OncoCyte (OCX) 10-Q 11 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 10, 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	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 4,000	$ 7,996
BioTime shares held as available-for-sale securities, at fair value	1,617	2,541
Prepaid expenses and other current assets	129	388
Total current assets	5,746	10,925
NONCURRENT ASSETS
Intangible assets, net	1,109	1,230
Equipment and furniture, net	515	576
Deposits	54	0
TOTAL ASSETS	7,424	12,731
CURRENT LIABILITIES
Amount due to parent, BioTime	1,688	807
Amount due to affiliates	151	40
Accounts payable	192	285
Accrued expenses and other current liabilities	509	1,182
Capital lease liability, current portion	173	0
Total current liabilities	2,713	2,314
Capital lease liability, net of current portion	244	0
TOTAL LIABILITIES	2,957	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; 25,431 and 25,391 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	35,345	34,901
Accumulated other comprehensive loss on available-for-sale securities	(1,273)	(350)
Accumulated deficit	(29,605)	(24,134)
Total stockholders' equity	4,467	10,417
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 7,424	$ 12,731

CONDENSED BALANCE SHEETS (Unau3

CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2016	Dec. 31, 2015
SHAREHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	5,000	5,000
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	50,000
Common stock, shares issued (in shares)	25,431	25,391
Common shares, shares outstanding (in shares)	25,431	25,391

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
EXPENSES:
Research and development	$ (1,195)	$ (886)	$ (2,884)	$ (2,004)
General and administrative	(1,337)	(519)	(2,580)	(769)
Total operating expenses	(2,532)	(1,405)	(5,464)	(2,773)
Loss from operations	(2,532)	(1,405)	(5,464)	(2,773)
OTHER INCOME (EXPENSES), NET
Interest income (expense), net	(11)	(6)	(7)	(7)
Total other income (expenses), net	(11)	(6)	(7)	(7)
NET LOSS	$ (2,543)	$ (1,411)	$ (5,471)	$ (2,780)
Basic and diluted net loss per share (in dollars per share)	$ (0.10)	$ (0.07)	$ (0.22)	$ (0.13)
Weighted average common shares outstanding: basic and diluted (in shares)	25,427	21,200	25,411	21,200

CONDENSED STATEMENTS OF COMPREH

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) [Abstract]
NET LOSS	$ (2,543)	$ (1,411)	$ (5,471)	$ (2,780)
Other comprehensive loss, net of tax:
Unrealized loss on BioTime shares held as available-for-sale securities	(161)	(1,179)	(923)	(88)
COMPREHENSIVE LOSS	$ (2,704)	$ (2,590)	$ (6,394)	$ (2,868)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,471)	$ (2,780)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	54	21
Amortization of intangible assets	121	121
Stock-based compensation	361	151
Contingently issuable warrant expense to investors	0	65
Changes in operating assets and liabilities:
Amount due to parent, BioTime	881	1,373
Amount due to affiliates	111	(150)
Prepaid expenses and other current assets	259	67
Accounts payable and accrued liabilities	(290)	(16)
Net cash used in operating activities	(3,974)	(1,148)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(10)	(11)
Security deposit	(54)	0
Net cash used in investing activities	(64)	(11)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options	82	0
Proceeds from issuance of common shares	0	3,300
Repayment of capital lease obligation	(40)	0
Net cash provided by financing activities	42	3,300
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(3,996)	2,141
CASH AND CASH EQUIVALENTS:
At beginning of the period	7,996	257
At end of the period	$ 4,000	$ 2,398

