Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 29, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | OncoCyte Corp | |
Entity Central Index Key | 0001642380 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 51,972,830 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 19,444 | $ 8,034 |
Marketable equity securities | 415 | 428 |
Prepaid expenses and other current assets | 418 | 180 |
Total current assets | 20,277 | 8,642 |
NONCURRENT ASSETS | ||
Machinery, equipment and right of use assets, net | 1,079 | 614 |
Deposits and other noncurrent assets | 169 | 262 |
Equity method investment in Razor | 11,245 | |
TOTAL ASSETS | 32,770 | 9,518 |
CURRENT LIABILITIES | ||
Amount due to Lineage and affiliates | 2,101 | |
Accounts payable | 358 | 166 |
Accrued expenses and other current liabilities | 1,855 | 2,109 |
Loan payable, current | 577 | 800 |
Financing lease and right of use liabilities, current | 253 | 385 |
Total current liabilities | 3,043 | 5,561 |
NONCURRENT LIABILITIES | ||
Loan payable, net of deferred financing costs, noncurrent | 347 | |
Financing lease and right of use liabilities, noncurrent | 392 | 187 |
TOTAL LIABILITIES | 3,435 | 6,095 |
Commitments and contingencies (Note 10) | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, no par value, 5,000 shares authorized; none issued and outstanding | ||
Common stock, no par value, 85,000 shares authorized; 51,973 and 40,664 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 115,126 | 74,742 |
Accumulated other comprehensive loss | ||
Accumulated deficit | (85,791) | (71,319) |
Total shareholders' equity | 29,335 | 3,423 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 32,770 | $ 9,518 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, no par value | ||
Common stock, shares authorized | 85,000,000 | 85,000,000 |
Common stock, shares issued | 51,973,000 | 40,664,000 |
Common stock, shares outstanding | 51,973,000 | 40,664,000 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
EXPENSES: | ||||
Research and development | $ 1,625 | $ 1,527 | $ 4,476 | $ 5,310 |
General and administrative | 3,002 | 1,312 | 9,087 | 4,434 |
Sales and marketing | 630 | 184 | 1,153 | 1,411 |
Total operating expenses | 5,257 | 3,023 | 14,716 | 11,155 |
Loss from operations | (5,257) | (3,023) | (14,716) | (11,155) |
OTHER INCOME (EXPENSES), NET | ||||
Interest income (expense), net | 135 | (50) | 282 | (167) |
Unrealized gain (loss) on marketable equity securities | (103) | 102 | (13) | 71 |
Other expenses, net | (25) | (4) | ||
Total other income (expenses), net | 32 | 52 | 244 | (100) |
NET LOSS | $ (5,225) | $ (2,971) | $ (14,472) | $ (11,255) |
Net loss per share; basic and diluted | $ (0.10) | $ (0.07) | $ (0.29) | $ (0.30) |
Weighted average common shares outstanding; basic and diluted | 51,973,000 | 40,227,000 | 50,217,000 | 36,901,000 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
NET LOSS | $ (5,225) | $ (2,971) | $ (14,472) | $ (11,255) |
Other comprehensive loss, net of tax | ||||
COMPREHENSIVE LOSS | $ (5,225) | $ (2,971) | $ (14,472) | $ (11,255) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (14,472) | $ (11,255) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 278 | 317 |
Amortization of intangible assets | 121 | |
Amortization of prepaid maintenance | 28 | 9 |
Impairment charge for intangible assets | 625 | |
Stock-based compensation | 2,209 | 1,079 |
Unrealized (gain) loss on marketable equity securities | 13 | (71) |
Amortization of debt issuance costs | 30 | 62 |
Warrants issued to Chardan Capital for advisory services | 234 | |
Other | 25 | 24 |
Changes in operating assets and liabilities: | ||
Amount due to Lineage and affiliates | (2,100) | 12 |
Prepaid expenses and other current assets | (238) | (77) |
Accounts payable and accrued liabilities | (416) | (39) |
Net cash used in operating activities | (14,409) | (9,193) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Equity method investment in Razor | (11,245) | |
Purchase of equipment | (18) | (31) |
Security deposit and other | 64 | |
Net cash used in investing activities | (11,199) | (31) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of options | 943 | 58 |
Proceeds from sale of common shares | 40,250 | 10,000 |
Financing costs to issue common shares | (3,252) | (65) |
Proceeds from sale of common shares and warrants | 3,592 | |
Financing costs to issue common shares and warrants | (290) | |
Repayment of loan payable | (600) | (600) |
Repayment of financing lease obligations | (323) | (250) |
Net cash provided by financing activities | 37,018 | 12,445 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 11,410 | 3,221 |
CASH AND CASH EQUIVALENTS: | ||
At beginning of the period | 8,034 | 7,600 |
At end of the period | $ 19,444 | $ 10,821 |
Organization, Description of th
Organization, Description of the Business and Liquidity | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of the Business and Liquidity | 1. Organization, Description of the Business and Liquidity OncoCyte Corporation (“OncoCyte”) is a molecular diagnostics company whose mission is to provide actionable answers at critical decision points during the course of lung cancer care, with the goal of improving patient outcomes by accelerating and optimizing diagnosis and treatment. OncoCyte’s first product for commercial release is a proprietary treatment stratification or “prognostic” test that identifies which patients with early stage non-small cell lung cancer may benefit from chemotherapy, resulting in a significantly higher, five-year survival rate. OncoCyte is also developing DetermaVu™, as a proprietary non-invasive blood test using molecular markers to determine whether lung nodules detected through imaging are unlikely to be malignant, with the goal of reducing the number of unnecessary invasive and expensive diagnostic biopsy procedures. OncoCyte holds a 25% equity interest in Razor Genomics, Inc. (“Razor”), a privately held company, developing a prognostic test to assist physicians in the management of non-small cell lung cancer (see Note 5). Razor’s key product is a commercially ready test called the “Molecular Prognostic Assay”, a proprietary treatment stratification test (the “Razor assay”) for early stage lung cancer. OncoCyte has licensed all rights to commercialize the Razor assay and plans to conduct certain clinical trials for purposes of promoting commercialization. OncoCyte is currently devoting substantially all of its efforts on developing and commercializing its lung cancer diagnostic test DetermaVu™ and the Razor assay. OncoCyte was incorporated in 2009 in the state of California and was formerly a majority-owned subsidiary of Lineage Cell Therapeutics, Inc. (“Lineage”) (formerly known as BioTime, Inc.), a publicly traded, clinical-stage, biotechnology company developing new cellular therapies for degenerative retinal diseases, neurological conditions associated with demyelination, and aiding the body in detecting and combating cancer. Beginning on February 17, 2017, OncoCyte ceased to be a subsidiary of Lineage for financial reporting purposes when Lineage’s percentage ownership of outstanding OncoCyte common stock declined below 50% as a result of the issuance of additional OncoCyte common stock to certain investors who exercised OncoCyte stock purchase warrants (see Note 7). Liquidity For all periods presented, OncoCyte generated no revenues. Since inception, OncoCyte has financed its operations through the sale of common stock, warrants, warrant exercises, bank loans, and sales of Lineage common shares that it holds as marketable equity securities. Lineage also provides OncoCyte with the use of Lineage office and laboratory facilities, and through September 30, 2019 provided administrative services, to OncoCyte under a Shared Facilities and Services Agreement (the “Shared Facilities Agreement”) as described in Note 4. OncoCyte has incurred operating losses and negative cash flows since inception and had an accumulated deficit of $85.8 million as of September 30, 2019. OncoCyte expects to continue to incur operating losses and negative cash flows for the foreseeable future. At September 30, 2019, OncoCyte had $19.4 million of cash and cash equivalents and held Lineage and AgeX Therapeutics, Inc. (“AgeX”) common stock as marketable equity securities valued at $0.4 million. On October 17, 2019, OncoCyte refinanced a loan from Silicon Valley Bank for net proceeds of $2.5 million (see Notes 6 and 11). On November 13, 2019, OncoCyte entered into a series of stock purchase agreements on like terms pursuant to which OncoCyte agreed to sell a total of 5,058,824 shares of common stock for approximately $8.6 million in cash in an offering registered under the Securities Act of 1933, as amended (the “Securities Act”). OncoCyte expects the transaction to close on November 15, 2019 subject to the satisfaction of customary closing conditions. See Note 11. OncoCyte believes that its cash, cash equivalents and marketable equity securities is sufficient to carry out current operations through at least twelve months from the issuance date of the condensed interim financial statements included in this Report. OncoCyte will need to raise additional capital to finance its operations, including the development and commercialization of its cancer diagnostic and prognostic tests, until such time as it is able to complete development and commercialize one or more tests and generate sufficient revenues to cover its operating expenses. Presently, OncoCyte is devoting substantially all of its efforts on developing and commercializing its lung cancer diagnostic test DetermaVu™ and the Razor assay. OncoCyte may also explore a range of other commercialization options in order to reduce capital needs and the risks associated with the timelines and uncertainty for attaining the Medicare and commercial reimbursement approvals that will be essential for the successful commercialization of OncoCyte’s cancer tests. Those alternative arrangements could include acquisition of companies in the diagnostic or related markets, marketing arrangements with other diagnostic companies through which OncoCyte might receive a royalty on sales, or through which it might form a joint venture to market its cancer tests and share in net revenues. Delays in the development of DetermaVu™ could prevent OncoCyte from raising sufficient additional capital to finance the completion of development and commercial launch of DetermaVu™ the Razor assay, or other cancer diagnostic tests. Investors may also be reluctant to provide OncoCyte with capital until its tests are approved for reimbursement by Medicare or private insurers or healthcare providers. The unavailability or inadequacy of financing or revenues to meet future capital needs could force OncoCyte to modify, curtail, delay, or suspend some or all aspects of planned operations. Sales of additional equity securities could result in the dilution of the interests of its shareholders. OncoCyte cannot assure that adequate financing will be available on favorable terms, if at all. Basis of presentation The unaudited condensed interim financial statements presented herein, and discussed below, have been prepared on a stand-alone basis in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Commission (the “SEC”). In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted. The condensed balance sheet as of December 31, 2018 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These condensed interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in OncoCyte’s Annual Report on Form 10-K for the year ended December 31, 2018. The accompanying condensed interim financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of OncoCyte’s financial condition and results of operations. The condensed results of operations are not necessarily indicative of the results to be expected for any other interim period or for the entire year. Prior to February 17, 2017, Lineage consolidated the results of OncoCyte into Lineage’s consolidated results based on Lineage’s ability to control OncoCyte’s operating and financial decisions and policies through its majority ownership of OncoCyte common stock. Beginning on February 17, 2017, Lineage’s percentage ownership of the outstanding OncoCyte common stock declined below 50%, resulting in a loss of “control” of OncoCyte under GAAP and, as a result, Lineage deconsolidated OncoCyte’s financial statements from Lineage’s consolidated financial statements. As a result of this deconsolidation, OncoCyte is no longer considered a subsidiary of Lineage under GAAP with effect from February 17, 2017. Beginning on September 11, 2019, because Lineage’s ownership interest in OncoCyte decreased to below 20%, Lineage no longer exercises significant influence over the operations and management of OncoCyte. OncoCyte remains an affiliate of Lineage. To the extent OncoCyte did not have its own employees or human resources for its operations, Lineage or Lineage subsidiaries provided certain employees for administrative or operational services, as necessary, for the benefit of OncoCyte (see Note 4). Accordingly, Lineage allocated expenses such as salaries and payroll related expenses incurred and paid on behalf of OncoCyte based on the amount of time that particular employees devoted to OncoCyte affairs. Other expenses such as legal, accounting, human resources, marketing, travel, and entertainment expenses were allocated to OncoCyte to the extent that those expenses were incurred by or on behalf of OncoCyte. Lineage also allocated certain overhead expenses such as facilities rent and utilities, property taxes, insurance, internet and telephone expenses based on a percentage determined by management. These allocations have been made based upon activity-based allocation drivers such as time spent, percentage of square feet of office or laboratory space used, and percentage of personnel devoted to OncoCyte’s operations or management. Management has evaluated the appropriateness of the percentage allocations on a periodic basis and believes that this basis for allocation is reasonable. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Investments in Common Stock of Privately Held Companies – Investments – Equity Method and Joint Ventures OncoCyte initially records equity method investments at fair value on the date of the acquisition with subsequent adjustments to the investment balance based on OncoCyte’s share of earnings or losses from the investment. The equity method investment balance is shown in noncurrent assets on the consolidated balance sheets. OncoCyte reviews investments accounted for under the equity method for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be fully recoverable. If a determination is made that an “other-than-temporary” impairment exists, OncoCyte writes down its investment to fair value. On September 30, 2019, OncoCyte acquired a 25% ownership interest in Razor accounted for under the equity method of accounting as further discussed in Note 5. Research and development expenses Research and development expenses for the periods presented include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by Lineage that benefited or supported OncoCyte’s research and development functions. Direct research and development expenses consist primarily of personnel costs and related benefits, including stock-based compensation, consulting fees, and obligations incurred to suppliers. Indirect research and development expenses allocated by Lineage to OncoCyte under the Shared Facilities Agreement (see Note 4), were primarily based on headcount or space occupied, as applicable, and include laboratory supplies, laboratory expenses, rent and utilities, common area maintenance, telecommunications, property taxes and insurance. Research and development costs are expensed as incurred. General and administrative expenses General and administrative expenses include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by Lineage that benefited or supported OncoCyte’s general and administrative functions. Direct general and administrative expenses consist primarily of compensation and related benefits, including stock-based compensation, for executive and corporate personnel, and professional and consulting fees. Indirect general and administrative expenses allocated by Lineage to OncoCyte under the Shared Facilities Agreement (see Note 4) were primarily based on headcount or space occupied, as applicable, and include costs for financial reporting and compliance, rent and utilities, common area maintenance, telecommunications, property taxes and insurance. Sales and marketing expenses Sales and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade show expenses, branding and positioning expenses, and consulting fees. Indirect sales and marketing expenses allocated by Lineage, were primarily based on OncoCyte’s headcount or space occupied, as applicable, and include costs for rent and utilities, common area maintenance, telecommunications, property taxes and insurance, incurred by Lineage and allocated to OncoCyte under the Shared Facilities Agreement. Accounting for shares of Lineage and AgeX common stock In accordance with ASC 320-10-25, Investments – Debt and Equity Securities Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, Beginning on January 1, 2018, with the adoption of ASU 2016-01 discussed below, the Lineage and AgeX shares held by OncoCyte are now referred to as “marketable equity securities,” and unrealized holding gains and losses on those shares are reported in the statements of operations in other income and expenses, net. Prior to January 1, 2018 and the adoption of ASU 2016-01, the Lineage shares held were called “available-for-sale securities” and unrealized holding gains and losses were reported in other comprehensive income or loss, net of tax, and were a component of the accumulated other comprehensive income or loss on the condensed balance sheet. Realized gains and losses on Lineage shares are also included in other income and expenses, net, in the condensed statements of operations. The shares of AgeX common stock OncoCyte holds were received from Lineage as a dividend-in-kind on November 28, 2018. OncoCyte did not sell any shares of Lineage or AgeX stock during any of the periods presented. As of September 30, 2019, OncoCyte held 353,264 and 35,326 shares of common stock of Lineage and AgeX, respectively, as marketable equity securities with a combined fair market value of $415,000. On January 1, 2018, in accordance with the adoption of ASU 2016-01, OncoCyte recorded a cumulative-effect adjustment for the Lineage shares as available-for-sale-securities to reclassify the unrealized loss of $888,000 included in accumulated other comprehensive loss to the accumulated deficit balance. For the three and nine months ended September 30, 2019, OncoCyte recorded an unrealized loss of $103,000 and $13,000, respectively, included in other income and expenses, net, due to the changes in fair market value of the marketable equity securities from the respective balance sheet dates. For the three and nine months ended September 30, 2018, OncoCyte recorded an unrealized gain of $102,000 and $71,000, respectively, included in other income and expenses, net, due to the increase in fair market value of the marketable equity securities from the respective balance sheet dates. Net loss per common share All potentially dilutive common stock equivalents are antidilutive because OncoCyte reported a net loss for all periods presented. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Three Months Ended September 30, (Unaudited) Nine Months Ended September 30, (Unaudited) 2019 2018 2019 2018 Stock options 2,146 3,101 3,158 3,101 Warrants 3,285 4,035 3,285 4,035 Recently adopted accounting pronouncements Leases In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. On January 1, 2019, OncoCyte adopted Accounting Standards Update 2016-02, Leases Codification Improvements to Topic 842, Leases, Leases (Topic 842): Targeted improvements, Upon adoption of ASC 842 and based on the available practical expedients under that standard, OncoCyte did not reassess any expired or existing contracts, reassess the lease classification for any expired or existing leases and reassess initial direct costs for exiting leases. OncoCyte also elected not to capitalize leases that have terms of twelve months or less. The adoption of ASC 842 did not have a material impact to OncoCyte’s financial statements because OncoCyte did not have any significant operating leases at the time of adoption. As discussed in Note 10, OncoCyte accounts for an embedded operating lease in accordance with ASC 842 in connection with the Razor equity method investment discussed in Note 5. OncoCyte’s accounting for financing leases (previously referred to as “capital leases”) remained substantially unchanged. Financing leases are included in machinery and equipment, and in financing lease liabilities, current and noncurrent, in OncoCyte’s condensed balance sheets (see Note 10). Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Recently Issued Accounting Pronouncements Not Yet Adopted The recently issued accounting pronouncements applicable to OncoCyte that are not yet effective should be read in conjunction with the recently issued accounting pronouncements, as applicable and disclosed in OncoCyte’s Annual Report on Form 10-K for the year ended December 31, 2018. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement |
Selected Balance Sheet Componen
Selected Balance Sheet Components | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Components | 3. Selected Balance Sheet Components Prepaid expenses and other current assets As of September 30, 2019 and December 31, 2018, prepaid expenses and other current assets were comprised of the following (in thousands): September 30, 2019 December 31, 2018 (unaudited) Prepaid insurance $ 219 $ 102 Other 199 78 Total prepaid expenses and other current assets $ 418 $ 180 Accrued expenses and other current liabilities As of September 30, 2019 and December 31, 2018, accrued expenses and other current liabilities were comprised of the following (in thousands): September 30, 2019 December 31, 2018 (unaudited) Accrued compensation $ 803 $ 1,303 Accrued vendors and other expenses (1) 1,052 806 Total accrued expenses and other current liabilities $ 1,855 $ 2,109 (1) As of September 30, 2019, accrued vendors and other expenses includes purchases of new machinery and equipment of $0.4 million. Machinery, equipment and right of use assets, net As of September 30, 2019 and December 31, 2018, machinery, equipment and rights of use assets, net were as follows (in thousands): September 30, 2019 December 31, 2018 (unaudited) Machinery and equipment $ 1,476 $ 1,562 Right-of-use assets (1) 397 - Accumulated depreciation (794 ) (948 ) Machinery, equipment and right of use assets, net $ 1,079 $ 614 (1) OncoCyte recorded certain right of use assets and liabilities in accordance with ASC 842 in connection with the equity method investment in Razor on September 30, 2019 (see Notes 5 and 10). During the nine months ended September 30, 2019, OncoCyte wrote off approximately $0.5 million in fully depreciated assets with a corresponding reduction to accumulated depreciation. Depreciation expense amounted to $84,000 and $110,000 for the three months ended September 30, 2019 and 2018, and $278,000 and $317,000 for the nine months ended September 30, 2019 and 2018, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4. Related Party Transactions Shared Facilities Agreement On October 8, 2009, OncoCyte and Lineage executed the Shared Facilities Agreement. Beginning on October 1, 2019, OncoCyte will no longer be using shared services as OncoCyte has hired, or is in the process of hiring, its own administrative, finance and accounting personnel, but OncoCyte is continuing to use a portion of Lineage’s facilities in Alameda, California under the Shared Facilities Agreement. Under the terms of the Shared Facilities Agreement, Lineage has agreed to permit OncoCyte to use Lineage’s premises and equipment located in Alameda, California for the purpose of conducting business. Through September 30, 2019, Lineage provided accounting, billing, bookkeeping, payroll, treasury, payment of accounts payable, and other similar administrative services to OncoCyte. Lineage has charged OncoCyte a Use Fee for services received and usage of facilities, equipment, and supplies. For each billing period, Lineage prorated and allocated costs incurred, as applicable, to OncoCyte. Such costs have included services of Lineage employees, equipment, insurance, lease, professional, software, supplies and utilities. Allocation depends on key cost drivers including actual documented use, square footage of facilities used, time spent, costs incurred by or for OncoCyte, or upon proportionate usage by Lineage and OncoCyte, as reasonably estimated by Lineage (collectively “Use Fees”). Lineage charges OncoCyte a 5% markup on such allocated costs as permitted by the Shared Facilities Agreement. The Use Fee is determined and invoiced to OncoCyte on a regular basis, generally monthly or quarterly. If the Shared Facilities Agreement terminates prior to the last day of a billing period, the Use Fee will be determined for the number of days in the billing period elapsed prior to the termination of the Shared Facilities Agreement. Each invoice will be payable in full by OncoCyte within 30 days after receipt. Any invoice, or portion thereof, not paid in full when due will bear interest at the rate of 15% per annum until paid. In addition to the Use Fees, OncoCyte reimbursed Lineage for any out of pocket costs incurred by Lineage for the purchase of office supplies, laboratory supplies, and other goods and materials and services for the account or use of OncoCyte based on invoices documenting such costs. Lineage has no obligation to purchase or acquire any office supplies or other goods and materials or any services for OncoCyte, and if any such supplies, goods, materials or services are obtained for OncoCyte, Lineage may arrange for the suppliers thereof to invoice OncoCyte directly. The Shared Facilities Agreement will remain in effect, unless either party gives the other party written notice stating that the Shared Facilities Agreement will terminate on December 31 of that year, or unless the agreement otherwise is terminated under another provision of the agreement. The Shared Facilities Agreement is not considered a lease under the provisions of ASC 842 discussed in Note 2, because, among other factors, a significant part of the Shared Facilities Agreement is a contract for services, not a tangible asset, and is cancelable by either party without penalty. Lineage’s lease of its principal office and research facility will expire on January 31, 2023. In the aggregate, Use Fees charged to OncoCyte by Lineage were as follows (in thousands): Three Months Ended September 30, (unaudited) Nine Months Ended September 30, (unaudited) 2019 2018 2019 2018 Research and development $ 160 $ 230 $ 579 $ 667 General and administrative 125 105 341 257 Sales and marketing 53 57 69 251 Total Use Fees $ 338 $ 392 $ 989 $ 1,175 As of December 31, 2018, OncoCyte had $2.1 million outstanding and payable to Lineage and affiliates included in current liabilities on account of Use Fees under the Shared Facilities Agreement. On February 15, 2019, OncoCyte paid the $2.1 million owed to Lineage for prior services provided under the Shared Facilities Agreement. As of October 1, 2019, the minimum fixed payments due under the Shared Facilities Agreement are approximately $84,000 per month, primarily for use of the facilities. As of September 30, 2019, amounts owed to Lineage under the Shared Facilities Agreement were insignificant. Financing Transactions On July 31, 2018, OncoCyte raised approximately $3.3 million in net proceeds, after offering expenses, from the sale of 1,256,118 shares of its common stock and warrants (the “July 