Cover
Cover - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 03, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | ||||
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Dec. 31, 2021 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2021 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity File Number | 1-37648 | |||
Entity Registrant Name | Oncocyte Corporation | |||
Entity Central Index Key | 0001642380 | |||
Entity Tax Identification Number | 27-1041563 | |||
Entity Incorporation, State or Country Code | CA | |||
Entity Address, Address Line One | 15 Cushing | |||
Entity Address, City or Town | Irvine | |||
Entity Address, State or Province | CA | |||
Entity Address, Postal Zip Code | 92618 | |||
City Area Code | (949) | |||
Local Phone Number | 409-7600 | |||
Title of 12(b) Security | Common Stock, no par value | |||
Trading Symbol | OCX | |||
Security Exchange Name | NASDAQ | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 297.6 | |||
Entity Common Stock, Shares Outstanding | 92,246,604 | |||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for its 2022 Annual Meeting of Shareholders are incorporated by reference in Part III | |||
ICFR Auditor Attestation Flag | false | |||
Auditor Firm ID | 100 | 252 | ||
Auditor Name | Withum Smith+Brown, PC | OUM & Co. LL | ||
Auditor Location | San Francisco, California | San Francisco, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 35,605 | $ 7,143 |
Accounts receivable | 1,437 | 203 |
Marketable equity securities | 904 | 675 |
Prepaid expenses and other current assets | 1,197 | 1,205 |
Total current assets | 39,143 | 9,226 |
NONCURRENT ASSETS | ||
Right-of-use and financing lease assets, net | 2,779 | 3,262 |
Machinery and equipment, net, and construction in progress | 5,748 | 3,262 |
Equity method investment in Razor | 13,417 | |
Goodwill | 18,684 | 9,187 |
Intangible assets, net | 91,245 | 15,009 |
Restricted cash | 1,700 | 1,700 |
Other noncurrent assets | 264 | 356 |
TOTAL ASSETS | 159,563 | 55,419 |
CURRENT LIABILITIES | ||
Accounts payable | 2,447 | 432 |
Accrued compensation | 3,376 | 3,468 |
Accrued expenses and other current liabilities | 2,425 | 2,284 |
Accrued severance from acquisition, current | 2,352 | |
Accrued liabilities from acquisition, current | 1,388 | |
Loans payable, net of deferred financing costs, current | 1,313 | 2,390 |
Right-of-use and financing lease liabilities, current | 819 | 422 |
Total current liabilities | 14,120 | 8,996 |
NONCURRENT LIABILITIES | ||
Loans payable, net of deferred financing costs, noncurrent | 1,508 | |
Right-of-use and financing lease liabilities, noncurrent | 3,545 | 4,312 |
Contingent consideration liabilities, noncurrent | 76,681 | 7,120 |
TOTAL LIABILITIES | 94,346 | 21,936 |
Commitments and contingencies (Note 10) | ||
SHAREHOLDERS’ EQUITY | ||
Preferred stock, no par value, 5,000 shares authorized; no shares issued and outstanding | ||
Common stock, no par value, 230,000 shares authorized; 92,232 and 69,117 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 252,954 | 157,160 |
Accumulated other comprehensive loss | 37 | |
Accumulated deficit | (187,774) | (123,677) |
Total shareholders’ equity | 65,217 | 33,483 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 159,563 | $ 55,419 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 230,000,000 | 230,000,000 |
Common stock, shares issued | 92,232,000 | 69,117,000 |
Common stock, shares, outstanding | 92,231,917 | 69,116,802 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Net revenue | $ 7,727 | $ 1,216 |
Cost of revenues | 4,185 | 1,855 |
Cost of revenues – amortization of acquired intangibles | 3,354 | |
Gross profit | 188 | (639) |
Operating expenses: | ||
Research and development | 13,631 | 9,800 |
Sales and marketing | 11,167 | 6,494 |
General and administrative | 22,336 | 16,788 |
Change in fair value of contingent consideration | 27,266 | (4,010) |
Total operating expenses | 74,400 | 29,072 |
Loss from operations | (74,212) | (29,711) |
OTHER INCOME (EXPENSES), NET | ||
Interest expense, net | (209) | (252) |
Unrealized gain (loss) on marketable equity securities | 229 | 297 |
Pro rata loss from equity method investment in Razor | (270) | (1,547) |
Gain on extinguishment of debt (PPP loan) | 1,141 | |
Other income (expense), net | (37) | 27 |
Total other income (expenses), net | 854 | (1,475) |
LOSS BEFORE INCOME TAXES | (73,358) | (31,186) |
Income tax benefit | 9,261 | 1,254 |
NET LOSS | $ (64,097) | $ (29,932) |
Net loss per share: basic and diluted | $ (0.72) | $ (0.46) |
Weighted average shares outstanding: basic and diluted | 88,920 | 65,478 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
NET LOSS | $ (64,097) | $ (29,932) |
Foreign currency translation adjustments | 37 | |
