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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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54-1560050
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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Title of Each Class
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Name of Each Exchange on which Registered
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Common Stock, par value $0.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Item 1
6.
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Form 10-K Summary
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•
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Ownership. The company must be more than 50 percent owned and controlled by U.S. citizens or permanent resident aliens, or owned by an entity that is itself more than 50 percent owned and controlled by U.S. citizens or permanent resident aliens; and
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•
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Size. The company, including its affiliates, cannot have more than 500 employees.
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•
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accurately anticipate customer needs;
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•
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innovate and develop new technologies and applications;
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•
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successfully commercialize new technologies in a timely manner;
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•
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price products competitively and manufacture and deliver products in sufficient volumes and on time; and
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•
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differentiate our product offerings from those of our competitors.
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•
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having to comply with U.S. export control regulations and policies that restrict our ability to communicate with non-U.S. employees and supply foreign affiliates and customers;
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•
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changes in or interpretations of foreign regulations that may adversely affect our ability to sell our products, perform services or repatriate profits to the United States;
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•
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the imposition of tariffs;
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•
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hyperinflation or economic or political instability in foreign countries;
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•
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imposition of limitations on, or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries or joint ventures;
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•
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conducting business in places where business practices and customs are unfamiliar and unknown;
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•
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the imposition of restrictive trade policies;
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•
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the imposition of inconsistent laws or regulations;
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•
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the imposition or increase of investment and other restrictions or requirements by foreign governments;
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•
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uncertainties relating to foreign laws and legal proceedings;
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•
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having to comply with a variety of U.S. laws, including the Foreign Corrupt Practices Act ("FCPA"); and
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•
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having to comply with licensing requirements.
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•
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we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications and issued patents;
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•
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we or our licensors might not have been the first to file patent applications for these inventions;
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•
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others may independently develop similar or alternative technologies or duplicate any of our technologies;
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•
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it is possible that none of our pending patent applications or the pending patent applications of our licensors will result in issued patents;
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•
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patents may issue to third parties that cover how we might practice our technology;
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•
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our issued patents and issued patents of our licensors may not provide a basis for commercially viable technologies, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties; and
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•
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we may not develop additional proprietary technologies that are patentable.
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•
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sales of our common stock by our significant stockholders, or the perception that such sales may occur;
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•
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changes in earnings estimates, investors’ perceptions, recommendations by securities analysts or our failure to achieve analysts’ earnings estimates;
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•
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changes in our status as an entity eligible to receive SBIR contracts and grants;
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•
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quarterly variations in our or our competitors’ results of operations;
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•
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general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors;
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•
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announcements by us, or by our competitors, of acquisitions, new products, significant contracts, commercial relationships or capital commitments;
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•
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pending or threatened litigation;
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•
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any major change in our board of directors or management or any competing proxy solicitations for director nominees;
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•
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changes in governmental regulations or in the status of our regulatory approvals;
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•
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announcements related to patents issued to us or our competitors;
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•
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a lack of, limited or negative industry or securities analyst coverage;
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•
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discussions of our company or our stock price by the financial and scientific press and online investor communities
;
and
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•
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general developments in our industry.
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•
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a classified board of directors serving staggered terms;
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•
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advance notice requirements to stockholders for matters to be brought at stockholder meetings;
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•
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a supermajority stockholder vote requirement for amending certain provisions of our amended and restated certificate of incorporation and bylaws; and
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•
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the right to issue preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer.
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2016
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2015
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||||||||||||
Fiscal Period
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High
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Low
|
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High
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Low
|
||||||||
First Quarter
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$
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1.25
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$
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0.74
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$
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1.85
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$
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1.27
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Second Quarter
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$
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1.32
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$
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0.97
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$
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1.47
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$
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0.96
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Third Quarter
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$
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1.69
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$
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1.08
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$
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1.30
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$
|
0.88
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Fourth Quarter
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$
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1.55
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$
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1.22
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$
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1.23
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$
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0.88
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Period