Organization, Basis of Presenta

Organization, Basis of Presentation and Liquidity	6 Months Ended
	Jun. 30, 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 June 30, 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 rent, 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 condensed 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 $29.6 million and $24.1 million at June 30, 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 June 30, 2016, OncoCyte had $4.0 million in cash and cash equivalents and held BioTime shares available-for-sale, valued at $1.6 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	6 Months Ended
	Jun. 30, 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): Six Months Ended June 30, (Unaudited) 2016 2015 Net loss $ (5,471 ) $ (2,780 ) Weighted average common shares outstanding – basic and diluted 25,411 21,200 Net loss per share – basic and diluted $ (0.22 ) $ (0.13 ) 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): Six Months Ended June 30, (Unaudited) 2016 2015 Stock options 2,803 2,445 Recent accounting pronouncements 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. I is effective for annual and interim reporting periods ending after December 15, 2016. 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	6 Months Ended
	Jun. 30, 2016
Selected Balance Sheet Components [Abstract]
Selected Balance Sheet Components	3. Selected Balance Sheet Components Prepaid expenses and other current assets As of June 30, 2016 and December 31, 2015, prepaid expenses and other current assets were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Prepaid license fees $ 17 $ 19 Outside research - 366 Insurance 27 - Other prepaid expenses and current asset 85 3 Prepaid expenses and other current assets $ 129 $ 388 Accrued expenses and other current liabilities As of June 30, 2016 and December 31, 2015, accrued expenses and other current liabilities were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Accrued bonuses and payroll related expenses $ 163 $ 325 Other accrued expenses 346 857 Accrued expenses and other current liabilities $ 509 $ 1,182 Intangible assets, net As of June 30, 2016 and December 31, 2015, intangible assets were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Intangible assets $ 2,419 $ 2,419 Accumulated amortization (1,310 ) (1,189 ) Intangible assets, net $ 1,109 $ 1,230 Amortization expense amounted to $121,000 for the six months ended June 30, 2016 and 2015, respectively. Equipment and furniture, net As of June 30, 2016 and December 31, 2015, equipment and furniture were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Equipment and furniture $ 743 $ 750 Accumulated depreciation (228 ) (174 ) Equipment and furniture, net $ 515 $ 576 On April 7, 2016, OncoCyte entered into a lease schedule under a Master Lease Line Agreement for certain equipment costing approximately $458,000 (see Note 8), requiring payments of $14,442 per month over 36 months. OncoCyte has accounted for this lease as a capital lease in accordance with ASC 840, Leases

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 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 June 30, 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 $381,000 and $243,000 included in general and administrative expenses, and $393,000 and $302,000 included in research and development expenses included in the statements of operations for the six months ended June 30, 2016 and 2015, respectively. As of June 30, 2016 and December 31, 2015, OncoCyte had $1.8 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. Master Lease Line Agreement On April 7, 2016, OncoCyte entered into a Master Lease Line Agreement (the “Lease Agreement”) with an unrelated financing company for the purchase and financing of certain equipment. BioTime was named as a co-lessee under the Lease Agreement. If OncoCyte raises equity financing greater than $10 million, the lessor will release BioTime from the Lease Agreement as a co-lessee. See Note 8.

Shareholders' Equity

Shareholders' Equity	6 Months Ended
	Jun. 30, 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 June 30, 2016, no preferred shares were issued or outstanding. Common Stock During the six months ended June 30, 2016, 40,207 shares of common stock were issued upon the exercise of stock options, from which OncoCyte received approximately $82,000 in cash proceeds.

Stock-based Compensation

Stock-based Compensation	6 Months Ended
	Jun. 30, 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 June 30, 2016, 1,154,084 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 Shares Available for Grant Number of Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2015 1,757 2,240 $ 2.03 Options granted (637 ) 637 3.06 Options exercised - (40 ) 2.06 Options forfeited 5 (5 ) - Options cancelled 29 (29 ) 2.20 Outstanding at June 30, 2016 1,154 2,803 $ 2.26 Exercisable at June 30, 2016 1,317 $ 1.82 There were 40,207 stock options exercised during the six months ended June 30, 2016. OncoCyte recorded stock-based compensation expense in the following categories on the accompanying condensed statements of operations for the six months ended June 30, 2016 and 2015 (in thousands): Six Months Ended June 30, (Unaudited) 2016 2015 Research and development $ 96 $ 74 General and administrative 265 77 Total stock-based compensation expense $ 361 $ 151 The assumptions that were used to calculate the grant date fair value of OncoCyte’s employee and non-employee stock option grants for the six months ended June 30, 2016 and 2015 were as follows. 2016 2015 Expected life (in years) 6.36 6.07 Risk-free interest rates 1.37 % 1.73 % Volatility 70.42 % 73.02 % 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 six months ended June 30, 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	6 Months Ended
	Jun. 30, 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	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies	8. Commitments and Contingencies Master Lease Line Agreement On April 7, 2016, OncoCyte entered into the Lease Agreement with an unrelated financing company for the purchase and financing of certain equipment. OncoCyte may use up to $875,000 for purchases of equipment financed by this Lease Agreement between March 29, 2016 through March 28, 2017, the expiration date of the availability of funds under the Lease Agreement. Each lease schedule OncoCyte enters into under the Lease Agreement must be in minimum increments of $50,000 each with a 36-month lease term, collateralized by the equipment financed under the lease schedule; each lease schedule requires a deposit for the first and last payment under that schedule. Monthly payments will be determined using a lease factor approximating an interest rate of 10% per annum. At the end of each lease schedule under the Lease Agreement, assuming no default has occurred, OncoCyte may either return the equipment financed under the schedule for a restocking fee of 7.5% of the original cost of the equipment or purchase the equipment from the financing company at a fair value not less than 12.5% of the original cost of the equipment. BioTime was named as a co-lessee under the Lease Agreement. If OncoCyte raises equity financing greater than $10 million, the lessor will release BioTime from the Lease Agreement as a co-lessee. On April 7, 2016, OncoCyte entered into a lease schedule under the Lease Agreement for certain equipment costing approximately $458,000, requiring payments of $14,442 per month over 36 months. OncoCyte has accounted for this lease as a capital lease in accordance with ASC 840, Leases 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 will assess 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 will disclose the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. OncoCyte is not presently a party to any litigation. 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 June 30, 2016 and December 31, 2015.