COMPREHENSIVE LOSS | $ (64,060) | $ (29,932) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2019 | $ 124,583 | $ (93,745) | $ 30,838 | |
Balance, shares at Dec. 31, 2019 | 57,032,000 | |||
Net Loss | (29,932) | (29,932) | ||
Stock-based compensation | 5,066 | 5,066 | ||
Sale of common shares | $ 18,343 | 18,343 | ||
Sale of common shares, shares | 8,257,000 | |||
Financing costs paid to issue common shares, including at-the-market transactions | $ (58) | (58) | ||
Sale of common shares, including at-the-market transactions | $ 2,732 | 2,732 | ||
Sale of common shares, including at-the-market transactions, shares | 1,137,000 | |||
Financing costs for at-the-market transactions | $ (82) | (82) | ||
Stock options exercised | $ 1,422 | 1,422 | ||
Stock options exercised, shares | 680,000 | |||
Shares issued upon vesting of RSU, net of shares retired to pay employees’ taxes | $ (15) | (15) | ||
Shares issued upon vesting of RSU, net of shares retired to pay employees' taxes, shares | 13,000 | |||
Issuance of common stock in lieu of cash for payment of board fees and deferred salaries | $ 169 | 169 | ||
Issuance of common stock in lieu of cash for payment of board fees and deferred salaries, shares | 82,000 | |||
Issuance of common stock as partial consideration for Insight Genetics, Inc. acquisition | $ 5,000 | 5,000 | ||
Issuance of common stock as partial consideration for Insight Genetics, Inc. acquisition, shares | 1,916,000 | |||
Balance at Dec. 31, 2020 | $ 157,160 | (123,677) | 33,483 | |
Balance, shares at Dec. 31, 2020 | 69,117,000 | |||
Net Loss | (64,097) | (64,097) | ||
Stock-based compensation | 6,841 | 6,841 | ||
Financing costs paid to issue common shares, including at-the-market transactions | (3,065) | (3,065) | ||
Sale of common shares, including at-the-market transactions | $ 77,987 | 77,987 | ||
Sale of common shares, including at-the-market transactions, shares | 19,536,000 | |||
Stock options exercised | $ 2,584 | $ 2,584 | ||
Stock options exercised, shares | 924,000 | 924,000 | ||
Warrants exercised | $ 2,631 | $ 2,631 | ||
Warrants exercised, shares | 872,000 | |||
Shares issued upon vesting of RSU, net of shares retired to pay employees’ taxes | $ (239) | (239) | ||
Shares issued upon vesting of RSU, net of shares retired to pay employees' taxes, shares | 153,000 | |||
Issuance of common stock as consideration for Razor Genomics acquisition | $ 5,756 | 5,756 | ||
Issuance of common stock as consideration for Razor Genomics acquisition, shares | 982,000 | |||
Issuance of common stock as consideration for Chronix Biomedical acquisition | $ 3,299 | 3,299 | ||
Issuance of common stock as consideration for Chronix Biomedical acquisition, shares | 648,000 | |||
Foreign currency translation adjustment | 37 | 37 | ||
Balance at Dec. 31, 2021 | $ 252,954 | $ 37 | $ (187,774) | $ 65,217 |
Balance, shares at Dec. 31, 2021 | 92,232,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (64,097) | $ (29,932) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 844 | 313 |
Amortization of intangible assets | 3,361 | 81 |
Impairment charge for long-lived assets | 422 | |
Pro rata loss from equity method investment in Razor | 270 | 1,547 |
Stock-based compensation | 6,841 | 5,066 |
Unrealized gain on marketable equity securities | (229) | (297) |
Amortization of debt issuance costs | 56 | 102 |
Change in fair value of contingent consideration | 27,266 | (4,010) |
Deferred income tax benefit | (9,261) | (1,254) |
Gain on extinguishment of debt (PPP loan) | (1,141) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,229) | (182) |
Lease liabilities | 147 | 1,504 |
Prepaid expenses and other assets | 227 | (188) |
Accounts payable and accrued liabilities | (1,348) | 848 |
Accrued severance from Chronix Biomedical acquisition | 2,352 | |
Net cash used in operating activities | (35,941) | (25,980) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of Insight Genetics, net of cash acquired | (607) | (6,189) |
Acquisition of Razor Genomics asset, net of cash acquired | (6,648) | |
Acquisition of Chronix Biomedical, net of cash acquired | (4,459) | (325) |
Equity method investment in Razor | (4,000) | |
Construction in progress and purchases of furniture and equipment | (2,247) | (1,227) |
Security deposit and other | (7) | |
Net cash used in investing activities | (13,961) | (11,748) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 2,584 | 1,445 |
Proceeds from sale of common shares | 65,263 | 18,343 |
Financing costs to issue common shares | (2,675) | (58) |
Proceeds from sale of common shares under at-the-market transactions | 12,724 | 2,462 |
Financing costs for at-the-market sales | (390) | (74) |
Proceeds from exercise of warrants | 2,631 | |
Common shares received and retired for employee taxes paid | (239) | (14) |
