0001239819-22-000106 | 10-Q | XBRL Viewer

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Cover page - shares	6 Months Ended
Cover page - shares	Jun. 30, 2022	Aug. 10, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	000-52008
Entity Registrant Name	LUNA INNOVATIONS INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1560050
Entity Address, Address Line One	301 First Street SW
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Roanoke
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	24011
City Area Code	540
Local Phone Number	769-8400
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	LUNA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		32,809,755
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001239819
Current Fiscal Year End Date	--12-31

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 4,864	$ 17,128
Accounts receivable, net	30,422	20,913
Contract assets	3,369	5,166
Inventory	30,754	22,493
Prepaid expenses and other current assets	6,535	3,793
Assets held for sale	0	12,952
Total current assets	75,944	82,445
Property and equipment, net	4,499	2,988
Intangible assets, net	20,399	17,177
Goodwill	28,441	18,984
Operating lease right-of-use assets	4,774	5,075
Other non-current assets	3,214	247
Deferred tax asset	4,612	3,321
Total assets	141,883	130,237
Current liabilities:
Current portion of long-term debt obligations	2,000	4,167
Accounts payable	3,881	2,809
Accrued and other current liabilities	16,413	9,258
Contract liabilities	4,816	4,649
Current portion of operating lease liabilities	2,449	2,101
Liabilities associated with assets held for sale	0	9,703
Total current liabilities	29,559	32,687
Long-term debt obligations, net of current portion	19,218	11,673
Long-term portion of operating lease liabilities	2,767	3,509
Deferred tax liability	1,357	0
Other long-term liabilities	421	445
Total liabilities	53,322	48,314
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, par value $0.001, 100,000,000 shares authorized, 34,528,065 and 33,855,725 shares issued, 32,752,348 and 32,116,270 shares outstanding at June 30, 2022 and December 31, 2021, respectively	35	34
Treasury stock at cost, 1,784,957 and 1,744,026 shares at June 30, 2022 and December 31, 2021, respectively	(5,542)	(5,248)
Additional paid-in capital	102,043	98,745
Accumulated deficit	(4,345)	(11,575)
Accumulated other comprehensive loss	(3,630)	(33)
Total stockholders’ equity	88,561	81,923
Total liabilities and stockholders’ equity	$ 141,883	$ 130,237

Consolidated Balance Sheets (Unaudited) (Parenthetical) (Unaudited) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	34,528,065	33,855,725
Common stock, outstanding (in shares)	32,752,348	32,116,270
Treasury stock (in shares)	1,784,957	1,744,026

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue	$ 26,162	$ 21,965	$ 48,642	$ 42,962
Cost of revenue	10,199	9,384	18,400	18,110
Gross profit	15,963	12,581	30,242	24,852
Operating expense:
Selling, general and administrative	15,760	12,805	29,862	23,739
Research, development and engineering	2,665	1,810	5,207	4,727
Total operating expense	18,425	14,615	35,069	28,466
Operating loss	(2,462)	(2,034)	(4,827)	(3,614)
Other income/(expense):
Other income	53	0	73	0
Interest expense, net	(111)	(122)	(224)	(265)
Total other expense, net	(58)	(122)	(151)	(265)
Loss from continuing operations before income taxes	(2,520)	(2,156)	(4,978)	(3,879)
Income tax expense/(benefit)	422	(995)	(693)	(1,659)
Net loss from continuing operations	(2,942)	(1,161)	(4,285)	(2,220)
Income from discontinued operations, net of income tax expense (benefit) of ($856), $101, $166 and $146	591	931	594	1,672
Gain on sale of discontinued operations, net of tax of $3,117	0	0	10,921	0
Net income from discontinued operations	591	931	11,515	1,672
Net (loss)/income	$ (2,351)	$ (230)	$ 7,230	$ (548)
Net loss per share from continuing operations:
Basic (in dollars per share)	$ (0.09)	$ (0.04)	$ (0.13)	$ (0.07)
Diluted (in dollars per share)	(0.09)	(0.04)	(0.13)	(0.07)
Net income per share from discontinued operations:
Basic (in dollars per share)	0.02	0.03	0.36	0.05
Diluted (in dollars per share)	0.02	0.03	0.36	0.05
Net (loss)/income per share attributable to common stockholders:
Basic (in dollars per share)	(0.07)	(0.01)	0.22	(0.02)
Diluted (in dollars per share)	$ (0.07)	$ (0.01)	$ 0.22	$ (0.02)
Weighted average shares:
Basic (in shares)	32,478,736	31,494,563	32,361,560	31,413,451
Diluted (in shares)	32,478,736	31,494,563	32,361,560	31,413,451

Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Discontinued operations tax effect	$ (856)	$ 101	$ 166	$ 146
Tax effect of gain from discontinued operation			$ 3,117

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net (loss)/income	$ (2,351)	$ (230)	$ 7,230	$ (548)
Other comprehensive (loss)/income	(3,227)	(247)	(3,597)	876
Total other comprehensive (loss)/income	$ (5,578)	$ (477)	$ 3,633	$ 328

- Definition

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

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+ Details

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive (Loss)/Income
Common Stock, Beginning Balance (in shares) at Dec. 31, 2020		31,024,537
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2020			1,699,975
Beginning balance at Dec. 31, 2020	$ 74,442	$ 33	$ (4,789)	$ 92,403	$ (12,957)	$ (248)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)		578,181
Exercise of stock options	1,489			1,489
Share-based compensation (in shares)		146,013
Share-based compensation	1,514			1,514
ESPP issuance (in shares)		63,193
ESPP issuance	530			530
Purchase of treasury stock (in shares)		(39,480)	39,480
Purchase of treasury stock	(420)		$ (420)
Net (loss)/income	(548)				(548)
Foreign currency translation adjustment	876					876
Common Stock, Ending Balance (in shares) at Jun. 30, 2021		31,772,444
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2021			1,739,455
Ending balance at Jun. 30, 2021	77,883	$ 33	$ (5,209)	95,936	(13,505)	628
Common Stock, Beginning Balance (in shares) at Mar. 31, 2021		31,392,989
Treasury Stock, Beginning Balance (in shares) at Mar. 31, 2021			1,720,785
Beginning balance at Mar. 31, 2021	76,546	$ 33	$ (4,991)	93,904	(13,275)	875
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)		263,484
Exercise of stock options	645			645
Share-based compensation (in shares)		71,448
Share-based compensation	857			857
ESPP issuance (in shares)		63,193
ESPP issuance	530			530
Purchase of treasury stock (in shares)		(18,670)	18,670
Purchase of treasury stock	(218)		$ (218)
Net (loss)/income	(230)				(230)
Foreign currency translation adjustment	(247)					(247)
Common Stock, Ending Balance (in shares) at Jun. 30, 2021		31,772,444
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2021			1,739,455
Ending balance at Jun. 30, 2021	$ 77,883	$ 33	$ (5,209)	95,936	(13,505)	628
Common Stock, Beginning Balance (in shares) at Dec. 31, 2021	32,116,270	32,116,270
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2021			1,744,026
Beginning balance at Dec. 31, 2021	$ 81,923	$ 34	$ (5,248)	98,745	(11,575)	(33)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)		360,432
Exercise of stock options	1,158	$ 1		1,157
Share-based compensation (in shares)		215,123
Share-based compensation	1,620			1,620
ESPP issuance (in shares)		101,454
ESPP issuance	521			521
Purchase of treasury stock (in shares)		(40,931)	40,931
Purchase of treasury stock	(294)		$ (294)
Net (loss)/income	7,230				7,230
Foreign currency translation adjustment	$ (3,597)					(3,597)
Common Stock, Ending Balance (in shares) at Jun. 30, 2022	32,752,348	32,752,348
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2022			1,784,957
Ending balance at Jun. 30, 2022	$ 88,561	$ 35	$ (5,542)	102,043	(4,345)	(3,630)
Common Stock, Beginning Balance (in shares) at Mar. 31, 2022		32,361,122
Treasury Stock, Beginning Balance (in shares) at Mar. 31, 2022			1,782,289
Beginning balance at Mar. 31, 2022	92,017	$ 34	$ (5,526)	99,906	(1,994)	(403)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)		217,040
Exercise of stock options	938	$ 1		937
Share-based compensation (in shares)		75,400
Share-based compensation	679			679
ESPP issuance (in shares)		101,454
ESPP issuance	521			521
Purchase of treasury stock (in shares)		(2,668)	2,668
Purchase of treasury stock	(16)		$ (16)
Net (loss)/income	(2,351)				(2,351)
Foreign currency translation adjustment	$ (3,227)					(3,227)
Common Stock, Ending Balance (in shares) at Jun. 30, 2022	32,752,348	32,752,348
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2022			1,784,957
Ending balance at Jun. 30, 2022	$ 88,561	$ 35	$ (5,542)	$ 102,043	$ (4,345)	$ (3,630)

