Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 09, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | OncoCyte Corp | ||
Entity Central Index Key | 0001642380 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 70,300,000 | ||
Entity Common Stock, Shares Outstanding | 88,914,144 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 7,143 | $ 22,072 | |
Accounts receivable | 203 | ||
Marketable equity securities | 675 | 379 | |
Prepaid expenses and other current assets | 1,205 | 505 | |
Total current assets | 9,226 | 22,956 | |
NONCURRENT ASSETS | |||
Right-of-use assets, machinery and equipment, net and construction in progress | 6,524 | 3,728 | |
Equity method investment in Razor | 13,417 | 10,964 | |
Goodwill | [1] | 9,187 | |
Intangibles, net | 15,009 | ||
Deposits and other noncurrent assets | 2,056 | 2,211 | |
TOTAL ASSETS | 55,419 | 39,859 | |
CURRENT LIABILITIES | |||
Amount due to Lineage and affiliates | 6 | ||
Accounts payable | 432 | 469 | |
Accrued expenses and other current liabilities | 5,752 | 2,610 | |
Loan payable, current | 2,390 | 1,125 | |
Right-of-use and financing lease liabilities, current | 422 | 230 | |
Total current liabilities | 8,996 | 4,440 | |
NONCURRENT LIABILITIES | |||
Loan payable, net of deferred financing costs, noncurrent | 1,508 | 1,905 | |
Right-of-use and financing lease liabilities, noncurrent | 4,312 | 2,676 | |
Contingent consideration liabilities | 7,120 | ||
TOTAL LIABILITIES | 21,936 | 9,021 | |
Commitments and contingencies (Note 14) | |||
SHAREHOLDERS' EQUITY | |||
Preferred stock, no par value, 5,000 shares authorized; none issued and outstanding | |||
Common stock, no par value, 150,000 shares authorized; 69,117 and 57,032 shares issued and outstanding at December 31, 2020 and 2019, respectively | 157,160 | 124,583 | |
Accumulated deficit | (123,677) | (93,745) | |
Total shareholders' equity | 33,483 | 30,838 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 55,419 | $ 39,859 | |
[1] | Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Merger (see Note 5). |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
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 | 150,000,000 | 150,000,000 |
Common stock, shares issued | 69,117,000 | 57,032,000 |
Common stock, shares outstanding | 69,117,000 | 57,032,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUE | ||
Total revenues | $ 1,216 | |
OPERATING EXPENSES | ||
Cost of revenues | 1,855 | |
Research and development | 9,800 | 6,794 |
General and administrative | 16,788 | 13,281 |
Sales and marketing | 6,494 | 2,164 |
Change in fair value of contingent consideration | (4,010) | |
Total costs and operating expenses | 30,927 | 22,239 |
Loss from operations | (29,711) | (22,239) |
OTHER INCOME (EXPENSES), NET | ||
Loss on extinguishment of debt | (153) | |
Interest income (expense), net | (252) | 299 |
Unrealized gain (loss) on marketable equity securities | 297 | (49) |
Pro rata loss from equity method investment in Razor | (1,547) | (281) |
Other income (expenses), net | 27 | (3) |
Total other expenses, net | (1,475) | (187) |
LOSS BEFORE INCOME TAXES | (31,186) | (22,426) |
Income tax benefit | 1,254 | |
NET LOSS | $ (29,932) | $ (22,426) |
Net loss per share; basic and diluted | $ (0.46) | $ (0.44) |
Weighted average shares outstanding; basic and diluted | 65,478,000 | 51,296,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
NET LOSS | $ (29,932) | $ (22,426) |
Other comprehensive loss, net of tax | ||
COMPREHENSIVE LOSS | $ (29,932) | $ (22,426) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 74,742 | $ (71,319) | $ 3,423 | |
Balance, shares at Dec. 31, 2018 | 40,664,000 | |||
Net loss | (22,426) | (22,426) | ||
Stock-based compensation | $ 2,995 | 2,995 | ||
Stock-based compensation, shares | ||||
Sale of common shares | $ 48,850 | $ 48,850 | ||
Sale of common shares, shares | 15,793,000 | |||
Financing costs paid to issue common shares | $ (3,317) | $ (3,317) | ||
Financing costs paid to issue common shares, shares | ||||
Exercise of stock options | $ 943 | 943 | ||
Exercise of stock options, shares | 575,000 | |||
Issuance of warrants | $ 370 | 370 | ||
Issuance of warrants, shares | ||||
Balance at Dec. 31, 2019 | $ 124,583 | (93,745) | 30,838 | |
Balance, shares at Dec. 31, 2019 | 57,032,000 | |||
Net loss | (29,932) | (29,932) | ||
Stock-based compensation | $ 5,066 | 5,066 | ||
Stock-based compensation, shares | ||||
Sale of common shares | $ 18,343 | $ 18,343 | ||
Sale of common shares, shares | 8,257,000 | |||
Financing costs paid to issue common shares | $ (58) | $ (58) | ||
Financing costs paid to issue common shares, shares | ||||
Exercise of stock options | $ 1,422 | $ 1,422 | ||
Exercise of stock options, shares | 680,000 | |||
Sale of common shares under at-the-market transactions | $ 2,732 | $ 2,732 | ||
Sale of common shares under at-the-market transactions, shares | 1,137,000 | |||
Financing costs for at-the-market sales | $ (82) | (82) | ||
Financing costs for at-the-market sales, shares | ||||
Shares issued upon vesting of RSU, net of shares retired to pay employees' taxes | $ (15) | $ (15) | ||
Shares issued upon vesting of RSU, net of shares retired to pay employees' taxes, shares | 13,000 | |||
Issuance of common stock in lieu of cash for payment of board fees and deferred salaries | $ 169 | $ 169 | ||
Issuance of common stock in lieu of cash for payment of board fees and deferred salaries, shares | 82,000 | |||
Issuance of common stock as partial consideration for Insight Genetics, Inc. acquisition | $ 5,000 | $ 5,000 | ||
Issuance of common stock as partial consideration for Insight Genetics, Inc. acquisition, shares | 1,916,000 | |||
Balance at Dec. 31, 2020 | $ 157,160 | $ (123,677) | $ 33,483 | |
Balance, shares at Dec. 31, 2020 | 69,117,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (29,932) | $ (22,426) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 313 | 344 |
Amortization of intangible assets | 81 | |
Amortization of right-of-use assets and liabilities | 1,504 | 7 |
Impairment charge for long-lived assets | 422 | |
Pro rata loss from equity method investment in Razor | 1,547 | 281 |
Amortization of prepaid maintenance | 74 | 37 |
Stock-based compensation | 5,066 | 2,995 |
Unrealized (gain) loss on marketable equity securities | (297) | 49 |
Amortization of debt issuance costs | 102 | 59 |
Loss on extinguishment of debt | 153 | |
Warrants issued for advisory services | 234 | |
Change in fair value of contingent consideration | (4,010) | |
Deferred income tax benefit | (1,254) | |
Other | 5 | 107 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (182) | |
Amount due to Lineage and affiliates | (6) | (2,094) |
Prepaid expenses and other current assets | (267) | (202) |
Accounts payable and accrued liabilities | 854 | 741 |
Net cash used in operating activities | (25,980) | (19,715) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of Insight Genetics, net of cash acquired | (6,189) | |
Deposits paid for the Chronix merger agreement | (325) | |
Equity method investment in Razor | (4,000) | (11,245) |
Purchases of furniture and equipment | (1,227) | (918) |
Security deposit and other | (7) | (252) |
Net cash used in investing activities | (11,748) | (12,415) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 1,445 | 943 |
Proceeds from sale of common shares | 18,343 | 48,850 |
Financing costs to issue common shares | (58) | (3,288) |
Proceeds from sale of common shares under at-the-market transactions | 2,462 | |
Financing costs for at-the-market sales | (74) | |
Common shares received and retired for employee taxes paid | (14) | |
Proceeds from refinance of bank loan | 3,000 | |
Payoff of principal and bank fees from refinancing of bank loan | (516) | |
Repayment of principal of loan payable prior to refinancing | (375) | (667) |
Repayment of financing lease obligations | (71) | (454) |
Proceeds from PPP loan | 1,141 | |
Net cash provided by financing activities | 22,799 | 47,868 |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (14,929) | 15,738 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||
At beginning of the year | 23,772 | 8,034 |
At end of the year | 8,843 | 23,772 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 209 | 171 |
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES | ||
Common stock issued for acquisition of Insight Genetics | 5,000 | |
Initial fair value of contingent consideration at acquisition date | 11,130 | |
Holdback liability | 600 | |
Construction in progress, machinery and equipment purchases included in accounts payable, accrued liabilities and landlord liability | 2,049 | |
Accounts receivable from agent for at-the-market sales of common stock, net of financing costs | 262 | |
Issuance of common stock in lieu of cash for payment of board fees and deferred salaries | 169 | |
Deferred final commitment fee for bank loan | $ 200 |
Organization, Description of th
Organization, Description of the Business and Liquidity | 12 Months Ended |
Dec. 31, 2020 | |
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”), incorporated in 2009 in the state of California, is a molecular diagnostics company focused on developing and commercializing proprietary laboratory-developed tests (“LDTs”) to serve unmet medical needs across the cancer care continuum. Oncocyte’s mission is to provide actionable information to physicians and patients at critical decision points to optimize diagnosis and treatment decisions, improve patient outcomes, and reduce overall cost of care. Oncocyte has prioritized lung cancer as its first indication. Lung cancer remains the leading cause of cancer death in the United States, despite the availability of molecular testing and novel therapies to treat patients. Oncocyte’s first product for commercial release is a proprietary treatment stratification test called DetermaRx™ 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. Through December 31, 2020, Oncocyte held a 25% equity interest in Razor Genomics, Inc. (“Razor”), a privately held company, that has developed and licensed to Oncocyte the lung cancer treatment stratification laboratory test that Oncocyte is commercializing as DetermaRx™. Oncocyte has an option to acquire all of the outstanding shares of Razor common stock from the Razor stockholders(see Notes 7 and 15). On January 31, 2020 (the “Merger Date”), Oncocyte completed its acquisition of Insight Genetics, Inc. (“Insight”) through a merger with a newly incorporated wholly-owned subsidiary of Oncocyte (the “Merger”) under the terms of an Agreement and Plan of Merger (the “Merger Agreement”). Prior to the Merger, Insight was a privately held company specializing in the discovery and development of the multi-gene molecular, laboratory-developed diagnostic tests that Oncocyte has branded as DetermaIO™. DetermaIO™ is a proprietary gene expression assay with promising data supporting its potential to help identify patients likely to respond to checkpoint inhibitor drugs. Insight has a CLIA-certified diagnostic laboratory with the capacity to support clinical trials or assay design on certain commercially available analytic platforms that may be used to develop additional diagnostic tests. Insight has also performed assay development and clinical testing services for pharmaceutical and biotechnology companies. The Merger has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations Other tests in the development pipeline include DetermaTx™, a test intended to compliment DetermaIO™ by assessing the mutational status of a tumor to help identify the appropriate targeted therapy. Oncocyte also plans to initiate the development of DetermaMx™ as a blood-based test to monitor cancer patients for recurrence of their disease. Oncocyte plans to add to its diagnostic test pipeline the TheraSure™-CNI Monitor, a patented, blood-based test for immunotherapy monitoring, through a merger with the developer of the test Chronix Biomedical, Inc. (“Chronix”) (see Note 15). Liquidity Oncocyte has incurred operating losses and negative cash flows since inception and had an accumulated deficit of $123.7 million as of December 31, 2020. Oncocyte expects to continue to incur operating losses and negative cash flows for the foreseeable future. Oncocyte did not generate revenues from its operations prior to the first quarter of 2020, and revenues for the year ended December 31, 2020 were not sufficient to cover Oncocyte’s operating expenses for that period. Oncocyte finances its operations primarily through the sale of shares of its common stock. Oncocyte was formerly a subsidiary of Lineage Cell Therapeutics, Inc. (“Lineage”) and Lineage provided Oncocyte with accounting, billing, bookkeeping, payroll, treasury, payment of accounts payable, and other similar administrative services, and the use of Lineage office and laboratory facilities, under a Shared Facilities and Services Agreement (the “Shared Facilities Agreement”), which was terminated as to all services on September 30, 2019, and as to all use of facilities on December 31, 2019 (see Note 8). Lineage’s ownership interest in Oncocyte has decreased to below 5% and Lineage no longer exercises significant influence over the operations and management of Oncocyte. As of December 31, 2020, Oncocyte had $7.1 million of cash and cash equivalents and held Lineage and AgeX Therapeutics, Inc. (“AgeX”) common stock as marketable equity securities with a combined fair market value of $0.7 million. On March 20, 2020, Oncocyte entered into an Equity Distribution Agreement with Piper Sandler & Co as “Sales Agent” (“ATM Agreement”) which Oncocyte may utilize in the future to raise up to $25 million of additional equity capital through the sale of shares of its common stock in “at the market” transactions. Oncocyte raised $69.6 million of additional capital through sales of its common stock during January and February 2021, which included sales through the ATM Agreement (see Note 15). A portion of the capital raised was used to purchase the outstanding Razor common stock form Razor stockholders (see Note 15). Oncocyte believes that its current cash, cash equivalents and marketable equity securities are sufficient to carry out current operations through at least twelve months from the issuance date of the consolidated financial statements included in this Report. On April 23, 2020, Oncocyte obtained a U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loan in the principal amount of $1,140,930 from Silicon Valley Bank (the “Bank”). The PPP loan bears interest at a rate of 1% per annum (see Note 9) and matures on April 23, 2022. The principal amount and accrued interest on the PPP loan is subject to forgiveness by the Bank through the SBA under the provisions of the PPP loan program. Oncocyte’s application for forgiveness of principal and accrued interest for the PPP loan is pending as of the date of this Report. Although Oncocyte was obligated to make monthly payments of principal and interest on the PPP loan commending in November 2020, each in such equal amount required to fully amortize the principal amount outstanding by the maturity date, Oncocyte has not been billed or charged for any payments for the PPP loan because of its loan forgiveness application status pending. Oncocyte continues to accrue interest on the PPP loan and there can be no assurance that any part of the PPP loan will be forgiven. Oncocyte will need to raise additional capital to finance its operations, including the development and commercialization of its cancer diagnostic tests, until such time as it is able to generate sufficient revenues from the commercialization of one or more of its cancer diagnostic tests and performing Pharma Services to cover its operating expenses. Presently, Oncocyte is devoting substantially all of its efforts on initial commercialization efforts for DetermaRx™ and completing development and planning commercialization of its cancer diagnostic test DetermaIO™, although DetermaIO™ is currently available for biopharma diagnostic development and research use only as a companion test in immunotherapy drug development to select patients for clinical trials. While Oncocyte plans to primarily market its diagnostic tests in the United States through its own sales force, it is also beginning to make marketing arrangements with distributors in other countries. In order to reduce capital needs and to expedite the commercialization of any new diagnostic tests that may become available for clinical use, Oncocyte may also pursue marketing arrangements with other diagnostic companies through which Oncocyte might receive licensing fees and royalty on sales, or through which it might form a joint venture to market its cancer tests and share in net revenues, in the United States or abroad. In addition to general economic and capital market trends and conditions, Oncocyte’s ability to raise sufficient additional capital to finance its operations from time to time will depend on a number of factors specific to Oncocyte’s operations such as operating revenues and expenses, progress in development of, or in obtaining reimbursement coverage from Medicare for, DetermaIO™ and other future diagnostic tests that Oncocyte may develop or acquire. The availability of financing and Oncocyte’s ability to generate revenues from operating activities may be adversely impacted by the ongoing COVID-19 pandemic which could continue to cause deferrals of cancer surgeries that might otherwise have resulted in the utilization of DetermaRx™, and which could continue to depress national and international economies and disrupt capital markets, supply chains, and aspects of Oncocyte’s operations. The extent to which the ongoing COVID-19 pandemic will ultimately impact Oncocyte’s business, results of operations, financial condition, or cash flows is highly uncertain and difficult to predict because it will depend on many factors that are outside Oncocyte’s control. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation The consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). 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, since February 17, 2017 Oncocyte has no longer been considered a subsidiary of Lineage under GAAP. During the year ended December 31, 2019, because Lineage’s ownership interest in Oncocyte decreased to below 20%, Lineage no longer exercised significant influence over the operations and management of Oncocyte. As of the date of this Report, Lineage’s ownership interest in Oncocyte is less than 5%. Prior to January 1, 2020, 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 8). 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, utilities, property taxes, insurance, and internet and telephone expenses based on a percentage determined by management. These allocations were 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 evaluated the appropriateness of the percentage allocations and believes that the basis for allocation is reasonable. Principles of consolidation On January 31, 2020, with the consummation of the Merger, Insight became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Insight’s operations and results with Oncocyte’s operations and results (see Note 5). The accompanying consolidated 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. All material intercompany accounts and transactions have been eliminated in consolidation. COVID-19 impact and related risks The ongoing global outbreak of COVID-19, and the various attempts throughout the world to contain it, have created significant volatility, uncertainty and disruption. In response to government directives and guidelines, health care advisories and employee and other concerns, Oncocyte has altered certain aspects of its operations. A number of Oncocyte’s employees have had to work remotely from home and those on site have had to follow Oncocyte’s social distance guidelines, which could impact their productivity. COVID-19 could also disrupt Oncocyte’s operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who cannot effectively work remotely but who elect not to come to work due to the illness affecting others in Oncocyte’s office or laboratory facilities, or due to quarantines. During the COVID-19 pandemic, Oncocyte has not been able, and may continue to not be able, to maintain its preferred level of physician or customer outreach and marketing of its diagnostic testing and Pharma Services, which may have negatively impacted and may continue to negatively impact potential new customers’ interest in those tests and services. Because of COVID-19, travel, visits, and in-person meetings related to Oncocyte’s business have been severely curtailed or canceled and Oncocyte has instead used on-line or virtual meetings to meet with potential customers and others. In addition to operational adjustments, the consequences of the COVID-19 pandemic have led to uncertainties related to Oncocyte’s business growth and ability to forecast the demand for its diagnostic testing and Pharma Services and resulting revenues. Concerns over available hospital, staffing, equipment, and other resources, and the risk of exposure to the virus, has led to early stage lung cancer surgeries being delayed, and the continued deferral of lung cancer surgeries due to resurgence in COVID-19 cases could result in delayed or reduced use of DetermaRx™. It is possible that impacts of COVID-19 on Oncocyte’s operations or revenues or its access to capital could prevent Oncocyte from complying, or could result in a material noncompliance, with one or more obligations or covenants under material agreements to which Oncocyte is a party, with the result that Oncocyte would be in material breach of the applicable obligation, covenant, or agreement. Any such material breach could cause Oncocyte to incur material financial liabilities or an acceleration of the date for paying a financial obligation to the other party to the applicable agreement, or could cause Oncocyte to lose material contractual rights, such as rights to use leased equipment or laboratory or office space, or rights to use licensed patents or other intellectual property the use of which is material to Oncocyte’s business. Similarly, it is possible that impacts of COVID-19 on the business, operations, or financial condition of any third party with whom Oncocyte has a contractual relationship could cause the third party to be unable to perform its contractual obligations to Oncocyte, resulting in Oncocyte’s loss of the benefits of a contract that could be material to Oncocyte’s business. The full extent to which the COVID-19 pandemic and the various responses to it might impact Oncocytes’ business, operations and financial results will depend on numerous evolving factors that are not subject to accurate prediction and that are beyond Oncocyte’s control. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates estimates which are subject to significant judgment, including, but not limited to, valuation methods used, assumptions requiring the use of judgment to prepare financial projections, timing of potential commercialization of acquired in-process intangible assets, applicable discount rates, probabilities of the likelihood of multiple outcomes of certain events related to contingent consideration, comparable companies or transactions, determination of fair value of the assets acquired and liabilities assumed including those relating to contingent consideration, assumptions related to the going concern assessments, allocation of direct and indirect expenses, useful lives associated with long-lived intangible assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, and assumptions used to value debt and stock-based awards and other equity instruments. Actual results may differ materially from those estimates. Similarly, Oncocyte assessed certain accounting matters that generally require consideration of forecasted financial information. The accounting matters assessed included, but were not limited to, Oncocyte’s equity investments, the carrying value of goodwill, acquired in-process intangible assets and other long-lived assets. Those assessments as well as other estimates referenced above were made in the context of information reasonably available to Oncocyte. While Oncocyte considered known or expected impacts of COVID-19 in making its assessments and estimates, the future impacts of COVID-19 are not presently determinable and could cause actual results to differ materially from Oncocyte’s estimates and assessments. Oncocyte’s future analysis or forecast of COVID-19 impacts could lead to changes in Oncocyte’s future estimates and assessments which could result in material impacts to Oncocyte’s consolidated financial statements in future reporting periods. Going concern assessment In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update, or ASU No. 2014-15, Oncocyte assesses going concern uncertainty in its consolidated financial statements to determine if it has sufficient cash, cash equivalents and working capital on hand, including marketable equity securities, and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to Oncocyte, it will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, Oncocyte makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent Oncocyte deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. Business combinations and fair value measurements Oncocyte accounts for business combinations in accordance with ASC 805, which requires the purchase consideration transferred to be measured at fair value on the acquisition date in accordance with ASC 820, Fair Value Measurement ● Level 1 ● Level 2 ● Level 3 When a part of the purchase consideration consists of shares of Oncocyte common stock, Oncocyte calculates the purchase price attributable to those shares, a Level 1 security, by determining the fair value of those shares quoted on the NYSE American as of the acquisition date. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development, and liabilities assumed, including any contingent consideration, as of the acquisition date. Goodwill is recognized as any amount of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in excess of the consideration transferred. ASC 805 precludes the recognition of an assembled workforce as an asset, effectively subsuming any assembled workforce value into goodwill. In determining fair value, Oncocyte utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value. For the periods presented, Oncocyte has no financial assets or liabilities recorded at fair value on a recurring basis, except for cash and cash equivalents consisting of money market funds and marketable equity securities of Lineage and AgeX common stock held by Oncocyte described below. These assets are measured at fair value using the period-end quoted market prices as a Level 1 input. Oncocyte also has certain contingent consideration liabilities which are carried at fair value based on Level 3 inputs (see Note 5). The carrying amounts of cash equivalents, prepaid expenses and other current assets, amounts due to Lineage and other affiliates, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The carrying amount of the Loan Payable to Silicon Valley Bank approximates fair value because the loan bears interest at a floating market rate, and the carrying amount of the PPP loan approximates fair value because of the SBA guarantee on the terms of the loan and the relatively recent funding date of the loan (see Note 9). Cash and cash equivalents Cash equivalents typically consist of money market fund investments for capital preservation, with maturities of three months or less when purchased. At December 31, 2020 and 2019, Oncocyte’s cash and cash equivalents balances totaled $7.1 million and $22.1 million, respectively. Financial instruments that potentially subject Oncocyte to credit risk consist principally of cash and cash equivalents. Oncocyte maintains cash and cash equivalent balances at financial institutions in excess of amounts insured by United States government agencies. Oncocyte places its cash and cash equivalents with high credit quality financial institutions. Accounting for Lineage and AgeX shares of common stock Oncocyte accounts for the Lineage and AgeX shares of common it holds as marketable equity securities in accordance with ASC 320-10-25, Investments – Debt and Equity Securities Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities As of December 31, 2020, 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 $675,000. Restricted cash Oncocyte classifies cash that has contractual or legal restrictions imposed by third parties as restricted cash, which is restricted as to withdrawal or use except for the specified purpose under a contract. Oncocyte includes the restricted cash consistent with the nature of the underlying contract and classifies it as part of current assets if the restricted cash will be released in the next twelve months from the balance sheet date, or in deposits and other noncurrent assets if it will be restricted for longer than twelve months from the balance sheet date. Oncocyte adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the statements of cash flows in accordance with ASU 2016-18 (in thousands): December 31, 2020 2019 Cash and cash equivalents $ 7,143 $ 22,072 Restricted cash included in deposits and other noncurrent assets (see Note 14) 1,700 1,700 Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows $ 8,843 $ 23,772 Goodwill and intangible assets In accordance with ASC 350, Intangibles – Goodwill and Other Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill, similar to IPR&D, is not amortized but is tested for impairment at least annually, or if circumstances indicate its value may no longer be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting Oncocyte’s business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Oncocyte continues to operate in one segment and considered to be the sole reporting unit and, therefore, goodwill is tested for impairment at the enterprise level. Oncocyte does not have intangible assets with indefinite useful lives other than goodwill and the acquired IPR&D discussed in Notes 5 and 6. As of December 31, 2020, there has been no impairment of goodwill and intangible assets. Contingent consideration liabilities Certain of Oncocyte’s asset and business acquisitions involve the potential for future payment of consideration to third-parties and former selling shareholders in amounts determined as a percentage of future net revenues generated, or upon attainment of revenue milestones, from Pharma Services or diagnostic tests, as applicable, or annual minimum royalties to certain licensors, as provided in the applicable agreements. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows. These obligations are referred to as contingent consideration. ASC 805 requires that contingent consideration be estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity interests to the selling shareholders in the future if certain future events occur or conditions are met, such as the attainment of product development milestones. Contingent consideration also includes additional future payments to selling shareholders based on achievement of components of earnings, such as “earn-out” provisions or percentage of future revenues, including royalties paid to the selling shareholders based on a percentage of revenues generated from DetermaIO™ and Insight Pharma Services over their respective useful life. The fair value of contingent consideration after the acquisition date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the consolidated statements of operations. Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss that Oncocyte records in its consolidated financial statements. See Notes 5 and 7 for a full discussion of these liabilities. Investments in capital stock of privately held companies Oncocyte evaluates whether investments held in common stock of other companies require consolidation of the company under, first, the variable interest entity (“VIE”) model, and then under the voting interest model in accordance with accounting guidance for consolidations under Accounting Standards Codification (“ASC”) 810-10. If consolidation of the entity is not required under either the VIE model or the voting interest model, Oncocyte determines whether the equity method of accounting should be applied in accordance with ASC 323, 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 7. On February 24, 2021, Oncocyte acquired the remaining 75% ownership interest in Razor (see Note 15). Leases Oncocyte accounts for leases in accordance with ASC 842, Leases On January 1, 2019, the adoption date of ASC 842, and based on the available practical expedients under the 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 consolidated financial statements because Oncocyte did not have any significant operating leases at the time of adoption. During the years ended December 31, 2020 and 2019, Oncocyte entered into various operating leases and an embedded operating lease in accordance with ASC 842 discussed in Note 14. Oncocyte’s accounting for financing leases (previously referred to as “capital leases”) remained substantially unchanged. Machinery and equipment, construction in progress Machinery and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally over a period of 3 to 10 years. For equipment purchased under financing leases, Oncocyte depreciates the equipment based on the shorter of the useful life of the equipment or the term of the lease, ranging from 3 to 5 years, depending on the nature and classification of the financing lease. Maintenance and repairs are expensed as incurred whereas significant renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and the related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is reflected in Oncocyte’s results of operations. Construction in progress, comprised primarily of leasehold improvements under construction, is not depreciated until the underlying asset is placed into service. Long-lived intangible assets Long-lived intangible assets, consisting primarily of acquired customer relationships, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful life of 5 years (see Note 5). Impairment of long-lived assets Oncocyte assesses the impairment of long-lived assets, which consist primarily of right-of-use assets for operating leases, customer relationships and machinery and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. As part of Oncocyte’s impairment assessment of its long-lived assets, Oncocyte determined that certain assets, mainly comprised of machinery and equipment and related prepaid service agreements used in the development of DetermaDx™ were impaired as of June 30, 2020, because Oncocyte determined to discontinue the development of that diagnostic test. Accordingly, Oncocyte recorded a noncash charge of $422,000 representing the net book value of those assets as of that date and included that charge in research and development expenses for the year ended December 31, 2020 (see Note 4). As of December 31, 2020, there has been no other impairment of long-lived assets. Accounting for warrants Oncocyte determines the accounting classification of warrants it issues, as either liability or equity classified, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock Income taxes Oncocyte has filed a standalone U.S. federal income tax return since its inception. For California purposes, Oncocyte activity for 2016 and for the period from January 1, 2017 through February 16, 2017, the date immediately before Lineage owned less than 50% of Oncocyte outstanding common stock, was included in Lineage’s California combined tax return. For periods beginning on February 17, 2017 and thereafter, Oncocyte filed or will file a standalone California income tax return. The provision for state income taxes has been determined as if Oncocyte had filed separate tax returns for the periods presented. Accordingly, the effective tax rate of Oncocyte in future years could vary from its historical effective tax rates depending on the future legal structure of Oncocyte and related tax elections. The historical deferred tax assets, including the operating losses and credit carryforwards generated by Oncocyte, will remain with Oncocyte. Oncocyte accounts for income taxes in accordance with ASC 740, Income Taxes The guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. Oncocyte will recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2020 and 2019. Oncocyte is not aware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation for the years ended December 31, 2020 and 2019. Oncocyte is currently unaware of any tax issues under review. On December 22, 2017, the United States enacted major federal tax reform legislation, Public Law No. 115-97, commonly referred to as the 2017 Tax Cuts and Jobs Act (“2017 Tax Act”), which enacted a broad range of changes to the Internal Revenue Code. Changes to taxes on corporations impacted by the 2017 Tax Act include, but are not limited to, lowering the U.S. federal tax rates to a 21% flat tax rate, eliminating the corporate alternative minimum tax (“AMT”), imposing additional limitations on the deductibility of interest and net operating losses, allowing any net operating loss (“NOLs”) generated in tax years ending after December 31, 2017 to be carried forward indefinitely and generally repealing carrybacks, reducing the maximum deduction for NOL carryforwards arising in tax years beginning after 2017 to a percentage of the taxpayer’s taxable income, and allowing for additional expensing of certain capital expenditures. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”) was enacted. The CARES Act included loans and grants to certain businesses, and temporary amendments to the Internal Revenue Code which changed net loss carryforward and back provisions and the business interest expenses limitation. Under the CARES Act provisions, the most relevant income tax considerations to Oncocyte relate to the amounts received under the Paycheck Protection Program loan program and the possible forgiveness of those loans by the SBA. Oncocyte has applied for forgiveness for the PPP loan and the application is still pending a decision by the SBA as of the date of this Report. On December 21, 2020, the U.S. president has signed into law the “Consolidated Appropriations Act, 2021” which includes further COVID-19 economic relief and extension of certain expiring tax provisions. The relief package includes a tax provision clarifying that businesses with forgiven PPP loans can deduct regular business expenses that are paid for with the loan proceeds for federal tax purposes. Additional pandemic relief tax measures include an expansion of the employee retention credit, enhanced charitable contribution deductions, and a temporary full deduction for business expenses for food and beverages provided by a restaurant (see Note 12). Revenue recognition Prior to January 1, 2020, Oncocyte generated no revenues. Effective on January 1, 2020, Oncocyte adopted the revenue recognition standard ASC Topic 606, Revenue from Contracts with Customers DetermaRx™ testing revenue In the first quarter of 2020, Oncocyte commercially launched DetermaRx™ and commenced performing tests on clinical samples through orders received from physicians, hospitals and other healthcare providers. In determining whether all of the revenue recognition criteria (i) through (v) above are met with respect to DetermaRx™ tests, each test result is considered a single performance obligation and is generally considered complete when the test result is delivered or made available to the prescribing physician electronically and, as such, there are no shipping or handling fees incurred by Oncocyte or billed to customers. Although Oncocyte bills a list price for all tests ordered and completed for all payer types, Oncocyte recognizes realized revenue on a cash basis rather than accrual basis when it cannot conclude that all the revenue recognition criteria have been met. Because DetermaRx™ is a novel test and there are no current reimbursement arrangements with third-party payers other than Medicare, the transaction price represents variable consideration. Application of the constraint for variable consideration is an area that requires significant judgment. For all payers other than Medicare, Oncocyte must take into account the novelty of the test, the uncertainty of receiving payment, or being subject to claims for refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte expects to continue to recognize revenue on a cash basis until it has a sufficient history to reliably estimate payment patterns or has contractual reimbursement arrangements, or both, in place. In September 2020, Oncocyte received a final pricing decision for DetermaRx™ from CMS and with Medicare coverage in effect, Oncocyte commenced recognizing revenue when DetermaRx™ tests are performed for Medicare patients, or when payment was approved by Medicare in the case of certain tests performed prior to September 2020, rather than on a cash basis. As of December 31, 2020, Oncocyte had accounts receivable from Medicare of $100,000 for completed DetermaRx™ tests (see Note 13). Pharma Services revenue Revenues recognized during the year ended December 31, 2020 include Pharma Services performed by Oncocyte’s Insight subsidiary. Insight provides a range of molecular diagnostic services to its pharmaceutical customers (referred to as “Pharma Services”) including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests in its CLIA-certified laboratory. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements with specific deliverables defined by the customer. Pharma Services are generally performed on a time and materials basis. Upon Insight’s completion of the service to the customer in accordance with the SOW, Insight has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes the pharma service revenue at that time. Insight identifies each sale of its pharma service offering as a single performance obligation. Completion of the service and satisfaction of the performance obligation under a SOW is typically evidenced by access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the SOW. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Insight has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Insight recognizes revenue over a period of time during which the work is performed using a formula that accounts for expended efforts, generally measured in labor hours, as a percentage of total estimated efforts for the completion of the SOW. As Insight satisfies the performance obligation under the SOW, any amounts earned as revenue and billed to the customer are included in accounts receivable. Any revenues earned but not yet billed to the customer as of the date of Oncocyte’s consolidated financial statements are recorded as contract assets and are included in prepaids and other current assets as of the f |
Selected Balance Sheet Componen
Selected Balance Sheet Components | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Components | 3. Selected Balance Sheet Components Prepaid expenses and other current assets As of December 31, 2020 and 2019, prepaid expenses and other current assets were comprised of the following (in thousands): 2020 2019 Prepaid insurance $ 264 $ 80 Prepaid vendors, deposits and service agreements 646 389 Other 295 36 Total prepaid expenses and other current assets $ 1,205 $ 505 Deposits and other noncurrent assets As of December 31, 2020 and 2019, deposits and other noncurrent assets were comprised of the following (in thousands): 2020 2019 Restricted cash and security deposit for the Irvine Lease (Note 14) $ 1,850 $ 1,850 Long-term prepaid maintenance contracts 118 268 Other 88 93 Total deposits and other noncurrent assets $ 2,056 $ 2,211 Accrued expenses and other current liabilities As of December 31, 2020 and 2019, accrued expenses and other current liabilities were comprised of the following (in thousands): 2020 2019 Accrued compensation (1) $ 3,556 $ 1,287 Cash holdback liability (see Note 5) 600 - Accrued vendor and other expenses 1,596 1,323 Accrued expenses and other current liabilities $ 5,752 $ 2,610 (1) Includes approximately $1.1 million in severance accrual as of December 31, 2020, in accordance with the severance benefits provided under certain employment and severance benefit agreements, in connection with Oncocyte’s partial reduction in force plan and salary reduction agreements instituted in September 2020 (see Note 14). |
Right-of-use Assets, Machinery
Right-of-use Assets, Machinery And Equipment, Net And Construction In Progress | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Right-of-use Assets, Machinery And Equipment, Net And Construction In Progress | 4. Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress As of December 31, 2020 and 2019, rights-of-use assets, machinery and equipment, net, and construction in progress were comprised of the following (in thousands): 2020 2019 Right-of-use assets (1) $ 3,397 $ 2,856 Machinery and equipment 2,480 1,089 Accumulated depreciation and amortization (1,440) (343) Right-of-use assets, machinery and equipment, net 4,437 3,602 Construction in progress 2,087 126 Right-of-use assets, machinery and equipment, net, and construction in progress $ 6,524 $ 3,728 (1) Oncocyte recorded certain right-of-use assets and liabilities for operating leases in accordance with ASC 842 (see Note 14). Depreciation expense amounted to approximately $313,000 and $344,000 for the years ended December 31, 2020 and 2019, respectively. Accumulated depreciation and amortization as of December 31, 2020 reflects a noncash impairment charge of $333,000 representing the net book value of certain machinery and equipment primarily used in the discontinued DetermaDx development program (see Note 2); the noncash charge is included in research and development expenses in the consolidated statements of operations for the year ended December 31, 2020. Construction in progress Construction in progress as of December 31, 2020 includes $2.1 million for leasehold improvements, consisting primarily of the costs incurred for the construction of Oncocyte’s primary laboratory facility its Irvine, California headquarters. Of this amount, $1.1 million has been financed by the landlord and is included in landlord liability (see Note 14). Construction in progress is not depreciated until the underlying asset is placed into service. |
Acquisition of Insight
Acquisition of Insight | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition of Insight | 5. Acquisition of Insight On January 31, 2020, Oncocyte completed its acquisition of Insight pursuant to the Merger Agreement. Merger Consideration at Closing Under the terms of the Merger Agreement, Oncocyte agreed to pay $7 million in cash and $5 million of Oncocyte common stock (the “Initial Merger Consideration”), subject to a holdback for indemnity claims not to exceed ten percent of the total Merger Consideration. The parties agreed to holdback $0.6 million in cash (“Cash Holdback”) and approximately 0.2 million shares of Oncocyte common stock (“Stock Holdback”) through December 31, 2020, in the event that Oncocyte has indemnity claims. The Stock Holdback shares are considered to be issued and outstanding shares of Oncocyte common stock as of the Merger Date but were placed in an escrow account and will be released from escrow after the holdback period, less any shares that may be returned to Oncocyte on account of any indemnity claims. Accordingly, on the Merger Date, Oncocyte delivered approximately $11.4 million in Merger Consideration, consisting of $6.4 million in cash, which was net of the $0.6 million cash holdback, and 1.9 million shares of Oncocyte common stock, which includes the stock holdback shares placed in escrow. The shares of Oncocyte common stock delivered were valued at $5 million, based on the average closing price of Oncocyte common stock on the NYSE American during the five trading days immediately preceding the date of the Merger Agreement. Milestone Payments (Milestone Contingent Consideration) In addition to the Initial Merger Consideration, Oncocyte may also pay contingent consideration of up to $6.0 million in any combination of cash or shares of Oncocyte common stock if certain milestones are achieved (the “Milestone Contingent Consideration”), which consist of (i) a $1.5 million clinical trial completion and data publication milestone, (ii) $3.0 million for an affirmative final local coverage determination from CMS for a specified lung cancer test, and (iii) up to $1.5 million for achieving certain CMS reimbursement milestones. Revenue Share (Royalty Contingent Consideration) As additional consideration for Insight’s shareholders, the Merger Agreement provides for Oncocyte to pay a revenue share of not more than ten percent of net collected revenues for current Insight pharma service offerings over a period of ten years, and a tiered revenue share percentage of net collected revenues through the end of the technology lifecycle if certain new cancer tests are developed and commercialized using Insight technology. Registration Rights Pursuant to the Merger Agreement, Oncocyte filed a registration statement with the SEC to register the resale of the shares of common stock under the Securities Act issued in connection with the Merger, which the SEC declared effective in August 2020. Workforce In connection with the closing of the Merger, Oncocyte did not assume sponsorship of the Insight Equity Incentive Plan. Accordingly, the Insight Equity Incentive Plan and all related stock options to purchase shares of Insight common stock outstanding immediately prior to the Merger were canceled on the Merger Date for no consideration. At the Merger Date, all of Insight’s employees ceased employment with Insight and Oncocyte offered employment to certain of those former Insight employees, principally in laboratory roles and certain administrative roles (“New Oncocyte Employees”), and granted new equity awards to the New Oncocyte Employees under the Oncocyte 2018 Equity Incentive Plan. All Oncocyte stock option awards granted to the New Oncocyte Employees have vesting terms and conditions consistent with stock options granted to most other Oncocyte employees. Aggregate Merger Consideration and Purchase Price Allocation The calculation of the aggregate merger consideration, consisting of the Initial Merger Consideration, Milestone Contingent Consideration and Royalty Contingent Consideration (the “Aggregate Merger Consideration”) transferred on January 31, 2020, at fair value, is shown in the following table (in thousands, except for share and per share amounts). The Milestone Contingent Consideration and the Royalty Contingent Consideration are collectively referred to as “Contingent Consideration”. Cash consideration $ 7,000 (1) Stock consideration Shares of Oncocyte common stock issued on the Merger Date 1,915,692 (2) Closing price per share of Oncocyte common stock on the Merger Date $ 2.61 Market value of Oncocyte common stock issued $ 5,000 Contingent Consideration $ 11,130 (3) Total fair value of consideration transferred on the Merger Date $ 23,130 (1) The cash consideration paid on the Merger Date was $6.4 million, which was net of a $0.6 million cash holdback discussed above, recorded as a holdback liability since Oncocyte retained the cash. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers are included as part of the total consideration transferred. (2) The 229,885 Stock Holdback shares were placed in an escrow account and considered to be issued and outstanding Oncocyte common stock. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers, including escrowed shares of common stock, are included as part of the total consideration transferred. (3) In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Merger Date, as further discussed below. Aggregate Merger Consideration allocation Oncocyte allocated the Aggregate Merger Consideration transferred to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the Merger Date. The fair values of the identifiable intangible assets acquired and the liabilities assumed was determined based on inputs that were unobservable and significant to the overall fair value measurement, which is also based on estimates and assumptions made by management at the time of the Merger. As such, this was classified as Level 3 fair value hierarchy measurements and disclosures in accordance with ASC 820. The following table sets forth the allocation of the Aggregate Merger Consideration transferred to Insight’s tangible and identifiable intangible assets acquired and liabilities assumed on the Merger Date, with the excess recorded as goodwill (in thousands): January 31, 2020 Assets acquired: Cash and cash equivalents $ 36 Accounts receivable and other current assets 42 Right-of-use assets, machinery and equipment 585 Long-lived intangible assets – customer relationships 440 Acquired in-process research and development 14,650 Total identifiable assets acquired (a) 15,753 Liabilities assumed: Accounts payable 61 Right-of-use liabilities – operating lease 495 Contingent Consideration transferred 11,130 Long-term deferred income tax liability 1,254 Total identifiable liabilities assumed (b) 12,940 Net assets acquired, excluding goodwill (a) - (b) = (c) 2,813 Total cash and stock consideration transferred (d) 12,000 Goodwill (d) - (c) $ 9,187 The valuation of identifiable intangible assets and applicable estimated useful lives are as follows (in thousands, except for useful life): Estimated Asset Fair Value Useful Life (Years) In process research and development (“IPR&D”) $ 14,650 n/a Customer relationships 440 5 $ 15,090 The following is a discussion of the valuation methods and significant assumptions used to determine the fair value of Insights’ material assets and liabilities in connection with the Merger: Acquired In-Process Research and Development and Deferred Income Tax Liability Oncocyte determined the estimated aggregate fair value of DetermaIO™ using the Multi-Period Excess Earnings Method (“MPEEM”) under the income approach. MPEEM calculates the economic benefits by determining the income attributable to an intangible asset after the returns are subtracted for contributory assets such as working capital, assembled workforce, and fixed assets. The resulting after-tax net earnings are discounted at a rate commensurate with the risk inherent in the economic benefit projections of the assets. To calculate fair value of DetermaIO™ under MPEEM, Oncocyte used probability-weighted, projected cash flows discounted at a rate considered appropriate given the significant inherent risks associated with similar assets. Cash flows were calculated based on projections of revenues and expenses related to the asset and were assumed to extend through a multi-year projection period. Revenues from commercialization of DetermaIO™ were based on the estimated market potential for the indications for use which may include tests for the treatment of certain lung cancers and tests for the treatment of certain breast cancers. The expected cash flows from DetermaIO™ were then discounted to present value using a weighted-average cost of capital for companies with profiles substantially similar to that of Oncocyte and the risk inherent in the economic benefit projections of similar assets, which Oncocyte believes represents the rate that market participants would use to value those assets. The discount rate used to value DetermaIO™ was approximately 35%. The projected cash flows were based on significant assumptions, including the time and resources needed to complete development of the asset, timing and reimbursement rates from CMS, regulatory approvals, if any, to commercialize the asset, estimates of the number of tests that might be performed, revenue and operating profit expected to be generated by the asset, the expected economic life of the asset, market penetration and competition, and risks associated with achieving commercialization, including delay or failure to obtain CMS and any required regulatory approval, failure of clinical trials, and intellectual property litigation. Because the IPR&D (prior to completion or abandonment of the research and development) is considered an indefinite-lived asset for accounting purposes but is not recognized for tax purposes, the fair value of the IPR&D on the acquisition date generated a deferred income tax liability (“DTL”) in accordance with ASC 740, Income Taxes Customer relationships Customer relationships generate similar DTLs to IPR&D as Oncocyte records this asset for accounting purposes but not for tax purposes. Accordingly, Oncocyte has offset all the acquired DTLs associated with the customer relationships with available acquired NOLs and included in the amount recorded discussed above (see Note 12). Right-of-use assets and liabilities, machinery and equipment Contingent consideration liabilities – There are three milestones comprising the Milestone Contingent Consideration, collectively referred to as the Milestones, in connection with the Insight Merger which Oncocyte valued and recorded as part of Contingent Consideration as of the Merger Date (see table below), which consist of (i) a payment for clinical trial completion and related data publication (“Milestone 1”), (ii) a payment for an affirmative final local coverage determination from CMS for a specified lung cancer test (“Milestone 2”), and (iii) a payment for achieving specified CMS reimbursement milestones (“Milestone 3”). If achieved, any respective Milestone will be paid at the contractual value shown below, with the payment made either in cash or in shares of Oncocyte common stock as determined by Oncocyte. There can be no assurance that any of the Milestones will be achieved. There are two separate components of the Royalty Contingent Consideration, collectively referred to as the Royalty Payments, in connection with the Merger which Oncocyte valued and recorded as part of Contingent Consideration as of the Merger Date (see table below); Royalty Payments consist of (i) revenue share payments based on a percentage of future sales generated from DetermaIO™ (“Royalty 1”), and (ii) revenue share payments based on percentage of future sales generated from current Insight pharma service offerings, as defined in the Merger Agreement (“Royalty 2”). There can be no assurance that any revenues on which the Royalty Payments are based will be generated from DetermaIO™ or pharma service offerings. The following table shows the Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability (in thousands): Contractual Value Initial Fair Value Milestone 1 $ 1,500 $ 1,340 Milestone 2 3,000 1,830 Milestone 3 (a) 1,500 770 Royalty 1 (b) See (b) 5,980 Royalty 2 (b) See (b) 1,210 Total $ 6,000 $ 11,130 (a) Indicates the maximum payable if the Milestone achieved. (b) Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, as defined, accordingly, there is no fixed contractual value for the Royalty Contingent Consideration. The fair value of the Milestone Contingent Consideration was determined using a scenario analysis valuation method which incorporates Oncocyte’s assumptions with respect to the likelihood of achievement of the Milestones, credit risk, timing of the Milestone Contingent Consideration payments and a risk-adjusted discount rate to estimate the present value of the expected payments. The discount rate was estimated at approximately 8% after adjustment for the probability of achievement of the Milestones. No Milestone Contingent Consideration is payable with respect to a particular Milestone unless and until the Milestone is achieved. Since the Milestone Contingent Consideration payments are based on nonfinancial, binary events, management believes the use of the scenario analysis method is appropriate. The fair value of each Milestone after the Merger Date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in Oncocyte’s consolidated statements of operations. The fair value of the Royalty Contingent Consideration was determined using a single scenario analysis method to value the Royalty Payments. The single scenario method incorporates Oncocyte’s assumptions with respect to specified future revenues generated from DetermaIO™ and current Insight Pharma Services over their respective useful lives, credit risk, and a risk-adjusted discount rate to estimate the present value of the expected royalty payments. The credit and risk-adjusted discount rate was estimated at approximately 48%. Since the Royalty Contingent Consideration payments are based on future revenues and linear payouts, management believes the use of the single scenario method is appropriate. The fair value of the Contingent Consideration after the Merger Date will be reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in Oncocyte’s consolidated statements of operations. As of December 31, 2020, based on Oncocyte’s reassessment of the significant assumptions note above, there was a reduction of approximately $4 million to the fair value of the Contingent Consideration primarily attributable to revised estimates of the timing of the possible future payouts and, accordingly, this decrease was recorded as an unrealized gain in the consolidated statements of operations for the year ended December 31, 2020. The following table reflects the activity for Oncocyte’s Contingent Consideration since the Merger Date, measured at fair value using Level 3 inputs (in thousands): Fair Value Balance at January 31, 2020 $ 11,130 Change in estimated fair value (4,010 ) Balance at December 31, 2020 $ 7,120 Contingent consideration is not deductible for tax purposes, even if paid; therefore, no deferred tax assets related to the Contingent Consideration were recorded. Goodwill – Goodwill and identifiable intangible assets may not be amortizable or deductible for tax purposes since these assets are not recognized for tax purposes. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 6. Goodwill and Intangible Assets, net As of December 31, 2020 and 2019, goodwill and intangible assets, net, consisted of the following (in thousands): 2020 2019 Goodwill (1) $ 9,187 $ - Intangible assets: Acquired IPR&D – DetermaIO™ (2) $ 14,650 $ - - Intangible assets subject to amortization: Acquired intangible assets – customer relationship 440 - Total intangible assets 15,090 - Accumulated amortization (81) - Intangible assets, net $ 15,009 $ - (1) Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Merger (see Note 5). (2) See Note 5 for information on the Merger which was consummated on January 31, 2020. |
Equity Method Investment in Raz
Equity Method Investment in Razor Genomics, Inc. | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment in Razor Genomics, Inc. | 7. 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 Option 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 exceed the number of shares issuable without shareholder approval under applicable stock exchange rules, Oncocyte may deliver a number of shares of common stock that would not exceed the number of shares permissible under stock exchange rules 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 DetermaRx™. Even if DetermaRx™ 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. As further discussed in Note 15, on February 24, 2021, Oncocyte made the Additional Purchase Payment and acquired the balance of the outstanding Razor common stock. 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 DetermaRx™ for purposes of promoting commercialization (“Clinical Trial”). 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 representatives of Oncocyte and Encore on a 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 DetermaRx™ (the “Preliminary Coverage Milestone Payment”). In June 2020, following Razor’s receipt of a positive final coverage decision from CMS for reimbursement of patient costs of DetermaRx™, Oncocyte paid Encore $4 million (“CMS Final Milestone Payment”). Oncocyte accounted 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 the number of shares that may be issued without shareholder approval under applicable stock exchange rules, Oncocyte may deliver the number of shares permissible under stock exchange rules 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 DetermaRx™ in the field of use covered by the applicable license held by Razor for purposes of commercialization and development of DetermaRx™. Pursuant to the Razor Sublicense Agreement Oncocyte will pay all royalties and all revenue sharing and earnout payments owed by Razor to certain third parties with respect to DetermaRx™ revenues, including the licensor of the patent rights sublicensed to Oncocyte, but those payments will be deducted from gross revenues to determine net revenues for the purpose of paying royalties to the Razor shareholders. Total royalty and earnout payments to the Razor shareholders, the licensor, and other third parties will be a low double-digit percentage, and in addition certain milestone payments may become due if cumulative net revenue benchmarks are reached. Royalties and earnout payments will be payable on a quarterly basis. This payment obligation will continue after Oncocyte’s purchase of the Razor common stock from 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 (see Note 14). 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, DetermaRx™ or its prospects or its ability to be commercialized, and it remains continuing and uncured. Accounting for the Razor Investment Oncocyte has accounted for the Razor investment under the equity method of accounting under ASC 323 because prior to purchasing the Razor common stock form Encore and the Minority Shareholders Oncocyte exercised significant influence over, but did not control, the Razor entity. Oncocyte did not control the Razor entity because, among other factors, Oncocyte was entitled to designate one person to serve on a three-member board of directors of Razor, with the other two members designated by Encore. Also, any deadlocked decisions by a Steering Committee of Oncocyte and Encore representatives that makes decisions with respect to the Clinical Trial, other than with respect to the Clinical Trial budget, will be resolved by a member designated by Encore. The Razor Preferred Stock is considered 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, DetermaRx™, 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 The aggregate Razor acquisition payments of $11.245 million incurred during September 2019, including $10 million paid for the Razor Preferred Stock, the $1 million Preliminary Coverage Milestone Payment, and $0.245 million in transaction expenses, and the $4 million CMS Final Milestone Payment made by Oncocyte during June 2020, will be amortized over a 10-year useful life of DetermaRx™ and will be reflected in Oncocyte’s pro rata earnings and losses of the equity method investment in Razor. Under ASC 323, the additional contingent consideration arrangements, including the Clinical Trial Milestone Payment and the Additional Purchase Payment discussed above, will be recorded only if the consideration is both probable (milestone has been achieved) and estimable in accordance with ASC 450, Contingencies Summarized standalone financial data for Razor The unaudited results of operations for the year ended December 31, 2020 of Razor is summarized below (in thousands): Condensed Statement of Operations (1) Year Ended December 31, 2020 (unaudited) Research and development expense $ 691 General and administrative expense - Loss from operations (691) Net loss $ (691) (1) The condensed statement of operations of Razor is provided for informational purposes only. Razor’s full results are not included in Oncocyte’s consolidated results of operations because Razor is not consolidated with Oncocyte’s financial statements for any period presented but has been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date. However, since September 30, 2019 and through December 31, 2020, Oncocyte’s pro rata share of losses from the Razor investment have been included in other income or expenses, net, on the condensed consolidated statements of operations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions Shared Facilities and Service Agreement On October 8, 2009, Oncocyte and Lineage executed the Shared Facilities Agreement. Beginning on October 1, 2019, Oncocyte ceased using shared services and has relied its own administrative, finance and accounting personnel. Effective December 31, 2019, Oncocyte terminated the Shared Facilities Agreement. Under the terms of the Shared Facilities Agreement, Lineage permitted Oncocyte to use Lineage’s office and laboratory facility and equipment located in Alameda, California. Through September 30, 2019, Lineage provided accounting, billing, bookkeeping, payroll, treasury, payment of accounts payable, and other similar administrative services to Oncocyte and through December 31, 2019, Lineage permitted Oncocyte the use of Lineage’s office and laboratory facilities and equipment. In January 2020, Oncocyte moved into its new corporate headquarters in Irvine, California, and also operates clinical laboratories in Brisbane, California and Nashville, Tennessee (see Note 14). Lineage 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 included services of Lineage employees, equipment, insurance, lease, professional, software, supplies and utilities. Allocation of expenses between Lineage and Oncocyte depended 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. Lineage charged Oncocyte a 5% markup on such allocated costs as permitted by the Shared Facilities Agreement. 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. The Shared Facilities Agreement was 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 was a contract for services, not a tangible asset, and was cancelable by either party without penalty. In the aggregate, Lineage charged Use Fees to Oncocyte as follows (in thousands): Year Ended December 31, 2019 Research and development $ 696 General and administrative 438 Sales and marketing 108 Total use fees $ 1,242 As of December 31, 2019, amounts owed to Lineage under the Shared Facilities Agreement were insignificant. Financing Transactions On January 2, 2020, Oncocyte entered into Subscription Agreements with selected investors, including Broadwood Partners, L.P. (“Broadwood”) and certain funds and accounts managed by Pura Vida Investments LLC (“Pura Vida”), in a registered direct offering of 3,523,776 shares of common stock, no par value, at an offering price of $2.156 per share, for an aggregate purchase price of approximately $7.6 million. During April 2020, Oncocyte sold 4,733,700 shares of common stock, no par value, at an offering price of $2.27 per share, for an aggregate purchase price of approximately $10.75 million, in a registered direct offering. Oncocyte paid no fees or commissions to broker-dealers or any underwriting or finder’s fees. Broadwood and certain funds and accounts managed by Pura Vida purchased shares in the offering (see Note 15). Consulting Services During the year ended December 31, 2020, Oncocyte incurred consulting fees of $0.6 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. |
Loan Payable to Silicon Valley
Loan Payable to Silicon Valley Bank | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Loan Payable to Silicon Valley Bank | 9. 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. Payments of interest only on the principal balance were due monthly from the loan funding date, March 23, 2017, through October 31, 2017, and, beginning on November 1, 2017, monthly payments of principal of approximately $67,000 plus interest are due and payable. The outstanding principal amount plus accrued interest was due and payable to the Bank at maturity on April 1, 2020, but was paid off through a loan refinancing completed in October 2019, including a payment of a $116,000 final payment fee due under the terms of the Loan Agreement. The Bank waived a 1.0% prepayment fee in connection with the refinancing of the loan. Amended Loan Agreement 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. 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 DetermaRx 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 were due monthly from the draw date through March 31, 2020, followed by 24 monthly payments of principal and interest, but the Bank has agreed to a deferral of principal payments, as discussed below. The outstanding principal balance of the loan will bear interest at a stated floating annual interest equal to the greater of (a) the prime rate or (b) 5% per annum. As of December 31, 2020, the latest published prime rate was 3.25% per annum. On April 2, 2020, as part of the Bank’s COVID-19 pandemic relief program, Oncocyte and the Bank entered into a Loan Deferral Agreement (“Loan Deferral”) with respect to the Amended Loan Agreement. Under the Loan Deferral Agreement, the Bank agreed to (i) extend the scheduled maturity date of the Amended Loan Agreement from March 31, 2022 to September 30, 2022, and (ii) deferred the principal payments by an additional 6 months whereby payments of interest only on the Bank loan principal balance will be due monthly from May 1, 2020 through October 1, 2020, followed by 23 monthly payments of principal and interest beginning on November 1, 2020, all provided at no additional fees to Oncocyte. No other terms of the Amended Loan Agreement were changed or modified. The Loan Deferral was accounted for as a modification of debt in accordance with ASC 470-50, Debt – Modifications and Extinguishments At maturity of the loan, Oncocyte will also pay the Bank an additional final payment fee of $200,000, which was recorded as a deferred financing charge in October 2019 and is being amortized to interest expense over the term of the loan using the effective interest method. As of December 31, 2020, the unamortized deferred financing cost was $68,000. Oncocyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 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 occurs. Oncocyte was in compliance with the Amended Loan Agreement as of the filing date of this Report. Bank Warrants In 2017, in connection with the Loan Agreement, Oncocyte issued common stock purchase warrants to the Bank (the “2017 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, the Bank was issued warrants to purchase an additional 7,321 shares at an exercise price of $5.46 per share, through March 23, 2027. The Bank may elect to exercise the 2017 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. 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 “2019 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 2019 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 2019 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 2019 Bank Warrant on a “cashless exercise” basis and receive a number of shares determined by multiplying the number of shares for which the 2019 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. Paycheck Protection Program Loan On April 23, 2020, Oncocyte obtained a a PPP loan from the Bank in the principal amount of $1,140,930. The PPP loan bears interest at a rate of 1% per annum and matures on April 23, 2022. Under the provisions of the PPP loan, the principal amount and accrued interest is subject to forgiveness by the Bank through the SBA. Oncocyte’s loan forgiveness application with the SBA is pending as of the date of this Report., Although Oncocyte was obligated to make monthly payments of principal and interest commencing on November 23, 2020, each in such equal amount required to fully amortize the principal amount outstanding on the PPP loan by the maturity date, Oncocyte has not been billed or charged for any repayment amounts on the PPP loan because of its loan forgiveness application pending status. Oncocyte continues to accrue interest on the PPP loan and there can be no assurance that any part of the PPP loan will be forgiven. The PPP loan promissory note contains customary borrower default provisions and lender remedies, including the right of the Bank to require immediate repayment in full the outstanding principal balance of the PPP loan with accrued interest. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | 10. Shareholders’ Equity Preferred Stock Oncocyte is authorized to issue up to 5,000,000 shares of no par value preferred stock. As of December 31, 2020 and 2019, no preferred shares were issued or outstanding. Common Stock Oncocyte has 150,000,000 shares of no par value common stock authorized. The holders of Oncocyte’s common stock are entitled to receive ratably dividends when, as, and if declared by the Board of Directors out of funds legally available. Upon liquidation, dissolution, or winding up, the holders of Oncocyte common stock are entitled to receive ratably the net assets available after the payment of all debts and other liabilities and subject to the prior rights of Oncocyte outstanding preferred shares, if any. The holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of Oncocyte stockholders. The holders of common stock have no preemptive, subscription, or redemption rights. The outstanding shares of common stock are fully paid and non-assessable. Under the ATM Agreement, during the year ended December 31, 2020, Oncocyte sold 1,136,673 shares of common stock for net proceeds of approximately $2.65 million in at-the-market transactions, of which $0.3 million was receivable from the Sales Agent for sales completed on the last trading day of December 2020. On February 4, 2021, in connection with the offering completed on February 9, 2021 discussed in Note 15, Oncocyte suspended offering any shares of its common stock pursuant to the ATM Agreement and will not make any further sales of its common stock pursuant to the ATM Agreement. As of December 31, 2020 and 2019, Oncocyte had 69,116,802 and 57,031,654 issued and outstanding shares of common stock, respectively. See Note 8 with respect to certain financing transactions pursuant to which Oncocyte sold shares of common stock and common stock purchase warrants during the years ended December 31, 2020 and 2019. See Note 15 regarding for common stock sales completed after December 31, 2020. Common Stock Purchase Warrants As of December 31, 2020, Oncocyte had an aggregate of 3,383,913 common stock purchase warrants issued and outstanding with exercise prices ranging from $1.69 to $5.50 per warrant (see Note 15). The warrants will expire on various dates through October 17, 2029. 