Cover
Cover - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2023 | Apr. 03, 2024 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-37648 | ||
Entity Registrant Name | Oncocyte Corporation | ||
Entity Central Index Key | 0001642380 | ||
Entity Tax Identification Number | 27-1041563 | ||
Entity Incorporation, State or Country Code | CA | ||
Entity Address, Address Line One | 15 Cushing | ||
Entity Address, City or Town | Irvine | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92618 | ||
City Area Code | (949) | ||
Local Phone Number | 409-7600 | ||
Title of 12(b) Security | Common Stock, no par value | ||
Trading Symbol | OCX | ||
Security Exchange Name | NASDAQ | ||
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 | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 18.8 | ||
Entity Common Stock, Shares Outstanding | 8,273,073 | ||
Documents Incorporated by Reference [Text Block] | Portions of the registrant’s Proxy Statement for its 2024 Annual Meeting of Shareholders (the “Proxy Statement”), to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2023, are incorporated herein by reference in Part III of this Annual Report on Form 10-K. | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | WithumSmith+Brown, PC | Marcum LLP | |
Auditor Firm ID | 100 | 688 | |
Auditor Location | East Brunswick, New Jersey | Costa Mesa, CA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 9,432 | $ 19,993 |
Accounts receivable, net of allowance for credit losses of $5 and $154, respectively | 484 | 2,012 |
Marketable equity securities | 433 | |
Prepaid expenses and other current assets | 643 | 977 |
Assets held for sale | 139 | |
Current assets of discontinued operations (Note 13) | 2,121 | |
Total current assets | 10,698 | 25,536 |
NONCURRENT ASSETS | ||
Right-of-use and financing lease assets, net | 1,637 | 2,179 |
Machinery and equipment, net, and construction in progress | 3,799 | 8,672 |
Intangible assets, net | 56,595 | 61,633 |
Restricted cash | 1,700 | 1,700 |
Other noncurrent assets | 463 | 371 |
TOTAL ASSETS | 74,892 | 100,091 |
CURRENT LIABILITIES | ||
Accounts payable | 953 | 1,253 |
Accrued compensation | 1,649 | 1,771 |
Accrued royalties | 1,116 | 2,022 |
Accrued expenses and other current liabilities | 452 | 1,817 |
Accrued severance from acquisition | 2,314 | 2,314 |
Accrued liabilities from acquisition | 109 | |
Right-of-use and financing lease liabilities, current | 665 | 815 |
Current liabilities of discontinued operations (Note 13) | 45 | 2,005 |
Total current liabilities | 7,194 | 12,106 |
NONCURRENT LIABILITIES | ||
Right-of-use and financing lease liabilities, noncurrent | 2,204 | 2,729 |
Contingent consideration liabilities | 39,900 | 45,662 |
TOTAL LIABILITIES | 49,298 | 60,497 |
Commitments and contingencies | ||
Series A Redeemable Convertible Preferred Stock, no par value; stated value $1,000 per share; 5 and 6 shares issued and outstanding at December 31, 2023 and 2022, respectively; aggregate liquidation preference of $5,296 and $6,091 as of December 31, 2023 and 2022, respectively | 5,126 | 5,302 |
SHAREHOLDERS’ EQUITY | ||
Preferred stock, no par value, 5,000 shares authorized; no shares issued and outstanding | ||
Common stock, no par value, 230,000 shares authorized; 8,261 and 5,932 shares issued and outstanding at December 31, 2023 and 2022, respectively | 310,295 | 294,929 |
Accumulated other comprehensive income | 49 | 39 |
Accumulated deficit | (289,876) | (260,676) |
Total shareholders’ equity | 20,468 | 34,292 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 74,892 | $ 100,091 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance for credit loss | $ 5 | $ 154 |
Preferred stock, no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 230,000,000 | 230,000,000 |
Common stock, shares issued | 8,261,073 | 5,932,191 |
Common stock, shares outstanding | 8,261,073 | 5,932,191 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Temporary equity, no par value | $ 0 | $ 0 |
Temporary equity, stated par value | $ 1,000 | $ 1,000 |
Temporary equity, shares issued | 5,000 | 6,000 |
Temporary equity, shares outstanding | 5,000 | 6,000 |
Temporary equity, liquidation preference | $ 5,296 | $ 6,091 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Net revenue | $ 1,503 | $ 958 |
Cost of revenues | 1,002 | 880 |
Cost of revenues – amortization of acquired intangibles | 88 | 96 |
Gross profit (loss) | 413 | (18) |
Operating expenses: | ||
Research and development | 9,294 | 7,301 |
Sales and marketing | 2,795 | 1,132 |
General and administrative | 11,182 | 21,881 |
Change in fair value of contingent consideration | (5,762) | (31,019) |
Impairment losses | 6,757 | |
Goodwill impairment | 18,684 | |
Loss on disposal and held for sale assets | 1,283 | |
Total operating expenses | 25,549 | 17,979 |
Loss from operations | (25,136) | (17,997) |
Other (expenses) income: | ||
Interest expense | (52) | (83) |
Realized and unrealized loss on marketable equity securities, net | (61) | (471) |
Other income (expenses), net | 394 | (61) |
Total other income (expenses) | 281 | (615) |
Loss from continuing operations | (24,855) | (18,612) |
Loss from discontinued operations (Note 13) | (2,926) | (54,290) |
Net loss | (27,781) | (72,902) |
Less: dividends and accretion of Series A redeemable convertible preferred stock | (942) | (520) |
Net loss attributable to common stockholders | $ (28,723) | $ (73,422) |
Net loss from continuing operations per share: basic | $ (3.37) | $ (3.45) |
Net loss from continuing operations per share: diluted | (3.37) | (3.45) |
Net loss from discontinued operations per share: basic | (0.38) | (9.80) |
Net loss from discontinued operations per share: diluted | (0.38) | (9.80) |
Net loss attributable to common stockholders per share: basic | (3.75) | (13.25) |
Net loss attributable to common stockholders per share: diluted | $ (3.75) | $ (13.25) |
Weighted average shares outstanding: basic | 7,651 | 5,540 |
Weighted average shares outstanding: diluted | 7,651 | 5,540 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Net loss | $ (27,781) | $ (72,902) |
Foreign currency translation adjustments | 10 | 2 |
Comprehensive loss | $ (27,771) | $ (72,900) |
Consolidated Statements of Seri
Consolidated Statements of Series A Redeemable Convertible Preferred Stock and Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Preferred Stock [Member] Series A Redeemable Convertible Preferred Stock [Member] | Common Stock [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2021 | $ 252,954 | $ 37 | $ (187,774) | $ 65,217 | |
Balance, shares at Dec. 31, 2021 | 4,612 | ||||
Net Loss | (72,902) | (72,902) | |||
Foreign currency translation adjustment | 2 | 2 | |||
Stock-based compensation | 10,042 | 10,042 | |||
Shares issued upon vesting of RSUs, net of shares retired to pay employees’ taxes | |||||
Shares issued upon vesting of RSUs, net of shares retired to pay employees' taxes | 6 | ||||
Accretion of Series A convertible preferred stock to redemption value | 520 | $ (520) | (520) | ||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts | $ 32,453 | 32,453 | |||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts, shares | 1,314 | ||||
Issuance of Series A redeemable convertible preferred stock, net of financing costs | $ 4,782 | ||||
Issuance of Series A redeemable convertible preferred stock, net of financing costs, shares | 6 | ||||
Balance at Dec. 31, 2022 | $ 5,302 | $ 294,929 | 39 | (260,676) | 34,292 |
Balance, shares at Dec. 31, 2022 | 6 | 5,932 | |||
Cumulative change in accounting principle (Note 2) | (1,419) | (1,419) | |||
Balance at January 1, 2023, as adjusted | $ 5,302 | $ 294,929 | 39 | (262,095) | 32,873 |
Adjusted balance, shares | 6 | 5,932 | |||
Net Loss | (27,781) | (27,781) | |||
Foreign currency translation adjustment | 10 | 10 | |||
Stock-based compensation | 2,760 | 2,760 | |||
Vesting of bonus awards | 91 | 91 | |||
Sale of common shares, net of financing costs | $ 13,421 | 13,421 | |||
Sale of common shares, net of financing costs, shares | 2,275 | ||||
Deemed dividend on Series A redeemable convertible preferred stock | 118 | $ (118) | (118) | ||
Shares issued upon vesting of RSUs, net of shares retired to pay employees’ taxes | |||||
Shares issued upon vesting of RSUs, net of shares retired to pay employees' taxes | 45 | ||||
Shares issued for consultant services | $ 36 | 36 | |||
Shares issued for consultant services, shares | 9 | ||||
Redemption of Series A redeemable convertible preferred stock | $ (1,118) | ||||
Redemption of SeriesA redeemable convertible preferred stock, shares | (1) | ||||
Accretion of Series A convertible preferred stock to redemption value | $ 824 | (824) | (824) | ||
Balance at Dec. 31, 2023 | $ 5,126 | $ 310,295 | $ 49 | $ (289,876) | $ 20,468 |
Balance, shares at Dec. 31, 2023 | 5 | 8,261 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (27,781) | $ (72,902) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 1,592 | 1,528 |
Amortization of intangible assets | 88 | 3,692 |
Stock-based compensation | 2,760 | 10,042 |
Equity compensation for bonus awards and consulting services | 127 | |
Realized and unrealized loss on marketable equity securities, net | 61 | 471 |
Amortization of debt issuance costs | 12 | |
Change in fair value of contingent consideration | (5,762) | (31,019) |
Impairment losses | 6,757 | |
Goodwill impairment | 18,684 | |
Loss on disposal of discontinued operations | 1,521 | |
Loss on disposal and held for sale assets | 1,283 | |
Impairment loss from held for sale assets of discontinued operations (Note 13) | 25,866 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 109 | (575) |
Prepaid expenses and other assets | 784 | (231) |
Accounts payable and accrued liabilities | (4,757) | 297 |
Accrued severance and liabilities from Chronix Biomedical acquisition | (1,317) | |
Lease assets and liabilities | (107) | (116) |
Net cash used in operating activities | (23,325) | (45,568) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of marketable equity securities | 367 | |
Proceeds from sale of equipment | 354 | |
Construction in progress and purchases of furniture and equipment | (281) | (4,340) |
Cash sold in discontinued operations (Note 13) | (1,372) | |
Net cash used in investing activities | (932) | (4,340) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common shares | 13,848 | 32,812 |
Financing costs to issue common shares | (427) | (389) |
Proceeds from sale of redeemable convertible Series A preferred shares | 4,875 | |
Redemption of redeemable convertible Series A preferred shares | (1,118) | |
Financing costs to issue redeemable convertible Series A preferred shares | (93) | |
Proceeds from sale of common shares under at-the-market transactions | 31 | |
Financing costs for at-the-market sales | (1) | |
Repayment of bank loan | (1,325) | |
Repayment of financing lease obligations | (117) | (104) |
Net cash provided by financing activities | 12,186 | 35,806 |
NET CHANGE IN CASH, CASH EQUIVALENTS (INCLUDES DISCONTINUED OPERATIONS) AND RESTRICTED CASH | (12,071) | (14,102) |
CASH, CASH EQUIVALENTS (INCLUDES DISCONTINUED OPERATIONS) AND RESTRICTED CASH, BEGINNING | 23,203 | 37,305 |
CASH, CASH EQUIVALENTS (INCLUDES DISCONTINUED OPERATIONS) AND RESTRICTED CASH, ENDING | 11,132 | 23,203 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 24 | |
Cash paid for income taxes | ||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Construction in progress, machinery and equipment purchases included in accounts payable and accrued liabilities | $ 323 |
Organization, Description of th
Organization, Description of the Business and Liquidity | 12 Months Ended |
Dec. 31, 2023 | |
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,” the “Company,” “we” or “us”), incorporated in 2009 in the state of California, is a precision diagnostics company focused on developing and commercializing proprietary tests in three areas: VitaGraft is a blood-based solid organ transplantation monitoring test, DetermaIO is a gene expression test that assesses the tumor microenvironment to predict response to immunotherapies, and DetermaCNI is a blood-based monitoring tool for monitoring therapeutic efficacy in cancer patients. Razor Transactions Oncocyte’s first product for commercial release was 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. Beginning in September 2019 through February 23, 2021, Oncocyte held a 25 On December 15, 2022, the Company, entered into a Stock Purchase Agreement (the “Razor Stock Purchase Agreement”) with Dragon Scientific, LLC, a Delaware limited liability company (“Dragon”) and Razor. Pursuant to the Razor Stock Purchase Agreement, Oncocyte agreed to sell to Dragon, 3,188,181 70 As a result of the divestiture of Razor, the Company has retrospectively revised the consolidated statement of operations and balance sheet for the year ended December 31, 2022, to reflect the operations of Razor as discontinued operations and the related assets and liabilities disposed. See Note 13, “Discontinued Operations of Razor” for additional information. On February 16, 2023, Oncocyte completed the Razor Sale Transaction (the “Razor Closing”). In connection with the Razor Closing, Oncocyte transferred to Razor all of the assets and liabilities related to DetermaRx. While no monetary consideration was received for the sale of 70 1,366,364 30 Going Concern Oncocyte has incurred operating losses and negative cash flows since inception and had an accumulated deficit of $ 289.9 million as of December 31, 2023. Oncocyte expects to continue to incur operating losses and negative cash flows for the foreseeable future. Since its formation, Oncocyte has financed its operations primarily through the sale of shares of its common stock, convertible preferred stock and warrants to acquire common stock. At December 31, 2023, Oncocyte had $ 9.4 million of cash and cash equivalents. As of December 31, 2023, Oncocyte is completing clinical development and planning commercialization of 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. Oncocyte received a positive coverage decision from MolDx for VitaGraft Kidney in August of 2023, and it became commercially available for ordering in January 2024 through Oncocyte’s CLIA Laboratory in Nashville, Tennessee. VitaGraft Kidney is now broadly available to transplant professionals upon request. While Oncocyte plans to primarily market its laboratory 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 laboratory 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 tests and share in net revenues, in the United States or abroad. On April 5, 2024, the Company entered into an agreement to collaborate in the development and the commercialization of research use only and in vitro diagnostics kitted transplant products. See Note 14, “Subsequent Events” for additional information. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On April 11, 2024, the Company entered into a private placement securities purchase agreement with certain accredited investors. The gross proceeds to the Company from the private placement are expected to be approximately $ 15.8 million. See Note 14, “Subsequent Events” for additional information. 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 laboratory tests that Oncocyte may develop or acquire. 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 long-term financing will be available on favorable terms, if at all. In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Report are issued. This evaluation initially does not take into consideration the potential mitigating effect of our plans that have not been fully implemented as of the date the consolidated financial statements included in this Report are issued. When substantial doubt exists under this methodology, we evaluate whether the mitigating effect of our plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of our plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that such financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date that such financial statements are issued. In performing this analysis, we excluded certain elements of our operating plan that cannot be considered probable. Our expectation to generate operating losses and negative operating cash flows in the future and the need for additional funding to support our planned operations raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that the consolidated financial statements are issued. Management intends to complete additional equity financings while maintaining reduced spending levels. However, due to several factors, including those outside management’s control, there can be no assurance that we will be able to complete additional equity financings. If we are unable to complete additional financings, management’s plans include further reducing or delaying operating expenses. We have concluded the likelihood that our plan to successfully obtain sufficient funding from one or more of these sources or adequately reduce expenditures, while reasonably possible, is less than probable. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Accounting Principles The consolidated financial statements and accompanying notes are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Principles of Consolidation and Basis of Presentation On January 31, 2020, with the acquisition of Insight Genetics, Inc. (“Insight”) through a merger with a newly incorporated wholly-owned subsidiary of Oncocyte (the “Insight Merger”) under the terms of an Agreement and Plan of Merger (the “Insight Merger Agreement”), 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 3). On April 15, 2021, with the acquisition of Chronix Biomedical, Inc. (“Chronix”) pursuant to an Agreement and Plan of Merger dated February 2, 2021, amended February 23, 2021, and amended and restated as of April 15, 2021 (as amended and restated, the “Chronix Merger Agreement”), by and among Oncocyte, CNI Monitor Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Oncocyte (“Merger Sub”), Chronix became a wholly-owned subsidiary of Oncocyte (the “Chronix Merger”), and on that date Oncocyte began consolidating Chronix’s operations and results with Oncocyte’s operations and results (see Note 3). All material intercompany accounts and transactions have been eliminated in consolidation. We have reflected the operations of Razor as discontinued operations for the periods presented. See Note 13 for further information. Amounts and disclosures throughout these notes to consolidated financial statements relate solely to continuing operations and exclude all discontinued operations, unless otherwise noted. Discontinued operations comprise activities that were disposed of or discontinued at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements On July 24, 2023, the Company implemented a 1-for-20 230 Reclassifications Certain prior period amounts in the consolidated financial statements and notes to consolidated financial statements have been reclassified to conform to the current period presentation. These changes had no impact on the previously reported consolidated financial condition, results of operations or cash flows. 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 and forecasted financial information, 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), the carrying value of goodwill and other intangibles, impairments, assumptions related to going concern assessments, revenue recognition, allocation of direct and indirect expenses, useful lives associated with long-lived intangible and other assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, allowances for credit losses, and assumptions used to value debt, stock-based awards and other equity instruments. These assessments are made in the context of information reasonably available to Oncocyte. Actual results may differ materially from those estimates. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 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. Fair Value Measurements, Business Combinations and Contingent Consideration Liabilities 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 as of the acquisition date based on prices quoted on the principal national securities exchange on which the shares traded. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development (“IPR&D”), 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 recorded at fair value on a recurring basis, except for money market funds and marketable equity securities. These assets are measured at fair value using the period-end quoted market prices as a Level 1 input. 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 laboratory 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, which are carried at fair value based on Level 3 inputs on a recurring basis. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 certain revenues generated. 