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Total Number of Shares Purchased
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Average Price Paid per Share
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
(1)
|
Approximate Dollar Value of Shares that May Yet to be Purchased Under the Program
|
||||||
10/1/2016-10/31/2016
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—
|
|
—
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—
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$
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1,759,184
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|
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11/1/2016-11/30/2016
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6,400
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$
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1.25
|
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6,400
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$
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1,751,191
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12/1/2016-12/31/2016
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—
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$
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—
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—
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$
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1,751,191
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Total
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6,400
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1.25
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6,400
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1,751,191
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Years ended December 31,
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||||||||||||||||||
In thousands, except share and per share data
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2016
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2015
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2014
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2013
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2012
|
||||||||||
Consolidated Statement of Operations Data:
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||||||||||
Revenues:
|
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|
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|
|
|
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||||||||||
Technology development
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$
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16,825
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$
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13,599
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$
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12,206
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$
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11,422
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|
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$
|
15,127
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Products and licensing
|
42,386
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30,421
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9,054
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6,912
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8,339
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|||||
Total revenues
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59,211
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|
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44,020
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21,260
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18,334
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23,466
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|||||
Cost of revenues:
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|
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|
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||||||||||
Technology development
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12,711
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10,379
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9,376
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8,882
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10,749
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|||||
Products and licensing
|
24,765
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17,141
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4,047
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3,403
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3,825
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|||||
Total cost of revenues
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37,476
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27,520
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13,423
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12,285
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14,574
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|||||
Gross profit
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21,735
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16,501
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7,837
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6,049
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8,892
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|||||
Operating expense
|
23,672
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22,750
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12,342
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14,084
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13,022
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|
|||||
Operating loss
|
(1,937
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)
|
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(6,250
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)
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(4,505
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)
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(8,035
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)
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(4,130
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)
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|||||
Other (expense)/income, net
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(36
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)
|
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(10
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)
|
|
111
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|
347
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|
|
108
|
|
|||||
Interest expense, net
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(321
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)
|
|
(220
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)
|
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(96
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)
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(208
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)
|
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(312
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)
|
|||||
Loss from continuing operations before income tax
|
(2,294
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)
|
|
(6,480
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)
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(4,490
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)
|
|
(7,896
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)
|
|
(4,334
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)
|
|||||
Income tax expense/(benefit)
|
75
|
|
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(471
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)
|
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(1,137
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)
|
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(2,387
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)
|
|
(1,107
|
)
|
|||||
Net loss from continuing operations
|
(2,369
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)
|
|
(6,009
|
)
|
|
(3,353
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)
|
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(5,508
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)
|
|
(3,227
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)
|
|||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
8,326
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|
|
9,347
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|
|
4,705
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|
|
1,843
|
|
|||||
Net (loss)/income
|
(2,369
|
)
|
|
2,317
|
|
|
5,995
|
|
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(803
|
)
|
|
(1,384
|
)
|
|||||
Preferred stock dividend
|
105
|
|
|
86
|
|
|
112
|
|
|
102
|
|
|
120
|
|
|||||
Net (loss)/income attributable to common stockholders
|
$
|
(2,475
|
)
|
|
$
|
2,231
|
|
|
$
|
5,883
|
|
|
$
|
(905
|
)
|
|
$
|
(1,504
|
)
|
Net loss per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.23
|
)
|
|
(0.38
|
)
|
|
(0.23
|
)
|
||
Net income per share from discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
$
|
—
|
|
|
$
|
0.36
|
|
|
$
|
0.63
|
|
|
0.33
|
|
|
0.13
|
|
||
Net (loss)/income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
0.10
|
|
|
$
|
0.40
|
|
|
(0.06
|
)
|
|
(0.11
|
)
|
||
Weighted-average shares:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
27,547,217
|
|
|
23,026,494
|
|
|
14,880,697
|
|
|
14,336,135
|
|
|
13,930,267
|
|
|
As of December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
12,802
|
|
|
$
|
17,464
|
|
|
$
|
14,117
|
|
|
$
|
7,779
|
|
|
$
|
6,340
|
|
Working capital
|
21,129
|
|
|
23,417
|
|
|
15,413
|
|
|
10,106
|
|
|
10,509
|
|
|||||
Total assets
|
54,997
|
|
|
58,132
|
|
|
27,584
|
|
|
19,704
|
|
|
20,458
|
|
|||||
Total current liabilities
|
15,968
|
|
|
15,334
|
|
|
8,473
|
|
|
7,206
|
|
|
9,186
|
|
|||||
Total debt
|
4,253
|
|
|
6,125
|
|
|
625
|
|
|
2,125
|
|
|
3,625
|
|
|
Years ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
$ Difference
|
|
% Difference
|
|||||||
Technology development revenues
|
$
|
16,825,157
|
|
|
$
|
13,599,048
|
|
|
$
|
3,226,109
|
|
|
23.7
|
%
|
Products and licensing revenues
|
42,385,839
|
|
|
30,421,310
|
|
|
11,964,529
|
|
|
39.3
|
%
|
|||
Total revenues
|
$
|
59,210,996
|
|
|
$
|
44,020,358
|
|
|
$
|
15,190,638
|
|
|
34.5
|
%
|
|
Years ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
$ Difference
|
|
% Difference
|
|||||||
Technology development costs
|
$
|
12,711,447
|
|
|
$
|
10,378,616
|
|
|
$
|
2,332,831
|
|
|
22.5
|
%
|
Products and licensing costs
|
24,764,788
|
|
|
17,141,079
|
|
|
7,623,709
|
|
|
44.5
|
%
|
|||
Total costs of revenues
|
$
|
37,476,235
|
|
|
$
|
27,519,695
|
|
|
$
|
9,956,540
|
|
|
36.2
|
%
|
|
Years ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
$ Difference
|
|
% Difference
|
|||||||
Selling, general and administrative expense
|
$
|
18,139,966
|
|
|
$
|
18,481,270
|
|
|
$
|
(341,304
|
)
|
|
(1.8
|
)%
|
Research, development and engineering expense
|
5,532,130
|
|
|
4,268,988
|
|
|
1,263,142
|
|
|
29.6
|
%
|
|||
Total operating expense
|
$
|
23,672,096
|
|
|
$
|
22,750,258
|
|
|
$
|
921,838
|
|
|
4.1
|
%
|
|
Years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net cash used in operating activities
|
$
|
(399,837
|
)
|
|
$
|
(5,087,907
|
)
|
Net cash (used in)/provided by investing activities
|
(2,000,184
|
)