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows used in operating activities
Net income/(loss)	$ 7,230	$ (548)
Adjustments to reconcile net income/(loss) to net cash used in operating activities
Depreciation and amortization	2,694	2,360
Share-based compensation	2,177	1,514
Gain on sale of discontinued operations, net of tax	(10,921)	0
Deferred taxes	(124)	0
Tax benefit from release of valuation allowance	0	475
Change in assets and liabilities
Accounts receivable	(6,555)	(473)
Contract assets	140	763
Inventory	(4,281)	(1,562)
Other current assets	(3,870)	(2,399)
Other long-term assets	646	0
Accounts payable and accrued and other current liabilities	6,123	(2,185)
Contract liabilities	1,196	(826)
Other long-term liabilities	(1,523)	0
Net cash used in operating activities	(7,068)	(2,881)
Cash flows used in investing activities
Acquisition of property and equipment	(1,657)	(551)
Intangible property costs	4
Intangible property costs		(141)
Proceeds from sale of property and equipment	25	0
Proceeds from sale of discontinued operations	12,973	0
Acquisition of Lios	(22,085)	0
Net cash used in investing activities	(10,740)	(692)
Cash flows provided by/(used in) financing activities
Payments on finance lease obligations	(24)	(24)
Proceeds from borrowings under debt obligations	21,150	0
Payments of debt obligations	(15,772)	(2,072)
Repurchase of common stock	(294)	(420)
Proceeds from ESPP	521	530
Proceeds from the exercise of options	1,158	1,490
Net cash provided by/(used in) financing activities	6,739	(496)
Effect of exchange rate changes on cash and cash equivalents	(1,195)	673
Net decrease in cash and cash equivalents	(12,264)	(3,396)
Cash and cash equivalents—beginning of period	17,128	15,366
Cash and cash equivalents—end of period	4,864	11,970
Supplemental disclosure of cash flow information
Cash paid for interest	183	125
Cash received for income tax refund, net	$ 787	$ 87

Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	Basis of Presentation and Significant Accounting Policies Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries, and distributed fiber optic sensing solutions that measure, or "sense" the structures for industries ranging from aerospace, automotive, oil and gas, security and infrastructure. Our communications test and control products help customers test their fiber optic networks and assemblies with speed and precision in both lab and production environments, accelerating the development of fiber optic products and assuring accurate testing of optical components like photonic integrated circuits and coherent receivers, which are both critical elements of meeting the world’s exponentially growing demand for bandwidth. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by measuring stress, strain, and temperature at a high resolution for new designs or manufacturing processes. Our distributed fiber optic sensing products ensure the safety and structural integrity or operational health of critical assets in the field, by monitoring stress, strain, and vibration in large civil and industrial infrastructure such as bridges, roads, pipelines and borders. We also provide applied research services, primarily under federally funded development programs, that leverage our sensing and instrumentation technologies to meet the specific needs and applications of our customers. Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments considered necessary to present fairly our financial position at June 30, 2022, results of operations, comprehensive income/(loss) and changes in stockholders' equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated balance sheet as of December 31, 2021 was derived from our audited consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether the carrying value has been impaired. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: •Level 1—Quoted prices for identical instruments in active markets. •Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. •Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued and other liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its floating per annum interest rate of the daily simple secured overnight financing rate ("SOFR"), plus an SOFR adjustment, plus a margin ranging from 1.75% to 2.50%, to be at market based upon similar instruments that would be available to us. The Company has certain assets and liabilities that have been recorded at fair value on a non-recurring basis following an acquisition. Refer to Note 3, Business Acquisition, for the allocation of the total consideration based upon the fair value of the assets acquired and liabilities assumed as of the acquisition date. Reportable Segments Prior to September 30, 2021, we were organized into two main reporting segments, our Lightwave segment and our Luna Labs segment. We now have one reportable segment, Lightwave, following the determination that our Luna Labs segment met held-for-sale and discontinued operations accounting criteria at the end of the third quarter of 2021. On March 8, 2022, we completed the sale of substantially all of our equity interests in Luna Labs. Prior to the sale, our Luna Labs segment performed applied research principally in the areas of sensing and instrumentation, advanced materials, optical technologies and health sciences. See Note 2, Sale of Discontinued Operations, for additional disclosure related to discontinued operations and assets held for sale. The remaining segment, Lightwave, develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products. Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. For the three and six months ended June 30, 2022 and 2021, all potentially dilutive securities for stock options and restricted stock unites were excluded as their impact would be anti-dilutive. Foreign Currency For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal period end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings. Recently Issued Pronouncements, Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption to have a material impact on our consolidated financial statements.

Sale of Discontinued Operations

6 Months Ended

Jun. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

Sale of Discontinued Operations

On March 8, 2022, we completed the sale of substantially all of our equity interests in our Luna Labs business to certain members of Luna Labs’ senior management team and a group of outside investors for an initial purchase price of $20.4 million before working capital and escrow adjustments and transaction expenses. Total consideration included $13.0 million of cash received at closing, $2.5 million in the form of a convertible note and $1.7 million in the form of 60-day promissory notes. We can earn up to $1.0 million in future payments from Luna Labs upon the achievement by Luna Labs of certain financial goals. The 60-day promissory notes and earn out receivable are included within the prepaid expenses and other current assets line item and the convertible note is included in other non-current assets line item of the consolidated balance sheet. The gain on the transaction was $10.9 million, net of taxes of $3.1 million.

We have separately reported the financial results of Luna Labs as discontinued operations in our consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, respectively, and presented the related assets and liabilities as held for sale in the consolidated balance sheet as of December 31, 2021. These changes have been applied to all periods presented. The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Luna Labs segment that will be eliminated from continuing operations. Previously reported expenses for the Luna Labs segment have been restated to exclude certain allocated expenses that are not directly attributable to the Luna Labs segment.

The key components from discontinued operations related to the Luna Labs business are as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	—	$	5,972	$	5,108	$	11,274
Cost of revenues	—		4,603		3,692		8,747
Gross profit	—		1,369		1,416		2,527
Selling, general and administrative expenses	265		337		656		709
Operating (loss)/income	(265)		1,032		760		1,818
Income tax (benefit)/expense	(856)		101		166		146
Net income from discontinued operations, net of tax	$	591	$	931	$	594	$	1,672

Assets and liabilities of discontinued operations classified as held for sale in the consolidated balance sheet as of December 31, 2021 consist of the following (in thousands):


	December 31, 2021
Accounts receivable, net	$	2,967
Inventory	282
Contract assets	4,051
Prepaid expenses and other current	132
Property and equipment, net	330
Intangible assets, net	165
Operating lease ROU asset	4,884
Other assets	141
Assets held for sale	$	12,952








Accounts payable	1,042
Accrued and other current liabilities	821
Contract liabilities	2,626
Current portion of operating lease liabilities	388
Long-term portion of operating lease liabilities	4,826
Liabilities associated with assets held for sale	$	9,703

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. The following table presents cash flow and non-cash information related to discontinued operations for the six months ended June 30, 2022 and 2021 (in thousands):


	Six Months Ended June 30,
	2022		2021
Depreciation and amortization	$	23	$	31
Share-based compensation	177		10
Acquisition of property and equipment	34		50

Business Acquisitions

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Business Acquisitions

Business Acquisition

On March 10, 2022, we entered into and closed a Share Purchase Agreement (the “Share Purchase Agreement”) with NKT Photonics A/S ("NKT Photonics") to purchase all of the shares of NKT Photonics GmbH and LIOS Technologies Inc. (collectively "Lios") for aggregate consideration of $22.1 million (€20.0 million). Lios is a provider of distributed fiber optic monitoring solutions for power cable, pipelines, oilfield services, security, highways, railways and industrial fire detection systems. The acquisition of Lios provides us with long range, fully distributed temperature and strain sensing capabilities, intellectual property, products and expertise that are highly complementary to Luna, which we believe will accelerate our technology and overall growth roadmap. The Share Purchase Agreement contains customary representations and warranties and indemnities.

