PART I. FINANCIAL INFORMATION Presents unaudited consolidated financial statements, management's analysis, market risks, and internal controls [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents Luna Innovations' unaudited consolidated financial statements, including balance sheets, operations, equity, cash flows, and notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and stockholders' equity at specific dates Consolidated Balance Sheets (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $82,613 | $75,469 | | Total assets | $129,681 | $131,002 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $33,656 | $30,085 | | Total liabilities | $50,812 | $56,560 | | Total stockholders' equity | $78,869 | $74,442 | | Total liabilities and stockholders' equity | $129,681 | $131,002 | [Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) Details the company's revenues, costs, and net income or loss for the specified reporting periods Consolidated Statements of Operations (in thousands, except share and per share data) | (in thousands, except share and per share data) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $20,329 | $15,350 | $63,291 | $39,837 | | Gross profit | $12,584 | $9,632 | $37,436 | $24,126 | | Operating (loss)/income | $(10) | $1,212 | $(3,625) | $874 | | Net (loss)/income from continuing operations | $(344) | $2,308 | $(2,564) | $1,886 | | Income from discontinued operations, net of income tax | $699 | $794 | $2,371 | $1,469 | | Net income/(loss) | $355 | $3,102 | $(193) | $3,355 | | Basic Net (loss)/income per share attributable to common stockholders | $0.01 | $0.10 | $(0.01) | $0.11 | | Diluted Net (loss)/income per share attributable to common stockholders | $0.01 | $0.10 | $(0.01) | $0.10 | [Consolidated Statements of Comprehensive (Loss)/Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%2FIncome) Reports net income or loss and other comprehensive income or loss for the specified periods Consolidated Statements of Comprehensive (Loss)/Income (in thousands) | (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income/(loss) | $355 | $3,102 | $(193) | $3,355 | | Other comprehensive (loss)/income | $(672) | $— | $204 | $— | | Total other comprehensive (loss)/income | $(317) | $3,102 | $11 | $3,355 | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines changes in common stock, treasury stock, additional paid-in capital, and accumulated deficit Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share data) - Q3 2021 | (in thousands, except share data) | Balance at June 30, 2021 | Balance at Sep 30, 2021 | | :--- | :--- | :--- | | Common Stock Shares | 31,772,444 | 31,961,907 | | Common Stock $ | $33 | $34 | | Treasury Stock Shares | 1,739,455 | 1,739,455 | | Treasury Stock $ | $(5,209) | $(5,209) | | Additional Paid-in Capital | $95,936 | $97,238 | | Accumulated Deficit | $(13,505) | $(13,150) | | Accumulated Other Comprehensive Income/(loss) | $628 | $(44) | | Total | $77,883 | $78,869 | Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share data) - YTD Q3 2021 | (in thousands, except share data) | Balance at Dec 31, 2020 | Balance at Sep 30, 2021 | | :--- | :--- | :--- | | Common Stock Shares | 31,024,537 | 31,961,907 | | Common Stock $ | $33 | $34 | | Treasury Stock Shares | 1,699,975 | 1,739,455 | | Treasury Stock $ | $(4,789) | $(5,209) | | Additional Paid-in Capital | $92,403 | $97,238 | | Accumulated Deficit | $(12,957) | $(13,150) | | Accumulated Other Comprehensive (Loss)/Income | $(248) | $(44) | | Total | $74,442 | $78,869 | [Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Summarizes cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (in thousands) | (in thousands) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,230 | $97 | | Net cash (used in)/provided by investing activities | $(1,158) | $290 | | Net cash (used in)/provided by financing activities | $(960) | $1,029 | | Effect of exchange rate changes on cash and cash equivalents | $277 | $— | | Net (decrease)/increase in cash and cash equivalents | $(611) | $1,416 | | Cash and cash equivalents—beginning of period | $15,366 | $25,006 | | Cash and cash equivalents—end of period | $14,755 | $26,422 | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies and financial statement items [1. Basis of Presentation and Significant Accounting Policies](index=11&type=section&id=1.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) Describes the company's business, reporting segments, and key accounting principles applied - **Luna Innovations is a leader** in advanced optical technology, providing high-performance fiber optic test, measurement, and control products, and distributed fiber optic sensing solutions for various industries[28](index=28&type=chunk) - The company also provides applied research services, primarily funded by the U.S. government, in advanced materials, sensing, and healthcare applications[29](index=29&type=chunk) - The Luna Labs segment was classified as held for sale during Q3 **2021**, resulting in Lightwave becoming the **sole reportable segment** going forward[36](index=36&type=chunk)[37](index=37&type=chunk) [2. Discontinued Operations](index=13&type=section&id=2.%20Discontinued%20Operations) Details the financial impact and classification of the Luna Labs segment as held for sale - Luna Labs segment **met held-for-sale and discontinued operations accounting criteria** at the end of Q3 **2021**, with the sale expected to be completed within one year[43](index=43&type=chunk) Discontinued Operations Financial Summary (in thousands) | (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $6,376 | $5,700 | $17,650 | $16,929 | | Net income from discontinued operations, net of tax | $699 | $794 | $2,371 | $2,905 | Discontinued Operations Assets and Liabilities (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets held for sale | $13,855 | $13,000 | | Liabilities associated with assets held for sale | $9,091 | $8,933 | [3. Business Acquisitions](index=14&type=section&id=3.