|
|
8,294,714
|
|
||
Net cash (used in)/provided by financing activities
|
(2,261,561
|
)
|
|
140,264
|
|
||
Net (decrease)/increase in cash and cash equivalents
|
$
|
(4,661,582
|
)
|
|
$
|
3,347,071
|
|
|
Total
|
|
Less than 1
year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5
years
|
||||||||||
Long-term debt obligations (1)
|
$
|
4,291,666
|
|
|
$
|
1,833,333
|
|
|
$
|
2,458,333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating facility leases (2)
|
8,244,602
|
|
|
1,601,292
|
|
|
3,054,013
|
|
|
2,148,120
|
|
|
1,441,177
|
|
|||||
Other leases (3)
|
186,501
|
|
|
61,244
|
|
|
85,737
|
|
|
39,520
|
|
|
—
|
|
|||||
Purchase order obligation (4)
|
1,522,642
|
|
|
1,522,642
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other liabilities (5)
|
880,000
|
|
|
220,000
|
|
|
440,000
|
|
|
220,000
|
|
|
—
|
|
|||||
Total
|
$
|
15,125,411
|
|
|
$
|
5,238,511
|
|
|
$
|
6,038,083
|
|
|
$
|
2,407,640
|
|
|
$
|
1,441,177
|
|
(1)
|
Amounts due under our debt obligations to SVB are payable in monthly installments, plus accrued interest, through May 2019.
|
(2)
|
We lease our facilities in Blacksburg, Charlottesville and Roanoke, Virginia, Ann Arbor, Michigan, Camarillo California, and Montreal, Canada under operating leases that as of December 31, 2016, are scheduled to expire between April 2017 and December 2024. Upon expiration of our office leases, we may exercise certain renewal options as specified in the leases. Rental payments associated with these option periods are not included in the table above.
|
(3)
|
In August 2013 and January 2016, we executed leases in the amounts of $51,000, and $207,000, respectively, for office equipment. These equipment leases expire in 2018 and 2021, respectively.
|
(4)
|
In 2016, our Luna Technologies subsidiary executed two non-cancelable purchase orders in the amounts of $0.5 million and $1.0 million for multiple shipments of tunable lasers to be delivered over an 18-month period beginning in July 2016. In addition, in 2016 we issued two purchase orders for component parts and capital equipment for our HSOR products with an aggregate value of $0.8 million for delivery through the second quarter of 2017, of which $0.5 million was outstanding as of December 31, 2016.
|
(5)
|
Other liabilities include remaining amounts payable for minimum royalty payments for certain licensed technologies payable over the remaining patent terms of the underlying technology.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
12,802,458
|
|
|
$
|
17,464,040
|
|
Accounts receivable, net
|
14,297,725
|
|
|
11,034,557
|
|
||
Inventory, net
|
8,370,235
|
|
|
8,863,167
|
|
||
Prepaid expenses and other current assets
|
1,627,175
|
|
|
1,388,439
|
|
||
Total current assets
|
37,097,593
|
|
|
38,750,203
|
|
||
Property and equipment, net
|
6,780,838
|
|
|
6,614,238
|
|
||
Intangible assets, net
|
8,681,263
|
|
|
10,404,312
|
|
||
Goodwill
|
2,348,331
|
|
|
2,274,112
|
|
||
Other assets
|
88,948
|
|
|
88,948
|
|
||
Total assets
|
$
|
54,996,973
|
|
|
$
|
58,131,813
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long term debt obligations
|
$
|
1,833,333
|
|
|
$
|
1,833,333
|
|
Current portion of capital lease obligations
|
52,128
|
|
|
31,459
|
|
||
Accounts payable
|
4,466,192
|
|
|
4,054,425
|
|
||
Accrued liabilities
|
8,667,100
|
|
|
8,304,686
|
|
||
Deferred revenue
|
949,603
|
|
|
1,109,759
|
|
||
Total current liabilities
|
15,968,356
|
|
|
15,333,662
|
|
||
Long-term portion of deferred rent
|
1,403,957
|
|
|
1,564,229
|
|
||
Long-term debt obligations
|
2,420,032
|
|
|
4,291,667
|
|
||
Long-term capital lease obligations
|
114,940
|
|
|
35,237
|
|
||
Total liabilities
|
19,907,285
|
|
|
21,224,795
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, par value $0.001, 1,321,514 shares authorized, issued and outstanding at December 31, 2016 and 2015
|
1,322
|
|
|
1,322
|
|
||
Common stock, par value $0.001, 100,000,000 shares authorized, 27,988,104 and 27,644,833 shares issued, 27,541,277 and 27,477,181 shares outstanding at December 31, 2016 and 2015, respectively
|
28,600
|
|
|
28,178
|
|
||
Treasury stock at cost, 446,827 and 167,652 shares at December 31, 2016 and 2015, respectively
|
(517,987
|
)
|
|
(184,934
|
)
|
||
Additional paid-in capital
|
82,451,958
|
|
|
81,461,907
|
|
||
Accumulated deficit
|
(46,874,205
|
)
|
|
(44,399,455
|
)
|
||
Total stockholders’ equity
|
35,089,688
|
|
|
36,907,018
|
|
||
Total liabilities and stockholders’ equity
|
$
|
54,996,973
|
|
|
$
|
58,131,813
|
|
|
Years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
||||
Technology development
|
$
|
16,825,157
|
|
|
$
|
13,599,048
|
|
Products and licensing
|
42,385,839
|
|
|
30,421,310
|
|
||
Total revenues
|
59,210,996
|
|
|
44,020,358
|
|
||
Cost of revenues:
|
|
|
|
||||
Technology development
|
12,711,447
|
|
|
10,378,616
|
|
||
Products and licensing
|
24,764,788
|
|
|
17,141,079
|
|
||
Total cost of revenues
|
37,476,235
|
|
|
27,519,695
|
|
||
Gross profit
|
21,734,761
|
|
|
16,500,663
|
|
||
Operating expense:
|
|
|
|
||||
Selling, general and administrative
|
18,139,966
|
|
|
18,481,270
|
|
||
Research, development and engineering
|
5,532,130
|
|
|
4,268,988
|
|
||
Total operating expense
|
23,672,096
|
|
|
22,750,258
|
|
||
Operating loss
|
(1,937,335
|
)
|
|
(6,249,595
|
)
|
||
Other expense:
|
|
|
|
||||
Other expense, net
|
(35,849
|
)
|
|
(9,967
|
)
|
||
Interest expense, net
|
(320,942
|
)
|
|
(220,403
|
)
|
||
Total other expense
|
(356,791
|
)
|
|
(230,370
|
)
|
||
Loss from continuing operations before income taxes
|
(2,294,126
|
)
|
|
(6,479,965
|
)
|
||
Income tax expense/(benefit)
|
75,366
|
|
|
(470,605
|
)
|
||
Net (loss)/income from continuing operations
|
(2,369,492
|
)
|
|
(6,009,360
|
)
|
||
Income from discontinued operations, net of income taxes of $0 and $0.7 million
|
—
|
|
|
8,326,386
|
|
||
Net (loss)/income
|
(2,369,492
|
)
|
|
2,317,026
|
|
||
Preferred stock dividend
|
105,258
|
|
|
85,830
|
|
||
Net (loss)/income attributable to common stockholders
|
$
|
(2,474,750
|
)
|
|
$
|
2,231,196
|
|
Net loss per share from continuing operations:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.26
|
)
|
Net income per share from discontinued operations:
|
|
|
|
||||
Basic and diluted
|
$
|
—
|
|
|
$
|
0.36
|
|
Net (loss)/income per share attributable to common stockholders:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
0.10
|
|
Weighted average shares:
|
|
|
|
||||
Basic and diluted
|
27,547,217
|
|
|
23,026,494
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Treasury Stock
|
Additional
Paid in
Capital
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||||||||||
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
Shares
|
|
$
|
$
|
|
$
|
|
$
|
|||||||||||||||
Balance—January 1, 2015
|
1,321,514
|
|
|
1,322
|
|
|
15,088,199
|
|
|
15,541
|
|
|
22,727
|
|
|
(32,221
|
)
|
64,147,666
|
|
|
(46,630,651
|
)
|
|
17,501,657
|
|
||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
233,704
|
|
|
233
|
|
|
—
|
|
|
—
|
|
82,283
|
|
|
—
|
|
|
82,516
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
453,522
|
|
|
453
|
|
|
—
|
|
|
—
|
|
1,018,224
|
|
|
—
|
|
|
1,018,677
|
|
||||||
Non-cash compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
280,202
|
|
|
—
|
|
|
280,202
|
|
||||||
Issuance of stock to former API stockholders
|
—
|
|
|
—
|
|
|
11,872,557
|
|
|
11,872
|
|
|
—
|
|
|
—
|
|
15,659,902
|
|
|
—
|
|
|
15,671,774
|
|
||||||
Options issued in exchange for API options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
187,879
|
|
|
—
|
|
|
187,879
|
|
||||||
Stock dividends (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
85,751
|
|
|
(85,830
|
)
|
|
—
|
|
||||||
Forfeitures of restricted stock grants
|
—
|
|
|
—
|
|
|
(25,876
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(144,925
|
)
|
|
—
|
|
|
144,925
|
|
|
(152,713
|
)
|
—
|
|
|
—
|
|
|
(152,713
|
)
|
||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
2,317,026
|
|
|
2,317,026
|
|
||||||
Balance—December 31, 2015
|
1,321,514
|
|
|
$
|
1,322
|
|
|
27,477,181
|
|
|
$
|
28,178
|
|
|
167,652
|
|
|
$
|
(184,934
|
)
|
$
|
81,461,907
|
|
|
$
|
(44,399,455
|
)
|
|
$
|
36,907,018
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
319,000
|
|
|
319
|
|
|
—
|
|
|
—
|
|
859,896
|
|
|
—
|
|
|
860,215
|
|
||||||
Non-cash compensation
|
—
|
|
|
—
|
|
|
24,271
|
|
|
24
|
|
|
—
|
|
|
—
|
|
24,976
|
|
|
—
|
|
|
25,000
|
|
||||||
Stock dividends (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
105,179
|
|
|
(105,258
|
)
|
|
—
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(279,175
|
)
|
|
—
|
|
|
279,175
|
|
|
(333,053
|
)
|
—
|
|
|
—
|
|
|
(333,053
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
(2,369,492
|
)
|
|
(2,369,492
|
)
|
||||||
Balance—December 31, 2016
|
1,321,514
|
|
|
$
|
1,322
|
|
|
27,541,277
|
|
|
$
|
28,600
|
|
|
446,827
|
|
|
$
|
(517,987
|
)
|
$
|
82,451,958
|
|
|
$
|
(46,874,205
|
)
|
|
$
|
35,089,688
|
|
(1)
|
The stock dividends payable in connection with the Series A Convertible Preferred Stock are issuable upon the request of Carilion.
|
|
Years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows used in operating activities:
|
|
|
|
||||
Net (loss)/income
|
$
|
(2,369,492
|
)
|
|
$
|
2,317,026
|
|
Adjustments to reconcile net income to net cash used in by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
3,713,879
|
|
|
2,457,032
|
|
||
Stock-based compensation
|
860,215
|
|
|
1,124,379
|
|
||
Gain on sale of discontinued operations, net of income taxes
|
—
|
|
|
(8,326,386
|
)
|
||
Bad debt
|
305,593
|
|
|
10,375
|
|
||
Tax benefit from utilization of loss from current year operations
|
—
|
|
|
(510,772
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(3,568,761
|
)
|
|
(2,040,323
|
)
|
||
Inventory
|
492,932
|
|
|
(252,934
|
)
|
||
Other assets
|
(238,736
|
)
|
|
(131,411
|
)
|
||
Accounts payable and accrued liabilities
|
564,689
|
|
|
16,429
|
|
||
Deferred revenue
|
(160,156
|
)
|
|
248,678
|
|
||
Net cash used in operating activities
|
(399,837
|
)
|
|
(5,087,907
|
)
|
||
Cash flows (used in)/provided by investing activities:
|
|
|
|
||||
Acquisition of property and equipment
|
(1,509,984
|
)
|
|
(710,348
|
)
|
||
Intangible property costs
|
(490,200
|
)
|
|
(367,050
|
)
|
||
Cash acquired in business combination
|
—
|
|
|
374,517
|
|
||
Proceeds from sale of discontinued operations, net
|
—
|
|
|
8,997,595
|
|
||
Net cash (used in)/provided by investing activities
|
(2,000,184
|
)
|
|
8,294,714
|
|
||
Cash flows (used in)/provided by financing activities:
|
|
|
|
||||
Payments on debt obligations
|
(1,871,635
|
)
|
|
(6,712,355
|
)
|
||
Payments on capital lease obligations
|
(56,873
|
)
|
|
(77,184
|
)
|
||
Purchase of treasury stock
|
(333,053
|
)
|
|
(152,713
|
)
|
||
Borrowings under term loans
|
—
|
|
|
7,000,000
|
|
||
Proceeds from the exercise of options and warrants
|
—
|
|
|
82,516
|
|
||
Net cash (used in)/provided by financing activities
|
(2,261,561
|
)
|
|
140,264
|
|
||
Net change in cash and cash equivalents
|
(4,661,582
|
)
|
|
3,347,071
|
|
||
Cash and cash equivalents—beginning of period
|
17,464,040
|
|
|
14,116,969
|
|
||
Cash and cash equivalents—end of period
|
$
|
12,802,458
|
|
|
$
|
17,464,040
|
|
Supplemental disclosure of cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
308,116
|
|
|
$
|
187,017
|
|
Cash paid for income taxes
|
$
|
233,732
|
|
|
$
|
40,167
|
|
Cash received for income tax refunds
|
$
|
67,127
|
|
|
|
||
Value of common stock issued for business combination
|
$
|
—
|
|
|
$
|
15,485,187
|
|
Dividend on preferred stock, 79,292 shares of common stock issuable for each of the years ended December 31, 2016 and 2015
|
$
|
105,258
|
|
|
$
|
85,830
|
|
•
|
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.