Repayment of loan payable | (1,500) | (375) |
Repayment of financing lease obligations | (34) | (71) |
Proceeds from PPP loan | 1,141 | |
Net cash provided by financing activities | 78,364 | 22,799 |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 28,462 | (14,929) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING | 8,843 | 23,772 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING | 37,305 | 8,843 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 114 | 209 |
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES | ||
Common stock issued for acquisition of Razor Genomics assets | 5,756 | |
Deferred tax liability generated from the acquisition of Razor Genomics assets | 7,077 | |
Common stock issued for acquisition of Insight Genetics | 5,000 | |
Common stock issued for acquisition of Chronix Biomedical | 3,299 | |
Deferred tax liability generated from the acquisition of Chronix | 2,183 | |
Initial fair value of contingent consideration at acquisition date | 42,295 | 11,130 |
Assumed liability from Chronix Acquisition | 3,352 | |
Holdback liability | 600 | |
Construction in progress, machinery and equipment purchases included in accounts payable, accrued liabilities and landlord liability | 1,083 | 2,049 |
Accounts receivable from agent for at-the-market sales of common stock, net of financing costs | 262 | |
Issuance of common stock in lieu of cash for payment of board fees and deferred salaries | $ 169 |
Organization, Description of th
Organization, Description of the Business and Liquidity | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of the Business and Liquidity | 1. Organization, Description of the Business and Liquidity Oncocyte Corporation (“Oncocyte”), incorporated in 2009 in the state of California, is a molecular diagnostics company focused on developing and commercializing proprietary laboratory-developed tests (“LDTs”) to serve unmet medical needs across the cancer care continuum. Oncocyte’s mission is to provide actionable information to physicians and patients at critical decision points to optimize diagnosis and treatment decisions, improve patient outcomes, and reduce overall cost of care. Oncocyte has prioritized lung cancer as its first indication. Lung cancer remains the leading cause of cancer death in the United States, despite the availability of molecular testing and novel therapies to treat patients. Oncocyte’s first product for commercial release is a proprietary treatment stratification test called DetermaRx™ that identifies which patients with early-stage non-small cell lung cancer may benefit from chemotherapy, resulting in a significantly higher, five-year survival rate. Beginning in September 2019 through February 23, 2021, Oncocyte held a 25 10 5.7 Business Combinations Oncocyte completed its acquisition of Insight Genetics, Inc. (“Insight”) on January 31, 2020 (the “Insight Merger Date”) through a merger with a newly incorporated wholly owned subsidiary of Oncocyte (the “Insight Merger”) under the terms of an Agreement and Plan of Merger (the “Insight Merger Agreement”). Prior to the Insight Merger, Insight was a privately held company specializing in the discovery and development of the multi-gene molecular, laboratory-developed diagnostic tests that Oncocyte has branded as DetermaIO™. DetermaIO™ is a proprietary gene expression assay with promising data supporting its potential to help identify patients likely to respond to checkpoint inhibitor drugs. Insight has a CLIA-certified diagnostic laboratory with the capacity to support clinical trials or assay design on certain commercially available analytic platforms that may be used to develop additional diagnostic tests. Insight also performs Pharma Services in its CLIA-certified laboratory for pharmaceutical and biotechnology companies, including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests (“Pharma Services”). The Insight Merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, which requires, among other things, that the assets and liabilities assumed be recognized at their fair values as of the acquisition date. See Note 3 for a full discussion of the Insight Merger. On April 15, 2021 (the “Chronix Merger Date”), Oncocyte completed its acquisition of Chronix Biomedical, Inc. (“Chronix”) pursuant to an Agreement and Plan of Merger dated February 2, 2021, amended February 23, 2021, and amended and restated as of April 15, 2021 (as amended and restated, the “Chronix Merger Agreement”), by and among Oncocyte, CNI Monitor Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Oncocyte (“Merger Sub”), Chronix, the stockholders party to the Chronix Merger Agreement and a party named as equity holder representative. Pursuant to the Chronix Merger Agreement, Merger Sub merged with and into