The Lios acquisition has 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. Due to the timing of the acquisition relative to the interim balance sheet date, the purchase price allocation of Lios is based on a preliminary valuation and is subject to revision as final valuation of acquired intangible assets and evaluation of working capital values and related reserves are completed.

The following table summarizes the preliminary allocation of the purchase consideration of the Lios acquisition:


	(in thousands)
Accounts receivable	$	3,001
Inventory	5,388
Prepaid expenses and other current assets	92
Property and equipment	858
Intangible assets	5,994
Goodwill	10,533
Operating lease right-of-use asset	512
Accounts payable	(1,217)
Accrued and other current liabilities	(1,026)
Current portion of operating lease liability	(322)
Deferred income tax liability	(1,537)
Long-term portion of operating lease liability	(191)

Total purchase consideration	$	22,085

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

Estimated

Useful Life

(in thousands)

Developed technology

6 years

1,998

Customer relationships

8 years

3,330

Trade names and trademarks

7 years

333

Backlog

1 year

333

5,994

Lios's developed technology primarily consists of its distributed fiber optic monitoring solutions that provide a wide range of applications using fully distributed temperature and strain sensing. The developed technologies were valued using the "relief from royalty method" under the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of these assets. A discount rate of 14.5% was used to discount the cash flows to the present value.

Trade names and trademarks are considered a type of guarantee of a certain level of recognizability, quality or performance represented by the Lios brand. Trade names and trademarks were valued using the "relief from royalty" method under the income approach. This method is based on the assumption that in lieu of ownership, a market participant would be willing to pay a royalty in order to exploit the related benefits of these assets. A discount rate of 14.5% was used to discount the cash flows to the present value.

Backlog arises from unfulfilled purchase or sales order contracts. The value of Lios's backlog as of the acquisition date was calculated using the "multi-period excess earnings" method under the income approach. A discount rate of 13.5% was used to discount the cash flows attributable solely to the backlog to the present value.

Customer relationships represent the fair value of either (i) the avoidance of cost associated with the creation of a new customer relationship or (ii) the projected cash flows that will be derived from the sale of products to existing customers as of the acquisition date. Lios's customer relationships were valued using the "multi-period excess earnings" method under the income approach. This method reflects the present value of the projected cash flows that are expected by the existing customers less charges representing the contribution of other assets to those cash flows. A discount rate of 15.5% was used to discount these cash flows to the present value.

Goodwill represents the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed in connection with the acquisition. Goodwill generated from our business acquisitions was primarily attributable to expected synergies from future customer and sales growth. We do not expect this goodwill to be deductible for tax purposes.

Intangible assets, net

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets, net

Intangible assets, net at June 30, 2022 and December 31, 2021 consisted of the following:


	Estimated Life	June 30, 2022		December 31, 2021
(in thousands)
Patent costs	1 - 18 years	$	8,731	$	9,230
Developed technology	6 - 10 years	16,202		14,440
In-process research and development	N/A	2,684		2,732
Customer base	5 - 8 years	3,719		700
Trade names	7 - 15 years	883		550
Backlog	1 - 3 years	333		—
		32,552		27,652
Accumulated amortization		(12,153)		(10,475)
		$	20,399	$	17,177

Amortization expense for the three and six months ended June 30, 2022 was $0.8 million and $1.7 million, respectively. Estimated aggregate amortization, based on the net value of intangible assets at June 30, 2022, for each of the next five years and beyond is as follows (in thousands):


Year Ending December 31,
2022 (remaining 6 months)	$	2,377
2023	3,926
2024	3,248
2025	2,914
2026	2,798
2027 & beyond	5,136
Total	$	20,399

Goodwill

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The change in the carrying value of goodwill during the six months ended June 30, 2022 was as follows:


(in thousands)
Balance as of December 31, 2021	18,984
Acquisition of Lios	10,533
Foreign currency translation	(1,076)
Balance as of June 30, 2022	$	28,441

Inventory

6 Months Ended

Jun. 30, 2022

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 were as follows:


	June 30, 2022		December 31, 2021
(in thousands)
Finished goods	$	10,997	$	10,087
Work-in-process	2,901		2,318
Raw materials	16,856		10,088
Total inventory	30,754		22,493

Accrued Liabilities

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued LiabilitiesAccrued liabilities consisted of the following:


	June 30, 2022		December 31, 2021
(in thousands)
Accrued compensation	$	7,794	$	6,798
Contingent consideration	100		225
Accrued professional fees	1,343		503
Accrued income tax	4,071		328
Current portion of finance lease liability	49		48

Accrued liabilities - other	3,056		1,356
Total accrued and other current liabilities	$	16,413	$	9,258

Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

Long-term debt consisted of the following:


(in thousands)	June 30, 2022		December 31, 2021
Term Loan (net of debt issuance costs of $82 and $44, 4.05% and 2.48% at June 30, 2022 and December 31, 2021, respectively)	$	19,918	$	8,290
Revolving Loan (4.05% and 2.43% at June 30, 2022 and December 31, 2021)	1,300		7,550
	21,218		15,840
Less: Current portion of long-term debt obligations	(2,000)		(4,167)
Long-term debt obligations	$	19,218	$	11,673

PNC Bank Facility

On June 21, 2022 (the “Effective Date”), the Company entered into a Loan Modification Agreement (the “Second Amendment”) in respect of its Loan Agreement, dated as of December 1, 2020 (the “Original Loan Agreement” and as amended by that certain First Amendment to Loan Agreement, dated as of March 10, 2022, and the Second Amendment, the “Loan Agreement”) with PNC Bank, National Association, as lender (the “Lender”) and certain of the Company’s domestic subsidiaries as guarantors, to, among other things, extend the maturity date of the Term Loan and Revolving Line (each as defined below) to June 21, 2027 and increase the total commitments to the Company.

The Loan Agreement provides a $15.0 million revolving credit facility (the “Revolving Line”) and a $20 million term loan facility (the “Term Loan”). On the Effective Date, we borrowed the full amount of the Term Loan from the Lender according to a term note (the “Term Note”), a portion of the proceeds of which were used to refinance the remaining principal amount of the $12.5 million in term loans issued under the Original Loan Agreement, and the remainder of which were used to pay down approximately $13.7 million of the $15.0 million in revolving loans outstanding under the Revolving Line (the “Revolving Loan”) according to a revolving line of credit note (the “Revolving Line of Credit Note”). We may repay and reborrow advances under the Revolving Line from time to time according to the Revolving Line of Credit Note.

The Term Loan matures on June 21, 2027, which was extended from December 1, 2023 as part of the loan modification. The Term Loan amortizes at a rate equal to 10% for the first year, 15% for years two and three and 20% in years four and five, in each case payable on a quarterly basis. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest will be due and payable on June 21, 2027. The Term Loan bears interest at a floating per annum rate equal to the sum of (a) the daily simple secured overnight finance rate ("Daily Simple SOFR"), plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.50% per annum, depending on our Net Leverage Ratio (as defined in the Loan Agreement). We may prepay the Term Loan without penalty or premium.

