Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | OncoCyte Corp | |
Entity Central Index Key | 1,642,380 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,431,174 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,856 | $ 7,996 |
BioTime shares held as available-for-sale securities, at fair value | 1,779 | 2,541 |
Prepaid expenses and other current assets | 262 | 388 |
Total current assets | 7,897 | 10,925 |
NONCURRENT ASSETS | ||
Intangible assets, net | 1,169 | 1,230 |
Equipment and furniture, net | 581 | 576 |
TOTAL ASSETS | 9,647 | 12,731 |
CURRENT LIABILITIES | ||
Amount due to parent, BioTime | 1,318 | 807 |
Amount due to affiliates | 152 | 40 |
Accounts payable | 403 | 285 |
Accrued expenses and other current liabilities | 879 | 1,182 |
Total current liabilities | 2,752 | 2,314 |
TOTAL LIABILITIES | $ 2,752 | $ 2,314 |
Commitments and contingencies (see Note 8) | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, no par value, 5,000 shares authorized; none issued and outstanding | $ 0 | $ 0 |
Common stock, no par value, 50,000 shares authorized; 25,412 and 25,391 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 35,069 | 34,901 |
Accumulated other comprehensive loss on available-for-sale securities | (1,112) | (350) |
Accumulated deficit | (27,062) | (24,134) |
Total stockholders' equity | 6,895 | 10,147 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 9,647 | $ 12,731 |
CONDENSED BALANCE SHEETS (Unau3
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
SHAREHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 25,412,000 | 25,391,000 |
Common shares, shares outstanding (in shares) | 25,412,000 | 25,391,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
EXPENSES: | ||
Research and development | $ 1,689 | $ 1,117 |
General and administrative | 1,243 | 250 |
Total operating expenses | 2,932 | 1,367 |
Loss from operations | (2,932) | (1,367) |
OTHER INCOME (EXPENSES), NET | ||
Interest income (expense), net | 4 | (2) |
Total other income (expenses), net | 4 | (2) |
NET LOSS | $ (2,928) | $ (1,369) |
Basic and diluted net loss per share (in dollars per share) | $ (0.12) | $ (0.08) |
Weighted average common shares outstanding: basic and diluted (in shares) | 25,396 | 18,200 |
CONDENSED STATEMENTS OF COMPREH
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) [Abstract] | ||
NET LOSS | $ (2,928) | $ (1,369) |
Other comprehensive loss, net of tax: | ||
Unrealized (loss) gain on BioTime shares held as available-for-sale securities | (762) | 1,090 |
COMPREHENSIVE LOSS | $ (3,690) | $ (279) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,928) | $ (1,369) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 10 | 11 |
Amortization of intangible assets | 61 | 61 |
Stock-based compensation | 125 | 216 |
Changes in operating assets and liabilities: | ||
Amount due to parent, BioTime | 511 | 1,047 |
Amount due to affiliates | 113 | 31 |
Prepaid expenses and other current assets | 126 | 31 |
Accounts payable and accrued liabilities | (185) | (192) |
Net cash used in operating activities | (2,167) | (164) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (15) | (11) |
Net cash used in investing activities | (15) | (11) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of options | 42 | 0 |
Net cash provided by financing activities | 42 | 0 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,140) | (175) |
CASH AND CASH EQUIVALENTS: | ||
At beginning of the period | 7,996 | 257 |
At end of the period | $ 5,856 | $ 82 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Liquidity | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Basis of Presentation and Liquidity [Abstract] | |
Organization, Basis of Presentation and Liquidity | 1. Organization, Basis of Presentation and Liquidity OncoCyte Corporation (“OncoCyte”) was incorporated in 2009 in the state of California and is a majority-owned subsidiary of BioTime, Inc. (“BioTime”), a publicly traded biotechnology company focused in the field of regenerative medicine. OncoCyte is developing molecular cancer diagnostics utilizing a discovery platform that focuses on identifying genetic markers broadly expressed in numerous types of cancer. OncoCyte is presently focusing its efforts on developing diagnostic tests for use in detecting a variety of cancers including lung, bladder, and breast cancers. Basis of presentation The financial statements presented herein, and discussed below, have been prepared on a stand-alone basis. The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The balance sheet as of December 31, 2015 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in OncoCyte’s Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying interim condensed financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of OncoCyte’s financial