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 Note 3 for a full discussion of these liabilities and additional Level 3 fair value disclosures. The following tables present the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy: Schedule of Fair Value Measurement of Financial Assets and Liabilities December 31, 2023 Fair value Level 1 Level 2 Level 3 (In thousands) Liabilities: Contingent consideration liabilities (Note 3) $ 39,900 $ - $ - $ 39,900 Total $ 39,900 $ - $ - $ 39,900 December 31, 2022 Fair value Level 1 Level 2 Level 3 (In thousands) Assets: Marketable equity securities $ 433 $ 433 $ - $ - Total $ 433 $ 433 $ - $ - Liabilities: Contingent consideration liabilities (Note 3) $ 45,662 $ - $ - $ 45,662 Total $ 45,662 $ - $ - $ 45,662 The carrying amounts of cash and cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. In accordance with GAAP, from time to time, the Company measures certain assets at fair value on a nonrecurring basis. The Company reviews the carrying value of intangibles, including IPR&D (see Note 5), and other long-lived assets for indications of impairment at least annually. Refer to related discussions of impairments below. Cash, Cash Equivalents and Restricted Cash Oncocyte considers all highly liquid securities with original maturities of three months or less when purchased to be cash equivalents. For the periods presented, Oncocyte’s cash equivalents are comprised of investments in AAA rated money market funds that invest in first-tier only securities, which primarily include domestic commercial paper and securities issued or guaranteed by the U.S. government or its agencies. Restricted cash relates to a bank letter of credit required under our office lease arrangement, refer to Note 7 for additional information. Marketable Equity Securities Oncocyte accounted for the shares of Lineage Cell Therapeutics, Inc. (“Lineage”) and AgeX Therapeutics, Inc. (“AgeX”) common stock it held as marketable equity securities in accordance with ASC 321-10, Investments – Equity Securities As of December 31, 2022, Oncocyte held 353,264 35,326 433,000 1.4 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Investments in 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 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 pro rata share of earnings or losses from the investment. Since February 16, 2023, Oncocyte continues to own an equity interest Razor, however, based on the Razor transactions as discussed in Note 1, the remaining common stock held is accounted for at historical cost less impairment, which is zero. Assets Held for Sale and Discontinued Operations Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. During the year ended December 31, 2023, the Company entered into various agreements to sell laboratory equipment. As a result, the Company classified the equipment as held for sale as current assets, in the consolidated balance sheet, as all the criteria of ASC subtopic 360-10, Property, Plant, and Equipment 139,000 1.3 Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Machinery and Equipment, Net, and 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 10 3 5 Construction in progress, comprised primarily of leasehold improvements under construction, is not depreciated until the underlying asset is placed into service. Intangible Assets and Goodwill In accordance with ASC 350, Intangibles – Goodwill and Other Oncocyte does not have intangible assets with indefinite useful lives other than the acquired IPR&D discussed in Note 5, which as of December 31, 2023, has been partially impaired. 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 that it is more-likely-than-not that the carrying value of the associated reporting unit exceeds its fair value. 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. In accordance with ASC 350, we review and evaluate our long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that we may not recover their net book value. We test goodwill for impairment on an annual basis in the fourth quarter of each year, and between annual tests, if indicators of potential impairment exist, using a fair-value approach. We typically use an income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates). Estimates utilized in the projected cash flows include consideration of macroeconomic conditions, overall category growth rates, competitive activities, cost containment and margin expansion, Company business plans, the underlying product or technology life cycles, economic barriers to entry, and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. During the fourth quarter of 2022, and upon the eminent sale of Razor, the Company assessed its current environment and concluded that it was more-likely-than-not that the fair value of the goodwill was less than the carrying value. As such, the Company performed a quantitative test to estimate the fair value of the enterprise. Using the discounted cash flow method and taking into consideration the loss of Razor’s future cash flows, the calculated enterprise fair value was lower than carrying value. At that time, the carrying value of goodwill was comprised of, $ 9.2 9.5 18.7 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Long-Lived Intangible Assets Long-lived intangible assets subject to amortization are stated at acquired cost, less accumulated amortization. We amortize intangible assets not considered to have an indefinite useful life using the straight-line method over their estimated period of benefit, which generally ranges from 1 9 5 Impairment of Long-Lived Assets Oncocyte assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Oncocyte’s long-lived assets consist primarily of intangible assets, right-of-use assets for operating leases, customer relationships, and machinery and equipment. 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 carrying value of the asset over its fair value, is recorded. See Note 4 for additional information with respect to the impairment of leasehold improvements during 2023. Leases Oncocyte accounts for leases in accordance with ASC 842, Leases ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 After all relevant assessments, Oncocyte concludes whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date. Based on the above guidance and, among other factors, the fact that our warrants cannot be cash settled under any circumstance but require share settlement, all of our outstanding warrants meet the equity classification criteria and have been classified as equity. Refer to Notes 6 and 8 for details about our outstanding warrants. Revenue Recognition Pursuant to ASC 606, revenues are recognized when control of services performed is transferred to customers, in an amount that reflects the consideration Oncocyte expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, an entity satisfies a performance obligation. Oncocyte determines transaction prices based on the amount of consideration we expect to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. The Company considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The following table presents consolidated revenues by service: Schedule of Disaggregation of Revenue 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Pharma Services $ 1,467 $ 958 Laboratory developed test services 36 - Total $ 1,503 $ 958 Pharma Services Revenue Revenues recognized include Pharma Services performed by Oncocyte’s Insight and Chronix subsidiaries for its pharmaceutical customers, including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements or license agreements (together with SOW the “Pharma Services Agreements”) with specific deliverables defined by the customer. Pharma Services are performed on a (i) time and materials basis or (ii) per test completed basis. Upon completion of the service to the customer in accordance with a Pharma Services Agreement, Oncocyte has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes Pharma Service revenue at that time. Insight identifies each service of its Pharma Service offering as a single performance obligation. Offerings include services such as recurring fees for project management, fees for storage and handling, pass through expenses for shipping or calibration, training, proficiency, reproducibility tests, etc. Chronix identifies the processing of test samples as a separate performance obligation (considered a series) within license agreements with customers. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Completion of the service and satisfaction of the performance obligation is typically evidenced by acknowledgment of completed services, and access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the Pharma Services Agreements. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Oncocyte has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Oncocyte recognizes revenue over a period 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 performance obligations are satisfied under the Pharma Services Agreements, 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 balance sheets when the customer is invoiced according to the billing schedule in the contract. As of December 31, 2023 and 2022, Oncocyte had accounts receivable from Pharma Services customers of $ 488,000 257,000 Allowance for Credit Losses Oncocyte establishes an allowance for credit losses 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, reasonable and supportable forecast that affect the collectability of the reported amount, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Oncocyte 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 credit loss reserve accounts. As of December 31, 2023 and 2022, we had an allowance for credit losses of $ 5,000 zero Laboratory Developed Test Services Prior to the Razor Sale Transaction, Oncocyte generated revenue from performing DetermaRx tests on clinical samples through orders received from physicians, hospitals, and other healthcare providers. In determining whether all 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 has billed a list price for all tests ordered and completed for all payer types, Oncocyte considers constraints on the variable consideration when recognizing revenue for DetermaRx. 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 consider the novelty of the test, the uncertainty of receiving payment, or being subject to claims for a refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte has recognized revenue upon payment because it has had insufficient history to reliably estimate payment patterns. As of December 31, 2023 and 2022, Oncocyte had accounts receivable of zero 1.9 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Allowance for Credit Losses We maintain an allowance for credit losses related to Laboratory Developed Test Services at an amount we estimate to be sufficient to provide adequate protection against losses resulting from extending credit to our customers. We base this allowance, in the aggregate, on historical collection experience, age of receivables and general economic conditions, as well as specific identification of uncollectible accounts. We initially established an allowance in 2022 in connection with remaining Medicare and Medicare Advantage account balances and have continued to add to the allowance as appropriate. In the first quarter of 2023, in connection with the adoption of the new current expected credit loss model (see “Recent Accounting Pronouncements – Recently Adopted” below for additional information), the Company determined that the Medicare and Medicare Advantage accounts receivable net balance of approximately $ 1.4 million was uncollectible and should therefore be written-off as of the adoption date, January 1, 2023. As of December 31, 2023 and 2022, we had an allowance for credit losses of zero 154,000 154,000 zero Licensing Revenue Revenues that may be recognized include licensing revenue derived from agreements with customers for exclusive rights to market Oncocyte’s proprietary testing technology. Under the agreements, Oncocyte grants exclusive rights to certain trademarks and technology of Oncocyte for the purpose of marketing Oncocyte’s tests within a defined geographic territory. A license agreement may specify milestone deliverables or performance obligations, for which Oncocyte recognizes revenue when its licensee confirms the completion of Oncocyte’s performance obligation. A licensing agreement may also include ongoing sales support from Oncocyte and typically includes non-refundable licensing fees and per-test Pharma Services revenues discussed above, for which Oncocyte treats the licensing of the technology, trademarks, and ongoing support as a single performance obligation satisfied by the passage of time over the term of the agreement. Disaggregation of Revenues and Concentrations of Credit Risk The following table presents the percentage of consolidated revenues by service: Schedule of Concentration of Risk 2023 2022 Years Ended December 31, 2023 2022 Pharma Services 98 % 100 % Laboratory developed test services 2 % 0 % Total 100 % 100 % The following table presents the percentage of consolidated revenues generated by unaffiliated customers, based on the respective periods presented, that individually represented greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers 2023 2022 Years Ended December 31, 2023 2022 Pharma services - Company A 47 % 43 % Pharma services - Company B 27 % 14 % Pharma services - Company C 11 % 11 % The following table presents the percentage of consolidated revenues attributable to geographical locations, based on country of domicile: Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations 2023 2022 Years Ended December 31, 2023 2022 United States – Pharma Services 59 % 77 % Outside of the United States – Pharma Services 39 % 23 % United States – Laboratory developed test services 2 % 0 % Total 100 % 100 % The Company holds an insignificant amount of long-lived tangible assets in Germany. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Financial instruments that potentially subject the Company to concentrations of credit risk are cash equivalents and accounts receivable. The Company places its cash equivalents primarily in highly rated money market funds. Cash and cash equivalents are also invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. The Company has not experienced any significant losses on its deposits of cash and cash equivalents. Two Pharma Services customers individually represented approximately 79 13 59 30 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 Laboratory Developed Test Services, providing deliverables according to our licensing agreements, license fees due to third parties, and amortization of acquired intangible assets such as the customer relationship intangible assets (see Note 5). Infrastructure expenses include depreciation of laboratory equipment, allocated rent costs, leasehold improvements, and allocated information technology costs for operations at Oncocyte’s CLIA laboratory in Tennessee. Costs associated with generating the revenues are recorded as the tests or services are performed regardless of whether revenue was recognized. Royalties or revenue share payments for licensed technology calculated as a percentage of revenues generated using the associated technology are |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | 3. Business Combinations Acquisition of Insight Genetics, Inc. On January 31, 2020 (the “Insight Merger Date”), Oncocyte completed its acquisition of Insight pursuant to the Insight Merger Agreement. 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. Accordingly, Oncocyte determined there are two types of contingent consideration in connection with the Insight Merger, the Milestone Contingent Consideration and the Royalty Contingent Consideration discussed below, which are collectively referred to as the “Contingent Consideration”. 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 Insight 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 LCD 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. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table shows the Insight Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability: Schedule of Fair Value of Contingent Consideration Liability Contractual Fair Value on the Value Merger Date (In thousands) 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 is achieved. (b) As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. The fair value of the Contingent Consideration after the Insight 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. As of December 31, 2023, Milestone 1 is not expected to be paid and is excluded from the current fair value. Durning 2023, based on Oncocyte’s reassessment of significant assumptions, there was a decrease of approximately $ 3.3 Oncocyte uses a discounted cash flow valuation technique to determine the fair value of its Level 3 contingent consideration liabilities. The significant unobservable inputs used in Insight’s contingent consideration valuation on December 31, 2023, included: (i) a discount period, based on the expected milestone payment dates, ranging from 1.3 years to 1.5 years, (ii) a discount rate of 13.9%, and (iii) a management probability estimate of 25% to 50%. The significant unobservable inputs used on December 31, 2022, included: (i) a discount period, based on the expected milestone payment dates, ranging from .75 years to 1.0 years, (ii) a discount rate of 15.8%, and (iii) a management probability estimate of 15% to 75% The following tables reflect the activity for the Insight Contingent Consideration measured at fair value using Level 3 inputs: Schedule of Contingent Consideration, Measured at Fair Value Fair Value (In thousands) Balance at December 31, 2021 $ 7,060 Change in estimated fair value (1,690 ) Balance at December 31, 2022 $ 5,370 Balance at December 31, 2022 $ 5,370 Change in estimated fair value (3,330 ) Balance at December 31, 2023 $ 2,040 Contingent consideration is not deductible for tax purposes, even if paid; therefore, no deferred tax assets related to the Contingent Consideration were recorded. Acquisition of Chronix Biomedical, Inc. On April 15, 2021 (the “Chronix Merger Date”), Oncocyte completed its acquisition of Chronix pursuant the Chronix Merger Agreement. As additional consideration for holders of certain classes and series of Chronix capital stock, the Chronix Merger Agreement originally required Oncocyte to pay “Chronix Contingent Consideration” consisting of (i) “Chronix Milestone Payments” of up to $ 14.0 15 75 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On February 8, 2023, the Company and equity holder representative entered into Amendment No. 1 to the Merger Agreement (the “Chronix Amendment”), pursuant to which the parties agreed that (i) Chronix’s equity holders will be paid earnout consideration of 10 5 15 The fair value of the Chronix Contingent Consideration after the Chronix 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. During 2023, based on Oncocyte’s reassessment of significant assumptions, there was a decrease of approximately $ 2.4 Oncocyte uses a discounted cash flow valuation technique to determine the fair value of its Level 3 contingent consideration liabilities. The significant unobservable inputs used in Chronix’s contingent consideration valuation on December 31, 2023, included: (i) a discount period, based on the related patent expiration dates, ranging from 9.9 years to 11.7 years, (ii) a discount rate of 14.7% to 15.8%, and (iii) a payout percentage of 10% based on the earnout provision. The significant unobservable inputs used on December 31, 2022, included: (i) a discount period, based on the related patent expiration dates, ranging from 5.5 years to 16.2 years, (ii) a discount rate of 17.8% to 18.6%, and (iii) a payout percentage of 5% to 75% based on the earnout provision. The following tables reflect the activity for the Chronix Contingent Consideration measured at fair value using Level 3 inputs: Schedule of Contingent Consideration, Measured at Fair Value Fair Value (In thousands) Balance at December 31, 2021 $ 69,621 Change in estimated fair value (29,329 ) Balance at December 31, 2022 $ 40,292 Balance at December 31, 2022 $ 40,292 Change in estimated fair value (2,432 ) Balance at December 31, 2023 $ 37,860 Oncocyte recognized approximately $ 9.5 2.2 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Right-Of-Use and Financing Leas
Right-Of-Use and Financing Lease Assets, Net, Machinery and Equipment, Net, and Construction in Progress | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Right-Of-Use and Financing Lease Assets, Net, Machinery and Equipment, Net, and Construction in Progress | 4. Right-Of-Use and Financing Lease Assets, Net, Machinery and Equipment, Net, and Construction in Progress Right-of-use and financing lease assets, net, machinery and equipment, net, and construction in progress were as follows: Schedule of Right-of-use and Financing Lease Assets, Machinery and Equipment, Net, and Construction in Progress 2023 2022 December 31, 2023 2022 (In thousands) Right-of-use and financing lease assets $ 4,036 $ 3,499 Machinery, equipment and leasehold improvements 6,909 9,408 Accumulated depreciation and amortization (6,235 ) (4,196 ) Right-of-use and financing lease assets and machinery and equipment, net 4,710 8,711 Construction in progress 726 2,140 Total $ 5,436 $ 10,851 Right-of-use and financing lease assets, machinery and equipment, net, and construction in progress $ 5,436 $ 10,851 Fixed asset depreciation and amortization expense amounted to $ 1.6 1.5 During the third quarter of 2023, in connection with a new sublease arrangement (see Note 7), the Company identified circumstances that indicated a potential impairment of certain leasehold improvements (included in construction in progress) and after a valuation was performed, management concluded that such leasehold improvements were impaired. Accordingly, the Company recorded an impairment of approximately $ 1.8 million. The Company used a discounted cash flow valuation method to determine the Level 3 fair value of the leasehold improvements asset group discussed above. The significant unobservable inputs used, effective as of September 30, 2023, included: (i) a discount period of 50 months based on the required sublease payments, and (ii) a discount rate of 7.25 1.2 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 5. Intangible Assets, Net As part of the Insight and Chronix acquisitions completed on January 31, 2020, and April 15, 2021, respectively, the Company has acquired IPR&D and customer relationships (see Note 3). During the first quarter of 2023, due to changes in management and the economic condition of the Company, management shifted the Company’s business strategy to direct efforts on fewer studies and to transition from tests that are laboratory developed tests to research use only sales. Due to the change in strategy, the Company’s long range plan forecasts were updated and anticipated future benefits derived from the Company’s assets. The change in strategy represent a significant indicator for change in value of the Company’s long-lived assets. The original IPR&D balances were reassessed based on the updated long range plan, using the multi-period excess earnings method (“MPEEM”) approach, the results of the valuation noted that the carrying value of the DetermaIO related IPR&D intangible assets was greater than the fair market value, whereas the CNI and VitaGraft related IPR&D intangible assets carrying value was lower than the fair market value. Accordingly, the Company recorded an impairment of approximately $ 5.0 The MPEEM valuation approach is a discounted cash flow valuation technique and was used to determine the Level 3 fair value of Insight’s IPR&D discussed above. The significant unobservable inputs used as of March 31, 2023 and December 31, 2023, included: (i) a discount period of 20.0 years, based on the expected life of patent, (ii) a royalty rate of 0.3%, and (iii) a weighted average cost of capital rate of 30.0%. This valuation approach yielded a fair value of $9.7 million as of March 31, 2023. As market conditions change, the Company will re-evaluate assumptions used in the determination of fair value for IPR&D and is uncertain to the extent of the volatility in the unobservable inputs in the foreseeable future. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Intangible assets, net, consisted of the following: Schedule of Intangible Assets, Net December 31, 2023 2022 (In thousands) Intangible assets: Acquired IPR&D - DetermaIO TM (1) $ 9,700 $ 14,650 Acquired IPR&D - DetermaCNI™ and VitaGraft™ (2) 46,800 46,800 Intangible assets subject to amortization: Acquired intangible assets - customer relationship 440 440 Total intangible assets 56,940 61,890 Accumulated amortization - customer relationship (3) (345 ) (257 ) Intangible assets, net $ 56,595 $ 61,633 (1) See Note 3 for information on the Insight Merger. (2) See Note 3 for information on the Chronix Merger. (3) Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the consolidated statements of operations because the intangible assets pertain directly to the revenues generated from the acquired intangibles. Intangible asset amortization expense amounted to $ 88,000 3.7 3.6 Future amortization expense of intangible assets subject to amortization is as follows: Schedule of Intangible Assets Future Amortization Expense Amortization (In thousands) Year ending December 31, 2024 $ 88 2025 7 Total $ 95 |