%20Business%20Acquisitions) Summarizes recent acquisitions, including OptaSense and New Ridge Technologies, and their financial impact - On December **3**, **2020**, Luna Innovations acquired OptaSense for **$38.9 million**, gaining distributed acoustic sensing (DAS) intellectual property and products, complementing its Lightwave segment[46](index=46&type=chunk) - On October **29**, **2020**, Luna acquired New Ridge Technologies for **$0.6 million**, integrating its fiber optic test and measurement equipment into the Lightwave segment[48](index=48&type=chunk) OptaSense Purchase Consideration Allocation (in thousands) | (in thousands) | OptaSense Purchase Consideration | | :--- | :--- | | Accounts receivable | $4,534 | | Inventory | $12,793 | | Identifiable intangible assets | $11,263 | | Goodwill | $8,520 | | Total purchase consideration | $33,688 | [4. Intangible assets, net](index=17&type=section&id=4.%20Intangible%20assets%2C%20net) Presents the company's intangible assets, including patents, developed technology, and customer base Intangible Assets, Net (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Patent costs | $3,508 | $3,595 | | Developed technology | $17,409 | $17,344 | | In-process research & development | $1,580 | $1,580 | | Customer base | $1,302 | $1,302 | | Trade names | $3,121 | $3,122 | | Backlog | $696 | $696 | | Total | $27,616 | $27,639 | | Accumulated amortization | $(9,797) | $(7,645) | | Intangible assets, net | $17,819 | $19,994 | - Amortization expense for intangible assets was **$0.8 million** for the three months ended September **30**, **2021**, and **$2.4 million** for the nine months ended September **30**, **2021**[60](index=60&type=chunk) [5. Goodwill](index=17&type=section&id=5.%20Goodwill) Details the company's goodwill balance and changes due to acquisitions and foreign currency translation Goodwill (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Goodwill | $19,000 | $18,100 | - Goodwill decreased by **$0.2 million** during the three months ended September **30**, **2021**, due to foreign currency translation, and by **$0.9 million** during the nine months ended September **30**, **2021**, primarily due to measurement period adjustments[61](index=61&type=chunk) [6. Inventory](index=17&type=section&id=6.%20Inventory) Provides a breakdown of inventory components, including finished goods, work-in-process, and raw materials Inventory Breakdown (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Finished goods | $10,955 | $11,547 | | Work-in-process | $3,023 | $1,425 | | Raw materials | $11,372 | $10,090 | | Total inventory | $25,350 | $23,062 | [7. Accrued Liabilities](index=18&type=section&id=7.%20Accrued%20Liabilities) Lists various accrued liabilities, such as compensation, professional fees, and income tax Accrued Liabilities (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Accrued compensation | $7,785 | $7,669 | | Contingent consideration | $225 | $225 | | Accrued professional fees | $647 | $825 | | Accrued income tax | $1,286 | $281 | | Total accrued and other current liabilities | $10,826 | $10,773 | [8. Debt](index=18&type=section&id=8.%20Debt) Details the company's debt obligations, including term loans and revolving credit facilities, and covenants Debt Obligations (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Term Loan (net) | $9,326 | $12,434 | | Revolving Loan | $7,550 | $7,550 | | Total | $16,876 | $19,984 | | Less: Current portion of long-term debt obligations | $(4,167) | $(4,167) | | Long-term debt obligations | $12,709 | $15,817 | - The company entered into a Loan Agreement with PNC Bank on December **1**, **2020**, providing a **$12.5 million** term loan and a **$15.0 million** revolving credit facility, used in part for the OptaSense acquisition[66](index=66&type=chunk)[141](index=141&type=chunk) - The Term Loan and Revolving Line mature on December **1**, **2023**, bearing interest at LIBOR plus a margin (**1.75%** to **2.25%**) and are subject to financial covenants[67](index=67&type=chunk)[68](index=68&type=chunk)[71](index=71&type=chunk) [9. Leases](index=19&type=section&id=9.%20Leases) Describes the company's operating and finance lease arrangements, including ROU assets and lease liabilities - The company recognizes ROU assets and lease liabilities for operating and finance leases with terms over twelve months, primarily for facilities (operating leases) and equipment (finance leases)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) Lease Liabilities (in thousands) | (in thousands) | Operating Leases | Finance Leases | | :--- | :--- | :--- | | Total future minimum lease payments | $6,621 | $219 | | Less: interest | $528 | $11 | | Total lease liabilities | $6,093 | $208 | | Current lease liability | $2,020 | $48 | | Long-term lease liability | $4,073 | $160 | Weighted-Average Lease Data | Weighted-average data | Operating Leases | Finance Leases | | :--- | :--- | :--- | | Remaining lease term (years) | 5.8 | 4.2 | | Discount rate | 6% | 3% | [10. Capital Stock and Share-Based Compensation](index=21&type=section&id=10.