|
Equipment
|
3 – 7 years
|
Furniture and fixtures
|
7 years
|
Software
|
3 years
|
Leasehold improvements
|
Lesser of lease term or life of improvements
|
|
Purchase Consideration
|
||
Fair value of Luna common stock Issued to API shareholders
|
$
|
15,671,775
|
|
Fair value of vested API options assumed by Luna
|
187,879
|
|
|
Total purchase consideration
|
$
|
15,859,654
|
|
|
Allocation of Purchase Consideration
|
||
Cash
|
$
|
374,517
|
|
Accounts receivable
|
3,314,994
|
|
|
Inventory
|
5,246,000
|
|
|
Other current assets
|
541,726
|
|
|
Property and equipment
|
3,601,850
|
|
|
Identifiable intangible assets
|
11,100,000
|
|
|
Goodwill
|
2,348,331
|
|
|
Other assets
|
86,953
|
|
|
Accounts payable and accrued expenses
|
(5,508,789
|
)
|
|
Debt
|
(5,212,355
|
)
|
|
Other liabilities
|
(33,573
|
)
|
|
Total purchase consideration
|
$
|
15,859,654
|
|
|
|
|
Estimated Fair Value
|
|
Estimated Useful Life
|
||
Developed technology
|
$
|
4,500,000
|
|
|
2 - 10 years
|
In-process research and development
|
3,900,000
|
|
|
Indefinite
|
|
Customer base
|
1,300,000
|
|
|
9 - 11 years
|
|
Trade names
|
1,000,000
|
|
|
10 years
|
|
Backlog
|
400,000
|
|
|
1 year
|
|
|
$
|
11,100,000
|
|
|
|
Goodwill as of January 1, 2015
|
$
|
—
|
|
Goodwill recorded at acquisition date of API
|
614,184
|
|
|
Measurement period adjustments
|
1,659,928
|
|
|
Goodwill as of December 31, 2015
|
2,274,112
|
|
|
Measurement period adjustments
|
74,219
|
|
|
Goodwill as of December 31, 2016
|
$
|
2,348,331
|
|
|
|
Years ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(unaudited)
|
||||||
|
|
|
|
|
||||
Revenue
|
|
$
|
59,210,996
|
|
|
$
|
52,887,000
|
|
|
|
|
|
|
||||
Loss from continuing operations
|
|
$
|
(2,369,492
|
)
|
|
$
|
(4,641,000
|
)
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Silicon Valley Bank Term Loans
|
$
|
4,291,666
|
|
|
$
|
6,125,000
|
|
Less: unamortized debt issuance costs
|
38,301
|
|
|
—
|
|
||
Less: current portion
|
1,833,333
|
|
|
1,833,333
|
|
||
Total long-term debt obligations
|
$
|
2,420,032
|
|
|
$
|
4,291,667
|
|
Year
|
Amount
|
||
2017
|
$
|
1,833,333
|
|
2018
|
1,833,333
|
|
|
2019
|
625,000
|
|
|
Total
|
$
|
4,291,666
|
|
|
Years ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
||||
Interest expense on Term Loans
|
|
$
|
287,491
|
|
|
$
|
202,994
|
|
Amortization of debt issuance costs
|
|
16,308
|
|
|
9,072
|
|
||
Other interest expense
|
|
17,143
|
|
|
8,337
|
|
||
Total interest expense
|
|
$
|
320,942
|
|
|
$
|
220,403
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Billed
|
$
|
12,299,453
|
|
|
$
|
9,661,387
|
|
Unbilled
|
2,231,432
|
|
|
1,412,381
|
|
||
Other
|
19,479
|
|
|
95,600
|
|
||
|
14,550,364
|
|
|
11,169,368
|
|
||
Less: allowance for doubtful accounts
|
(252,639
|
)
|
|
(134,811
|
)
|
||
|
$
|
14,297,725
|
|
|
$
|
11,034,557
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Building
|
$
|
69,556
|
|
|
$
|
69,556
|
|
Equipment
|
12,589,998
|
|
|
11,055,886
|
|
||
Furniture and fixtures
|
656,769
|
|
|
666,654
|
|
||
Software
|
1,225,992
|
|
|
1,092,484
|
|
||
Leasehold improvements
|
5,267,349
|
|
|
5,257,703
|
|
||
|
19,809,664
|
|
|
18,142,283
|
|
||
Less—accumulated depreciation
|
(13,028,826
|
)
|
|
(11,528,045
|
)
|
||
|
$
|
6,780,838
|
|
|
$
|
6,614,238
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Patent costs
|
$
|
3,169,920
|
|
|
$
|
2,723,971
|
|
Developed technology
|
8,400,000
|
|
|
6,100,000
|
|
||
In-process research and development
|
—
|
|
|
2,300,000
|
|
||
Customer base
|
1,300,000
|
|
|
1,300,000
|
|
||
Trade names
|
1,000,000
|
|
|
1,000,000
|
|
||
Backlog
|
400,000
|
|
|
400,000
|
|
||
|
14,269,920
|
|
|
13,823,971
|
|
||
Accumulated amortization
|
(5,588,657
|
)
|
|
(3,419,659
|
)
|
||
|
$
|
8,681,263
|
|
|
$
|
10,404,312
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
Accrued compensation
|
$
|
5,442,723
|
|
|
$
|
4,719,533
|
|
|
Accrued sub-contracts
|
483,477
|
|
|
351,847
|
|
||
|
Accrued professional fees
|
67,719
|
|
|
133,847
|
|
||
|
Accrued income tax
|
—
|
|
|
160,438
|
|
||
|
Deferred rent
|
155,138
|
|
|
137,889
|
|
||
|
Royalties
|
345,895
|
|
|
351,003
|
|
||
|
Warranty reserve
|
185,125
|
|
|
173,687
|
|
||
|
Claims reserve
|
1,577,123
|
|
|
1,752,904
|
|
||
|
Accrued liabilities - other
|
409,900
|
|
|
523,538
|
|
||
Total accrued liabilities
|
$
|
8,667,100
|
|
|
$
|
8,304,686
|
|
|
Years ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Current:
|
|
|
|
||||
Federal
|
$
|
—
|
|
|
$
|
(510,772
|
)
|
State
|
75,366
|
|
|
40,167
|
|
||
Deferred Federal
|
—
|
|
|
—
|
|
||
Deferred State
|
—
|
|
|
—
|
|
||
Income tax expense/(benefit)
|
$
|
75,366
|
|
|
$
|
(470,605
|
)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Current
|
|
Long-Term
|
|
Current
|
|
Long-Term
|
||||||||
Bad debt and inventory reserve
|
$
|
382,075
|
|
|
$
|
—
|
|
|
$
|
157,847
|
|
|
$
|
—
|
|
Inventory adjustment
|
—
|
|
|
940,885
|
|
|
—
|
|
|
939,793
|
|
||||
UNICAP
|
—
|
|
|
46,593
|
|
|
—
|
|
|
40,752
|
|
||||
Deferred revenue
|
—
|
|
|
154,608
|
|
|
—
|
|
|
131,489
|
|
||||
Deferred rent
|
—
|
|
|
550,419
|
|
|
—
|
|
|
599,094
|
|
||||
Depreciation and amortization
|
—
|
|
|
(3,490,869
|
)
|
|
—
|
|
|
(4,231,265
|
)
|
||||
Charitable contributions
|
—
|
|
|
5,741
|
|
|
—
|
|
|
4,954
|
|
||||
Net operating loss carryforwards- Luna
|
—
|
|
|
4,779,976
|
|
|
—
|
|
|
5,106,166
|
|
||||
Net operating loss carryforwards- API
|
—
|
|
|
9,783,512
|
|
|
—
|
|
|
9,783,512
|
|
||||
Net operating loss carryforwards - state
|
—
|
|
|
281,799
|
|
|
—
|
|
|
323,557
|
|
||||
Net operating loss carryforwards- Canada
|
—
|
|
|
10,503
|
|
|
—
|
|
|
39,867
|
|
||||
Research and development credits
|
—
|
|
|
4,250,803
|
|
|
—
|
|
|
4,250,803
|
|
||||
California manufacturing credit
|
—
|
|
|
15,554
|
|
|
—
|
|
|
15,554
|
|
||||
Accrued liabilities
|
1,067,019
|
|
|
|
|
1,211,752
|
|
|
—
|
|
|||||
Deferred compensation
|
—
|
|
|
267,897
|
|
|
—
|
|
|
192,547
|
|
||||
Stock-based compensation
|
—
|
|
|
1,867,947
|
|
|
—
|
|
|
1,804,338
|
|
||||
AMT credit
|
—
|
|
|
395,083
|
|
|
—
|
|
|
388,342
|
|
||||
Total
|
1,449,094
|
|
|
19,860,451
|
|
|
1,369,599
|
|
|
19,389,503
|
|
||||
Valuation allowance
|
(1,449,094
|
)
|
|
(19,860,451
|
)
|
|
(1,369,599
|
)
|
|
(19,389,503
|
)
|
||||
Net deferred tax asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Years ended December 31,
|
||||
|
|
2016
|
|
2015
|
||
Income tax expense at federal statutory rate
|
|
34.00
|
%
|
|
34.00
|
%
|
State taxes, net of federal tax effects
|
|
(1.15
|
)%
|
|
3.34
|
%
|
Change in valuation allowance
|
|
(23.99
|
)%
|
|
(10.50
|
)%
|
Incentive stock options
|
|
(11.08
|
)%
|
|
(4.84
|
)%
|
Provision to return adjustments
|
|
(1.01
|
)%
|
|
0.18
|
%
|
Meals and entertainment
|
|
(0.78
|
)%
|
|
(0.25
|
)%
|
Capitalized merger costs
|
|
—
|
%
|
|
(14.95
|
)%
|
Windfall deduction
|
|
—
|
%
|
|
0.26
|
%
|
Other permanent differences
|
|
0.44
|
%
|
|
0.01
|
%
|
Income tax (expense)/benefit
|
|
(3.57
|
)%
|
|
7.25
|
%
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||||||||
|
Number of
Shares
|
|
Price per
Share Range
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value (1)
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value (1)
|
||||||||||||
Balance at January 1, 2015
|
4,289,631
|
|
|
$0.35 - 6.55
|
|
|
$
|
1.93
|
|
|
$
|
512,901
|
|
|
3,111,199
|
|
|
$
|
2.11
|
|
|
$
|
453,032
|
|
|
Forfeited
|
(789,412
|
)
|
|
$0.35 - 9.03
|
|
|
$
|
2.86
|
|
|
|
|
|
|
|
|
|
||||||||
Exercised
|
(230,672
|
)
|
|
$0.35 - 1.77
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
||||||||
Granted
|
65,500
|
|
|
$0.94 - 1.45
|
|
|
$
|
1.21
|
|
|
|
|
|
|
|
|
|
||||||||
Issued in exchange for API options
|
465,681
|
|
|
$1.38 - 9.03
|
|
|
$
|
4.83
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2015
|
3,800,728
|
|
|
$0.61 - 8.43
|
|
|
$
|
2.17
|
|
|
$
|
111,314
|
|
|
3,045,150
|
|
|
$
|
2.39
|
|
|
$
|
103,603
|
|
|
Forfeited
|
(963,614
|
)
|
|
$1.18 - 8.43
|
|
|
$
|
2.99
|
|
|
|
|
|
|
|
|
|
||||||||
Exercised
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Granted
|
20,000
|
|
|
$
|
1.15
|
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at December 31, 2016
|
2,857,114
|
|
|
$0.61 - 6.83
|
|
|
$
|
1.89
|
|
|
$
|
107,063
|
|
|
2,367,630
|
|
|
$
|
1.93
|
|
|
$
|
101,071
|
|
(1)
|
The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only.