2018 Offering”). The shares of common stock and warrants were sold in “Units” at a purchase price of $2.86 per Unit, with each Unit consisting of one share of common stock and one warrant to purchase one share of its common stock (“July 2018 Offering Warrants”). The Units of common stock and warrants were sold in a registered direct offering. OncoCyte’s former Chief Executive Officer, the Chief Financial Officer, the Senior Vice President of Research and Development, and certain members of OncoCyte’s Board of Directors purchased Units in the July 2018 Offering on the same terms as other investors. On March 28, 2018, OncoCyte entered into securities purchase agreements with two accredited investors for the private placement of 7,936,508 shares of OncoCyte’s common stock for $1.26 per share, for total gross proceeds of $10.0 million before deducting offering expenses, $8.0 million of which was received in March 2018 and $2.0 million in May 2018. The securities purchase agreements contain certain registration rights (see Note 4). The investors are Broadwood Partners, L.P. and George Karfunkel, who beneficially own more than 5% of OncoCyte’s outstanding common stock. OncoCyte agreed to register the shares sold to the investors for resale under the Securities Act not later than 60 days after the closing of the sale of the shares. OncoCyte also agreed to pay liquidated damages calculated in the manner provided in the securities purchase agreement if OncoCyte did not file the registration statement in a timely manner. Because the registration statement was not filed as required by the securities purchase agreement during the year ended December 31, 2018, OncoCyte accrued $300,000 on account of liquidated damages owed and paid this amount in March 2019. On November 13, 2019, OncoCyte entered into a public offering transaction with certain investors, including Broadwood Capital, L.P. (see Note 11). Consulting Services During the three and nine months ended September 30, 2019, OncoCyte incurred consulting fees of $0.2 million to a firm in which OncoCyte’s current President and Chief Executive Officer, Ronald Andrews, was a partner. Mr. Andrews resigned from this firm as an active partner effective June 30, 2019, the date prior to commencement of his employment by OncoCyte. |
Equity Method Investment in Raz
Equity Method Investment in Razor Genomics, Inc. | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment in Razor Genomics, Inc. | 5. Equity Method Investment in Razor Genomics, Inc. On September 30, 2019, OncoCyte completed the purchase of 1,329,870 shares of Razor Series A Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), representing 25% of the outstanding equity of Razor on a fully diluted basis, for $10 million in cash (the “Initial Closing”) pursuant to a Subscription and Stock Purchase Agreement (the “Purchase Agreement”), dated September 4, 2019, among OncoCyte, Encore Clinical, Inc. (“Encore”), and Razor. Pursuant to the Purchase Agreement, OncoCyte entered into Minority Holder Stock Purchase Agreements of like tenor (the “Minority Purchase Agreements”) with the shareholders of Razor other than Encore (the “Minority Shareholders”) for the future purchase of the shares of Razor common stock they own. OncoCyte has also entered into certain other agreements with Razor and Encore, including a Sublicense and Distribution Agreement (the “Sublicense Agreement”), a Development Agreement (the “Development Agreement”), and an amendment to a Laboratory Services Agreement (the “Laboratory Agreement”) pursuant to which OncoCyte became a party to that agreement. Purchase Agreement Under the Purchase Agreement, OncoCyte has the option to acquire the balance of the outstanding shares of Razor common stock from Encore under the Purchase Agreement and from the Minority Shareholders under the Minority Purchase Agreements (the “Option”) for an additional $10 million in cash and OncoCyte common stock valued at $5 million in total (the “Additional Purchase Payment”). If the issuance of shares of OncoCyte common stock having a market value of $5 million would require OncoCyte to issue a number of shares that, when combined with any shares issuable under the Development Agreement discussed below, would exceed 19.99% of the issued and outstanding shares of OncoCyte common stock or the outstanding voting power of its shares as of the date of the Purchase Agreement, OncoCyte may deliver a number of shares of common stock that would not exceed that combined 19.99% limit and an amount of cash necessary to bring the combined value of cash and shares to $5 million. OncoCyte has agreed to exercise the Option if, within a specified time frame, certain milestones are met related to the contracting of clinical trial sites for a clinical trial of the Razor assay. Even if the Razor assay clinical trial milestones are not met within the time frame referenced in the Purchase Agreement and the Minority Purchase Agreements, OncoCyte will have the option, but not the obligation, to purchase the balance of the outstanding Razor common stock from Encore and the Minority Shareholders for the Additional Purchase Payment that would be applicable if the milestones were met. OncoCyte’s obligations to purchase the Razor shares from Encore and the Minority Shareholders are subject to the satisfaction of certain conditions customary for a transaction of this kind. Development Agreement Under the Development Agreement, Razor reserved as a “Clinical Trial Expense Reserve” $4 million of the proceeds it received at the Initial Closing from the sale of the Preferred Stock to OncoCyte, to fund Razor’s share of costs incurred in connection with a clinical trial of the Razor assay for purposes of promoting commercialization (“Clinical Trial”). OncoCyte and Encore will each appoint two representatives to a joint steering committee ( Steering Committee ), which will be formed under the terms of the Development Agreement to oversee the Clinical Trial. Acting by majority vote of the appointed representatives, the Steering Committee will make all design, execution, and termination decisions related to the Clinical Trial, but any deadlocked decisions other than approval of the Clinical Trial budgets, will be resolved by a member designated by Encore. The Steering Committee will agree on a total budget and an initial annual budget for the Clinical Trial. The annual budget will be reviewed and may be revised annually by a majority vote of the Steering Committee. OncoCyte will be responsible for all expenses for the Clinical Trial that exceed the Clinical Trial Expense Reserve up to the total budget amount approved by the Steering Committee, which is expected to cover multiple years and is estimated to be up to $12 million for OncoCyte s portion. The Development Agreement provides for certain payments by OncoCyte to Encore if certain product reimbursement, Clinical Trial, and financing milestones are attained. OncoCyte has paid Encore $1 million in cash as a milestone payment for the receipt of a preliminary positive coverage decision from the Centers for Medicare and Medicaid Services Molecular Diagnostic Services Program (“CSM/MolDx”) for the Razor assay (the “Preliminary Coverage Milestone Payment”). In the event Razor receives the final positive coverage decision from CMS/MolDx for reimbursement of patient costs of the Razor assay within 12 months after the Initial Closing, OncoCyte will pay Encore $4 million (“CMS Final Milestone Payment”). OncoCyte will account for those milestone payments as part of its equity method investment in Razor. Upon completion of enrollment of the full number of patients for the Clinical Trial, OncoCyte will issue to Encore and the Minority Shareholders shares of OncoCyte common stock with an aggregate market value at the date of issue equal to $3 million (“Clinical Trial Milestone Payment”). If the issuance of shares of our common stock having a market value of $3 million would require us to issue a number of shares that, when combined with any shares we issued under the Purchase Agreement and the Minority Shareholder Purchase Agreements, would exceed 19.99% of the issued and outstanding shares of OncoCyte common stock or the outstanding voting power of its shares as of the date of the Purchase Agreement, OncoCyte may deliver a number of shares of our common stock that would not exceed that combined 19.99% limit and an amount of cash necessary to bring the combined value of cash and shares to $3 million. If within a specified time frame Encore is substantially responsible for obtaining funding to OncoCyte or Razor for the Clinical Trial from any third-party pharmaceutical company, a portion of such additional funding amount will be paid to Encore, subject to a $3 million cap on the payment to Encore if the funding is provided by a designated pharmaceutical company. Sublicense Agreement Under the Sublicense Agreement, Razor granted to OncoCyte an exclusive worldwide sublicense under certain patent rights applicable to the Razor assay in the field of use covered by the applicable license held by Razor for purposes of commercialization and development of the Razor assay (the “License Agreement’). OncoCyte will make royalty payments to Encore and the Minority Shareholders based on the net cash revenues actually collected from the commercialization of the Razor assay, less certain related costs including certain payments to third parties as royalties and revenue share payments owed by Razor to third parties with respect to revenues from the commercialization of the Razor assay. The initial royalty rate payable to Encore and the Minority Shareholders will be a low double-digit percentage and will decline as certain cumulative net revenue benchmarks are reached, with a single digit royalty rate payable to them as the benchmarks are attained. Royalties will be payable to Encore and the Minority Shareholders on a quarterly basis. OncoCyte will pay all royalties that become due under the License Agreement, and all revenue sharing and earnout payments owed by Razor to certain third parties with respect to Razor assay revenues, but those payments will be deducted from gross revenues to determine net revenues for the purpose of paying royalties to Encore and the Minority Shareholders. Laboratory Agreement Under the Laboratory Agreement, OncoCyte has assumed Razor’s Laboratory Agreement payment obligations of $450,000 per year. The Laboratory Agreement gives OncoCyte the right to use Razor’s CLIA laboratory in Brisbane, California. OncoCyte pays Encore a quarterly fee for services related to operating and maintaining the CLIA laboratory, including certain staffing. The Laboratory Agreement will expire on September 29, 2021, but OncoCyte may extend the term for additional one-year periods, or OncoCyte may terminate the agreement at its option after it completes the purchase of the shares of Razor common stock from Razor stockholders pursuant to the Purchase Agreement and Minority Purchase Agreements. OncoCyte also has the right to terminate the Laboratory Agreement if there is an event or occurrence that adversely affects, in any material respect, the Razor assay or its prospects or its ability to be commercialized, and it remains continuing and uncured. Accounting for the Razor Investment The Razor investment is being accounted for under the equity method of accounting under ASC 323 because OncoCyte exercises significant influence over, but does not control, the Razor entity. OncoCyte does not control the Razor entity because, among other factors, OncoCyte is entitled to designate one person to serve on a three-member board of directors of Razor, with the other two members designated by Encore, and any deadlocked decisions by the Steering Committee, other than with respect to the Clinical Trial budget, will be resolved by a member designated by Encore. The Razor Preferred Stock is considered to be in-substance common stock for purposes of the ASC 323 equity method investment in Razor. The equity method investment in Razor is considered an asset, rather than a business, because, among other factors, Razor has no workforce, no commercial product, no revenues, no distribution system and no facilities. Substantially all of the fair value of Razor’s assets at the Initial Closing was concentrated in Razor’s intangible asset, the Razor assay, thus satisfying the requirements of the screen test in accordance with Accounting Standards Update (“ASU”) 2017-01 , Business combinations (Topic 805): Clarifying the Definition of a Business Contingencies |
Loan Payable to Silicon Valley