condition and results of operations. The condensed results of operations are not necessarily indicative of the results to be expected for any other interim period or for the entire year. BioTime has consolidated the results of OncoCyte into BioTime’s consolidated results based on BioTime’s ability to control OncoCyte’s operating and financial decisions and policies through its majority ownership of OncoCyte common stock throughout the periods presented. BioTime owned 57.7% of the outstanding common stock of OncoCyte at March 31, 2016 and December 31, 2015. To the extent OncoCyte does not have its own employees or human resources for its operations, BioTime or BioTime subsidiaries provide certain employees for administrative or operational services, as necessary, for the benefit of OncoCyte (see Note 4). Accordingly, BioTime allocates expenses such as salaries and payroll related expenses incurred and paid on behalf of OncoCyte based on the amount of time that particular employees devote to OncoCyte affairs. Other expenses such as legal, accounting, marketing, travel, and entertainment expenses are allocated to OncoCyte to the extent that those expenses are incurred by or on behalf of OncoCyte. BioTime also allocates certain overhead expenses such as insurance, internet and telephone expenses based on a percentage determined by management. These allocations are made based upon activity-based allocation drivers such as time spent, percentage of square feet of office or laboratory space used, and percentage of personnel devoted to OncoCyte’s operations or management. Management evaluates the appropriateness of the percentage allocations on a quarterly basis and believes that this basis for allocation is reasonable. OncoCyte grants stock options to employees of BioTime, or employees of other BioTime subsidiaries who perform services for OncoCyte, and OncoCyte recorded stock-based compensation expense in the accompanying statements of operations for these services performed in the periods presented. Liquidity For all periods presented, OncoCyte had generated no revenues. Since inception, OncoCyte has financed its operations through the sale of its common stock to its shareholders, including BioTime, loans from BioTime and other BioTime affiliates, and sales of BioTime common shares that OncoCyte holds as available-for-sale securities. OncoCyte has incurred operating losses and negative cash flows since inception, and had an accumulated deficit of $27.1 million and $24.1 million at March 31, 2016 and December 31, 2015, respectively. OncoCyte plans to continue to invest significant resources in research and development in the field of cancer molecular diagnostics. OncoCyte expects to continue to incur operating losses and negative cash flows. The unavailability or inadequacy of financing to meet future capital needs could force OncoCyte to modify, curtail, delay, or suspend some or all aspects of its planned operations. Sales of additional equity securities could result in the dilution of the interests of its shareholders. OncoCyte will need to obtain additional debt or equity capital in order to finance its operations. OncoCyte cannot assure that such financing will be available on favorable terms, if at all. As of March 31, 2016, OncoCyte had $5.9 million in cash and cash equivalents and held BioTime shares available-for-sale, valued at $1.8 million, which OncoCyte may use for working capital purposes, as necessary. Based on cash and available for sale securities currently on hand and projected rates of expenditure, OncoCyte believes that it will be able to fund ongoing operations through December 31, 2016 but would need to raise additional capital to establish a diagnostic testing laboratory and to commercialize any of the cancer diagnostic tests that it is developing. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Net loss per common share The computations of basic and diluted net loss per share of common stock are as follows (in thousands, except per share amounts): Three Months Ended March 31, (Unaudited) 2016 2015 Net loss $ (2,928 ) $ (1,369 ) Weighted average common shares outstanding – basic and diluted 25,396 18,200 Net loss per share – basic and diluted $ (0.12 ) $ (0.08 ) The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Three Months Ended March 31, (Unaudited) 2016 2015 Stock options 2,848 2,000 Recent accounting pronouncements The following accounting standards, which are not yet effective, are presently being evaluated by OncoCyte to determine the impact that they might have on its financial statements. In April 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”. The amendments clarify two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The update is effective for annual periods beginning