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 2017 Bank Warrants and 2019 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 years ended December 31, 2020 and 2019, 680,308 and 575,000 shares of common stock, respectively, were issued upon the exercise of stock options, from which Oncocyte received $1.4 million and $0.9 million in cash proceeds, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation Stock Option Plan 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. The 2018 Incentive Plan reserved 11,000,000 shares of common stock for the grant of stock options or the sale of restricted stock (“Restricted Stock”) or for the settlement of hypothetical units issued with reference to common stock (“Restricted Stock Units”). Oncocyte may also grant stock appreciation rights (“SARs”) under the 2018 Incentive Plan. The 2018 Incentive Plan also permits Oncocyte to issue such other securities as its Board of Directors (the “Board”) or the Compensation Committee (the “Committee”) administering the 2018 Incentive Plan may determine. Awards of stock options, Restricted Stock, SARs, and Restricted Stock Units (“Awards”) may be granted under the 2018 Incentive Plan to Oncocyte employees, directors, and consultants. Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse on the date of grant or in periodic installments or upon the attainment of performance goals, or upon the occurrence of specified events. Awards may not vest, in whole or in part, earlier than one year from the date of grant. Vesting of an Award after the date of grant may be accelerated only in the limited circumstances specified in the 2018 Incentive Plan. In the case of the acceleration of vesting of any performance-based Award, acceleration of vesting shall be limited to actual performance achieved, pro rata achievement of the performance goal(s) on the basis for the elapsed portion of the performance period, or a combination of actual and pro rata achievement of performance goals. No person shall be granted, during any one-year period, options to purchase, or SARs with respect to, more than 1,000,000 shares in the aggregate, or any Awards of Restricted Stock or Restricted Stock Units with respect to more than 500,000 shares in the aggregate. If an Award is to be settled in cash, the number of shares on which the Award is based shall not count toward the individual share limit. No Awards may be granted under the 2018 Incentive Plan more than ten years after the date upon which the 2018 Incentive Plan was adopted by the Board, and no options or SARS granted under the 2018 Incentive Plan may be exercised after the expiration of ten years from the date of grant. Stock Options Options granted under the 2018 Incentive Plan may be either “incentive stock options” within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”), or “non-qualified” stock options that do not qualify incentive stock options. Incentive stock options may be granted only to Oncocyte employees and employees of subsidiaries. The exercise price of stock options granted under the 2018 Incentive Plan must be equal to the fair market of Oncocyte common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of Oncocyte stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of the common stock on the grant date, and the term of the option may be no longer than five years. The aggregate fair market value of common stock (determined as of the grant date of the option) with respect to which incentive stock options become exercisable for the first time by an optionee in any calendar year may not exceed $100,000. The exercise price of an option may be payable in cash or in common stock having a fair market value equal to the exercise price, or in a combination of cash and common stock, or other legal consideration for the issuance of stock as the Board or Committee may approve. Generally, options will be exercisable only while the optionee remains an employee, director or consultant, or during a specific period thereafter, but in the case of the termination of an employee, director, or consultant’s services due to death or disability, the period for exercising a vested option shall be extended to the earlier of 12 months after termination or the expiration date of the option. Restricted Stock and Restricted Stock Units In lieu of granting options, Oncocyte may enter into purchase agreements with employees under which they may purchase or otherwise acquire Restricted Stock or Restricted Stock Units subject to such vesting, transfer, and repurchase terms, and other restrictions. The price at which Restricted Stock may be issued or sold will be not less than 100% of fair market value. Employees or consultants, but not executive officers or directors, who purchase Restricted Stock may be permitted to pay for their shares by delivering a promissory note or an installment payment agreement that may be secured by a pledge of their Restricted Stock. Restricted Stock may also be issued for services actually performed by the recipient prior to the issuance of the Restricted Stock. Unvested Restricted Stock for which Oncocyte has not received payment may be forfeited, or Oncocyte may have the right to repurchase unvested shares upon the occurrence of specified events, such as termination of employment. Subject to the restrictions set with respect to the particular Award, a recipient of Restricted Stock generally shall have the rights and privileges of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld for the recipient’s account, and interest may be credited on the amount of the cash dividends withheld. The cash dividends or stock dividends so withheld and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the recipient in cash or, at the discretion of the Board or Committee, in shares of common stock having a fair market value equal to the amount of such dividends, if applicable, upon the release of restrictions on the Restricted Stock and, if the Restricted Stock is forfeited, the recipient shall have no right to the dividends. The terms and conditions of a grant of Restricted Stock Units shall be determined by the Board or Committee. No shares of common stock shall be issued at the time a Restricted Stock Unit is granted. A recipient of Restricted Stock Units shall have no voting rights with respect to the Restricted Stock Units. Upon the expiration of the restrictions applicable to a Restricted Stock Unit, Oncocyte will either issue to the recipient, without charge, one share of common stock per Restricted Stock Unit or cash in an amount equal to the fair market value of one share of common stock. At the discretion of the Board or Committee, each Restricted Stock Unit (representing one share of common stock) may be credited with cash and stock dividends paid in respect of one share (“Dividend Equivalents”). Dividend Equivalents shall be withheld for the recipient’s account, and interest may be credited on the amount of cash Dividend Equivalents withheld. Dividend Equivalents credited to a recipient’s account and attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or in shares of common stock having a fair market value equal to the amount of the Dividend Equivalents and earnings, if applicable, upon settlement of the Restricted Stock Unit. If a Restricted Stock Unit is forfeited, the recipient shall have no right to the related Dividend Equivalents. Equity awards activity A summary of Oncocyte equity awards activity under the 2010 Plan 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 January 1, 2019 - 4,171 $ 2.92 Options exercised - (575) 1.64 Options forfeited, cancelled and expired - (405) 3.43 Balance at December 31, 2019 - 3,191 $ 3.08 Options exercised - (680) 2.12 Options forfeited, cancelled and expired - (1,293) 2.73 Balance at December 31, 2020 - 1,218 $ 3.55 Exercisable at December 31, 2020 1,216 $ 3.58 In 2018, under the 2010 Plan, Oncocyte granted certain stock options 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 DetermaDx™ and obtaining Medicare reimbursement coverage for that test (“Performance-Based Options”). During the year ended December 31, 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. The Medicare reimbursement conditions will not be met as Oncocyte has determined not to pursue commercialization of DetermaDx™. Approximately 125,000 stock options granted in May 2018 contain a hybrid vesting condition which vest on the earlier to occur of three years of service from the grant date or achieving a defined Performance-Based Option milestone with respect to DetermaDx™ local decision coverage. These stock options are considered to be service-based awards for financial accounting purposes with the fair value of the options being recognized in stock-based compensation expense over an effective three-year service period. During the year ended December 31, 2020, prior to the discontinuation of development of DetermaDx™, certain performance conditions required for vesting were met, and, accordingly, 265,000 shares vested and $466,000 of stock-based compensation expense was recorded with regard to the Performance-Based Options during that period. As of December 31, 2020, there were no Performance-Based Options outstanding. At December 31, 2020 and 2019, Oncocyte had approximately $8.1 million and $6.5 million, respectively, of total unrecognized compensation expense related to the 2010 Plan and 2018 Incentive Plan that will be recognized over a weighted-average period of approximately 2.5 years and 2.6 years, respectively. A summary of 2018 Incentive Plan activity and related information follows (in thousands except weighted average exercise price): Shares Available for Grant Number of Options Outstanding Number of RSUs Outstanding Weighted Average Exercise Price Balance at January 1, 2019 4,639 361 - $ 2.21 Option pool increase 6,000 - - $ - Options granted (4,089) 4,089 - $ 2.87 RSUs granted (170) - 85 $ n/a Options exercised - - - $ - Options forfeited and cancelled 362 (362) $ 3.42 Balance at December 31, 2019 6,742 4,088 85 $ 2.77 RSUs vested - - (20) $ n/a RSUs granted (272) - 136 $ n/a Options granted (3,332) 3,332 - $ 2.42 Options exercised - - - $ - Options forfeited and cancelled 208 (208) - $ 2.16 Balance at December 31, 2020 3,346 7,212 201 $ 2.60 Exercisable at December 31, 2020 2,195 $ 2.73 Additional information regarding Oncocyte’s outstanding stock options and vested and exercisable stock options is summarized below: Options Outstanding As of December 31, 2020 Exercise Prices Number of Shares Weighted Average Remaining Contractual Life (Years) Weighted Average $ 1.33 - $2.38 2,920 8.56 $ 2.04 $ 2.40 - $2.63 3,299 8.62 2.58 $ 2.78 - $5.90 2,155 7.29 4.01 $ 1.33 - $5.90 8,374 8.26 $ 2.76 Oncocyte recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations for the years ended December 31, 2020 and 2019 (in thousands): 2020 2019 Cost of revenues $ 93 $ - Research and development 1,245 612 General and administrative 3,187 2,272 Sales and marketing 541 111 Total stock-based compensation expense $ 5,066 $ 2,995 The weighted-average estimated fair value of stock options with service-conditions granted during the years ended December 31, 2020 and 2019 was $2.42 and $2.01 per share, respectively, using the Black-Scholes option pricing model with the following weighted-average assumptions: 2020 2019 Expected life (in years) 6.00 6.03 Risk-free interest rates 1.08% 2.05% Volatility 103.73% 79.02% 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 years ended December 31, 2020 and 2019 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 | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes An income tax benefit of $1.3 million was recorded for the year ended December 31, 2020, and no provision or benefit for income taxes was recorded for the year ended December 31, 2019. Oncocyte has filed standalone U.S. federal income tax returns since its inception and will file a consolidated return with Insight Genetics for the year ended December 31, 2020. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The primary components of the deferred tax assets and liabilities at December 31, 2020 and 2019 were as follows (in thousands): 2020 2019 Deferred tax assets/(liabilities): Net operating loss carryforwards and capital loss carryforwards $ 29,203 $ 19,391 Research and development credit carryforwards 2,638 2,190 Marketable equity securities 261 394 Patents and fixed assets - 949 Stock-based and other compensation 1,855 1,166 Equity method investment in Razor 404 81 Right-of-use liability 1,064 764 Other 168 - Right-of-use asset (712) (749) Intangibles and fixed assets (3,129) - Total 31,752 24,186 Valuation allowance (31,752) (24,186) Net deferred tax asset $ - $ - In connection with the Merger discussed in Note 5 and in accordance with ASC 805, a change in the acquirer’s valuation allowance that stems from a business combination should be recognized as an element of the acquirer’s income tax expense or benefit in the period of the acquisition. Accordingly, for the year ended December 31, 2020, Oncocyte recorded a $1.25 million partial release of its valuation allowance and a corresponding income tax benefit stemming from the DTLs generated by the IPR&D and customer relationships intangible assets acquired in the Merger. Income taxes differed from the amounts computed by applying the applicable U.S. federal income tax rates indicated to pretax losses from operations as a result of the following: 2020 2019 Computed tax benefit at federal statutory rate 21% 21% Permanent differences 2% (2)% State tax benefit 4% 2% Research and development credits 1% (2)% Other -% -% Adjust basis for available-for-sale-securities -% -% Change in valuation allowance (24)% (19)% 4% -% As of December 31, 2020, Oncocyte had net operating loss carryforwards of approximately $119.7 million for U.S. federal income tax purposes and $73.6 million for state income tax purposes. Federal net operating losses generated on or prior to December 31, 2017 expire in varying amounts between 2027 and 2037, while federal net operating losses generated after December 31, 2017 carryforward indefinitely. The state net operating losses expire in varying amounts between 2022 and 2040. Oncocyte also has capital loss carryforwards for federal and state income tax purposes of $0.3 million each which expire in 2022. As of December 31, 2020, Oncocyte has research and development credit carryforwards for federal and state purposes of $1.8 million and $1.7 million, respectively. The federal credits will expire between 2030 and 2040, while the state credits have no expiration. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. Other than the partial release discussed above, 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. The change in the valuation allowance was $7.6 million and $4.3 million for the years ended December 31, 2020 and 2019, respectively. Oncocyte has uncertain tax benefits (“UTBs”) totaling $3.1 million and $2.9 million as of December 31, 2020 and 2019, respectively, which were netted against deferred tax assets subject to valuation allowance as shown below. The UTBs had no effect on the effective tax rate and there would be no cash tax impact for any period presented. Oncocyte recognizes interest and penalties related to UTBs, when they occur, as a component of income tax expense. There were no interest or penalties recognized for the years ended December 31, 2020 and 2019. Oncocyte does not expect its UTBs to change significantly over the next twelve months. A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands): December 31, 2020 2019 (in thousands) Balance at the beginning of the year $ 2,888 $ - Additions based on tax positions related to current year 149 1,301 Adjustments based on tax positions related to prior years 15 1,587 Balance at end of year $ 3,052 $ 2,888 Other Income Tax Matters Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. California has similar rules. Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the NOL and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. In general, Oncocyte is no longer subject to tax examination by the Internal Revenue Service or state taxing authorities for years before 2016. Although the federal and state statutes are closed for purposes of assessing additional income tax in those prior years, the taxing authorities may still make adjustments to the NOL and credit carryforwards used in open years. Therefore, the tax statutes should be considered open as it relates to the NOL and credit carryforwards used in open years. For tax years that remain open to examination, potential examinations may include questioning of the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with the Internal Revenue Code or state tax laws. Oncocyte’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Oncocyte’s practice is to recognize interest and penalties related to income tax matters in tax expense. As of December 31, 2020 and 2019, Oncocyte has no accrued interest and penalties. |
Disaggregation of Revenues and
Disaggregation of Revenues and Concentration Risk | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Disaggregation of Revenues and Concentration Risk | 13. Disaggregation of Revenues and Concentration Risk The tables present certain information concerning source of Oncocyte revenues for the year ended December 31, 2020. Oncocyte generated no revenues during the year ended December 31, 2019. The following table presents the percentage of consolidated revenues attributable to products or services classes that represent greater than ten percent of consolidated revenues: Year Ended December 31, 2020 2019 DetermaRx™ 45% - Pharma Services 55% - Total 100% - The following table presents the percentage of consolidated revenues received from unaffiliated customers that individually represent greater than ten percent of consolidated revenues: Year Ended December 31, 2020 2019 Medicare for DetermaRx™ 40% - Pharma Services Company A 23% - Pharma Services Company B 12% - The following table presents the percentage of consolidated revenues attributable to geographical locations: Year Ended December 31, 2020 2019 United States 61% - Outside of the United States – Pharma Services 39% - Total 100% - The following table presents accounts receivable, as a percentage of total consolidated accounts receivables, from third-party payers and other customers that provided in excess of 10% of Oncocyte’s total accounts receivable. December 31, 2020 2019 Pharma Services Company A 35% - Medicare for DetermaRx TM 45% - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Oncocyte has certain commitments other than those discussed in Notes 5 and 7. Office Lease Agreement On December 23, 2019, Oncocyte entered into an Office Lease Agreement (the “Irvine Lease”) of a building containing approximately 26,800 square feet of rentable space located at 15 Cushing in Irvine California (the “Premises”) that will serve as Oncocyte’s new principal executive and administrative offices and laboratory facility. Oncocyte completed the relocation of its offices to the Premises in January 2020. Oncocyte is constructing a laboratory at the Irvine facility to perform cancer diagnostic tests. The laboratory construction is expected to be completed during 2021. The Irvine Lease has an initial term of 89 calendar months (the “Term”), which commenced on June 1, 2020 (the “Commencement Date”). Oncocyte has an option to extend the Term for a period of five years (the “Extended Term”). Oncocyte will pay base monthly rent in the amount of $61,640 during the first 12 months of the Term. Base monthly rent will increase annually, over the base monthly rent then in effect, by 3.5%. Oncocyte will be entitled to an abatement of 50% of the base monthly rent during the first ten calendar months of the Term. If the Lease is terminated based on the occurrence of an “event of default,” Oncocyte will be obligated to pay the abated rent to the lessor. If Oncocyte exercises its option to extend the Term, the initial base monthly rent during the Extended Term will be the greater of the base monthly rent in effect during the last year of the Term or the prevailing market rate. The prevailing market rate will be determined based on annual rental rates per square foot for comparable space in the area where the Premises are located. If Oncocyte does not agree with the prevailing market rate proposed by the lessor, the rate may be determined through an appraisal process. The base monthly rent during the Extended Term shall be subject to the same annual rent adjustment as applicable for base monthly rent during the Term. In addition to base monthly rent, Oncocyte will pay in monthly installments (a) all costs and expenses, other than certain excluded expenses, incurred by the lessor in each calendar year in connection with operating, maintaining, repairing (including replacements if repairs are not feasible or would not be effective) and managing the Premises and the building in which the Premises are located (“Expenses”), and (b) all real estate taxes and assessments on the Premises and the building in which the Premises are located, all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Premises, and costs and fees incurred in connection with seeking reductions in such tax liabilities (“Taxes”). Subject to certain exceptions, Expenses shall not be increased by more than 4% annually on a cumulative, compounded basis. Oncocyte was entitled to an abatement of its obligations to pay Expenses and Taxes while constructing improvements to the Premises constituting “Tenant’s Work” under the Lease prior to the Commencement Date, except that Oncocyte was obligated to pay 43.7% of Expenses and Taxes during the period prior to the Commencement Date for its use of the second floor of the Premises, which was already built out as office space. The lessor has agreed to provide Oncocyte with a “Tenant Improvement Allowance” in the amount of $1,340,000 to pay for the plan, design, permitting, and construction of the improvements constituting Tenant’s Work. The lessor shall be entitled to retain 1.5% of the Tenant Improvement Allowance as an administrative fee. As of December 31, 2020, the lessor had provided $1.1 million of the total Tenant Improvement Allowance. Oncocyte has provided the lessor with a security deposit in the amount of $150,000 and a letter of credit in the amount of $1,700,000. The lessor may apply the security deposit, in whole or in part, for the payment of rent and any other amount that Oncocyte is or becomes obligated to pay under the Irvine Lease but fails to pay when due and beyond any cure period. The lessor may draw on the letter of credit from time to time to pay any amount that is unpaid and due, or if the original issuing bank notifies the lessor that the letter of credit will not be renewed or extended for the period required under the Irvine Lease and Oncocyte fails to timely provide a replacement letter of credit, or an event of default under the Irvine Lease occurs and continues beyond the applicable cure period, or if certain insolvency or bankruptcy or insolvency with respect to Oncocyte occur. Oncocyte is required to restore any portion of the security deposit that is applied by the lessor to payments due under the Lease, and Oncocyte is required to restore the amount available under the letter of credit to the required amount if any portion of the letter of credit is drawn by the lessor. Commencing on the 34th month of the Term, (a) the amount of the letter of credit that Oncocyte is required to maintain shall be reduced on a monthly basis, in equal installments, to amortize the required amount to zero at the end of the Term, and (b) Oncocyte will have the right to cancel the letter of credit at any time if it meets certain market capitalization and balance sheet thresholds; provided, in each case, that Oncocyte is not in then default under the Lease beyond any applicable notice and cure period and the lessor has not determined that an event exists that would lead to an event of default. To obtain the letter of credit, Oncocyte has provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor. The restricted cash may not be used for any other purpose (see Note 3). Application of leasing standard, ASC 842 The Irvine Lease is an operating lease under ASC 842 included in the tables below. The tables below provide the amounts recorded in connection with the application of ASC 842 as of, and during, the year ended December 31, 2020, for Oncocyte’s operating and financing leases (see Note 2). Under the Laboratory Agreement discussed in Note 7, 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 the landlord’s consent for the use of the laboratory at Razor’s Brisbane, California location (the “Brisbane Facility”) under the terms of a sublease to which Encore is the sublessee. The sublease 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 December 31, 2020, the aggregate payments due to the landlord for early cancellation of the Brisbane Lease would be approximately $329,000 (aggregate payments from December 30, 2020 through March 31, 2023). 