%20Capital%20Stock%20and%20Share-Based%20Compensation) Covers common stock, share-based compensation expenses, and restricted stock unit grants - For the nine months ended September **30**, **2021**, the company granted options to purchase **80,735** shares of common stock with a weighted average fair value of **$5.24** per share[80](index=80&type=chunk) - Share-based compensation expense related to stock options was **$0.3 million** (Q3 **2021**) and **$0.8 million** (YTD Q3 **2021**)[81](index=81&type=chunk) - The company granted **134,250** time-based restricted stock units (RSUs) during the nine months ended September **30**, **2021**, with a weighted average fair value of **$11.35** per share[82](index=82&type=chunk)[83](index=83&type=chunk) [11. Revenue Recognition](index=22&type=section&id=11.%20Revenue%20Recognition) Explains revenue recognition policies and provides a breakdown of revenue by geographic location and customer type Revenue by Geographic Location and Customer Type (in thousands) | (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue by Geographic Location: United States | $11,555 | $8,729 | $33,670 | $21,622 | | Total Revenue by Geographic Location: Asia | $3,390 | $4,532 | $10,658 | $11,857 | | Total Revenue by Geographic Location: Europe | $3,628 | $1,694 | $12,114 | $5,261 | | Total Revenue by Major Customer Type: Sales to the U.S. government | $2,713 | $2,599 | $7,629 | $6,119 | | Total Revenue by Major Customer Type: U.S. direct commercial sales and other | $8,444 | $6,130 | $25,642 | $15,503 | | Total Revenue by Major Products/Services: Test, measurement and sensing systems | $18,253 | $12,987 | $56,255 | $34,023 | Contract Assets and Liabilities (in thousands) | (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Contract assets | $2,883 | $4,139 | | Contract liabilities | $4,967 | $6,698 | | Net contract assets | $(2,084) | $(2,559) | - Unfulfilled performance obligations for the Lightwave segment were approximately **$38.6 million** at September **30**, **2021**, with **36%** expected to be satisfied in **2021**, **56%** in **2022**, and the remainder by **2025**[93](index=93&type=chunk) [12. Income Taxes](index=24&type=section&id=12.%20Income%20Taxes) Discusses the effective income tax rate and factors contributing to its difference from the federal statutory rate - The effective income tax rate for the nine months ended September **30**, **2021**, was **35.90%**, compared to (**97.28%**) for the same period in **2020**[95](index=95&type=chunk) - The **2021** rate differed from the federal statutory rate of **21%** due to permanent differences from equity compensation adjustments, state income taxes, R&D tax credits, and losses with no corresponding valuation allowances[95](index=95&type=chunk) [13. Commitments and Contingencies](index=24&type=section&id=13.%20Commitments%20and%20Contingencies) Outlines legal proceedings and non-cancelable purchase order commitments - The company is involved in legal proceedings in the ordinary course of business, but management believes ultimate liability will **not materially affect** financial position or results[96](index=96&type=chunk) - As of September **30**, **2021**, approximately **$1.7 million** in non-cancelable purchase order commitments for tunable lasers remained, expected to be delivered by September **30**, **2022**[98](index=98&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=25&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides management's analysis of financial condition, operational results, liquidity, and capital resources [Overview of Our Business](index=25&type=section&id=Overview%20of%20Our%20Business) Describes Luna Innovations' core business in advanced optical technology and its market focus - **Luna Innovations is a leader** in advanced optical technology, offering fiber optic test, measurement, and control products for telecommunications and photonics, and distributed fiber optic sensing solutions for various industries[104](index=104&type=chunk) - The company's Lightwave segment focuses on fiber optic sensing and communications test/control products, while the Luna Labs segment (now discontinued operations) performed applied research[105](index=105&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk) - The acquisition of OptaSense in December **2020** expanded the Lightwave segment's capabilities into distributed acoustic sensing (DAS) for high-growth markets[108](index=108&type=chunk) [Acquisitions](index=26&type=section&id=Acquisitions) Summarizes recent acquisitions, particularly OptaSense, and their strategic impact on the business - On December **3**, **2020**, Luna acquired OptaSense Holdings Limited for **$38.9 million**, enhancing its distributed acoustic sensing (DAS) intellectual property and market presence[111](index=111&type=chunk) [Discontinued Operations](index=26&type=section&id=Discontinued%20Operations) Details the financial impact and classification of the Luna Labs segment as held for sale - The Luna Labs segment was classified as held-for-sale and discontinued operations at the end of Q3 **2021**, with the sale anticipated within one year[112](index=112&type=chunk) [Description of Revenues, Costs and Expenses](index=27&type=section&id=Description%20of%20Revenues%2C%20Costs%20and%20Expenses) Explains the components of revenues, costs, and operating expenses, noting COVID-19 impacts - The COVID-19 pandemic has **caused supply chain disruptions, delayed revenue, and impacted customer/supplier interactions**[114](index=114&type=chunk) - Revenues are generated from product sales, commercial product development, licensing, and technology development activities, with Luna Labs' R&D services now reported as discontinued operations[115](index=115&type=chunk)[116](index=116&type=chunk) - Operating expenses include selling, general and administrative, research, development and engineering, depreciation, amortization, and M&A costs, with Luna Labs' operating expenses also in discontinued operations[119](index=119&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Highlights key accounting policies and estimates