after December 15, 2017 including interim reporting periods therein. OncoCyte is currently evaluating the impact, if any, the adoption of ASU 2016-10 will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2016. OncoCyte is currently evaluating the impact the adoption of ASU 2016-09 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which requires lessees to recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those annual periods. Early adoption is permitted. OncoCyte is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements. On January 5, 2016, the FASB issued ASU 2016-01: “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. Changes to the current GAAP model primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The most significant amendment was to equity investments. All equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification (with changes in fair value reported in other comprehensive income) for equity securities with readily determinable fair values. The amendment also allows equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. OncoCyte is currently evaluating the impact the adoption of ASU 2016-01 will have on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". ASU No. 2014-15 defines management's responsibility to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. It is effective for annual reporting periods ending after December 15, 2016, and for annual and interim reporting periods thereafter. Early adoption is permitted. OncoCyte has not elected early adoption and believes the impact of the adoption of ASU No. 2014-15 could have a material adverse impact on OncoCyte’s financial statements. |
Selected Balance Sheet Componen
Selected Balance Sheet Components | 3 Months Ended |
Mar. 31, 2016 | |
Selected Balance Sheet Components [Abstract] | |
Selected Balance Sheet Components | 3. Selected Balance Sheet Components Prepaid expenses and other current assets As of March 31, 2016 and December 31, 2015, prepaid expenses and other current assets were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Prepaid license fees $ 68 $ 19 Outside research 93 366 Insurance 43 - Other prepaid expenses and current asset 58 3 Prepaid expenses and other current assets $ 262 $ 388 Accrued expenses and other current liabilities As of March 31, 2016 and December 31, 2015, accrued expenses and other current liabilities were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Accrued bonuses and payroll related expenses $ 82 $ 325 Other accrued expenses 797 857 Accrued expenses and other current liabilities $ 879 $ 1,182 Intangible assets, net As of March 31, 2016 and December 31, 2015, intangible assets were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Intangible assets $ 2,419 $ 2,419 Accumulated amortization (1,250 ) (1,189 ) Intangible assets, net $ 1,169 $ 1,230 Amortization expense amounted to $61,000 for the three months ended March 31, 2016 and 2015, respectively. Equipment and furniture, net As of March 31, 2016 and December 31, 2015, equipment and furniture were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Equipment and furniture $ 766 $ 750 Accumulated depreciation (185 ) (174 ) Equipment and furniture, net $ 581 $ 576 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4. Related Party Transactions Shared Facilities and Service Agreement On October 8, 2009, OncoCyte and BioTime executed a Shared Facilities and Services Agreement (“Shared Facilities Agreement”). Under the terms of the Shared Facilities Agreement, BioTime will allow OncoCyte to use its premises and equipment located at Alameda, California for the sole purpose of conducting business. BioTime will also provide accounting, billing, bookkeeping, payroll, treasury, payment of accounts payable, and other similar administrative services to OncoCyte. BioTime may also provide the services of attorneys, accountants, and other professionals who may also provide professional services to BioTime and its other subsidiaries. BioTime will also provide OncoCyte with the services of its laboratory and research personnel, including BioTime employees and contractors, for the performance of research and development work for OncoCyte at the premises. BioTime charges OncoCyte a Use Fee for services received and usage of facilities, equipment, and supplies. For each billing period, BioTime prorates and allocates costs incurred, as applicable, to OncoCyte, such costs include services of Bio Time employees, equipment, insurance, lease, professional, software, supplies and utilities. Allocation depends on key cost drivers including actual documented use, square footage of facilities used, time spent, costs incurred by or for OncoCyte, or upon proportionate usage by BioTime and OncoCyte, as reasonably estimated by BioTime (collectively “Use Fees”). BioTime, at its discretion, has the right to charge OncoCyte a 5% markup on such allocated costs although BioTime has not elected to charge this markup since the inception of the Shared Facilities Agreement. The allocated cost of BioTime employees and contractors who provide services is based upon records maintained of the number of hours of such personnel devoted to the performance of services. The Use Fee is determined and invoiced to OncoCyte on a quarterly basis for each calendar quarter of each calendar year. If the Shared Facilities Agreement terminates prior to the last day of a billing period, the Use Fee will be determined for the number of days in the billing period elapsed prior to the termination of the Shared Facilities Agreement. Each invoice will be payable in full by OncoCyte within 30 days after receipt. Any invoice, or portion thereof, not paid in full when due will bear interest at the rate of 15% per annum until paid, unless the failure to make a payment is due to any inaction or delay in making a payment by BioTime employees from OncoCyte funds available for such purpose, rather than from the unavailability of sufficient funds legally available for payment or from an act, omission, or delay by any employee or agent of OncoCyte. Through March 31, 2016 BioTime has not charged OncoCyte any interest. In addition to the Use Fees, OncoCyte will reimburse BioTime for any out of pocket costs incurred by BioTime for the purchase of office supplies, laboratory supplies, and other goods and materials and services for the account or use of OncoCyte, provided that invoices documenting such costs are delivered to OncoCyte with each invoice for the Use Fee. Furthermore, BioTime will have no obligation to purchase or acquire any office supplies or other goods and materials or any services for OncoCyte, and if any such supplies, goods, materials or services are obtained for OncoCyte, BioTime may arrange for the suppliers thereof to invoice OncoCyte directly. The Shared Facilities Agreement will remain in effect, unless either party gives the other party written notice stating that the Shared Facilities Agreement will terminate on December 31 of that year, or unless the agreement otherwise terminated under another provision of the agreement. In aggregate, BioTime allocated and charged such Use Fees to OncoCyte approximating $178,000 and $138,000 included in general and administrative expenses, and $229,000 and $180,000 included in research and development expenses included in the statements of operations for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016 and December 31, 2015, OncoCyte had $1.5 million and $847,000 payable to BioTime and affiliates included in current liabilities in connection with the costs incurred under the Shared Facilities Agreement. Since these amounts are due and payable in 30 days of being invoiced, the payables are classified as current liabilities for all periods presented. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 5. Shareholders’ Equity Preferred Stock OncoCyte is authorized to issue up to 5,000,000 shares of no par value preferred stock. As of March 31, 2016, no preferred shares were issued or outstanding. Common Stock During the three months ended March 31, 2016, 20,833 shares of common stock were issued upon the exercise of stock options, from which OncoCyte received approximately $42,000 in cash proceeds . |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | 6. Stock-based Compensation Options Granted OncoCyte has adopted a Stock Option Plan (the “Plan”) under which 4,000,000 shares of common stock are authorized for the grant of stock options or the sale of restricted stock. The Plan also permits OncoCyte to issue such other securities as its Board of Directors or the Compensation Committee administering the Plan may determine. As of March 31, 2016, 1,128,417 shares of common stock were available for future grants under the Plan. A summary of OncoCyte stock option activity under the Plan and related information follows (in thousands except weighted average exercise price): Options Available for Grant Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2015 1,757 2,240 $ 2.03 Options granted (637 ) 637 3.06 Options exercised - (21 ) 2.00 Options forfeited 5 (5 ) - Options cancelled 3 (3 ) 2.20 Outstanding at March 31, 2016 1,128 2,848 $ 2.26 Exercisable at March 31, 2016 1,095 $ 1.64 There were 20,833 stock options exercised during the three months ended March 31, 2016. OncoCyte recorded stock-based compensation expense in the following categories on the accompanying statements of operations for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, (Unaudited) 2016 2015 Research and development $ 37 $ 142 General and administrative 88 74 Total stock-based compensation expense $ 125 $ 216 The assumptions that were used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the three months ended March 31, 2016 and 2015 were as follows. 