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 the inception of the Laboratory Agreement in accordance with ASC 842, as shown in the table below. Financing lease As of December 31, 2020, Oncocyte has one financing lease remaining through December 2023 for certain laboratory equipment with aggregate remaining payments of $433,000 shown in the table below. Operating and Financing leases The following table presents supplemental cash flow information related to operating and financing leases for the year ended December 31, 2020 (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 552 Operating cash flows from financing leases 9 Financing cash flows from financing leases 71 Right-of-use assets obtained in exchange for lease obligation: Operating lease, including lease acquired in Insight Genetics business combination $ 536 The following table presents supplemental balance sheet information related to operating and financing leases as of December 31, 2020 (in thousands, except lease term and discount rate): Operating leases Right-of-use assets, net $ 2,919 Right-of-use lease liabilities, current $ 271 Right-of-use lease liabilities, noncurrent 4,091 Total operating lease liabilities $ 4,362 Financing Leases Machinery and equipment, gross $ 523 Accumulated depreciation (180 ) Machinery and equipment, net $ 343 Current liabilities $ 151 Noncurrent liabilities 221 Total financing lease liabilities $ 372 Weighted average remaining lease term Operating leases 6.2 years Financing leases 2.7 years Weighted average discount rate Operating leases 11.15 % Financing leases 11.27 % The following table presents future minimum lease commitments as of December 31, 2020 (in thousands): Operating Leases Financing Leases Year Ending December 31, 2021 $ 1,030 $ 185 2022 1,096 124 2023 1,000 124 2024 889 - 2025 869 - Thereafter 1,594 - Total minimum lease payments 6,478 433 Less: amounts representing interest (1,887 ) (61 ) Less: Tenant Improvement Allowance, net of administrative fee (229) (1) - Present value of net minimum lease payments $ 4,362 $ 372 (1) In accordance with ASC 842, a tenant allowance should be included in the measurement of the consideration in the lease agreement at inception and reflected as a reduction to the right-of-use asset and a corresponding reduction to the right-use-liability if the lessee both controls the construction of the tenant improvements and the expects to fully earn all of the tenant allowance. Oncocyte has met both conditions at the inception of the Irvine Lease and has recorded the Tenant Improvement Allowance accordingly. As the cash for the Tenant Improvement Allowance is received from the lessor under the terms of the Irvine Lease, the corresponding right-of-use liability will increase and will be amortized as part of the right-of use asset and liability amortization over the term of the Irvine Lease in accordance with ASC 842. As of December 31, 2020, the lessor had provided $1.1 million of the total $1.3 million Tenant Improvement Allowance, leaving a balance of $0.2 million. 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 that are subsequently resolved with the authorities or potentially through the courts. Management believes Oncocyte has adequately provided for any ultimate amounts that are likely to result from these audits; however, final assessments, if any, could be significantly different than the amounts recorded in the consolidated financial statements. Employment Contracts Oncocyte has entered into employment and severance benefit contracts with certain executive officers. Under the provisions of the contracts, Oncocyte may be required to incur severance obligations for matters relating to changes in control, as defined, and certain terminations of executives. As of December 31, 2020, Oncocyte accrued approximately $1.1 million in severance obligations for certain executive officers, in accordance with the severance benefit provisions of their respective employment and severance benefit agreements, related to Oncocyte’s partial reduction in force plan and salary reduction agreements instituted in September 2020. 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. Oncocyte’s office and laboratory facility leases also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from Oncocyte’s use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, lease, 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 December 31, 2020 and 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Equity financings and related transactions On January 20, 2021, Oncocyte entered into Subscription Agreements with certain institutional investors for a registered direct offering of 7,301,410 shares of common stock, no par value, at an offering price of $3.424 per share, for an aggregate purchase price of $25.0 million. The price per share was the average of the closing price of our common stock on the NYSE American for the five trading days prior to the date on which we and the investors executed the Subscription Agreements. Oncocyte did not pay any fees or commissions to broker-dealers or any finder’s fees, nor did it issue any stock purchase warrants, in connection with the offer and sale of the shares. The investors included Broadwood Capital, LP, Oncocyte’s largest shareholder, and certain investment funds and accounts managed by Pura Vida Investments, LLC, which beneficially owns greater than 5% of our issued and outstanding common stock. On February 4, 2021, Oncocyte entered into a Purchase Agreement (the “Underwriting Agreement”) with Piper Sandler & Co., as representative of the underwriters named therein (the “Underwriters”), pursuant to which agreed to issue and sell to the Underwriters in an underwritten public offering (the “Offering”) an aggregate of 7,780,000 shares of OncoCyte common stock at a public offering price of $4.50 per share, before underwriting discounts and commissions. Under the terms of the Underwriting Agreement, Oncocyte also granted to the Underwriters an option to purchase up to an additional 1,167,000 shares of common stock to cover over-allotments. On February 9, 2021, Oncocyte completed the Offering and issued 8,947,000 shares of common stock, including the 1,167,000 shares to cover the exercise in full of the Underwriters’ over-allotment option, for aggregate net proceeds to Oncocyte of approximately $37.5 million, after deducting commissions, discounts and estimated expenses related to the Offering. Broadwood Capital, LP purchased 600,000 shares in the Offering. In January 2021, under the ATM Agreement, Oncocyte sold 2,178,327 shares of common stock in at-the-market transactions for approximately $6.3 million in net cash proceeds. On February 4, 2021, in connection with the Offering discussed above, Oncocyte suspended all further offers and sales of shares of its common stock pursuant to the ATM Agreement. In February 2021, Oncocyte received $0.8 million in cash proceeds from the issuance of 248,251 shares of common stock from the exercise of certain common stock purchase warrants that were issued and sold during a prior period. Razor Genomics Second Close On January 29, 2021, the principal shareholder of Razor informed Oncocyte that the milestone requiring Oncocyte to purchase the outstanding shares of Razor common stock had been attained under the Subscription and the Purchase Agreement. On February 24, 2021, Oncocyte completed the purchase of all of the issued and outstanding shares of common stock of Razor and paid the selling shareholders in total $10 million in cash and issued to them a total of 982,318 shares of Oncocyte common stock having a market value of $5 million based on an average closing price of common stock on the NYSE American over the five trading day period ending on the date prior to the date on which Oncocyte received notice of the achievement of the milestone. As a result of the purchase of the Razor common stock, Oncocyte is now the sole shareholder of Razor. Merger Agreement with Chronix Biomedical, Inc. On February 2, 2021, OncoCyte entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CNI Monitor Sub, Inc., a Delaware corporation and wholly-owned subsidiary of OncoCyte, (“Merger Sub”), Chronix Biomedical, Inc., a Delaware corporation (“Chronix”), the stockholders party to the Merger Agreement (the “Stockholders”) and the equityholder representative. Pursuant to the Merger Agreement, Merger Sub will be merged with and into Chronix (the “Merger”) with Chronix surviving the Merger. OncoCyte’s board of directors and Chronix’s board of directors have approved the Merger Agreement. Merger Consideration If the Chronix merger is completed, Oncocyte will issue 295,000 shares of OncoCyte common stock to holders of certain Chronix preferred stock, will provide $2.675 million in cash for the payment of certain Chronix liabilities and will assume up to $5.575 million of additional Chronix liabilities. Earnout Consideration As additional consideration for Chronix’s stockholders, the Merger Agreement provides for OncoCyte to pay (i) up to $14 million in any combination of cash or OncoCyte common shares if the milestones are achieved, (ii) earnout consideration during the five to ten-year earnout periods of up to 15% of net collections for sales of specified tests and products, and (iii) up to 75% of net collections from the sale or license to a third party of Chronix’s patents for use in transplantation medicine during a seven-year earnout period. The completion of the Merger is subject to the satisfaction or waiver of closing conditions, including: (i) the absence of any applicable law or order that prohibits completion of the Merger, (ii) performance in all material respects of the obligations required to be performed by the other party pursuant to the Merger Agreement at or prior to the completion of the Merger, (iii) the accuracy of certain representations and warranties made in the Merger Agreement by the other party, subject to certain knowledge or materiality qualifications, (iv) no Stockholders entitled to vote on the Merger will have provided notice of exercise of their dissenter’s rights, and (v) the liabilities of Chronix and its subsidiaries will not exceed $8.25 million in the aggregate. The Merger Agreement also includes termination provisions for both OncoCyte and Chronix, including the right to terminate by mutual consent and the right of either party to terminate the Merger Agreement if the closing has not occurred on or prior to April 30, 2021. Registration Rights Pursuant to the Merger Agreement, OncoCyte agreed to file a registration statement with the SEC covering the issuance or resale of the shares of common stock to be issued in connection with the Merger within 90 days following receipt of information necessary to file the registration statement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). 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, since February 17, 2017 Oncocyte has no longer been considered a subsidiary of Lineage under GAAP. During the year ended December 31, 2019, because Lineage’s ownership interest in Oncocyte decreased to below 20%, Lineage no longer exercised significant influence over the operations and management of Oncocyte. As of the date of this Report, Lineage’s ownership interest in Oncocyte is less than 5%. Prior to January 1, 2020, 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 8). 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, utilities, property taxes, insurance, and internet and telephone expenses based on a percentage determined by management. These allocations were 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 evaluated the appropriateness of the percentage allocations and believes that the basis for allocation is reasonable. |
Principles of Consolidation | Principles of consolidation On January 31, 2020, with the consummation of the Merger, Insight became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Insight’s operations and results with Oncocyte’s operations and results (see Note 5). The accompanying consolidated 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. All material intercompany accounts and transactions have been eliminated in consolidation. |
Covid-19 Impact and Related Risks | COVID-19 impact and related risks The ongoing global outbreak of COVID-19, and the various attempts throughout the world to contain it, have created significant volatility, uncertainty and disruption. In response to government directives and guidelines, health care advisories and employee and other concerns, Oncocyte has altered certain aspects of its operations. A number of Oncocyte’s employees have had to work remotely from home and those on site have had to follow Oncocyte’s social distance guidelines, which could impact their productivity. COVID-19 could also disrupt Oncocyte’s operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who cannot effectively work remotely but who elect not to come to work due to the illness affecting others in Oncocyte’s office or laboratory facilities, or due to quarantines. During the COVID-19 pandemic, Oncocyte has not been able, and may continue to not be able, to maintain its preferred level of physician or customer outreach and marketing of its diagnostic testing and Pharma Services, which may have negatively impacted and may continue to negatively impact potential new customers’ interest in those tests and services. Because of COVID-19, travel, visits, and in-person meetings related to Oncocyte’s business have been severely curtailed or canceled and Oncocyte has instead used on-line or virtual meetings to meet with potential customers and others. In addition to operational adjustments, the consequences of the COVID-19 pandemic have led to uncertainties related to Oncocyte’s business growth and ability to forecast the demand for its diagnostic testing and Pharma Services and resulting revenues. Concerns over available hospital, staffing, equipment, and other resources, and the risk of exposure to the virus, has led to early stage lung cancer surgeries being delayed, and the continued deferral of lung cancer surgeries due to resurgence in COVID-19 cases could result in delayed or reduced use of DetermaRx™. It is possible that impacts of COVID-19 on Oncocyte’s operations or revenues or its access to capital could prevent Oncocyte from complying, or could result in a material noncompliance, with one or more obligations or covenants under material agreements to which Oncocyte is a party, with the result that Oncocyte would be in material breach of the applicable obligation, covenant, or agreement. Any such material breach could cause Oncocyte to incur material financial liabilities or an acceleration of the date for paying a financial obligation to the other party to the applicable agreement, or could cause Oncocyte to lose material contractual rights, such as rights to use leased equipment or laboratory or office space, or rights to use licensed patents or other intellectual property the use of which is material to Oncocyte’s business. Similarly, it is possible that impacts of COVID-19 on the business, operations, or financial condition of any third party with whom Oncocyte has a contractual relationship could cause the third party to be unable to perform its contractual obligations to Oncocyte, resulting in Oncocyte’s loss of the benefits of a contract that could be material to Oncocyte’s business. The full extent to which the COVID-19 pandemic and the various responses to it might impact Oncocytes’ business, operations and financial results will depend on numerous evolving factors that are not subject to accurate prediction and that are beyond Oncocyte’s control. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates estimates which are subject to significant judgment, including, but not limited to, valuation methods used, assumptions requiring the use of judgment to prepare financial projections, timing of potential commercialization of acquired in-process intangible assets, applicable discount rates, probabilities of the likelihood of multiple outcomes of certain events related to contingent consideration, comparable companies or transactions, determination of fair value of the assets acquired and liabilities assumed including those relating to contingent consideration, assumptions related to the going concern assessments, allocation of direct and indirect expenses, useful lives associated with long-lived intangible assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, and assumptions used to value debt and stock-based awards and other equity instruments. Actual results may differ materially from those estimates. Similarly, Oncocyte assessed certain accounting matters that generally require consideration of forecasted financial information. The accounting matters assessed included, but were not limited to, Oncocyte’s equity investments, the carrying value of goodwill, acquired in-process intangible assets and other long-lived assets. Those assessments as well as other estimates referenced above were made in the context of information reasonably available to Oncocyte. While Oncocyte considered known or expected impacts of COVID-19 in making its assessments and estimates, the future impacts of COVID-19 are not presently determinable and could cause actual results to differ materially from Oncocyte’s estimates and assessments. Oncocyte’s future analysis or forecast of COVID-19 impacts could lead to changes in Oncocyte’s future estimates and assessments which could result in material impacts to Oncocyte’s consolidated financial statements in future reporting periods. |
Going Concern Assessment | Going concern assessment In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update, or ASU No. 2014-15, Oncocyte assesses going concern uncertainty in its consolidated financial statements to determine if it has sufficient cash, cash equivalents and working capital on hand, including marketable equity securities, and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to Oncocyte, it will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, Oncocyte makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent Oncocyte deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. |
Business Combinations and Fair Value Measurements | Business combinations and fair value measurements Oncocyte accounts for business combinations in accordance with ASC 805, which requires the purchase consideration transferred to be measured at fair value on the acquisition date in accordance with ASC 820, Fair Value Measurement ● Level 1 ● Level 2 ● Level 3 When a part of the purchase consideration consists of shares of Oncocyte common stock, Oncocyte calculates the purchase price attributable to those shares, a Level 1 security, by determining the fair value of those shares quoted on the NYSE American as of the acquisition date. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development, and liabilities assumed, including any contingent consideration, as of the acquisition date. Goodwill is recognized as any amount of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in excess of the consideration transferred. ASC 805 precludes the recognition of an assembled workforce as an asset, effectively subsuming any assembled workforce value into goodwill. In determining fair value, Oncocyte utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value. For the periods presented, Oncocyte has no financial assets or liabilities recorded at fair value on a recurring basis, except for cash and cash equivalents consisting of money market funds and marketable equity securities of Lineage and AgeX common stock held by Oncocyte described below. These assets are measured at fair value using the period-end quoted market prices as a Level 1 input. Oncocyte also has certain contingent consideration liabilities which are carried at fair value based on Level 3 inputs (see Note 5). The carrying amounts of cash equivalents, prepaid expenses and other current assets, amounts due to Lineage and other affiliates, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The carrying amount of the Loan Payable to Silicon Valley Bank approximates fair value because the loan bears interest at a floating market rate, and the carrying amount of the PPP loan approximates fair value because of the SBA guarantee on the terms of the loan and the relatively recent funding date of the loan (see Note 9). |
Cash and Cash Equivalents | Cash and cash equivalents Cash equivalents typically consist of money market fund investments for capital preservation, with maturities of three months or less when purchased. At December 31, 2020 and 2019, Oncocyte’s cash and cash equivalents balances totaled $7.1 million and $22.1 million, respectively. Financial instruments that potentially subject Oncocyte to credit risk consist principally of cash and cash equivalents. Oncocyte maintains cash and cash equivalent balances at financial institutions in excess of amounts insured by United States government agencies. Oncocyte places its cash and cash equivalents with high credit quality financial institutions. |
Accounting for Lineage and Agex Shares of Common Stock | Accounting for Lineage and AgeX shares of common stock Oncocyte accounts for the Lineage and AgeX shares of common it holds as marketable equity securities in accordance with ASC 320-10-25, Investments – Debt and Equity Securities Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities As of December 31, 2020, 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 $675,000. |
Restricted Cash | Restricted cash Oncocyte classifies cash that has contractual or legal restrictions imposed by third parties as restricted cash, which is restricted as to withdrawal or use except for the specified purpose under a contract. Oncocyte includes the restricted cash consistent with the nature of the underlying contract and classifies it as part of current assets if the restricted cash will be released in the next twelve months from the balance sheet date, or in deposits and other noncurrent assets if it will be restricted for longer than twelve months from the balance sheet date. Oncocyte adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the statements of cash flows in accordance with ASU 2016-18 (in thousands): December 31, 2020 2019 Cash and cash equivalents $ 7,143 $ 22,072 Restricted cash included in deposits and other noncurrent assets (see Note 14) 1,700 1,700 Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows $ 8,843 $ 23,772 |
Goodwill and Intangible Assets | Goodwill and intangible assets In accordance with ASC 350, Intangibles – Goodwill and Other Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill, similar to IPR&D, is not amortized but is tested for impairment at least annually, or if circumstances indicate its value may no longer be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting Oncocyte’s business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Oncocyte continues to operate in one segment and considered to be the sole reporting unit and, therefore, goodwill is tested for impairment at the enterprise level. Oncocyte does not have intangible assets with indefinite useful lives other than goodwill and the acquired IPR&D discussed in Notes 5 and 6. As of December 31, 2020, there has been no impairment of goodwill and intangible assets. |
Contingent Consideration Liabilities | Contingent consideration liabilities Certain of Oncocyte’s asset and business acquisitions involve the potential for future payment of consideration to third-parties and former selling shareholders in amounts determined as a percentage of future net revenues generated, or upon attainment of revenue milestones, from Pharma Services or diagnostic tests, as applicable, or annual minimum royalties to certain licensors, as provided in the applicable agreements. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows. These obligations are referred to as contingent consideration. ASC 805 requires that contingent consideration be estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity interests to the selling shareholders in the future if certain future events occur or conditions are met, such as the attainment of product development milestones. Contingent consideration also includes additional future payments to selling shareholders based on achievement of components of earnings, such as “earn-out” provisions or percentage of future revenues, including royalties paid to the selling shareholders based on a percentage of revenues generated from DetermaIO™ and Insight Pharma Services over their respective useful life. The fair value of contingent consideration after the acquisition date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the consolidated statements of operations. Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss that Oncocyte records in its consolidated financial statements. See Notes 5 and 7 for a full discussion of these liabilities. |
Investments in Capital Stock of Privately Held Companies | Investments in capital stock of privately held companies Oncocyte evaluates whether investments held in common stock of other companies require consolidation of the company under, first, the variable interest entity (“VIE”) model, and then under the voting interest model in accordance with accounting guidance for consolidations under Accounting Standards Codification (“ASC”) 810-10. If consolidation of the entity is not required under either the VIE model or the voting interest model, Oncocyte determines whether the equity method of accounting should be applied in accordance with ASC 323, 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 7. On February 24, 2021, Oncocyte acquired the remaining 75% ownership interest in Razor (see Note 15). |
Leases | Leases Oncocyte accounts for leases in accordance with ASC 842, Leases On January 1, 2019, the adoption date of ASC 842, and based on the available practical expedients under the 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 consolidated financial statements because Oncocyte did not have any significant operating leases at the time of adoption. During the years ended December 31, 2020 and 2019, Oncocyte entered into various operating leases and an embedded operating lease in accordance with ASC 842 discussed in Note 14. Oncocyte’s accounting for financing leases (previously referred to as “capital leases”) remained substantially unchanged. |
Machinery and Equipment, Construction in Progress | Machinery and equipment, construction in progress Machinery and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally over a period of 3 to 10 years. For equipment purchased under financing leases, Oncocyte depreciates the equipment based on the shorter of the useful life of the equipment or the term of the lease, ranging from 3 to 5 years, depending on the nature and classification of the financing lease. Maintenance and repairs are expensed as incurred whereas significant renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and the related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is reflected in Oncocyte’s results of operations. Construction in progress, comprised primarily of leasehold improvements under construction, is not depreciated until the underlying asset is placed into service. |