The Revolving Line expires on June 21, 2027, which was extended from December 1, 2023 as part of the loan modification. Borrowings under the Revolving Line bear interest at a floating per annum rate equal to the sum of (a) the Daily Simple SOFR, plus (b) an SOFR adjustment of ten basis points (0.10%), plus (c) an applicable margin. The applicable margin ranges from 1.75% to 2.50% per annum, depending on our Net Leverage Ratio. Accrued interest is due and payable on the first day of each month and the outstanding principal balance and any accrued but unpaid interest is due and payable on June 21, 2027. The unused portion of the Revolving Line accrues a fee equal to 0.20% per annum multiplied by the quarterly average unused amount. The unused Revolving Line totaled $13.7 million at June 30, 2022.

The Loan Agreement includes a number of affirmative and restrictive covenants applicable to us and our subsidiaries, including, among others, financial covenants regarding minimum net leverage and fixed charge coverage (beginning in the third quarter ended September 30, 2022), affirmative covenants regarding delivery of financial statements, payment of taxes, and maintenance of government compliance, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. For the quarter ended June 30, 2022, we were initially subject to a minimum adjusted EBITDA level which was not met as of June 30, 2022 but was subsequently waived. We expect to be in compliance with the minimum net leverage and fixed charge coverage financial covenants for the next twelve months.

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

Maturities on debt are as follows (in thousands):


Year Ending December 31,	Amount

2022 (remaining 6 months)	992
2023	2,484
2024	2,984
2025	3,484
2026	3,984
2027 and thereafter	7,290
Total	$	21,218

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

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-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

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

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

We also have finance leases for equipment which have remaining terms ranging from 1 to 3 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 finance lease ROU assets are included within the other non-current assets line item of the consolidated balance sheets. The current and long-term portion of the ROU lease liabilities are included within the accrued and other current liabilities and other long-term liabilities line items of the consolidated balance sheets, respectively.

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 June 30, 2022, we had no operating or finance leases that have not yet commenced.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Operating lease costs	$	788	$	529	1,363		$	1,058
Variable rent costs	(60)		(29)		(110)		(57)
Total rent expense	$	728	$	500	$	1,253	$	1,001

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2022 (remaining 6 months)	$	1,339	$	26
2023	2,061		53
2024	1,349		53
2025	673		48
2026	137		—
2027 and beyond	—		—
Total future minimum lease payments	5,559		180
Less: imputed interest	343		7
Total lease liabilities	$	5,216	$	173

Current lease liability	$	2,449	$	49
Long-term lease liability	2,767		124
Total lease liabilities	$	5,216	$	173

Other information related to leases is as follows:


	Three Months Ended June 30,				Six months ended June 30,
(in thousands, except weighted-average data)	2022		2021		2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	13	$	13	$	26	$	27
Interest on lease liabilities	(1)		(1)		(2)		(3)
Total finance lease cost	$	12	$	12	$	24	$	24

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	511	$	571	$	1,040	$	1,109
Finance cash flows from finance leases	$	12	$	12	$	24	$	24
Right-of-use assets obtained in exchange for new operating lease liabilities	$	33	$	—	$	33	$	—

Other weighted average information related to leases is as follows:


	Six Months Ended June 30,
	2022		2021
Weighted-average remaining lease term (years) - operating leases	5.8		3.7
Weighted-average remaining lease term (years) - finance leases	3.2		4.2
Weighted-average discount rate - operating leases	6	%	6	%
Weighted-average discount rate - finance leases	3	%	3	%

Leases

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

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Operating lease costs	$	788	$	529	1,363		$	1,058
Variable rent costs	(60)		(29)		(110)		(57)
Total rent expense	$	728	$	500	$	1,253	$	1,001

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2022 (remaining 6 months)	$	1,339	$	26
2023	2,061		53
2024	1,349		53
2025	673		48
2026	137		—
2027 and beyond	—		—
Total future minimum lease payments	5,559		180
Less: imputed interest	343		7
Total lease liabilities	$	5,216	$	173

Current lease liability	$	2,449	$	49
Long-term lease liability	2,767		124
Total lease liabilities	$	5,216	$	173

Other information related to leases is as follows:


	Three Months Ended June 30,				Six months ended June 30,
(in thousands, except weighted-average data)	2022		2021		2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	13	$	13	$	26	$	27
Interest on lease liabilities	(1)		(1)		(2)		(3)
Total finance lease cost	$	12	$	12	$	24	$	24

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	511	$	571	$	1,040	$	1,109
Finance cash flows from finance leases	$	12	$	12	$	24	$	24
Right-of-use assets obtained in exchange for new operating lease liabilities	$	33	$	—	$	33	$	—

Other weighted average information related to leases is as follows:


	Six Months Ended June 30,
	2022		2021
Weighted-average remaining lease term (years) - operating leases	5.8		3.7
Weighted-average remaining lease term (years) - finance leases	3.2		4.2
Weighted-average discount rate - operating leases	6	%	6	%
Weighted-average discount rate - finance leases	3	%	3	%

Capital Stock and Share-Based Compensation	6 Months Ended
Capital Stock and Share-Based Compensation	Jun. 30, 2022
Equity [Abstract]
Capital Stock and Share-Based Compensation	Capital Stock and Share-Based Compensation Stock Options For the three and six months ended June 30, 2022, we recognized $0.2 million and $0.4 million, respectively, in share-based compensation expense related to stock options, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. Share-based compensation expense related to stock options for the three and six months ended June 30, 2021 totaled $0.3 million and $0.5 million, respectively. We expect to recognize $0.6 million in share-based compensation expense over the weighted-average remaining service period of 1.2 years for stock options outstanding as of June 30, 2022. Restricted Stock Units During the three and six months ended June 30, 2022, we granted 376,436 and 623,842 time-based restricted stock units ("RSUs"), respectively. RSU grants for the three and six months ended June 30, 2021 totaled 55,000 and 134,250, respectively. The general terms of the RSUs are similar to awards previously granted by us. The weighted average fair value of the time-based RSUs granted during the three and six months ended June 30, 2022 was $5.48 and $6.39 per share, respectively. The fair value of each RSU was determined based on the market price of our stock on the date of grant. In addition, pursuant to our Deferred Compensation Plan, non-employee directors can elect to defer the receipt of some or all of the equity compensation that they receive for board and committee service. During the three and six months ended June 30, 2022 we granted 89,825 and 98,261 RSUs, respectively, pursuant to the Deferred Compensation Plan. RSU grants pursuant to the Deferred Compensation Plan for the three and six months ended June 30, 2021 totaled 4,259 and 8,917, respectively. The general terms of these RSUs are similar to awards previously granted by us. The weighted average fair value of these RSUs granted during the three and six months ended June 30, 2022, was $5.56 and $5.81 per share, respectively. The fair value of each RSU was determined based on the market price of our stock on the date of grant. For the three and six months ended June 30, 2022, we recognized $0.5 million and $1.2 million, respectively, in share-based compensation expense related to RSUs, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. Share-based compensation related to RSUs for the three and six months ended June 30, 2021 totaled $0.3 million and $0.6 million, respectively. We expect to recognize $5.6 million in share-based compensation expense over the weighted-average remaining service period of 2.3 years for RSUs outstanding as of June 30, 2022. Employee Stock Purchase Plan ("ESPP") For the three and six months ended June 30, 2022, we recognized $0.1 million and $0.2 million, respectively, in share-based compensation expense related to the ESPP, which is included in our selling, general and administrative expense in the accompanying consolidated statement of operations. Share-based compensation related to the ESPP for the three and six months ended June 30, 2021 totaled $0.1 million and $0.2 million, respectively.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
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+ Details

Revenue Recognition

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic locations, customer type, contract type, timing of recognition, and major categories, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. We disaggregate revenue on the basis of where the physical goods are shipped. We also classify revenue by the customer type of entity for which it does business, which is an indicator of the diversity of our client base. We attribute revenues generated from being a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Disaggregation by contract mix provides insight in terms of the degree of performance risk that we have assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as we are required to deliver a scope of work or level of effort for a negotiated fixed price. Cost-based contracts are considered to provide the lowest amount of performance risk since we are generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements. By classifying revenue by major product and service, we attribute revenue from a client to the major product or service that we believe to be the client's primary market.