|
|
|
Years ended December 31,
|
||
|
|
2016
|
|
2015
|
Risk-free interest rate range
|
|
1.5%
|
|
1.88% – 1.95%
|
Expected life of option-years
|
|
7.5
|
|
7.5
|
Expected stock price volatility
|
|
73%
|
|
75% - 103%
|
Executive turnover rates
|
|
—%
|
|
—%
|
Non-executive turnover rates
|
|
14.0%
|
|
40.0%
|
Expected dividend yield
|
|
—%
|
|
—%
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
|
Range of
Exercise Prices
|
|
Options
Outstanding
|
|
Weighted
Average
Remaining
Life in
Years
|
|
Weighted
Average
Exercise
Price
|
|
Options
Exercisable
|
|
Weighted
Average
Exercise
Price of
Options
Exercisable
|
||||||
Year ended December 31, 2015
|
$0.61 - $8.43
|
|
3,800,728
|
|
|
5.55
|
|
$
|
2.17
|
|
|
3,045,150
|
|
|
$
|
2.39
|
|
Year ended December 31, 2016
|
$0.61- $6.83
|
|
2,857,114
|
|
|
5.09
|
|
$
|
1.89
|
|
|
2,637,630
|
|
|
$
|
1.93
|
|
|
Total Intrinsic Value of
Options Exercised
|
|
Total Fair Value of
Options Vested
|
||
Year ended December 31, 2015
|
198,013
|
|
|
741,619
|
|
Year ended December 31, 2016
|
—
|
|
|
370,654
|
|
|
Number of Unvested Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Value of Unvested Shares
|
|||||
Balance at January 1, 2015
|
530,250
|
|
|
$1.34
|
|
$
|
710,535
|
|
||
Granted
|
334,000
|
|
|
$1.12
|
|
$
|
374,080
|
|
||
Vested
|
(168,750
|
)
|
|
$1.33
|
|
$
|
(224,438
|
)
|
||
Forfeitures
|
(25,875
|
)
|
|
$1.35
|
|
$
|
(35,018
|
)
|
||
Balance at December 31, 2015
|
669,625
|
|
|
$1.23
|
|
$
|
825,159
|
|
||
Granted
|
319,000
|
|
|
$1.15
|
|
$
|
366,850
|
|
||
Vested
|
(245,583
|
)
|
|
$1.23
|
|
$
|
(303,245
|
)
|
||
Forfeitures
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Balance at December 31, 2016
|
743,042
|
|
|
$1.20
|
|
$
|
888,764
|
|
|
Number of RSUs
|
|
|
|
Intrinsic Value
|
|||||
|
Issued
|
|
Unvested
|
|
Weighted Average Grant Date Fair Value per Share
|
|
Outstanding
|
Unvested
|
||
Balance at January 1, 2015
|
329,524
|
|
|
—
|
|
|
$1.53
|
|
|
|
Granted
|
152,697
|
|
|
72,813
|
|
$1.01
|
|
|
|
|
Vested
|
—
|
|
|
—
|
|
|
$0.00
|
|
|
|
Forfeitures
|
—
|
|
|
—
|
|
|
$0.00
|
|
|
|
Converted
|
(118,297
|
)
|
|
—
|
|
|
$1.46
|
|
|
|
Balance at December 31, 2015
|
363,924
|
|
|
72,813
|
|
$1.33
|
|
|
|
|
Granted
|
188,857
|
|
|
86,956
|
|
$1.18
|
|
|
|
|
Vested
|
—
|
|
|
(72,813
|
)
|
|
$1.01
|
|
|
|
Forfeitures
|
—
|
|
|
—
|
|
|
$0.00
|
|
|
|
Converted
|
(24,271
|
)
|
|
—
|
|
|
$1.01
|
|
|
|
Balance at December 31, 2016
|
528,510
|
|
|
86,956
|
|
$1.29
|
|
$776,910
|
$127,825
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid per Share
|
|||
October 2016
|
—
|
|
|
$
|
—
|
|
November 2016
|
6,400
|
|
|
$
|
1.25
|
|
December 2016
|
—
|
|
|
$
|
—
|
|
2017
|
$
|
1,601,292
|
|
2018
|
1,602,932
|
|
|
2019
|
1,451,081
|
|
|
2020
|
1,341,255
|
|
|
2021
|
806,865
|
|
|
Thereafter
|
1,441,177
|
|
|
|
$
|
8,244,602
|
|
|
Years ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
||||
Technology Development revenue
|
|
$
|
16,825,157
|
|
|
$
|
13,599,048
|
|
Products and Licensing revenue
|
|
42,385,839
|
|
|
30,421,310
|
|
||
Total revenue
|
|
59,210,996
|
|
|
44,020,358
|
|
||
Technology Development operating loss
|
|
(193,244
|
)
|
|
(3,708,710
|
)
|
||
Products and Licensing operating loss
|
|
(1,744,091
|
)
|
|
(2,540,885
|
)
|
||
Total operating loss
|
|
$
|
(1,937,335
|
)
|
|
$
|
(6,249,595
|
)
|
Depreciation, Technology Development
|
|
$
|
352,435
|
|
|
$
|
399,857
|
|
Depreciation, Products and Licensing
|
|
$
|
1,148,195
|
|
|
$
|
920,932
|
|
Amortization, Technology Development
|
|
$
|
195,619
|
|
|
$
|
88,423
|
|
Amortization, Products and Licensing
|
|
$
|
2,017,629
|
|
|
$
|
1,152,072
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Total segment assets:
|
|
|
|
||||
Technology Development
|
$
|
16,923,090
|
|
|
$
|
21,203,211
|
|
Products and Licensing
|
38,073,883
|
|
|
36,928,602
|
|
||
Total
|
$
|
54,996,973
|
|
|
$
|
58,131,813
|
|
Property plant and equipment and intangible assets, Technology Development
|
$
|
2,602,803
|
|
|
$
|
2,917,448
|
|
Property plant and equipment and intangible assets, Products and Licensing
|
$
|
15,207,630
|
|
|
$
|
16,375,215
|
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
(Dollars in thousands,
except per share amounts)
|
March 31,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
|
March 31,
2015 |
|
June 30,
2015 |
|
September 30,
2015 |
|
December 31,
2015 |
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Technology development
|
$
|
3,723
|
|
|
$
|
4,137
|
|
|
$
|
4,312
|
|
|
$
|
4,653
|
|
|
$
|
2,876
|
|
|
$
|
3,728
|
|
|
$
|
3,277
|
|
|
$
|
3,718
|
|
Products and licensing
|
10,264
|
|
|
10,510
|
|
|
10,307
|
|
|
11,305
|
|
|
2,463
|
|
|
6,298
|
|
|
9,928
|
|
|
11,732
|
|
||||||||
Total revenues
|
13,987
|
|
|
14,647
|
|
|
14,619
|
|
|
15,958
|
|
|
5,339
|
|
|
10,026
|
|
|
13,205
|
|
|
15,450
|
|
||||||||
Gross margin
|
4,844
|
|
|
5,171
|
|
|
5,609
|
|
|
6,111
|
|
|
2,289
|
|
|
4,197
|
|
|
4,979
|
|
|
5,036
|
|
||||||||
Operating (loss)/income
|
(1,352
|
)
|
|
(652
|
)
|
|
(362
|
)
|
|
427
|
|
|
(2,615
|
)
|
|
(2,123
|
)
|
|
(723
|
)
|
|
(815
|
)
|
||||||||
Net (loss)/income from continuing operations
|
(1,460
|
)
|
|
(771
|
)
|
|
(445
|
)
|
|
306
|
|
|
(2,627
|
)
|
|
(2,168
|
)
|
|
(802
|
)
|
|
(414
|
)
|
||||||||
Income from discontinued operations net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,329
|
|
||||||||
Net (loss)/income
|
(1,460
|
)
|
|
(771
|
)
|
|
(445
|
)
|
|
306
|
|
|
(2,627
|
)
|
|
(2,168
|
)
|
|
(802
|
)
|
|
7,914
|
|
||||||||
Net (loss)/income attributable to common stockholders
|
$
|
(1,481
|
)
|
|
$
|
(796
|
)
|
|
$
|
(474
|
)
|
|
$
|
276
|
|
|
$
|
(2,654
|
)
|
|
$
|
(2,189
|
)
|
|
$
|
(820
|
)
|
|
$
|
7,893
|
|
Net (loss)/income per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic and diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.17
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
Net income per share from discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic and diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.30
|
|
Net (loss)/income attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic and diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.29
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic and diluted
|
27,477,181
|
|
|
27,557,960
|
|
|
27,605,028
|
|
|
27,538,606
|
|
|
15,117,679
|
|
|
21,997,768
|
|
|
27,393,392
|
|
|
27,464,993
|
|
|
|
Year ended December 31,
|
||
|
|
2015
|
||
Net revenues
|
|
$
|
—
|
|
Cost of revenues
|
|
—
|
|
|
Operating expenses
|
|
—
|
|
|
Loss before income taxes
|
|
—
|
|
|
Allocated tax benefit
|
|
—
|
|
|
Operating loss from discontinued operations
|
|
—
|
|
|
Gain on sale, net of $0.7 million of related income taxes
|
|
8,326,386
|
|
|
Income from discontinued operations, net of income taxes
|
|
$
|
8,326,386
|
|
Plan category
|
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
(a)
|
|
Weighted-
average exercise
price of
outstanding
options,
warrants and
rights
(b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
3,223,114
|
|
|
$
|
1.96
|
|
|
3,749,619
|
|
Total
|
3,223,114
|
|
|
$
|
1.96
|
|
|
3,749,619
|
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
(1)
|
Financial Statements. See Index to Consolidated Financial Statements at Item 8 of this Report on Form 10-K.
