
Identifiable intangible assets	1,650,000			8,200,000
Goodwill	29,760			10,511,916
Accounts payable and accrued expenses	(379,737		)	(4,076,489		)
Total purchase consideration	$	5,544,733		$	19,904,250

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



	Estimated	Estimated Fair Value
	Useful Life	MOI		GP
Developed technology	5 - 8 years	$	1,200,000	$	7,200,000
In-process research and development	7 years	200,000		—
Trade names and trademarks	3 years	150,000		400,000
Customer base	7 - 15 years	100,000		600,000
		$	1,650,000	$	8,200,000

Developed technologies acquired primarily consist of MOI's technologies related to fiber optic sensing instruments, modules, and components and GP's technologies relating to the measurement and control of the polarization of light. The developed technologies were valued using the "multi-period excess earnings" method, under the income approach. The multi-period excess earnings method reflects the present value of the projected cash flows that are expected by the developed technologies less charges representing the contribution of other assets to those cash flows. Discount rates of 24.5% and 17% were used to discount these cash flows of MOI and GP, respectively, to present value.

In-process research and development represents the fair value of an incomplete MOI research and development project that had not reached technological feasibility as of the closing date of the acquisition. In the fourth quarter of 2019, the fair value of this project at the closing date of the acquisition will begin being amortized following the project's completion. The fair value of in process research and development was determined using the multi-period excess earnings method. A discount rate of 29.5% was used to discount these cash flows to the present value.

Customer base represents the fair value of projected cash flows that will be derived from the sale of products to existing customers of MOI and GP as of the respective closing dates of their acquisitions. Customer relationships were valued using the "distributor" method, under the income approach. Under this premise, the margin of a distributor within the industry is deemed to be the margin attributable to customer relationships. This isolates the cash flows attributable to the customer relationships for which a market participant would be willing to pay. Discount rates of 24.5% and 16% were used to discount these cash flows of MOI and GP, respectively, to present value.

Trade names and trademarks are considered a type of guarantee of a certain level of quality or performance represented by the MOI and GP brands. Trade names and trademarks were valued using the "relief from royalty" method of the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of this asset. Discount rates of 17% and 16% were used to discount these cash flows of MOI and GP, respectively, to the present value.

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

Pro forma consolidated results of operations

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions of MOI and GP had been completed on January 1, 2018. The pro forma information includes adjustments to depreciation expense for property and equipment acquired 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 and excluded from pro forma income from continuing operations were $1.0 million for the year ended December 31, 2019. There were no transaction-related expenses associated with the acquisition for the year ended December 31, 2018. The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations or the combined business had the acquisitions of MOI and GP occurred on January 1, 2018, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below.



	Years Ended December 31,
	2019		2018
	(unaudited)		(unaudited)
Revenue	$	72,576,902	$	60,249,896

Income from continuing operations	$	6,912,802	$	1,559,008

Accounts Receivable, net

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Accounts Receivable, net

Accounts receivable, net consist of the following:



	December 31,
	2019			2018
Billed	$	17,193,742		$	13,289,790
Other	5,182			31,361
	17,198,924			13,321,151
Less: allowance for doubtful accounts	(930,279		)	(284,083		)
Accounts receivable, net	$	16,268,645		$	13,037,068

Intangible Assets, Net

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible Assets, net

Intangible assets, net consist of the following:



		December 31,
	Estimated Life	2019			2018
Patent costs	1 - 18 years	$	5,291,245		$	4,991,460
Developed technology	5 years	9,800,000			2,600,000
In-process research and development	N/A	1,580,000			200,000
Customer base	7 years	700,000			100,000
Trade names	3 years	550,000			150,000
		17,921,245			8,041,460
Accumulated amortization		(7,726,768		)	(4,739,190		)
Intangible assets, net		$	10,194,477		$	3,302,270

Amortization for the years ended December 31, 2019 and 2018 was approximately $1.6 million and $0.4 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, 2019, for each of the next five years and beyond is as follows:



Year Ending December 31,
2020	$	1,640,851
2021	1,660,112
2022	1,509,418
2023	1,437,195
2024	1,247,195
2025 and beyond	2,699,706
	$	10,194,477

We did not recognize any intangible asset impairment charges during the years ended December 31, 2019 or 2018.

Property and Equipment, Net

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, net

Property and equipment, net, consists of the following:



	December 31,
	2019			2018
Building	$	69,556		$	69,556
Equipment	9,564,426			9,341,007
Furniture and fixtures	684,812			640,890
Software	1,178,210			1,122,231
Leasehold improvements	5,287,935			4,950,510
	16,784,939			16,124,194
Less—accumulated depreciation	(13,319,327		)	(12,496,308		)
Property and equipment, net	$	3,465,612		$	3,627,886

Depreciation for the years ended December 31, 2019 and 2018 was approximately $1.0 million and $0.5 million, respectively, and is included primarily in selling, general and administrative expense in our consolidated statements of operations.

Inventory

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

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.

Components of inventory are as follows:



	December 31,
	2019		2018
Finished goods	$	1,695,461	$	1,339,832
Work-in-process	1,007,719		643,420
Raw materials	7,591,251		4,890,490
Inventory, net	$	10,294,431	$	6,873,742

Goodwill

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

As of December 31, 2019, goodwill has been allocated to the Products and Licensing segment. The changes in the carrying value of goodwill during the year ended December 31, 2019 were as follows:



Balance as of December 31, 2018	$	101,008
Goodwill resulting from business combination - GP	10,511,916
Measurement Period Adjustment - MOI	(71,248		)
Balance as of December 31, 2019	$	10,541,676

We concluded the carrying value of goodwill was not impaired as of December 31, 2019 as we determined that it was not more likely than not that the fair value of the reporting units was less than its carrying value.

Accrued Liabilities

12 Months Ended

Dec. 31, 2019

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consist of the following:



		December 31,
		2019		2018
	Accrued compensation	$	6,416,163	$	4,467,587
	Contingent consideration - GP	1,000,000		—
	Accrued professional fees	113,303		198,062
	Accrued income tax	715,916		236,636
	Deferred rent	—		146,542
	Current operating lease liability	1,283,310		—
	Current finance lease liability	50,307		—
	Accrued royalties	364,951		302,428
	Accrued liabilities-other	425,595		404,752
	Working capital payable - MOI	—		542,983
	Customer deposits	—		298,468
Total accrued liabilities		$	10,369,545	$	6,597,458

Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

Silicon Valley Bank Facility

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

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

Amounts due under the Loan Agreement are secured by our assets, including all personal property, inventory and bank accounts; however, intellectual property is not secured under the Loan Agreement. The inventory used to secure the amount due does not include demo or loaner equipment with an aggregate book value up to $1.0 million. The Loan Agreement requires us to observe a number of financial and operational covenants, including maintenance of a specified Liquidity Coverage Ratio (as defined in the Loan Agreement), protection and registration of intellectual property rights and customary negative covenants. If any event of default occurs SVB may declare due immediately all borrowings under the Credit Facility and foreclose on the collateral. Furthermore, an event of default under the Credit Facility would result in an increase in the interest rate on any amounts outstanding. As of December 31, 2019, there were no events of default on the Credit Facility.

Interest expense, net for the years ended December 31, 2019 and 2018 consisted of the following:



	Years ended December 31,
		2019		2018
Interest expense on Term Loans		$	8,073	$	101,087
Amortization of debt issuance costs		5,685		16,308
Other interest expense		2,120		6,949
Total interest expense, net		$	15,878	$	124,344

Leases

12 Months Ended

Dec. 31, 2019

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, 2019, our lease components included in the consolidated balance sheet were as follows:



Lease component	Classification	December 31, 2019
Assets
ROU assets - operating lease	Other assets	$	2,235,731
ROU assets - finance lease	Other assets	70,183
Total ROU assets		$	2,305,914

Liabilities
Current operating lease liability	Accrued liabilities	$	1,283,310
Current finance lease liability	Accrued liabilities	50,307
Long-term operating lease liability	Other liabilities	1,988,395
Long-term finance lease liability	Other liabilities	23,092
Total lease liabilities		$	3,345,104

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



	Year Ended
	December 31, 2019
Operating lease costs	$	1,622,476
Variable rent costs	(146,542		)
Total rent expense	$	1,475,934

Future minimum lease payments under non-cancelable operating leases were as follows as of December 31, 2019:



Year Ending December 31,
2020	$	1,467,701
2021	640,800
2022	544,704
2023	544,704
2024 and beyond	544,704
Total future minimum lease payments	3,742,613
Less: Interest	470,908
Total operating lease liabilities	$	3,271,705

Current operating lease liability	$	1,283,310
Long-term operating lease liability	1,988,395
Total operating lease liabilities	$	3,271,705

Future minimum lease payments under non-cancelable finance leases were as follows as of December 31, 2019:



Year Ending December 31,
2020	$	56,020
2021	10,710
2022	10,083
2023	5,042
2024 and beyond	—
Total future minimum lease payments	81,855
Less: Interest	8,456
Total finance lease liabilities	$	73,399

Current finance lease liability	$	50,307
Long-term finance lease liability	23,092
Total finance lease liabilities	$	73,399

Other information related to leases is as follows:



	Year Ended
	December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	46,498
Interest on lease liabilities	4,926
Total finance lease cost	$	51,424

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,622,476
Finance cash flows from finance leases	$	40,047
Right-of-use assets obtained in exchange for new finance lease liabilities	$	14,541
Weighted-average remaining lease term (years) - operating leases	3.7
Weighted-average remaining lease term (years) - finance leases	2.1
Weighted-average discount rate - operating leases	7		%
Weighted-average discount rate - finance leases	7		%

At December 31, 2019, we had no operating or finance leases that have not yet commenced.

Prior to the adoption of ASC 842, lease expense of approximately $1.0 million was recognized in our consolidated statement of operations for the year ended December 31, 2018.

Leases

As of December 31, 2019, our lease components included in the consolidated balance sheet were as follows:



Lease component	Classification	December 31, 2019
Assets
ROU assets - operating lease	Other assets	$	2,235,731
ROU assets - finance lease	Other assets	70,183
Total ROU assets		$	2,305,914

Liabilities
Current operating lease liability	Accrued liabilities	$	1,283,310
Current finance lease liability	Accrued liabilities	50,307
Long-term operating lease liability	Other liabilities	1,988,395
Long-term finance lease liability	Other liabilities	23,092
Total lease liabilities		$	3,345,104

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



	Year Ended
	December 31, 2019
Operating lease costs	$	1,622,476
Variable rent costs	(146,542		)
Total rent expense	$	1,475,934

Future minimum lease payments under non-cancelable operating leases were as follows as of December 31, 2019:



Year Ending December 31,
2020	$	1,467,701
2021	640,800
2022	544,704
2023	544,704
2024 and beyond	544,704
Total future minimum lease payments	3,742,613
Less: Interest	470,908
Total operating lease liabilities	$	3,271,705

Current operating lease liability	$	1,283,310
Long-term operating lease liability	1,988,395
Total operating lease liabilities	$	3,271,705

Future minimum lease payments under non-cancelable finance leases were as follows as of December 31, 2019:



Year Ending December 31,
2020	$	56,020
2021	10,710
2022	10,083
2023	5,042
2024 and beyond	—
Total future minimum lease payments	81,855
Less: Interest	8,456
Total finance lease liabilities	$	73,399

Current finance lease liability	$	50,307
Long-term finance lease liability	23,092
Total finance lease liabilities	$	73,399

Other information related to leases is as follows:



	Year Ended
	December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	46,498
Interest on lease liabilities	4,926
Total finance lease cost	$	51,424

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,622,476
Finance cash flows from finance leases	$	40,047
Right-of-use assets obtained in exchange for new finance lease liabilities	$	14,541
Weighted-average remaining lease term (years) - operating leases	3.7
Weighted-average remaining lease term (years) - finance leases	2.1
Weighted-average discount rate - operating leases	7		%
Weighted-average discount rate - finance leases	7		%

At December 31, 2019, we had no operating or finance leases that have not yet commenced.