Loan Payable to Silicon Valley Bank | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Loan Payable to Silicon Valley Bank | 6. Loan Payable to Silicon Valley Bank On February 21, 2017, OncoCyte entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (the “Bank”) pursuant to which OncoCyte borrowed $2.0 million on March 23, 2017. As of September 30, 2019, there were no additional amounts available to be borrowed on the Loan Agreement. Payments of interest only on the principal balance were due monthly from the draw date through October 31, 2017, and, beginning on November 1, 2017, monthly payments of principal of approximately $67,000 plus interest became due and payable. The outstanding principal balance of the loan bore interest at a stated floating annual interest rate equal to the greater of (i) three-quarters of one percent (0.75%) above the prime rate or (ii) four and one-quarter percent (4.25%). As of September 30, 2019, the latest published prime rate plus 0.75% was 5.75% per annum. On October 17, 2019, OncoCyte entered into a First Amendment to Loan and Security Agreement which refinanced the outstanding balance of the loan, made additional borrowings available to OncoCyte, and modified some of the provisions of the original Loan Agreement described herein (see Note 11). The outstanding principal amount plus accrued interest was originally due and payable to the Bank at maturity on April 1, 2020. Under the Loan Agreement, OncoCyte was obligated to pay the Bank an additional final payment fee of 5.8% of the original principal borrowed, amounting to $116,000, upon repayment of the loan. OncoCyte accrued the $116,000 final payment fee as a deferred financing cost on the March 23, 2017 draw date. The Loan Agreement provides that the outstanding principal amount of the loan, with interest accrued, the final payment fee, and the prepayment fee may become due and payable prior to the applicable maturity date if an “Event of Default” as defined in the Loan Agreement occurs and is not cured within any applicable cure period. Upon the occurrence and during the continuance of an Event of Default, all obligations due to the Bank will bear interest at a rate per annum which is 5% above the then applicable interest rate. An Event of Default includes, among other events, failure to pay interest and principal when due, material adverse changes, which include a material adverse change in OncoCyte’s business, operations, or condition (financial or otherwise), failure to provide the bank with timely financial statements and copies of filings with the Securities and Exchange Commission, as required, legal judgments or pending or threatened legal actions of $50,000 or more, insolvency, and delisting from the NYSE American. OncoCyte’s obligations under the Loan Agreement are collateralized by substantially all of its assets other than intellectual property such as patents and trade secrets that OncoCyte owns. Accordingly, if an Event of Default were to occur and not be cured, the Bank could foreclose on its security interest in the collateral. OncoCyte was in compliance with the Loan Agreement as of the filing date of this Report. Under the provisions of the Loan Agreement, as consented by the Bank, any proceeds received by OncoCyte from sales of Lineage shares may be used by OncoCyte to fund its operations. Bank Warrants On February 21, 2017, and in conjunction with $2.0 million becoming available under the Loan Agreement, OncoCyte issued common stock purchase warrants to the Bank (the “Bank Warrants”) entitling the Bank to purchase shares of OncoCyte common stock in tranches related to the loan tranches under the Loan Agreement. In conjunction with the availability of the loan, the Bank was issued warrants to purchase 8,247 shares of OncoCyte common stock at an exercise price of $4.85 per share, through February 21, 2027. On March 23, 2017, in conjunction with borrowing $2.0 million, the Bank was issued warrants to purchase an additional 7,321 common shares at an exercise price of $5.46 per share, through March 23, 2027. The Bank may elect to exercise the Bank Warrants on a “cashless exercise” basis and receive a number of shares determined by multiplying the number of shares for which the applicable tranche is being exercised by (A) the excess of the fair market value of the common stock over the applicable exercise price, divided by (B) the fair market value of the common stock. The fair market value of the common stock will be the last closing or sale price on a national securities exchange, interdealer quotation system, or over-the-counter market. The Bank Warrants are classified as equity since, among other factors, they are not mandatorily redeemable, cannot be settled in cash or other assets and require settlement by issuing a fixed number of shares of common stock of OncoCyte. OncoCyte determined the fair value of the Bank Warrants using the Black-Scholes option pricing model to be approximately $62,000, which was recorded as a deferred financing cost against the loan payable balance. Aggregate deferred financing costs of $196,000, recorded against the loan payable balance, are amortized to interest expense over the term of the loan using the effective interest method. As of September 30, 2019, unamortized deferred financing costs were insignificant. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | 7. Shareholders’ Equity Preferred Stock OncoCyte is authorized to issue 5,000,000 shares of no par value preferred stock. As of September 30, 2019, no preferred shares were issued or outstanding. Common Stock OncoCyte has 85,000,000 shares of common stock, no par value, authorized. As of September 30, 2019 and December 31, 2018, respectively, OncoCyte had 51,972,830 and 40,664,496 shares of common stock issued and outstanding (see Note 11). Common Stock Purchase Warrants As of September 30, 2019, OncoCyte had an aggregate of 3,285,339 common stock purchase warrants issued and outstanding with exercise prices ranging from $1.77 to $5.50 per warrant. The warrants will expire on various dates through March 23, 2027. Certain warrants have “cashless exercise” provisions meaning that the value of a portion of warrant shares may be used to pay the exercise price rather than payment in cash, which may be exercised under any circumstances in the case of the Bank Warrants or, in the case of certain other warrants, only if a registration statement for the warrants and underlying shares of common stock is not effective under the Securities Act or a prospectus in the registration statement is not available for the issuance of shares upon the exercise of the warrants. OncoCyte has considered the guidance in ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Stock option exercises During the nine months ended September 30, 2019, 576,000 shares of common stock were issued upon the exercise of stock options, from which OncoCyte received approximately $0.9 million in cash proceeds. Reconciliation of Changes in Shareholders’ Equity The following tables show changes in components of shareholders’ equity for the periods from January 1, 2019 to September 30, 2019, and from June 30, 2019 to September 30, 2019 (unaudited and in thousands). Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JANUARY 1, 2019 40,664 $ 74,742 $ - $ (71,319 ) $ 3,423 Net loss - - - (14,472 ) (14,472 ) Stock-based compensation - 2,209 - - 2,209 Sale of common shares 10,733 40,250 - - 40,250 Financing costs paid to issue common shares - (3,252 ) - - (3,252 ) Exercise of stock options 576 943 - - 943 Issuance of warrants to Chardan Capital - 234 - - 234 BALANCE AT SEPTEMBER 30, 2019 51,973 $ 115,126 $ - $ (85,791 ) $ 29,335 Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JUNE 30, 2019 51,973 $ 114,071 $ - $ (80,566 ) $ 33,505 Net loss - - - (5,225 ) (5,225 ) Stock-based compensation - 821 - - 821 Exercise of stock options - - - - - Issuance of warrants to Chardan Capital - 234 - - 234 BALANCE AT SEPTEMBER 30, 2019 51,973 $ 115,126 $ - $ (85,791 ) $ 29,335 The following tables show changes in components of shareholders’ equity for the periods from January 1, 2018 to September 30, 2018, and from June 30, 2018 to September 30, 2018 (unaudited and in thousands). Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JANUARY 1, 2018 31,452 $ 59,968 $ (888 ) $ (54,677 ) $ 4,403 Net loss - - - (11,255 ) (11,255 ) Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018 - - 888 (888 ) - Stock-based compensation - 1,079 - - 1,079 Sale of common shares 7,936 10,000 - 10,000 Financing costs paid to issue common shares (65 ) - (65 ) Sale of common shares and warrants 1,256 3,592 - 3,592 Financing costs paid to issue common shares and warrants - (290 ) - - (290 ) Exercise of stock options 20 59 - - 59 BALANCE AT SEPTEMBER 30, 2018 40,664 $ 74,343 $ - $ (66,820 ) $ 7,523 Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JUNE 30, 2018 39,408 $ 70,695 $ - $ (63,849 ) $ 6,846 Net loss - - - (2,971 ) (2,971 ) Stock-based compensation - 344 - - 344 Sale of common shares and warrants 1,255 3,592 - - 3,592 Financing costs paid to issue common shares and warrants - (290 ) - - (290 ) Exercise of stock options 1 2 - - 2 BALANCE AT SEPTEMBER 30, 2018 40,664 $ 74,343 $ - $ (66,820 ) $ 7,523 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation OncoCyte had a 2010 Stock Option Plan (the “2010 Plan”) under which 5,200,000 shares of common stock were authorized for the grant of stock options or the sale of restricted stock. On August 27, 2018, OncoCyte shareholders approved a new Equity Incentive Plan (the “2018 Incentive Plan”) to replace the 2010 Plan. In adopting the 2018 Incentive Plan, OncoCyte terminated the 2010 Plan and will not grant any additional stock options or sell any stock under restricted stock purchase agreements under the 2010 Plan; however, stock options issued under the 2010 Plan will continue in effect in accordance with their terms and the terms of the 2010 Plan until the exercise or expiration of the individual options. A summary of OncoCyte’s 2010 Plan activity and related information follows (in thousands except weighted average exercise price): Options Shares Available for Grant Number of Options Outstanding Weighted Average Exercise Price Balance at December 31, 2018 - 4,171 $ 2.92 Options exercised - (575 ) 1.64 Options forfeited, canceled and expired - (301 ) 3.42 Balance at September 30, 2019 - 3,295 $ 3.10 Exercisable at September 30, 2019 2,756 $ 2.97 In 2018, under the 2010 Plan, OncoCyte granted certain stock options to employees and consultants, with exercise prices ranging from $2.30 per share to $3.15 per share, that will vest in increments upon the attainment of specified performance conditions related to the development of DetermaVu™ and obtaining Medicare reimbursement coverage for that test (“Performance-Based Options”). None of the vesting conditions were met during the three and nine months ended September 30, 2018, and during the three months ended 30, 2019, . During the nine months ended 30, 2019, certain performance conditions required for vesting were met, and, accordingly, 47,500 shares vested and $101,000 of stock-based compensation expense was recorded with regard to the Performance-Based Options. As of 30, 2019, there were 856,800 Performance-Based Options outstanding. As of September 30, 2019, 11,000,000 shares of common stock were reserved under the 2018 Incentive Plan for the grant of stock options or the sale of restricted stock or for the settlement of hypothetical units issued with reference to common stock (“RSUs”). OncoCyte may also grant stock appreciation rights under the 2018 Incentive Plan. A summary of OncoCyte’s 2018 Incentive Plan activity and related information follows (in thousands except weighted average exercise price): Options Shares Available for Grant Number of Options Outstanding Weighted Average Exercise Price Balance at December 31, 2018 4,639 361 $ 2.21 Option pool increase 6,000 - Options granted (3,526 ) 3,526 3.01 RSUs granted (170 ) 85 - Options exercised - - - Options forfeited and canceled - - - Balance at September 30, 2019 6,943 3,972 $ 2.94 Exercisable at September 30, 2019 230 $ 2.40 OncoCyte recorded stock-based compensation expense in the following categories on the accompanying condensed statements of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 165 $ 17 $ 439 $ (5 ) (1) General and administrative 617 277 1,711 851 Sales and marketing 39 50 59 233 Total stock-based compensation expense $ 821 $ 344 $ 2,209 $ 1,079 (1) The negative stock-based compensation expense is primarily attributable to the decrease in the OncoCyte stock price from $4.65 per share at December 31, 2017 to $2.50 per share at September 30, 2018 for consultant stock options which required mark-to-market adjustment each quarter for unvested shares. The assumptions that were used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the nine months ended September 30, 2019 and 2018 were as follows. Nine Months Ended September 30, 2019 2018 Expected life (in years) 6.03 9.07 Risk-free interest rates 2.10 % 2.93 % Volatility 78.92 % 81.13 % Dividend yield - % - % The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If OncoCyte had made different assumptions, its stock-based compensation expense and net loss for the three months and nine ended September 30, 2019 and 2018 may have been significantly different. OncoCyte does not recognize deferred income taxes for incentive stock option compensation expense and records a tax deduction only when a disqualified disposition has occurred. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The provision for income taxes for interim periods is determined using an estimated annual effective tax rate in accordance with ASC 740-270, Income Taxes, Interim Reporting Due to losses incurred for all periods presented, OncoCyte did not record any provision or benefit for income taxes. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. OncoCyte established a full valuation allowance for all periods presented due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies OncoCyte has certain commitments other than those discussed in Notes 4 and 5. Master Lease Line Agreement On April 7, 2016, OncoCyte entered into a Master Lease Line Agreement (“Lease Agreement No. 1”) with a financing company for the purchase and financing of certain equipment. Lease Agreement No. 1, as amended, provided OncoCyte with a $881,000 line of credit for purchases of equipment. Each lease schedule OncoCyte enters into under Lease Agreement No. 1 has a 36-month lease term, is collateralized by the equipment financed, which are subject to lease schedules, and required OncoCyte to provide a deposit for the first and last payment under that schedule. Monthly payments were determined using a lease factor approximating an interest rate of 10% per annum. OncoCyte has the right at the end of each lease schedule under Lease Agreement No. 1, if no default has occurred, to either return the equipment financed under the schedule for a restocking fee of 7.5% of the original cost of the equipment or to purchase the equipment from the financing company at a fair value not less than 12.5% of the original cost of the equipment. On April 7, 2016, OncoCyte entered into a lease schedule (“Lease Schedule No. 1”) under the Lease Agreement No. 1 for certain equipment costing approximately $435,000 applied against the lease line, requiring payments of $14,442 per month over 36 months. In March 2019, upon termination of Lease Schedule No. 1, OncoCyte paid the 7.5% restocking fee and returned the equipment to the financing company. In December 2016, OncoCyte entered into another lease schedule (“Lease Schedule No. 2”) for certain equipment costing approximately $161,000, requiring payments of $5,342 per month over 36 months. In April 2017, OncoCyte entered into a third and final lease schedule (“Lease Schedule No. 3”) for certain equipment costing approximately $285,000, requiring payments of $9,462 per month over 36 months. After the last tranche, Lease Agreement No. 1 was closed with no remaining financing available On May 11, 2017, OncoCyte entered into another Master Lease Line Agreement (“Lease Agreement No. 2”) with the same finance company on terms similar to Lease Agreement No. 1. On July 2, 2018, OncoCyte entered into a lease schedule under the Lease Agreement No. 2 for certain equipment costing approximately $209,000, requiring payments of $6,709 per month over 36 months, a $116,000 prepaid maintenance contract for the duration of the lease, and requiring 12 monthly payments of $10,238, including imputed interest. After the financing of this equipment and the prepaid maintenance contract, there was no financing remaining available under Lease Agreement No. 2 as of September 30, 2019. OncoCyte had accounted for these leases as capital leases in accordance with ASC 840 due to the net present value of the payments under the lease approximating the fair value of the equipment at inception of the lease. As discussed in Note 2, upon adoption of ASC 842, the accounting for these leases was substantially unchanged and these leases are referred to as financing leases under ASC 842. The payments under the lease schedules will be amortized to financing lease obligations and interest expense using the interest method at an imputed rate of approximately 10% per annum. Adoption and application of ASC 842 The tables below provide the amounts recorded in connection with the adoption of ASC 842 as of, and during, the nine months ended September 30, 2019, for OncoCyte’s operating and financing leases (see Note 2). Under the Laboratory Agreement discussed in Note 5, OncoCyte assumed all of Razor’s Laboratory Agreement payment obligations amounting to $450,000 per year. Although OncoCyte is not a party to any lease agreement with Razor or Encore, under the terms of the Laboratory Agreement, OncoCyte received landlord’s consent for the use of the laboratory at Razor’s Brisbane, California location (the “Brisbane Facility”) for which Encore is a party to a sublease which expires on March 31, 2023 (the “Brisbane Lease”). The laboratory fee payments to Encore include both laboratory services and the use of the Brisbane Facility. Under the provisions of the Laboratory Agreement, if OncoCyte terminates the Laboratory Agreement prior to the expiration of the Brisbane Lease, OncoCyte shall assume the costs related to the subletting or early termination of the Brisbane Lease. If the Laboratory Agreement were to be terminated on September 30, 2019, the aggregate payments due to the landlord for early cancellation of the Brisbane Lease would be approximately $477,000 (aggregate payments from September 30, 2019 through March 31, 2023). Accordingly, OncoCyte determined that the Laboratory Agreement contains an embedded operating lease for the Brisbane Facility and OncoCyte allocated the aggregate payments to this lease component for purposes of calculating the net present value of the right-of-use asset and liability as of September 30, 2019, in accordance with ASC 842, as shown in the table below. The following table presents supplemental cash flow information related to operating and financing leases for the nine months ended September 30, 2019 (in thousands): Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from financing leases $ 30 Financing cash flows from financing leases 323 Right-of-use asset obtained in exchange for lease obligation: Operating lease (Brisbane Facility) 397 The following table presents supplemental balance sheet information related to operating and financing leases as of September 30, 2019 (in thousands, except lease term and discount rate): September 30, 2019 Operating lease Right-of-use assets, net $ 397 Right-of-use lease liabilities, current $ 81 Right-of-use lease liabilities, noncurrent 316 Total operating lease liabilities $ 397 Financing leases Machinery and equipment, gross $ 758 Accumulated depreciation (517 ) Machinery and equipment, net $ 241 Current liabilities $ 172 Noncurrent liabilities 77 Total financing lease liabilities $ 249 Weighted average remaining lease term Operating lease 3.5 years Financing leases 1.5 years Weighted average discount rate Operating lease 10.0 % Financing leases 9.6 % Future minimum lease commitments are as follows (in thousands): Operating Lease Financing Leases Year Ending December 31, 2019 $ 28 $ 67 2020 121 140 2021 137 61 2022 153 - 2023 39 - Total minimum lease payments $ 478 $ 268 Less amounts representing interest (81 ) (19 ) Present value of net minimum lease payments $ 397 $ 249 Litigation – General OncoCyte will be subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and other matters. When OncoCyte is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, OncoCyte will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, OncoCyte discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. Tax Filings OncoCyte tax filings are subject to audit by taxing authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes. OncoCyte has not received any notice from any taxing authority that any of its tax returns are being audited, and OncoCyte has not provided for any additional tax related obligations that are likely to result from any future audits. Employment Contracts OncoCyte has entered into employment contracts with certain executive officers. Under the provisions of the contracts, OncoCyte may be required to incur severance obligations for matters relating to terminations of employment under certain circumstances. Indemnification In the normal course of business, OncoCyte may provide indemnification of varying scope under OncoCyte’s agreements with other companies or consultants, typically OncoCyte’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, OncoCyte will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties in connection with the use or testing of OncoCyte’s diagnostic tests. Indemnification provisions could also cover third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to OncoCyte’s diagnostic tests. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, or license agreement to which they relate. The Purchase Agreement also contains provisions under which OncoCyte has agreed to indemnify Razor and Encore from losses and expenses resulting from breaches or inaccuracy of OncoCyte’s representations and warranties and breaches or nonfulfillment of OncoCyte’s covenants, agreements, and obligations under the Purchase Agreement. The potential future payments OncoCyte could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, OncoCyte has not been subject to any claims or demands for indemnification. OncoCyte also maintains various liability insurance policies that limit OncoCyte’s financial exposure. As a result, OncoCyte management believes that the fair value of these indemnification agreements is minimal. Accordingly, OncoCyte has not recorded any liabilities for these agreements as of September 30, 2019 and December 31, 2018. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events On October 17, 2019 OncoCyte entered into a First Amendment to Loan and Security Agreement (the “Amended Loan Agreement”) with the Bank pursuant to which Oncocyte obtained a new $3 million secured credit facility (“Tranche 1”), a portion of which was used to repay the remaining balance of approximately $400,000 on outstanding loans from the Bank, plus a final payment of $116,000, under the February 21, 2017 Loan Agreement with the Bank. The credit line under the Amended Loan Agreement may be increased by an additional $2 million (“Tranche 2”) if OncoCyte obtains at least $20 million of additional equity capital, as was the case with the original Loan Agreement, and a positive final coverage determination is received from the Centers for Medicate and Medicaid Services for the Razor assay at a specified minimum price point per test (the “Tranche 2 Milestone”), and OncoCyte is not in default under the Amended Loan Agreement. Payments of interest only on the principal balance will be due monthly from the draw date through March 31, 2020 followed by 24 monthly payments of principal and interest, provided, however, that if the Tranche 2 Milestone is achieved the interest only payment period will be extended through September 30, 2020 followed by 18 equal monthly payments of principal plus interest. The outstanding principal balance of the loan will bear interest at a stated floating annual interest equal to (a) the greater of 0.75% above the prime rate or 4.25% for Tranche 1 loans, or (b) the greater of the prime rate or 5% per annum for Tranche 2 loans. The principal amount of all loans plus accrued interest will be due and payable to the Bank at maturity on March 31, 2022. At maturity, OncoCyte will also pay the Bank an additional final payment fee of $200,000. OncoCyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 3.0% of the outstanding principal balance if prepaid within one year after October 17, 2019, 2.0% of the outstanding principal balance if prepaid more than one year but less than two years after October 17, 2019, or 1.0% of the outstanding principal balance if prepaid two years or more after October 17, 2019. Any amounts borrowed and repaid may not be reborrowed. The outstanding principal amount of the loan, with interest accrued, the final payment fee, and the prepayment fee may become due and payable prior to the applicable maturity date if an “Event of Default” as defined in the Amended Loan Agreement. On October 17, 2019 in conjunction with Tranche 1 becoming available under the Amended Loan Agreement, OncoCyte issued a common stock purchase warrant to the Bank (the “Bank Warrant”) entitling the Bank to purchase 98,574 shares of OncoCyte common stock at the initial Warrant Price of $1.69 per share through October 17, 2029. The number of shares of common stock issuable upon the exercise of the Bank Warrant will increase on the date of each draw, if any, on Tranche 2. The number of additional shares of common stock issuable upon the exercise of the Bank Warrant will be equal to 0.02% of OncoCyte’s fully diluted equity outstanding for each $1 million draw under Tranche 2. The Warrant Price for Tranche 2 warrant shares will be determined upon each draw of Tranche 2 funds and will be closing price of OncoCyte common stock on the NYSE American or other applicable market on the date immediately before the applicable date on which OncoCyte borrows funds under Tranche 2. The Bank may elect to exercise the Bank Warrant on a “cashless exercise” basis and receive a number of shares determined by multiplying the number of shares for which the Bank Warrant is being exercised by (A) the excess of the fair market value of the common stock over the applicable Warrant Price, divided by (B) the fair market value of the common stock. The fair market value of the common stock will be last closing or sale price on a national securities exchange, interdealer quotation system, or over-the-counter market. On November 13, 2019, OncoCyte entered into a series of stock purchase agreements on like terms pursuant to which OncoCyte agreed to sell a total of 5,058,824 shares of common stock for approximately $8.6 million in cash in an offering registered under the Securities Act. OncoCyte expects the transaction to close on November 15, 2019 subject to the satisfaction of customary closing conditions. As part of this offering, Broadwood Partners, L.P., who beneficially owns 22.9% of OncoCyte's outstanding common stock, has agreed to purchase 1,176,471 shares. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Investments in Common Stock of Privately Held Companies | Investments in Common Stock of Privately Held Companies – Investments – Equity Method and Joint Ventures OncoCyte initially records equity method investments at fair value on the date of the acquisition with subsequent adjustments to the investment balance based on OncoCyte’s share of earnings or losses from the investment. The equity method investment balance is shown in noncurrent assets on the consolidated balance sheets. OncoCyte reviews investments accounted for under the equity method for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be fully recoverable. If a determination is made that an “other-than-temporary” impairment exists, OncoCyte writes down its investment to fair value. On September 30, 2019, OncoCyte acquired a 25% ownership interest in Razor accounted for under the equity method of accounting as further discussed in Note 5. |
Research and Development Expenses | Research and development expenses Research and development expenses for the periods presented include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by Lineage that benefited or supported OncoCyte’s research and development functions. Direct research and development expenses consist primarily of personnel costs and related benefits, including stock-based compensation, consulting fees, and obligations incurred to suppliers. Indirect research and development expenses allocated by Lineage to OncoCyte under the Shared Facilities Agreement (see Note 4), were primarily based on headcount or space occupied, as applicable, and include laboratory supplies, laboratory expenses, rent and utilities, common area maintenance, telecommunications, property taxes and insurance. Research and development costs are expensed as incurred. |