Long-lived Intangible Assets | Long-lived intangible assets Long-lived intangible assets, consisting primarily of acquired customer relationships, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful life of 5 years (see Note 5). |
Impairment of Long-Lived Assets | Impairment of long-lived assets Oncocyte assesses the impairment of long-lived assets, which consist primarily of right-of-use assets for operating leases, customer relationships and machinery and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. As part of Oncocyte’s impairment assessment of its long-lived assets, Oncocyte determined that certain assets, mainly comprised of machinery and equipment and related prepaid service agreements used in the development of DetermaDx™ were impaired as of June 30, 2020, because Oncocyte determined to discontinue the development of that diagnostic test. Accordingly, Oncocyte recorded a noncash charge of $422,000 representing the net book value of those assets as of that date and included that charge in research and development expenses for the year ended December 31, 2020 (see Note 4). As of December 31, 2020, there has been no other impairment of long-lived assets. |
Accounting for Warrants | Accounting for warrants Oncocyte determines the accounting classification of warrants it issues, as either liability or equity classified, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock |
Income Taxes | Income taxes Oncocyte has filed a standalone U.S. federal income tax return since its inception. For California purposes, Oncocyte activity for 2016 and for the period from January 1, 2017 through February 16, 2017, the date immediately before Lineage owned less than 50% of Oncocyte outstanding common stock, was included in Lineage’s California combined tax return. For periods beginning on February 17, 2017 and thereafter, Oncocyte filed or will file a standalone California income tax return. The provision for state income taxes has been determined as if Oncocyte had filed separate tax returns for the periods presented. Accordingly, the effective tax rate of Oncocyte in future years could vary from its historical effective tax rates depending on the future legal structure of Oncocyte and related tax elections. The historical deferred tax assets, including the operating losses and credit carryforwards generated by Oncocyte, will remain with Oncocyte. Oncocyte accounts for income taxes in accordance with ASC 740, Income Taxes The guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. Oncocyte will recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2020 and 2019. Oncocyte is not aware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation for the years ended December 31, 2020 and 2019. Oncocyte is currently unaware of any tax issues under review. On December 22, 2017, the United States enacted major federal tax reform legislation, Public Law No. 115-97, commonly referred to as the 2017 Tax Cuts and Jobs Act (“2017 Tax Act”), which enacted a broad range of changes to the Internal Revenue Code. Changes to taxes on corporations impacted by the 2017 Tax Act include, but are not limited to, lowering the U.S. federal tax rates to a 21% flat tax rate, eliminating the corporate alternative minimum tax (“AMT”), imposing additional limitations on the deductibility of interest and net operating losses, allowing any net operating loss (“NOLs”) generated in tax years ending after December 31, 2017 to be carried forward indefinitely and generally repealing carrybacks, reducing the maximum deduction for NOL carryforwards arising in tax years beginning after 2017 to a percentage of the taxpayer’s taxable income, and allowing for additional expensing of certain capital expenditures. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”) was enacted. The CARES Act included loans and grants to certain businesses, and temporary amendments to the Internal Revenue Code which changed net loss carryforward and back provisions and the business interest expenses limitation. Under the CARES Act provisions, the most relevant income tax considerations to Oncocyte relate to the amounts received under the Paycheck Protection Program loan program and the possible forgiveness of those loans by the SBA. Oncocyte has applied for forgiveness for the PPP loan and the application is still pending a decision by the SBA as of the date of this Report. On December 21, 2020, the U.S. president has signed into law the “Consolidated Appropriations Act, 2021” which includes further COVID-19 economic relief and extension of certain expiring tax provisions. The relief package includes a tax provision clarifying that businesses with forgiven PPP loans can deduct regular business expenses that are paid for with the loan proceeds for federal tax purposes. Additional pandemic relief tax measures include an expansion of the employee retention credit, enhanced charitable contribution deductions, and a temporary full deduction for business expenses for food and beverages provided by a restaurant (see Note 12). |
Revenue Recognition | Revenue recognition Prior to January 1, 2020, Oncocyte generated no revenues. Effective on January 1, 2020, Oncocyte adopted the revenue recognition standard ASC Topic 606, Revenue from Contracts with Customers DetermaRx™ testing revenue In the first quarter of 2020, Oncocyte commercially launched DetermaRx™ and commenced performing tests on clinical samples through orders received from physicians, hospitals and other healthcare providers. In determining whether all of the revenue recognition criteria (i) through (v) above are met with respect to DetermaRx™ tests, each test result is considered a single performance obligation and is generally considered complete when the test result is delivered or made available to the prescribing physician electronically and, as such, there are no shipping or handling fees incurred by Oncocyte or billed to customers. Although Oncocyte bills a list price for all tests ordered and completed for all payer types, Oncocyte recognizes realized revenue on a cash basis rather than accrual basis when it cannot conclude that all the revenue recognition criteria have been met. Because DetermaRx™ is a novel test and there are no current reimbursement arrangements with third-party payers other than Medicare, the transaction price represents variable consideration. Application of the constraint for variable consideration is an area that requires significant judgment. For all payers other than Medicare, Oncocyte must take into account the novelty of the test, the uncertainty of receiving payment, or being subject to claims for refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte expects to continue to recognize revenue on a cash basis until it has a sufficient history to reliably estimate payment patterns or has contractual reimbursement arrangements, or both, in place. In September 2020, Oncocyte received a final pricing decision for DetermaRx™ from CMS and with Medicare coverage in effect, Oncocyte commenced recognizing revenue when DetermaRx™ tests are performed for Medicare patients, or when payment was approved by Medicare in the case of certain tests performed prior to September 2020, rather than on a cash basis. As of December 31, 2020, Oncocyte had accounts receivable from Medicare of $100,000 for completed DetermaRx™ tests (see Note 13). Pharma Services revenue Revenues recognized during the year ended December 31, 2020 include Pharma Services performed by Oncocyte’s Insight subsidiary. Insight provides a range of molecular diagnostic services to its pharmaceutical customers (referred to as “Pharma Services”) including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests in its CLIA-certified laboratory. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements with specific deliverables defined by the customer. Pharma Services are generally performed on a time and materials basis. Upon Insight’s completion of the service to the customer in accordance with the SOW, Insight has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes the pharma service revenue at that time. Insight identifies each sale of its pharma service offering as a single performance obligation. Completion of the service and satisfaction of the performance obligation under a SOW is typically evidenced by access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the SOW. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Insight has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Insight recognizes revenue over a period of time during which the work is performed using a formula that accounts for expended efforts, generally measured in labor hours, as a percentage of total estimated efforts for the completion of the SOW. As Insight satisfies the performance obligation under the SOW, any amounts earned as revenue and billed to the customer are included in accounts receivable. Any revenues earned but not yet billed to the customer as of the date of Oncocyte’s consolidated financial statements are recorded as contract assets and are included in prepaids and other current assets as of the financial statement date. Amounts recorded in contract assets are reclassified to accounts receivable in Oncocyte’s consolidated financial statements when the customer is invoiced according to the billing schedule in the contract. Insight establishes an allowance for doubtful accounts based on the evaluation of the collectability of its Pharma Services accounts receivables after considering a variety of factors, including the length of time receivables are past due, significant events that may impair the customer’s ability to pay, such as a bankruptcy filing or deterioration in the customer’s operating results or financial position, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Insight continuously monitors collections and payments from customers and maintains a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the allowance for doubtful accounts. As of December 31, 2020, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Pharma Services. As of December 31, 2020, Oncocyte had accounts receivable from Pharma Services customers of $103,000 (see Note 13). |
Cost of Revenues | Cost of revenues Cost of revenues generally consists of cost of materials, direct labor including benefits, bonus and stock-based compensation, equipment and infrastructure expenses, clinical sample related costs associated with performing Pharma Services and DetermaRx™ tests, and license fees due to third parties, and also includes amortization of acquired customer relationship intangible assets. Infrastructure expenses include depreciation of laboratory equipment, allocated rent costs, leasehold improvements and allocated information technology costs for operations at Oncocyte’s CLIA laboratories in California and Tennessee. Costs associated with performing diagnostic tests and Pharma Services are recorded as the tests or services are performed regardless of whether revenue was recognized with respect to that test or pharma service. Royalties or revenue share payments for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expenses at the time the related revenues are recognized. As discussed above, Oncocyte generated no revenues or cost of revenues prior to January 1, 2020. |
Research and Development Expenses | Research and development expenses Research and development expenses are comprised of costs incurred to develop technology, and include: salaries and benefits, including stock-based compensation; laboratory expenses, including reagents and supplies used in research and development laboratory work; infrastructure expenses, including allocated facility occupancy costs; and contract services and other outside costs. Indirect research and development expenses are allocated primarily based on headcount, as applicable, and include rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Research and development costs are expensed as incurred. For periods prior to January 1, 2020, indirect research and development expenses included overhead costs incurred and allocated by Lineage to Oncocyte under the Shared Facilities Agreement as expenses that benefited or supported Oncocyte’s research and development functions. The Shared Facilities Agreement was terminated as of December 31, 2019 (see Note 8). |
General and Administrative Expenses | General and administrative expenses General and administrative expenses include both direct expenses incurred by Oncocyte and, prior to January 1, 2020, indirect overhead costs incurred by Lineage and allocated to Oncocyte under the Shared Facilities Agreement as expenses 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; professional and consulting fees; rent and utilities; common area maintenance; telecommunications; property taxes; and insurance. Indirect general and administrative expenses allocated by Lineage to Oncocyte under the Shared Facilities Agreement, which was terminated as of December 31, 2019 (see Note 8), 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. Sales and marketing expenses also include indirect expenses for applicable overhead allocated based on headcount, and include allocated costs for rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Prior to January 1, 2020, a portion of the expenses allocated by Lineage under the Shared Facilities Agreement were designated by Oncocyte as sales and marketing expenses to the extent Oncocyte determined that such expenses were fairly allocable to sales and marketing functions, including overhead. |
Stock-based Compensation | Stock-based compensation Oncocyte recognizes compensation expense related to employee option grants and restricted stock grants, if any, in accordance with FASB ASC 718, Compensation – Stock Compensation All excess tax benefits and tax deficiencies from stock-based compensation awards accounted for under ASC 718 are recognized as income tax benefit or expense, respectively, in the statements of operations. An excess income tax benefit arises when the tax deduction of a share-based award for income tax purposes exceeds the compensation cost recognized for financial reporting purposes and, a tax deficiency arises when the compensation cost exceeds the tax deduction. Because Oncocyte has a full valuation allowance for all periods presented (see Note 12), there was no impact to Oncocyte statements of operations for any excess tax benefits or deficiencies, as any excess benefit or deficiency would be offset by the change in the valuation allowance. Forfeitures are accounted for as they occur. Oncocyte estimates the fair value of employee stock-based payment awards on the grant-date and recognizes the resulting fair value over the requisite service period. For stock-based awards that vest only upon the attainment of one or more performance goals set by Oncocyte at the time of the grant (sometimes referred to as milestone vesting), compensation cost is recognized if and when Oncocyte determines that it is probable that the performance condition or conditions will be, or have been, achieved. Oncocyte uses the Black-Scholes option pricing model for estimating the fair value of options granted under Oncocyte’s equity plans. The fair value of each restricted stock grant, if any, is determined based on the value of the common stock granted or sold. Oncocyte has elected to treat stock-based payment awards with graded vesting schedules and time-based service conditions as a single award and recognizes stock-based compensation on a straight-line basis over the requisite service period. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Black-Scholes option pricing model requires Oncocyte to make certain assumptions including the expected option term, the expected volatility, the risk-free interest rate and the dividend yield (see Note 11). The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. Oncocyte estimates the expected term of options granted based on its own experience and, in part, based on upon the “simplified method” provided under Staff Accounting Bulletin, Topic 14 |
Net Loss Per Common Share | Net loss per common share Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the weighted-average number of shares of common stock outstanding plus the potential effect of dilutive securities or contracts which are exercisable to common stock, such as stock options and warrants (using the treasury stock method) and shares issuable in future periods, except in cases where the effect would be anti-dilutive. Because Oncocyte reported net losses for all periods presented, all potentially dilutive common stock is antidilutive for those periods. The following common stock equivalents were excluded from the computation of diluted net loss per common share of common stock for the years ended December 31, 2020 and 2019 because including them would have been antidilutive (in thousands): Year Ended December 31, 2020 2019 Stock options 8,906 1,589 Warrants 3,384 3,384 |
Segments | Segments Oncocyte’s executive management team, as a group, represents the entity’s chief operating decision makers. To date, Oncocyte’s executive management team has viewed Oncocyte’s operations as one segment that includes the research, development and commercialization of diagnostic tests for the detection of cancer, including molecular diagnostic services to pharmaceutical customers. As a result, the financial information disclosed materially represents all of the financial information related to Oncocyte’s sole operating segment. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently issued accounting pronouncements not yet adopted The following accounting standards, which are not yet effective, are presently being evaluated by Oncocyte to determine the impact that it might have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In August 2020, the Financial Accounting Standards Board issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the statements of cash flows in accordance with ASU 2016-18 (in thousands): December 31, 2020 2019 Cash and cash equivalents $ 7,143 $ 22,072 Restricted cash included in deposits and other noncurrent assets (see Note 14) 1,700 1,700 Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows $ 8,843 $ 23,772 |
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 common share of common stock for the years ended December 31, 2020 and 2019 because including them would have been antidilutive (in thousands): Year Ended December 31, 2020 2019 Stock options 8,906 1,589 Warrants 3,384 3,384 |
Selected Balance Sheet Compon_2
Selected Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | As of December 31, 2020 and 2019, prepaid expenses and other current assets were comprised of the following (in thousands): 2020 2019 Prepaid insurance $ 264 $ 80 Prepaid vendors, deposits and service agreements 646 389 Other 295 36 Total prepaid expenses and other current assets $ 1,205 $ 505 |
Schedule of Deposits and Other Noncurrent Assets | As of December 31, 2020 and 2019, deposits and other noncurrent assets were comprised of the following (in thousands): 2020 2019 Restricted cash and security deposit for the Irvine Lease (Note 14) $ 1,850 $ 1,850 Long-term prepaid maintenance contracts 118 268 Other 88 93 Total deposits and other noncurrent assets $ 2,056 $ 2,211 |
Schedule of Accrued Expenses and Other Current Liabilities | As of December 31, 2020 and 2019, accrued expenses and other current liabilities were comprised of the following (in thousands): 2020 2019 Accrued compensation (1) $ 3,556 $ 1,287 Cash holdback liability (see Note 5) 600 - Accrued vendor and other expenses 1,596 1,323 Accrued expenses and other current liabilities $ 5,752 $ 2,610 (1) Includes approximately $1.1 million in severance accrual as of December 31, 2020, in accordance with the severance benefits provided under certain employment and severance benefit agreements, in connection with Oncocyte’s partial reduction in force plan and salary reduction agreements instituted in September 2020 (see Note 14). |
Right-of-use Assets, Machiner_2
Right-of-use Assets, Machinery And Equipment, Net And Construction In Progress (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Right-of-use Assets, Machinery And Equipment, Net And Construction in Progress | As of December 31, 2020 and 2019, rights-of-use assets, machinery and equipment, net, and construction in progress were comprised of the following (in thousands): 2020 2019 Right-of-use assets (1) $ 3,397 $ 2,856 Machinery and equipment 2,480 1,089 Accumulated depreciation and amortization (1,440) (343) Right-of-use assets, machinery and equipment, net 4,437 3,602 Construction in progress 2,087 126 Right-of-use assets, machinery and equipment, net, and construction in progress $ 6,524 $ 3,728 (1) Oncocyte recorded certain right-of-use assets and liabilities for operating leases in accordance with ASC 842 (see Note 14). |
Acquisition of Insight (Tables)
Acquisition of Insight (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Aggregate Merger Consideration | The Milestone Contingent Consideration and the Royalty Contingent Consideration are collectively referred to as “Contingent Consideration”. Cash consideration $ 7,000 (1) Stock consideration Shares of Oncocyte common stock issued on the Merger Date 1,915,692 (2) Closing price per share of Oncocyte common stock on the Merger Date $ 2.61 Market value of Oncocyte common stock issued $ 5,000 Contingent Consideration $ 11,130 (3) Total fair value of consideration transferred on the Merger Date $ 23,130 (1) The cash consideration paid on the Merger Date was $6.4 million, which was net of a $0.6 million cash holdback discussed above, recorded as a holdback liability since Oncocyte retained the cash. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers are included as part of the total consideration transferred. (2) The 229,885 Stock Holdback shares were placed in an escrow account and considered to be issued and outstanding Oncocyte common stock. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers, including escrowed shares of common stock, are included as part of the total consideration transferred. (3) In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Merger Date, as further discussed below. |
Schedule of Intangible Assets Acquired and Liabilities Assumed | The following table sets forth the allocation of the Aggregate Merger Consideration transferred to Insight’s tangible and identifiable intangible assets acquired and liabilities assumed on the Merger Date, with the excess recorded as goodwill (in thousands): January 31, 2020 Assets acquired: Cash and cash equivalents $ 36 Accounts receivable and other current assets 42 Right-of-use assets, machinery and equipment 585 Long-lived intangible assets – customer relationships 440 Acquired in-process research and development 14,650 Total identifiable assets acquired (a) 15,753 Liabilities assumed: Accounts payable 61 Right-of-use liabilities – operating lease 495 Contingent Consideration transferred 11,130 Long-term deferred income tax liability 1,254 Total identifiable liabilities assumed (b) 12,940 Net assets acquired, excluding goodwill (a) - (b) = (c) 2,813 Total cash and stock consideration transferred (d) 12,000 Goodwill (d) - (c) $ 9,187 |
Schedule of Identifiable Intangible Assets and Estimated Useful Life | The valuation of identifiable intangible assets and applicable estimated useful lives are as follows (in thousands, except for useful life): Estimated Asset Fair Value Useful Life (Years) In process research and development (“IPR&D”) $ 14,650 n/a Customer relationships 440 5 $ 15,090 |
Schedule of Fair Value of Contingent Consideration Liability | The following table shows the Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability (in thousands): Contractual Value Initial Fair Value Milestone 1 $ 1,500 $ 1,340 Milestone 2 3,000 1,830 Milestone 3 (a) 1,500 770 Royalty 1 (b) See (b) 5,980 Royalty 2 (b) See (b) 1,210 Total $ 6,000 $ 11,130 (a) Indicates the maximum payable if the Milestone achieved. (b) Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, as defined, accordingly, there is no fixed contractual value for the Royalty Contingent Consideration. |
Schedule of Contingent Consideration, Measured at Fair Value | The following table reflects the activity for Oncocyte’s Contingent Consideration since the Merger Date, measured at fair value using Level 3 inputs (in thousands): Fair Value Balance at January 31, 2020 $ 11,130 Change in estimated fair value (4,010 ) Balance at December 31, 2020 $ 7,120 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | As of December 31, 2020 and 2019, goodwill and intangible assets, net, consisted of the following (in thousands): 2020 2019 Goodwill (1) $ 9,187 $ - Intangible assets: Acquired IPR&D – DetermaIO™ (2) $ 14,650 $ - - Intangible assets subject to amortization: Acquired intangible assets – customer relationship 440 - Total intangible assets 15,090 - Accumulated amortization (81) - Intangible assets, net $ 15,009 $ - (1) Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Merger (see Note 5). (2) See Note 5 for information on the Merger which was consummated on January 31, 2020. |
Equity Method Investment in R_2