Prior to the adoption of ASC 842, lease expense of approximately $1.0 million was recognized in our consolidated statement of operations for the year ended December 31, 2018.

Stockholders' Equity

12 Months Ended

Dec. 31, 2019

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)
Balance at January 1, 2018	2,714,561		$0.61 - 6.55	$	1.88	$	2,098,195	2,590,030	$	1.89	$	2,013,034
Forfeited	(675,607	)	$1.15 - 6.55	1.90
Exercised	(96,425	)	$0.65 - 2.46	2.07
Granted	1,166,339		$2.67 - 3.53	3.09
Balance at December 31, 2018	3,108,868		$0.61 - 6.55	$	2.26	$	3,669,794	1,986,740	$	1.81	$	3,314,494
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	$	14,459,884	1,835,799	$	2.28	$	9,197,775


(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,
	2019	2018
Risk-free interest rate range	2.5%	3.04%
Expected life of option-years	7	7
Expected stock price volatility	65%	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, 2018	$0.61 - 6.55	3,108,868	5.72	$2.26	1,986,740	3.46	$1.81
Year ended December 31, 2019	$1.18 - 7.37	3,160,397	6.24	$2.72	1,835,799	4.30	$2.28



	Total Intrinsic Value of Options Exercised		Total Fair Value of Options Vested
Year ended December 31, 2018	$	112,213	$	2,980,110
Year ended December 31, 2019	$	1,641,687	$	3,267,672

For the years ended December 31, 2019 and 2018, the weighted average grant date fair value of options granted was $2.32 and $2.07 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, 2019, the weighted average remaining service period is 3.4 years.

Unamortized stock option expense at December 31, 2019 that will be amortized over the weighted-average remaining service period of 2.9 years totaled $2.8 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, 2019, we granted an aggregate of 280,000 RSUs to certain employees. Of the RSUs granted during 2019, 217,000 of such RSUs are subject to time-based vesting and are scheduled to vest in three equal annual installments on the anniversary dates of the grant. The remaining 63,000 RSUs are performance-based awards that will vest based on our achievement of long-term performance goals, in particular, based on our levels of 2021 revenue and operating income. The 63,000 shares issuable upon vesting of the performance-based RSUs represent the maximum payout under our performance-based awards, based upon 150% of our target performance for 2021 revenue and operating income (the payout of such awards based on target performance for 2021 revenue and operating income would be 42,000 shares). In the case of the time-based and performance-based RSUs, vesting is also subject to the employee's continuous service with us through vesting. In 2018, we granted 280,000 shares of restricted stock to certain employees. Shares issued to employees vest in three equal annual installments on the anniversary dates of their grant. In 2019 and 2018, 194,333 and 182,500 shares of restricted stock vested, respectively.

In addition, in conjunction with our 2018 and 2019 Annual Meetings of Stockholders, we granted RSUs to certain members of our Board of Directors in respect of the annual equity compensation under our non-employee director compensation policy (other members of our Board of Directors elected to receive their annual equity compensation for Board service in the form of stock units under our Deferred Compensation Plan as described below). In 2019 and 2018, we granted 11,600 and 16,286, respectively, RSUs to members of our Board of Directors in respect of the annual equity compensation under our non-employee director compensation policy. RSUs issued to our Board of Directors vest at the earlier of the one-year anniversary of their grant or the next annual stockholders' meeting. In 2019 and 2018, 16,286 and 129,865 RSUs, respectively, vested.

The following table summarizes our aggregate restricted stock awards and RSU activity in 2019 and 2018:



	Number of Unvested Shares		Weighted Average Grant Date Fair Value	Aggregate Grant Date Fair Value of Unvested Shares
Balance at January 1, 2017	489,698		$1.51	$	738,345
Granted	296,287		$3.07	$	909,600
Vested	(312,365	)	$1.45	$	(454,339	)
Forfeitures	(15,000	)	$1.41	$	(21,150	)
Balance at December 31, 2018	458,620		$2.56	$	1,172,456
Granted	291,600		$3.75	$	1,094,430
Vested	(210,619	)	$2.33	$	(490,769	)
Forfeitures	(37,499	)	$2.96	$	(111,115	)
Balance at December 31, 2019	502,102		$3.32	$	1,665,002

We recognized $1.5 million and $0.6 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, 2019 and 2018, respectively, and we will recognize $4.0 million over the remaining requisite service period for unamortized restricted stock, RSUs and stock options.

Unamortized restricted stock and RSUs expense at December 31, 2019 that will be amortized over the weighted-average remaining service period of 2 years totaled $1.2 million.

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.

In December 2017, we amended and restated our Deferred Compensation Plan to also permit participants to defer the annual equity compensation for board service (which would otherwise be issued in the form of restricted stock units) under our non-employee director compensation policy. For participating directors, 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 are vested upon the earlier of the one-year anniversary date of the grant or next annual meeting of stockholders, although the participating directors do not receive the shares represented by such units until a future qualifying event. A summary of stock unit activity under the Deferred Compensation Plan for 2019 and 2018 is as follows.



	Number of Stock Units	Weighted Average Grant Date Fair Value per Share	Intrinsic Value Outstanding
January 1, 2018	466,702	$1.40	$	1,134,086
Granted	40,588	$2.99
December 31, 2018	507,290	$1.40	$	1,699,422
Granted	121,713	$4.41
December 31, 2019	629,003	$2.09	$	4,585,432

As of December 31, 2019, 37,546 of the outstanding stock units had not yet vested.

Stock Repurchase Program

In September 2017, our board of directors authorized a new stock repurchase program providing for the repurchase of up to $2.0 million of our common stock through September 19, 2018. Our stock repurchase program did not obligate us to acquire any specific number of shares. Under the program, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. As of September 19, 2018, we had repurchased a total of 565,629 shares, respectively, for an aggregate purchase price of $1.1 million under this stock repurchase program. We currently maintain all repurchased shares under these stock repurchase programs as treasury stock.

In August 2019, our board of directors authorized a new stock repurchase program which allowed us to repurchase up to $2.0 million of our common stock through August 2020. As of September 30, 2019, we had repurchased a total of 333,953 shares for an aggregate purchase price of $2.0 million under this new stock repurchase program, and accordingly the program expired. We currently maintain all repurchased shares under this stock repurchase program as treasury stock.

Revenue Recognition

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Our operations are divided into two operating segments—“Products and Licensing” and “Technology Development”.

The Products and Licensing segment derives its revenues from product sales, funded product development and technology licenses.

The Technology Development segment provides applied research to customers in our areas of focus. Our engineers and scientists collaborate with our network of government, academic and industry experts to identify technologies and ideas with promising market potential. We then compete to win fee-for-service contracts from government agencies and industrial customers who seek innovative solutions to practical problems that require new technology. The Technology Development segment derives its revenues primarily from services.

Disaggregation of Revenue

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

The details are listed in the table below for the years ended December 31, 2019 and 2018:



		Years ended December 31,
		2019						2018
		Products and Licensing		Technology Development		Total		Products and Licensing		Technology Development		Total
Total Revenue by Geographic Location
	United States	$	21,782,692	$	26,024,674	$	47,807,366	$	11,585,296	$	20,967,556	$	32,552,852
	Asia	13,669,304		—		13,669,304		5,977,563		—		5,977,563
	Europe	7,277,234		—		7,277,234		3,873,161		—		3,873,161
	Canada, Central and South America	1,432,082		—		1,432,082		382,797		—		382,797
	All Others	329,729		—		329,729		130,872		—		130,872
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Major Customer Type
	Sales to the U.S. government	$	2,601,069	$	25,377,961	$	27,979,030	$	1,834,289	$	20,703,338	$	22,537,627
	U.S. direct commercial sales and other	19,181,625		646,713		19,828,338		9,737,720		264,218		10,001,938
	Foreign commercial sales & other	22,708,347		—		22,708,347		10,377,680		—		10,377,680
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Contract Type
	Fixed-price contracts	$	44,491,041	$	14,111,092	$	58,602,133	$	21,949,689	$	9,388,770	$	31,338,459
	Cost-type contracts	—		11,913,582		11,913,582		—		11,578,786		11,578,786
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	43,129,361	$	—	$	43,129,361	$	21,330,000	$	—	$	21,330,000
	Goods/services transferred over time	1,361,680		26,024,674		27,386,354		619,689		20,967,556		21,587,245
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Major Products/Services
	Technology development	$	—	$	26,024,674	$	26,024,674	$	—	$	20,967,556	$	20,967,556
	Test, measurement and sensing systems	41,787,613		—		41,787,613		19,641,434		—		19,641,434
	Other	2,703,428		—		2,703,428		2,308,255		—		2,308,255
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245

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 (liabilities)/assets changed by $1.0 million, due primarily to increased contract liabilities in addition to a slight increase in contract assets. The increase in contract liabilities is a result of the increased number of government research programs in addition to an increase in the number of our fixed-price contracts that have reached milestones as designated in their respective contracts, but revenue has not yet been recognized. The increase in contract assets is primarily driven by the unbilled fee required by our cost-reimbursable government contracts, which cannot be fully billed until after the specific contract is complete.

The following table shows the components of our contract balances as of December 31, 2019 and 2018:



	December 31,
	2019			2018
Contract assets	$	3,208,206		$	2,759,315
Contract liabilities	(3,887,685		)	(2,486,111		)
Net contract assets	$	(679,479	)	$	273,204

Performance Obligations

Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our Products and Licensing segment's unfulfilled performance obligations was $16.1 million at December 31, 2019. We expect to satisfy 63% of the performance obligations in 2020, 13% in 2021 and the remainder by 2024. The approximate value of our Technology Development segment's unfulfilled performance obligations was $31.3 million at December 31, 2019. We expect to satisfy 70% of the performance obligations in 2020, 24% in 2021 and the remainder by 2022.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

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



	Years ended December 31,
	2019			2018
Current:
Federal	$	1,466,770		$	(44,727	)
State	227,912			92,545
Deferred federal	(2,849,371		)	—
Deferred state	(499,661		)	—
Income tax (benefit)/expense	$	(1,654,350	)	$	47,818

Deferred tax assets and liabilities consist of the following components:



	December 31, 2019				December 31, 2018
		Long-Term				Long-Term
Bad debt and inventory reserve		$	376,331			$	332,721
Inventory adjustment		—				(21,785		)
UNICAP		4,828				2,804
Deferred revenue		130,058				115,676
ASC842 Lease Accounting (DTA)		796,864				288,017
ASC842 Lease Accounting (DTL)		(544,539		)		—
Depreciation and amortization		(2,134,569		)		(838,540		)
Net operating loss carryforwards- Luna		349,421				349,421
Net operating loss carryforwards- API		1,169,671				1,265,538
Net operating loss carryforwards - state		150,050				179,149
Net operating loss carryforwards- Canada		10,503				10,503
Accrued liabilities		594,450				394,118
Deferred compensation		294,190				216,944
Stock-based compensation		373,658				803,757
Restricted stock		102,741				60,681
State bonus		33,791				44,861
Performance based compensation		9,499				—
Transaction costs		58,540				63,668
Total		1,775,487				3,267,533
Valuation allowance		(359,924		)		(3,267,533		)
Net deferred tax asset		$	1,415,563			$	—

The net deferred tax asset is included in other non-current assets on the consolidated balance sheet.