The details are listed in the table below for the three and six months ended June 30, 2022 and 2021:


		Three Months Ended June 30,				Six Months Ended June 30,

(in thousands)		2022		2021		2022		2021
		(unaudited)				(unaudited)
Total Revenue by Geographic Location
	United States	$	10,249	$	11,536	20,764		$	22,115
	Asia	4,187		3,596		9,017		7,268
	Europe	7,558		4,509		12,465		8,486
	Canada, Central and South America	3,957		2,324		6,185		5,093
	All Others	211		—		211		—
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Major Customer Type
	Sales to the U.S. government	$	2,156	$	2,502	$	3,791	$	4,916
	U.S. direct commercial sales and other	8,093		9,033		16,974		17,199
	Foreign commercial sales & other	15,913		10,430		27,877		20,847
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Contract Type
	Fixed-price contracts	$	25,501	$	20,732	$	47,354	$	41,778
	Cost-type contracts	661		1,233		1,289		1,184
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	22,885	$	18,099	41,494		$	34,939
	Goods/services transferred over time	3,277		3,866		7,149		8,023
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Major Products/Services
	Technology development	$	1,539	$	2,027	3,136		$	4,167
	Test, measurement and sensing systems	24,022		19,485		44,117		38,003

	Other	601		—		1,389		—
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Contract Balances

Our contract assets consist of unbilled amounts for research contracts as well as custom product contracts. Contract liabilities include excess billings, subcontractor accruals, warranty expense, extended warranty revenue, and customer deposits. During the three and six months ended June 30, 2022, we recognized $1.4 million and $2.9 million, respectively, of revenue that was included in contract liabilities as of December 31, 2021.

The following table shows the components of our contract balances as of June 30, 2022 and December 31, 2021:


(in thousands)	June 30, 2022		December 31, 2021
Contract assets	$	3,369	$	5,166
Contract liabilities	4,816		4,649
Net contract (liabilities) assets	$	(1,447)	$	517

Performance Obligations

Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our unfulfilled performance obligations was $47.6 million at June 30, 2022. We expect to satisfy $36.4 million of the performance obligations in 2022, $8.3 million in 2023 and the remainder by 2026.

- Definition

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

+ References

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

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Our provision for income taxes is based upon the estimated annual effective tax rate for the year applied to the current period income plus the tax effect of any significant or unusual items, discrete events or changes in tax law. Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. We and our subsidiaries file U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions. For the six months ended June 30, 2022, our effective income tax rate was 13.9% compared to 42.8% for the six months ended June 30, 2021. The effective tax rate for 2022 differed from the federal statutory rate of 21%, primarily as a result of unfavorable impact from the net Global Intangible Low Taxed Inclusion ("GILTI") and losses for which no benefit can be recorded partially offset by Research & Development ("R&D") tax credits. The effective tax rate for 2021 differed from the federal statutory rate of 21% primarily as a result of the excess tax benefit on stock compensation vesting and exercises.

- Definition

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

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+ Details

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe are from time to time involved in certain legal proceedings in the ordinary course of conducting our business. While the ultimate liability pursuant to these actions cannot currently be determined, we believe it is not reasonably possible that these legal proceedings will have a material adverse effect on our financial position or results of operations.We executed non-cancelable purchase orders totaling $4.8 million as of June 30, 2022 for multiple shipments of tunable lasers to be delivered over a 9-15 month period. At June 30, 2022, approximately $4.4 million of these commitments remained and are expected to be delivered by August 22, 2023.

Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2022
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Luna Innovations Incorporated (“we,” “Luna Innovations” or the “Company”), headquartered in Roanoke, Virginia, was incorporated in the Commonwealth of Virginia in 1990 and reincorporated in the State of Delaware in April 2003. We are a leader in advanced optical technology, providing high performance fiber optic test, measurement and control products for the telecommunications and photonics industries, and distributed fiber optic sensing solutions that measure, or "sense" the structures for industries ranging from aerospace, automotive, oil and gas, security and infrastructure. Our communications test and control products help customers test their fiber optic networks and assemblies with speed and precision in both lab and production environments, accelerating the development of fiber optic products and assuring accurate testing of optical components like photonic integrated circuits and coherent receivers, which are both critical elements of meeting the world’s exponentially growing demand for bandwidth. Our distributed fiber optic sensing products help designers and manufacturers more efficiently develop new and innovative products by measuring stress, strain, and temperature at a high resolution for new designs or manufacturing processes. Our distributed fiber optic sensing products ensure the safety and structural integrity or operational health of critical assets in the field, by monitoring stress, strain, and vibration in large civil and industrial infrastructure such as bridges, roads, pipelines and borders. We also provide applied research services, primarily under federally funded development programs, that leverage our sensing and instrumentation technologies to meet the specific needs and applications of our customers.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments, consisting of only normal recurring adjustments considered necessary to present fairly our financial position at June 30, 2022, results of operations, comprehensive income/(loss) and changes in stockholders' equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated balance sheet as of December 31, 2021 was derived from our audited consolidated financial statements. The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022.
Goodwill and Intangible Assets	Goodwill and Intangible AssetsGoodwill and intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, as of October 1 of each year, or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We analyze the reasonableness of the remaining useful life whenever events or circumstances indicate that the carrying amount may not be recoverable to determine whether the carrying value has been impaired.
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels: •Level 1—Quoted prices for identical instruments in active markets. •Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. •Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued and other liabilities approximate fair value because of the short-term nature of these instruments. The carrying amount of lease liabilities approximate fair value because these financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. We consider the terms of the PNC Bank, National Association debt facility, including its floating per annum interest rate of the daily simple secured overnight financing rate ("SOFR"), plus an SOFR adjustment, plus a margin ranging from 1.75% to 2.50%, to be at market based upon similar instruments that would be available to us. The Company has certain assets and liabilities that have been recorded at fair value on a non-recurring basis following an acquisition. Refer to Note 3, Business Acquisition, for the allocation of the total consideration based upon the fair value of the assets acquired and liabilities assumed as of the acquisition date.
Reportable Segments	Reportable Segments Prior to September 30, 2021, we were organized into two main reporting segments, our Lightwave segment and our Luna Labs segment. We now have one reportable segment, Lightwave, following the determination that our Luna Labs segment met held-for-sale and discontinued operations accounting criteria at the end of the third quarter of 2021. On March 8, 2022, we completed the sale of substantially all of our equity interests in Luna Labs. Prior to the sale, our Luna Labs segment performed applied research principally in the areas of sensing and instrumentation, advanced materials, optical technologies and health sciences. See Note 2, Sale of Discontinued Operations, for additional disclosure related to discontinued operations and assets held for sale. The remaining segment, Lightwave, develops, manufactures and markets distributed fiber optic sensing products and fiber optic communications test and control products.
Net Income/(Loss) Per Share	Net Income/(Loss) Per Share Basic per share data is computed by dividing our net income/(loss) by the weighted average number of shares outstanding during the period. Diluted per share data is computed by dividing net income/(loss) by the weighted average shares outstanding during the period increased to include, if dilutive, the number of additional common share equivalents that would have been outstanding if potential shares of common stock had been issued using the treasury stock method. For the three and six months ended June 30, 2022 and 2021, all potentially dilutive securities for stock options and restricted stock unites were excluded as their impact would be anti-dilutive.
Foreign Currency	Foreign CurrencyFor our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal period end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive loss within equity. Gains and losses resulting from foreign currency transactions are included in earnings.
Recently Issued Pronouncements, Not Yet Adopted	Recently Issued Pronouncements, Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments, which requires companies to measure financial assets at an amortized cost basis to be presented at the net amount expected to be collected. The new accounting rules eliminate the probable initial recognition threshold and, instead, reflect an entity's current estimate of all expected credit losses. ASU 2016-13 is applicable to our trade receivables. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. We have elected this extension and the effective date for us to adopt this standard will be for fiscal years beginning after December 15, 2022. We are currently in the process of evaluating the impact of ASU 2016-13, but we do not expect the adoption to have a material impact on our consolidated financial statements.