|
(2)
|
Schedules.
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
|
Balance
at beginning
of Period
|
|
Additions
|
|
Deductions
|
|
Balance at
end
of period
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Reserves deducted from assets to which they apply:
|
|
|
|
|
|
|
|
||||||||
Deferred tax valuation allowance
|
$
|
12,690,449
|
|
|
$
|
8,068,653
|
|
|
$
|
—
|
|
|
$
|
20,759,102
|
|
Allowances for doubtful accounts
|
134,811
|
|
|
10,375
|
|
|
(10,375
|
)
|
|
134,811
|
|
||||
|
$
|
12,825,260
|
|
|
$
|
8,079,028
|
|
|
$
|
(10,375
|
)
|
|
$
|
20,893,913
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Reserves deducted from assets to which they apply:
|
|
|
|
|
|
|
|
||||||||
Deferred tax valuation allowance
|
$
|
20,759,102
|
|
|
$
|
550,444
|
|
|
$
|
—
|
|
|
$
|
21,309,546
|
|
Allowances for doubtful accounts
|
134,811
|
|
|
305,593
|
|
|
(187,765
|
)
|
|
252,639
|
|
||||
|
$
|
20,893,913
|
|
|
$
|
856,037
|
|
|
$
|
(187,765
|
)
|
|
$
|
21,562,185
|
|
(3)
|
Exhibits. The exhibits filed as part of this report are listed under “Exhibits” at subsection (b) of this Item 15.
|
(b)
|
Exhibits
|
Exhibit No.
|
Exhibit Document
|
2.1(1)
|
Findings of Fact, Conclusions of Law, and Order under 11 U.S.C. §§ 1129(a) and (b) and Fed. R. Bankr. P. 3020 Confirming First Amended Joint Plan of Reorganization of Luna Innovations Incorporated and Luna Innovations, Inc., debtors and debtors-in-possession, dated January 12, 2010 (Exhibit 2.1)
|
2.2(1)
|
First Amended Joint Plan of Reorganization of Luna Innovations Incorporated and Luna Technologies, Inc., dated December 18, 2009 (Exhibit 2.2)
|
2.3(1)
|
First Amended Disclosure Statement in support of First Amended Joint Plan of Reorganization of Luna Innovations Incorporated, et al., under Chapter 11 of the Bankruptcy Code, dated December 18, 2009 (Exhibit 2.3)
|
2.4(2)*
|
Asset Purchase Agreement, dated March 1, 2013, by and between Luna Innovations Incorporated and MacAulay-Brown, Inc. (Exhibit 2.4)
|
2.5(3)*
|
Asset Purchase Agreement by and between Luna innovations Incorporated and Luna Technologies, Inc. and Intuitive Surgical Operations, Inc., and Intuitive Surgical International, Ltd., dated as of January 17, 2014 (Exhibit) 2.1)
|
2.6(4)
|
Agreement and Plan of Merger and Reorganization dated as of January 30, 2015, by and among Luna Innovations Incorporated, API Merger Sub, Inc. and Advanced Photonix, Inc. (Exhibit 2.1)
|
3.1(5)
|
Amended and Restated Certificate of Incorporation of the Registrant (Exhibit 3.2)
|
3.2(6)
|
Certificate of Designations of the Series A Convertible Preferred Stock (Exhibit 3.1)
|
3.3(7)
|
Amended and Restated Bylaws of the Registrant (Exhibit 3.4)
|
3.4(8)
|
Amendment to Amended and Restated Bylaws (Exhibit 3.1)
|
3.4(4)
|
Amendment to Amended and Restated Bylaws (Exhibit 3.1)
|
4.1(9)
|
Specimen Common Stock certificate of the Registrant (Exhibit 4.1)
|
4.2(9)
|
2006 Equity Incentive Plan (Exhibit 10.9)
|
4.3(7)
|
Form of Stock Option Agreement under 2006 Equity Incentive Plan (Exhibit 4.7)
|
4.4(10)
|
Form of Performance Unit Award Agreement (Exhibit 4.5)
|
4.5(39)
|
2016 Equity Incentive Plan (Exhibit 4.7)
|
4.6(39)
|
Form of Stock Option Grant Notice and Stock Option Agreement under 2016 Equity Incentive Plan (Exhibit 4.8)
|
4.7(39)
|
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2016 Equity Incentive Plan (Exhibit 4.9)
|
4.8(40)
|
Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under 2016 Equity Incentive Plan (Exhibit 10.1)
|
10.1(11)
|
Form of Indemnification Agreement for directors and executive officers (Exhibit 10.1)
|
10.2(12)
|
Commercial Lease, dated March 15, 2007, between Canvasback Real Estate & Investments LLC and Luna Innovations Incorporated (705 Dale Avenue, Charlottesville, Virginia) (Exhibit 10.1)
|
10.3(9)**
|
License Agreement No. DN-982, dated June 10, 2002, by and between the National Aeronautics and Space Administration (NASA) and Luna Innovations Incorporated; Modification No. 1 to License Agreement No. DN-982, dated January 23, 2006, by and between NASA and Luna Innovations Incorporated (Exhibit 10.22)
|
10.4(9)**
|
License Agreement No. DN-951, dated December 20, 2000, by and between NASA and Luna Technologies, Inc. (Exhibit 10.23)
|
10.5(9)**
|
Amended and Restated License Agreement, dated March 19, 2004, by and between Virginia Tech Intellectual Properties, Inc. and Luna Innovations Incorporated (Exhibit 10.26)
|
10.6(13)
|
Asset Transfer and License Agreement by and between Luna Innovations Incorporated and Coherent, Inc. (Exhibit 10.21)
|
10.7(14)**
|
Development and Supply Agreement, dated December 12, 2006, by and between Luna Innovations Incorporated and Intuitive Surgical, Inc. dated June 11, 2007 (Exhibit 10.1)
|
10.8(15)
|
Amendment to Commercial Lease, by and between Luna Innovations Incorporated and Canvasback Real Estate & Investments LLC dated March 18, 2008 (Exhibit 10.5)
|
10.9(16)
|
Confidential Settlement Agreement, dated as of December 11, 2009, by and between Luna Innovations, Inc. and Luna Technologies, Inc. and Hansen Medical, Inc. (Exhibit 10.26)
|
10.10(6)
|
Securities Purchase and Exchange Agreement, dated January 12, 2010, by and between Luna Innovations Incorporated and Carilion Clinic (Exhibit 10.1)
|
10.11(6)
|
Warrant No. 1 to Purchase Common Stock, dated January 13, 2010, issued to Carilion Clinic (Exhibit 10.2)
|
10.12(6)
|
Warrant No. 2 to Purchase Common Stock, dated January 13, 2010, issued to Carilion Clinic (Exhibit 10.3)
|
10.13(6)
|
Amended and Restated Investor Rights Agreement, dated January 13, 2010, by and among Luna Innovations Incorporated, Carilion Clinic, and certain stockholders of Luna Innovations Incorporated (Exhibit 10.4)
|
10.14(17)
|
Non-Employee Directors’ Deferred Compensation Plan (Exhibit 10.37)
|
10.15(18)**
|
License Agreement, effective January 12, 2010, by and among Luna Innovations Incorporated, Luna Technologies, Inc. and Hansen Medical, Inc. (Exhibit 10.6)
|
10.16(18)**
|
Development and Supply Agreement, effective January 12, 2010, by and among Luna Innovations Incorporated, Luna Technologies, Inc. and Hansen Medical, Inc., as amended on February 17, 2010 and April 2, 2010 (Exhibit 10.7)
|
10.17(18)**
|
License Agreement, effective January 12, 2010, by and among Luna Innovations Incorporated, Luna Technologies, Inc. and Intuitive Surgical, Inc. (Exhibit 10.8)
|
10.18(18)**
|
Amendments to Development and Supply Agreement, effective January 12, 2010 and April 27, 2010, by and between Luna Innovations Incorporated and Intuitive Surgical, Inc. (Exhibit 10.9)
|
10.19(18)
|
Confidential Mutual Release, effective as of January 12, 2010, by and among Luna Innovations Incorporated, Luna Technologies, Inc. and Hansen Medical, Inc. (Exhibit 10.13)
|
10.20(18)
|
Industrial Lease Agreement, dated as of March 21, 2006, by and between Luna Innovations Incorporated and the Economic Development Authority of Montgomery County, Virginia, as amended by a First Amendment effective as of May 11, 2006, a Second Amendment effective as of July 15, 2009 and a Third Amendment effective as of March 23, 2010 (Exhibit 10.14)
|
10.21(18)
|