The (benefit)/expense 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,
	2019		2018
Income tax expense at federal statutory rate	21.00	%	21.00	%
State taxes, net of federal tax effects	(8.67	)%	—	%
Change in valuation allowance	(67.39	)%	(27.65	)%
Incentive stock options	(1.75	)%	(1.05	)%
Provision to return adjustments	7.26	%	21.24	%
Meals and entertainment	0.50	%	0.97	%
AMT credit	—	%	(9.83	)%
Other permanent differences	4.20	%	(0.88	)%
Income tax (benefit)/expense	(44.85	)%	3.80	%

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 $6.0 million for API expiring at varying dates through 2035.

In 2015, we performed a formal Section 382 study and determined that we do not have a limitation on our NOLs available to offset future income. As a result of the acquisition of API, the API NOL carryover and research and development credits will be subject to the Section 382 limitation. A formal Section 382 study was prepared in 2019, and it was determined that there was no ownership changes in 2019 resulting in a limitation on NOLs, but a portion of the NOLs will expire unutilized.

The U.S. federal statute of limitations remains open for the year 2016 and onward. We currently have no federal income tax returns under examination. U.S. state jurisdictions have statutes of limitation generally ranging from three to seven years. We currently have no state income or franchise tax returns under examination. We currently do not file tax returns in any foreign tax jurisdiction other than Canada.

As of December 31, 2019, we are no longer in a three-year cumulative loss position, which required additional analysis to be performed in order to determine the likelihood of realizing the deferred tax assets in the foreseeable future. After further analysis, it was determined that a portion of the December 31, 2019 balance of deferred tax assets will be realized. Because the NOLs carried over from API are limited under Section 382, the deferred tax asset of $1.2 million is expected to be realized over an extended period of time (with continued earnings realized ratably through 2034). The deferred tax asset related to the NOL carryovers of API Canada, Luna Analytics, Luna Nanomaterials, and Luna Quest will likely not be realized in the foreseeable future as these entities no longer have any activity. As of December 31, 2019, valuation allowances of $3.3 million were released and a tax benefit has been recognized in our consolidated statement of operations.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2019
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. The Claim received from Macom totaled $2.1 million under various indemnity provisions. We have disputed Macom's assertion of right to payment for the matters described in the Claim. It is uncertain what amount, if any, will be owed in settlement of the Claim. As of 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 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. There have been no amounts recorded in reference to the above matter in the financial statements as of December 31, 2019. It is uncertain what amount, if any, will be received with respect to this potential adjustment. 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 $1.1 million in the first quarter of 2018 and a non-cancelable purchase order totaling $1.9 million in the third quarter of 2019 for multiple shipments of tunable lasers to be delivered over an 18-month period. At December 31, 2019, approximately $1.3 million of these commitments remained and is expected to be delivered by December 31, 2020. Royalty Agreement We have licensed certain third-party technologies from vendors for which we owe minimum royalties aggregating $0.2 million payable over the remaining patent terms of the underlying technology.

Employee Profit Sharing Plan	12 Months Ended
Employee Profit Sharing Plan	Dec. 31, 2019
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 $0.4 million and $0.3 million to the plan for the years ended December 31, 2019 and December 31, 2018, respectively.

Relationship with Major Customers	12 Months Ended
Relationship with Major Customers	Dec. 31, 2019
Risks and Uncertainties [Abstract]
Relationship with Major Customers	Relationship with Major Customers During the years ended December 31, 2019 and 2018, approximately 40% and 53%, respectively, of our consolidated revenues were attributable to contracts with the U.S. government. At December 31, 2019 and 2018, receivables with respect to contracts with the U.S. government represented 12% and 23% of total trade receivables, respectively.

Financial Information About Segments

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Financial Information About Segments

Our operations are divided into two reportable segments: Products and Licensing and Technology Development. The Products and Licensing segment develops and sells products or licenses technologies based on commercially viable concepts developed by the Technology Development segment. The Products and Licensing segment derives its revenue from product sales, funded product development and technology licenses.

Our engineers and scientists collaborate with our network of government, academic and industry experts to identify technologies and ideas with promising market potential. We then compete to win fee-for-service contracts from government agencies and industrial customers who seek innovative solutions to practical problems that require new technology. The Technology Development segment derives its revenue primarily from services. The Technology Development segment provides applied research to customers in our areas of focus.

Our President and Chief Executive Officer and his direct reports collectively represent our chief operating decision makers, and they evaluate segment performance based primarily on revenue and operating income or loss.

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, 2019 and 2018.

During the years ended December 31, 2019 and 2018, 32% and 24%, respectively, of our total sales took place outside the United States. Customers in China represented 11% of total revenues in the year ended December 31, 2019, while no other single country, outside of the United States, represented more than 10% of total revenues in the year ended December 31, 2018.



	Years ended December 31,
		2019		2018
Products and Licensing revenue		$	44,491,041	$	21,949,689
Technology Development revenue		26,024,674		20,967,556
Total revenue		$	70,515,715	$	42,917,245
Products and Licensing operating income		$	1,807,616	$	499,323
Technology Development operating income		1,507,405		378,212
Total operating income		$	3,315,021	$	877,535
Depreciation, Technology Development		$	397,296	$	379,952
Depreciation, Products and Licensing		$	552,285	$	273,185
Amortization, Technology Development		$	91,185	$	130,765
Amortization, Products and Licensing		$	1,462,525	$	418,349

Additional segment information is as follows:



	December 31,
	2019		2018
Total segment assets:
Products and Licensing	$	48,723,810	$	40,775,211
Technology Development	37,800,250		34,823,525
Total	$	86,524,060	$	75,598,736
Property plant and equipment and intangible assets, Technology Development	$	2,079,486	$	2,103,711
Property plant and equipment and intangible assets, Products and Licensing	$	22,122,279	$	4,927,453

Quarterly Results (unaudited)

12 Months Ended

Dec. 31, 2019

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 2019 and 2018.



	Three Months Ended
(Dollars in thousands, except per share amounts)	March 31, 2019			June 30, 2019		September 30, 2019		December 31, 2019		March 31, 2018			June 30, 2018		September 30, 2018		December 31, 2018
Revenues:
Products and licensing	$	8,192		$	11,373	$	11,894	$	13,032	$	4,131		$	4,457	$	5,371	$	7,990
Technology development	6,641			6,441		6,495		6,448		4,637			5,466		5,316		5,548
Total revenues	14,833			17,814		18,389		19,480		8,768			9,923		10,687		13,538
Gross margin	6,768			8,752		9,275		10,388		3,840			4,231		4,689		6,572
Operating (loss)/income	(898		)	1,014		1,481		1,718		(373		)	205		581		423
Net income/(loss) from continuing operations	1,126			840		1,231		2,146		(272		)	299		1,293		(122		)
Income from discontinued operations net of income taxes	—			—		—		—		421			768		7,556		1,062
Net income	1,126			840		1,231		2,146		149			1,067		8,849		940
Net income attributable to common stockholders	$	1,043		$	751	$	1,117	$	2,146	$	84		$	1,004	$	8,785	$	873
Net income/(loss) per share from continuing operations:
Basic	$	0.04		$	0.03	$	0.04	$	0.07	$	(0.01	)	$	0.01	$	0.05	$	—
Diluted	$	0.03		$	0.02	$	0.04	$	0.07	$	(0.01	)	$	0.01	$	0.04	$	—
Net income per share from discontinued operations:
Basic	$	—		$	—	$	—	$	—	$	0.02		$	0.03	$	0.27	$	0.04
Diluted	$	—		$	—	$	—	$	—	$	0.02		$	0.02	$	0.23	$	0.04
Net income attributable to common stockholders:
Basic	$	0.04		$	0.03	$	0.04	$	0.07	$	—		$	0.04	$	0.31	$	0.03
Diluted	$	0.03		$	0.02	$	0.03	$	0.07	$	—		$	0.03	$	0.27	$	0.03
Weighted average shares:
Basic	28,039,080			28,246,840		28,291,297		30,159,322		27,204,989			27,531,361		27,901,631		28,067,348
Diluted	33,479,935			33,650,790		32,115,847		32,211,847		27,204,989			31,506,745		33,055,881		28,067,348

Discontinued Operations

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

On July 31, 2018, we sold the assets and operations related to our Opto business, which was part of our Products and Licensing segment, to an unaffiliated third party for an initial purchase price up to $18.5 million, of which $17.5 million was received at closing and has been properly recorded in the financial statements with the remaining purchase price adjustment up to $1.0 million which is contingent upon the attainment of specified revenue targets during the eighteen months following the closing of the sale. The Opto business was a component of the operations of API, which we acquired in May 2015, and represented all of our operations in our Camarillo, California and Montreal, Quebec facilities.

We have reported the results of operations of the Opto business as discontinued operations in our consolidated financial statements for the year ended December 31, 2018. There was no income or loss from discontinued operations for the year ended December 31, 2019. We allocated a portion of the consolidated tax expense to discontinued operations based on the ratio of the discontinued business's loss before allocations.

The following table presents a summary of the transactions related to the sales of Opto in the year ended December 31, 2018:



	Year Ended December 31,
	2018
Sale price	$	17,500,000
Adjusted purchase price	17,500,000

Assets held for sale	(8,193,184		)
Liabilities held for sale	989,453
Transaction costs	(858,227		)
Return of working capital	730,000
Income tax expense	(1,572,245		)
Gain on sale of discontinued operations	$	8,595,797

The key components of net income from discontinued operations were as follows:



	Year Ended December 31,
	2018
Net revenues	$	8,363,606
Cost of revenues	5,294,268
Operating expenses	1,728,113
Other (income)/expenses	(13,330		)
Income before income taxes	1,354,555
Allocated tax expense	183,921
Operating income from discontinued operations	1,170,634
Gain on sale, net of related income taxes	8,595,797
Net income from discontinued operations	$	9,766,431

For the year ended December 31, 2018, the acquisition of property plant and equipment was $0.1 million, intangible property costs were $0.01 million, and depreciation and amortization was $0.2 million, all related to discontinued operations. For the year ended December 31, 2018, proceeds from the sale of the Opto business which were included in cash flows from investing activities $16.0 million. The gain on sale of discontinued operations included in non-cash adjustments to cash flows from operating activities for 2018 was $8.6 million.