General and Administrative Expenses | General and administrative expenses General and administrative expenses include both direct expenses incurred by OncoCyte and indirect overhead costs allocated by Lineage that benefited or supported OncoCyte’s general and administrative functions. Direct general and administrative expenses consist primarily of compensation and related benefits, including stock-based compensation, for executive and corporate personnel, and professional and consulting fees. Indirect general and administrative expenses allocated by Lineage to OncoCyte under the Shared Facilities Agreement (see Note 4) were primarily based on headcount or space occupied, as applicable, and include costs for financial reporting and compliance, rent and utilities, common area maintenance, telecommunications, property taxes and insurance. |
Sales and Marketing Expenses | Sales and marketing expenses Sales and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade show expenses, branding and positioning expenses, and consulting fees. Indirect sales and marketing expenses allocated by Lineage, were primarily based on OncoCyte’s headcount or space occupied, as applicable, and include costs for rent and utilities, common area maintenance, telecommunications, property taxes and insurance, incurred by Lineage and allocated to OncoCyte under the Shared Facilities Agreement. |
Accounting for Shares of Lineage and AgeX Common Stock | Accounting for shares of Lineage and AgeX common stock In accordance with ASC 320-10-25, Investments – Debt and Equity Securities Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, Beginning on January 1, 2018, with the adoption of ASU 2016-01 discussed below, the Lineage and AgeX shares held by OncoCyte are now referred to as “marketable equity securities,” and unrealized holding gains and losses on those shares are reported in the statements of operations in other income and expenses, net. Prior to January 1, 2018 and the adoption of ASU 2016-01, the Lineage shares held were called “available-for-sale securities” and unrealized holding gains and losses were reported in other comprehensive income or loss, net of tax, and were a component of the accumulated other comprehensive income or loss on the condensed balance sheet. Realized gains and losses on Lineage shares are also included in other income and expenses, net, in the condensed statements of operations. The shares of AgeX common stock OncoCyte holds were received from Lineage as a dividend-in-kind on November 28, 2018. OncoCyte did not sell any shares of Lineage or AgeX stock during any of the periods presented. As of September 30, 2019, OncoCyte held 353,264 and 35,326 shares of common stock of Lineage and AgeX, respectively, as marketable equity securities with a combined fair market value of $415,000. On January 1, 2018, in accordance with the adoption of ASU 2016-01, OncoCyte recorded a cumulative-effect adjustment for the Lineage shares as available-for-sale-securities to reclassify the unrealized loss of $888,000 included in accumulated other comprehensive loss to the accumulated deficit balance. For the three and nine months ended September 30, 2019, OncoCyte recorded an unrealized loss of $103,000 and $13,000, respectively, included in other income and expenses, net, due to the changes in fair market value of the marketable equity securities from the respective balance sheet dates. For the three and nine months ended September 30, 2018, OncoCyte recorded an unrealized gain of $102,000 and $71,000, respectively, included in other income and expenses, net, due to the increase in fair market value of the marketable equity securities from the respective balance sheet dates. |
Net Loss Per Common Share | Net loss per common share All potentially dilutive common stock equivalents are antidilutive because OncoCyte reported a net loss for all periods presented. The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Three Months Ended September 30, (Unaudited) Nine Months Ended September 30, (Unaudited) 2019 2018 2019 2018 Stock options 2,146 3,101 3,158 3,101 Warrants 3,285 4,035 3,285 4,035 |
Recently Adopted Accounting Pronouncements | Recently adopted accounting pronouncements Leases In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. On January 1, 2019, OncoCyte adopted Accounting Standards Update 2016-02, Leases Codification Improvements to Topic 842, Leases, Leases (Topic 842): Targeted improvements, Upon adoption of ASC 842 and based on the available practical expedients under that standard, OncoCyte did not reassess any expired or existing contracts, reassess the lease classification for any expired or existing leases and reassess initial direct costs for exiting leases. OncoCyte also elected not to capitalize leases that have terms of twelve months or less. The adoption of ASC 842 did not have a material impact to OncoCyte’s financial statements because OncoCyte did not have any significant operating leases at the time of adoption. As discussed in Note 10, OncoCyte accounts for an embedded operating lease in accordance with ASC 842 in connection with the Razor equity method investment discussed in Note 5. OncoCyte’s accounting for financing leases (previously referred to as “capital leases”) remained substantially unchanged. Financing leases are included in machinery and equipment, and in financing lease liabilities, current and noncurrent, in OncoCyte’s condensed balance sheets (see Note 10). Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted The recently issued accounting pronouncements applicable to OncoCyte that are not yet effective should be read in conjunction with the recently issued accounting pronouncements, as applicable and disclosed in OncoCyte’s Annual Report on Form 10-K for the year ended December 31, 2018. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock | The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Three Months Ended September 30, (Unaudited) Nine Months Ended September 30, (Unaudited) 2019 2018 2019 2018 Stock options 2,146 3,101 3,158 3,101 Warrants 3,285 4,035 3,285 4,035 |
Selected Balance Sheet Compon_2
Selected Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | As of September 30, 2019 and December 31, 2018, prepaid expenses and other current assets were comprised of the following (in thousands): September 30, 2019 December 31, 2018 (unaudited) Prepaid insurance $ 219 $ 102 Other 199 78 Total prepaid expenses and other current assets $ 418 $ 180 |
Schedule of Accrued Expenses and Other Current Liabilities | As of September 30, 2019 and December 31, 2018, accrued expenses and other current liabilities were comprised of the following (in thousands): September 30, 2019 December 31, 2018 (unaudited) Accrued compensation $ 803 $ 1,303 Accrued vendors and other expenses (1) 1,052 806 Total accrued expenses and other current liabilities $ 1,855 $ 2,109 (1) As of September 30, 2019, accrued vendors and other expenses includes purchases of new machinery and equipment of $0.4 million. |
Schedule of Machinery, Equipment and Right of Use Assets, Net | As of September 30, 2019 and December 31, 2018, machinery, equipment and rights of use assets, net were as follows (in thousands): September 30, 2019 December 31, 2018 (unaudited) Machinery and equipment $ 1,476 $ 1,562 Right-of-use assets (1) 397 - Accumulated depreciation (794 ) (948 ) Machinery, equipment and right of use assets, net $ 1,079 $ 614 (1) OncoCyte recorded certain right of use assets and liabilities in accordance with ASC 842 in connection with the equity method investment in Razor on September 30, 2019 (see Notes 5 and 10). |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Aggregate Use of Fees Charged | In the aggregate, Use Fees charged to OncoCyte by Lineage were as follows (in thousands): Three Months Ended September 30, (unaudited) Nine Months Ended September 30, (unaudited) 2019 2018 2019 2018 Research and development $ 160 $ 230 $ 579 $ 667 General and administrative 125 105 341 257 Sales and marketing 53 57 69 251 Total Use Fees $ 338 $ 392 $ 989 $ 1,175 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Reconciliation of Changes in Shareholders' Equity | The following tables show changes in components of shareholders’ equity for the periods from January 1, 2019 to September 30, 2019, and from June 30, 2019 to September 30, 2019 (unaudited and in thousands). Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JANUARY 1, 2019 40,664 $ 74,742 $ - $ (71,319 ) $ 3,423 Net loss - - - (14,472 ) (14,472 ) Stock-based compensation - 2,209 - - 2,209 Sale of common shares 10,733 40,250 - - 40,250 Financing costs paid to issue common shares - (3,252 ) - - (3,252 ) Exercise of stock options 576 943 - - 943 Issuance of warrants to Chardan Capital - 234 - - 234 BALANCE AT SEPTEMBER 30, 2019 51,973 $ 115,126 $ - $ (85,791 ) $ 29,335 Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JUNE 30, 2019 51,973 $ 114,071 $ - $ (80,566 ) $ 33,505 Net loss - - - (5,225 ) (5,225 ) Stock-based compensation - 821 - - 821 Exercise of stock options - - - - - Issuance of warrants to Chardan Capital - 234 - - 234 BALANCE AT SEPTEMBER 30, 2019 51,973 $ 115,126 $ - $ (85,791 ) $ 29,335 The following tables show changes in components of shareholders’ equity for the periods from January 1, 2018 to September 30, 2018, and from June 30, 2018 to September 30, 2018 (unaudited and in thousands). Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JANUARY 1, 2018 31,452 $ 59,968 $ (888 ) $ (54,677 ) $ 4,403 Net loss - - - (11,255 ) (11,255 ) Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018 - - 888 (888 ) - Stock-based compensation - 1,079 - - 1,079 Sale of common shares 7,936 10,000 - 10,000 Financing costs paid to issue common shares (65 ) - (65 ) Sale of common shares and warrants 1,256 3,592 - 3,592 Financing costs paid to issue common shares and warrants - (290 ) - - (290 ) Exercise of stock options 20 59 - - 59 BALANCE AT SEPTEMBER 30, 2018 40,664 $ 74,343 $ - $ (66,820 ) $ 7,523 Common Stock Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Loss Deficit Equity BALANCE AT JUNE 30, 2018 39,408 $ 70,695 $ - $ (63,849 ) $ 6,846 Net loss - - - (2,971 ) (2,971 ) Stock-based compensation - 344 - - 344 Sale of common shares and warrants 1,255 3,592 - - 3,592 Financing costs paid to issue common shares and warrants - (290 ) - - (290 ) Exercise of stock options 1 2 - - 2 BALANCE AT SEPTEMBER 30, 2018 40,664 $ 74,343 $ - $ (66,820 ) $ 7,523 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock-based Compensation Expense | OncoCyte recorded stock-based compensation expense in the following categories on the accompanying condensed statements of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 165 $ 17 $ 439 $ (5 ) (1) General and administrative 617 277 1,711 851 Sales and marketing 39 50 59 233 Total stock-based compensation expense $ 821 $ 344 $ 2,209 $ 1,079 (1) The negative stock-based compensation expense is primarily attributable to the decrease in the OncoCyte stock price from $4.65 per share at December 31, 2017 to $2.50 per share at September 30, 2018 for consultant stock options which required mark-to-market adjustment each quarter for unvested shares. |
Schedule of Assumptions Used to Calculate Fair Value of Stock Options | The assumptions that were used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the nine months ended September 30, 2019 and 2018 were as follows. Nine Months Ended September 30, 2019 2018 Expected life (in years) 6.03 9.07 Risk-free interest rates 2.10 % 2.93 % Volatility 78.92 % 81.13 % Dividend yield - % - % |
2010 Plan Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of OncoCyte’s 2010 Plan activity and related information follows (in thousands except weighted average exercise price): Options Shares Available for Grant Number of Options Outstanding Weighted Average Exercise Price Balance at December 31, 2018 - 4,171 $ 2.92 Options exercised - (575 ) 1.64 Options forfeited, canceled and expired - (301 ) 3.42 Balance at September 30, 2019 - 3,295 $ 3.10 Exercisable at September 30, 2019 2,756 $ 2.97 |
2018 Incentive Plan Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of OncoCyte’s 2018 Incentive Plan activity and related information follows (in thousands except weighted average exercise price): Options Shares Available for Grant Number of Options Outstanding Weighted Average Exercise Price Balance at December 31, 2018 4,639 361 $ 2.21 Option pool increase 6,000 - Options granted (3,526 ) 3,526 3.01 RSUs granted (170 ) 85 - Options exercised - - - Options forfeited and canceled - - - Balance at September 30, 2019 6,943 3,972 $ 2.94 Exercisable at September 30, 2019 230 $ 2.40 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease | The following table presents supplemental cash flow information related to operating and financing leases for the nine months ended September 30, 2019 (in thousands): Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from financing leases $ 30 Financing cash flows from financing leases 323 Right-of-use asset obtained in exchange for lease obligation: Operating lease (Brisbane Facility) 397 |
Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases | The following table presents supplemental balance sheet information related to operating and financing leases as of September 30, 2019 (in thousands, except lease term and discount rate): September 30, 2019 Operating lease Right-of-use assets, net $ 397 Right-of-use lease liabilities, current $ 81 Right-of-use lease liabilities, noncurrent 316 Total operating lease liabilities $ 397 Financing leases Machinery and equipment, gross $ 758 Accumulated depreciation (517 ) Machinery and equipment, net $ 241 Current liabilities $ 172 Noncurrent liabilities 77 Total financing lease liabilities $ 249 Weighted average remaining lease term Operating lease 3.5 years Financing leases 1.5 years Weighted average discount rate Operating lease 10.0 % Financing leases 9.6 % |
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases | Future minimum lease commitments are as follows (in thousands): Operating Lease Financing Leases Year Ending December 31, 2019 $ 28 $ 67 2020 121 140 2021 137 61 2022 153 - 2023 39 - Total minimum lease payments $ 478 $ 268 Less amounts representing interest (81 ) (19 ) Present value of net minimum lease payments $ 397 $ 249 |