requiring significant management judgment - Financial statements require management estimates and judgments, particularly concerning accounts receivable, inventory, goodwill, and long-lived assets, with potential future impacts from the COVID-19 pandemic[122](index=122&type=chunk)[123](index=123&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance for the specified periods, comparing current to prior year [Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020](index=28&type=section&id=Three%20Months%20Ended%20September%2030%2C%202021%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202020) Compares financial results for the three months ended September 30, 2021 and 2020, highlighting key changes Three Months Ended September 30, 2021 vs 2020 (in thousands) | (in thousands) | 2021 | 2020 | $ Difference | % Difference | | :--- | :--- | :--- | :--- | :--- | | Revenues | $20,329 | $15,350 | $4,979 | 32% | | Cost of revenues | $7,745 | $5,718 | $2,027 | 35% | | Gross margin | 62% | 63% | -1% | - | | Selling, general and administrative | $9,674 | $6,229 | $3,445 | 55% | | Research, development and engineering | $2,920 | $1,615 | $1,305 | 81% | | Operating (loss)/income | $(10) | $1,212 | $(1,222) | -101% | | Net income from discontinued operations, net | $699 | $794 | $(95) | -12% | - The increase in revenues and cost of revenues was **primarily driven by the OptaSense acquisition**[125](index=125&type=chunk)[126](index=126&type=chunk) - **Operating expenses rose significantly** due to OptaSense operations, integration costs, intangible asset amortization, and variable costs supporting sales growth[127](index=127&type=chunk)[128](index=128&type=chunk) [Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020](index=29&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202021%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202020) Compares financial results for the nine months ended September 30, 2021 and 2020, highlighting key changes Nine Months Ended September 30, 2021 vs 2020 (in thousands) | (in thousands) | 2021 | 2020 | $ Difference | % Difference | | :--- | :--- | :--- | :--- | :--- | | Revenues | $63,291 | $39,837 | $23,454 | 59% | | Cost of revenues | $25,855 | $15,711 | $10,144 | 65% | | Gross margin | 59% | 59% | 0% | 0% | | Selling, general and administrative | $33,414 | $17,959 | $15,455 | 86% | | Research, development and engineering | $7,647 | $4,717 | $2,930 | 62% | | Operating (loss)/income | $(3,625) | $874 | $(4,499) | -515% | | Net income from discontinued operations, net | $2,371 | $1,469 | $902 | 61% | - **Revenue growth was primarily due to the OptaSense acquisition** and increased sales of communications testing products[132](index=132&type=chunk) - **Operating expenses increased significantly** due to OptaSense operations, integration costs, amortization of intangible assets, and variable costs supporting sales growth[134](index=134&type=chunk)[135](index=135&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, available credit, and ability to meet short-term and long-term obligations - As of September **30**, **2021**, cash and cash equivalents totaled **$14.8 million**[139](index=139&type=chunk) - The company believes current cash and available revolving line of credit will provide **adequate liquidity for the next twelve months**, with potential for third-party financing for increased capital spending[146](index=146&type=chunk) - The Loan Agreement with PNC Bank includes financial and restrictive covenants, with obligations secured by a first priority perfected security interest in substantially all assets[144](index=144&type=chunk) [Discussion of Cash Flows](index=31&type=section&id=Discussion%20of%20Cash%20Flows) Analyzes cash flows from operating, investing, and financing activities for the specified periods Cash Flow Summary (in thousands) | (in thousands) | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | $ Difference | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,230 | $97 | $1,133 | | Net cash (used in)/provided by investing activities | $(1,158) | $290 | $(1,448) | | Net cash (used in)/provided by financing activities | $(960) | $1,029 | $(1,989) | | Net (decrease)/increase in cash and cash equivalents | $(611) | $1,416 | $(2,027) | - Operating activities provided **$1.2 million** in cash for the first nine months of **2021**, driven by non-cash charges for depreciation, amortization, and share-based compensation, partially offset by working capital outflows[147](index=147&type=chunk) - Investing activities used **$1.2 million** in cash in **2021**, primarily for fixed asset additions and capitalized intellectual property costs, a shift from cash provided in **2020**[149](index=149&type=chunk) [Off-Balance Sheet Arrangements](index=32&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of off-balance sheet arrangements as of the reporting date - As of September **30**, **2021**, the company had **no off-balance sheet arrangements**[151](index=151&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Outlines exposure to market risks, specifically interest rate and foreign currency exchange rate fluctuations [Interest Rate Risk](index=33&type=section&id=Interest%20Rate%20Risk) Evaluates the company's exposure to interest rate fluctuations on its variable-rate debt - The company is exposed to interest rate risk on its Term Loan and Revolving Loan, which have variable interest rates based on LIBOR plus a margin[153](index=153&type=chunk) - As of September **30**, **2021**, outstanding borrowings were **$9.3 million** (Term Loan) and **$7.6 million** (Revolving Loan) at a weighted-average variable interest rate of **2.1%**[153](index=153&type=chunk) - A **0.25%** increase in interest rates