Bank Loan
Bank Loan | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Bank Loan | 6. Bank Loan Amended Loan Agreement In October 2019, Oncocyte entered into a First Amendment to Loan and Security Agreement (the “Amended Loan Agreement”) with Silicon Valley Bank (“the Bank”) pursuant to which Oncocyte obtained a new $ 3 2 200,000 2 Payments of interest only on the principal balance were due monthly from the draw date through maturity. The outstanding principal balance of the loan had interest at a stated floating annual interest equal to the greater of (a) the prime rate or (b) 5 5.5 In April 2020, 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 As of the loan maturity in September 2022, there are no remaining unamortized deferred financing costs and the full principal balance of the loan has been paid off. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Bank Warrants In 2017, in connection with the original 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 original loan agreement. In conjunction with the availability of the loan, the Bank was issued warrants to purchase 412 97.00 366 109.20 In October 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 4,928 33.80 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Office and Facilities Leases Irvine Office Lease On December 23, 2019, Oncocyte and Cushing Ventures, LLC (“Landlord”) entered into an Office Lease Agreement (the “Irvine Lease”) of a building containing approximately 26,800 The Irvine Lease has an initial term of 89 calendar months (the “Term”), which commenced on June 1, 2020 (the “Commencement Date”) and will end September 2027. Oncocyte has an option to extend the Term for a period of five years (the “Extended Term”). Oncocyte agreed to pay base monthly rent in the amount of $ 61,640 3.5 50 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 agreed to 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 lessor 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 Irvine Lease prior to the Commencement Date, except that Oncocyte was obligated to pay 43.7 The lessor provided Oncocyte with a “Tenant Improvement Allowance” in the amount of $ 1.3 1.5 1.3 Oncocyte has provided the lessor with a security deposit in the amount of $ 150,000 1.7 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, accordingly, Oncocyte has reflected $ 1.7 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Irvine Office Sublease On August 8, 2023, Oncocyte and Induce Biologics USA, Inc. (“Subtenant”) entered into a Sublease Agreement (the “Sublease Agreement”), which subsequently became effective as of September 14, 2023, upon the execution and delivery by the Company, Subtenant, and Landlord, of that certain Landlord’s Consent to Sublease dated September 12, 2023 (the “Consent Agreement”), under which Landlord consented to the Sublease Agreement, on the terms and subject to the conditions set forth therein. The Sublease Agreement is subject and subordinate to the Irvine Lease. Under the Sublease Agreement, the Company agreed to initially sublet to Subtenant a portion of the Premises consisting of approximately 13,400 13,400 The Sublease Agreement provides that, from and after the Commencement Date, Subtenant will pay to the Company monthly base rent in the following amounts: (i) $36,850.00 for rental periods beginning on the Commencement Date and ending on or before December 31, 2024 (subject to adjustment in the event that Subtenant exercises its option to accelerate the Expansion Date, such that the Expansion Period begins prior to December 31, 2024); (ii) $37,955.50 for rental periods beginning on or after January 1, 2025 and ending on or before June 20, 2025 (subject to adjustment in the event that Subtenant exercises its option to accelerate the Expansion Date, such that the Expansion Period begins prior to June 20, 2025); (iii) $75,844.00 for rental periods beginning on or after July 1, 2025 and ending on or before December 31, 2025; (iv) $78,188.33 for rental periods beginning on or after January 1, 2026 and ending on or before December 31, 2026; and (v) $80,533.98 for rental periods beginning on or after January 1, 2027 and ending on or before October 31, 2027 Following the Commencement Date, Subtenant will be responsible for the payment of Additional Rent, including Expenses and Taxes (as each such term is defined in the Irvine Lease), provided that, with respect to the Initial Period, Subtenant will be responsible for only 50 101,987.38 The Sublease Agreement contains customary provisions with respect to, among other things, Subtenant’s obligation to comply with the Irvine Lease and applicable laws, the payment of utilities and similar services utilized by Subtenant with respect its use of the Premises, the indemnification of the Company by Subtenant, and the right of the Company to terminate the Sublease Agreement in its entirety and retake the Premises if Subtenant fails to remedy certain defaults of its obligations under the Sublease Agreement within specified time periods. Nashville Leases Insight operates a CLIA-certified laboratory and has additional office space located at 2 International Plaza, Nashville, Tennessee, under lease arrangements with MPC Holdings, LLC. In August 2021, the Company entered into a lease agreement to add an additional suite to its Nashville office space, containing 1,928 8,362 On January 1, 2024, the Company renewed its exiting leases with MPC Holdings, LLC and added a new lease agreement to further expand its Nashville office space. The new lease contains 2,319 10,681 4,826 36 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Embedded Operating Lease In December 2019, Oncocyte entered into a Laboratory Services Agreement with Razor and Encore Clinical, Inc. (“Encore”), a former stockholder of Razor (the “Laboratory Agreement”). Under the Laboratory Agreement (which expired on September 29, 2021), Oncocyte assumed all of Razor’s Laboratory Agreement payment obligations. 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 expired 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. The Laboratory Agreement terminated on 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. The office and facilities leases discussed above are operating leases under ASC 842 and are included in the tables below. The tables below provide the amounts recorded in connection with the application of ASC 842 for Oncocyte’s operating and financing leases (see Note 2 for additional policy information). Financing Lease As of December 31, 2023, Oncocyte has no remaining financing leases. Previously, we had one such lease for certain laboratory equipment as shown in the prior year table below. Oncocyte’s lease obligations were collateralized by the equipment financed under the lease schedule. Operating and Financing Leases The following table presents supplemental balance sheet information related to operating and financing leases: Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases 2023 2022 December 31, 2023 2022 (In thousands) Operating lease Right-of-use assets, net $ 1,637 $ 2,088 Right-of-use lease liabilities, current $ 628 $ 698 Right-of-use lease liabilities, noncurrent 2,102 2,730 Total operating lease liabilities $ 2,730 $ 3,428 Financing lease Machinery and equipment $ 537 $ 537 Accumulated depreciation (537 ) (446 ) Machinery and equipment, net $ - $ 91 Current liabilities $ - $ 117 Noncurrent liabilities - - Total financing lease liabilities $ - $ 117 Weighted average remaining lease term Operating lease 3.7 4.5 Financing lease n/a 1.0 Weighted average discount rate Operating lease 11.31 % 11.24 % Financing lease n/a 11.55 % ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Future minimum lease commitments are as follows: Schedule of Future Minimum Lease Commitments for Operating and Financing Leases Operating Financing Leases Leases (In thousands) Year Ending December 31, 2024 $ 903 $ - 2025 869 - 2026 899 - 2027 695 - Total minimum lease payments 3,366 - Less amounts representing interest (636 ) - Present value of net minimum lease payments $ 2,730 $ - The following table presents supplemental cash flow information related to operating and financing leases: Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from operating leases $ 1,048 $ 1,143 Operating cash flows from financing leases $ 7 $ 20 Financing cash flows from financing leases $ 117 $ 104 The Company incurred total lease cost, including short-term lease expenses, of $ 842,000 1.1 64,000 zero Litigation – General Oncocyte may 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, 2023 and 2022, Oncocyte has accrued approximately $ 2.5 4.4 2.3 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 Razor Stock 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 Razor Stock Purchase Agreement. Oncocyte periodically enters into underwriting and securities sales agreements with broker-dealers in connection with the offer and sale of Oncocyte securities. The terms of those underwriting and securities sales agreements include indemnification provisions pursuant to which Oncocyte agrees to indemnify the broker-dealers from certain liabilities, including liabilities arising under the Securities Act, in connection with the offer and sale of Oncocyte securities. 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, 2023 and 2022. |
Series A Redeemable Convertible
Series A Redeemable Convertible Preferred Stock and Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Series A Redeemable Convertible Preferred Stock and Shareholders’ Equity | 8. Series A Redeemable Convertible Preferred Stock and Shareholders’ Equity Series A Redeemable Convertible Preferred Stock On April 13, 2022, the Company entered into a Securities Purchase Agreement with institutional accredited investors (the “Investors”) in a registered direct offering of 11,765 384,477 30.60 850 1,000 5,000,000 10,000,000 4.9 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Series A Preferred Stock is convertible into shares of the Company’s common stock at any time at the holder’s option. The conversion price will be subject to customary anti-dilution adjustments for matters such as stock splits, stock dividends and other distributions on our common stock, and recapitalizations. A holder is prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the shares of our common stock then issued and outstanding (provided a holder may elect, at the first closing, to increase such beneficial ownership limitation solely as to itself up to 19.99% of the number of shares of our common stock outstanding immediately after giving effect to the conversion, provided further that following the receipt of shareholder approval required by applicable Nasdaq rules with respect to the issuance of common stock that would exceed the beneficial ownership limitation, such beneficial ownership limitation will no longer apply to the holder if the holder notified the Company that the holder wishes the Company to seek such shareholder approval). the Company received such shareholder approval to remove the beneficial ownership limitation with respect to the Series A Preferred Stock held by Broadwood. The Company may force the conversion of up to one-third of the shares of Series A Preferred Stock originally issued, subject to customary equity conditions, if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140% of the conversion price and on 20 out of the same 30 trading days the daily trading volume equals or exceeds 20,000 shares of our common stock. The Company may only effect one forced conversion during any 30-trading day period In the event of the Company’s liquidation, dissolution, or winding up, holders of Series A Preferred Stock will receive a payment equal to the stated value of the Series A Preferred Stock plus accrued but unpaid dividends and any other amounts that may have become payable on the Series A Preferred Stock due to any failure or delay that may have occurred in issuing shares of common stock upon conversion of a portion of the Series A Preferred Stock, before any distribution or payment to the holders of common stock or any of our other junior equity. Shares of Series A Preferred Stock generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series A Preferred Stock will be required to amend any provision of our certificate of incorporation that would have a materially adverse effect on the rights of the holders of the Series A Preferred Stock. Additionally, as long as any shares of Series A Preferred Stock remain outstanding, unless the holders of at least 51% 8 15 Shares of Series A Preferred Stock are entitled to receive cumulative dividends at a rate per share (as a percentage of stated value) of 6% 478,000 The Company is required to redeem, for cash, the shares of Series A Preferred Stock on the earlier to occur of (1) April 8, 2024, (2) the commencement of certain a voluntary or involuntary bankruptcy, receivership, or similar proceedings against the Company or its assets, (3) a Change of Control Transaction (as defined herein) and (4) at the election and upon notice of 51% 50% 50% 1,064 1.1 118,000 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The issuance and sale of the Series A Preferred Stock was completed pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-256650), filed with the SEC on May 28, 2021 and declared effective by the SEC on June 8, 2021, and an accompanying prospectus dated June 8, 2021 as supplemented by a prospectus supplement dated April 13, 2022. As of December 31, 2023 and 2022, Oncocyte had 4,818 5,882 In connection with the Company’s private placement as discussed in Note 14, “Subsequent Events,” the Company will use a portion of the net proceeds to redeem the remaining 4,818 Preferred Stock As of December 31, 2023 and 2022, Oncocyte has 5,000,000 no no Common Stock As of December 31, 2023 and 2022, Oncocyte has 230,000,000 no 8,261,073 5,932,191 Underwritten Offering On April 13, 2022, Oncocyte entered into an underwriting agreement (the “Underwriting Agreement”) with BTIG, LLC, as representative of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell to the Underwriters an aggregate of 1,313,320 1,313,320 656,660 26.65 26.45 0.20 Under the terms of the Underwriting Agreement, the Company also granted to the Underwriters an over-allotment option, exercisable in whole or in part at any time for a period of 30 days from the date of the Underwriting Agreement, to purchase up to an additional 196,998 196,998 98,499 24.85 0.20 196,998 196,998 The Company received net proceeds of approximately $ 32.8 The Underwritten Offering was made pursuant to the Company’s effective “shelf” registration statement on Form S-3 (Registration No. 333-256650) filed with the SEC Commission on May 28, 2021 and declared effective by the SEC on June 8, 2021, and an accompanying prospectus dated June 8, 2021 as supplemented by a prospectus supplement dated April 13, 2022. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS April 2023 Offering On April 3, 2023, Oncocyte entered into an agreement with certain members of the Company’s board of directors, and several institutional and accredited investors, including Broadwood, the Company’s largest shareholder, and certain members of the Company’s board of directors (and certain of their affiliated parties), relating to their purchase of an aggregate of up to 2,278,121 7.08 6.03 2,274,709 13.9 1.1 1,064 Common Stock Purchase Warrants As of December 31, 2023 and 2022, Oncocyte had an aggregate of 819,767 30.60 109.20 3.09 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation Equity Incentive Plans Oncocyte had a 2010 Stock Option Plan (the “2010 Plan”) under which 260,000 10,124 30,367 As of December 31, 2023, 1,050,000 355,672 2022 Equity Awards During the year ended December 31, 2022, the Company awarded share-based payment awards under the 2018 Plan to certain executive officers and employees with time-based, market-based and performance-based vesting conditions (“2022 equity awards”). The fair value of the RSU 2022 equity awards with performance-based vesting condition was estimated using the Black-Scholes option-pricing model assuming that performance goals will be achieved. If such performance conditions are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The probability of 2022 equity awards performance-based vesting conditions were evaluated each reporting period and the Company trued-up the amount of cumulative cost recognized for the 2022 performance-based awards at each reporting period based on the most up-to-date probability estimates. The Company recognized the compensation expense for 2022 performance-based awards expected to vest on a straight-line basis over the respective service period for each separately vesting tranche. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The fair value of the RSU 2022 equity awards with market-based and time-based vesting conditions were estimated using the Monte Carlo simulation model. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility and the estimated period to achievement of the performance and market conditions, which are subject to the achievement of the market-based goals established by the Company and the continued employment of the participant. These awards vest only to the extent that the market-based conditions are satisfied as specified in the vesting conditions. Unlike the performance-based awards, the grant date fair value and associated compensation cost of the market-based awards reflect the probability of the market condition being achieved, and the Company recognized this compensation cost regardless of the actual achievement of the market condition. Assumptions utilized in connection with the Monte Carlo valuation technique included: estimated risk-free interest rate of 2.0 2.8 100 0 117,625 In May 2022, the Company approved amendments to vesting conditions of 61,875 12,500 50% 50% the Company of average market capitalization minimum, target, and maximum goals of (i) $300 million; (ii) $400 million; and (iii) $500 million, respectively, during the period beginning on January 1, 2022 and ending on December 31, 2024. In accordance with ASC 718, the Company calculated the fair value of the market-based awards on the date of modification, noting an increase in the fair value of approximately $ 58,500 2.72 2.6 95.0 0 In July 2022, the Company approved amendments to vesting conditions of 23,750 50% 50% the achievement of performance minimum, target, and maximum goals of (i) 90% of revenue goal; (ii) 100% of revenue goal; and (iii) exceed revenue goal by up to 150%, respectively, during fiscal year 2022. As of December 31, 2022, 50% of the performance-based awards were forfeited since the Company did not achieve LCD reimbursement for VitaGraft. The remaining 50% were eligible to vest on December 31, 2023, since the Company completed the LCD submission for DetermaCNI on December 16, 2022 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS During the year ended December 31, 2022, the Company accelerated the vesting of certain equity awards in accordance with the 2018 Incentive Plan after the departure of officers of the Company and the adoption of the workforce reduction plan. Due to the acceleration of such awards all associated unrecognized compensation was accelerated and recognized in full. As of December 31, 2023, the remaining 2022 equity awards with performance-based or market-based conditions either vested or forfeited during 2023, accordingly no related RSUs are outstanding. Plan Activity A summary of Oncocyte’s 2010 Plan and 2018 Incentive Plan activity and related information follows: Summary of Stock Option Activity Options RSUs Weighted Shares Weighted Average Average Grant Available Number Outstanding Exercise Price Number Outstanding Date Fair Value (In thousands, except weighted average amounts) Balance at December 31, 2022 442 458 $ 59.39 22 $ 12.23 RSUs vested n/a n/a n/a (13 ) $ 7.97 RSUs granted (9 ) n/a n/a 5 $ 4.00 Options granted (355 ) 355 $ 5.50 n/a n/a Options exercised n/a - $ - n/a n/a Options forfeited/expired 261 (281 ) $ 57.90 n/a n/a RSUs forfeited 2 n/a n/a (1 ) $ 19.40 Performance RSUs forfeited 15 n/a n/a (8 ) $ 19.40 Balance at December 31, 2023 356 532 $ 24.56 5 $ 4.00 Weighted average remaining contractual life (years) 8.30 Options exercisable at December 31, 2023 160 $ 56.34 Weighted average remaining contractual life (years) 6.05 Stock-based compensation expense for the year $ 2,721 $ 39 Unrecognized stock-based compensation expense $ 2,659 $ 9 Weighted average remaining recognition period (years) 2.07 0.48 The aggregate intrinsic value of options outstanding and exercisable, respectively, was zero 354,790 4.13 234,790 13.09 Schedule of Assumptions Used to Calculate Fair Value of Stock Options Years Ended December 31, 2023 2022 Expected life (in years) 6.24 6.01 Risk-free interest rates 3.99 % 2.43 % Volatility 107.05 % 106.74 % Dividend yield 0 % 0 % In August 2023, the Company awarded 120,000 4.81 6.19 91.0 0 1.09 1.74 156,000 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The aggregate fair value of RSUs vested during the years ended December 31, 2023 and 2022, was $ 88,000 374,000 4.00 16.22 Oncocyte recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations: Summary of Stock-based Compensation Expense 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Cost of revenues $ 14 $ 10 Research and development 1,238 773 Sales and marketing 241 261 General and administrative 1,249 5,435 Expense included in discontinued operations 18 3,563 Total $ 2,760 $ 10,042 Total unrecognized stock-based compensation expense as of December 31, 2023 was $ 2.7 Other Information In August 2023, the Company issued 9,091 36,000 The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If Oncocyte had made different assumptions, its stock-based compensation expense and net loss for the periods presented may have been significantly different. Refer to Note 2 for additional information. 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, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes In 2023, the Company incurred $ 24.9 million of pretax book losses in the United States and $ 12,000 of net operating income internationally from continuing operations. In 2022, the Company incurred $ 18.6 million of pretax book losses in the United States and $ 10,000 of net operating income internationally from continuing operations. A deferred income tax benefit of zero 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. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The primary components of the deferred tax assets and liabilities were as follows: Schedule of Components of Deferred Tax Assets and Liabilities 2023 2022 (1) December 31, 2023 2022 (1) (In thousands) Deferred tax assets: Net operating loss carryforwards and capital loss carryforwards $ 61,760 $ 57,675 Research and development credit carryforwards 4,054 3,680 Marketable equity securities - 364 Stock-based and other compensation 2,368 5,067 Right-of-use liability 756 952 Razor investment 2,303 - Capitalized R&D (2) 6,026 4,011 Capital loss carryforward 5,372 - Other 8 49 Total deferred tax assets 82,647 71,798 Valuation allowance (67,314 ) (54,408 ) Deferred tax assets, net of valuation allowance 15,333 17,390 Deferred tax liabilities: Right-of-use asset (453 ) (580 ) Intangibles and fixed assets (14,880 ) (16,810 ) Total deferred tax liabilities (15,333 ) (17,390 ) Net deferred taxes $ - $ - (1) The 2022 net operating loss carryforwards and Razor investment lines have been updated to conform to the 2023 presentation. (2) Relates to research and development expenditures required to be capitalized as of December 31, 2023 and 2022. Income taxes differed from the amounts computed by applying the applicable U.S. federal income tax rates indicated to pretax losses. A reconciliation of the difference between the federal statutory tax rates and the Company’s effective tax rates from continuing operations is as follows: Schedule of Income Tax Reconciliation 2023 2022 (1) Years Ended December 31, 2023 2022 (1) Computed tax benefit at federal statutory rate 21 % 21 % Permanent differences 0 % -8 % State tax benefit 13 % 1 % Research and development credits 1 % -3 % Change in fair value of contingent consideration 5 % 35 % Change in valuation allowance -48 % -19 % Goodwill impairment 0 % -21 % Stock-based compensation -11 % -3 % Officers compensation 2 % -3 % Razor investment 19 % 0 % Expiring tax attributes -2 % 0 % Total 0 % 0 % (1) The 2022 permanent differences, stock-based compensation and officers compensation lines have been updated to conform to the 2023 presentation. As of December 31, 2023, Oncocyte had net operating loss (“NOL”) carryforwards of approximately $ 243.4 129.6 between 2024 and 2037 between 2024 and 2043 As of December 31, 2023, Oncocyte has research and development credit carryforwards for federal and state purposes of $ 3.7 2.6 between 2031 and 2043 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax assets will not be realized. Oncocyte has 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 $ 12.9 17.2 Oncocyte has unrecognized tax benefits (“UTBs”) totaling $ 2.3 1.9 no A reconciliation of the annual beginning and ending UTBs is as follows: Schedule of Unrecognized Tax Benefit 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Balance at the beginning of the year $ 1,921 $ 1,390 Additions based on tax positions related to current year 375 531 Adjustments based on tax positions related to prior years - - Settlements - - Balance at end of year $ 2,296 $ 1,921 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. In general, Oncocyte is no longer subject to tax examination by the Internal Revenue Service or state taxing authorities for years before 2018. 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. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions Financing Transactions On April 13, 2022, Oncocyte entered into the Securities Purchase Agreement with the Investors, including Broadwood and John Peter Gutfreund, a former director of Oncocyte, for the Series A Preferred Stock offering. Each of Broadwood and Mr. Gutfreund has a direct material interest in the Series A Preferred Stock offering and agreed to purchase 5,882.35 1,176.48 85,000 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Further, on April 13, 2022, Oncocyte entered into the Underwriting Agreement with the Underwriters for the Underwritten Offering. Pursuant to the Underwritten Offering, Broadwood acquired from us (i) 261,032 300,187 150,093 30.60 300,187 39,154 249,204 286,585 143,292 286,585 37,380 309,976 356,472 178,236 356,472 46,496 On April 3, 2023, Oncocyte entered into a securities purchase agreement with certain investors, including Broadwood, Pura Vida and entities affiliated with AWM, and certain individuals, including our Chairman Andrew Arno and former director John Peter Gutfreund (and certain of their affiliated parties), which provided for the sale and issuance by the Company of an aggregate of 2,274,709 shares of common stock at an offering price of: (i) $6.03 to investors who are not considered to be “insiders” of the Company pursuant to Nasdaq Listing Rules (“Insiders”), which amount reflected the average closing price of the Common Stock on Nasdaq during the five trading day period immediately prior to pricing, and (ii) $7.08 to Insiders, which amount reflected the final closing price of the Common Stock on Nasdaq on the last trading day immediately prior to pricing . Broadwood purchased 1,341,381 shares of common stock for $ 8,093,361.84 , Pura Vida purchased 33,150 shares of common stock for $ 200,013.84 and entities affiliated with AWM purchased 472,354 shares of common stock for $ 2,849,999.92 . Mr. Arno and his affiliated parties purchased 21,162 shares of common stock for $ 150,000.51 , and Mr. Gutfreund and his affiliated parties purchased 85,250 for $ 604,252.00 . On April 5, 2023, Oncocyte redeemed all of the 588.23529 618,672.34 On April 11, 2024, the Company entered into a private placement securities purchase agreement with certain accredited investors. The gross proceeds to the Company from the private placement are expected to be approximately $ 15.8 Other Transactions The Company previously employed the son of Andrew Arno, Chairman of the Board as its Senior Manager, Investor Relations, Corporate Planning & Development. The total compensation paid by the Company to Mr. Arno’s son since January 1, 2022 is approximately $ 200,000 During the year ended December 31, 2023, Oncocyte purchased $ 581,000 375,000 206,000 On April 5, 2024, the Company entered into an agreement with Bio-Rad to collaborate in the development and the commercialization of research use only and in vitro diagnostics kitted transplant products. See Note 14, “Subsequent Events” for additional information. |
Co-Development Agreement with L
Co-Development Agreement with Life Technologies Corporation | 12 Months Ended |
Dec. 31, 2023 | |
Co-development Agreement With Life Technologies Corporation | |
Co-Development Agreement with Life Technologies Corporation | 12. Co-Development Agreement with Life Technologies Corporation On January 13, 2022, Oncocyte entered into a Collaboration Agreement (the “LTC Agreement”) with Life Technologies Corporation, a Delaware corporation and subsidiary of Thermo Fisher Scientific (“LTC”), in order to partner in the development and collaborate in the commercialization of Thermo Fisher Scientific’s existing Oncomine Comprehensive Assay Plus and Oncocyte’s DetermaIO assay for use with LTC’s Ion Torrent TM TM TM TM in vitro 749,000 |
Discontinued Operations of Razo
Discontinued Operations of Razor | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations of Razor | 13. Discontinued Operations of Razor On December 15, 2022, the Company entered into the Razor Stock Purchase Agreement with Dragon and Razor. Pursuant to the Razor Stock Purchase Agreement, Oncocyte agreed to sell, and Dragon agreed to purchase, 3,188,181 70 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In addition to the transfer of 70 116,000 The Company recorded the final adjustment related to the disposal, including final working capital adjustments, and recognized an impairment loss of $ 1.3 27.2 The operating results for Razor have been recorded in discontinued operations of the accompanying consolidated statements of operations for all periods presented, and we have reclassified their assets and liabilities as discontinued operations in the accompanying balance sheets. We have retrospectively adjusted the amounts reported for the year ended December 31, 2022 in the following tables to give effect to such reporting of discontinued operations. For the year ended December 31, 2023, discontinued operations reflect operating results of Razor up to the closing of the sale. The Company’s consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of comprehensive loss, statements of shareholders’ equity and statements of cash flows combined continuing and discontinued operations. A summary of financial information related to the Company’s discontinued operations is as follows. The following table represents the results of the discontinued operations of Razor: Schedule of Discontinued Operations 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Net revenue $ 421 $ 4,673 Cost of revenues 507 7,930 Research and development 702 12,136 Sales and marketing 498 12,462 General and administrative 329 569 Loss from impairment of held for sale assets 1,311 25,866 Net loss from discontinued operations $ (2,926 ) $ (54,290 ) ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table represents the carrying amounts of the assets and liabilities of the discontinued operations of Razor: Schedule of Assets and Liabilities Discontinued Operations 2023 2022 December 31, 2023 2022 (In thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ - $ 1,510 Prepaid expenses and other current assets - 346 Machinery and equipment, net, and construction in progress - 211 Intangible assets, net - 25,920 Impairment of held for sale assets - (25,866 ) TOTAL ASSETS $ - $ 2,121 LIABILITIES AND SHAREHOLDERS’ EQUITY Accounts payable $ 45 $ 492 Accrued compensation - 248 Accrued expenses and other current liabilities - 1,265 Total current liabilities 45 2,005 TOTAL LIABILITIES $ 45 $ 2,005 The following table summarizes cash used related to the discontinued operations of Razor: 2023 2022 Years Ended December 31, 2023 2022 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net cash used in operating activities $ (4,357 ) $ (20,790 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities $ (1,372 ) $ (91 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Collaboration Agreement On April 5, 2024, the Company entered into a Collaboration Agreement with Bio-Rad to collaborate in the development and the commercialization of research use only and in vitro diagnostics kitted transplant products using Bio-Rad’s ddPCR instruments and reagents (the “Collaboration Agreement”). The Collaboration Agreement has a term of 10 years unless earlier terminated pursuant to customary termination provisions. The Collaboration Agreement provides that through the oversight of a joint steering committee comprised of representatives from both parties, the parties will collaborate on the development of (i) the Company’s series of GraftAssure™ Transplant Monitoring Assays to measure and test the concentration of donor-derived cell free DNA for research use only (the “RUO Assays”); and (ii) the Company’s VitaGraft™ Transplant Monitoring Assays that have received regulatory approval as an in vitro diagnostic device (the “IVD Kits”) for exclusive use on one or more Bio-Rad ddPCR instruments. Pursuant to the Collaboration Agreement, and toward the development of the RUO Assays and the IVD Kits, the Company will collect and screen samples, conduct feasibility testing and stability studies, and perform analytical validation, among other things; and Bio-Rad will supply its ddPCR instruments and platforms as well as manufacture and supply all consumables. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Prior to the commercial launch of the RUO Assays, under the Collaboration Agreement, the parties will develop a plan to market and sell the RUO Assays. The Company will be responsible for the manufacture and supply of all RUO Assays, and Bio-Rad will supply to the Company Bio-Rad’s ddPCR instruments and reagents for use in commercializing the RUO Assays, which products will be purchased by the Company exclusively from Bio-Rad. The Company and Bio-Rad will be jointly responsible for co-promoting and co-marketing the RUO Assays within the United States and Germany (the “Territory”). The Company has the exclusive right to sell the RUO Assays in the Territory exclusively with the use of Bio-Rad ddPCR instruments and reagents. Bio-Rad will be responsible for promoting and marketing, and has the exclusive right to sell, the RUO Assays outside the Territory. For the sales of the RUO Assays in the Territory, the Company will pay to Bio-Rad a single digit royalty payment based on net sales. The Company will manufacture and supply the RUO Assays to Bio-Rad for resale outside the Territory. Additionally, the Collaboration Agreement provides Bio-Rad an option for the exclusive right to promote, market and sell IVD Kits worldwide subject to certain conditions. If and when such option is exercised, Bio-Rad will purchase additional Securities Purchase Agreement On April 11, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (collectively, the “Purchasers”) for the issuance and sale in a private placement (the “Private Placement”) of an aggregate of 5,076,900 shares (the “Common Shares”) of Common Stock and pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 342,888 shares of Common Stock, with an exercise price of $ 0.0001 per share. The purchase price for one Common Share was $ 2.9164 , and the purchase price for one Pre-Funded Warrant was $ 2.9163 . Certain insiders of the Company subscribed for 42,373 2.95 A holder of the Pre-Funded Warrants may not exercise any portion of such holder’s Pre-Funded Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99 9.99 In connection with the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as of April 11, 2024, with the Purchasers, pursuant to which the Company agreed to prepare and file a registration statement with the SEC registering the resale of the Common Shares and the shares of Common Stock underlying the Pre-Funded Warrants no later than 30 days after the date of the Registration Rights Agreement, and to use best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no later than 60 days following the date of the Registration Rights Agreement (or 75 days following the date of the Registration Rights Agreement in the event of a “full review” by the SEC). The gross proceeds to the Company from the Private Placement were approximately $ 15.8 million, before deducting placement agent fees and expenses and estimated offering expenses payable by the Company. The Company intends to use the net proceeds received from the Private Placement for general corporate purposes and working capital. In addition, approximately $ 5.4 Needham & Company, LLC served as the Company’s exclusive placement agent in connection with the Private Placement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles The consolidated financial statements and accompanying notes are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation On January 31, 2020, with the acquisition of Insight Genetics, Inc. (“Insight”) through a merger with a newly incorporated wholly-owned subsidiary of Oncocyte (the “Insight Merger”) under the terms of an Agreement and Plan of Merger (the “Insight Merger Agreement”), 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 3). On April 15, 2021, with the acquisition of Chronix Biomedical, Inc. (“Chronix”) pursuant to an Agreement and Plan of Merger dated February 2, 2021, amended February 23, 2021, and amended and restated as of April 15, 2021 (as amended and restated, the “Chronix Merger Agreement”), by and among Oncocyte, CNI Monitor Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Oncocyte (“Merger Sub”), Chronix became a wholly-owned subsidiary of Oncocyte (the “Chronix Merger”), and on that date Oncocyte began consolidating Chronix’s operations and results with Oncocyte’s operations and results (see Note 3). All material intercompany accounts and transactions have been eliminated in consolidation. We have reflected the operations of Razor as discontinued operations for the periods presented. See Note 13 for further information. Amounts and disclosures throughout these notes to consolidated financial statements relate solely to continuing operations and exclude all discontinued operations, unless otherwise noted. Discontinued operations comprise activities that were disposed of or discontinued at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements On July 24, 2023, the Company implemented a 1-for-20 230 |
Reclassifications | Reclassifications Certain prior period amounts in the consolidated financial statements and notes to consolidated financial statements have been reclassified to conform to the current period presentation. These changes had no impact on the previously reported consolidated financial condition, results of operations or cash flows. |
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 and forecasted financial information, 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), the carrying value of goodwill and other intangibles, impairments, assumptions related to going concern assessments, revenue recognition, allocation of direct and indirect expenses, useful lives associated with long-lived intangible and other assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, allowances for credit losses, and assumptions used to value debt, stock-based awards and other equity instruments. These assessments are made in the context of information reasonably available to Oncocyte. Actual results may differ materially from those estimates. |
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, 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. |