Organization, Basis of Presen15

Organization, Basis of Presentation and Liquidity (Policies)	6 Months Ended
	Jun. 30, 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 June 30, 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 rent, 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 condensed 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 $29.6 million and $24.1 million at June 30, 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 June 30, 2016, OncoCyte had $4.0 million in cash and cash equivalents and held BioTime shares available-for-sale, valued at $1.6 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 Accoun16

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 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): Six Months Ended June 30, (Unaudited) 2016 2015 Net loss $ (5,471 ) $ (2,780 ) Weighted average common shares outstanding – basic and diluted 25,411 21,200 Net loss per share – basic and diluted $ (0.22 ) $ (0.13 ) 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): Six Months Ended June 30, (Unaudited) 2016 2015 Stock options 2,803 2,445
Recent accounting pronouncements	Recent accounting pronouncements 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. I is effective for annual and interim reporting periods ending after December 15, 2016. 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 Accoun17

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 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): Six Months Ended June 30, (Unaudited) 2016 2015 Net loss $ (5,471 ) $ (2,780 ) Weighted average common shares outstanding – basic and diluted 25,411 21,200 Net loss per share – basic and diluted $ (0.22 ) $ (0.13 )
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): Six Months Ended June 30, (Unaudited) 2016 2015 Stock options 2,803 2,445

Selected Balance Sheet Compon18

Selected Balance Sheet Components (Tables)	6 Months Ended
	Jun. 30, 2016
Selected Balance Sheet Components [Abstract]
Prepaid Expenses and Other Current Assets	As of June 30, 2016 and December 31, 2015, prepaid expenses and other current assets were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Prepaid license fees $ 17 $ 19 Outside research - 366 Insurance 27 - Other prepaid expenses and current asset 85 3 Prepaid expenses and other current assets $ 129 $ 388
Accrued Expenses and Other Current Liabilities	As of June 30, 2016 and December 31, 2015, accrued expenses and other current liabilities were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Accrued bonuses and payroll related expenses $ 163 $ 325 Other accrued expenses 346 857 Accrued expenses and other current liabilities $ 509 $ 1,182
Intangible Assets, Net	As of June 30, 2016 and December 31, 2015, intangible assets were comprised of the following (in thousands): June 30, 2016 (Unaudited) December 31, 2015 Intangible assets $ 2,419 $ 2,419 Accumulated amortization (1,310 ) (1,189 ) Intangible assets, net $ 1,109 $ 1,230
Equipment and Furniture, Net	June 30, 2016 (Unaudited) December 31, 2015 Equipment and furniture $ 743 $ 750 Accumulated depreciation (228 ) (174 ) Equipment and furniture, net $ 515 $ 576

Stock-based Compensation (Table

Stock-based Compensation (Tables)	6 Months Ended
	Jun. 30, 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 Shares Available for Grant Number of Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2015 1,757 2,240 $ 2.03 Options granted (637 ) 637 3.06 Options exercised - (40 ) 2.06 Options forfeited 5 (5 ) - Options cancelled 29 (29 ) 2.20 Outstanding at June 30, 2016 1,154 2,803 $ 2.26 Exercisable at June 30, 2016 1,317 $ 1.82
Categories of Stock-based Compensation Expense	OncoCyte recorded stock-based compensation expense in the following categories on the accompanying condensed statements of operations for the six months ended June 30, 2016 and 2015 (in thousands): Six Months Ended June 30, (Unaudited) 2016 2015 Research and development $ 96 $ 74 General and administrative 265 77 Total stock-based compensation expense $ 361 $ 151
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 six months ended June 30, 2016 and 2015 were as follows. 2016 2015 Expected life (in years) 6.36 6.07 Risk-free interest rates 1.37 % 1.73 % Volatility 70.42 % 73.02 % Dividend yield - % - %

Organization, Basis of Presen20

Organization, Basis of Presentation and Liquidity (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Revenues	$ 0	$ 0
Accumulated deficit	(29,605)	(24,134)
Cash and cash equivalents	$ 4,000	$ 7,996	$ 2,398	$ 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	$ 1,600