Lease for Riverside Center, dated December 30, 2005, by and between Carilion Medical Center and Luna Innovations Incorporated, as amended by an Amended Lease dated July 20, 2006, a Second Amendment dated on or about October 5, 2007 and a Third Amendment effective as of April 1, 2010 (Exhibit 10.15)
|
10.22(18)
|
Loan and Security Agreement, dated February 18, 2010, by and between Luna Innovations Incorporated, Luna Technologies, Inc. and Silicon Valley Bank (Exhibit 10.5)
|
10.23(19)
|
Third Amendment to Commercial Lease dated June 21, 2010, by and between Canvasback Real Estate & Investments, LLC and Luna Innovations, Incorporated (Exhibit 10.5)
|
10.24(20)**
|
Amendment No.3 to the Development Supply Agreement, dated as of September 2, 2010, by and between Luna Innovations Incorporated and Intuitive Surgical, Inc. (Exhibit 10.5)
|
10.25(21)
|
First Loan Modification Agreement, dated as of March 7, 2011, by and between Luna Innovations Incorporated and Silicon Valley Bank (Exhibit 10.1)
|
10.26(22)**
|
Amendment No. 4 to the Development and Supply Agreement, dated as of March 23, 2011, by and between Luna Innovations Incorporated and Intuitive Surgical, Inc. (Exhibit 10.2)
|
10.27(22)
|
Fourth Amendment to Industrial Lease Agreement, dated as of March 1, 2011, by and between The Economic Development Authority of Montgomery County and Luna Innovations Incorporated (Exhibit 10.3)
|
10.28(23)
|
Second Loan Modification Agreement, dated as of May 18, 2011, by and between Luna Innovations Incorporated, Luna Technologies, Inc. and Silicon Valley Bank (Exhibit 10.1)
|
10.29(24)
|
Fifth Amendment to Industrial Lease Agreement, dated as of November 1, 2011, by and between The Economic Development Authority of Montgomery County and Luna Innovations Incorporated
|
10.30(24)
|
Employment Agreement dated March 28, 2012, by and between My E. Chung and Luna Innovations Incorporated
|
10.31(24)
|
Employment Agreement dated March 28, 2012, by and between Dale E. Messick and Luna Innovations Incorporated
|
10.32(24)
|
Employment Agreement dated March 28, 2012, by and between Scott A. Graeff and Luna Innovations Incorporated
|
10.33(25)**
|
Amendment No. 5 to Development and Supply Agreement, dated as of March 22, 2012, by and between Luna Innovations Incorporated and Intuitive Surgical, Inc. (Exhibit 10.1)
|
10.34(26)
|
Fourth Amendment to Commercial Lease, dated as of April 15, 2012, by and between Canvasback Real Estate & Investments, LLC and Luna Innovations Incorporated (Exhibit 10.3)
|
10.35(27)
|
Development Agreement, dated as of April 25, 2012, by and between Luna Innovations Incorporated and Philips Medical Systems Nederland BV (Exhibit 10.1)
|
10.36(28)
|
Third Loan Modification Agreement, dated as of May 17, 2012, by and between Luna Innovations Incorporated, Luna Technologies, Inc. and Silicon Valley Bank (Exhibit 10.1)
|
10.37(29)
|
Fourth Loan Modification Agreement, dated March 21, 2013, by and between Luna Innovations Incorporated, Luna Technologies, Inc. and Silicon Valley Bank (Exhibit 10.1)
|
10.38(29)
|
Fourth Amendment to Luna Innovations Lease of Riverside Center, dated March 21, 2013, by and between Carilion Clinic Properties, LLC and Luna Innovations Incorporated (Exhibit 10.2)
|
10.39(30)**
|
Amendment No. 6 to the Intuitive-Luna Development and Supply Agreement, dated December 15, 2012, by and between Luna Innovations Incorporated and Intuitive Surgical Operations, Inc., a successor in interest to Intuitive Surgical, Inc. (Exhibit 10.2)
|
10.40(30)**
|
Amendment No. 7 to the Intuitive-Luna Development and Supply Agreement, entered into on June 28, 2013, by and between Luna Innovations Incorporated and Intuitive Surgical Operations, Inc., a successor in interest to Intuitive Surgical, Inc. (Exhibit 10.3)
|
10.41(31)
|
Fifth Amendment to Luna Innovations Lease of Riverside Center, dated December 13, 2013, by and between Carilion Clinic Properties, LLC and Luna Innovations Incorporated (Exhibit 10.44)
|
10.42(3)**
|
Cross-License Agreement by and among Luna Innovations Incorporated and Luna Technologies, Inc., and Intuitive Surgical Operations, Inc., and Intuitive Surgical international, Ltd., dated as of January 17, 2014 (Exhibit 10.2)
|
10.43(3)**
|
Consent, Release and Fifth Loan Modification Agreement between Luna Innovations incorporated and Silicon Valley Bank dated as of January 21, 2014 (Exhibit 10.3)
|
10.44(32)
|
Sixth Amendment to Industrial lease Agreement by and between the Economic Development Authority of Montgomery County, Virginia and Luna Innovations Incorporated dated October 1, 2014
|
10.45(32)
|
Industrial Lease Agreement by and between The Economic Development Authority of Montgomery County, Virginia and Luna Innovations Incorporated dated October 1, 2014
|
10.46(32)
|
Lease Agreement by and between SBA Tenant, LLC and Luna Innovations Incorporated dated November 2014
|
10.47(33)
|
Joinder, Consent, and Sixth Loan Modification Agreement between Luna Innovations Incorporated, Luna Technologies, Inc., Advanced Photonix, LLC and Silicon Valley Bank, dated as of May 8, 2015 (Exhibit 10.1)
|
10.48(34)
|
Joinder, Consent, and Seventh Loan Modification Agreement between Luna Innovations Incorporated, Luna Technologies, Inc., Advanced Photonix, LLC and Silicon Valley Bank, dated as of September 29, 2015 (Exhibit 10.1)
|
10.49(35)
|
First Amendment to Industrial Lease Agreement by and between the Economic Development Authority of Montgomery County, Virginia and Luna Innovation Incorporated, dated January 20, 2015 (Exhibit 10.3)
|
10.50(35)
|
Sixth Amendment to Luna Innovations Lease of Riverside Center, dated January 20, 2015, by and between Carilion Clinic Properties, LLC and Luna Innovations Incorporated (Exhibit 10.4)
|
10.51(36)
|
Amended and Restated Non-Employee Director Compensation Policy, dated June 30, 2015 (Exhibit 10.1)
|
10.52(37)
|
Fifth Amendment to Commercial Lease by and between Canvasback Real Estate and Investments, LLC and the Registrant, dated as of August 5, 2015 (Exhibit 10.2)
|
10.53(38)
|
Addendum to Asset Purchase Agreement, by and among Luna Innovations Incorporated, Intuitive Surgical Operations, Inc. and Intuitive Surgical International, Ltd., dated as of December 22, 2015 (Exhibit 10.1)
|
10.54
|
Eighth Loan Modification Agreement, dated December 15, 2016, by and between Luna Innovations Incorporated, Luna Technologies, Inc., Advanced Photonix, LLC and Silicon Valley Bank
|
21.1(10)
|
List of Subsidiaries (Exhibit 21.1)
|
23.1
|
Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm
|
24.1
|
Power of Attorney (see signature page)
|
31.1
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1***
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2***
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following materials from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016, are formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, 2016 and 2015, (ii) Consolidated Statements of Operations for the years ended December 31, 2016 and 2015, (iii) Consolidated Statements of Changes in Stockholder’s Equity for the years ended December 31, 2016 and 2015 (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015, and (v) Notes to Audited Consolidated Financial Statements.