Chronix, with Chronix surviving as a wholly owned subsidiary of Oncocyte (the “Chronix Merger”). Prior to the Chronix Merger, Chronix was a privately held molecular diagnostics company, developing blood tests for use in cancer treatment and organ transplantation. Through the Chronix Merger, Oncocyte has added to its LDT development pipeline the TheraSure™-CNI Monitor, a patented, blood-based test for immunotherapy monitoring which Oncocyte expects to market as DetermaCNI TM Other tests in the development pipeline include DetermaTx™, a test intended to complement DetermaIO™ by assessing the mutational status of a tumor to help identify the appropriate targeted therapy. Oncocyte also plans to initiate the development of DetermaMx™ as a blood-based test to monitor cancer patients for recurrence of their disease. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Liquidity Oncocyte has incurred operating losses and negative cash flows since inception and had an accumulated deficit of $ 187.8 million as of December 31, 2021. Oncocyte expects to continue to incur operating losses and negative cash flows for the foreseeable future. Oncocyte did not generate revenues from its operations prior to the first quarter of 2020, and revenues since that period through the date of this Report were not sufficient to cover Oncocyte’s operating expenses for that period. Oncocyte finances its operations primarily through the sale of shares of its common stock. As of December 31, 2021, Oncocyte had $ 35.6 0.9 On March 20, 2020, Oncocyte entered into an Equity Distribution Agreement with Piper Sandler & Co as “Sales Agent” (“ATM Agreement”) which Oncocyte may utilize in the future to raise up to $ 25 69.6 On April 23, 2020, Oncocyte obtained a U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loan in the principal amount of $ 1,140,930 1 April 23, 2022 1,140,930 On June 11, 2021, Oncocyte entered into an at-the-market sales agreement with BTIG, LLC as sales agent and/or principal (the “Agent”) pursuant to which Oncocyte may sell up to an aggregate of $ 50,000,000 Between July 1, 2021 and December 31, 2021, Oncocyte sold 1,108,650 5.63 6.24 Presently, Oncocyte is devoting substantially all of its efforts on initial commercialization efforts for DetermaRx™ and completing clinical development and planning commercialization of DetermaIO™, although DetermaIO™ is currently available for biopharma diagnostic development and research use only as a companion test in immunotherapy drug development to select patients for clinical trials; and continuing development and planning commercialization of DetermaTx TM ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In addition to general economic and capital market trends and conditions, Oncocyte’s ability to raise sufficient additional capital to finance its operations from time to time will depend on a number of factors specific to Oncocyte’s operations such as operating revenues and expenses, progress in development of, or in obtaining reimbursement coverage from Medicare for, DetermaIO™ and other future diagnostic tests that Oncocyte may develop or acquire. The availability of financing and Oncocyte’s ability to generate revenues from operating activities may be adversely impacted by the ongoing COVID-19 pandemic which could continue to cause deferrals of cancer surgeries that might otherwise have resulted in the utilization of DetermaRx™ and deferrals of drug development clinical trials that might have utilized Oncocyte’s Pharma Services. The COVID-19 pandemic also could continue to depress national and international economies and disrupt capital markets, supply chains, and aspects of Oncocyte’s operations. The extent to which the ongoing COVID-19 pandemic will ultimately impact Oncocyte’s business, results of operations, financial condition, or cash flows is highly uncertain and difficult to predict because it will depend on many factors that are outside Oncocyte’s control. The unavailability or inadequacy of financing or revenues to meet future capital needs could force Oncocyte to modify, curtail, delay, or suspend some or all aspects of planned operations. Sales of additional equity securities could result in the dilution of the interests of its shareholders. Oncocyte cannot assure that adequate financing will be available on favorable terms, if at all. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of presentation The consolidated financial statements include the accounts Oncocyte and our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Principles of consolidation On January 31, 2020, with the consummation of the Insight Merger, Insight became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Insight’s operations and results with Oncocyte’s operations and results (see Note 3). On February 24, 2021, with the acquisition of the remaining equity interests in Razor, Razor became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Razor’s results with Oncocyte’s operations and results (see Note 3). On April 15, 2021, with the acquisition of Chronix, Chronix became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Chronix’s operations and results with Oncocyte’s operations and results (see Note 3). ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of Oncocyte’s financial condition and results of operations. The consolidated results of operations are not necessarily indicative of the results to be expected for any other interim period or for the entire year. All material intercompany accounts and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates estimates which are subject to significant judgment, including, but not limited to, valuation methods used, assumptions requiring the use of judgment to prepare financial projections, timing of potential commercialization of acquired in-process intangible assets, applicable discount rates, probabilities of the likelihood of multiple outcomes of certain events related to contingent consideration, comparable companies or transactions, determination of fair value of the assets acquired and liabilities assumed including those relating to contingent consideration, assumptions related to the going concern assessments, allocation of direct and indirect expenses, useful lives associated with long-lived intangible assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, and assumptions used to value debt and stock-based awards and other equity instruments. Actual results may differ materially from those estimates. Similarly, Oncocyte assessed certain accounting matters that generally require consideration of forecasted financial information. The accounting matters assessed included, but were not limited to, Oncocyte’s equity investments, the carrying value of goodwill, acquired in-process intangible assets and other long-lived assets. Those assessments as well as other estimates referenced above were made in the context of information reasonably available to Oncocyte. While Oncocyte considered known or expected impacts of COVID-19 in making its assessments and estimates, the future impacts of COVID-19 are not presently determinable and could cause actual results to differ materially from Oncocyte’s estimates and assessments. Oncocyte’s future analysis or forecast of COVID-19 impacts could lead to changes in Oncocyte’s future estimates and assessments which could result in material impacts to Oncocyte’s consolidated financial statements in future reporting periods. Going concern assessment In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update, or ASU No. 2014-15, Oncocyte assesses going concern uncertainty in its consolidated financial statements to determine if it has sufficient cash, cash equivalents and working capital on hand, including marketable equity securities, and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to Oncocyte, it will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, Oncocyte makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent Oncocyte deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Business combinations and fair value measurements Oncocyte accounts for business combinations in accordance with ASC 805, which requires the purchase consideration transferred to be measured at fair value on the acquisition date in accordance with ASC 820, Fair Value Measurement ● Level 1 ● Level 2 ● Level 3 When a part of the purchase consideration consists of shares of Oncocyte common stock, Oncocyte calculates the purchase price attributable to those shares, a Level 1 security, by determining the fair value of those shares quoted on the NYSE American as of the acquisition date. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including IPR&D, and liabilities assumed, including any contingent consideration, as of the acquisition date. Goodwill is recognized as any amount of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in excess of the consideration transferred. ASC 805 precludes the recognition of an assembled workforce as an asset, effectively subsuming any assembled workforce value into goodwill. In determining fair value, Oncocyte utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value. For the periods presented, Oncocyte has no financial assets or liabilities recorded at fair value on a recurring basis, except for cash and cash equivalents consisting of money market funds and marketable equity securities of Lineage and AgeX common stock held by Oncocyte described below. These assets are measured at fair value using the period-end quoted market prices as a Level 1 input. Oncocyte also