2016 2015 Expected life (in years) 6.39 4.49 Risk-free interest rates 1.40 % 1.44 % Volatility 71.22 % 71.15 % Dividend yield - % - % Stock-based compensation expense is recognized based on awards that are ultimately expected to vest, and as a result, the amount has been reduced by estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on OncoCyte’s historical experience and future expectations. The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If OncoCyte had made different assumptions, its stock-based compensation expense and net loss for the three months ended March 31, 2016 and 2015 may have been significantly different. There was no net income tax benefit recognized in the statements of operations for stock-based compensation expense for non-qualified stock options, as OncoCyte fully offset net deferred tax assets with a valuation allowance (see Note 7). In addition, 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 | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate. The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, if any, and changes in or the interpretation of tax laws in jurisdictions where OncoCyte conducts business. Due to losses incurred for all periods presented, OncoCyte did not record any provision or benefit for income taxes. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. OncoCyte established a full valuation allowance for all periods presented due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies OncoCyte had no commitments other than those under the Shared Facilities and Services Agreement described in Note 4. The minimum fixed payments due under the Shared Facilities Agreement are approximately $15,000 per month. Litigation – General OncoCyte will be subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and others. 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. OncoCyte is not aware of any claims likely to have a material adverse effect on its financial condition or results of operations. Employment Contracts OncoCyte has entered into employment contracts with certain executive officers. Under the provisions of the contracts, OncoCyte may be required to incur severance obligations for matters relating to changes in control, as defined, and involuntary terminations. Indemnification In the normal course of business, OncoCyte may provide indemnification of varying scope under OncoCyte’s agreements with other companies or consultants, typically OncoCyte’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, OncoCyte will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties in connection with the use or testing of OncoCyte’s diagnostic tests. Indemnification provisions could also cover third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to OncoCyte’s diagnostic tests. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, or license agreement to which they relate. The 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 March 31, 2016 and December 31, 2015. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events On April 7, 2016 OncoCyte entered into a capital lease agreement for laboratory equipment with a net present value of $464,000. OncoCyte will make monthly payments of $14,442 for 36 months. |
Organization, Basis of Presen16
Organization, Basis of Presentation and Liquidity (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Basis of Presentation and Liquidity [Abstract] | |
Basis of presentation | Basis of presentation The financial statements presented herein, and discussed below, have been prepared on a stand-alone basis. The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The balance sheet as of December 31, 2015 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in OncoCyte’s Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying interim condensed financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of OncoCyte’s financial condition and results of operations. The condensed results of operations are not necessarily indicative of the results to be expected for any other interim period or for the entire year. BioTime has consolidated the results of OncoCyte into BioTime’s consolidated results based on BioTime’s ability to control OncoCyte’s operating and financial decisions and policies through its majority ownership of OncoCyte common stock throughout the periods presented. BioTime owned 57.7% of the outstanding common stock of OncoCyte at March 31, 2016 and December 31, 2015. To the extent OncoCyte does not have its own employees or human resources for its operations, BioTime or BioTime subsidiaries provide certain employees