Fair Value Measurements, Business Combinations and Contingent Consideration Liabilities | Fair Value Measurements, Business Combinations and Contingent Consideration Liabilities 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 as of the acquisition date based on prices quoted on the principal national securities exchange on which the shares traded. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development (“IPR&D”), 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 recorded at fair value on a recurring basis, except for money market funds and marketable equity securities. These assets are measured at fair value using the period-end quoted market prices as a Level 1 input. 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 laboratory 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, which are carried at fair value based on Level 3 inputs on a recurring basis. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 certain revenues generated. 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 Note 3 for a full discussion of these liabilities and additional Level 3 fair value disclosures. The following tables present the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy: Schedule of Fair Value Measurement of Financial Assets and Liabilities December 31, 2023 Fair value Level 1 Level 2 Level 3 (In thousands) Liabilities: Contingent consideration liabilities (Note 3) $ 39,900 $ - $ - $ 39,900 Total $ 39,900 $ - $ - $ 39,900 December 31, 2022 Fair value Level 1 Level 2 Level 3 (In thousands) Assets: Marketable equity securities $ 433 $ 433 $ - $ - Total $ 433 $ 433 $ - $ - Liabilities: Contingent consideration liabilities (Note 3) $ 45,662 $ - $ - $ 45,662 Total $ 45,662 $ - $ - $ 45,662 The carrying amounts of cash and cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. In accordance with GAAP, from time to time, the Company measures certain assets at fair value on a nonrecurring basis. The Company reviews the carrying value of intangibles, including IPR&D (see Note 5), and other long-lived assets for indications of impairment at least annually. Refer to related discussions of impairments below. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Oncocyte considers all highly liquid securities with original maturities of three months or less when purchased to be cash equivalents. For the periods presented, Oncocyte’s cash equivalents are comprised of investments in AAA rated money market funds that invest in first-tier only securities, which primarily include domestic commercial paper and securities issued or guaranteed by the U.S. government or its agencies. Restricted cash relates to a bank letter of credit required under our office lease arrangement, refer to Note 7 for additional information. |
Marketable Equity Securities | Marketable Equity Securities Oncocyte accounted for the shares of Lineage Cell Therapeutics, Inc. (“Lineage”) and AgeX Therapeutics, Inc. (“AgeX”) common stock it held as marketable equity securities in accordance with ASC 321-10, Investments – Equity Securities As of December 31, 2022, Oncocyte held 353,264 35,326 433,000 1.4 |
Investments in Privately Held Companies | Investments in 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 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 pro rata share of earnings or losses from the investment. Since February 16, 2023, Oncocyte continues to own an equity interest Razor, however, based on the Razor transactions as discussed in Note 1, the remaining common stock held is accounted for at historical cost less impairment, which is zero. |
Assets Held for Sale and Discontinued Operations | Assets Held for Sale and Discontinued Operations Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the consolidated balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. During the year ended December 31, 2023, the Company entered into various agreements to sell laboratory equipment. As a result, the Company classified the equipment as held for sale as current assets, in the consolidated balance sheet, as all the criteria of ASC subtopic 360-10, Property, Plant, and Equipment 139,000 1.3 Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements |
Machinery and Equipment, Net, and Construction in Progress | Machinery and Equipment, Net, and 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 10 3 5 Construction in progress, comprised primarily of leasehold improvements under construction, is not depreciated until the underlying asset is placed into service. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill In accordance with ASC 350, Intangibles – Goodwill and Other Oncocyte does not have intangible assets with indefinite useful lives other than the acquired IPR&D discussed in Note 5, which as of December 31, 2023, has been partially impaired. 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 that it is more-likely-than-not that the carrying value of the associated reporting unit exceeds its fair value. 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. In accordance with ASC 350, we review and evaluate our long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that we may not recover their net book value. We test goodwill for impairment on an annual basis in the fourth quarter of each year, and between annual tests, if indicators of potential impairment exist, using a fair-value approach. We typically use an income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates). Estimates utilized in the projected cash flows include consideration of macroeconomic conditions, overall category growth rates, competitive activities, cost containment and margin expansion, Company business plans, the underlying product or technology life cycles, economic barriers to entry, and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. During the fourth quarter of 2022, and upon the eminent sale of Razor, the Company assessed its current environment and concluded that it was more-likely-than-not that the fair value of the goodwill was less than the carrying value. As such, the Company performed a quantitative test to estimate the fair value of the enterprise. Using the discounted cash flow method and taking into consideration the loss of Razor’s future cash flows, the calculated enterprise fair value was lower than carrying value. At that time, the carrying value of goodwill was comprised of, $ 9.2 9.5 18.7 |
Long-Lived Intangible Assets | Long-Lived Intangible Assets Long-lived intangible assets subject to amortization are stated at acquired cost, less accumulated amortization. We amortize intangible assets not considered to have an indefinite useful life using the straight-line method over their estimated period of benefit, which generally ranges from 1 9 5 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Oncocyte assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Oncocyte’s long-lived assets consist primarily of intangible assets, right-of-use assets for operating leases, customer relationships, and machinery and equipment. 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 carrying value of the asset over its fair value, is recorded. See Note 4 for additional information with respect to the impairment of leasehold improvements during 2023. |
Leases | Leases Oncocyte accounts for leases in accordance with ASC 842, Leases |
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 After all relevant assessments, Oncocyte concludes whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date. Based on the above guidance and, among other factors, the fact that our warrants cannot be cash settled under any circumstance but require share settlement, all of our outstanding warrants meet the equity classification criteria and have been classified as equity. Refer to Notes 6 and 8 for details about our outstanding warrants. |
Revenue Recognition | Revenue Recognition Pursuant to ASC 606, revenues are recognized when control of services performed is transferred to customers, in an amount that reflects the consideration Oncocyte expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, an entity satisfies a performance obligation. Oncocyte determines transaction prices based on the amount of consideration we expect to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. The Company considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The following table presents consolidated revenues by service: Schedule of Disaggregation of Revenue 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Pharma Services $ 1,467 $ 958 Laboratory developed test services 36 - Total $ 1,503 $ 958 Pharma Services Revenue Revenues recognized include Pharma Services performed by Oncocyte’s Insight and Chronix subsidiaries for its pharmaceutical customers, including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements or license agreements (together with SOW the “Pharma Services Agreements”) with specific deliverables defined by the customer. Pharma Services are performed on a (i) time and materials basis or (ii) per test completed basis. Upon completion of the service to the customer in accordance with a Pharma Services Agreement, Oncocyte has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes Pharma Service revenue at that time. Insight identifies each service of its Pharma Service offering as a single performance obligation. Offerings include services such as recurring fees for project management, fees for storage and handling, pass through expenses for shipping or calibration, training, proficiency, reproducibility tests, etc. Chronix identifies the processing of test samples as a separate performance obligation (considered a series) within license agreements with customers. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Completion of the service and satisfaction of the performance obligation is typically evidenced by acknowledgment of completed services, and access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the Pharma Services Agreements. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Oncocyte has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Oncocyte recognizes revenue over a period 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 performance obligations are satisfied under the Pharma Services Agreements, 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 balance sheets when the customer is invoiced according to the billing schedule in the contract. As of December 31, 2023 and 2022, Oncocyte had accounts receivable from Pharma Services customers of $ 488,000 257,000 Allowance for Credit Losses Oncocyte establishes an allowance for credit losses 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, reasonable and supportable forecast that affect the collectability of the reported amount, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Oncocyte 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 credit loss reserve accounts. As of December 31, 2023 and 2022, we had an allowance for credit losses of $ 5,000 zero Laboratory Developed Test Services Prior to the Razor Sale Transaction, Oncocyte generated revenue from performing DetermaRx tests on clinical samples through orders received from physicians, hospitals, and other healthcare providers. In determining whether all 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 has billed a list price for all tests ordered and completed for all payer types, Oncocyte considers constraints on the variable consideration when recognizing revenue for DetermaRx. 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 consider the novelty of the test, the uncertainty of receiving payment, or being subject to claims for a refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte has recognized revenue upon payment because it has had insufficient history to reliably estimate payment patterns. As of December 31, 2023 and 2022, Oncocyte had accounts receivable of zero 1.9 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Allowance for Credit Losses We maintain an allowance for credit losses related to Laboratory Developed Test Services at an amount we estimate to be sufficient to provide adequate protection against losses resulting from extending credit to our customers. We base this allowance, in the aggregate, on historical collection experience, age of receivables and general economic conditions, as well as specific identification of uncollectible accounts. We initially established an allowance in 2022 in connection with remaining Medicare and Medicare Advantage account balances and have continued to add to the allowance as appropriate. In the first quarter of 2023, in connection with the adoption of the new current expected credit loss model (see “Recent Accounting Pronouncements – Recently Adopted” below for additional information), the Company determined that the Medicare and Medicare Advantage accounts receivable net balance of approximately $ 1.4 million was uncollectible and should therefore be written-off as of the adoption date, January 1, 2023. As of December 31, 2023 and 2022, we had an allowance for credit losses of zero 154,000 154,000 zero Licensing Revenue Revenues that may be recognized include licensing revenue derived from agreements with customers for exclusive rights to market Oncocyte’s proprietary testing technology. Under the agreements, Oncocyte grants exclusive rights to certain trademarks and technology of Oncocyte for the purpose of marketing Oncocyte’s tests within a defined geographic territory. A license agreement may specify milestone deliverables or performance obligations, for which Oncocyte recognizes revenue when its licensee confirms the completion of Oncocyte’s performance obligation. A licensing agreement may also include ongoing sales support from Oncocyte and typically includes non-refundable licensing fees and per-test Pharma Services revenues discussed above, for which Oncocyte treats the licensing of the technology, trademarks, and ongoing support as a single performance obligation satisfied by the passage of time over the term of the agreement. Disaggregation of Revenues and Concentrations of Credit Risk The following table presents the percentage of consolidated revenues by service: Schedule of Concentration of Risk 2023 2022 Years Ended December 31, 2023 2022 Pharma Services 98 % 100 % Laboratory developed test services 2 % 0 % Total 100 % 100 % The following table presents the percentage of consolidated revenues generated by unaffiliated customers, based on the respective periods presented, that individually represented greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers 2023 2022 Years Ended December 31, 2023 2022 Pharma services - Company A 47 % 43 % Pharma services - Company B 27 % 14 % Pharma services - Company C 11 % 11 % The following table presents the percentage of consolidated revenues attributable to geographical locations, based on country of domicile: Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations 2023 2022 Years Ended December 31, 2023 2022 United States – Pharma Services 59 % 77 % Outside of the United States – Pharma Services 39 % 23 % United States – Laboratory developed test services 2 % 0 % Total 100 % 100 % The Company holds an insignificant amount of long-lived tangible assets in Germany. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Financial instruments that potentially subject the Company to concentrations of credit risk are cash equivalents and accounts receivable. The Company places its cash equivalents primarily in highly rated money market funds. Cash and cash equivalents are also invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. The Company has not experienced any significant losses on its deposits of cash and cash equivalents. Two Pharma Services customers individually represented approximately 79 13 59 30 |
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 Laboratory Developed Test Services, providing deliverables according to our licensing agreements, license fees due to third parties, and amortization of acquired intangible assets such as the customer relationship intangible assets (see Note 5). Infrastructure expenses include depreciation of laboratory equipment, allocated rent costs, leasehold improvements, and allocated information technology costs for operations at Oncocyte’s CLIA laboratory in Tennessee. Costs associated with generating the revenues are recorded as the tests or services are performed regardless of whether revenue was recognized. 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. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are comprised of costs incurred to develop technology, which 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. |
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. |
General and Administrative Expenses | General and Administrative Expenses 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. |
Stock-Based Compensation | Stock-Based Compensation Oncocyte recognizes compensation expense related to employee, Board of Director and other non-employee option grants and restricted stock grants in accordance with the Financial Accounting Standards Board (“FASB”) ASC 718, Compensation – Stock Compensation. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Oncocyte estimates the fair value of stock-based payment awards on the grant date and recognizes the resulting fair value over the requisite service period, which is generally a four-year ten years 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. 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. Oncocyte estimates the expected volatility using its own stock price volatility to the extent applicable or a combination of its stock price volatility and the stock price volatility of peer companies, for a period equal to the expected term of the options. The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of Oncocyte’s stock options. The dividend yield assumption is based on Oncocyte’s history and expectation of dividend payouts. Oncocyte has never declared or paid any cash dividends on its common stock, and Oncocyte does not anticipate paying any cash dividends in the foreseeable future. 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 10), 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. |
Retirement Plan | Retirement Plan Oncocyte has an employee savings and retirement plan under Section 401(k) of the Internal Revenue Code. The plan is a defined contribution plan in which eligible employees may elect to have a percentage of their compensation contributed to the plan, subject to certain guidelines issued by the Internal Revenue Service. During the years ended December 31, 2023 and 2022, Oncocyte’s total contributions to the plan were $ 310,000 689,000 |
Income Taxes | Income Taxes Oncocyte and its subsidiaries will file a consolidated U.S. federal income tax return and combined California state return for the year ended December 31, 2023. 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 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In accordance with the 2017 Tax Act, research and experimental (“R&E”) expenses under Internal Revenue Code Section 174 were required to be capitalized beginning in 2022. R&E expenses are required to be amortized over a period of 5 years for domestic expenses and 15 years for foreign expenses. The Inflation Reduction Act of 2022 specifically introduces the topic of corporate alternative minimum tax (“CAMT”) on adjusted financial statement income on applicable corporations for taxable years beginning after December 31, 2022. There is no impact to our current tax provision. On January 19, 2024, the House Ways and Means Committee approved the Tax Relief for American Families and Workers Act of 2024. The legislation includes, but is not limited to, retroactive delay of the Section 174 R&D domestic capitalization requirements, extension of 100-percent bonus depreciation through 2025, and updates to the interest expense limitation. As the legislation was not enacted as of December 31, 2023, these provisions do not impact the 2023 income tax provision. The Company will continue to monitor the legislative activity. |
Net Loss Per Common Share | Net Loss Per Common Share Basic loss per share is computed by dividing the net loss applicable to common stockholders after deducting cumulative unpaid dividends and accretion of the preferred stock, by the weighted average number of shares of common stock outstanding during the year. Diluted loss per share is computed by dividing the net loss applicable to common stockholders after deducting cumulative unpaid dividends and accretion of the preferred stock, by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method or the if-converted method, or the two-class method for participating securities, whichever is more dilutive. Potential common shares are excluded from the computation if their effect is antidilutive. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS All common stock equivalents are antidilutive because Oncocyte reported a net loss for all periods presented. The following table presents the calculation of basic and diluted loss per share of common stock: Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock 2023 2022 Years Ended December 31, 2023 2022 (In thousands, except per share data) Numerators: Loss from continuing operations $ (24,855 ) $ (18,612 ) Accretion of Series A redeemable convertible preferred stock (824 ) (520 ) Deemed dividend on Series A redeemable convertible preferred stock (118 ) - Net loss from continuing operations - basic and diluted $ (25,797 ) $ (19,132 ) Net loss $ (27,781 ) $ (72,902 ) Accretion of Series A redeemable convertible preferred stock (824 ) (520 ) Deemed dividend on Series A redeemable convertible preferred stock (118 ) - Net loss attributable to common stockholders - basic and diluted $ (28,723 ) $ (73,422 ) Denominator: Weighted average shares outstanding - basic and diluted 7,651 5,540 Net loss from continuing operations per share - basic and diluted $ (3.37 ) $ (3.45 ) Net loss attributable to common stockholders per share - basic and diluted $ (3.75 ) $ (13.25 ) Anti-dilutive potential common shares excluded from the computation of diluted net loss per common share: Stock options 532 458 RSUs 5 22 Warrants 820 820 Series A redeemable convertible preferred stock 5 4 Total 1,362 1,304 Anti-dilutive potential common shares excluded from computation of diluted net loss per common share 1,362 1,304 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 1.4 million was uncollectible and should therefore be written-off, based on the new guidance. Accordingly, the Company has recorded a cumulative-effect adjustment of such amount to the opening accumulated deficit balance as of January 1, 2023. The impact of recording such adjustment on our consolidated balance sheet as of January 1, 2023, was to reduce our net accounts receivable and increase our accumulated deficit balances by $ 1.4 In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measurement of Financial Assets and Liabilities | The following tables present the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy: Schedule of Fair Value Measurement of Financial Assets and Liabilities December 31, 2023 Fair value Level 1 Level 2 Level 3 (In thousands) Liabilities: Contingent consideration liabilities (Note 3) $ 39,900 $ - $ - $ 39,900 Total $ 39,900 $ - $ - $ 39,900 December 31, 2022 Fair value Level 1 Level 2 Level 3 (In thousands) Assets: Marketable equity securities $ 433 $ 433 $ - $ - Total $ 433 $ 433 $ - $ - Liabilities: Contingent consideration liabilities (Note 3) $ 45,662 $ - $ - $ 45,662 Total $ 45,662 $ - $ - $ 45,662 |