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2019

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
	Balance at beginning of Period		Additions		Deductions			Balance at end of period
Year Ended December 31, 2018
Reserves deducted from assets to which they apply:
Deferred tax valuation allowance	$	5,020,744	$	—	$	(1,753,211	)	$	3,267,533
Allowances for doubtful accounts	286,717		3,500		(6,134		)	284,083
	$	5,307,461	$	3,500	$	(1,759,345	)	$	3,551,616
Year Ended December 31, 2019
Reserves deducted from assets to which they apply:
Deferred tax valuation allowance	$	3,267,533	$	—	$	(2,907,609	)	$	359,924
Allowances for doubtful accounts	284,083		646,196		—			930,279
	$	3,551,616	$	646,196	$	(2,907,609	)	$	1,290,203

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.


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


(b)	Exhibits

Organization and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Consolidation Policy

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.

Products, Licensing Revenues and Technology Development Revenues

Revenue Recognition

Products and Licensing Revenues

Technology Development 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

Cash Equivalents

Fair Value Measurements


•	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.

Property and Equipment

Property and Equipment, net

Property and equipment 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

Based on our annual goodwill impairment analysis we performed in the fourth quarter of 2019, the fair value of our reporting units more likely than not exceed the carrying values.

Research, Development and Engineering

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

Impairment of Long-Lived Assets

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

The effect of 3.2 million and 4.9 million common stock equivalents are included for the diluted per share data for the year ended December 31, 2019 and 2018, respectively.

Stock-Based Compensation

Advertising

We expense the cost of advertising as incurred.

Income Taxes

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements



	Balance at		Adjustment for			Adjusted balance at
	December 31, 2018		ASC 842			January 1, 2019
Assets:
Property and equipment, net	$	3,627,886	$	(90,494	)	$	3,537,392
Other assets, net	1,995		3,536,133			3,538,128

Liabilities:
Accrued liabilities	6,597,458		1,242,669			7,840,127
Current portion of capital lease obligations	40,586		(40,586		)	—
Long-term deferred rent	1,035,974		(1,035,974		)	—
Long-term operating lease liability	—		3,271,705			3,271,705
Long-term capital lease obligations	68,978		(68,978		)	—
Long-term finance lease liability	—		76,803			76,803

Recently Issued Pronouncements not yet adopted

Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Property and Equipment Estimated Useful Lives

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



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

Schedule of the Cumulative Effect of Adoption of Topic 842

Upon the adoption of the new lease standard on January 1, 2019, we recorded the following adjustments:



	Balance at		Adjustment for			Adjusted balance at
	December 31, 2018		ASC 842			January 1, 2019
Assets:
Property and equipment, net	$	3,627,886	$	(90,494	)	$	3,537,392
Other assets, net	1,995		3,536,133			3,538,128

Liabilities:
Accrued liabilities	6,597,458		1,242,669			7,840,127
Current portion of capital lease obligations	40,586		(40,586		)	—
Long-term deferred rent	1,035,974		(1,035,974		)	—
Long-term operating lease liability	—		3,271,705			3,271,705
Long-term capital lease obligations	68,978		(68,978		)	—
Long-term finance lease liability	—		76,803			76,803

Business Acquisitions (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Allocation of the Purchase Consideration

The following table summarizes the allocation of the purchase consideration of each acquisition:



	MOI			GP
Accounts receivable	$	1,742,693		$	1,520,950
Inventory	1,435,606			2,698,000
Other current assets	69,951			763,873
Property and equipment	996,460			286,000
Identifiable intangible assets	1,650,000			8,200,000
Goodwill	29,760			10,511,916
Accounts payable and accrued expenses	(379,737		)	(4,076,489		)
Total purchase consideration	$	5,544,733		$	19,904,250

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
	Useful Life	MOI		GP
Developed technology	5 - 8 years	$	1,200,000	$	7,200,000
In-process research and development	7 years	200,000		—
Trade names and trademarks	3 years	150,000		400,000
Customer base	7 - 15 years	100,000		600,000
		$	1,650,000	$	8,200,000

Unaudited Pro Forma Financial Information

The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations or the combined business had the acquisitions of MOI and GP occurred on January 1, 2018, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below.



	Years Ended December 31,
	2019		2018
	(unaudited)		(unaudited)
Revenue	$	72,576,902	$	60,249,896

Income from continuing operations	$	6,912,802	$	1,559,008

Accounts Receivable, net (Tables)

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Components of Accounts Receivable, net

Accounts receivable, net consist of the following:



	December 31,
	2019			2018
Billed	$	17,193,742		$	13,289,790
Other	5,182			31,361
	17,198,924			13,321,151
Less: allowance for doubtful accounts	(930,279		)	(284,083		)
Accounts receivable, net	$	16,268,645		$	13,037,068

Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible assets, net consist of the following:



		December 31,
	Estimated Life	2019			2018
Patent costs	1 - 18 years	$	5,291,245		$	4,991,460
Developed technology	5 years	9,800,000			2,600,000
In-process research and development	N/A	1,580,000			200,000
Customer base	7 years	700,000			100,000
Trade names	3 years	550,000			150,000
		17,921,245			8,041,460
Accumulated amortization		(7,726,768		)	(4,739,190		)
Intangible assets, net		$	10,194,477		$	3,302,270

Estimated Aggregate Amortization Based on Net Value of Intangible Assets

Estimated aggregate amortization, based on the net value of intangible assets at December 31, 2019, for each of the next five years and beyond is as follows:



Year Ending December 31,
2020	$	1,640,851
2021	1,660,112
2022	1,509,418
2023	1,437,195
2024	1,247,195
2025 and beyond	2,699,706
	$	10,194,477

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net, consists of the following:



	December 31,
	2019			2018
Building	$	69,556		$	69,556
Equipment	9,564,426			9,341,007
Furniture and fixtures	684,812			640,890
Software	1,178,210			1,122,231
Leasehold improvements	5,287,935			4,950,510
	16,784,939			16,124,194
Less—accumulated depreciation	(13,319,327		)	(12,496,308		)
Property and equipment, net	$	3,465,612		$	3,627,886

Inventory (Tables)

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Components of Inventory

Components of inventory are as follows:



	December 31,
	2019		2018
Finished goods	$	1,695,461	$	1,339,832
Work-in-process	1,007,719		643,420
Raw materials	7,591,251		4,890,490
Inventory, net	$	10,294,431	$	6,873,742

Goodwill (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying value of goodwill during the year ended December 31, 2019 were as follows:



Balance as of December 31, 2018	$	101,008
Goodwill resulting from business combination - GP	10,511,916
Measurement Period Adjustment - MOI	(71,248		)
Balance as of December 31, 2019	$	10,541,676

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following:



		December 31,
		2019		2018
	Accrued compensation	$	6,416,163	$	4,467,587
	Contingent consideration - GP	1,000,000		—
	Accrued professional fees	113,303		198,062
	Accrued income tax	715,916		236,636
	Deferred rent	—		146,542
	Current operating lease liability	1,283,310		—
	Current finance lease liability	50,307		—
	Accrued royalties	364,951		302,428
	Accrued liabilities-other	425,595		404,752
	Working capital payable - MOI	—		542,983
	Customer deposits	—		298,468
Total accrued liabilities		$	10,369,545	$	6,597,458

Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of Interest Expense

Interest expense, net for the years ended December 31, 2019 and 2018 consisted of the following:



	Years ended December 31,
		2019		2018
Interest expense on Term Loans		$	8,073	$	101,087
Amortization of debt issuance costs		5,685		16,308
Other interest expense		2,120		6,949
Total interest expense, net		$	15,878	$	124,344

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Schedule of Lease Components

As of December 31, 2019, our lease components included in the consolidated balance sheet were as follows:



Lease component	Classification	December 31, 2019
Assets
ROU assets - operating lease	Other assets	$	2,235,731
ROU assets - finance lease	Other assets	70,183
Total ROU assets		$	2,305,914

Liabilities
Current operating lease liability	Accrued liabilities	$	1,283,310
Current finance lease liability	Accrued liabilities	50,307
Long-term operating lease liability	Other liabilities	1,988,395
Long-term finance lease liability	Other liabilities	23,092
Total lease liabilities		$	3,345,104

Schedule of Other Information Related to Leases

Other information related to leases is as follows:



	Year Ended
	December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	46,498
Interest on lease liabilities	4,926
Total finance lease cost	$	51,424

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,622,476
Finance cash flows from finance leases	$	40,047
Right-of-use assets obtained in exchange for new finance lease liabilities	$	14,541
Weighted-average remaining lease term (years) - operating leases	3.7
Weighted-average remaining lease term (years) - finance leases	2.1
Weighted-average discount rate - operating leases	7		%
Weighted-average discount rate - finance leases	7		%

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



	Year Ended
	December 31, 2019
Operating lease costs	$	1,622,476
Variable rent costs	(146,542		)
Total rent expense	$	1,475,934

Schedule of Future Minimum Lease Payments

Future minimum lease payments under non-cancelable operating leases were as follows as of December 31, 2019:



Year Ending December 31,
2020	$	1,467,701
2021	640,800
2022	544,704
2023	544,704
2024 and beyond	544,704
Total future minimum lease payments	3,742,613
Less: Interest	470,908
Total operating lease liabilities	$	3,271,705

Current operating lease liability	$	1,283,310
Long-term operating lease liability	1,988,395
Total operating lease liabilities	$	3,271,705

Finance Lease Payments

Future minimum lease payments under non-cancelable finance leases were as follows as of December 31, 2019:



Year Ending December 31,
2020	$	56,020
2021	10,710
2022	10,083
2023	5,042
2024 and beyond	—
Total future minimum lease payments	81,855
Less: Interest	8,456
Total finance lease liabilities	$	73,399

Current finance lease liability	$	50,307
Long-term finance lease liability	23,092
Total finance lease liabilities	$	73,399

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

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)
Balance at January 1, 2018	2,714,561		$0.61 - 6.55	$	1.88	$	2,098,195	2,590,030	$	1.89	$	2,013,034
Forfeited	(675,607	)	$1.15 - 6.55	1.90
Exercised	(96,425	)	$0.65 - 2.46	2.07
Granted	1,166,339		$2.67 - 3.53	3.09
Balance at December 31, 2018	3,108,868		$0.61 - 6.55	$	2.26	$	3,669,794	1,986,740	$	1.81	$	3,314,494
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	$	14,459,884	1,835,799	$	2.28	$	9,197,775


(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,
	2019	2018
Risk-free interest rate range	2.5%	3.04%
Expected life of option-years	7	7
Expected stock price volatility	65%	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, 2018	$0.61 - 6.55	3,108,868	5.72	$2.26	1,986,740	3.46	$1.81
Year ended December 31, 2019	$1.18 - 7.37	3,160,397	6.24	$2.72	1,835,799	4.30	$2.28



	Total Intrinsic Value of Options Exercised		Total Fair Value of Options Vested
Year ended December 31, 2018	$	112,213	$	2,980,110
Year ended December 31, 2019	$	1,641,687	$	3,267,672

Activity of Restricted Stock

The following table summarizes our aggregate restricted stock awards and RSU activity in 2019 and 2018:



	Number of Unvested Shares		Weighted Average Grant Date Fair Value	Aggregate Grant Date Fair Value of Unvested Shares
Balance at January 1, 2017	489,698		$1.51	$	738,345
Granted	296,287		$3.07	$	909,600
Vested	(312,365	)	$1.45	$	(454,339	)
Forfeitures	(15,000	)	$1.41	$	(21,150	)
Balance at December 31, 2018	458,620		$2.56	$	1,172,456
Granted	291,600		$3.75	$	1,094,430
Vested	(210,619	)	$2.33	$	(490,769	)
Forfeitures	(37,499	)	$2.96	$	(111,115	)
Balance at December 31, 2019	502,102		$3.32	$	1,665,002

Activity of Restricted Stock Units

A summary of stock unit activity under the Deferred Compensation Plan for 2019 and 2018 is as follows.