for administrative or operational services, as necessary, for the benefit of OncoCyte (see Note 4). Accordingly, BioTime allocates expenses such as salaries and payroll related expenses incurred and paid on behalf of OncoCyte based on the amount of time that particular employees devote to OncoCyte affairs. Other expenses such as legal, accounting, marketing, travel, and entertainment expenses are allocated to OncoCyte to the extent that those expenses are incurred by or on behalf of OncoCyte. BioTime also allocates certain overhead expenses such as insurance, internet and telephone expenses based on a percentage determined by management. These allocations are made based upon activity-based allocation drivers such as time spent, percentage of square feet of office or laboratory space used, and percentage of personnel devoted to OncoCyte’s operations or management. Management evaluates the appropriateness of the percentage allocations on a quarterly basis and believes that this basis for allocation is reasonable. OncoCyte grants stock options to employees of BioTime, or employees of other BioTime subsidiaries who perform services for OncoCyte, and OncoCyte recorded stock-based compensation expense in the accompanying statements of operations for these services performed in the periods presented. |
Liquidity | Liquidity For all periods presented, OncoCyte had generated no revenues. Since inception, OncoCyte has financed its operations through the sale of its common stock to its shareholders, including BioTime, loans from BioTime and other BioTime affiliates, and sales of BioTime common shares that OncoCyte holds as available-for-sale securities. OncoCyte has incurred operating losses and negative cash flows since inception, and had an accumulated deficit of $27.1 million and $24.1 million at March 31, 2016 and December 31, 2015, respectively. OncoCyte plans to continue to invest significant resources in research and development in the field of cancer molecular diagnostics. OncoCyte expects to continue to incur operating losses and negative cash flows. The unavailability or inadequacy of financing to meet future capital needs could force OncoCyte to modify, curtail, delay, or suspend some or all aspects of its planned operations. Sales of additional equity securities could result in the dilution of the interests of its shareholders. OncoCyte will need to obtain additional debt or equity capital in order to finance its operations. OncoCyte cannot assure that such financing will be available on favorable terms, if at all. As of March 31, 2016, OncoCyte had $5.9 million in cash and cash equivalents and held BioTime shares available-for-sale, valued at $1.8 million, which OncoCyte may use for working capital purposes, as necessary. Based on cash and available for sale securities currently on hand and projected rates of expenditure, OncoCyte believes that it will be able to fund ongoing operations through December 31, 2016 but would need to raise additional capital to establish a diagnostic testing laboratory and to commercialize any of the cancer diagnostic tests that it is developing. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Net loss per common share | Net loss per common share The computations of basic and diluted net loss per share of common stock are as follows (in thousands, except per share amounts): Three Months Ended March 31, (Unaudited) 2016 2015 Net loss $ (2,928 ) $ (1,369 ) Weighted average common shares outstanding – basic and diluted 25,396 18,200 Net loss per share – basic and diluted $ (0.12 ) $ (0.08 ) The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Three Months Ended March 31, (Unaudited) 2016 2015 Stock options 2,848 2,000 |
Recent accounting pronouncements | Recent accounting pronouncements The following accounting standards, which are not yet effective, are presently being evaluated by OncoCyte to determine the impact that they might have on its financial statements. In April 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”. The amendments clarify two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The update is effective for annual periods beginning after December 15, 2017 including interim reporting periods therein. OncoCyte is currently evaluating the impact, if any, the adoption of ASU 2016-10 will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2016. OncoCyte is currently evaluating the impact the adoption of ASU 2016-09 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which requires lessees to recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those annual periods. Early adoption is permitted. OncoCyte is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements. On January 5, 2016, the FASB issued ASU 2016-01: “Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. Changes