Schedule of Disaggregation of Revenue | The following table presents consolidated revenues by service: Schedule of Disaggregation of Revenue 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Pharma Services $ 1,467 $ 958 Laboratory developed test services 36 - Total $ 1,503 $ 958 |
Schedule of Concentration of Risk | The following table presents the percentage of consolidated revenues by service: Schedule of Concentration of Risk 2023 2022 Years Ended December 31, 2023 2022 Pharma Services 98 % 100 % Laboratory developed test services 2 % 0 % Total 100 % 100 % |
Schedule of Consolidated Revenues Generated by Unaffiliated Customers | The following table presents the percentage of consolidated revenues generated by unaffiliated customers, based on the respective periods presented, that individually represented greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers 2023 2022 Years Ended December 31, 2023 2022 Pharma services - Company A 47 % 43 % Pharma services - Company B 27 % 14 % Pharma services - Company C 11 % 11 % |
Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations | The following table presents the percentage of consolidated revenues attributable to geographical locations, based on country of domicile: Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations 2023 2022 Years Ended December 31, 2023 2022 United States – Pharma Services 59 % 77 % Outside of the United States – Pharma Services 39 % 23 % United States – Laboratory developed test services 2 % 0 % Total 100 % 100 % |
Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock | All common stock equivalents are antidilutive because Oncocyte reported a net loss for all periods presented. The following table presents the calculation of basic and diluted loss per share of common stock: Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock 2023 2022 Years Ended December 31, 2023 2022 (In thousands, except per share data) Numerators: Loss from continuing operations $ (24,855 ) $ (18,612 ) Accretion of Series A redeemable convertible preferred stock (824 ) (520 ) Deemed dividend on Series A redeemable convertible preferred stock (118 ) - Net loss from continuing operations - basic and diluted $ (25,797 ) $ (19,132 ) Net loss $ (27,781 ) $ (72,902 ) Accretion of Series A redeemable convertible preferred stock (824 ) (520 ) Deemed dividend on Series A redeemable convertible preferred stock (118 ) - Net loss attributable to common stockholders - basic and diluted $ (28,723 ) $ (73,422 ) Denominator: Weighted average shares outstanding - basic and diluted 7,651 5,540 Net loss from continuing operations per share - basic and diluted $ (3.37 ) $ (3.45 ) Net loss attributable to common stockholders per share - basic and diluted $ (3.75 ) $ (13.25 ) Anti-dilutive potential common shares excluded from the computation of diluted net loss per common share: Stock options 532 458 RSUs 5 22 Warrants 820 820 Series A redeemable convertible preferred stock 5 4 Total 1,362 1,304 Anti-dilutive potential common shares excluded from computation of diluted net loss per common share 1,362 1,304 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Insight Genetics Inc [Member] | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Contingent Consideration Liability | The following table shows the Insight Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability: Schedule of Fair Value of Contingent Consideration Liability Contractual Fair Value on the Value Merger Date (In thousands) 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 is achieved. (b) As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. |
Schedule of Contingent Consideration, Measured at Fair Value | The following tables reflect the activity for the Insight Contingent Consideration measured at fair value using Level 3 inputs: Schedule of Contingent Consideration, Measured at Fair Value Fair Value (In thousands) Balance at December 31, 2021 $ 7,060 Change in estimated fair value (1,690 ) Balance at December 31, 2022 $ 5,370 Balance at December 31, 2022 $ 5,370 Change in estimated fair value (3,330 ) Balance at December 31, 2023 $ 2,040 |
Chronix Merger [Member] | |
Business Acquisition [Line Items] | |
Schedule of Contingent Consideration, Measured at Fair Value | The following tables reflect the activity for the Chronix Contingent Consideration measured at fair value using Level 3 inputs: Schedule of Contingent Consideration, Measured at Fair Value Fair Value (In thousands) Balance at December 31, 2021 $ 69,621 Change in estimated fair value (29,329 ) Balance at December 31, 2022 $ 40,292 Balance at December 31, 2022 $ 40,292 Change in estimated fair value (2,432 ) Balance at December 31, 2023 $ 37,860 |
Right-Of-Use and Financing Le_2
Right-Of-Use and Financing Lease Assets, Net, Machinery and Equipment, Net, and Construction in Progress (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Right-of-use and Financing Lease Assets, Machinery and Equipment, Net, and Construction in Progress | Right-of-use and financing lease assets, net, machinery and equipment, net, and construction in progress were as follows: Schedule of Right-of-use and Financing Lease Assets, Machinery and Equipment, Net, and Construction in Progress 2023 2022 December 31, 2023 2022 (In thousands) Right-of-use and financing lease assets $ 4,036 $ 3,499 Machinery, equipment and leasehold improvements 6,909 9,408 Accumulated depreciation and amortization (6,235 ) (4,196 ) Right-of-use and financing lease assets and machinery and equipment, net 4,710 8,711 Construction in progress 726 2,140 Total $ 5,436 $ 10,851 Right-of-use and financing lease assets, machinery and equipment, net, and construction in progress $ 5,436 $ 10,851 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net, consisted of the following: Schedule of Intangible Assets, Net December 31, 2023 2022 (In thousands) Intangible assets: Acquired IPR&D - DetermaIO TM (1) $ 9,700 $ 14,650 Acquired IPR&D - DetermaCNI™ and VitaGraft™ (2) 46,800 46,800 Intangible assets subject to amortization: Acquired intangible assets - customer relationship 440 440 Total intangible assets 56,940 61,890 Accumulated amortization - customer relationship (3) (345 ) (257 ) Intangible assets, net $ 56,595 $ 61,633 (1) See Note 3 for information on the Insight Merger. (2) See Note 3 for information on the Chronix Merger. (3) Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the consolidated statements of operations because the intangible assets pertain directly to the revenues generated from the acquired intangibles. |
Schedule of Intangible Assets Future Amortization Expense | Future amortization expense of intangible assets subject to amortization is as follows: Schedule of Intangible Assets Future Amortization Expense Amortization (In thousands) Year ending December 31, 2024 $ 88 2025 7 Total $ 95 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
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: Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases 2023 2022 December 31, 2023 2022 (In thousands) Operating lease Right-of-use assets, net $ 1,637 $ 2,088 Right-of-use lease liabilities, current $ 628 $ 698 Right-of-use lease liabilities, noncurrent 2,102 2,730 Total operating lease liabilities $ 2,730 $ 3,428 Financing lease Machinery and equipment $ 537 $ 537 Accumulated depreciation (537 ) (446 ) Machinery and equipment, net $ - $ 91 Current liabilities $ - $ 117 Noncurrent liabilities - - Total financing lease liabilities $ - $ 117 Weighted average remaining lease term Operating lease 3.7 4.5 Financing lease n/a 1.0 Weighted average discount rate Operating lease 11.31 % 11.24 % Financing lease n/a 11.55 % |
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases | Future minimum lease commitments are as follows: Schedule of Future Minimum Lease Commitments for Operating and Financing Leases Operating Financing Leases Leases (In thousands) Year Ending December 31, 2024 $ 903 $ - 2025 869 - 2026 899 - 2027 695 - Total minimum lease payments 3,366 - Less amounts representing interest (636 ) - Present value of net minimum lease payments $ 2,730 $ - |
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: Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from operating leases $ 1,048 $ 1,143 Operating cash flows from financing leases $ 7 $ 20 Financing cash flows from financing leases $ 117 $ 104 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of Oncocyte’s 2010 Plan and 2018 Incentive Plan activity and related information follows: Summary of Stock Option Activity Options RSUs Weighted Shares Weighted Average Average Grant Available Number Outstanding Exercise Price Number Outstanding Date Fair Value (In thousands, except weighted average amounts) Balance at December 31, 2022 442 458 $ 59.39 22 $ 12.23 RSUs vested n/a n/a n/a (13 ) $ 7.97 RSUs granted (9 ) n/a n/a 5 $ 4.00 Options granted (355 ) 355 $ 5.50 n/a n/a Options exercised n/a - $ - n/a n/a Options forfeited/expired 261 (281 ) $ 57.90 n/a n/a RSUs forfeited 2 n/a n/a (1 ) $ 19.40 Performance RSUs forfeited 15 n/a n/a (8 ) $ 19.40 Balance at December 31, 2023 356 532 $ 24.56 5 $ 4.00 Weighted average remaining contractual life (years) 8.30 Options exercisable at December 31, 2023 160 $ 56.34 Weighted average remaining contractual life (years) 6.05 Stock-based compensation expense for the year $ 2,721 $ 39 Unrecognized stock-based compensation expense $ 2,659 $ 9 Weighted average remaining recognition period (years) 2.07 0.48 |
Schedule of Assumptions Used to Calculate Fair Value of Stock Options | Schedule of Assumptions Used to Calculate Fair Value of Stock Options Years Ended December 31, 2023 2022 Expected life (in years) 6.24 6.01 Risk-free interest rates 3.99 % 2.43 % Volatility 107.05 % 106.74 % Dividend yield 0 % 0 % |
Summary of Stock-based Compensation Expense | Oncocyte recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations: Summary of Stock-based Compensation Expense 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Cost of revenues $ 14 $ 10 Research and development 1,238 773 Sales and marketing 241 261 General and administrative 1,249 5,435 Expense included in discontinued operations 18 3,563 Total $ 2,760 $ 10,042 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets and Liabilities | The primary components of the deferred tax assets and liabilities were as follows: Schedule of Components of Deferred Tax Assets and Liabilities 2023 2022 (1) December 31, 2023 2022 (1) (In thousands) Deferred tax assets: Net operating loss carryforwards and capital loss carryforwards $ 61,760 $ 57,675 Research and development credit carryforwards 4,054 3,680 Marketable equity securities - 364 Stock-based and other compensation 2,368 5,067 Right-of-use liability 756 952 Razor investment 2,303 - Capitalized R&D (2) 6,026 4,011 Capital loss carryforward 5,372 - Other 8 49 Total deferred tax assets 82,647 71,798 Valuation allowance (67,314 ) (54,408 ) Deferred tax assets, net of valuation allowance 15,333 17,390 Deferred tax liabilities: Right-of-use asset (453 ) (580 ) Intangibles and fixed assets (14,880 ) (16,810 ) Total deferred tax liabilities (15,333 ) (17,390 ) Net deferred taxes $ - $ - (1) The 2022 net operating loss carryforwards and Razor investment lines have been updated to conform to the 2023 presentation. (2) Relates to research and development expenditures required to be capitalized as of December 31, 2023 and 2022. |
Schedule of Income Tax Reconciliation | Schedule of Income Tax Reconciliation 2023 2022 (1) Years Ended December 31, 2023 2022 (1) Computed tax benefit at federal statutory rate 21 % 21 % Permanent differences 0 % -8 % State tax benefit 13 % 1 % Research and development credits 1 % -3 % Change in fair value of contingent consideration 5 % 35 % Change in valuation allowance -48 % -19 % Goodwill impairment 0 % -21 % Stock-based compensation -11 % -3 % Officers compensation 2 % -3 % Razor investment 19 % 0 % Expiring tax attributes -2 % 0 % Total 0 % 0 % (1) The 2022 permanent differences, stock-based compensation and officers compensation lines have been updated to conform to the 2023 presentation. |
Schedule of Unrecognized Tax Benefit | A reconciliation of the annual beginning and ending UTBs is as follows: Schedule of Unrecognized Tax Benefit 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Balance at the beginning of the year $ 1,921 $ 1,390 Additions based on tax positions related to current year 375 531 Adjustments based on tax positions related to prior years - - Settlements - - Balance at end of year $ 2,296 $ 1,921 |
Discontinued Operations of Ra_2
Discontinued Operations of Razor (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Assets and Liabilities Discontinued Operations | The following table represents the results of the discontinued operations of Razor: Schedule of Discontinued Operations 2023 2022 Years Ended December 31, 2023 2022 (In thousands) Net revenue $ 421 $ 4,673 Cost of revenues 507 7,930 Research and development 702 12,136 Sales and marketing 498 12,462 General and administrative 329 569 Loss from impairment of held for sale assets 1,311 25,866 Net loss from discontinued operations $ (2,926 ) $ (54,290 ) |
Discontinued Operations, Held-for-Sale [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Assets and Liabilities Discontinued Operations | The following table represents the carrying amounts of the assets and liabilities of the discontinued operations of Razor: Schedule of Assets and Liabilities Discontinued Operations 2023 2022 December 31, 2023 2022 (In thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ - $ 1,510 Prepaid expenses and other current assets - 346 Machinery and equipment, net, and construction in progress - 211 Intangible assets, net - 25,920 Impairment of held for sale assets - (25,866 ) TOTAL ASSETS $ - $ 2,121 LIABILITIES AND SHAREHOLDERS’ EQUITY Accounts payable $ 45 $ 492 Accrued compensation - 248 Accrued expenses and other current liabilities - 1,265 Total current liabilities 45 2,005 TOTAL LIABILITIES $ 45 $ 2,005 The following table summarizes cash used related to the discontinued operations of Razor: 2023 2022 Years Ended December 31, 2023 2022 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net cash used in operating activities $ (4,357 ) $ (20,790 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities $ (1,372 ) $ (91 ) |
Organization, Description of _2
Organization, Description of the Business and Liquidity (Details Narrative) - USD ($) $ in Thousands | Apr. 11, 2024 | Dec. 15, 2022 | Dec. 31, 2023 | Feb. 16, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Feb. 23, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Accumulated deficit | $ 289,876 | $ (1,400) | $ 260,676 | ||||
Cash and Cash Equivalents, at Carrying Value | $ 9,432 | $ 19,993 | |||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Proceeds from private placement | $ 15,800 | ||||||
Razor Genomics, Inc. [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Equity interest | 25% | ||||||
Razor Genomics, Inc. [Member] | Razor Stock Purchase Agreement [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Equity interest | 30% | ||||||
Shares owned | 1,366,364 | ||||||
Razor Genomics, Inc. [Member] | Razor Stock Purchase Agreement [Member] | Dragon Scientific LLC [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Equity interest | 70% | 70% | |||||
Number of shares issued | 3,188,181 |
Schedule of Fair Value Measurem
Schedule of Fair Value Measurement of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | $ 39,900 | $ 45,662 |
Assets, Fair Value Disclosure | 433 | |
Fair Value, Inputs, Level 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | ||
Assets, Fair Value Disclosure | 433 | |
Fair Value, Inputs, Level 2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | ||
Assets, Fair Value Disclosure | ||
Fair Value, Inputs, Level 3 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | 39,900 | 45,662 |
Assets, Fair Value Disclosure | ||
Contingent Consideration Liabilities [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | 39,900 | 45,662 |
Contingent Consideration Liabilities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | ||
Contingent Consideration Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | ||
Contingent Consideration Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | $ 39,900 | 45,662 |
Marketable Equity Securities [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | 433 | |
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | 433 | |
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | ||
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure |
Schedule of Disaggregation of R
Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Total | $ 1,503 | $ 958 |
Pharma Services [Member] | ||
Total | 1,467 | 958 |
Laboratory Developed Test Services [Member] | ||
Total | $ 36 |
Schedule of Concentration of Ri
Schedule of Concentration of Risk (Details) - Revenue Benchmark [Member] - Product Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Total | 100% | 100% |
Pharma Services [Member] | ||
Product Information [Line Items] | ||
Total | 98% | 100% |
Laboratory Developed Test Services [Member] | ||
Product Information [Line Items] | ||
Total | 2% | 0% |
Schedule of Consolidated Revenu
Schedule of Consolidated Revenues Generated by Unaffiliated Customers (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pharma Services - Company A [Member] | ||
Product Information [Line Items] | ||
Pharma services - Company C | 47% | 43% |
Pharma Services - Company B [Member] | ||
Product Information [Line Items] | ||
Pharma services - Company C | 27% | 14% |
Pharma Services - Company C [Member] | ||
Product Information [Line Items] | ||
Pharma services - Company C | 11% | 11% |
Schedule of Percentage of Conso
Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations (Details) - Revenue Benchmark [Member] - Product Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Total | 100% | 100% |
Pharma Services [Member] | ||
Product Information [Line Items] | ||
Total | 98% | 100% |
Laboratory Developed Test Services [Member] | ||
Product Information [Line Items] | ||
Total | 2% | 0% |
UNITED STATES | Pharma Services [Member] | ||
Product Information [Line Items] | ||
Total | 59% | 77% |
UNITED STATES | Laboratory Developed Test Services [Member] | ||
Product Information [Line Items] | ||
Total | 2% | 0% |
Outside of United States [Member] | Pharma Services [Member] | ||
Product Information [Line Items] | ||
Total | 39% | 23% |
Schedule of Common Stock Comput
Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Loss from continuing operations | $ (24,855) | $ (18,612) |
Accretion of Series A redeemable convertible preferred stock | (824) | (520) |
Deemed dividend on Series A redeemable convertible preferred stock | (118) | |
Net loss from continuing operations - basic | (25,797) | (19,132) |
Net loss from continuing operations - diluted | (25,797) | (19,132) |
Net loss | (27,781) | (72,902) |
Net loss attributable to common stockholders - basic | (28,723) | (73,422) |
Net loss attributable to common stockholders - diluted | $ (28,723) | $ (73,422) |
Weighted average shares outstanding - basic | 7,651 | 5,540 |
Weighted average shares outstanding - diluted | 7,651 | 5,540 |
Net loss from continuing operations per share - basic | $ (3.37) | $ (3.45) |
Net loss from continuing operations per share - diluted | (3.37) | (3.45) |
Net loss attributable to common stockholders per share - basic | (3.75) | (13.25) |
Net loss attributable to common stockholders per share - diluted | $ (3.75) | $ (13.25) |
Anti-dilutive potential common shares excluded from computation of diluted net loss per common share | 1,362 | 1,304 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive potential common shares excluded from computation of diluted net loss per common share | 532 | 458 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive potential common shares excluded from computation of diluted net loss per common share | 5 | 22 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive potential common shares excluded from computation of diluted net loss per common share | 820 | 820 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive potential common shares excluded from computation of diluted net loss per common share | 5 | 4 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jul. 24, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2023 | |
Product Information [Line Items] | |||||
Reverse stock split | 1-for-20 | ||||
Common stock, shares authorized | 230,000,000 | 230,000,000 | 230,000,000 | 230,000,000 | |
Inventory write down | $ 139,000 | ||||
Asset impairment charges | 1,300,000 | ||||
Goodwill impairment loss | $ 18,684,000 | ||||
Long-lived intangible assets, useful life | 5 years | 5 years | |||
Accounts receivable | $ 484,000 | $ 484,000 | 2,012,000 | ||
Allowance for doubtful accounts receivable | 5,000 | $ 5,000 | 154,000 | ||
Option vesting period | 4 years | ||||
Option maximum contractual term | 10 years | ||||
Retirement plan contribution | $ 310,000 | 689,000 | |||
Accrued interest and penalties | 0 | 0 | 0 | ||
Retained earnings accumulated deficit | (289,876,000) | (289,876,000) | (260,676,000) | $ 1,400,000 | |
Medicare and Medicare Advantage [Member] | |||||
Product Information [Line Items] | |||||
Accounts receivable | 0 | 0 | 1,900,000 | ||