	Number of Stock Units	Weighted Average Grant Date Fair Value per Share	Intrinsic Value Outstanding
January 1, 2018	466,702	$1.40	$	1,134,086
Granted	40,588	$2.99
December 31, 2018	507,290	$1.40	$	1,699,422
Granted	121,713	$4.41
December 31, 2019	629,003	$2.09	$	4,585,432

Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019 and 2018:



		Years ended December 31,
		2019						2018
		Products and Licensing		Technology Development		Total		Products and Licensing		Technology Development		Total
Total Revenue by Geographic Location
	United States	$	21,782,692	$	26,024,674	$	47,807,366	$	11,585,296	$	20,967,556	$	32,552,852
	Asia	13,669,304		—		13,669,304		5,977,563		—		5,977,563
	Europe	7,277,234		—		7,277,234		3,873,161		—		3,873,161
	Canada, Central and South America	1,432,082		—		1,432,082		382,797		—		382,797
	All Others	329,729		—		329,729		130,872		—		130,872
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Major Customer Type
	Sales to the U.S. government	$	2,601,069	$	25,377,961	$	27,979,030	$	1,834,289	$	20,703,338	$	22,537,627
	U.S. direct commercial sales and other	19,181,625		646,713		19,828,338		9,737,720		264,218		10,001,938
	Foreign commercial sales & other	22,708,347		—		22,708,347		10,377,680		—		10,377,680
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Contract Type
	Fixed-price contracts	$	44,491,041	$	14,111,092	$	58,602,133	$	21,949,689	$	9,388,770	$	31,338,459
	Cost-type contracts	—		11,913,582		11,913,582		—		11,578,786		11,578,786
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	43,129,361	$	—	$	43,129,361	$	21,330,000	$	—	$	21,330,000
	Goods/services transferred over time	1,361,680		26,024,674		27,386,354		619,689		20,967,556		21,587,245
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245


Total Revenue by Major Products/Services
	Technology development	$	—	$	26,024,674	$	26,024,674	$	—	$	20,967,556	$	20,967,556
	Test, measurement and sensing systems	41,787,613		—		41,787,613		19,641,434		—		19,641,434
	Other	2,703,428		—		2,703,428		2,308,255		—		2,308,255
	Total	$	44,491,041	$	26,024,674	$	70,515,715	$	21,949,689	$	20,967,556	$	42,917,245

Schedule of Components of Contract Balances

The following table shows the components of our contract balances as of December 31, 2019 and 2018:



	December 31,
	2019			2018
Contract assets	$	3,208,206		$	2,759,315
Contract liabilities	(3,887,685		)	(2,486,111		)
Net contract assets	$	(679,479	)	$	273,204

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

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



	Years ended December 31,
	2019			2018
Current:
Federal	$	1,466,770		$	(44,727	)
State	227,912			92,545
Deferred federal	(2,849,371		)	—
Deferred state	(499,661		)	—
Income tax (benefit)/expense	$	(1,654,350	)	$	47,818

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consist of the following components:



	December 31, 2019				December 31, 2018
		Long-Term				Long-Term
Bad debt and inventory reserve		$	376,331			$	332,721
Inventory adjustment		—				(21,785		)
UNICAP		4,828				2,804
Deferred revenue		130,058				115,676
ASC842 Lease Accounting (DTA)		796,864				288,017
ASC842 Lease Accounting (DTL)		(544,539		)		—
Depreciation and amortization		(2,134,569		)		(838,540		)
Net operating loss carryforwards- Luna		349,421				349,421
Net operating loss carryforwards- API		1,169,671				1,265,538
Net operating loss carryforwards - state		150,050				179,149
Net operating loss carryforwards- Canada		10,503				10,503
Accrued liabilities		594,450				394,118
Deferred compensation		294,190				216,944
Stock-based compensation		373,658				803,757
Restricted stock		102,741				60,681
State bonus		33,791				44,861
Performance based compensation		9,499				—
Transaction costs		58,540				63,668
Total		1,775,487				3,267,533
Valuation allowance		(359,924		)		(3,267,533		)
Net deferred tax asset		$	1,415,563			$	—

Reconciliation of Income Tax Benefit (Expense)



	Years ended December 31,
	2019		2018
Income tax expense at federal statutory rate	21.00	%	21.00	%
State taxes, net of federal tax effects	(8.67	)%	—	%
Change in valuation allowance	(67.39	)%	(27.65	)%
Incentive stock options	(1.75	)%	(1.05	)%
Provision to return adjustments	7.26	%	21.24	%
Meals and entertainment	0.50	%	0.97	%
AMT credit	—	%	(9.83	)%
Other permanent differences	4.20	%	(0.88	)%
Income tax (benefit)/expense	(44.85	)%	3.80	%

Financial Information About Segments (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Information about Results of Operations for Each Segment

Additional segment information is as follows:



	December 31,
	2019		2018
Total segment assets:
Products and Licensing	$	48,723,810	$	40,775,211
Technology Development	37,800,250		34,823,525
Total	$	86,524,060	$	75,598,736
Property plant and equipment and intangible assets, Technology Development	$	2,079,486	$	2,103,711
Property plant and equipment and intangible assets, Products and Licensing	$	22,122,279	$	4,927,453



	Years ended December 31,
		2019		2018
Products and Licensing revenue		$	44,491,041	$	21,949,689
Technology Development revenue		26,024,674		20,967,556
Total revenue		$	70,515,715	$	42,917,245
Products and Licensing operating income		$	1,807,616	$	499,323
Technology Development operating income		1,507,405		378,212
Total operating income		$	3,315,021	$	877,535
Depreciation, Technology Development		$	397,296	$	379,952
Depreciation, Products and Licensing		$	552,285	$	273,185
Amortization, Technology Development		$	91,185	$	130,765
Amortization, Products and Licensing		$	1,462,525	$	418,349

Quarterly Results (unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

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 2019 and 2018.



	Three Months Ended
(Dollars in thousands, except per share amounts)	March 31, 2019			June 30, 2019		September 30, 2019		December 31, 2019		March 31, 2018			June 30, 2018		September 30, 2018		December 31, 2018
Revenues:
Products and licensing	$	8,192		$	11,373	$	11,894	$	13,032	$	4,131		$	4,457	$	5,371	$	7,990
Technology development	6,641			6,441		6,495		6,448		4,637			5,466		5,316		5,548
Total revenues	14,833			17,814		18,389		19,480		8,768			9,923		10,687		13,538
Gross margin	6,768			8,752		9,275		10,388		3,840			4,231		4,689		6,572
Operating (loss)/income	(898		)	1,014		1,481		1,718		(373		)	205		581		423
Net income/(loss) from continuing operations	1,126			840		1,231		2,146		(272		)	299		1,293		(122		)
Income from discontinued operations net of income taxes	—			—		—		—		421			768		7,556		1,062
Net income	1,126			840		1,231		2,146		149			1,067		8,849		940
Net income attributable to common stockholders	$	1,043		$	751	$	1,117	$	2,146	$	84		$	1,004	$	8,785	$	873
Net income/(loss) per share from continuing operations:
Basic	$	0.04		$	0.03	$	0.04	$	0.07	$	(0.01	)	$	0.01	$	0.05	$	—
Diluted	$	0.03		$	0.02	$	0.04	$	0.07	$	(0.01	)	$	0.01	$	0.04	$	—
Net income per share from discontinued operations:
Basic	$	—		$	—	$	—	$	—	$	0.02		$	0.03	$	0.27	$	0.04
Diluted	$	—		$	—	$	—	$	—	$	0.02		$	0.02	$	0.23	$	0.04
Net income attributable to common stockholders:
Basic	$	0.04		$	0.03	$	0.04	$	0.07	$	—		$	0.04	$	0.31	$	0.03
Diluted	$	0.03		$	0.02	$	0.03	$	0.07	$	—		$	0.03	$	0.27	$	0.03
Weighted average shares:
Basic	28,039,080			28,246,840		28,291,297		30,159,322		27,204,989			27,531,361		27,901,631		28,067,348
Diluted	33,479,935			33,650,790		32,115,847		32,211,847		27,204,989			31,506,745		33,055,881		28,067,348

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Key Components of Discontinued Operations

The key components of net income from discontinued operations were as follows:



	Year Ended December 31,
	2018
Net revenues	$	8,363,606
Cost of revenues	5,294,268
Operating expenses	1,728,113
Other (income)/expenses	(13,330		)
Income before income taxes	1,354,555
Allocated tax expense	183,921
Operating income from discontinued operations	1,170,634
Gain on sale, net of related income taxes	8,595,797
Net income from discontinued operations	$	9,766,431

The following table presents a summary of the transactions related to the sales of Opto in the year ended December 31, 2018:



	Year Ended December 31,
	2018
Sale price	$	17,500,000
Adjusted purchase price	17,500,000

Assets held for sale	(8,193,184		)
Liabilities held for sale	989,453
Transaction costs	(858,227		)
Return of working capital	730,000
Income tax expense	(1,572,245		)
Gain on sale of discontinued operations	$	8,595,797

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 205
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721665-107760

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=109226691&loc=d3e2941-110230

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 205
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721675-107760

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=d3e1361-107760

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721673-107760

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721663-107760

+ Details

Organization and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) shares in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Significant Accounting Policies [Line Items]
Allowance for uncollectible receivables	$ 930,279	$ 284,083
Cash in excess of FDIC insured limits	5,000,000	4,000,000
Research, development and engineering	$ 7,496,012	$ 3,766,160
Common stock equivalents included for diluted per share data (in shares)	3.2	4.9
Advertising expense	$ 100,000	$ 100,000
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
Prime Rate \| Silicon Valley Bank
Significant Accounting Policies [Line Items]
Debt, additional interest above prime rate	1.00%
Prime Rate \| Silicon Valley Bank \| Term Loan
Significant Accounting Policies [Line Items]
Debt, additional interest above prime rate	2.00%
U.S. Treasury Obligations
Significant Accounting Policies [Line Items]
Cash equivalents	$ 19,800,000	$ 38,300,000