to the current GAAP model primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The most significant amendment was to equity investments. All equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification (with changes in fair value reported in other comprehensive income) for equity securities with readily determinable fair values. The amendment also allows equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. OncoCyte is currently evaluating the impact the adoption of ASU 2016-01 will have on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". ASU No. 2014-15 defines management's responsibility to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. It is effective for annual reporting periods ending after December 15, 2016, and for annual and interim reporting periods thereafter. Early adoption is permitted. OncoCyte has not elected early adoption and believes the impact of the adoption of ASU No. 2014-15 could have a material adverse impact on OncoCyte’s financial statements. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Computations of Basic and Diluted Net Loss Per Share | The computations of basic and diluted net loss per share of common stock are as follows (in thousands, except per share amounts): Three Months Ended March 31, (Unaudited) 2016 2015 Net loss $ (2,928 ) $ (1,369 ) Weighted average common shares outstanding – basic and diluted 25,396 18,200 Net loss per share – basic and diluted $ (0.12 ) $ (0.08 ) |
Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock | The following common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Three Months Ended March 31, (Unaudited) 2016 2015 Stock options 2,848 2,000 |
Selected Balance Sheet Compon19
Selected Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Selected Balance Sheet Components [Abstract] | |
Prepaid Expenses and Other Current Assets | As of March 31, 2016 and December 31, 2015, prepaid expenses and other current assets were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Prepaid license fees $ 68 $ 19 Outside research 93 366 Insurance 43 - Other prepaid expenses and current asset 58 3 Prepaid expenses and other current assets $ 262 $ 388 |
Accrued Expenses and Other Current Liabilities | As of March 31, 2016 and December 31, 2015, accrued expenses and other current liabilities were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Accrued bonuses and payroll related expenses $ 82 $ 325 Other accrued expenses 797 857 Accrued expenses and other current liabilities $ 879 $ 1,182 |
Intangible Assets, Net | As of March 31, 2016 and December 31, 2015, intangible assets were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Intangible assets $ 2,419 $ 2,419 Accumulated amortization (1,250 ) (1,189 ) Intangible assets, net $ 1,169 $ 1,230 |
Equipment and Furniture, Net | As of March 31, 2016 and December 31, 2015, equipment and furniture were comprised of the following (in thousands): March 31, 2016 (Unaudited) December 31, 2015 Equipment and furniture $ 766 $ 750 Accumulated depreciation (185 ) (174 ) Equipment and furniture, net $ 581 $ 576 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stock-based Compensation [Abstract] | |
Summary of Stock Option Activity | A summary of OncoCyte stock option activity under the Plan and related information follows (in thousands except weighted average exercise price): Options Available for Grant Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2015 1,757 2,240 $ 2.03 Options granted (637 ) 637 3.06 Options exercised - (21 ) 2.00 Options forfeited 5 (5 ) - Options cancelled 3 (3 ) 2.20 Outstanding at March 31, 2016 1,128 2,848 $ 2.26 Exercisable at March 31, 2016 1,095 $ 1.64 |
Categories of Stock-based Compensation Expense | OncoCyte recorded stock-based compensation expense in the following categories on the accompanying statements of operations for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, (Unaudited) 2016 2015 Research and development $ 37 $ 142 General and administrative 88 74 Total stock-based compensation expense $ 125 $ 216 |
Assumptions Used to Calculate Fair Value of Stock Options | The assumptions that were used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the three months ended March 31, 2016 and 2015 were as follows. 2016 2015 Expected life (in years) 6.39 4.49 Risk-free interest rates 1.40 % 1.44 % Volatility 71.22 % 71.15 % Dividend yield - % - % |
Organization, Basis of Presen21
Organization, Basis of Presentation and Liquidity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | $ 0 | $ 0 | ||
Accumulated deficit | (27,062) | (24,134) | ||
Cash and cash equivalents | $ 5,856 | $ 7,996 | $ 82 | $ 257 |
BioTime, Inc. [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity ownership percentage | 57.70% | 57.70% | ||