Pharma Services [Member] | |||||
Product Information [Line Items] | |||||
Accounts receivable | 488,000 | 488,000 | 257,000 | ||
Allowance for doubtful accounts receivable | 5,000 | $ 5,000 | $ 0 | ||
Pharma Services [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk percentage | 79% | 59% | |||
Pharma Services [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk percentage | 13% | 30% | |||
Laboratory Developed Test Services [Member] | |||||
Product Information [Line Items] | |||||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | $ 154,000 | ||
Accounts Receivable, after Allowance for Credit Loss | 1,400,000 | ||||
Insight Genetics Inc [Member] | |||||
Product Information [Line Items] | |||||
Goodwill | 9,200,000 | ||||
Chronix Biomedical Inc [Member] | |||||
Product Information [Line Items] | |||||
Goodwill | $ 9,500,000 | ||||
Minimum [Member] | |||||
Product Information [Line Items] | |||||
Long-lived intangible assets, useful life | 1 year | 1 year | |||
Maximum [Member] | |||||
Product Information [Line Items] | |||||
Long-lived intangible assets, useful life | 9 years | 9 years | |||
Machinery and Equipment [Member] | Minimum [Member] | |||||
Product Information [Line Items] | |||||
Estimated useful life of plant and equipment | 3 years | 3 years | |||
Machinery and Equipment [Member] | Maximum [Member] | |||||
Product Information [Line Items] | |||||
Estimated useful life of plant and equipment | 10 years | 10 years | |||
Equipment [Member] | Minimum [Member] | |||||
Product Information [Line Items] | |||||
Lease term | 3 years | 3 years | |||
Equipment [Member] | Maximum [Member] | |||||
Product Information [Line Items] | |||||
Lease term | 5 years | 5 years | |||
Lineage Cell Therapeutics Inc [Member] | |||||
Product Information [Line Items] | |||||
Common stock held as marketable equity securities | 353,264 | ||||
AgeX Therapeutics Inc [Member] | |||||
Product Information [Line Items] | |||||
Common stock held as marketable equity securities | 35,326 | ||||
Lineage and AgeX [Member] | |||||
Product Information [Line Items] | |||||
Fair value of equity securities | $ 433,000 | ||||
Realized loss on sale of shares | $ 1,400,000 |
Schedule of Fair Value of Conti
Schedule of Fair Value of Contingent Consideration Liability (Details) - Insight Genetics Inc [Member] $ in Thousands | Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | ||
Contractual Value | $ 6,000 | |
Fair Value on the Merger Date | 11,130 | |
Milestone 1 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 1,500 | |
Fair Value on the Merger Date | 1,340 | |
Milestone 2 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 3,000 | |
Fair Value on the Merger Date | 1,830 | |
Milestone 3 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 1,500 | [1] |
Fair Value on the Merger Date | 770 | [1] |
Royalty 1 [Member] | ||
Business Acquisition [Line Items] | ||
Fair Value on the Merger Date | 5,980 | [2] |
Royalty 2 [Member] | ||
Business Acquisition [Line Items] | ||
Fair Value on the Merger Date | $ 1,210 | [2] |
[1]Indicates the maximum payable if the Milestone is achieved.[2]As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. |
Schedule of Contingent Consider
Schedule of Contingent Consideration, Measured at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Beginning balance | $ 45,662 | |
Change in estimated fair value | (5,762) | $ (31,019) |
Ending balance | 39,900 | 45,662 |
Fair Value, Inputs, Level 3 [Member] | Insight Genetics Inc [Member] | ||
Business Acquisition [Line Items] | ||
Beginning balance | 5,370 | 7,060 |
Change in estimated fair value | (3,330) | (1,690) |
Ending balance | 2,040 | 5,370 |
Fair Value, Inputs, Level 3 [Member] | Chronix Merger [Member] | ||
Business Acquisition [Line Items] | ||
Beginning balance | 40,292 | 69,621 |
Change in estimated fair value | (2,432) | (29,329) |
Ending balance | $ 37,860 | $ 40,292 |
Business Combinations (Details
Business Combinations (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 08, 2023 | Apr. 15, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Fair value | $ 3.3 | |||
Chronix [Member] | ||||
Business Acquisition [Line Items] | ||||
Fair value | $ 2.4 | |||
Merger Agreement [Member] | Chronix Equity [Member] | ||||
Business Acquisition [Line Items] | ||||
Earnout percentage on collections for sales | 10% | |||
Gross proceeds percentage | 5% | |||
Merger Agreement [Member] | Chronix Milestone [Member] | ||||
Business Acquisition [Line Items] | ||||
Royalty payments | 15% | |||
Maximum [Member] | Merger Agreement [Member] | Chronix Biomedical Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Business combination consideration transferred | $ 14 | |||
Earnout percentage on collections for sales | 15% | |||
Earnout percentage on collections for sale or license | 75% | |||
Insight Genetics Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 9.2 | |||
Insight Genetics Inc [Member] | Valuation Technique, Discounted Cash Flow [Member] | ||||
Business Acquisition [Line Items] | ||||
Unobservable Measurement Input, Uncertainty, Description | The significant unobservable inputs used in Insight’s contingent consideration valuation on December 31, 2023, included: (i) a discount period, based on the expected milestone payment dates, ranging from 1.3 years to 1.5 years, (ii) a discount rate of 13.9%, and (iii) a management probability estimate of 25% to 50%. The significant unobservable inputs used on December 31, 2022, included: (i) a discount period, based on the expected milestone payment dates, ranging from .75 years to 1.0 years, (ii) a discount rate of 15.8%, and (iii) a management probability estimate of 15% to 75% | |||
Chronix Merger [Member] | Valuation Technique, Discounted Cash Flow [Member] | ||||
Business Acquisition [Line Items] | ||||
Unobservable Measurement Input, Uncertainty, Description | The significant unobservable inputs used in Chronix’s contingent consideration valuation on December 31, 2023, included: (i) a discount period, based on the related patent expiration dates, ranging from 9.9 years to 11.7 years, (ii) a discount rate of 14.7% to 15.8%, and (iii) a payout percentage of 10% based on the earnout provision. The significant unobservable inputs used on December 31, 2022, included: (i) a discount period, based on the related patent expiration dates, ranging from 5.5 years to 16.2 years, (ii) a discount rate of 17.8% to 18.6%, and (iii) a payout percentage of 5% to 75% based on the earnout provision. | |||
Chronix Biomedical Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 9.5 | |||
Chronix Biomedical Inc [Member] | Vita Graft [Member] | ||||
Business Acquisition [Line Items] | ||||
Net deferred tax liabilities | $ 2.2 |
Schedule of Right-of-use and Fi
Schedule of Right-of-use and Financing Lease Assets, Machinery and Equipment, Net, and Construction in Progress (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Right-of-use and financing lease assets | $ 4,036 | $ 3,499 |
Machinery, equipment and leasehold improvements | 6,909 | 9,408 |
Accumulated depreciation and amortization | (6,235) | (4,196) |
Right-of-use and financing lease assets and machinery and equipment, net | 4,710 | 8,711 |
Construction in progress | 726 | 2,140 |
Right-of-use and financing lease assets, machinery and equipment, net, and construction in progress | $ 5,436 | $ 10,851 |
Right-Of-Use and Financing Le_3
Right-Of-Use and Financing Lease Assets, Net, Machinery and Equipment, Net, and Construction in Progress (Details Narrative) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Depreciation and amortization expense | $ 1,592 | $ 1,528 | |
Impairment of leasehold | $ 1,800 | ||
Derivative assets liabilities at fair value net | $ 1,200 | ||
Measurement Input, Discount Rate [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability measurement input | 0.0725 |
Schedule of Intangible Assets,
Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Indefinite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | $ 56,940 | $ 61,890 | |
Intangible assets, net | 56,595 | 61,633 | |
Customer Relationships [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets | 440 | 440 | |
Finite-lived intangible assets, accumulated amortization | [1] | (345) | (257) |
In Process Research and Development [Member] | DetermaIO [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | [2] | 9,700 | 14,650 |
In Process Research and Development [Member] | DetermaCNI and VitaGraft [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | [3] | $ 46,800 | $ 46,800 |
[1]Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the consolidated statements of operations because the intangible assets pertain directly to the revenues generated from the acquired intangibles.[2]See Note 3 for information on the Insight Merger.[3]See Note 3 for information on the Chronix Merger. |
Schedule of Intangible Assets F
Schedule of Intangible Assets Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 88 |
2025 | 7 |
Total | $ 95 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Impairment of intangible assets | $ 6,757 | ||
Intangible asset amortization expense | $ 88 | 3,692 | |
Intangible asset amortization expense from discontinued operations | $ 3,600 | ||
MPEEM Valuation Approach [Member] | |||
Unobservable Measurement Input, Uncertainty, Description | The significant unobservable inputs used as of March 31, 2023 and December 31, 2023, included: (i) a discount period of 20.0 years, based on the expected life of patent, (ii) a royalty rate of 0.3%, and (iii) a weighted average cost of capital rate of 30.0%. This valuation approach yielded a fair value of $9.7 million as of March 31, 2023. As market conditions change, the Company will re-evaluate assumptions used in the determination of fair value for IPR&D and is uncertain to the extent of the volatility in the unobservable inputs in the foreseeable future. | ||
DetermaIO [Member] | |||
Impairment of intangible assets | $ 5,000 |
Bank Loan (Details Narrative)
Bank Loan (Details Narrative) - USD ($) | Sep. 30, 2022 | Aug. 31, 2022 | Oct. 17, 2019 | Dec. 31, 2017 | Mar. 23, 2017 |
Warrant [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Warrants to purchase shares | 412 | 366 | |||
Warrant exercise price, per share | $ 97 | $ 109.20 | |||
Amended Loan Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Interest rate | 5.50% | 5% | |||
Amended Loan Agreement [Member] | Bank Warrant [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Warrants to purchase shares | 4,928 | ||||
Warrant exercise price, per share | $ 33.80 | ||||
Amended Loan Agreement [Member] | Share-Based Payment Arrangement, Tranche One [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Line of credit, current | $ 3,000,000 | ||||
Amended Loan Agreement [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Line of credit, current | 2,000,000 | ||||
Additional paid in capital | $ 200,000 | ||||
Line of credit facility, maximum borrowing capacity | $ 2 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
Machinery and equipment, net | $ 1,637 | $ 2,179 |
Total financing lease liabilities | ||
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Right-of-use and financing lease liabilities, current | Right-of-use and financing lease liabilities, current |
Operating and Financing Leases [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets, net | $ 1,637 | $ 2,088 |
Right-of-use lease liabilities, current | 628 | 698 |
Right-of-use lease liabilities, noncurrent | 2,102 | 2,730 |
Total operating lease liabilities | 2,730 | 3,428 |
Machinery and equipment | 537 | 537 |
Accumulated depreciation | (537) | (446) |
Machinery and equipment, net | 91 | |
Current liabilities | 117 | |
Noncurrent liabilities | ||
Total financing lease liabilities | $ 117 | |
Weighted average remaining lease term, Operating lease | 3 years 8 months 12 days | 4 years 6 months |
Weighted average remaining lease term, Financing lease | 1 year | |
Operating lease | 11.31% | 11.24% |
Financing lease | 11.55% |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
2024 | $ 903 |
2025 | 869 |
2026 | 899 |
2027 | 695 |
Total minimum lease payments | 3,366 |
Less amounts representing interest | (636) |
Present value of net minimum lease payments | 2,730 |
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
2024 | |
2025 | |
2025 | |
2026 | |
Total minimum lease payments | |
Less amounts representing interest | |
Total financing lease liabilities |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 1,048 | $ 1,143 |
Operating cash flows from financing leases | 7 | 20 |
Financing cash flows from financing leases | $ 117 | $ 104 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||
Dec. 23, 2019 USD ($) ft² | Jun. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) ft² | Dec. 31, 2022 USD ($) | Jan. 01, 2024 ft² | Aug. 08, 2023 ft² | Aug. 27, 2021 ft² | |
Restricted cash | $ 1,700,000 | ||||||
lessee, operating sublease, residual value guarantee, description | The Sublease Agreement provides that, from and after the Commencement Date, Subtenant will pay to the Company monthly base rent in the following amounts: (i) $36,850.00 for rental periods beginning on the Commencement Date and ending on or before December 31, 2024 (subject to adjustment in the event that Subtenant exercises its option to accelerate the Expansion Date, such that the Expansion Period begins prior to December 31, 2024); (ii) $37,955.50 for rental periods beginning on or after January 1, 2025 and ending on or before June 20, 2025 (subject to adjustment in the event that Subtenant exercises its option to accelerate the Expansion Date, such that the Expansion Period begins prior to June 20, 2025); (iii) $75,844.00 for rental periods beginning on or after July 1, 2025 and ending on or before December 31, 2025; (iv) $78,188.33 for rental periods beginning on or after January 1, 2026 and ending on or before December 31, 2026; and (v) $80,533.98 for rental periods beginning on or after January 1, 2027 and ending on or before October 31, 2027 | ||||||
Short-term lease expenses | $ 842,000 | $ 1,100,000 | |||||
Sublease income | 64,000 | 0 | |||||
Chronix Acquisition [Member] | |||||||
Severance Costs | 2,300,000 | ||||||
Executive Officers [Member] | |||||||
Severance Costs | 2,500,000 | $ 4,400,000 | |||||
Office Lease Agreement [Member] | |||||||
Area of Land | ft² | 26,800 | 13,400 | |||||
Payments for rent | $ 61,640 | ||||||
Tenant improvement allowance | $ 1,300,000 | ||||||
Percentage of administrative fee paid on original cost of equipment | 1.50% | ||||||
Security Deposit | $ 150,000 | $ 101,987.38 | |||||
Line of Credit, Current | $ 1,700,000 | ||||||
Office Lease Agreement [Member] | Landlord [Member] | |||||||
Tenant improvement allowance | $ 1,300,000 | ||||||
Office Lease Agreement [Member] | Monthly Rent [Member] | |||||||
Interest rate on lease agreement | 3.50% | ||||||
Obligated to pay expenses and taxes percentage | 43.70% | 50% | |||||
Office Lease Agreement [Member] | First Ten Calendar [Member] | |||||||
Interest rate on lease agreement | 50% | ||||||
Lease Agreement [Member] | |||||||
Area of Land | ft² | 1,928 | ||||||
Rentable area | ft² | 8,362 | ||||||
Lease Agreement [Member] | Subsequent Event [Member] | MPC Holdings LLC [Member] | |||||||
Area of Land | ft² | 2,319 | ||||||
Rentable area | ft² | 10,681 | ||||||
Area of Lab | ft² | 4,826 | ||||||
Lease term | 36 months |
Series A Redeemable Convertib_2
Series A Redeemable Convertible Preferred Stock and Shareholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Apr. 05, 2023 | Apr. 03, 2023 | Apr. 19, 2022 | Apr. 13, 2022 | Apr. 13, 2022 | Apr. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 11, 2024 | Jul. 24, 2023 | |
Class of Stock [Line Items] | ||||||||||
Preferred stock offering value in tranche | $ 32,453,000 | |||||||||
Net proceeds to immediately redeem | ||||||||||
Common stock, shares authorized | 5,000,000 | 5,000,000 | ||||||||
Common stock no par value | $ 0 | $ 0 | ||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||
Common stock, shares authorized | 230,000,000 | 230,000,000 | 230,000,000 | |||||||
Common stock, shares issued | 8,261,073 | 5,932,191 | ||||||||
Common stock, shares outstanding | 8,261,073 | 5,932,191 | ||||||||
Proceeds from issuance of common stock | $ 13,848,000 | $ 32,812,000 | ||||||||
Warrants issued and outstanding | 819,767 | 819,767 | ||||||||
Warrants, weighted average remaining life | 3 years 1 month 2 days | |||||||||
Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrant exercise price per share | $ 109.20 | $ 109.20 | ||||||||
Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrant exercise price per share | $ 30.60 | $ 30.60 | ||||||||
Common Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 1,314,000 | |||||||||
Preferred stock offering value in tranche | $ 32,453,000 | |||||||||
Net proceeds to immediately redeem | ||||||||||
Common Stock [Member] | Subsequent Event [Member] | Private Placement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Offering price per share | $ 2.95 | |||||||||
Registered Direct Offering [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 13,900,000 | |||||||||
Registered Direct Offering [Member] | Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 2,278,121 | |||||||||
Registered Direct Offering [Member] | Board Members [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued price per share | $ 7.08 | |||||||||
Registered Direct Offering [Member] | Other Investors [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued price per share | $ 6.03 | |||||||||
Underwriting Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 1,313,320 | |||||||||
Shares issued price per share | $ 26.45 | $ 26.45 | ||||||||
Number of warrants | 1,313,320 | 1,313,320 | ||||||||
Offering price per share | $ 26.65 | $ 26.65 | ||||||||
Warrant exercise price per share | $ 0.20 | 0.20 | ||||||||
Net proceeds | $ 32,800,000 | |||||||||
Underwriting Agreement [Member] | Over-Allotment Option [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 196,998 | |||||||||
Shares issued price per share | $ 24.85 | $ 24.85 | ||||||||
Number of warrants | 196,998 | 196,998 | ||||||||
Warrant exercise price per share | $ 0.20 | $ 0.20 | ||||||||
Warrant exercised | 196,998 | |||||||||
Underwriting Agreement [Member] | Common Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of warrants | 656,660 | 656,660 | ||||||||
Underwriting Agreement [Member] | Common Stock [Member] | Over-Allotment Option [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of warrants | 98,499 | 98,499 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock outstanding percentage | 51% | 51% | ||||||||
Cash in hand | $ 8,000,000 | $ 8,000,000 | ||||||||
Indebtedness expenses | $ 15,000,000 | $ 15,000,000 | ||||||||
Dividends rate | 6% | |||||||||
Accrete dividends | $ 478,000 | |||||||||
Temporary equity, shares oustanding | 5,000 | 6,000 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Subsequent Event [Member] | Private Placement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of stock redeem, shares | 4,818 | |||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock offering value in tranche | ||||||||||
Number of stock redeem, shares | (1,000) | |||||||||
Net proceeds to immediately redeem | $ (1,118,000) | |||||||||
Temporary equity, shares oustanding | 4,818 | 5,882 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Preferred Stock [Member] | Interest [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ownership percentage | 51% | 51% | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Preferred Stock [Member] | Oncocyte Corp [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ownership percentage | 50% | 50% | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Preferred Stock [Member] | Security [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ownership percentage | 50% | 50% | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of common shares issuable upon conversion | 384,477 | 384,477 | ||||||||
Conversion price | $ 30.60 | $ 30.60 | ||||||||
Shares issued price per share | 850 | 850 | ||||||||
Stated value per share | $ 1,000 | $ 1,000 | ||||||||
Preferred stock offering value in tranche | $ 5,000,000 | |||||||||
Net proceeds | 10,000,000 | |||||||||
Conversion of stock, description | A holder is prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the shares of our common stock then issued and outstanding (provided a holder may elect, at the first closing, to increase such beneficial ownership limitation solely as to itself up to 19.99% of the number of shares of our common stock outstanding immediately after giving effect to the conversion, provided further that following the receipt of shareholder approval required by applicable Nasdaq rules with respect to the issuance of common stock that would exceed the beneficial ownership limitation, such beneficial ownership limitation will no longer apply to the holder if the holder notified the Company that the holder wishes the Company to seek such shareholder approval). | |||||||||
Conversion of stock, conditions | the Company received such shareholder approval to remove the beneficial ownership limitation with respect to the Series A Preferred Stock held by Broadwood. The Company may force the conversion of up to one-third of the shares of Series A Preferred Stock originally issued, subject to customary equity conditions, if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140% of the conversion price and on 20 out of the same 30 trading days the daily trading volume equals or exceeds 20,000 shares of our common stock. The Company may only effect one forced conversion during any 30-trading day period | |||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Net proceeds | $ 4,900,000 | |||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | Investors [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 11,765 | |||||||||