Organization, Description of _2
Organization, Description of the Business and Liquidity (Details Narrative) - USD ($) $ in Thousands | Nov. 13, 2019 | Oct. 17, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 11, 2019 | Dec. 31, 2018 | Feb. 17, 2017 |
Schedule of Equity Method Investments [Line Items] | |||||||
Accumulated deficit | $ (85,791) | $ (71,319) | |||||
Cash and cash equivalents | 19,444 | 8,034 | |||||
Lineage and AgeX Therapeutics shares held as marketable equity securities, at fair value | 415 | $ 428 | |||||
Proceeds from sale of common stock | 40,250 | $ 10,000 | |||||
Subsequent Event [Member] | Stock Purchase Agreements [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity ownership percentage | 22.90% | ||||||
Number of shares sold | 5,058,824 | ||||||
Proceeds from sale of common stock | $ 8,600 | ||||||
Lineage Cell Therapeutics, Inc [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity ownership percentage | 20.00% | 50.00% | |||||
Lineage and AgeX Therapeutics shares held as marketable equity securities, at fair value | $ 415 | ||||||
Razor Genomics, Inc. [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity ownership percentage | 25.00% | ||||||
Silicon Valley Bank [Member] | Subsequent Event [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Proceeds from loan | $ 2,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Jan. 02, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 11, 2019 | Dec. 31, 2018 | Feb. 17, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Equity method investment, description | The equity method applies to investments in common stock or in-substance common stock if OncoCyte exercises significant influence over, but does not control, the entity, typically represented by ownership of 20% or more of the voting interests of a company. | |||||||
Marketable equity securities, fair market value | $ 415 | $ 415 | $ 428 | |||||
Unrealized (gain) loss on marketable equity securities | $ (103) | $ 102 | $ (13) | $ 71 | ||||
Accounting Standards Update 2016-01 [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Unrealized (gain) loss on marketable equity securities | $ (888) | |||||||
Lineage Cell Therapeutics, Inc [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Equity ownership percentage | 20.00% | 50.00% | ||||||
Shares held as available-for-sale securities, shares | 353,264 | 353,264 | ||||||
Marketable equity securities, fair market value | $ 415 | $ 415 | ||||||
AgeX Therapeutics, Inc [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Shares held as available-for-sale securities, shares | 35,326 | 35,326 | ||||||
Marketable equity securities, fair market value | $ 415 | $ 415 | ||||||
Razor Genomics, Inc. [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Equity ownership percentage | 25.00% | 25.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 2,146,000 | 3,101,000 | 3,158,000 | 3,101,000 |
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 3,285,000 | 4,035,000 | 3,285,000 | 4,035,000 |
Selected Balance Sheet Compon_3
Selected Balance Sheet Components (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Write off in depreciated assets | $ 500 | |||
Depreciation expense | $ 84 | $ 110 | $ 278 | $ 317 |
Selected Balance Sheet Compon_4
Selected Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid insurance | $ 219 | $ 102 |
Other | 199 | 78 |
Total prepaid expenses and other current assets | $ 418 | $ 180 |
Selected Balance Sheet Compon_5
Selected Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |||
Accrued compensation | $ 803 | $ 1,303 | |
Accrued vendors and other expenses | [1] | 1,052 | 806 |
Total accrued expenses and other current liabilities | $ 1,855 | $ 2,109 | |
[1] | As of September 30, 2019, accrued vendors and other expenses includes purchases of new machinery and equipment of $0.4 million. |
Selected Balance Sheet Compon_6
Selected Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Balance Sheet Related Disclosures [Abstract] | |
Purchases of new machinery and equipment | $ 400 |
Selected Balance Sheet Compon_7
Selected Balance Sheet Components - Schedule of Machinery, Equipment and Right of Use Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |||
Machinery and equipment | $ 1,476 | $ 1,562 | |
Right-of-use assets | [1] | 397 | |
Accumulated depreciation | (794) | (948) | |
Machinery, equipment and right of use assets, net | $ 1,079 | $ 614 | |
[1] | OncoCyte recorded certain right of use assets and liabilities in accordance with ASC 842 in connection with the equity method investment in Razor on September 30, 2019 (see Notes 5 and 10). |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2019 | Feb. 15, 2019 | Jul. 31, 2018 | Mar. 28, 2018 | Mar. 31, 2019 | May 31, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 11, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Feb. 17, 2017 |
Related Party Transaction [Line Items] | ||||||||||||||
Lease payment | $ 30 | |||||||||||||
shares issued, price per share | $ 2.50 | $ 4.65 | ||||||||||||
Liquidated damages owed | $ 300 | |||||||||||||
Broadwood Partners, L.P. and George Karfunkel [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Equity ownership percentage | 5.00% | |||||||||||||
Ronald Andrews [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Consulting fees | $ 200 | $ 200 | ||||||||||||
July 2018 Offering [Member] | Common Stock and Warrants [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Proceeds from sale of equity | $ 3,300 | |||||||||||||
Sale of equity | 1,256,118 | |||||||||||||
shares issued, price per share | $ 2.86 | |||||||||||||
Number of common shares available in each separable unit | 1 | |||||||||||||
Number of warrants to purchase stock in each separable unit | 1 | |||||||||||||
Securities Purchase Agreement [Member] | Private Placement [Member] | Common Stock [Member] | Two Accredited Investors [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Sale of equity | 7,936,508 | |||||||||||||
shares issued, price per share | $ 1.26 | |||||||||||||
Proceeds from issuance of private placement | $ 10,000 | $ 2,000 | $ 8,000 | |||||||||||
Current Liabilities [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Allocated use fees payable | $ 2,100 | |||||||||||||
Lineage Cell Therapeutics, Inc [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Markup rate on allocated costs | 5.00% | |||||||||||||
Term of payment | 30 days | |||||||||||||
Interest rate charged on unpaid and overdue invoices | 15.00% | |||||||||||||
Lease expire date | Jan. 31, 2023 | |||||||||||||
Equity ownership percentage | 20.00% | 50.00% | ||||||||||||
Lineage Cell Therapeutics, Inc [Member] | Shared Facilities Agreement [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Lease payment | $ 2,100 | |||||||||||||
Lineage Cell Therapeutics, Inc [Member] | Shared Facilities Agreement [Member] | Subsequent Event [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Minimum fixed payments due under the shared facilities agreement | $ 84 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Aggregate Use of Fees Charged (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Research and development | $ 1,625 | $ 1,527 | $ 4,476 | $ 5,310 |
General and administrative | 3,002 | 1,312 | 9,087 | 4,434 |
Sales and marketing | 630 | 184 | 1,153 | 1,411 |
Lineage Cell Therapeutics, Inc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Research and development | 160 | 230 | 579 | 667 |
General and administrative | 125 | 105 | 341 | 257 |
Sales and marketing | 53 | 57 | 69 | 251 |
Total Use Fees | $ 338 | $ 392 | $ 989 | $ 1,175 |
Equity Method Investment in R_2
Equity Method Investment in Razor Genomics, Inc. (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Common stock value | $ 115,126 | $ 74,742 | |
Equity method investment in Razor | 11,245 | ||
Shares issued, value | 40,250 | $ 10,000 | |
Purchase Agreement [Member] | |||
Common stock value | $ 5,000 | ||
Equity method investment, description | If the issuance of shares of OncoCyte common stock having a market value of $5 million would require OncoCyte to issue a number of shares that, when combined with any shares issuable under the Development Agreement discussed below, would exceed 19.99% of the issued and outstanding shares of OncoCyte common stock or the outstanding voting power of its shares as of the date of the Purchase Agreement, OncoCyte may deliver a number of shares of common stock that would not exceed that combined 19.99% limit and an amount of cash necessary to bring the combined value of cash and shares to $5 million. | ||
Development Agreement [Member] | |||
Clinical trial expense reserve amount | $ 4,000 | ||
Development Agreement [Member] | Maximum [Member] | |||
Estimated clinical trial expense | 12,000 | ||
Laboratory Agreement [Member] | |||
Payment obligation amount | $ 450 | ||
Lease expiration period | Sep. 29, 2021 | ||
Razor Genomics, Inc. [Member] | |||
Equity ownership percentage | 25.00% | ||
Stock purchase price | $ 10,000 | ||
Equity method investment in Razor | 11,245 | ||
Preliminary coverage milestone payment | 1,000 | ||
Transaction expenses | $ 245 | ||
Estimated useful life of Razor assay | P10Y | ||
Razor Genomics, Inc. [Member] | Preferred Stock [Member] | |||
Equity method investment in Razor | $ 10,000 | ||
Razor Genomics, Inc. [Member] | Purchase Agreement [Member] | |||
Stock purchase price | $ 10,000 | ||
Razor Genomics, Inc. [Member] | Series A Convertible Preferred Stock [Member] | |||
Number of shares purchased | 1,329,870 | ||
Preferred stock, par value | $ 0.0001 | ||
Encore Clinical, Inc. [Member] | Development Agreement [Member] | |||
Equity method investment, description | If the issuance of shares of our common stock having a market value of $3 million would require us to issue a number of shares that, when combined with any shares we issued under the Purchase Agreement and the Minority Shareholder Purchase Agreements, would exceed 19.99% of the issued and outstanding shares of OncoCyte common stock or the outstanding voting power of its shares as of the date of the Purchase Agreement, OncoCyte may deliver a number of shares of our common stock that would not exceed that combined 19.99% limit and an amount of cash necessary to bring the combined value of cash and shares to $3 million. | ||
Milestone payment | $ 1,000 | ||
Equity method investment in Razor | $ 4,000 | ||
Milestone payment description | In the event Razor receives the final positive coverage decision from CMS/MolDx for reimbursement of patient costs of the Razor assay within 12 months after the Initial Closing, OncoCyte will pay Encore $4 million ("CMS Final Milestone Payment"). | ||
Shares issued, value | $ 3,000 | ||
Additional funding amount | $ 3,000 |
Loan Payable to Silicon Valle_2
Loan Payable to Silicon Valley Bank (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Mar. 23, 2017 | Feb. 21, 2017 | |
Debt Instrument [Line Items] | ||||
Amortization of deferred financing costs | $ 30 | $ 62 | ||
Warrants [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount borrowed | $ 2,000 | |||
Warrants to purchase, shares | 7,321 | 8,247 | ||
Warrant exercise price, per share | $ 5.46 | $ 4.85 | ||
Deferred financing costs | 62 | |||
Aggregate deferred financing costs | $ 196 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Warrant exercise price, per share | $ 1.77 | |||
Loan and Security Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount borrowed | $ 116 | $ 2,000 | $ 2,000 | |
Periodic payment term | Payments of interest only on the principal balance were due monthly from the draw date through October 31, 2017, and, beginning on November 1, 2017 | |||
Periodic payments of principal and interest | $ 67 | |||
Basis spread variable rate | 0.75% | |||
Base rate | 4.25% | |||
Prime rate plus variable spread per annum | 5.75% | |||
Debt instrument, maturity date | Apr. 1, 2020 | |||
Additional final payment fee percentage | 5.80% | |||
Amortization of deferred financing costs | $ 116 | |||
Interest rate on obligations due to bank | 5.00% | |||
Loan and Security Agreement [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Minimum legal judgments or legal actions amount triggering loan default | $ 50 | |||
Loan and Security Agreement [Member] | Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread variable rate | 0.75% |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||
Preferred stock par value | |||||
Preferred stock, shares issued | |||||
Preferred stock, shares outstanding | |||||
Common stock, shares authorized | 85,000,000 | 85,000,000 | 85,000,000 | ||
Common stock par value | |||||
Common stock, shares issued | 51,973,000 | 51,973,000 | 40,664,000 | ||
Common stock, shares outstanding | 51,973,000 | 51,973,000 | 40,664,000 | ||
Common stock purchase warrants, shares issued | 3,285,339 | 3,285,339 | |||
Common stock purchase warrants, shares outstanding | 3,285,339 | 3,285,339 | |||
Warrant expiry date | Mar. 23, 2027 | Mar. 23, 2027 | |||
Exercise of stock options | $ 2 | $ 943 | $ 59 | ||
Common Stock [Member] | |||||
Exercise of stock options, shares | 1,000 | 576,000 | 20,000 | ||
Exercise of stock options | $ 2 | $ 943 | $ 59 | ||
Minimum [Member] | |||||
Common stock purchase warrants, exercise price | $ 1.77 | $ 1.77 | |||
Maximum [Member] | |||||
Common stock purchase warrants, exercise price | $ 5.50 | $ 5.50 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Reconciliation of Changes in Shareholders' Equity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Balance | $ 33,505 | $ 6,846 | $ 3,423 | $ 4,403 |
Net loss | (5,225) | (2,971) | (14,472) | (11,255) |
Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018 | ||||
Stock-based compensation | 821 | 344 | 2,209 | 1,079 |
Sale of common shares | 40,250 | 10,000 | ||
Financing costs paid to issue common shares | (3,252) | (65) | ||