Sale of Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

The key components from discontinued operations related to the Luna Labs business are as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	—	$	5,972	$	5,108	$	11,274
Cost of revenues	—		4,603		3,692		8,747
Gross profit	—		1,369		1,416		2,527
Selling, general and administrative expenses	265		337		656		709
Operating (loss)/income	(265)		1,032		760		1,818
Income tax (benefit)/expense	(856)		101		166		146
Net income from discontinued operations, net of tax	$	591	$	931	$	594	$	1,672

Assets and liabilities of discontinued operations classified as held for sale in the consolidated balance sheet as of December 31, 2021 consist of the following (in thousands):


	December 31, 2021
Accounts receivable, net	$	2,967
Inventory	282
Contract assets	4,051
Prepaid expenses and other current	132
Property and equipment, net	330
Intangible assets, net	165
Operating lease ROU asset	4,884
Other assets	141
Assets held for sale	$	12,952








Accounts payable	1,042
Accrued and other current liabilities	821
Contract liabilities	2,626
Current portion of operating lease liabilities	388
Long-term portion of operating lease liabilities	4,826
Liabilities associated with assets held for sale	$	9,703

The following table presents cash flow and non-cash information related to discontinued operations for the six months ended June 30, 2022 and 2021 (in thousands):


	Six Months Ended June 30,
	2022		2021
Depreciation and amortization	$	23	$	31
Share-based compensation	177		10
Acquisition of property and equipment	34		50

- Definition

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

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+ Details

Business Acquisitions (Tables)

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Allocation of Purchase Consideration

The following table summarizes the preliminary allocation of the purchase consideration of the Lios acquisition:


	(in thousands)
Accounts receivable	$	3,001
Inventory	5,388
Prepaid expenses and other current assets	92
Property and equipment	858
Intangible assets	5,994
Goodwill	10,533
Operating lease right-of-use asset	512
Accounts payable	(1,217)
Accrued and other current liabilities	(1,026)
Current portion of operating lease liability	(322)
Deferred income tax liability	(1,537)
Long-term portion of operating lease liability	(191)

Total purchase consideration	$	22,085

Schedule of Preliminary Identifiable Intangible Assets Acquired and their Estimated Lives

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

Estimated

Useful Life

(in thousands)

Developed technology

6 years

1,998

Customer relationships

8 years

3,330

Trade names and trademarks

7 years

333

Backlog

1 year

333

5,994

Intangible assets, net (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets, net at June 30, 2022 and December 31, 2021 consisted of the following:


	Estimated Life	June 30, 2022		December 31, 2021
(in thousands)
Patent costs	1 - 18 years	$	8,731	$	9,230
Developed technology	6 - 10 years	16,202		14,440
In-process research and development	N/A	2,684		2,732
Customer base	5 - 8 years	3,719		700
Trade names	7 - 15 years	883		550
Backlog	1 - 3 years	333		—
		32,552		27,652
Accumulated amortization		(12,153)		(10,475)
		$	20,399	$	17,177

Schedule of Estimated Aggregate Amortization Based on Net Value of Intangible Assets

Estimated aggregate amortization, based on the net value of intangible assets at June 30, 2022, for each of the next five years and beyond is as follows (in thousands):


Year Ending December 31,
2022 (remaining 6 months)	$	2,377
2023	3,926
2024	3,248
2025	2,914
2026	2,798
2027 & beyond	5,136
Total	$	20,399

Goodwill (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The change in the carrying value of goodwill during the six months ended June 30, 2022 was as follows:


(in thousands)
Balance as of December 31, 2021	18,984
Acquisition of Lios	10,533
Foreign currency translation	(1,076)
Balance as of June 30, 2022	$	28,441

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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+ Details

Inventory (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

Components of inventory were as follows:


	June 30, 2022		December 31, 2021
(in thousands)
Finished goods	$	10,997	$	10,087
Work-in-process	2,901		2,318
Raw materials	16,856		10,088
Total inventory	30,754		22,493

Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:


	June 30, 2022		December 31, 2021
(in thousands)
Accrued compensation	$	7,794	$	6,798
Contingent consideration	100		225
Accrued professional fees	1,343		503
Accrued income tax	4,071		328
Current portion of finance lease liability	49		48

Accrued liabilities - other	3,056		1,356
Total accrued and other current liabilities	$	16,413	$	9,258

Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt consisted of the following:


(in thousands)	June 30, 2022		December 31, 2021
Term Loan (net of debt issuance costs of $82 and $44, 4.05% and 2.48% at June 30, 2022 and December 31, 2021, respectively)	$	19,918	$	8,290
Revolving Loan (4.05% and 2.43% at June 30, 2022 and December 31, 2021)	1,300		7,550
	21,218		15,840
Less: Current portion of long-term debt obligations	(2,000)		(4,167)
Long-term debt obligations	$	19,218	$	11,673

Schedule of Maturities of Long-term Debt

Maturities on debt are as follows (in thousands):


Year Ending December 31,	Amount

2022 (remaining 6 months)	992
2023	2,484
2024	2,984
2025	3,484
2026	3,984
2027 and thereafter	7,290
Total	$	21,218

- Definition

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

+ References

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+ Details

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Schedule of other information related to leases

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Operating lease costs	$	788	$	529	1,363		$	1,058
Variable rent costs	(60)		(29)		(110)		(57)
Total rent expense	$	728	$	500	$	1,253	$	1,001

Other information related to leases is as follows:


	Three Months Ended June 30,				Six months ended June 30,
(in thousands, except weighted-average data)	2022		2021		2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	13	$	13	$	26	$	27
Interest on lease liabilities	(1)		(1)		(2)		(3)
Total finance lease cost	$	12	$	12	$	24	$	24

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	511	$	571	$	1,040	$	1,109
Finance cash flows from finance leases	$	12	$	12	$	24	$	24
Right-of-use assets obtained in exchange for new operating lease liabilities	$	33	$	—	$	33	$	—

Other weighted average information related to leases is as follows:


	Six Months Ended June 30,
	2022		2021
Weighted-average remaining lease term (years) - operating leases	5.8		3.7
Weighted-average remaining lease term (years) - finance leases	3.2		4.2
Weighted-average discount rate - operating leases	6	%	6	%
Weighted-average discount rate - finance leases	3	%	3	%

Schedule of future operating lease payments

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2022 (remaining 6 months)	$	1,339	$	26
2023	2,061		53
2024	1,349		53
2025	673		48
2026	137		—
2027 and beyond	—		—
Total future minimum lease payments	5,559		180
Less: imputed interest	343		7
Total lease liabilities	$	5,216	$	173

Current lease liability	$	2,449	$	49
Long-term lease liability	2,767		124
Total lease liabilities	$	5,216	$	173

Schedule of future finance lease payments

Future minimum lease payments under non-cancelable operating and finance leases were as follows as of June 30, 2022 (in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2022 (remaining 6 months)	$	1,339	$	26
2023	2,061		53
2024	1,349		53
2025	673		48
2026	137		—
2027 and beyond	—		—
Total future minimum lease payments	5,559		180
Less: imputed interest	343		7
Total lease liabilities	$	5,216	$	173

Current lease liability	$	2,449	$	49
Long-term lease liability	2,767		124
Total lease liabilities	$	5,216	$	173

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The details are listed in the table below for the three and six months ended June 30, 2022 and 2021:


		Three Months Ended June 30,				Six Months Ended June 30,

(in thousands)		2022		2021		2022		2021
		(unaudited)				(unaudited)
Total Revenue by Geographic Location
	United States	$	10,249	$	11,536	20,764		$	22,115
	Asia	4,187		3,596		9,017		7,268
	Europe	7,558		4,509		12,465		8,486
	Canada, Central and South America	3,957		2,324		6,185		5,093
	All Others	211		—		211		—
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Major Customer Type
	Sales to the U.S. government	$	2,156	$	2,502	$	3,791	$	4,916
	U.S. direct commercial sales and other	8,093		9,033		16,974		17,199
	Foreign commercial sales & other	15,913		10,430		27,877		20,847
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Contract Type
	Fixed-price contracts	$	25,501	$	20,732	$	47,354	$	41,778
	Cost-type contracts	661		1,233		1,289		1,184
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Timing of Recognition
	Goods transferred at a point in time	$	22,885	$	18,099	41,494		$	34,939
	Goods/services transferred over time	3,277		3,866		7,149		8,023
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Total Revenue by Major Products/Services
	Technology development	$	1,539	$	2,027	3,136		$	4,167
	Test, measurement and sensing systems	24,022		19,485		44,117		38,003