would result in an unfavorable annual impact of **$0.04 million** on pre-tax earnings and cash flows[153](index=153&type=chunk) [Foreign Currency Exchange Rate Risk](index=33&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) Assesses the impact of foreign currency exchange rate fluctuations on the company's financial results - Following the OptaSense acquisition, the company is exposed to foreign currency exchange rate fluctuations from foreign operations and cross-currency purchases[154](index=154&type=chunk) - As of September **30**, **2021**, the exposure to foreign currency rate fluctuations was **not material** to the company's financial condition or results of operations[154](index=154&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Details evaluation of disclosure controls and procedures and changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports on the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of September **30**, **2021**[158](index=158&type=chunk) - Based on the evaluation, disclosure controls and procedures were **concluded to be effective** as of September **30**, **2021**[158](index=158&type=chunk) [Changes in Internal Control over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Identifies any material changes in internal control over financial reporting during the period - **No material changes** in internal control over financial reporting occurred during the three months ended September **30**, **2021**[159](index=159&type=chunk) PART II. OTHER INFORMATION Covers legal proceedings, equity sales, defaults, mine safety, and other required disclosures [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Addresses the company's involvement in legal proceedings and management's assessment of their financial impact - The company is occasionally involved in litigation or claims in the ordinary course of business[162](index=162&type=chunk) - Management believes that the ultimate liability from these actions will **not materially affect** the company's financial position, results of operations, or liquidity[162](index=162&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) Details various risks and uncertainties that could adversely affect the company's business and financial condition [RISKS RELATING TO OUR BUSINESS](index=36&type=section&id=RISKS%20RELATING%20TO%20OUR%20BUSINESS) Details risks inherent to the company's business model, including reliance on licenses, suppliers, and government contracts - The company's fiber-optic products business relies on a revocable license from Intuitive Surgical, Inc.; revocation would **materially harm operations**[166](index=166&type=chunk) - Dependence on third-party vendors for specialized components and contract manufacturers for some products **creates vulnerability to supply shortages**, price fluctuations, and production disruptions, including from COVID-19[167](index=167&type=chunk)[168](index=168&type=chunk) - Reliance on U.S. government contracts, particularly SBIR programs (**25%** of total revenues for YTD Sep **2021**), **exposes the company to federal regulations, audits, and potential loss of eligibility**, which could adversely affect revenues and growth[170](index=170&type=chunk)[174](index=174&type=chunk)[178](index=178&type=chunk) [RISKS RELATING TO OUR OPERATIONS AND BUSINESS STRATEGY](index=42&type=section&id=RISKS%20RELATING%20TO%20OUR%20OPERATIONS%20AND%20BUSINESS%20STRATEGY) Outlines risks related to operational execution, strategic initiatives, acquisitions, and the COVID-19 pandemic - The company intends to sell its Luna Labs business, but there is **no guarantee of satisfactory terms or timeframe** for the divestiture[210](index=210&type=chunk) - Failure to properly evaluate and execute strategic initiatives, including integrating acquired businesses like OptaSense, could **adversely affect future results and stock price** due to integration difficulties, unknown liabilities, or loss of key personnel[211](index=211&type=chunk)[212](index=212&type=chunk) - The ongoing COVID-19 pandemic has **caused supply chain disruptions, delayed revenue, and impacted customer/supplier interactions**, with potential for further adverse effects on business, operations, and financial markets[224](index=224&type=chunk)[226](index=226&type=chunk) [RISKS RELATING TO OUR REGULATORY ENVIRONMENT](index=45&type=section&id=RISKS%20RELATING%20TO%20OUR%20REGULATORY%20ENVIRONMENT) Covers risks associated with compliance with various U.S. and foreign laws, regulations, and data privacy requirements - Operations are subject to numerous U.S. and foreign laws (e.g., export controls, anti-corruption, environmental, health and safety), with **non-compliance potentially leading to fines, penalties, or suspension** of export privileges[228](index=228&type=chunk)[229](index=229&type=chunk)[232](index=232&type=chunk) - Manufacturing facilities must meet federal, state, and foreign standards (e.g., FDA Good Manufacturing Practice, ISO); **failure to comply could lead to operational cessation and revenue impact**[231](index=231&type=chunk) - The company is subject to evolving privacy and data security laws (e.g., CCPA, CPRA, GDPR), with non-compliance or data breaches potentially resulting in **significant fines, penalties, and reputational damage**[235](index=235&type=chunk)[236](index=236&type=chunk)[239](index=239&type=chunk)[243](index=243&type=chunk) [RISKS RELATING TO OUR INTELLECTUAL PROPERTY](index=47&type=section&id=RISKS%20RELATING%20TO%20OUR%20INTELLECTUAL%20PROPERTY) Discusses risks concerning the protection, enforcement, and potential infringement of the company's intellectual property - Proprietary rights, including patents and trade secrets, **may not adequately protect