Sale of common shares and warrants | 3,592 | 3,592 | ||
Financing costs paid to issue common shares and warrants | (290) | (290) | ||
Exercise of stock options | 2 | 943 | 59 | |
Issuance of warrants to Chardan Capital | 234 | 234 | ||
Balance | 29,335 | 7,523 | 29,335 | 7,523 |
Common Stock [Member] | ||||
Balance | $ 114,071 | $ 70,695 | $ 74,742 | $ 59,968 |
Balance, shares | 51,973 | 39,408 | 40,664 | 31,452 |
Net loss | ||||
Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018 | ||||
Stock-based compensation | $ 821 | $ 344 | $ 2,209 | $ 1,079 |
Stock-based compensation, shares | ||||
Sale of common shares | $ 40,250 | $ 10,000 | ||
Sale of common shares, shares | 10,733 | 7,936 | ||
Financing costs paid to issue common shares | $ (3,252) | $ (65) | ||
Financing costs paid to issue common shares, shares | ||||
Sale of common shares and warrants | $ 3,592 | $ 3,592 | ||
Sale of common shares and warrants, shares | 1,255 | 1,256 | ||
Financing costs paid to issue common shares and warrants | $ (290) | $ (290) | ||
Financing costs paid to issue common shares and warrants, shares | ||||
Exercise of stock options | $ 2 | $ 943 | $ 59 | |
Exercise of stock options, shares | 1 | 576 | 20 | |
Issuance of warrants to Chardan Capital | $ 234 | $ 234 | ||
Issuance of warrants to Chardan Capital, shares | ||||
Balance | $ 115,126 | $ 74,343 | $ 115,126 | $ 74,343 |
Balance, shares | 51,973 | 40,664 | 51,973 | 40,664 |
Accumulated Other Comprehensive Loss [Member] | ||||
Balance | $ (888) | |||
Net loss | ||||
Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018 | 888 | |||
Stock-based compensation | ||||
Sale of common shares | ||||
Financing costs paid to issue common shares | ||||
Sale of common shares and warrants | ||||
Financing costs paid to issue common shares and warrants | ||||
Exercise of stock options | ||||
Issuance of warrants to Chardan Capital | ||||
Balance | ||||
Accumulated Deficit [Member] | ||||
Balance | (80,566) | (63,849) | (71,319) | (54,677) |
Net loss | (5,225) | (2,971) | (14,472) | (11,255) |
Cumulative-effect adjustment for adoption of ASU 2016-01 on January 1, 2018 | (888) | |||
Stock-based compensation | ||||
Sale of common shares | ||||
Financing costs paid to issue common shares | ||||
Sale of common shares and warrants | ||||
Financing costs paid to issue common shares and warrants | ||||
Exercise of stock options | ||||
Issuance of warrants to Chardan Capital | ||||
Balance | $ (85,791) | $ (66,820) | $ (85,791) | $ (66,820) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
2010 Stock Option Plan [Member] | ||
Common stock, shares authorized | 5,200,000 | |
2010 Stock Option Plan [Member] | Employees and Consultants [Member] | ||
Exercise prices ranging, lower limit | $ 2.30 | |
Exercise prices ranging, upper limit | $ 3.15 | |
Performance-Based Options [Member] | ||
Option vested | 47,500 | |
Share based compensation expenses | $ 101 | |
Performance-Based Options [Member] | Employees [Member] | ||
Performance-based options outstanding | 856,800 | |
2018 Incentive Plan Activity [Member] | ||
Option vested | ||
Performance-based options outstanding | 3,972,000 | 361,000 |
Number of common stock reserved for future issuance | 11,000,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
2010 Plan Activity [Member] | |
Shares available for grant options, beginning of period | |
Shares available for grant options exercised | |
Shares available for grant options forfeited canceled and expired | |
Shares available for grant outstanding, end of period | |
Number of options outstanding, beginning of period | 4,171,000 |
Number of options outstanding, options exercised | (575,000) |
Number of options outstanding, options forfeited and canceled | (301,000) |
Number of options outstanding, end of period | 3,295,000 |
Number of options outstanding, exercisable, end of period | 2,756,000 |
Weighted average exercise price, options outstanding, beginning of period | $ / shares | $ 2.92 |
Weighted average exercise price, options exercised | $ / shares | 1.64 |
Weighted average exercise price, options forfeited, canceled and expired | $ / shares | 3.42 |
Weighted average exercise price, outstanding end of period | $ / shares | 3.10 |
Weighted average exercise price, exercisable, end of period | $ / shares | $ 2.97 |
2018 Incentive Plan Activity [Member] | |
Shares available for grant options, beginning of period | 4,639,000 |
Shares available for grant option pool increase | 6,000,000 |
Shares available for grant options granted | (3,526,000) |
Shares available for grant options rsus granted | (170,000) |
Shares available for grant options exercised | |
Shares available for grant options forfeited canceled and expired | |
Shares available for grant outstanding, end of period | 6,943,000 |
Number of options outstanding, beginning of period | 361,000 |
Number of options outstanding, option pool increase | |
Number of options outstanding, option granted | 3,526,000 |
Number of options outstanding, option rsus granted | 85,000 |
Number of options outstanding, options exercised | |
Number of options outstanding, options forfeited and canceled | |
Number of options outstanding, end of period | 3,972,000 |
Number of options outstanding, exercisable, end of period | 230,000 |
Weighted average exercise price, options outstanding, beginning of period | $ / shares | $ 2.21 |
Weighted average exercise price, option granted | $ / shares | 3.01 |
Weighted average exercise price, option rsus granted | $ / shares | |
Weighted average exercise price, options exercised | $ / shares | |
Weighted average exercise price, options forfeited, canceled and expired | $ / shares | |
Weighted average exercise price, outstanding end of period | $ / shares | 2.94 |
Weighted average exercise price, exercisable, end of period | $ / shares | $ 2.40 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Total stock-based compensation expense | $ 821 | $ 344 | $ 2,209 | $ 1,079 | |
Stock Option Plan [Member] | Research and Development [Member] | |||||
Total stock-based compensation expense | 165 | 17 | 439 | (5) | [1] |
Stock Option Plan [Member] | General and Administrative [Member] | |||||
Total stock-based compensation expense | 617 | 277 | 1,711 | 851 | |
Stock Option Plan [Member] | Sales and Marketing [Member] | |||||
Total stock-based compensation expense | $ 39 | $ 50 | $ 59 | $ 233 | |
[1] | The negative stock-based compensation expense is primarily attributable to the decrease in the OncoCyte stock price from $4.65 per share at December 31, 2017 to $2.50 per share at September 30, 2018 for consultant stock options which required mark-to-market adjustment each quarter for unvested shares. |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Stock-based Compensation Expense (Details) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Share-based Payment Arrangement [Abstract] | ||
Stock price per shares | $ 2.50 | $ 4.65 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Expected life (in years) | 6 years 11 days | 9 years 26 days |
Risk-free interest rates | 2.10% | 2.93% |
Volatility | 78.92% | 81.13% |
Dividend yield | 0.00% | 0.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Apr. 07, 2016 | Mar. 31, 2019 | Apr. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 02, 2018 |
Other Commitments [Line Items] | |||||||
Monthly payment under financing lease | $ 323,000 | $ 250,000 | |||||
Imputed interest under finance lease | 19,000 | ||||||
Lease payments | 30,000 | ||||||
Laboratory Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Payment obligation amount | $ 450,000 | ||||||
Lease expiration period | Sep. 29, 2021 | ||||||
Lease payments | $ 477,000 | ||||||
Accounting Standards Update 2016-01 [Member] | |||||||
Other Commitments [Line Items] | |||||||
Imputed interest financing lease rate | 10.00% | ||||||
Master Lease Line Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Line of credit | $ 435,000 | $ 285,000 | $ 161,000 | $ 6,709 | |||
Lease agreement term | 36 months | 36 months | 36 months | 36 months | |||
Interest rate on lease agreement | 10.00% | 10.00% | |||||
Percentage of restocking fee paid on original cost of equipment | 7.50% | 7.50% | |||||
Monthly payment under financing lease | $ 14,442 | $ 9,462 | $ 5,342 | ||||
Available amount under lease agreement | $ 209,000 | ||||||
Prepaid maintenance under financing leases | 116,000 | ||||||
Imputed interest under finance lease | $ 10,238 | ||||||
Maximum [Member] | Master Lease Line Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Line of credit | $ 881,000 | ||||||
Minimum [Member] | Master Lease Line Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Percentage of fair value on original cost to purchase an equipment | 12.50% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from financing leases | $ 30 | |
Financing cash flows from financing leases | 323 | $ 250 |
Operating lease (Brisbane Facility) | $ 397 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease, Right-of-use assets, net | [1] | $ 397 | |
Operating lease, Right-of-use lease liabilities, current | 81 | ||
Operating lease, Right-of-use lease liabilities, noncurrent | 316 | ||
Total operating lease liabilities | 397 | ||
Financing leases, Machinery and equipment, gross | 758 | ||
Financing leases, Accumulated depreciation | (517) | ||
Financing leases, Machinery and equipment, net | 241 | ||
Current liabilities | 172 | ||
Noncurrent liabilities | 77 | ||
Total financing lease liabilities | $ 249 | ||
Weighted average remaining lease term, Operating lease | 3 years 6 months | ||
Weighted average remaining lease term, Financing leases | 1 year 6 months | ||
Weighted average discount rate, Operating lease | 10.00% | ||
Weighted average discount rate, Financing leases | 9.60% | ||
[1] | OncoCyte recorded certain right of use assets and liabilities in accordance with ASC 842 in connection with the equity method investment in Razor on September 30, 2019 (see Notes 5 and 10). |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Lease Commitments for Operating and Financing Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 28 |
2020 | 121 |
2021 | 137 |
2022 | 153 |
2023 | 39 |
Total minimum lease payments | 478 |
Less amounts representing interest | (81) |
Present value of net minimum lease payments | 397 |
2019 | 67 |
2020 | 140 |
2021 | 61 |
2022 | |
2023 | |
Total minimum lease payments | 268 |
Less amounts representing interest | (19) |
Present value of net minimum lease payments | $ 249 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2019 | Oct. 17, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Proceeds from sale of common stock | $ 40,250 | $ 10,000 | ||
Subsequent Event [Member] | Amended Loan Agreement [Member] | ||||
Line of credit, description | OncoCyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 3.0% of the outstanding principal balance if prepaid within one year after October 17, 2019, 2.0% of the outstanding principal balance if prepaid more than one year but less than two years after October 17, 2019, or 1.0% of the outstanding principal balance if prepaid two years or more after October 17, 2019. Any amounts borrowed and repaid may not be reborrowed. | |||
Interest rate description | Payments of interest only on the principal balance will be due monthly from the draw date through March 31, 2020 followed by 24 monthly payments of principal and interest, provided, however, that if the Tranche 2 Milestone is achieved the interest only payment period will be extended through September 30, 2020 followed by 18 equal monthly payments of principal plus interest. The outstanding principal balance of the loan will bear interest at a stated floating annual interest equal to (a) the greater of 0.75% above the prime rate or 4.25% for Tranche 1 loans, or (b) the greater of the prime rate or 5% per annum for Tranche 2 loans. | |||
Debt maturity date | Mar. 31, 2022 | |||
Subsequent Event [Member] | Amended Loan Agreement [Member] | Bank Warrant [Member] | ||||
Debt instrument, final payment | $ 200 | |||
Warrants to purchase common stock | 98,574 | |||
Warrant exercise price | $ 1.69 | |||
Warrant description | The number of additional shares of common stock issuable upon the exercise of the Bank Warrant will be equal to 0.02% of OncoCyte's fully diluted equity outstanding for each $1 million draw under Tranche 2. The Warrant Price for Tranche 2 warrant shares will be determined upon each draw of Tranche 2 funds and will be closing price of OncoCyte common stock on the NYSE American or other applicable market on the date immediately before the applicable date on which OncoCyte borrows funds under Tranche 2. | |||
Subsequent Event [Member] | Amended Loan Agreement [Member] | Tranche One [Member] | ||||
Secured credit facility | $ 3,000 | |||
Repayment of remaining balance | 400 | |||
Debt instrument, final payment | $ 116 | |||
Interest rate | 4.25% | |||
Subsequent Event [Member] | Amended Loan Agreement [Member] | Tranche One [Member] | Prime Rate [Member] | ||||
Interest rate | 0.75% | |||
Subsequent Event [Member] | Amended Loan Agreement [Member] | Tranche Two [Member] | ||||
Secured credit facility | $ 2,000 | |||
Additional equity capital | $ 20,000 | |||
Line of credit, description | The credit line under the Amended Loan Agreement may be increased by an additional $2 million ("Tranche 2") if OncoCyte obtains at least $20 million of additional equity capital, as was the case with the original Loan Agreement, and a positive final coverage determination is received from the Centers for Medicate and Medicaid Services for the Razor assay at a specified minimum price point per test (the "Tranche 2 Milestone"), and OncoCyte is not in default under the Amended Loan Agreement. | |||
Interest rate | 5.00% | |||
Subsequent Event [Member] | Stock Purchase Agreements [Member] | ||||
Proceeds from sale of common stock | $ 8,600 | |||
Number of shares sold | 5,058,824 | |||
Expected closing transaction date | Nov. 15, 2019 | |||
Ownership percentage | 22.90% | |||
Shares agreed to purchase during period | 1,176,471 |