Equity Method Investment in Razor Genomics, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Condensed Statement of Operations | The unaudited results of operations for the year ended December 31, 2020 of Razor is summarized below (in thousands): Condensed Statement of Operations (1) Year Ended December 31, 2020 (unaudited) Research and development expense $ 691 General and administrative expense - Loss from operations (691) Net loss $ (691) (1) The condensed statement of operations of Razor is provided for informational purposes only. Razor’s full results are not included in Oncocyte’s consolidated results of operations because Razor is not consolidated with Oncocyte’s financial statements for any period presented but has been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date. However, since September 30, 2019 and through December 31, 2020, Oncocyte’s pro rata share of losses from the Razor investment have been included in other income or expenses, net, on the condensed consolidated statements of operations. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Aggregate Use of Fees Charged | In the aggregate, Lineage charged Use Fees to Oncocyte as follows (in thousands): Year Ended December 31, 2019 Research and development $ 696 General and administrative 438 Sales and marketing 108 Total use fees $ 1,242 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Options Outstanding, Vested and Exercisable | Additional information regarding Oncocyte’s outstanding stock options and vested and exercisable stock options is summarized below: Options Outstanding As of December 31, 2020 Exercise Prices Number of Shares Weighted Average Remaining Contractual Life (Years) Weighted Average $ 1.33 - $2.38 2,920 8.56 $ 2.04 $ 2.40 - $2.63 3,299 8.62 2.58 $ 2.78 - $5.90 2,155 7.29 4.01 $ 1.33 - $5.90 8,374 8.26 $ 2.76 |
Summary of Stock-based Compensation Expense | Oncocyte recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations for the years ended December 31, 2020 and 2019 (in thousands): 2020 2019 Cost of revenues $ 93 $ - Research and development 1,245 612 General and administrative 3,187 2,272 Sales and marketing 541 111 Total stock-based compensation expense $ 5,066 $ 2,995 |
Schedule of Assumptions Used to Calculate Fair Value of Stock Options | The weighted-average estimated fair value of stock options with service-conditions granted during the years ended December 31, 2020 and 2019 was $2.42 and $2.01 per share, respectively, using the Black-Scholes option pricing model with the following weighted-average assumptions: 2020 2019 Expected life (in years) 6.00 6.03 Risk-free interest rates 1.08% 2.05% Volatility 103.73% 79.02% 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 equity awards activity under the 2010 Plan 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 January 1, 2019 - 4,171 $ 2.92 Options exercised - (575) 1.64 Options forfeited, cancelled and expired - (405) 3.43 Balance at December 31, 2019 - 3,191 $ 3.08 Options exercised - (680) 2.12 Options forfeited, cancelled and expired - (1,293) 2.73 Balance at December 31, 2020 - 1,218 $ 3.55 Exercisable at December 31, 2020 1,216 $ 3.58 |
2018 Incentive Plan Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of 2018 Incentive Plan activity and related information follows (in thousands except weighted average exercise price): Shares Available for Grant Number of Options Outstanding Number of RSUs Outstanding Weighted Average Exercise Price Balance at January 1, 2019 4,639 361 - $ 2.21 Option pool increase 6,000 - - $ - Options granted (4,089) 4,089 - $ 2.87 RSUs granted (170) - 85 $ n/a Options exercised - - - $ - Options forfeited and cancelled 362 (362) $ 3.42 Balance at December 31, 2019 6,742 4,088 85 $ 2.77 RSUs vested - - (20) $ n/a RSUs granted (272) - 136 $ n/a Options granted (3,332) 3,332 - $ 2.42 Options exercised - - - $ - Options forfeited and cancelled 208 (208) - $ 2.16 Balance at December 31, 2020 3,346 7,212 201 $ 2.60 Exercisable at December 31, 2020 2,195 $ 2.73 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets and Liabilities | The primary components of the deferred tax assets and liabilities at December 31, 2020 and 2019 were as follows (in thousands): 2020 2019 Deferred tax assets/(liabilities): Net operating loss carryforwards and capital loss carryforwards $ 29,203 $ 19,391 Research and development credit carryforwards 2,638 2,190 Marketable equity securities 261 394 Patents and fixed assets - 949 Stock-based and other compensation 1,855 1,166 Equity method investment in Razor 404 81 Right-of-use liability 1,064 764 Other 168 - Right-of-use asset (712) (749) Intangibles and fixed assets (3,129) - Total 31,752 24,186 Valuation allowance (31,752) (24,186) Net deferred tax asset $ - $ - |
Schedule of Income Tax Reconciliation | Income taxes differed from the amounts computed by applying the applicable U.S. federal income tax rates indicated to pretax losses from operations as a result of the following: 2020 2019 Computed tax benefit at federal statutory rate 21% 21% Permanent differences 2% (2)% State tax benefit 4% 2% Research and development credits 1% (2)% Other -% -% Adjust basis for available-for-sale-securities -% -% Change in valuation allowance (24)% (19)% 4% -% |
Schedule of Unrecognized Tax Benefit | A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands): December 31, 2020 2019 (in thousands) Balance at the beginning of the year $ 2,888 $ - Additions based on tax positions related to current year 149 1,301 Adjustments based on tax positions related to prior years 15 1,587 Balance at end of year $ 3,052 $ 2,888 |
Disaggregation of Revenues an_2
Disaggregation of Revenues and Concentration Risk (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Consolidated Revenues Attributable to Products or Services | The following table presents the percentage of consolidated revenues attributable to products or services classes that represent greater than ten percent of consolidated revenues: Year Ended December 31, 2020 2019 DetermaRx™ 45% - Pharma Services 55% - Total 100% - |
Schedule of Consolidated Revenues Generated by Unaffiliated Customers | The following table presents the percentage of consolidated revenues received from unaffiliated customers that individually represent greater than ten percent of consolidated revenues: Year Ended December 31, 2020 2019 Medicare for DetermaRx™ 40% - Pharma Services Company A 23% - Pharma Services Company B 12% - |
Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations | The following table presents the percentage of consolidated revenues attributable to geographical locations: Year Ended December 31, 2020 2019 United States 61% - Outside of the United States – Pharma Services 39% - Total 100% - |
Schedule of Percentage of Total Consolidated Accounts Receivables | The following table presents accounts receivable, as a percentage of total consolidated accounts receivables, from third-party payers and other customers that provided in excess of 10% of Oncocyte’s total accounts receivable. December 31, 2020 2019 Pharma Services Company A 35% - Medicare for DetermaRx TM 45% - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 year ended December 31, 2020 (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 552 Operating cash flows from financing leases 9 Financing cash flows from financing leases 71 Right-of-use assets obtained in exchange for lease obligation: Operating lease, including lease acquired in Insight Genetics business combination $ 536 |
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 December 31, 2020 (in thousands, except lease term and discount rate): Operating leases Right-of-use assets, net $ 2,919 Right-of-use lease liabilities, current $ 271 Right-of-use lease liabilities, noncurrent 4,091 Total operating lease liabilities $ 4,362 Financing Leases Machinery and equipment, gross $ 523 Accumulated depreciation (180 ) Machinery and equipment, net $ 343 Current liabilities $ 151 Noncurrent liabilities 221 Total financing lease liabilities $ 372 Weighted average remaining lease term Operating leases 6.2 years Financing leases 2.7 years Weighted average discount rate Operating leases 11.15 % Financing leases 11.27 % |
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases | The following table presents future minimum lease commitments as of December 31, 2020 (in thousands): Operating Leases Financing Leases Year Ending December 31, 2021 $ 1,030 $ 185 2022 1,096 124 2023 1,000 124 2024 889 - 2025 869 - Thereafter 1,594 - Total minimum lease payments 6,478 433 Less: amounts representing interest (1,887 ) (61 ) Less: Tenant Improvement Allowance, net of administrative fee (229) (1) - Present value of net minimum lease payments $ 4,362 $ 372 (1) In accordance with ASC 842, a tenant allowance should be included in the measurement of the consideration in the lease agreement at inception and reflected as a reduction to the right-of-use asset and a corresponding reduction to the right-use-liability if the lessee both controls the construction of the tenant improvements and the expects to fully earn all of the tenant allowance. Oncocyte has met both conditions at the inception of the Irvine Lease and has recorded the Tenant Improvement Allowance accordingly. As the cash for the Tenant Improvement Allowance is received from the lessor under the terms of the Irvine Lease, the corresponding right-of-use liability will increase and will be amortized as part of the right-of use asset and liability amortization over the term of the Irvine Lease in accordance with ASC 842. As of December 31, 2020, the lessor had provided $1.1 million of the total $1.3 million Tenant Improvement Allowance, leaving a balance of $0.2 million. |
Organization, Description of _2
Organization, Description of the Business and Liquidity (Details Narrative) - USD ($) | Apr. 23, 2020 | Mar. 20, 2020 | Feb. 28, 2021 | Feb. 24, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Schedule of Equity Method Investments [Line Items] | |||||||
Equity ownership percentage | 5.00% | ||||||
Accumulated deficit | $ (123,677,000) | $ (93,745,000) | |||||
Cash and cash equivalents | 7,143,000 | 22,072,000 | |||||
Marketable equity securities | $ 675,000 | $ 379,000 | |||||
PPP [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Interest rate | 1.00% | ||||||
Maturity date | Apr. 23, 2022 | ||||||
Subsequent Event [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Additional capital | $ 69,600,000 | ||||||
Razor Genomics, Inc. [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity ownership percentage | 25.00% | 25.00% | |||||
Razor Genomics, Inc. [Member] | Subsequent Event [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity ownership percentage | 75.00% | ||||||
Piper Sandler & Co [Member] | ATM Agreement [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Proceeds from offering | $ 25,000,000 | ||||||
Silicon Valley Bank [Member] | PPP [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Proceeds from loan | $ 1,140,930 | ||||||
Interest rate | 1.00% | ||||||
Maturity date | Apr. 23, 2022 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Feb. 24, 2021 | Sep. 30, 2019 | Feb. 17, 2017 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Equity ownership percentage | 5.00% | ||||
Equity method investment, description | As of the date of this Report, Lineage's ownership interest in Oncocyte is less than 5%. | ||||
Cash and cash equivalents balances | $ 7,143 | $ 22,072 | |||
Marketable equity securities, fair market value | 675 | 379 | |||
Impairment charge on goodwill and intangible asset | |||||
Impairment charge for long-lived assets | 422 | ||||
Payment of interest and penalties | |||||
Income tax rate | 21.00% | 21.00% | |||
Pharma Services [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Accounts receivable | $ 103 | ||||
Research and Development [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Impairment charge for long-lived assets | $ 422 | ||||
Acquired Customer Relationships [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Estimated useful life of intangible assets | 5 years | ||||
Razor Genomics, Inc. [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Equity ownership percentage | 25.00% | 25.00% | |||
Accounts receivable | $ 100 | ||||
Razor Genomics, Inc. [Member] | Subsequent Event [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Equity ownership percentage | 75.00% | ||||
Minimum [Member] | Machinery and Equipment [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Estimated useful life of plant and equipment | 3 years | ||||
Minimum [Member] | Equipment [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Lease term | 3 years | ||||
Maximum [Member] | Machinery and Equipment [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Estimated useful life of plant and equipment | 10 years | ||||
Maximum [Member] | Equipment [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Lease term | 5 years | ||||
Lineage Cell Therapeutics, Inc [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares held as available-for-sale securities, shares | 353,264 | ||||
Marketable equity securities, fair market value | $ 675 | ||||
Lineage Cell Therapeutics, Inc [Member] | Minimum [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Equity ownership percentage | 50.00% | ||||
Lineage Cell Therapeutics, Inc [Member] | Maximum [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Equity ownership percentage | 5.00% | 20.00% | |||
AgeX Therapeutics Inc [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares held as available-for-sale securities, shares | 35,326 | ||||
Marketable equity securities, fair market value | $ 675 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 7,143 | $ 22,072 | |
Restricted cash included in deposits and other noncurrent assets (see Note 14) | 1,700 | 1,700 | |
Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows | $ 8,843 | $ 23,772 | $ 8,034 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 8,906,000 | 1,589,000 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 3,384,000 | 3,384,000 |
Selected Balance Sheet Compon_3
Selected Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid insurance | $ 264 | $ 80 |
Prepaid vendors, deposits and service agreements | 646 | 389 |
Other | 295 | 36 |
Total prepaid expenses and other current assets | $ 1,205 | $ 505 |
Selected Balance Sheet Compon_4
Selected Balance Sheet Components - Schedule of Deposits and Other Noncurrent Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Restricted cash and security deposit for the Irvine Lease (Note 14) | $ 1,850 | $ 1,850 |
Long-term prepaid maintenance contracts | 118 | 268 |
Other | 88 | 93 |
Total deposits and other noncurrent assets | $ 2,056 | $ 2,211 |
Selected Balance Sheet Compon_5
Selected Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Accrued compensation | [1] | $ 3,556 | $ 1,287 |
Cash holdback liability (see Note 5) | 600 | ||
Accrued vendor and other expenses | 1,596 | 1,323 | |
Accrued expenses and other current liabilities | $ 5,752 | $ 2,610 | |
[1] | Includes approximately $1.1 million in severance accrual as of December 31, 2020, in accordance with the severance benefits provided under certain employment and severance benefit agreements, in connection with Oncocyte's partial reduction in force plan and salary reduction agreements instituted in September 2020 (see Note 14). |
Selected Balance Sheet Compon_6
Selected Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Balance Sheet Related Disclosures [Abstract] | |
Severance accrual | $ 1,100 |
Right-of-Use Assets, Machiner_3
Right-of-Use Assets, Machinery and Equipment, Net and Construction in Progress (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation expense | $ 313 | $ 344 |
Impairment charge for long-lived assets | 422 | |
Leasehold improvements | 2,100 | |
Landlord liability | 1,100 | |
Machinery and Equipment [Member] | ||
Impairment charge for long-lived assets | $ 333 |
Right-of-Use Assets, Machiner_4
Right-of-Use Assets, Machinery and Equipment, Net and Construction in Progress - Schedule of Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Right-of-use assets | $ 3,397 | $ 2,856 |
Machinery and equipment | 2,480 | 1,089 |
Accumulated depreciation and amortization | (1,440) | (343) |
Right-of-use assets, machinery and equipment, net | 4,437 | 3,602 |
Construction in progress | 2,087 | 126 |
Right-of-use assets, machinery and equipment, net, and construction in progress | $ 6,524 | $ 3,728 |
Acquisition of Insight (Details
Acquisition of Insight (Details Narrative) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2020USD ($)Numbershares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | |
Sale of common shares | $ 18,343 | $ 48,850 | |
Number of common stock, shares issued | shares | |||
Discount rate | 11.27% | ||
Operating lease, right use of asset | $ 3,397 | $ 2,856 | |
Fair value of contingent consideration | 4,000 | ||
Milestone Contingent Consideration [Member] | |||
Payments for milestones | $ 6,000 | ||
Discount rate | 8.00% | ||
Credit and risk-adjusted discount rate | 48.00% | ||
Cash Holdback [Member] | |||
Cash | $ 600 | $ 6,400 | |
Sale of common shares | $ 600 | ||
Stock Holdback [Member] | |||
Number of common stock, shares issued | shares | 229,885 | ||
Stock Holdback One [Member] | |||
Number of common stock, shares issued | shares | 1,900,000 | ||
Clinical Trial and Data Publication Milestone [Member] | Milestone Contingent Consideration [Member] | |||
Payments for milestones | $ 1,500 | ||
CMS Specified Lung Cancer [Member] | Milestone Contingent Consideration [Member] | |||
Payments for milestones | 3,000 | ||
CMS Reimbursement Milestones [Member] | Milestone Contingent Consideration [Member] | |||
Payments for milestones | 1,500 | ||
Merger Agreements [Member] | |||
Cash | 7,000 | ||
Sale of common shares | 5,000 | ||
Merger consideration | 11,400 | ||
Common stock delivered average value | $ 5,000 | ||
Trading days | Number | 5 | ||
Fair value of intangible asset | $ 14,700 | ||
Discount rate | 35.00% | ||
Acquisition of offsetting | $ 1,300 | ||
Estimated useful lives of amortization | 5 years | ||
Operating lease, right of use liability | $ 500 | ||
Operating lease, right use of asset | 500 | ||
Deferred tax liabilities | 1,300 | ||
Merger Agreements [Member] | Laboratory Machinery and Equipment [Member] | |||
Fair value of intangible asset | $ 100 |
Acquisition of Insight - Schedu
Acquisition of Insight - Schedule of Fair Value of Aggregate Merger Consideration (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | |
Jan. 31, 2020USD ($)$ / sharesshares | ||
Business Combinations [Abstract] | ||
Cash consideration | $ 7,000 | [1] |
Shares of Oncocyte common stock issued on the Merger Date | shares | 1,915,692 | [2] |
Closing price per share of Oncocyte common stock on the Merger Date | $ / shares | $ 2.61 | |
Market value of Oncocyte common stock issued | $ 5,000 | |
Contingent Consideration | 11,130 | [3] |
Total fair value of consideration transferred on the Merger Date | $ 23,130 | |
[1] | The cash consideration paid on the Merger Date was $6.4 million, which was net of a $0.6 million cash holdback discussed above, recorded as a holdback liability since Oncocyte retained the cash. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers are included as part of the total consideration transferred. | |
[2] | The 229,885 Stock Holdback shares were placed in an escrow account and considered to be issued and outstanding Oncocyte common stock. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers, including escrowed shares of common stock, are included as part of the total consideration transferred. | |
[3] | In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Merger Date, as further discussed below. |
Acquisition of Insight - Sche_2
Acquisition of Insight - Schedule of Fair Value of Aggregate Merger Consideration (Details) (Parenthetical) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash consideration paid | $ 6,400 | ||
Number of common stock, shares issued | |||
Cash Holdback [Member] | |||
Cash consideration paid | $ 600 | ||
Stock Holdback [Member] | |||
Number of common stock, shares issued | 229,885 |
Acquisition of Insight - Sche_3
Acquisition of Insight - Schedule of Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | [1] | Jan. 31, 2020 | Dec. 31, 2019 | [1] |
Business Combinations [Abstract] | |||||
Cash and cash equivalents | $ 36 | ||||
Accounts receivable and other current assets | 42 | ||||
Right-of-use assets, machinery and equipment | 585 | ||||
Long-lived intangible assets - customer relationships | 440 | ||||
Acquired in-process research and development | 14,650 | ||||
Total identifiable assets acquired | 15,753 | ||||
Accounts payable | 61 | ||||
Right-of-use liabilities - operating lease | 495 | ||||
Contingent Consideration transferred | 11,130 | ||||
Long-term deferred income tax liability | 1,254 | ||||
Total identifiable liabilities assumed | 12,940 | ||||
Net assets acquired, excluding goodwill | 2,813 | ||||
Total cash and stock consideration transferred | 12,000 | ||||
Goodwill | $ 9,187 | $ 9,187 | |||
[1] | Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Merger (see Note 5). |
Acquisition of Insight - Sche_4
Acquisition of Insight - Schedule of Identifiable Intangible Assets and Estimated Useful Life (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Estimated Asset Fair Value | $ 15,090 |
In Process Research and Development [Member] | |
Estimated Asset Fair Value | 14,650 |
Customer Relationships [Member] | |
Estimated Asset Fair Value | $ 440 |
Useful Life (Years) | 5 years |
Acquisition of Insight - Sche_5
Acquisition of Insight - Schedule of Fair Value of Contingent Consideration Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 31, 2020 | |
Contractual Value | $ 6,000 | ||
Initial Fair Value | 7,120 | $ 11,130 | |
Milestone 1 [Member] | |||
Contractual Value | 1,500 | ||
Initial Fair Value | 1,340 | ||
Milestone 2 [Member] | |||
Contractual Value | 3,000 | ||
Initial Fair Value | 1,830 | ||
Milestone 3 [Member] | |||
Contractual Value | [1] | 1,500 | |
Initial Fair Value | [1] | 770 | |
Royalty 1 [Member] | |||
Contractual Value | [2] | ||
Initial Fair Value | [2] | 5,980 | |
Royalty 2 [Member] | |||
Contractual Value | [2] | ||
Initial Fair Value | [2] | $ 1,210 | |
[1] | Indicates the maximum payable if the Milestone achieved. | ||
[2] | Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, as defined, accordingly, there is no fixed contractual value for the Royalty Contingent Consideration. |
Acquisition of Insight - Sche_6
Acquisition of Insight - Schedule of Contingent Consideration, Measured at Fair Value (Details) - USD ($) $ in Thousands | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | |||
Beginning balance | $ 11,130 | ||
Change in estimated fair value | (4,010) | $ (4,010) | |
Ending balance | $ 7,120 | $ 7,120 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Goodwill | $ 9,187 | [1] | $ 9,187 | [1] | ||
Acquired IPR&D - DetermaIO™ | [2] | 14,650 | ||||
Acquired intangible assets - customer relationship | 440 | |||||
Total intangible assets | 15,090 | |||||
Accumulated amortization | (81) | |||||
Intangible assets, net | $ 15,009 | |||||
[1] | Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Merger (see Note 5). | |||||
[2] | See Note 5 for information on the Merger which was consummated on January 31, 2020. |
Equity Method Investment in R_3
Equity Method Investment in Razor Genomics, Inc. (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity ownership percentage | 5.00% | ||
Common stock value | $ 157,160 | $ 124,583 | |
Equity method investment in razor | 13,417 | 10,964 | |
Sale of common shares | 18,343 | $ 48,850 | |
Purchase Agreement [Member] | |||
Common stock value | 5,000 | ||
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% | 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] | CMS Final [Member] | |||
Milestone payment | $ 4,000 | ||
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 Oncocyte common stock having a market value of $5 million would exceed the number of shares issuable without shareholder approval under applicable stock exchange rules, Oncocyte may deliver a number of shares of common stock that would not exceed the number of shares permissible under stock exchange rules and an amount of cash necessary to bring the combined value of cash and shares to $5 million. | ||
Milestone payment | $ 1,000 | ||
Equity method investment in razor | $ 4,000 | ||
Encore Clinical, Inc. [Member] | Development Agreement [Member] | Minority Shareholders [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 the number of shares that may be issued without shareholder approval under applicable stock exchange rules, Oncocyte may deliver the number of shares permissible under stock exchange rules and an amount of cash necessary to bring the combined value of cash and shares to $3 million. | ||
Sale of common shares | $ 3,000 | ||
Additional funding amount | $ 3,000 |
Equity Method Investment in R_4
Equity Method Investment in Razor Genomics, Inc. - Schedule of Condensed Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Research and development expense | $ 9,800 | $ 6,794 | |
General and administrative expense | 16,788 | 13,281 | |
Loss from operations | (29,711) | (22,239) | |
Net loss | (29,932) | $ (22,426) | |
Razor Genomics, Inc. [Member] | |||
Research and development expense | [1] | 691 | |
General and administrative expense | [1] | ||
Loss from operations | [1] | (691) | |
Net loss | [1] | $ (691) | |
[1] | The condensed statement of operations of Razor is provided for informational purposes only. Razor's full results are not included in Oncocyte's consolidated results of operations because Razor is not consolidated with Oncocyte's financial statements for any period presented but has been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date. However, since September 30, 2019 and through December 31, 2020, Oncocyte's pro rata share of losses from the Razor investment have been included in other income or expenses, net, on the condensed consolidated statements of operations. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jan. 02, 2020 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Number of common stock, shares issued | ||||
Sale of common shares value | $ 18,343 | $ 48,850 | ||
Ronald Andrews [Member] | ||||
Related Party Transaction [Line Items] | ||||
Consulting fees | $ 600 | |||
Pura Vida Investments LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Number of common stock, shares issued | 3,523,776 | 4,733,700 | ||
Shares issued, price per share | $ 2.156 | $ 2.27 | ||
Proceeds from offering | $ 7,600 | |||
Sale of common shares value | $ 10,750 | |||
Lineage Cell Therapeutics, Inc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Markup rate on allocated costs | 5.00% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Aggregate Use of Fees Charged (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||
Research and development | $ 9,800 | $ 6,794 |