Organization and Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2019
Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	3 years
Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	7 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	7 years
Software
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	3 years

Organization and Summary of Significant Accounting Policies - Schedule of the Cumulative Effect of Adoption of Topic 842 (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Assets
Property and equipment, net	$ 3,465,612	$ 3,537,392	$ 3,627,886
Other assets	2,341,179	3,538,128	1,995
Liabilities
Accrued liabilities	10,369,545	7,840,127	6,597,458
Current portion of capital lease obligations			40,586
Long-term portion of deferred rent			1,035,974
Long-term operating lease liability	1,988,395	3,271,705
Long-term capital lease obligations			$ 68,978
Long-term finance lease liability	$ 23,092	76,803
Accounting Standards Update 2016-02
Assets
Property and equipment, net		(90,494)
Other assets		3,536,133
Liabilities
Accrued liabilities		1,242,669
Current portion of capital lease obligations		(40,586)
Long-term portion of deferred rent		(1,035,974)
Long-term operating lease liability		3,271,705
Long-term capital lease obligations		(68,978)
Long-term finance lease liability		$ 76,803

Business Acquisitions - Additional Information (Details) - USD ($)			3 Months Ended	12 Months Ended
	Mar. 01, 2019	Oct. 15, 2018	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Cash payments for acquisition, net of cash acquired				$ 0	$ 5,001,750
Amortization expense				1,600,000	400,000
Acquisition related costs				$ 1,000,000	$ 0
Developed technology \| Maximum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				24.50%
Developed technology \| Minimum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				17.00%
In process research and development
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				29.50%
Customer base \| Maximum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				24.50%
Customer base \| Minimum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				16.00%
Trade names \| Maximum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				17.00%
Trade names \| Minimum
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets				16.00%
Micron Optics, Inc.
Business Acquisition [Line Items]
Cash payments for acquisition, net of cash acquired		$ 5,500,000
Income recognized since acquisition			$ 2,600,000	$ 10,800,000
Revenue recognized since acquisition			$ 1,100,000	1,800,000
General Photonics, Inc.
Business Acquisition [Line Items]
Income recognized since acquisition				10,500,000
Revenue recognized since acquisition				1,400,000
Cash consideration to purchase business	$ 19,000,000
Cash paid at closing	17,100,000
Remaining purchase price placed in escrow	$ 1,900,000
Contingent consideration				1,000,000
Contingent liability, fair value				1,000,000
Amortization expense				1,600,000
Acquisition costs, operating income				$ 900,000

Business Acquisitions - Allocation of Purchase Consideration (Details) - USD ($)	Dec. 31, 2019	Mar. 01, 2019	Dec. 31, 2018	Oct. 15, 2018
Business Acquisition [Line Items]
Goodwill	$ 10,541,676		$ 101,008
Micron Optics, Inc.
Business Acquisition [Line Items]
Accounts receivable				$ 1,742,693
Inventory				1,435,606
Other current assets				69,951
Property and equipment				996,460
Identifiable intangible assets				1,650,000
Goodwill				29,760
Accounts payable and accrued expenses				(379,737)
Total purchase consideration				$ 5,544,733
General Photonics, Inc.
Business Acquisition [Line Items]
Accounts receivable		$ 1,520,950
Inventory		2,698,000
Other current assets		763,873
Property and equipment		286,000
Identifiable intangible assets		8,200,000
Goodwill		10,511,916
Accounts payable and accrued expenses		(4,076,489)
Total purchase consideration		$ 19,904,250

Business Acquisitions - Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives (Details) - USD ($)	Oct. 15, 2018	Mar. 01, 2019
In process research and development
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	7 years
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
Micron Optics, Inc.
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	$ 1,650,000
Micron Optics, Inc. \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	1,200,000
Micron Optics, Inc. \| In process research and development
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	200,000
Micron Optics, Inc. \| Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	150,000
Micron Optics, Inc. \| Customer base
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets	$ 100,000
General Photonics, Inc.
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		$ 8,200,000
General Photonics, Inc. \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		7,200,000
General Photonics, Inc. \| In process research and development
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		0
General Photonics, Inc. \| Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		400,000
General Photonics, Inc. \| Customer base
Acquired Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets		$ 600,000
Minimum \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	5 years
Minimum \| Customer base
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	7 years
Maximum \| Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	8 years
Maximum \| Customer base
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life	15 years

Business Acquisitions - Pro Forma Consolidated Results of Operations (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Business Combinations [Abstract]
Revenue	$ 72,576,902	$ 60,249,896
Income from continuing operations	$ 6,912,802	$ 1,559,008

Accounts Receivable, net (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Billed	$ 17,193,742	$ 13,289,790
Other	5,182	31,361
Accounts Receivable, before Allowance for Credit Loss, Current	17,198,924	13,321,151
Less: allowance for doubtful accounts	(930,279)	(284,083)
Accounts Receivable, after Allowance for Credit Loss, Current	$ 16,268,645	$ 13,037,068

Intangible Assets, Net - Summary of Intangible Assets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 17,921,245	$ 8,041,460
Accumulated amortization	(7,726,768)	(4,739,190)
Intangible assets, net	10,194,477	3,302,270
In process research and development
Finite-Lived Intangible Assets [Line Items]
In-process research and development	1,580,000	200,000
Patent costs
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets gross	$ 5,291,245	4,991,460
Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	5 years
Finite lived intangible assets gross	$ 9,800,000	2,600,000
Customer base
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	7 years
Finite lived intangible assets gross	$ 700,000	100,000
Trade names
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible asset, useful life	3 years
Finite lived intangible assets gross	$ 550,000	$ 150,000
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
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

Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Building	$ 69,556		$ 69,556
Equipment	9,564,426		9,341,007
Furniture and fixtures	684,812		640,890
Software	1,178,210		1,122,231
Leasehold improvements	5,287,935		4,950,510
Property, plant and equipment, gross, total	16,784,939		16,124,194
Less—accumulated depreciation	(13,319,327)		(12,496,308)
Property and equipment, net	$ 3,465,612	$ 3,537,392	$ 3,627,886

Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1.6	$ 0.4

Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Depreciation	$ 1.0	$ 0.5

Intangible Assets, Net - Estimated Aggregate Amortization (Details)	Dec. 31, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 1,640,851
2021	1,660,112
2022	1,509,418
2023	1,437,195
2024	1,247,195
2025 and beyond	2,699,706
Finite lived intangible assets, net	$ 10,194,477

Inventory (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Finished goods	$ 1,695,461	$ 1,339,832
Work-in-process	1,007,719	643,420
Raw materials	7,591,251	4,890,490
Total Inventory	$ 10,294,431	$ 6,873,742

Goodwill (Details)	12 Months Ended
Goodwill (Details)	Dec. 31, 2019 USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2018	$ 101,008
Goodwill resulting from business combination - GP	10,511,916
Measurement Period Adjustment - MOI	(71,248)
Balance as of December 31, 2019	$ 10,541,676

Accrued Liabilities (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued compensation	$ 6,416,163		$ 4,467,587
Contingent consideration - GP	1,000,000		0
Accrued professional fees	113,303		198,062
Accrued income tax	715,916		236,636
Deferred rent	0		146,542
Current operating lease liability	1,283,310
Current finance lease liability	50,307
Accrued royalties	364,951		302,428
Accrued liabilities-other	425,595		404,752
Working capital payable - MOI	0		542,983
Customer deposits	0		298,468
Total accrued liabilities	$ 10,369,545	$ 7,840,127	$ 6,597,458

Debt - Additional Information (Details) - Silicon Valley Bank - USD ($)	12 Months Ended
	Dec. 31, 2019	Oct. 10, 2019
Prime Rate
Debt Instrument [Line Items]
Debt, additional interest above prime rate	1.00%
Term Loan
Debt Instrument [Line Items]
Debt, face amount	$ 6,000,000.0
Long-term debt obligation		$ 10,000,000.0
Effective interest rate		1.00%
Inventory used to secure debt		$ 1,000,000.0
Term Loan \| Prime Rate
Debt Instrument [Line Items]
Debt, additional interest above prime rate	2.00%
Effective interest rate		6.00%

Debt - Interest Expense (Details) - USD ($)	12 Months Ended
Debt - Interest Expense (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Interest expense on Term Loans	$ 8,073	$ 101,087
Amortization of debt issuance costs	5,685	16,308
Other interest expense	2,120	6,949
Total interest expense, net	$ 15,878	$ 124,344

Leases - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Rent expense		$ 1.0
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 - Lease Components (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019
Leases [Abstract]
ROU assets - operating lease	$ 2,235,731
ROU assets - finance lease	70,183
Total ROU assets	2,305,914
Current operating lease liability	1,283,310
Current finance lease liability	50,307
Long-term operating lease liability	1,988,395	$ 3,271,705
Long-term finance lease liability	23,092	$ 76,803
Total lease liabilities	$ 3,345,104

Leases - Rent Expense (Details)	12 Months Ended
Leases - Rent Expense (Details)	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating lease costs	$ 1,622,476
Variable rent costs	(146,542)
Total rent expense	$ 1,475,934

Leases - Future Lease Payments (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019
Leases [Abstract]
2020	$ 1,467,701
2021	640,800
2022	544,704
2023	544,704
2024 and beyond	544,704
Total future minimum lease payments	3,742,613
Less: Interest	470,908
Total operating lease liabilities	3,271,705
Current operating lease liability	1,283,310
Long-term operating lease liability	$ 1,988,395	$ 3,271,705

Leases - Finance Lease Payments (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019
Leases [Abstract]
2020	$ 56,020
2021	10,710
2022	10,083
2023	5,042
2024 and beyond	0
Total future minimum lease payments	81,855
Less: Interest	8,456
Total finance lease liabilities	73,399
Current finance lease liability	50,307
Long-term finance lease liability	$ 23,092	$ 76,803

Leases - Other Lease Information (Details)	12 Months Ended
Leases - Other Lease Information (Details)	Dec. 31, 2019 USD ($)
Finance lease cost:
Amortization of right-of-use assets	$ 46,498
Interest on lease liabilities	4,926
Total finance lease cost	51,424
Other information:
Operating cash flows from operating leases	1,622,476
Finance cash flows from finance leases	40,047
Right-of-use assets obtained in exchange for new finance lease liabilities	$ 14,541
Weighted-average remaining lease term (years) - operating leases	3 years 8 months 27 days
Weighted-average remaining lease term (years) - finance leases	2 years 1 month 2 days
Weighted-average discount rate - operating leases	7.00%
Weighted-average discount rate - finance leases	7.00%

Stockholders' Equity - Additional Information (Details)

1 Months Ended

12 Months Ended

Apr. 30, 2016

Jan. 31, 2010

USD ($)

Dec. 31, 2019

USD ($)

installment

$ / shares

Dec. 31, 2018

USD ($)

installment

$ / shares

Dec. 31, 2017

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

Stock based compensation expense | $

$ 1,500,000

$ 600,000

Stock-based compensation expense expected to be recognized | $

$ 4,000,000

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

$ 2.32

$ 2.07

Options outstanding, remaining contractual term

3 years 5 months

Weighted average remaining service period related to compensation recognition

2 years 10 months 30 days

Unamortized stock option expense to be recognized | $

$ 2,800,000

Restricted Stock

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

Shares issued (in shares)