	Other	601		—		1,389		—
	Total	$	26,162	$	21,965	$	48,642	$	42,962

Schedule of components of contract balances

The following table shows the components of our contract balances as of June 30, 2022 and December 31, 2021:


(in thousands)	June 30, 2022		December 31, 2021
Contract assets	$	3,369	$	5,166
Contract liabilities	4,816		4,649
Net contract (liabilities) assets	$	(1,447)	$	517

Basis of Presentation and Significant Accounting Policies (Details) - segment	6 Months Ended	9 Months Ended
	Jun. 30, 2022	Sep. 30, 2021
Debt Instrument [Line Items]
Number of operating segments		2
Number of reportable segments	1
SOFR \| PNC Bank Facility \| Minimum \| Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.75%
SOFR \| PNC Bank Facility \| Maximum \| Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	2.50%

Sale of Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands		6 Months Ended
	Mar. 08, 2022	Jun. 30, 2022	Jun. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of discontinued operations		$ 12,973	$ 0
Tax effect of gain from discontinued operation		$ 3,117
Discontinued Operations, Held-for-sale or Disposed of by Sale \| Luna Labs
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase price	$ 20,400
Proceeds from sale of discontinued operations	13,000
Contingent consideration	1,000
Gain on the transaction	10,900
Tax effect of gain from discontinued operation	3,100
Discontinued Operations, Held-for-sale or Disposed of by Sale \| Luna Labs \| Notes Receivable
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Convertible note	2,500
Discontinued Operations, Held-for-sale or Disposed of by Sale \| Luna Labs \| Note Receivable 2
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Convertible note	$ 1,700

Sale of Discontinued Operations - Discontinued Operations Related To Luna Lab Segment (Details) - Held-for-sale - Luna Labs - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 0	$ 5,972	$ 5,108	$ 11,274
Cost of revenues	0	4,603	3,692	8,747
Gross profit	0	1,369	1,416	2,527
Selling, general and administrative expenses	265	337	656	709
Operating (loss)/income	(265)	1,032	760	1,818
Income tax (benefit)/expense	(856)	101	166	146
Net income from discontinued operations, net of tax	$ 591	$ 931	$ 594	$ 1,672

Sale of Discontinued Operations - Assets and Liabilities Held For Sale (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract]
Assets held for sale	$ 0	$ 12,952
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract]
Liabilities associated with assets held for sale	$ 0	9,703
Luna Labs \| Held-for-sale
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract]
Accounts receivable, net		2,967
Inventory		282
Contract assets		4,051
Prepaid expenses and other current		132
Property and equipment, net		330
Intangible assets, net		165
Operating lease ROU asset		4,884
Other assets		141
Assets held for sale		12,952
Disposal Group, Including Discontinued Operation, Liabilities, Current [Abstract]
Accounts payable		1,042
Accrued and other current liabilities		821
Contract liabilities		2,626
Current portion of operating lease liabilities		388
Long-term portion of operating lease liabilities		4,826
Liabilities associated with assets held for sale		$ 9,703

Sale of Discontinued Operations - Cash Flow And Non-Cash Information (Details) - Luna Labs - Held-for-sale - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Depreciation and amortization	$ 23	$ 31
Share-based compensation	177	10
Acquisition of property and equipment	$ 34	$ 50

Business Acquisitions - Additional Information (Details) - LIOS Acquisition € in Millions, $ in Millions	Mar. 10, 2022 USD ($)	Mar. 10, 2022 EUR (€)
Business Acquisition [Line Items]
Aggregate consideration	$ 22.1	€ 20.0
Developed technology
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	14.50%	14.50%
Trade names and trademarks
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	14.50%	14.50%
Backlog
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	13.50%	13.50%
Customer relationships
Business Acquisition [Line Items]
Discount rate used to estimate fair value of acquired finite-lived intangible assets	15.50%	15.50%

Business Acquisitions - Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Mar. 10, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 28,441		$ 18,984
LIOS Acquisition
Business Acquisition [Line Items]
Accounts receivable		$ 3,001
Inventory		5,388
Prepaid expenses and other current assets		92
Property and equipment		858
Intangible assets		5,994
Goodwill		10,533
Operating lease right-of-use asset		512
Accounts payable		(1,217)
Accrued and other current liabilities		(1,026)
Current portion of operating lease liability		(322)
Deferred income tax liability		(1,537)
Long-term portion of operating lease liability		(191)
Total purchase consideration		$ 22,085

Business Acquisitions - Schedule of Preliminary Identifiable Intangible Assets Acquired (Details) - LIOS Acquisition $ in Thousands	Mar. 10, 2022 USD ($)
Business Acquisition [Line Items]
Intangible assets	$ 5,994
Developed technology
Business Acquisition [Line Items]
Acquired assets expected useful lives	6 years
Intangible assets	$ 1,998
Customer relationships
Business Acquisition [Line Items]
Acquired assets expected useful lives	8 years
Intangible assets	$ 3,330
Trade names and trademarks
Business Acquisition [Line Items]
Acquired assets expected useful lives	7 years
Intangible assets	$ 333
Backlog
Business Acquisition [Line Items]
Acquired assets expected useful lives	1 year
Intangible assets	$ 333

Intangible assets, net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 32,552	$ 27,652
Accumulated amortization	(12,153)	(10,475)
Total	20,399	17,177
Patent costs
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 8,731	9,230
Patent costs \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	1 year
Patent costs \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	18 years
Developed technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 16,202	14,440
Developed technology \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	6 years
Developed technology \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	10 years
In-process research and development
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 2,684	2,732
Customer base
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 3,719	700
Customer base \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	5 years
Customer base \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	8 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 883	550
Trade names \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	7 years
Trade names \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	15 years
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 333	$ 0
Backlog \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	1 year
Backlog \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Life	3 years

Intangible assets, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.8	$ 1.7

Intangible assets, net - Estimated Aggregate Amortization (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
2022 (remaining 6 months)	$ 2,377
2023	3,926
2024	3,248
2025	2,914
2026	2,798
2027 & beyond	5,136
Total	$ 20,399	$ 17,177

Goodwill (Details) $ in Thousands	6 Months Ended
Goodwill (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 18,984
Acquisition of Lios	10,533
Foreign currency translation	(1,076)
Ending balance	$ 28,441

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Finished goods	$ 10,997	$ 10,087
Work-in-process	2,901	2,318
Raw materials	16,856	10,088
Total inventory	$ 30,754	$ 22,493

Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued compensation	$ 7,794	$ 6,798
Contingent consideration	100	225
Accrued professional fees	1,343	503
Accrued income tax	4,071	328
Current portion of finance lease liability	49	48
Accrued liabilities - other	3,056	1,356
Accrued and other current liabilities	$ 16,413	$ 9,258
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued and other current liabilities	Accrued and other current liabilities

Debt - Long Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total	$ 21,218	$ 15,840
Less: Current portion of long-term debt obligations	(2,000)	(4,167)
Long-term debt obligations	19,218	11,673
Term Loan
Debt Instrument [Line Items]
Net of debt issuance costs	$ 82	$ 44
Debt instrument, stated percentage	4.05%	2.48%
Total	$ 19,918	$ 8,290
Revolving Loan
Debt Instrument [Line Items]
Debt instrument, stated percentage	4.05%	2.43%
Total	$ 1,300	$ 7,550