General and administrative | 16,788 | 13,281 |
Sales and marketing | $ 6,494 | 2,164 |
Lineage Cell Therapeutics, Inc [Member] | ||
Related Party Transaction [Line Items] | ||
Research and development | 696 | |
General and administrative | 438 | |
Sales and marketing | 108 | |
Total use fees | $ 1,242 |
Loan Payable to Silicon Valle_2
Loan Payable to Silicon Valley Bank (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 23, 2020 | Apr. 02, 2020 | Oct. 17, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 23, 2017 | Feb. 21, 2017 |
Debt Instrument [Line Items] | |||||||
Amortization of deferred financing costs | $ 102 | $ 59 | |||||
Interest rate | 3.25% | ||||||
Warrants [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Warrants to purchase, shares | 7,321 | 8,247 | |||||
Warrant exercise price, per share | $ 5.46 | $ 4.85 | |||||
Amended Loan Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, description | Oncocyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 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 were due monthly from the draw date through March 31, 2020, followed by 24 monthly payments of principal and interest, but the Bank has agreed to a deferral of principal payments, as discussed below. The outstanding principal balance of the loan will bear interest at a stated floating annual interest equal to the greater of (a) the prime rate or (b) 5% per annum. As of December 31, 2020, the latest published prime rate was 3.25% per annum. | ||||||
Amended Loan Agreement [Member] | Bank Warrant [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, final payment | $ 200 | ||||||
Unamortized deferred financing cost | $ 68 | ||||||
Warrants to purchase, shares | 98,574 | ||||||
Warrant exercise price, per share | $ 1.69 | ||||||
Amended Loan Agreement [Member] | Tranche One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Secured credit facility | $ 3,000 | ||||||
Repayment of remaining balance | 400 | ||||||
Debt instrument, final payment | 116 | ||||||
Amended Loan Agreement [Member] | Tranche Two [Member] | |||||||
Debt Instrument [Line Items] | |||||||
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 DetermaRx 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% | ||||||
Amended Loan Agreement [Member] | Tranche Two [Member] | Bank Warrant [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Warrant exercise price, per share | $ 0.02 | ||||||
Diluted equity outstanding | $ 1,000 | ||||||
Loan Deferral Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, maturity date description | The Bank agreed to (i) extend the scheduled maturity date of the Amended Loan Agreement from March 31, 2022 to September 30, 2022, and (ii) deferred the principal payments by an additional 6 months whereby payments of interest only on the Bank loan principal balance will be due monthly from May 1, 2020 through October 1, 2020, followed by 23 monthly payments of principal and interest beginning on November 1, 2020, all provided at no additional fees to Oncocyte. | ||||||
Loan and Security Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount borrowed | $ 2,000 | ||||||
Periodic payment term | Payments of interest only on the principal balance were due monthly from the loan funding date, March 23, 2017, through October 31, 2017, and, beginning on November 1, 2017 | ||||||
Periodic payments of principal and interest | $ 67 | ||||||
Debt instrument, maturity date | Apr. 1, 2020 | ||||||
Amortization of deferred financing costs | $ 116 | ||||||
Prepayment fee if prepaid two years or more | 1.00% | ||||||
PPP [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount borrowed | $ 1,140,930 | ||||||
Debt instrument, maturity date | Apr. 23, 2022 | ||||||
Debt instrument, interest rate | 1.00% |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock par value | ||
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock par value | ||
Stock issued during the period | ||
Net proceeds from common stock | $ 18,343 | $ 48,850 |
Common stock, shares issued | 69,117,000 | 57,032,000 |
Common stock, shares outstanding | 69,117,000 | 57,032,000 |
Common stock purchase warrants, shares issued | 3,383,913 | |
Common stock purchase warrants, shares outstanding | 3,383,913 | |
Warrant expiry date | Oct. 17, 2029 | |
Exercise of stock options, shares | ||
Exercise of stock options | $ 1,422 | $ 943 |
Minimum [Member] | ||
Common stock purchase warrants, exercise price | $ 1.69 | |
Maximum [Member] | ||
Common stock purchase warrants, exercise price | $ 5.50 | |
Common Stock [Member] | ||
Stock issued during the period | 8,257,000 | 15,793,000 |
Exercise of stock options, shares | 680,000 | 575,000 |
Exercise of stock options | $ 1,422 | $ 943 |
Sales Agent [Member] | Common Stock [Member] | ||
Net proceeds from common stock | $ 300 | |
ATM Agreement [Member] | ||
Stock issued during the period | 1,136,673 | |
Net proceeds from common stock | $ 2,650 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Exercise prices ranging, lower limit | $ 1.33 | |||
Exercise prices ranging, upper limit | 5.90 | |||
Fair value option exercise price per share | $ 2.42 | $ 2.01 | ||
Stock Appreciation Rights (SARs) [Member] | ||||
Number of option granted during the period | 1,000,000 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Number of option granted during the period | 500,000 | |||
Stock options description | The price at which Restricted Stock may be issued or sold will be not less than 100% of fair market value. | |||
2010 Stock Option Plan [Member] | ||||
Common stock, shares authorized | 5,200,000 | |||
Unrecognized compensation expense | $ 8,100 | |||
Unrecognized compensation expense recognized over a weighted-average period | 2 years 6 months | 2 years 7 months 6 days | ||
2010 Stock Option Plan [Member] | Employees and Consultants [Member] | ||||
Exercise prices ranging, lower limit | $ 2.30 | |||
Exercise prices ranging, upper limit | $ 3.15 | |||
2018 Incentive Plan Activity [Member] | ||||
Number of common stock reserved for future issuance | 11,000,000 | |||
Number of option granted during the period | 3,332,000 | 4,089,000 | ||
Stock options description | Under the 2018 Incentive Plan must be equal to the fair market of Oncocyte common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of Oncocyte stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of the common stock on the grant date, and the term of the option may be no longer than five years. | |||
Option vested | ||||
Fair value option exercise price per share | $ 2.42 | $ 2.87 | ||
2018 Incentive Plan Activity [Member] | Maximum [Member] | ||||
Stock options exercisable | $ 100 | |||
Performance-Based Options [Member] | ||||
Option vested | 265,000 | 47,500 | ||
Share based compensation expenses | $ 466 | $ 101 | ||
Performance-Based Options [Member] | DetermaDx [Member] | ||||
Number of option granted during the period | 125,000 | |||
2010 Incentive Plan Activity [Member] | ||||
Unrecognized compensation expense | $ 8,100 | |||
2018 Incentive Plan Activity [Member] | ||||
Unrecognized compensation expense | $ 6,500 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of options outstanding, options exercised | ||
Number of options outstanding, end of period | 8,374,000 | |
Weighted average exercise price, option granted | $ 2.42 | $ 2.01 |
Weighted average exercise price, outstanding end of period | $ 2.76 | |
2010 Plan Activity [Member] | ||
Shares available for grant options, beginning of period | ||
Shares available for grant options exercised | ||
Shares available for grant options forfeited, cancelled and expired | ||
Shares available for grant outstanding, end of period | ||
Number of options outstanding, beginning of period | 3,191,000 | 4,171,000 |
Number of options outstanding, options exercised | (68,000) | (575,000) |
Number of options outstanding, options forfeited, cancelled and expired | (1,293,000) | (405,000) |
Number of options outstanding, end of period | 1,218,000 | 3,191,000 |
Number of options outstanding, exercisable, end of period | 1,216,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 3.08 | $ 2.92 |
Weighted average exercise price, options exercised | 2.12 | 1.64 |
Weighted average exercise price, options forfeited, cancelled and expired | 2.73 | 3.43 |
Weighted average exercise price, outstanding end of period | 3.55 | $ 3.08 |
Weighted average exercise price, exercisable, end of period | $ 3.58 | |
2018 Incentive Plan Activity [Member] | ||
Shares available for grant options, beginning of period | 6,742,000 | 4,639,000 |
Shares available for grant option pool increase | 6,000 | |
Shares available for grant options RSUs vested | ||
Shares available for grant options RSUs granted | (272,000) | (170,000) |
Shares available for grant options granted | (3,332,000) | (4,089,000) |
Shares available for grant options exercised | ||
Shares available for grant options forfeited, cancelled and expired | 208,000 | 362,000 |
Shares available for grant outstanding, end of period | 3,346,000 | 6,742,000 |
Number of options outstanding, beginning of period | 4,088,000 | 361,000 |
Number of options outstanding, option pool increase | ||
Number of options outstanding, option granted | 3,332,000 | 4,089,000 |
Number of options outstanding, option RSUs vested | ||
Number of options outstanding, option RSUs granted | ||
Number of options outstanding, options exercised | ||
Number of options outstanding, options forfeited, cancelled and expired | (208,000) | (362,000) |
Number of options outstanding, end of period | 7,212,000 | 4,088,000 |
Number of options outstanding, exercisable, end of period | 2,195,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 2.77 | $ 2.21 |
Weighted average exercise price, option pool increase | ||
Weighted average exercise price, option granted | 2.42 | $ 2.87 |
Weighted average exercise price, option RSUs vested | ||
Weighted average exercise price, option RSUs granted | ||
Weighted average exercise price, options exercised | ||
Weighted average exercise price, options forfeited, cancelled and expired | 2.16 | 3.42 |
Weighted average exercise price, outstanding end of period | 2.60 | $ 2.77 |
Weighted average exercise price, exercisable, end of period | $ 2.73 | |
Number of RSUs Outstanding, beginning of period | 85,000 | |
Number of RSUs Outstanding, option pool increase | ||
Number of RSUs Outstanding, option granted | ||
Number of RSUs Outstanding, option RSUs vested | (20,000) | |
Number of RSUs Outstanding, option RSUs granted | 136,000 | 85,000 |
Number of RSUs Outstanding, options exercised | ||
Number of RSUs Outstanding, options forfeited, canceled and expired | ||
Number of RSUs Outstanding, end of period | 201,000 | 85,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Options Outstanding, Vested and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | $ 1.33 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 5.90 |
Options Outstanding, Number of Shares | shares | 8,374,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 8 years 3 months 4 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 2.76 |
Exercise Price Range One [Member] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | 1.33 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 2.38 |
Options Outstanding, Number of Shares | shares | 2,920,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 8 years 6 months 21 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 2.04 |
Exercise Price Range Two [Member] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | 2.40 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 2.63 |
Options Outstanding, Number of Shares | shares | 3,299,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 8 years 7 months 13 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 2.58 |
Exercise Price Range Three [Member] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | 2.78 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 5.90 |
Options Outstanding, Number of Shares | shares | 2,155,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 7 years 3 months 15 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 4.01 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total stock-based compensation expense | $ 5,066 | $ 2,995 |
Stock Option Plan [Member] | Cost of Revenues [Member] | ||
Total stock-based compensation expense | 93 | |
Stock Option Plan [Member] | Research and Development [Member] | ||
Total stock-based compensation expense | 1,245 | 612 |
Stock Option Plan [Member] | General and Administrative [Member] | ||
Total stock-based compensation expense | 3,187 | 2,272 |
Stock Option Plan [Member] | Sales and Marketing [Member] | ||
Total stock-based compensation expense | $ 541 | $ 111 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Expected life (in years) | 6 years | 6 years 11 days |
Risk-free interest rates | 1.08% | 2.05% |
Volatility | 103.73% | 79.02% |
Dividend yield | 0.00% | 0.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Provision for income taxes | $ (1,254) | ||
Partial release of valuation allowances | 1,250 | ||
Net operating loss carryforwards | 29,203 | 19,391 | |
Research and development credit carryforwards | 2,638 | 2,190 | |
Change in valuation allowance | 7,600 | 4,300 | |
Uncertain tax benefits | 3,052 | 2,888 | |
Accrued interest and penalties | |||
Income tax other description | The amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. | ||
Federal [Member] | |||
Net operating loss carryforwards | $ 119,700 | ||
Net operating loss expiration period description | Between 2027 and 2037 | ||
State [Member] | |||
Net operating loss carryforwards | $ 73,600 | ||
Net operating loss expiration period description | Between 2022 and 2040 | ||
Federal and State [Member] | |||
Net operating loss carryforwards | $ 300 | ||
Capital loss carryforward expiration year | 2022 | ||
Federal and State [Member] | Research and Development [Member] | |||
Credit carryforward expiration term | Between 2030 and 2040 | ||
State [Member] | Research and Development [Member] | |||
Research and development credit carryforwards | $ 1,800 | ||
Federal [Member] | Research and Development [Member] | |||
Research and development credit carryforwards | $ 1,700 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards and capital loss carryforwards | $ 29,203 | $ 19,391 |
Research and development credit carryforwards | 2,638 | 2,190 |
Marketable equity securities | 261 | 394 |
Patents and fixed assets | 949 | |
Stock-based and other compensation | 1,855 | 1,166 |
Equity method investment in Razor | 404 | 81 |
Right-of-use liability | 1,064 | 764 |
Other | 168 | |
Right-of-use asset | (712) | (749) |
Intangibles and fixed assets | (3,129) | |
Total | 31,752 | 24,186 |
Valuation allowance | (31,752) | (24,186) |
Net deferred tax asset |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Computed tax benefit at federal statutory rate | 21.00% | 21.00% |
Permanent differences | 2.00% | (2.00%) |
State tax benefit | 4.00% | 2.00% |
Research and development credits | 1.00% | (2.00%) |
Other | 0.00% | 0.00% |
Adjust basis for available-for-sale-securities | 0.00% | 0.00% |
Change in valuation allowance | (24.00%) | (19.00%) |
Income tax benefit percentage | 4.00% | 0.00% |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Balance at the beginning of the year | $ 2,888 | |
Additions based on tax positions related to current year | 149 | 1,301 |
Adjustments based on tax positions related to prior years | 15 | 1,587 |
Balance at end of year | $ 3,052 | $ 2,888 |
Disaggregation of Revenues an_3
Disaggregation of Revenues and Concentration Risk - Schedule of Consolidated Revenues Attributable to Products or Services (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration risk, percentage | 100.00% | 0.00% |
DetermaRx [Member] | ||
Concentration risk, percentage | 45.00% | 0.00% |
Pharma Services [Member] | ||
Concentration risk, percentage | 55.00% | 0.00% |
Disaggregation of Revenues an_4
Disaggregation of Revenues and Concentration Risk - Schedule of Consolidated Revenues Generated by Unaffiliated Customers (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration risk, percentage | 100.00% | 0.00% |
Medicare for DetermaRx [Member] | ||
Concentration risk, percentage | 40.00% | 0.00% |
Pharma Services Company A [Member] | ||
Concentration risk, percentage | 23.00% | 0.00% |
Pharma Services Company B [Member] | ||
Concentration risk, percentage | 12.00% | 0.00% |
Disaggregation of Revenues an_5
Disaggregation of Revenues and Concentration Risk - Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration risk, percentage | 100.00% | 0.00% |
United States [Member] | ||
Concentration risk, percentage | 61.00% | 0.00% |
Outside United States [Member] | ||
Concentration risk, percentage | 39.00% | 0.00% |
Disaggregation of Revenues an_6
Disaggregation of Revenues and Concentration Risk - Schedule of Percentage of Total Consolidated Accounts Receivables (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration risk, percentage | 100.00% | 0.00% |
Pharma Services Company A [Member] | ||
Concentration risk, percentage | 23.00% | 0.00% |
Pharma Services Company A [Member] | Accounts Receivable [Member] | ||
Concentration risk, percentage | 35.00% | 0.00% |
Medicare for DetermaRx [Member] | ||
Concentration risk, percentage | 40.00% | 0.00% |
Medicare for DetermaRx [Member] | Accounts Receivable [Member] | ||
Concentration risk, percentage | 45.00% | 0.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Dec. 23, 2019USD ($)ft² | Dec. 31, 2020USD ($) |
Other Commitments [Line Items] | ||
Payments due to the lanlord for early cancellation | $ 329,000 | |
Severance accrual | 1,100,000 | |
Laboratory Equipment [Member] | ||
Other Commitments [Line Items] | ||
Payment obligation amount | 433,000 | |
Office Lease Agreement [Member] | ||
Other Commitments [Line Items] | ||
Area of land | ft² | 26,800 | |
Payments for rent | $ 61,640 | |
Payments of tenant improvement allowance | $ 1,340,000 | |
Percentage of administrative fee paid on original cost of equipment | 1.50% | |
Security deposit | $ 150,000 | |
Line of credit | $ 1,700,000 | |
Office Lease Agreement [Member] | Landlord [Member] | ||
Other Commitments [Line Items] | ||
Interest rate on lease agreement | 4.00% | |
Payments of tenant improvement allowance | 1,100,000 | |
Office Lease Agreement [Member] | Monthly Rent [Member] | ||
Other Commitments [Line Items] | ||
Interest rate on lease agreement | 3.50% | |
Obligated to pay expenses and taxes percentage | 43.70% | |
Office Lease Agreement [Member] | First Ten Calendar [Member] | ||
Other Commitments [Line Items] | ||
Interest rate on lease agreement | 50.00% | |
Laboratory Agreement [Member] | ||
Other Commitments [Line Items] | ||
Payment obligation amount | $ 450,000 | |
Lease expiration period | Sep. 29, 2021 | |
Razor's Laboratory Agreement [Member] | ||
Other Commitments [Line Items] | ||
Lease expiration period | Mar. 31, 2023 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 552 | |
Operating cash flows from financing leases | 9 | |
Financing cash flows from financing leases | 71 | $ 454 |
Operating lease, including lease acquired in Insight Genetics business combination | $ 536 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating leases, Right-of-use assets, net | $ 3,397 | $ 2,856 |
Operating leases, Right-of-use lease liabilities, current | 271 | |
Operating leases, Right-of-use lease liabilities, noncurrent | 4,091 | |
Total operating lease liabilities | 4,362 | |
Financing Leases, Machinery and equipment, gross | 523 | |
Financing Leases, Accumulated depreciation | (180) | |
Financing Leases, Machinery and equipment, net | 343 | |
Current liabilities | 151 | |
Noncurrent liabilities | 221 | |
Total financing lease liabilities | $ 372 | |
Weighted average remaining lease term, Operating leases | 6 years 2 months 12 days | |
Weighted average remaining lease term, Financing leases | 2 years 8 months 12 days | |
Weighted average discount rate, Operating leases | 11.15% | |
Weighted average discount rate, Financing leases | 11.27% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Lease Commitments for Operating and Financing Leases (Details) $ in Thousands | Dec. 31, 2020USD ($) | |
Other Commitments [Line Items] | ||
Present value of net minimum lease payments | $ 372 | |
Operating Lease [Member] | ||
Other Commitments [Line Items] | ||
2021 | 1,030 | |
2022 | 1,096 | |
2023 | 1,000 | |
2024 | 889 | |
2025 | 869 | |
Thereafter | 1,594 | |
Total minimum lease payments | 6,478 | |
Less amounts representing interest | (1,887) | |
Less: Tenant Improvement Allowance, net of administrative fee | (229) | [1] |
Present value of net minimum lease payments | 4,362 | |
Financing Lease [Member] | ||
Other Commitments [Line Items] | ||
2020 | 185 | |
2021 | 124 | |
2022 | 124 | |
2023 | ||
2024 | ||
Thereafter | ||
Total minimum lease payments | 433 | |
Less amounts representing interest | (61) | |
Less Tenant Improvement Allowance, net of administrative fee | ||
Present value of net minimum lease payments | $ 372 | |
[1] | In accordance with ASC 842, a tenant allowance should be included in the measurement of the consideration in the lease agreement at inception and reflected as a reduction to the right-of-use asset and a corresponding reduction to the right-use-liability if the lessee both controls the construction of the tenant improvements and the expects to fully earn all of the tenant allowance. Oncocyte has met both conditions at the inception of the Irvine Lease and has recorded the Tenant Improvement Allowance accordingly. As the cash for the Tenant Improvement Allowance is received from the lessor under the terms of the Irvine Lease, the corresponding right-of-use liability will increase and will be amortized as part of the right-of use asset and liability amortization over the term of the Irvine Lease in accordance with ASC 842. As of December 31, 2020, the lessor had provided $1.1 million of the total $1.3 million Tenant Improvement Allowance, leaving a balance of $0.2 million. |
Commitments and Contingencies_5
Commitments and Contingencies - Schedule of Future Minimum Lease Commitments for Operating and Financing Leases (Details) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Payments for tenant improvements | $ 1,100 |
Tenant improvement allowance | 1,300 |
Tenant improvement allowance remaining balance | $ 200 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 24, 2021 | Feb. 09, 2021 | Feb. 04, 2021 | Feb. 02, 2021 | Jan. 20, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Jan. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock issued during the period | |||||||||||
Common stock, par value | |||||||||||
Shares issued during the period, value | $ 18,343,000 | $ 48,850,000 | |||||||||
Proceeds from issuance of common stock | 18,343,000 | 48,850,000 | |||||||||
Shares issued under merger aggrement | [1] | 1,915,692 | |||||||||
Amount of liabilities assumed under merger agreement | $ 12,940,000 | ||||||||||
Amount of liabilities | $ 21,936,000 | $ 9,021,000 | |||||||||
Subsequent Event [Member] | |||||||||||
Stock issued during the period | 248,251 | ||||||||||
Proceeds from issuance of common stock | $ 800,000 | ||||||||||
Subsequent Event [Member] | Razor Genomics, Inc. [Member] | |||||||||||
Stock issued during the period | 982,318 | ||||||||||
Shares issued during the period, value | $ 5,000,000 | ||||||||||
Cash paid to purchase shares of common stock | $ 10,000,000 | ||||||||||
Subscription Agreements [Member] | Institutional Investors [Member] | Subsequent Event [Member] | |||||||||||
Stock issued during the period | 7,301,410 | ||||||||||
Common stock, par value | |||||||||||
Share price per share | $ 3.424 | ||||||||||
Shares issued during the period, value | $ 25,000,000 | ||||||||||
Minimum beneficial ownership percentage | 5.00% | ||||||||||
Underwriting Agreement [Member] | Subsequent Event [Member] | Piper Sandler & Co [Member] | |||||||||||
Proceeds from issuance of common stock | $ 37,500,000 | ||||||||||
Underwriting Agreement [Member] | Subsequent Event [Member] | Piper Sandler & Co [Member] | Offering [Member] | |||||||||||
Stock issued during the period | 8,947,000 | 7,780,000 | |||||||||
Share price per share | $ 4.50 | ||||||||||
Underwriting Agreement [Member] | Subsequent Event [Member] | Piper Sandler & Co [Member] | Over-Allotments Option [Member] | |||||||||||
Stock issued during the period | 1,167,000 | ||||||||||
Underwriting Agreement [Member] | Subsequent Event [Member] | Piper Sandler & Co [Member] | Over-Allotments Option [Member] | Maximum [Member] | |||||||||||
Stock issued during the period | 1,167,000 | ||||||||||
Underwriting Agreement [Member] | Subsequent Event [Member] | Broadwood Capital, LP [Member] | Offering [Member] | |||||||||||
Stock issued during the period | 600,000 | ||||||||||
ATM Agreement [Member] | |||||||||||
Stock issued during the period | 1,136,673 | ||||||||||
Proceeds from issuance of common stock | $ 2,650,000 | ||||||||||
ATM Agreement [Member] | Subsequent Event [Member] | |||||||||||
Stock issued during the period | 2,178,327 | ||||||||||
Proceeds from issuance of common stock | $ 6,300,000 | ||||||||||
Merger Agreement [Member] | Subsequent Event [Member] | Chronix Biomedical, Inc [Member] | |||||||||||
Shares issued under merger aggrement | 295,000 | ||||||||||
Payment incurred on settlement of liabilities | $ 2,675,000 | ||||||||||
Amount of liabilities | 8,250,000 | ||||||||||
Merger Agreement [Member] | Subsequent Event [Member] | Chronix Biomedical, Inc [Member] | Maximum [Member] | |||||||||||
Amount of liabilities assumed under merger agreement | 5,575,000 | ||||||||||
Business combination consideration transferred | $ 14,000,000 | ||||||||||
Earnout percentage on collections for sales | 15.00% | ||||||||||
Earnout percentage on collections for sale or license | 75.00% | ||||||||||
[1] | The 229,885 Stock Holdback shares were placed in an escrow account and considered to be issued and outstanding Oncocyte common stock. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers, including escrowed shares of common stock, are included as part of the total consideration transferred. |