Value of BioTime available for sale securities held | $ 1,800 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Computations of basic and diluted net loss per share [Abstract] | ||
Net loss | $ (2,928) | $ (1,369) |
Weighted average common shares outstanding - basic and diluted (in shares) | 25,396 | 18,200 |
Net loss per share - basic and diluted (in dollars per share) | $ (0.12) | $ (0.08) |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,848 | 2,000 |
Selected Balance Sheet Compon23
Selected Balance Sheet Components (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Prepaid expenses and other current assets [Abstract] | |||
Prepaid license fees | $ 68 | $ 19 | |
Outside research | 93 | 366 | |
Insurance | 43 | 0 | |
Other prepaid expenses and current asset | 58 | 3 | |
Prepaid expenses and other current assets | 262 | 388 | |
Accrued expenses and other current liabilities [Abstract] | |||
Accrued bonuses and payroll related expenses | 82 | 325 | |
Other accrued expenses | 797 | 857 | |
Accrued expenses and other current liabilities | 879 | 1,182 | |
Intangible assets, net [Abstract] | |||
Intangible assets | 2,419 | 2,419 | |
Accumulated amortization | (1,250) | (1,189) | |
Intangible assets, net | 1,169 | 1,230 | |
Amortization expense | 61 | $ 61 | |
Equipment and furniture, net [Abstract] | |||
Equipment and furniture | 766 | 750 | |
Accumulated depreciation | (185) | (174) | |
Equipment and furniture, net | $ 581 | $ 576 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
BioTime, Inc. [Member] | ||
Shared Facilities and Service Agreement [Abstract] | ||
Markup rate on allocated costs | 5.00% | |
Term of payment | 30 days | |
Interest rate charged on unpaid and overdue invoices | 15.00% | |
OncoCyte [Member] | Current Liabilities [Member] | ||
Shared Facilities and Service Agreement [Abstract] | ||
Allocated Use Fees payable | $ 1,500,000 | $ 84,700 |
OncoCyte [Member] | General and Administrative Expenses [Member] | ||
Shared Facilities and Service Agreement [Abstract] | ||
Allocated Use Fees | 178,000 | 138,000 |
OncoCyte [Member] | Research and Development Expenses [Member] | ||
Shared Facilities and Service Agreement [Abstract] | ||
Allocated Use Fees | $ 229,000 | $ 180,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Preferred Stock [Abstract] | ||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Stock [Member] | ||
Common Stock [Abstract] | ||
Exercise of stock options (in shares) | 20,833 | |
Exercise of stock options , value | $ 42,000 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation [Abstract] | ||
Share-based compensation expense | $ 125 | $ 216 |
Research and Development [Member] | ||
Share-based Compensation [Abstract] | ||
Share-based compensation expense | 37 | 142 |
General and Administrative [Member] | ||
Share-based Compensation [Abstract] | ||
Share-based compensation expense | $ 88 | $ 74 |
Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, shares authorized (in shares) | 4,000,000 | |
Available for Grant [Rollforward] | ||
Outstanding, beginning of the period (in shares) | 1,757,000 | |
Options granted (in shares) | (637,000) | |
Options exercised (in shares) | 0 | |
Options forfeited (in shares) | 5,000 | |
Options cancelled (in shares) | 3,000 | |
Outstanding, end of the period (in shares) | 1,128,000 | |
Number of Shares [Rollforward] | ||
Outstanding, beginning of the period (in shares) | 2,240,000 | |
Option granted (in shares) | 637,000 | |
Options exercised (in shares) | (21,000) | |
Options forfeited (in shares) | (5,000) | |
Options cancelled (in shares) | (3,000) | |
Outstanding, end of the period (in shares) | 2,848,000 | |
Exercisable (in shares) | 1,095,000 | |
Weighted Average Exercise Price [Rollforward] | ||
Outstanding, beginning of the period (in dollars per share) | $ 2.03 | |
Option granted (in dollars per share) | 3.06 | |
Options exercised (in dollars per share) | 2 | |
Options forfeited (in dollars per share) | 0 | |
Options cancelled (in dollars per share) | 2.20 | |
Outstanding end of the period (in dollars per share) | 2.26 | |
Exercisable (in dollars per share) | $ 1.64 | |
Weighted-average assumptions [Abstract] | ||
Expected life | 6 years 4 months 20 days | 4 years 5 months 26 days |
Risk-free interest rates | 1.40% | 1.44% |
Volatility | 71.22% | 71.15% |
Dividend yield | 0.00% | 0.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Mar. 31, 2016USD ($) |
Commitments and Contingencies [Abstract] | |
Minimum fixed payments due under the shared facilities agreement | $ 15,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Apr. 07, 2016USD ($) |
Subsequent Event [Line Items] | |
Net present value of laboratory equipment under capital lease | $ 464,000 |
Montly payment under capital lease | $ 14,442 |
Capital lease term | 36 months |