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Debt - Additional Information (Details) - PNC Bank Facility - USD ($)		6 Months Ended
	Jun. 21, 2022	Jun. 30, 2022
Revolving Loan \| Loan Modification Agreement
Debt Instrument [Line Items]
Line of credit facility	$ 15,000,000
Line of credit facility, remaining borrowing capacity		$ 13,700,000
Repayments of lines of credit	$ 13,700,000
Unused capacity, commitment fee percentage	0.20%
Term Loan \| Loan Modification Agreement
Debt Instrument [Line Items]
Debt, face amount	$ 20,000,000
Line of credit facility, remaining borrowing capacity	$ 12,500,000
Term Loan \| Loan Modification Agreement \| Period 1
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	10.00%
Term Loan \| Loan Modification Agreement \| Period 2
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	15.00%
Term Loan \| Loan Modification Agreement \| Period 3
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	15.00%
Term Loan \| Loan Modification Agreement \| Period 4
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	20.00%
Term Loan \| Loan Modification Agreement \| Period 5
Debt Instrument [Line Items]
Debt instrument, amortization period, percentage	20.00%
SOFR \| Revolving Loan \| Loan Modification Agreement
Debt Instrument [Line Items]
Variable basis rate	0.10%
SOFR \| Revolving Loan \| Loan Modification Agreement \| Minimum
Debt Instrument [Line Items]
Variable basis rate	1.75%
SOFR \| Revolving Loan \| Loan Modification Agreement \| Maximum
Debt Instrument [Line Items]
Variable basis rate	2.50%
SOFR \| Term Loan \| Minimum
Debt Instrument [Line Items]
Variable basis rate		1.75%
SOFR \| Term Loan \| Maximum
Debt Instrument [Line Items]
Variable basis rate		2.50%
SOFR \| Term Loan \| Loan Modification Agreement
Debt Instrument [Line Items]
Variable basis rate	0.10%
SOFR \| Term Loan \| Loan Modification Agreement \| Minimum
Debt Instrument [Line Items]
Variable basis rate	1.75%
SOFR \| Term Loan \| Loan Modification Agreement \| Maximum
Debt Instrument [Line Items]
Variable basis rate	2.50%

Debt - Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
2022 (remaining 6 months)	$ 992
2023	2,484
2024	2,984
2025	3,484
2026	3,984
2027 and thereafter	7,290
Total	$ 21,218	$ 15,840

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Leases - Additional Information (Details)	6 Months Ended
Leases - Additional Information (Details)	Jun. 30, 2022
Office equipment
Lessee, Lease, Description [Line Items]
Useful life	5 years
Minimum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	1 year
Finance leases contract terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating leases contract terms	5 years
Finance leases contract terms	3 years

Leases - Rent Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Rent Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Leases [Abstract]
Operating lease costs	$ 788	$ 529	$ 1,363	$ 1,058
Variable rent costs	(60)	(29)	(110)	(57)
Total rent expense	$ 728	$ 500	$ 1,253	$ 1,001

Leases - Future Operating and Finance Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Operating Leases
2022 (remaining 6 months)	$ 1,339
2023	2,061
2024	1,349
2025	673
2026	137
2027 and beyond	0
Total future minimum lease payments	5,559
Less: imputed interest	343
Total lease liabilities	5,216
Current lease liability	2,449	$ 2,101
Long-term lease liability	2,767	3,509
Total lease liabilities	5,216
Finance Leases
2022 (remaining 6 months)	26
2023	53
2024	53
2025	48
2026	0
2027 and beyond	0
Total future minimum lease payments	180
Less: imputed interest	7
Total lease liabilities	173
Current portion of finance lease liability	49	$ 48
Long-term portion of finance lease liability	124
Total lease liabilities	$ 173
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other long-term liabilities

Leases - Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Finance lease cost:
Amortization of right-of-use assets	$ 13	$ 13	$ 26	$ 27
Interest on lease liabilities	(1)	(1)	(2)	(3)
Total finance lease cost	12	12	24	24
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	511	571	1,040	1,109
Finance cash flows from finance leases	12	12	24	24
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 33	$ 0	$ 33	$ 0
Weighted-average remaining lease term (years) - operating leases	5 years 9 months 18 days	3 years 8 months 12 days	5 years 9 months 18 days	3 years 8 months 12 days
Weighted-average remaining lease term (years) - finance leases	3 years 2 months 12 days	4 years 2 months 12 days	3 years 2 months 12 days	4 years 2 months 12 days
Weighted-average discount rate - operating leases	6.00%	6.00%	6.00%	6.00%
Weighted-average discount rate - finance leases	3.00%	3.00%	3.00%	3.00%

Capital Stock and Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 0.2	$ 0.3	$ 0.4	$ 0.5
Stock-based compensation expense not yet recognized	0.6		$ 0.6
Weighted average remaining service period			1 year 2 months 12 days
Restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	0.5	$ 0.3	$ 1.2	$ 0.6
Stock-based compensation expense not yet recognized	$ 5.6		$ 5.6
Weighted average remaining service period			2 years 3 months 18 days
RSUs granted (in shares)	376,436	55,000	623,842	134,250
RSUs granted (in dollars per share)	$ 5.48		$ 6.39
Restricted stock units (RSUs) \| Non-Employee Director Deferred Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	89,825	4,259	98,261	8,917
RSUs granted (in dollars per share)	$ 5.56		$ 5.81
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 0.1	$ 0.1	$ 0.2	$ 0.2

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 26,162	$ 21,965	$ 48,642	$ 42,962
Technology development
Disaggregation of Revenue [Line Items]
Revenue	1,539	2,027	3,136	4,167
Test, measurement and sensing systems
Disaggregation of Revenue [Line Items]
Revenue	24,022	19,485	44,117	38,003
Other
Disaggregation of Revenue [Line Items]
Revenue	601	0	1,389	0
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenue	22,885	18,099	41,494	34,939
Goods/services transferred over time
Disaggregation of Revenue [Line Items]
Revenue	3,277	3,866	7,149	8,023
Fixed-price contracts
Disaggregation of Revenue [Line Items]
Revenue	25,501	20,732	47,354	41,778
Cost-type contracts
Disaggregation of Revenue [Line Items]
Revenue	661	1,233	1,289	1,184
Sales to the U.S. government
Disaggregation of Revenue [Line Items]
Revenue	2,156	2,502	3,791	4,916
U.S. direct commercial sales and other
Disaggregation of Revenue [Line Items]
Revenue	8,093	9,033	16,974	17,199
Foreign commercial sales & other
Disaggregation of Revenue [Line Items]
Revenue	15,913	10,430	27,877	20,847
United States
Disaggregation of Revenue [Line Items]
Revenue	10,249	11,536	20,764	22,115
Asia
Disaggregation of Revenue [Line Items]
Revenue	4,187	3,596	9,017	7,268
Europe
Disaggregation of Revenue [Line Items]
Revenue	7,558	4,509	12,465	8,486
Canada, Central and South America
Disaggregation of Revenue [Line Items]
Revenue	3,957	2,324	6,185	5,093
All Others
Disaggregation of Revenue [Line Items]
Revenue	$ 211	$ 0	$ 211	$ 0

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Revenue recognized	$ 1,400	$ 2,900
Contract assets	3,369	3,369	$ 5,166
Contract liabilities	4,816	4,816	4,649
Net contract (liabilities) assets	$ (1,447)	$ (1,447)	$ 517

Revenue Recognition - Performance Obligation Amount (Details) $ in Millions	Jun. 30, 2022 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 47.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 36.4
Remaining performance obligation, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 8.3
Remaining performance obligation, period	1 year

Income Taxes (Details)	6 Months Ended
Income Taxes (Details)	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Effective income tax rate	13.90%	42.80%

Commitments and Contingencies (Details) - Tunable lasers $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
Loss Contingencies [Line Items]
Non-cancelable purchase order commitment	$ 4.8
Non-cancelable purchase order commitment remaining	$ 4.4
Minimum
Loss Contingencies [Line Items]
Non-cancelable purchase order delivery period	9 months
Maximum
Loss Contingencies [Line Items]
Non-cancelable purchase order delivery period	15 months