|
(1)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on January 15, 2010 (reporting under Items 1.03, 5.02 and 9.01). The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(2)
|
Incorporated by reference to the Registrant’s Annual Report on Form 10-K, Commission File No. 000-52008, filed on March 29, 2013. The number in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(3)
|
Incorporated by reference to the exhibit to the Registrant's Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 13, 2014. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(4)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on February 2, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(5)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on June 8, 2006. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(6)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on January 15, 2010 (reporting under Items 1.01, 3.02, 3.03, 5.03 and 9.01). The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(7)
|
Incorporated by reference to the exhibit to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-131764, filed on February 10, 2006. The number given in parentheses indicates the corresponding exhibit number in such Form S-1.
|
(8)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed with the Securities and Exchange Commission on May 10, 2010. The number in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(9)
|
Incorporated by reference to the exhibit to Amendment No. 5 of the Registrant’s Registration Statement on Form S-1, Commission File No. 333-131764, filed on April 19, 2006. The number given in parentheses indicates the corresponding exhibit number in such Form S-1.
|
(10)
|
Incorporated by reference to the exhibit to the Registrant’s Annual Report on Form 10-K, Commission File No. 000-52008, filed on March 29, 2016. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(11)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on July 17, 2009 (reporting under Items 1.01, 5.02 and 9.01). The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(12)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 15, 2007. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(13)
|
Incorporated by reference to the exhibit to Amendment No. 1 to Registrant’s Annual Report on Form 10-K, Commission File No. 000-52008, filed on April 6, 2007. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K/A.
|
(14)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on June 14, 2007. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(15)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 9, 2008. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(16)
|
Incorporated by reference to the exhibit to Registrant’s Annual Report on Form 10-K, Commission File No. 000-52008, filed on March 26, 2010. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(17)
|
Incorporated by reference to the exhibit to Registrant’s Annual Report on Form 10-K, Commission File No. 000-52008, filed on March 16, 2009. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(18)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 17, 2010. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(19)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on August 16, 2010. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(20)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on November 15, 2010. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(21)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on March 9, 2011. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(22)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 16, 2011. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(23)
|
Incorporated by reference to the exhibit to Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on August 12, 2011. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(24)
|
Incorporated by reference to the exhibit to the Registrant’s Annual Report on Form 10-K, Commission File No. 000-52008, filed on March 29, 2012. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(25)
|
Incorporated by reference to the exhibit to the Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 10, 2012. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(26)
|
Incorporated by reference to the exhibit to the Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on August 9, 2012. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(27)
|
Incorporated by reference to the exhibit to the Registrant’s Amendment No. 1 to Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on August 10, 2012. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(28)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on July 11, 2012. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(29)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on March 27, 2013. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(30)
|
Incorporated by reference to the exhibit to the Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on August 8, 2013. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(31)
|
Incorporated by reference to the exhibit to the Registrant's Annual Report on Form 10-K, Commission File No. 000-52008, filed on April 10, 2014. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(32)
|
Incorporated by reference to the exhibit to the Registrant's Annual Report on Form 10-K, Commission File No. 000-52008, filed on March 16, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 10-K.
|
(33)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on May 11, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(34)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on October 5, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(35)
|
Incorporated by reference to the exhibit to the Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on May 14, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(36)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on August 14, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(37)
|
Incorporated by reference to the exhibit to the Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on November 13, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
(38)
|
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission File No. 000-52008, filed on December 29, 2015. The number given in parentheses indicates the corresponding exhibit number in such Form 8-K.
|
(39)
|
Incorporated by reference to the exhibit to the Registrant’s Registration Statement on Form S-8, Commission File No. 333-211802, filed on June 3, 2016. The number given in parentheses indicates the corresponding exhibit number in such Form S-8.
|
(40)
|
Incorporated by reference to the exhibit to the Registrant’s Quarterly Report on Form 10-Q, Commission File No. 000-52008, filed on August 10, 2016. The number given in parentheses indicates the corresponding exhibit number in such Form 10-Q.
|
*
|
Confidential treatment has been granted with respect to portions of this exhibit, indicated by asterisks, which has been filed separately with the Securities and Exchange Commission. Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to this agreement are omitted, but will be furnished to the Securities and Exchange Commission upon request.
|
**
|
Confidential treatment has been granted with respect to portions of this exhibit, indicated by asterisks, which has been filed separately with the Securities and Exchange Commission.
|
***
|
These certifications are being furnished solely to accompany this annual report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
L
UNA
I
NNOVATIONS
I
NCORPORATED
|
||
|
|
|
|
|
By:
|
|
/s/ Dale E. Messick
|
|
|
|
Dale E. Messick
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ My E. Chung
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 20, 2017
|
My E. Chung
|
|
|
||
/s/ Dale E. Messick
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 20, 2017
|
Dale E. Messick
|
|
|
||
/s/ Michael W. Wise
|
|
Director
|
|
March 20, 2017
|
Michael W. Wise
|
|
|
||
/s/ Donald Pastor
|
|
Director
|
|
March 20, 2017
|
Donald Pastor
|
|
|
||
/s/ John B. Williamson III
|
|
Director
|
|
March 20, 2017
|
John B. Williamson III
|
|
|
||
/s/ Gary Spiegel
|
|
Director
|
|
March 20, 2017
|
Gary Spiegel
|
|
|
||
/s/ Richard W. Roedel
|
|
Chairman of the Board of Directors
|
|
March 20, 2017
|
Richard W. Roedel
|
|
|
A.
|
Modifications to Loan Agreement.
|
1
|
The Loan Agreement shall be amended by deleting the following text appearing as Section 6.9 thereof:
|
Period
|
Minimum Adjusted EBITDA
|
||
Trailing three (3) month period ending September 30, 2015
|
|
($600,000
|
)
|
Trailing six (6) month period ending December 31, 2015
|
|
($250,000
|
)
|
Trailing nine (9) month period ending March 31, 2016
|
($550,000)
|
||
Trailing twelve (12) month period ending June 30, 2016, and the last day of each fiscal quarter thereafter on a trailing twelve (12) month basis
|
$1.00”
|
2
|
The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof:
|
3
|
The Compliance Certificate appearing as
Exhibit B
to the Loan Agreement is hereby replaced with the Compliance Certificate in the form of
Exhibit B
attached hereto.
|
A.
|
this Loan Modification Agreement duly executed on behalf of Borrower;
|
B.
|
certified copies, dated as of a recent date, of financing statement and other lien searches of each Borrower, as Bank may request and which shall be obtained by Bank, accompanied by written evidence (including any UCC termination statements) that the Liens revealed in any such searched either (i) will be terminated prior to or in connection with the Agreement, or (ii) in the sole discretion of Bank, will constitute Permitted Liens;
|
C.
|
Borrower’s payment of the fees set forth in Section 5 above; and
|
D.
|
such other documents as Bank may reasonably request.
|
LUNA INNOVATIONS INCORPORATED
LUNA TECHNOLOGIES, INC.
ADVANCED PHOTONIX, INC.
PICOMETRIX, LLC
By:
Name:
Title:
|
BANK USE ONLY
Received by: _____________________
AUTHORIZED SIGNER
Date: _________________________
Verified: ________________________
AUTHORIZED SIGNER
Date: _________________________
Compliance Status: Yes No
|
Required:
|
Borrower shall maintain at all times, to be certified as of the last day of each month, unrestricted cash at Bank of not less than (i) Five Million Dollars ($5,000,000) through and including June 30, 2017, (ii) Four Million Dollars ($4,000,000) from July 1, 2017 through and including June 30, 2018, and (iii) Three Million Dollars ($3,000,000) at all times thereafter.
|
A.
|
Aggregate value of Borrower’s unrestricted cash at Bank
|
$
|
Required:
|
Borrower shall maintain at all times, to be certified as of the last day of each month, a Liquidity Coverage Ratio of greater than 1.50 to 1.00.
|
A.
|
Aggregate value of Borrower’s unrestricted cash at Bank
|
$
|
B.
|
Net accounts receivable of Borrower
|
$
|
C.
|
Line B multiplied fifty percent (60%)
|
$
|
D.
|
Line A. plus Line C
|
$
|
E.
|
Aggregate of all Obligations owing to Bank, including, without limitation, all issued and outstanding letters of credit
|
$
|
F.
|
Line D divided by Line E
|
$
|
1.
|
I have reviewed this annual report on Form 10-K of Luna Innovations Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ MY E. CHUNG
|
|
My E. Chung
|
|
President and Chief Executive Officer
(principal executive officer)
|
|
1.
|
I have reviewed this annual report on Form 10-K of Luna Innovations Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ DALE E. MESSICK
|
|
Dale E. Messick
|
|
Chief Financial Officer
(principal financial officer)
|
|
/S/ MY E. CHUNG
|
|
My E. Chung
|
|
President and Chief Executive Officer
(principal executive officer)
|
|
/S/ DALE E. MESSICK
|
|
Dale E. Messick
|
|
Chief Financial Officer
(principal financial officer)
|
|