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Computations of basic and diluted net loss per share [Abstract]
Net loss	$ (2,543)	$ (1,411)	$ (5,471)	$ (2,780)
Weighted average common shares outstanding - basic and diluted (in shares)	25,427	21,200	25,411	21,200
Net loss per share - basic and diluted (in dollars per share)	$ (0.10)	$ (0.07)	$ (0.22)	$ (0.13)
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)			2,803	2,445

Selected Balance Sheet Compon22

Selected Balance Sheet Components (Details) - USD ($)	Apr. 07, 2016	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Prepaid expenses and other current assets [Abstract]
Prepaid license fees		$ 17,000		$ 19,000
Outside research		0		366,000
Insurance		27,000		0
Other prepaid expenses and current asset		85,000		3,000
Prepaid expenses and other current assets		129,000		388,000
Accrued expenses and other current liabilities [Abstract]
Accrued bonuses and payroll related expenses		163,000		325,000
Other accrued expenses		346,000		857,000
Accrued expenses and other current liabilities		509,000		1,182,000
Intangible assets, net [Abstract]
Intangible assets		2,419,000		2,419,000
Accumulated amortization		(1,310,000)		(1,189,000)
Intangible assets, net		1,109,000		1,230,000
Amortization expense		121,000	$ 121,000
Equipment and furniture, net [Abstract]
Equipment and furniture		743,000		750,000
Accumulated depreciation		(228,000)		(174,000)
Equipment and furniture, net		$ 515,000		$ 576,000
Master Lease Line Agreement [Member]
Capital Leased Assets [Line Items]
Lease agreement value	$ 458,000
Monthly payment under capital lease	$ 14,442
Capital lease term	36 months

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	Apr. 07, 2016	Jun. 30, 2016	Jun. 30, 2015
Shared Facilities and Service Agreement [Abstract]
Minimum equity financing required to release as a co-lessee	$ 10,000,000
Current Liabilities [Member]
Shared Facilities and Service Agreement [Abstract]
Allocated use fees payable		$ 1,800,000	$ 847,000
General and Administrative Expenses [Member]
Shared Facilities and Service Agreement [Abstract]
Allocated use fees		381,000	243,000
Research and Development Expenses [Member]
Shared Facilities and Service Agreement [Abstract]
Allocated use fees		$ 393,000	$ 302,000
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%

Shareholders' Equity (Details)

Shareholders' Equity (Details) - USD ($)	6 Months Ended
	Jun. 30, 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)	40,207
Exercise of stock options , value	$ 82,000

Stock-based Compensation (Detai

Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation [Abstract]
Share-based compensation expense	$ 361	$ 151
Research and Development [Member]
Share-based Compensation [Abstract]
Share-based compensation expense	96	74
General and Administrative [Member]
Share-based Compensation [Abstract]
Share-based compensation expense	$ 265	$ 77
Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares authorized (in shares)	4,000,000
Shares 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)	29,000
Outstanding, end of the period (in shares)	1,154,000
Number of Options Outstanding [Rollforward]
Outstanding, beginning of the period (in shares)	2,240,000
Option granted (in shares)	637,000
Options exercised (in shares)	(40,000)
Options forfeited (in shares)	(5,000)
Options cancelled (in shares)	(29,000)
Outstanding, end of the period (in shares)	2,803,000
Exercisable (in shares)	1,317,000
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)	2.06
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)	$ 1.82
Weighted-average assumptions [Abstract]
Expected life	6 years 4 months 10 days	6 years 25 days
Risk-free interest rates	1.37%	1.73%
Volatility	70.42%	73.02%
Dividend yield	0.00%	0.00%

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	Apr. 07, 2016	Jun. 30, 2016
Commitments and Contingencies [Abstract]
Minimum equity financing required to release as a co-lessee	$ 10,000,000
Master Lease Line Agreement [Member]
Commitments and Contingencies [Abstract]
Lease agreement value	$ 458,000
Capital lease term	36 months
Interest rate on lease agreement	10.00%
Percentage of restocking fee paid on original cost of equipment	7.50%
Minimum equity financing required to release as a co-lessee	$ 10,000,000
Monthly payment under capital lease	14,442
Available amount under lease agreement		$ 417,000
Minimum [Member] | Master Lease Line Agreement [Member]
Commitments and Contingencies [Abstract]
Increment value of lease agreement	$ 50,000
Percentage of fair value on original cost to purchase an equipment	12.50%
Maximum [Member] | Master Lease Line Agreement [Member]
Commitments and Contingencies [Abstract]
Lease agreement value	$ 875,000