technologies**, facing challenges from invalidation, circumvention, independent development, or difficulties in enforcement[244](index=244&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Third parties may claim infringement of their intellectual property, leading to **substantial litigation or licensing expenses**, and potentially blocking the ability to sell products[251](index=251&type=chunk)[252](index=252&type=chunk) - A substantial portion of technology is subject to retained rights of licensors (academic institutions, corporations, government agencies), which **could lead to third-party licenses or limit the company's rights**[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) [RISKS RELATING TO OUR COMMON STOCK](index=50&type=section&id=RISKS%20RELATING%20TO%20OUR%20COMMON%20STOCK) Addresses risks related to stock price volatility, anti-takeover provisions, and internal control deficiencies - The common stock price has been **volatile and is expected to fluctuate significantly** due to various factors, including sales by significant stockholders, changes in earnings estimates, and general market conditions[259](index=259&type=chunk)[260](index=260&type=chunk) - Anti-takeover provisions in the company's charter, bylaws, and Delaware law **could discourage or prevent a change in control**, potentially affecting the stock price and limiting stockholder influence[264](index=264&type=chunk)[265](index=265&type=chunk) - Failure to maintain proper and effective internal controls over financial reporting could **adversely affect investor confidence and the stock value**, potentially leading to regulatory sanctions[275](index=275&type=chunk)[277](index=277&type=chunk) [GENERAL RISK FACTORS](index=52&type=section&id=GENERAL%20RISK%20FACTORS) Covers broad risks such as cybersecurity breaches, stock sales, and potential litigation - The company faces **risks of security breaches or compromises of IT networks and systems**, including cyber-attacks, which could lead to data loss, reputational damage, and operational disruptions[271](index=271&type=chunk)[272](index=272&type=chunk) - Substantial sales of common stock by stockholders, or the perception thereof, could lead to a **decline in the stock price**[273](index=273&type=chunk) - The company may become involved in securities class action litigation, which is **expensive and diverts management's attention**, potentially harming the business[274](index=274&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=54&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Reports on unregistered sales of equity securities and the use of proceeds, if any - There were **no unregistered sales of equity securities**, use of proceeds from registered equity securities, or purchases of equity securities by the registrant during the three months ended September **30**, **2021**[284](index=284&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=54&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Indicates whether there were any defaults upon senior securities - There were **no defaults upon senior securities**[280](index=280&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=54&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) States the applicability of mine safety disclosures - Mine safety disclosures are **not applicable** to the company[281](index=281&type=chunk) [ITEM 5. OTHER INFORMATION](index=54&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Indicates if there is any other information to disclose - There is **no other information to disclose**[282](index=282&type=chunk) [ITEM 6. EXHIBITS](index=55&type=section&id=ITEM%206.%20EXHIBITS) Lists the exhibits filed as part of the Form 10-Q, including certifications and interactive data files Exhibits List | Exhibit Number | Description | | :--- | :--- | | 31.1 | Certification of the Principal Executive Officer | | 31.2 | Certification of the Principal Financial Officer | | 32.1* | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 | | 32.2* | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 | | 101 | Inline XBRL Financial Statements and Notes | | 104 | Cover Page Interactive Data File | SIGNATURES Contains official signatures for the Quarterly Report on Form 10-Q, confirming submission by authorized personnel [SIGNATURES](index=56&type=section&id=SIGNATURES) Contains official signatures for the Quarterly Report on Form 10-Q, confirming submission by authorized personnel - The report was signed by Eugene J. Nestro, Chief Financial Officer (Principal Financial and Accounting Officer), on November **15**, **2021**[288](index=288&type=chunk)

Luna Innovations Incorporated (NASDAQ:LUNA) Q2 2021 Earnings Conference Call August 9, 2021 5:00 PM ET Company Representatives Scott Graeff - President, Chief Executive Officer Gene Nestro - Chief Financial Officer Brian Soller - Chief Operating Officer James Garrett - Senior Vice President, General Manager Allison Woody - Director of Administration Conference Call Participants Jim Marrone - Singular Research Barry Sine - Spartan Capital Securities Dave Kang - B. Riley Mark Morris - Private Investors Charle ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q _____________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER 000-52008 LUNA INNOVATIONS INCORPORATED (Exact name of registrant as specified in its char ...

First-quarter 2021 Results Investor Supplemental Materials May 17th, 2021 Safe Harbor Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This presentation includes information that constitutes "forward-looking statements" made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the company's expectations regarding the company's future financial performance, including 2021 gu ...