217,000

280,000

Share-based compensation vesting installments | installment

Share-based Compensation, vested (in shares)

63,000

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

63,000

Share-based compensation, percentage

150.00%

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

42,000

Shares vested (in shares)

194,333

182,500

Restricted Stock | Employees

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

Shares issued (in shares)

280,000

Restricted Stock and Restricted Stock Units

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

Weighted average remaining service period related to compensation recognition

2 years

Shares issued (in shares)

291,600

296,287

Share-based Compensation, vested (in shares)

502,102

458,620

489,698

Shares vested (in shares)

210,619

312,365

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

$ 1,200,000

Restricted Stock Units (RSUs)

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

Share-based Compensation, vested (in shares)

37,546

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

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

Shares issued (in shares)

11,600

16,286

Shares vested (in shares)

16,286

129,865

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

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 ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Options Outstanding, Number of Shares
Beginning balance (in shares)	3,108,868	2,714,561
Forfeited (in shares)	(14,707)	(675,607)
Exercised (in shares)	(558,834)	(96,425)
Granted (in shares)	625,070	1,166,339
Ending balance (in shares)	3,160,397	3,108,868
Options Outstanding, Price per Share Range
Beginning balance, lower limit (in dollars per share)	$ 0.61	$ 0.61
Beginning balance, upper limit (in dollars per share)	6.55	6.55
Forfeited, lower limit (in dollars per share)	1.47	1.15
Forfeited, upper limit (in dollars per share)	3.37	6.55
Exercised, lower limit (in dollars per share)	0.61	0.65
Exercised, upper limit (in dollars per share)	1.81	2.46
Granted, lower limit (in dollars per share)	3.21	2.67
Granted, upper limit (in dollars per share)	7.37	3.53
Ending balance, lower limit (in dollars per share)	1.18	0.61
Ending balance, upper limit (in dollars per share)	7.37	6.55
Options Outstanding, Weighted Average Exercise Price
Beginning balance (in dollars per share)	2.26	1.88
Forfeited (in dollars per share)	2.51	1.90
Exercised (in dollars per share)	1.21	2.07
Granted (in dollars per share)	3.63	3.09
Ending balance (in dollars per share)	$ 2.72	$ 2.26
Options outstanding, aggregate intrinsic value beginning balance	$ 3,669,794	$ 2,098,195
Options outstanding, aggregate intrinsic value ending balance	$ 14,459,884	$ 3,669,794
Options exercisable, beginning balance (in shares)	1,986,740	2,590,030
Options exercisable, ending balance (in shares)	1,835,799	1,986,740
Options exercisable, weighted average exercise price, beginning balance (in dollars per share)	$ 1.81	$ 1.89
Options exercisable, weighted average exercise price, ending balance (in dollars per share)	$ 2.28	$ 1.81
Options exercisable, aggregate intrinsic value, beginning balance	$ 3,314,494	$ 2,013,034
Options exercisable, aggregate intrinsic value, ending balance	$ 9,197,775	$ 3,314,494

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	2.50%	3.04%
Expected life of option-years	7 years	7 years
Expected stock price volatility	65.00%	67.00%
Expected dividend yield	0.00%	0.00%

Stockholders' Equity - Activity of Stock Option by Exercise Price Range (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower range (in dollars per share)	$ 1.18	$ 0.61
Range of exercise prices, upper range (in dollars per share)	$ 7.37	$ 6.55
Options outstanding (in shares)	3,160,397	3,108,868	2,714,561
Options outstanding, weighted average exercise price (in dollars per share)	$ 2.72	$ 2.26	$ 1.88
Options exercisable (in shares)	1,835,799	1,986,740	2,590,030
Weighted average exercise price of options exercisable (in dollars per share)	$ 2.28	$ 1.81	$ 1.89
Total Intrinsic Value of Options Exercised	$ 1,641,687	$ 112,213
Total Fair Value of Options Vested	$ 3,267,672	$ 2,980,110
$0.61 - 6.55
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options outstanding (in shares)		3,108,868
Options outstanding, weighted average remaining life in years		5 years 8 months 20 days
Options outstanding, weighted average exercise price (in dollars per share)		$ 2.26
Options exercisable (in shares)		1,986,740
Options exercisable, weighted average remaining life in years		3 years 5 months 16 days
Weighted average exercise price of options exercisable (in dollars per share)		$ 1.81
$1.18 - 7.37
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options outstanding (in shares)	3,160,397
Options outstanding, weighted average remaining life in years	6 years 2 months 27 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

Stockholders' Equity - Activity of Restricted Stock Issuances (Details) - Restricted Stock and Restricted Stock Units - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Number of Unvested Shares
Beginning balance (in shares)	458,620	489,698
Granted (in shares)	291,600	296,287
Vested (in shares)	(210,619)	(312,365)
Forfeitures (in shares)	(37,499)	(15,000)
Ending balance (in shares)	502,102	458,620
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 2.56	$ 1.51
Granted (in dollars per share)	3.75	3.07
Vested (in dollars per share)	2.33	1.45
Forfeitures (in dollars per share)	2.96	1.41
Ending balance (in dollars per share)	$ 3.32	$ 2.56
Aggregate Grant Date Fair Value of Unvested Shares
Beginning balance	$ 1,172,456	$ 738,345
Granted	1,094,430	909,600
Vested	(490,769)	(454,339)
Forfeitures	(111,115)	(21,150)
Ending balance	$ 1,665,002	$ 1,172,456

Stockholders' Equity - Activity of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - Deferred Compensation Plan - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Stock Units
Beginning balance (in shares)	507,290	466,702
Granted (in shares)	121,713	40,588
Ending balance (in shares)	629,003	507,290
Weighted Average Grant Date Fair Value per Share
Beginning balance (in dollars per share)	$ 1.40	$ 1.40
Granted (in dollars per share)	4.41	2.99
Ending balance (in dollars per share)	$ 2.09	$ 1.40
Intrinsic value, outstanding	$ 4,585,432	$ 1,699,422	$ 1,134,086

Stockholders' Equity - Share Repurchase Program (Details) - USD ($)	2 Months Ended	12 Months Ended		13 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Sep. 19, 2018	Aug. 30, 2019	Sep. 30, 2017
Equity [Abstract]
Authorized share repurchase amount					$ 2,000,000.0	$ 2,000,000.0
Purchase of treasury stock (in shares)	333,953			565,629
Amount of stock repurchased	$ 2,000,000	$ 2,220,467	$ 466,894	$ 1,100,000

Revenue Recognition - (Details)	12 Months Ended
Revenue Recognition - (Details)	Dec. 31, 2019 segment
Revenue from Contract with Customer [Abstract]
Number of operating segments	2

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 19,480,000	$ 18,389,000	$ 17,814,000	$ 14,833,000	$ 13,538,000	$ 10,687,000	$ 9,923,000	$ 8,768,000	$ 70,515,715	$ 42,917,245
Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues									27,979,030	22,537,627
U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues									19,828,338	10,001,938
Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues									22,708,347	10,377,680
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues									43,129,361	21,330,000
Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues									27,386,354	21,587,245
Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues									58,602,133	31,338,459
Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues									11,913,582	11,578,786
United States
Disaggregation of Revenue [Line Items]
Total revenues									47,807,366	32,552,852
Asia
Disaggregation of Revenue [Line Items]
Total revenues									13,669,304	5,977,563
Europe
Disaggregation of Revenue [Line Items]
Total revenues									7,277,234	3,873,161
Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues									1,432,082	382,797
All Others
Disaggregation of Revenue [Line Items]
Total revenues									329,729	130,872
Technology development
Disaggregation of Revenue [Line Items]
Total revenues									26,024,674	20,967,556
Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues									41,787,613	19,641,434
Other
Disaggregation of Revenue [Line Items]
Total revenues									2,703,428	2,308,255
Products and Licensing
Disaggregation of Revenue [Line Items]
Total revenues									44,491,041	21,949,689
Products and Licensing \| Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues									2,601,069	1,834,289
Products and Licensing \| U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues									19,181,625	9,737,720
Products and Licensing \| Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues									22,708,347	10,377,680
Products and Licensing \| Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues									43,129,361	21,330,000
Products and Licensing \| Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues									1,361,680	619,689
Products and Licensing \| Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues									44,491,041	21,949,689
Products and Licensing \| Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Products and Licensing \| United States
Disaggregation of Revenue [Line Items]
Total revenues									21,782,692	11,585,296
Products and Licensing \| Asia
Disaggregation of Revenue [Line Items]
Total revenues									13,669,304	5,977,563
Products and Licensing \| Europe
Disaggregation of Revenue [Line Items]
Total revenues									7,277,234	3,873,161
Products and Licensing \| Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues									1,432,082	382,797
Products and Licensing \| All Others
Disaggregation of Revenue [Line Items]
Total revenues									329,729	130,872
Products and Licensing \| Technology development
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Products and Licensing \| Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues									41,787,613	19,641,434
Products and Licensing \| Other
Disaggregation of Revenue [Line Items]
Total revenues									2,703,428	2,308,255
Technology Development
Disaggregation of Revenue [Line Items]
Total revenues									26,024,674	20,967,556
Technology Development \| Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Total revenues									25,377,961	20,703,338
Technology Development \| U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Total revenues									646,713	264,218
Technology Development \| Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Total revenues									26,024,674	20,967,556
Technology Development \| Fixed-price contracts
Disaggregation of Revenue [Line Items]
Total revenues									14,111,092	9,388,770
Technology Development \| Cost-type contracts
Disaggregation of Revenue [Line Items]
Total revenues									11,913,582	11,578,786
Technology Development \| United States
Disaggregation of Revenue [Line Items]
Total revenues									26,024,674	20,967,556
Technology Development \| Asia
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| Europe
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| Canada, Central and South America
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| All Others
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| Technology development
Disaggregation of Revenue [Line Items]
Total revenues									26,024,674	20,967,556
Technology Development \| Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Total revenues									0	0
Technology Development \| Other
Disaggregation of Revenue [Line Items]
Total revenues									$ 0	$ 0

Revenue Recognition - Contract Balances (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Increase in net contract assets (liablities)	$ (1,000,000)
Contract assets	3,208,206	$ 2,759,315
Contract liabilities	(3,887,685)	(2,486,111)
Net contract assets	$ (679,479)	$ 273,204

Revenue Recognition - Performance Obligation Amount (Details) $ in Millions	Dec. 31, 2019 USD ($)
Products and Licensing
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 16.1
Technology Development
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 31.3

Revenue Recognition - Performance Obligation Percent (Details)	Dec. 31, 2019
Products and Licensing \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	63.00%
Products and Licensing \| 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	13.00%
Technology Development \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	70.00%
Technology Development \| 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	24.00%

Income Taxes - Components of Income Tax Expense (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal	$ 1,466,770	$ (44,727)
State	227,912	92,545
Deferred federal	(2,849,371)	0
Deferred state	(499,661)	0
Income tax (benefit)/expense	$ (1,654,350)	$ 47,818