Series A Preferred Stock [Member] | Registered Direct Offering [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of stock redeem, shares | 1,064 | |||||||||
Net proceeds to immediately redeem | $ 1,100,000 | |||||||||
Number of stock redeem value | $ 118,000 | |||||||||
Common Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 2,274,709 | |||||||||
Series B Preferred Stock [Member] | Registered Direct Offering [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of stock redeem, shares | 1,064 | |||||||||
Net proceeds to immediately redeem | $ 1,100,000 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) - 2010 Plan and 2018 Incentive Plan Activity [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares available for grant options, beginning of period | 442,000 | |
Number of options outstanding, beginning of period | 458,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 59.39 | |
Number of RSUs Outstanding, beginning of period | 22,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 12.23 | |
Number of RSUs, vested | (13,000) | |
Weighted average exercise price, RSUs exercised | $ 7.97 | |
Shares available for grant RSUs granted | (9,000) | |
Number of RSUs, granted | 5,000 | |
Weighted average exercise price, RSUs granted | $ 4 | |
Shares available for grant options granted | (355,000) | |
Number of options, granted | 354,790 | |
Weighted average exercise price, options granted | $ 5.50 | $ 13.09 |
Shares available for grant options forfeited/expired | 261,000 | |
Number of options, forfeited/expired | (281,000) | |
Weighted average exercise price, options forfeited/expired | $ 57.90 | |
Shares available for grant RSUs forfeited | 2,000 | |
Number of RSUs, forfeited | (1,000) | |
Weighted average exercise price, performance RSUs forfeited | $ 19.40 | |
Shares available for grant performance RSUs forfeited | 15,000 | |
Number of performance RSUs forfeited | (8,000) | |
Shares available for grant outstanding, end of period | 356,000 | 442,000 |
Number of options outstanding, end of period | 532,000 | 458,000 |
Weighted average exercise price, options outstanding, end of period | $ 24.56 | $ 59.39 |
Number of RSUs Outstanding, end of period | 5,000 | 22,000 |
Weighted average exercise price, exercisable, end of period | $ 4 | $ 12.23 |
Weighted average remaining contractual life (years) | 8 years 3 months 18 days | |
Number of options exercisable | 160,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 56.34 | |
Weighted average options exercisable remaining contractual life (years), exercisable | 6 years 18 days | |
Stock-based compensation expense for options | $ 2,721 | |
Stock-based compensation expense for RSUs | 39 | |
Unrecognized stock based compensation expense for options | 2,659 | |
Unrecognized stock based compensation expense for RSUs | $ 9 | |
Weighted average remaining recognition period (years) | 2 years 25 days | |
Weighted average remaining recognition period (years) | 5 months 23 days |
Schedule of Assumptions Used to
Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected life (in years) | 6 years 2 months 26 days | 6 years 3 days |
Risk-free interest rates | 3.99% | 2.43% |
Volatility | 107.05% | 106.74% |
Dividend yield | 0% | 0% |
Summary of Stock-based Compensa
Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | $ 2,760 | $ 10,042 |
Cost of Revenues [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | 14 | 10 |
Research and Development Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | 1,238 | 773 |
Selling and Marketing Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | 241 | 261 |
General and Administrative Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | 1,249 | 5,435 |
Expense Included In Discontinued Operations [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total | $ 18 | $ 3,563 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2023 | Jul. 31, 2022 | May 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Risk-free interest rate | 3.99% | 2.43% | |||
Expected life (in years) | 6 years 2 months 26 days | 6 years 3 days | |||
Expected volatility | 107.05% | 106.74% | |||
Dividend yield | 0% | 0% | |||
Fair value of options granted | $ 156,000 | ||||
Share based payment award description | the achievement of performance minimum, target, and maximum goals of (i) 90% of revenue goal; (ii) 100% of revenue goal; and (iii) exceed revenue goal by up to 150%, respectively, during fiscal year 2022. | the Company of average market capitalization minimum, target, and maximum goals of (i) $300 million; (ii) $400 million; and (iii) $500 million, respectively, during the period beginning on January 1, 2022 and ending on December 31, 2024. | |||
Increase in fair value | $ 58,500 | ||||
Total unrecognized stock-based compensation expense | $ 2,700,000 | ||||
Number of restricted stock awards issued, shares | 9,091 | ||||
Number of restricted stock awards issued, value | $ 36,000 | ||||
Vita Graft [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vested percentage | 50% | 50% | |||
Determal O [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vested percentage | 50% | 50% | |||
Performance Shares [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share based payment award description | 50% of the performance-based awards were forfeited since the Company did not achieve LCD reimbursement for VitaGraft. The remaining 50% were eligible to vest on December 31, 2023, since the Company completed the LCD submission for DetermaCNI on December 16, 2022 | ||||
Performance Shares [Member] | Executive Officers And Employees [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of shares issued | 23,750 | 61,875 | |||
Market Based Awards [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Risk-free interest rate | 2.72% | ||||
Expected life (in years) | 2 years 7 months 6 days | ||||
Expected volatility | 95% | ||||
Dividend yield | 0% | ||||
Market Based Awards [Member] | Executive Officers And Employees [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of shares issued | 12,500 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Aggregate fair value of RSUs vested | $ 88,000,000 | $ 374,000,000 | |||
Weighted average grant date fair value, granted | $ 4 | $ 16.22 | |||
Monte Carlo Valuation Technique [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Risk-free interest rate | 4.81% | 2% | |||
Expected life (in years) | 6 years 2 months 8 days | 2 years 9 months 18 days | |||
Expected volatility | 91% | 100% | |||
Dividend yield | 0% | 0% | |||
Monte Carlo Valuation Technique [Member] | Minimum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Fair value grants | $ 1.09 | ||||
Monte Carlo Valuation Technique [Member] | Maximum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Fair value grants | $ 1.74 | ||||
2010 Stock Option Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock authorized for grant | 260,000 | ||||
Stock options outstanding | 10,124 | 30,367 | |||
2018 Incentive Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock reserved for future issuance | 1,050,000 | ||||
Number of shares available for grant | 355,672 | ||||
Performance-Based Options [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Fair value of options granted | $ 117,625 | ||||
Stock option grant | 120,000 | ||||
2010 Plan and 2018 Incentive Plan Activity [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock options outstanding | 532,000 | 458,000 | |||
Intrinsic value of options outstanding and exercisable | $ 0 | ||||
Stock option grant | 354,790 | ||||
Fair value grants | $ 4.13 | ||||
Weighted average grant date fair value of options | 5.50 | $ 13.09 | |||
Weighted average grant date fair value, granted | $ 4 | ||||
Time Based Stock Options [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock option grant | 234,790 |
Schedule of Components of Defer
Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | [1] | |
Deferred tax assets: | ||||
Net operating loss carryforwards and capital loss carryforwards | $ 61,760 | $ 57,675 | ||
Research and development credit carryforwards | 4,054 | 3,680 | ||
Marketable equity securities | 364 | |||
Stock-based and other compensation | 2,368 | 5,067 | ||
Right-of-use liability | 756 | 952 | ||
Razor investment | 2,303 | |||
Capitalized R&D | [2] | 6,026 | 4,011 | |
Capital loss carryforward | 5,372 | |||
Other | 8 | 49 | ||
Total deferred tax assets | 82,647 | 71,798 | ||
Valuation allowance | (67,314) | (54,408) | ||
Deferred tax assets, net of valuation allowance | 15,333 | 17,390 | ||
Deferred tax liabilities: | ||||
Right-of-use asset | (453) | (580) | ||
Intangibles and fixed assets | (14,880) | (16,810) | ||
Total deferred tax liabilities | (15,333) | (17,390) | ||
Net deferred taxes | ||||
[1]The 2022 net operating loss carryforwards and Razor investment lines have been updated to conform to the 2023 presentation.[2]Relates to research and development expenditures required to be capitalized as of December 31, 2023 and 2022. |
Schedule of Income Tax Reconcil
Schedule of Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2021 | [1] | |
Income Tax Disclosure [Abstract] | |||
Computed tax benefit at federal statutory rate | 21% | 21% | |
Permanent differences | 0% | (8.00%) | |
State tax benefit | 13% | 1% | |
Research and development credits | 1% | (3.00%) | |
Change in fair value of contingent consideration | 5% | 35% | |
Change in valuation allowance | (48.00%) | (19.00%) | |
Goodwill impairment | 0% | (21.00%) | |
Stock-based compensation | (11.00%) | (3.00%) | |
Officers compensation | 2% | (3.00%) | |
Razor investment | 19% | 0% | |
Expiring tax attributes | (2.00%) | 0% | |
Total | 0% | 0% | |
[1]The 2022 permanent differences, stock-based compensation and officers compensation lines have been updated to conform to the 2023 presentation. |
Schedule of Unrecognized Tax Be
Schedule of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Balance at the beginning of the year | $ 1,921 | $ 1,390 |
Additions based on tax positions related to current year | 375 | 531 |
Adjustments based on tax positions related to prior years | ||
Settlements | ||
Balance at end of year | $ 2,296 | $ 1,921 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Operating Loss Carryforwards [Line Items] | ||||
Income from continuing operations | $ (24,855,000) | $ (18,612,000) | ||
Operating Income (Loss) | (25,136,000) | (17,997,000) | ||
Deferred income tax benefit | 0 | 0 | ||
Operating loss carryforwards | 61,760,000 | 57,675,000 | [1] | |
Research and development credit carryforwards | 4,054,000 | 3,680,000 | [1] | |
Change in the valuation allowance | 12,900,000 | 17,200,000 | ||
Unrecognized tax benefits | 2,296,000 | 1,921,000 | $ 1,390,000 | |
Income tax examination, penalties and interest expense | $ 0 | 0 | ||
Other information pertaining to income taxes | 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. | |||
Domestic Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income from continuing operations | $ 24,900,000 | 18,600,000 | ||
Operating loss carryforwards | 243,400,000 | |||
Operating loss carryforwards expiration period | between 2024 and 2037 | |||
Research and development credit carryforwards | $ 3,700,000 | |||
Domestic Tax Authority [Member] | Research and Development Expense [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Credit carryforward expiration term | between 2031 and 2043 | |||
Foreign Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating Income (Loss) | $ 12,000 | $ 10,000 | ||
State and Local Jurisdiction [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 129,600,000 | |||
Operating loss carryforwards expiration period | between 2024 and 2043 | |||
Research and development credit carryforwards | $ 2,600,000 | |||
[1]The 2022 net operating loss carryforwards and Razor investment lines have been updated to conform to the 2023 presentation. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | 19 Months Ended | |||||
Apr. 11, 2024 | Apr. 05, 2023 | Apr. 03, 2023 | Apr. 13, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 27, 2023 | |
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Value, New Issues | $ 32,453,000 | ||||||
Number of shares redeemed, value | |||||||
Purchased laboratory equipment | 281,000 | 4,340,000 | |||||
Accounts payable due | $ 953,000 | $ 1,253,000 | |||||
Arno's Son [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Compensation paid | $ 200,000 | ||||||
Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant exercise price | $ 109.20 | $ 109.20 | |||||
Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 1,314,000 | ||||||
Issuance of shares | 2,275,000 | ||||||
Stock Issued During Period, Value, New Issues | $ 32,453,000 | ||||||
Number of shares redeemed, value | |||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Issuance of Private Placement | $ 15,800,000 | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | Subsequent Event [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of stock, shares | 5,076,900 | ||||||
Warrant exercise price | $ 0.0001 | ||||||
Bio Rad Laboratories Inc [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts payable due | 206,000 | ||||||
Broadwood Capital LP [Member] | Underwritten Offering [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant to purchase common stock | 300,187 | ||||||
Warrant exercise price | $ 30.60 | ||||||
Broadwood Capital LP [Member] | Underwritten Offering [Member] | Underwriters [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant to purchase common stock | 39,154 | ||||||
Broadwood Capital LP [Member] | Underwritten Offering [Member] | Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of stock, shares | 143,292 | ||||||
Broadwood Capital LP [Member] | Underwritten Offering [Member] | Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of stock, shares | 261,032 | ||||||
Pura Vida Investments LLC [Member] | Underwritten Offering [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant to purchase common stock | 286,585 | ||||||
Pura Vida Investments LLC [Member] | Underwritten Offering [Member] | Underwriters [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Issuance of shares | 37,380 | ||||||
Pura Vida Investments LLC [Member] | Underwritten Offering [Member] | Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant to purchase common stock | 150,093 | ||||||
Pura Vida Investments LLC [Member] | Underwritten Offering [Member] | Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of stock, shares | 249,204 | ||||||
Issuance of shares | 286,585 | ||||||
Halle Special Situations Fund LLC [Member] | Underwritten Offering [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant to purchase common stock | 356,472 | ||||||
Halle Special Situations Fund LLC [Member] | Underwritten Offering [Member] | Underwriters [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Issuance of shares | 46,496 | ||||||
Halle Special Situations Fund LLC [Member] | Underwritten Offering [Member] | Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant to purchase common stock | 178,236 | ||||||
Halle Special Situations Fund LLC [Member] | Underwritten Offering [Member] | Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Sale of stock, shares | 309,976 | ||||||
Series A Preferred Stock [Member] | Mr Gutfreund [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Number of shares redeemed, shares | 588.23529 | ||||||
Number of shares redeemed, value | $ 618,672.34 | ||||||
Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | Mr Gutfreund [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 1,176.48 | ||||||
Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | Broadwood Capital LP [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 5,882.35 | ||||||
Legal fees | $ 85,000 | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 2,274,709 | ||||||
Related Party Transaction, Description of Transaction | (i) $6.03 to investors who are not considered to be “insiders” of the Company pursuant to Nasdaq Listing Rules (“Insiders”), which amount reflected the average closing price of the Common Stock on Nasdaq during the five trading day period immediately prior to pricing, and (ii) $7.08 to Insiders, which amount reflected the final closing price of the Common Stock on Nasdaq on the last trading day immediately prior to pricing | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | Arno [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 21,162 | ||||||
Stock Issued During Period, Value, New Issues | $ 150,000.51 | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | Mr Gutfreund [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 85,250 | ||||||
Stock Issued During Period, Value, New Issues | $ 604,252 | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | Broadwood Partners LP [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 1,341,381 | ||||||
Stock Issued During Period, Value, New Issues | $ 8,093,361.84 | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | Pura Vida [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 33,150 | ||||||
Stock Issued During Period, Value, New Issues | $ 200,013.84 | ||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | AVM [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Offering shares | 472,354 | ||||||
Stock Issued During Period, Value, New Issues | $ 2,849,999.92 | ||||||
Laboratory Equipment [Member] | Bio Rad Laboratories Inc [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Purchased laboratory equipment | 581,000 | ||||||
Laboratory related expenses | $ 375,000 |
Co-Development Agreement with_2
Co-Development Agreement with Life Technologies Corporation (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Life Technologies Corporation [Member] | |
Development costs | $ 749,000 |
Schedule of Discontinued Operat
Schedule of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net loss from discontinued operations | $ (2,926) | $ (54,290) |
Discontinued Operations, Held-for-Sale [Member] | Razor Genomics, Inc. [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net revenue | 421 | 4,673 |
Cost of revenues | 507 | 7,930 |
Research and development | 702 | 12,136 |
Sales and marketing | 498 | 12,462 |
General and administrative | 329 | 569 |
Loss from impairment of held for sale assets | 1,311 | 25,866 |
Net loss from discontinued operations | $ (2,926) | $ (54,290) |
Schedule of Assets and Liabilit
Schedule of Assets and Liabilities Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CURRENT ASSETS | ||
TOTAL ASSETS | $ 2,121 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Total current liabilities | 45 | 2,005 |
Discontinued Operations, Held-for-Sale [Member] | Razor Genomics, Inc. [Member] | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 1,510 | |
Prepaid expenses and other current assets | 346 | |
Machinery and equipment, net, and construction in progress | 211 | |
Intangible assets, net | 25,920 | |
Impairment of held for sale assets | (25,866) | |
TOTAL ASSETS | 2,121 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Accounts payable | 45 | 492 |
Accrued compensation | 248 | |
Accrued expenses and other current liabilities | 1,265 | |
Total current liabilities | 45 | 2,005 |
TOTAL LIABILITIES | 45 | 2,005 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net cash used in operating activities | (4,357) | (20,790) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net cash used in investing activities | $ (1,372) | $ (91) |
Discontinued Operations of Ra_3
Discontinued Operations of Razor (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Feb. 16, 2023 | Dec. 15, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Feb. 23, 2021 | |
Razor Genomics, Inc. [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Equity method investment ownership percentage | 25% | ||||
Razor Stock Purchase Agreement [Member] | Razor Genomics, Inc. [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Consideration transferred | $ 116,000 | ||||
Razor Stock Purchase Agreement [Member] | Razor Genomics, Inc. [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Equity method investment ownership percentage | 30% | ||||
Loss on disposal | $ 1,300,000 | $ 27,200,000 | |||
Razor Stock Purchase Agreement [Member] | Razor Genomics, Inc. [Member] | Dragon Scientific LLC [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Equity method investment ownership percentage | 70% | ||||
Razor Stock Purchase Agreement [Member] | Dragon Scientific LLC [Member] | Razor Genomics, Inc. [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Number of shares issued | 3,188,181 | ||||
Equity method investment ownership percentage | 70% | 70% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Apr. 11, 2024 | Apr. 10, 2024 | Apr. 05, 2024 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | ||||
Redemption of Series A redeemable convertible preferred stock | ||||
Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Redemption of Series A redeemable convertible preferred stock | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Beneficial ownership considered | 4.99% | |||
Maximum beneficial ownership considered | 9.99% | |||
Proceeds from private placement | $ 15.8 | |||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Redemption of Series A redeemable convertible preferred stock | $ 5.4 | |||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of sale of shares | 5,076,900 | |||
Warrants to purchase shares | 342,888 | |||
Warrant exercise price, per share | $ 0.0001 | |||
Share price | 2.9164 | |||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Pre-Funded Warrant [Member] | ||||
Subsequent Event [Line Items] | ||||
Share price | $ 2.9163 | |||
Subsequent Event [Member] | Private Placement [Member] | Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of sale of shares | 42,373 | |||
Sale of stock price per share | $ 2.95 | |||
Subsequent Event [Member] | Collaboration Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Collaboration agreement term | 10 years |