Luna Innovations, Inc. (NASDAQ:LUNA) Q1 2021 Earnings Conference Call May 17, 2021 5:00 PM ET Company Participants Allison Woody - Director, Administration Scott Graeff - President, CEO, Treasurer, Secretary & Director Eugene Nestro - CFO Brian Soller - COO James Garrett - SVP & GM, Luna Labs Conference Call Participants Barry Sine - Spartan Capital Securities Jim Marrone - Singular Research Dave Kang - B. Riley Securities Tim Savageaux - Northland Capital Markets Operator Good day, and thank you for standi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 (Exact name of registrant as specified in its charter) _____________________________________ Delaware 54-1560050 (State or Other Jurisdiction of Incorporation or Organization) FORM 10-Q _____________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SE ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Luna Innovations, an advanced optical technology company, operates through Lightwave and Luna Labs segments, expanding via acquisitions and securing significant government contracts - The company operates through two main segments: Lightwave (fiber optics testing, measurement, and sensing) and Luna Labs (applied research)[24](index=24&type=chunk)[25](index=25&type=chunk) Revenue Contribution by Segment (FY 2020 vs. FY 2019) | Segment | 2020 Revenue % | 2019 Revenue % | | :--- | :--- | :--- | | Lightwave | 71% | 70% | | Luna Labs | 29% | 30% | - Acquired OptaSense Holdings Limited in December 2020 for **$38.9 million** to add distributed acoustic sensing (DAS) technology and expand into markets like security, infrastructure monitoring, and oil & gas[27](index=27&type=chunk)[30](index=30&type=chunk) - Acquired General Photonics Corporation in March 2019 for **$20.0 million**, enhancing its portfolio of components and test equipment for polarization control[28](index=28&type=chunk) - A significant portion of revenue comes from U.S. government contracts, accounting for **35% of total revenues in 2020**, down from 40% in 2019; the SBIR program alone contributed **32% of total revenues in 2020**[26](index=26&type=chunk) Backlog at Year-End (in millions) | Segment | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Lightwave | $28.2 | $16.1 | | Luna Labs | $26.8 | $31.3 | [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces various risks including reliance on technology licenses, government contracts, operational disruptions, intellectual property challenges, financial covenants, and stock price volatility - **Business Risks**: The company's fiber-optic products depend on a license from Intuitive Surgical, which is revocable under certain conditions; loss of this license would prevent the marketing and sale of these products[75](index=75&type=chunk) - **Government Contract Risks**: A significant portion of revenue (**32% in 2020**) comes from the SBIR program; the company risks losing eligibility for these contracts if it no longer meets SBA size and ownership criteria, which would materially impact revenues and cash flows[83](index=83&type=chunk)[88](index=88&type=chunk) - **Operational Risks**: The COVID-19 pandemic poses risks of business disruption, including potential delays in customer purchasing decisions and supply chain difficulties, which could adversely impact results[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - **Intellectual Property Risks**: The company's success depends on protecting its proprietary technologies; it faces risks that patents may not be issued or may be challenged, and trade secrets may be difficult to protect[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - **Financial Risks**: The company has a term loan and revolving line of credit with PNC Bank that include various financial and restrictive covenants; failure to comply could result in the acceleration of debt[113](index=113&type=chunk) - **Stock Risks**: The company's common stock price has been volatile and is subject to substantial fluctuations due to market conditions, operational performance, and other factors[164](index=164&type=chunk) [Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - Not applicable[179](index=179&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) As of December 31, 2020, the company leases all its properties, totaling approximately 199,000 square feet across 12 locations, including headquarters in Virginia and the UK Summary of Leased Facilities (as of Dec 31, 2020) | Facility Type | Location(s) | Total Square Footage | | :--- | :--- | :--- | | Operations | 12 locations (US, UK, CN, UAE) | 199,000 | | Corporate HQ | Roanoke, Virginia (US) | 4,400 | | OptaSense HQ | Farnborough, Hampshire (UK) | 7,500 | - All properties are leased, with lease end dates extending through 2030[180](index=180&type=chunk) [Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) Management believes any potential liability from occasional litigation arising from normal business operations will not materially affect the company's financial position - Management believes that any potential liability from ongoing litigation will not materially affect the company's financial condition[181](index=181&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[183](index=183&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, with no history or plans for cash dividends, and limited share repurchases for tax obligations - The company's common stock is listed on the Nasdaq Capital Market under the symbol "**LUNA**"[186](index=186&type=chunk) - As of March 10, 2021, there were **31,397,642 shares** of common stock outstanding[186](index=186&type=chunk) - The company has never paid cash dividends and does not plan to in the foreseeable future, with its debt facility also restricting such payments[193](index=193&type=chunk) Common Stock Repurchases (Q4 2020) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | 12/1/2020 - 12/31/2020 | 12,534 | $9.87 | [Selected Financial Data](index=35&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of the company's key consolidated financial data, highlighting consistent revenue growth and financial trends Five-Year Selected Financial Data (in thousands, except per share data) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | **$82,681** | **$70,516** | **$42,917** | **$33,082** | **$29,604** | | Gross profit | $42,188 | $35,183 | $19,438 | $13,369 | $11,714 | | Operating income/(loss) | $4,983 | $3,316 | $878 | $(2,208) | $(4,126) | | Net income/(loss) from continuing operations | $4,727 | $5,343 | $1,238 | $(1,251) | $(4,279) | | Net income/(loss) attributable to common stockholders | $3,291 | $5,057 | $10,747 | $14,468 | $(2,475) | | Diluted EPS attributable to common stockholders | $0.10 | $0.16 | $0.33 | $0.52 | $(0.09) | | **Total assets** | **$131,002** | **$86,524** | **$75,599** | **$66,223** | **$54,997** | | Total debt | $19,984 | $— | $619 | $2,436 | $4,253 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's 2020 financial performance, highlighting revenue growth, increased operating income, and strengthened liquidity through new credit facilities [Results of Operations (2020 vs. 2019)](index=43&type=section&id=Results%20of%20Operations) Total revenues increased 17.3% to $82.7 million in 2020, driven by growth in both Lightwave and Luna Labs segments, leading to higher gross profit and operating income Revenue Comparison (in thousands) | Segment | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Lightwave | $59,115 | $49,117 | $9,998 | 20.4% | | Luna Labs | $23,566 | $21,399 | $2,167 | 10.1% | | **Total** | **$82,681** | **$70,516** | **$12,165** | **17.3%** | Operating Expense Comparison (in thousands) | Expense Category | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Selling, general and administrative | $27,644 | $23,344 | $4,300 | 18.4% | | Research, development and engineering | $6,713 | $7,496 | $(783) | (10.4)% | | Acquisition related expense | $2,204 | $1,027 | $1,177 | 114.6% | | **Total Operating Expense** | **$37,205** | **$31,867** | **$5,338** | **16.8%** | - Net income from continuing operations was **$4.7 million** in 2020, compared to **$5.3 million** in 2019; the decrease was primarily due to a **$1.7 million** tax benefit in 2019 that did not recur, compared to a **$0.3 million** tax expense in 2020[259](index=259&type=chunk)[260](index=260&type=chunk) - A net loss from discontinued operations of **$1.4 million** was recognized in 2020 related to the final settlement of the 2017 sale of the High Speed Optical Receiver (HSOR) business[261](index=261&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2020, the company had $15.4 million in cash, supported by a new credit facility, with management confident in adequate liquidity for the next twelve months - Entered into a new Loan Agreement with PNC Bank in December 2020, providing a **$12.5 million** term loan and a **$15.0 million** revolving credit facility, both maturing in December 2023[264](index=264&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,856 | $4,798 | | Net cash used in investing activities | $(34,159) | $(19,815) | | Net cash provided by/(used in) financing activities | $21,649 | $(2,437) | | **Net decrease in cash** | **$(9,654)** | **$(17,454)** | - Management believes that cash on hand plus availability under the revolving line of credit will provide adequate liquidity for working capital needs over the next twelve months[270](index=270&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations on variable-rate debt and foreign currency exchange rates, though the latter was not material as of year-end 2020 - The company is exposed to interest rate risk on its **$20.1 million** of outstanding variable-rate debt; a hypothetical **0.25% increase** in interest rates would negatively impact annual pre-tax earnings by **$0.05 million**[282](index=282&type=chunk) - Following the acquisition of OptaSense, the company has exposure to foreign currency exchange rate fluctuations, primarily from its UK operations, but this risk was not material as of December 31, 2020[283](index=283&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2020 and 2019, including the auditor's report and detailed notes - Includes the full audited consolidated financial statements for the years ended December 31, 2020 and 2019, and the accompanying notes[285](index=285&type=chunk) - The independent auditor's report identified two critical audit matters: 1) Revenue recognition on the company's fixed-price contracts due to estimation uncertainty in future costs, and 2) The valuation of intangible assets acquired in the OptaSense business combination due to the subjectivity of assumptions used[290](index=290&type=chunk)[291](index=291&type=chunk)[295](index=295&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=83&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles or financial disclosure - None[449](index=449&type=chunk) [Controls and Procedures](index=83&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were not effective due to a late filing, but internal control over financial reporting was effective, excluding the recently acquired OptaSense - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2020, due to a late Form 8-K/A filing related to an acquisition[451](index=451&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2020[457](index=457&type=chunk) - The recently acquired OptaSense business was excluded from the scope of management's assessment of internal control over financial reporting for 2020[454](index=454&type=chunk) [Other Information](index=84&type=section&id=Item%209B.%20Other%20Information) There is no other information to report in this section - None[458](index=458&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2021 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's 2021 Proxy Statement[460](index=460&type=chunk) [Executive Compensation](index=85&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2021 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's 2021 Proxy Statement[461](index=461&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=85&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the company's 2021 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's 2021 Proxy Statement[462](index=462&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=85&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2021 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's 2021 Proxy Statement[463](index=463&type=chunk) [Principal Accounting Fees and Services](index=85&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2021 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's 2021 Proxy Statement[464](index=464&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K, including financial statements, schedules, and a comprehensive index of all exhibits - This section contains the index to the Consolidated Financial Statements and lists all exhibits filed with the annual report[467](index=467&type=chunk)[469](index=469&type=chunk) Schedule II - Valuation and Qualifying Accounts (in thousands) | Description | Balance at Beg. of 2020 | Additions | Deductions | Balance at End of 2020 | | :--- | :--- | :--- | :--- | :--- | | Deferred tax valuation allowance | $360 | $2,850 | $(360) | $2,850 | | Allowances for doubtful accounts | $930 | $127 | $(171) | $886 | [Form 10-K Summary](index=91&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section is not applicable - Not applicable[478](index=478&type=chunk)

Fourth-quarter and Full-Year 2020 Earnings Investor Supplemental Materials March 11th, 2021 Safe Harbor Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This presentation includes information that constitutes "forward-looking statements" made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the company's expectations regarding the company's future financial performance, ...

Luna Innovations, Inc. (NASDAQ:LUNA) Q4 2020 Results Conference Call March 11, 2021 5:00 PM ET Company Participants Allison Woody - Director of Administration Scott Graeff - President & Chief Executive Officer Gene Nestro - Chief Financial Officer Brian Soller - Senior Vice President & General Manager-Lightwave Division James Garrett - Senior Vice President & General Manager of Technology Development Conference Call Participants Barry Sine - Spartan Capital Jim Marrone - Singular Research Dave Kang - B. Ril ...

Third-quarter Fiscal 2020 Earnings Investor Supplemental Materials November 9, 2020 Safe Harbor Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This presentation includes information that constitutes "forward-looking statements" made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the company's expectations regarding the company's future financial performance, includi ...