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Deferred Income Tax Assets And Liabilities [Line Items]
Bad debt and inventory reserve	$ 376,331	$ 332,721
Inventory adjustment	0	(21,785)
UNICAP	4,828	2,804
Deferred revenue	130,058	115,676
ASC842 Lease Accounting (DTA)	796,864	288,017
ASC842 Lease Accounting (DTL)	(544,539)	0
Depreciation and amortization	(2,134,569)	(838,540)
Accrued liabilities	594,450	394,118
Deferred compensation	294,190	216,944
Stock-based compensation	373,658	803,757
Restricted stock	102,741	60,681
State bonus	33,791	44,861
Performance based compensation	9,499	0
Transaction costs	58,540	63,668
Total	1,775,487	3,267,533
Valuation allowance	(359,924)	(3,267,533)
Net deferred tax asset	1,415,563	0
Net operating loss carryforwards - state
Deferred Income Tax Assets And Liabilities [Line Items]
Net operating loss carryforwards	150,050	179,149
Net operating loss carryforwards- Canada
Deferred Income Tax Assets And Liabilities [Line Items]
Net operating loss carryforwards	10,503	10,503
Net operating loss carryforwards- Luna
Deferred Income Tax Assets And Liabilities [Line Items]
Net operating loss carryforwards	349,421	349,421
Net operating loss carryforwards- API
Deferred Income Tax Assets And Liabilities [Line Items]
Net operating loss carryforwards	$ 1,169,671	$ 1,265,538

Income Taxes - Reconciliation of Income Tax Benefit (Expense) (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income tax expense at federal statutory rate	21.00%	21.00%
State taxes, net of federal tax effects	(8.67%)	0.00%
Change in valuation allowance	(67.39%)	(27.65%)
Incentive stock options	(1.75%)	(1.05%)
Provision to return adjustments	7.26%	21.24%
Meals and entertainment	0.50%	0.97%
AMT Carryover	0.00%	(9.83%)
Other permanent differences	4.20%	(0.88%)
Income tax (benefit)/expense	(44.85%)	3.80%

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Taxes [Line Items]
Reduction in deferred tax asset due to Tax Act	$ 1,200,000
Tax benefit from release of valuation allowance	3,349,032	$ 0
API
Income Taxes [Line Items]
Net operating loss carryforwards	$ 6,000,000

Commitments and Contingencies - Additional Information (Details) $ in Millions		3 Months Ended			12 Months Ended
	Jul. 31, 2018 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2018 purchase_order	Mar. 31, 2018 USD ($) purchase_order	Dec. 31, 2019 USD ($)	Aug. 31, 2017 USD ($)
Commitments and Contingencies Disclosure [Line Items]
Number of non-cancelable purchase orders executed \| purchase_order			1	1
Minimum royalty payable					$ 0.2
Tunable Lasers
Commitments and Contingencies Disclosure [Line Items]
Non-cancelable purchase order delivery period (in months)		18 months
Non-cancelable purchase order commitment		$ 1.9		$ 1.1
Non-cancelable purchase order commitment remained					1.3
Macom
Commitments and Contingencies Disclosure [Line Items]
Accounts receivable				$ 2.1
Disposed of by Sale \| HSOR \| Macom
Commitments and Contingencies Disclosure [Line Items]
Escrow deposits related to indemnity claims					2.5	$ 4.0
Amount of the escrow balance received					$ 1.5
Disposed of by Sale \| Opto
Commitments and Contingencies Disclosure [Line Items]
Contingent consideration	$ 1.0
Non-cancelable purchase order delivery period (in months)	18 months

Employee Profit Sharing Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
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	$ 0.4	$ 0.3

Relationship with Major Customers (Details) - Sales to the U.S. government	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Consolidated Revenues
Concentration Risk [Line Items]
Concentration percentage	40.00%	53.00%
Billed Trade Receivables
Concentration Risk [Line Items]
Concentration percentage	12.00%	23.00%

Financial Information About Segments - Additional Information (Details) - segment	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Concentration Risk [Line Items]
Number of operating segments	2
Revenues \| Geographic Concentration Risk \| Outside of the United States
Concentration Risk [Line Items]
Percentage of total revenues by customer	32.00%	24.00%
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 ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total revenues	$ 19,480,000	$ 18,389,000	$ 17,814,000	$ 14,833,000	$ 13,538,000	$ 10,687,000	$ 9,923,000	$ 8,768,000	$ 70,515,715	$ 42,917,245
Operating (loss)/income	$ 1,718,000	$ 1,481,000	$ 1,014,000	$ (898,000)	$ 423,000	$ 581,000	$ 205,000	$ (373,000)	3,315,021	877,535
Depreciation									1,000,000	500,000
Amortization									1,600,000	400,000
Technology development
Segment Reporting Information [Line Items]
Total revenues									26,024,674	20,967,556
Operating (loss)/income									1,507,405	378,212
Depreciation									397,296	379,952
Amortization									91,185	130,765
Products and licensing
Segment Reporting Information [Line Items]
Total revenues									44,491,041	21,949,689
Operating (loss)/income									1,807,616	499,323
Depreciation									552,285	273,185
Amortization									$ 1,462,525	$ 418,349

Financial Information About Segments - Segment Information (Details) - USD ($)	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 86,524,060		$ 75,598,736
Property plant and equipment, and intangible assets	3,465,612	$ 3,537,392	3,627,886
Products and Licensing
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	48,723,810		40,775,211
Property plant and equipment, and intangible assets	22,122,279		4,927,453
Technology Development
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	37,800,250		34,823,525
Property plant and equipment, and intangible assets	$ 2,079,486		$ 2,103,711

Quarterly Results (unaudited) (Details) - USD ($)	3 Months Ended								12 Months Ended
Quarterly Results (unaudited) (Details) - USD ($)	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Total revenues	$ 19,480,000	$ 18,389,000	$ 17,814,000	$ 14,833,000	$ 13,538,000	$ 10,687,000	$ 9,923,000	$ 8,768,000	$ 70,515,715	$ 42,917,245
Gross margin	10,388,000	9,275,000	8,752,000	6,768,000	6,572,000	4,689,000	4,231,000	3,840,000	35,182,382	19,437,900
Operating (loss)/income	1,718,000	1,481,000	1,014,000	(898,000)	423,000	581,000	205,000	(373,000)	3,315,021	877,535
Net income/(loss) from continuing operations	2,146,000	1,231,000	840,000	1,126,000	(122,000)	1,293,000	299,000	(272,000)	5,342,545	1,237,810
Income from discontinued operations net of income taxes	0	0	0	0	1,062,000	7,556,000	768,000	421,000	0	9,766,431
Net income	2,146,000	1,231,000	840,000	1,126,000	940,000	8,849,000	1,067,000	149,000	5,342,545	11,004,241
Net income attributable to common stockholders	$ 2,146,000	$ 1,117,000	$ 751,000	$ 1,043,000	$ 873,000	$ 8,785,000	$ 1,004,000	$ 84,000	$ 5,057,095	$ 10,746,939
Net income/(loss) per share from continuing operations:
Basic (in dollars per share)	$ 0.07	$ 0.04	$ 0.03	$ 0.04	$ 0.00	$ 0.05	$ 0.01	$ (0.01)	$ 0.19	$ 0.04
Diluted (in dollars per share)	0.07	0.04	0.02	0.03	0.00	0.04	0.01	(0.01)	0.17	0.04
Net income per share from discontinued operations:
Basic (in dollars per share)	0.00	0.00	0.00	0.00	0.04	0.27	0.03	0.02	0.00	0.35
Diluted (in dollars per share)	0.00	0.00	0.00	0.00	0.04	0.23	0.02	0.02	0.00	0.30
Net income attributable to common stockholders:
Basic (in dollars per share)	0.07	0.04	0.03	0.04	0.03	0.31	0.04	0.00	0.18	0.39
Diluted (in dollars per share)	$ 0.07	$ 0.03	$ 0.02	$ 0.03	$ 0.03	$ 0.27	$ 0.03	$ 0.00	$ 0.16	$ 0.33
Weighted average shares:
Basic (in shares)	30,159,322	28,291,297	28,246,840	28,039,080	28,067,348	27,901,631	27,531,361	27,204,989	28,688,867	27,596,401
Diluted (in shares)	32,211,847	32,115,847	33,650,790	33,479,935	28,067,348	33,055,881	31,506,745	27,204,989	31,840,584	32,452,228
Products and licensing
Revenues:
Total revenues	$ 13,032,000	$ 11,894,000	$ 11,373,000	$ 8,192,000	$ 7,990,000	$ 5,371,000	$ 4,457,000	$ 4,131,000
Technology development
Revenues:
Total revenues	$ 6,448,000	$ 6,495,000	$ 6,441,000	$ 6,641,000	$ 5,548,000	$ 5,316,000	$ 5,466,000	$ 4,637,000

Discontinued Operations - Additional Information (Details) - USD ($)		12 Months Ended
	Jul. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture		$ 0	$ 15,799,529
Acquisition of property, plant and equipment for discontinued operations			100,000
Intangible property costs			10,000
Depreciation and amortization from discontinued operations			200,000
Gain on sale of discontinued operations		$ 0	8,595,798
Opto
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture			16,000,000
Opto \| Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Initial purchase price	$ 18,500,000		17,500,000
Proceeds from divestiture	17,500,000
Contingent consideration	$ 1,000,000
Gain on sale of discontinued operations			$ 8,595,797

Discontinued Operations - Summary of Transactions Related to Sale (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jul. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income tax expense		$ (1,572,244)
Gain on sale of discontinued operations	$ 0	8,595,798
Opto \| Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale price		17,500,000
Adjusted purchase price		17,500,000	$ 18,500,000
Assets held for sale		(8,193,184)
Liabilities held for sale		989,453
Transaction costs		(858,227)
Return of working capital		730,000
Income tax expense		(1,572,245)
Gain on sale of discontinued operations		$ 8,595,797

Discontinued Operations - Components of Income from Discontinued Operations (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]
Net revenues										$ 8,363,606
Cost of revenues										5,294,268
Operating expenses										1,728,113
Other (income)/expenses										(13,330)
Income before income taxes										1,354,555
Allocated tax expense										183,921
Operating income from discontinued operations										1,170,634
Gain on sale, net of related income taxes									$ 0	8,595,798
Net income from discontinued operations	$ 0	$ 0	$ 0	$ 0	$ 1,062,000	$ 7,556,000	$ 768,000	$ 421,000	$ 0	$ 9,766,431

Valuation and Qualifying Accounts (Details) - USD ($)	12 Months Ended
Valuation and Qualifying Accounts (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of Period	$ 3,551,616	$ 5,307,461
Additions	646,196	3,500
Deductions	(2,907,609)	(1,759,345)
Balance at end of period	1,290,203	3,551,616
Deferred tax valuation allowance
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of Period	3,267,533	5,020,744
Additions	0	0
Deductions	(2,907,609)	(1,753,211)
Balance at end of period	359,924	3,267,533
Allowances for doubtful accounts
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of Period	284,083	286,717
Additions	646,196	3,500
Deductions	0	(6,134)
Balance at end of period	$ 930,279	$ 284,083