has certain contingent consideration liabilities which are carried at fair value based on Level 3 inputs (see Note 3). The carrying amounts of cash equivalents, prepaid expenses and other current assets, amounts due to Lineage and other affiliates, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The carrying amount of the Loan Payable to Silicon Valley Bank approximates fair value because the loan bears interest at a floating market rate, and the carrying amount of the PPP loan approximates fair value because of the SBA guarantee on the terms of the loan and the relatively recent funding date of the loan (see Note 12). Cash and cash equivalents Cash equivalents typically consist of money market fund investments for capital preservation, with maturities of three months or less when purchased. At December 31, 2021 and 2020, Oncocyte’s cash and cash equivalents balances totaled $ 35.6 7.1 Financial instruments that potentially subject Oncocyte to credit risk consist principally of cash and cash equivalents. Oncocyte maintains cash and cash equivalent balances at financial institutions in excess of amounts insured by United States government agencies. Oncocyte places its cash and cash equivalents with high credit quality financial institutions. Accounts receivable and allowance for doubtful accounts Accounts receivable are stated at the amount we expect to collect. Our evaluation of the collectability of customer accounts receivable is based on various factors, including the length of time the receivables are past due, our history of bad debts and general industry conditions. Accounts that are deemed uncollectible are written off against the allowance for doubtful accounts. As of December 31, 2021 and December 31, 2020, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting for Lineage and AgeX shares of common stock Oncocyte accounts for the Lineage and AgeX shares of common it holds as marketable equity securities in accordance with ASC 320-10-25, Investments – Debt and Equity Securities Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities As of December 31, 2021, Oncocyte held 353,264 35,326 904,000 Prepaid expenses and other current assets As of December 31, 2021 and 2020, prepaid expenses and other current assets were comprised of the following (in thousands): Schedule of Prepaid Expenses and Other Current Assets 2021 2020 Prepaid vendors, deposits, and service agreements 365 646 Supplies inventory 304 - Prepaid insurance 243 264 Note receivable 200 - Other 85 295 Total prepaid expenses and other current assets 1,197 1,205 Restricted cash Oncocyte classifies cash that has contractual or legal restrictions imposed by third parties as restricted cash, which is restricted as to withdrawal or use except for the specified purpose under a contract. Oncocyte includes the restricted cash consistent with the nature of the underlying contract and classifies it as part of current assets if the restricted cash will be released in the next twelve months from the balance sheet date, or in deposits and other noncurrent assets if it will be restricted for longer than twelve months from the balance sheet date. Oncocyte adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the statements of cash flows in accordance with ASU 2016-18 (in thousands): Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash 2021 2020 December 31, 2021 2020 Cash and cash equivalents $ 35,605 $ 7,143 Restricted cash included in deposits and other noncurrent assets (see Note 10) 1,700 1,700 Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows $ 37,305 $ 8,843 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Goodwill and intangible assets In accordance with ASC 350, Intangibles – Goodwill and Other Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill, similar to IPR&D, is not amortized but is tested for impairment at least annually, or if circumstances indicate its value may no longer be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting Oncocyte’s business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Oncocyte continues to operate in one segment and considered to be the sole reporting unit and, therefore, goodwill is tested for impairment at the enterprise level. Oncocyte does not have intangible assets with indefinite useful lives other than goodwill and the acquired IPR&D discussed in Notes 3 and 4. As of December 31, 2021, there has been no Contingent consideration liabilities Certain of Oncocyte’s asset and business acquisitions involve the potential for future payment of consideration to third-parties and former selling shareholders in amounts determined as a percentage of future net revenues generated, or upon attainment of revenue milestones, from Pharma Services or diagnostic tests, as applicable, or annual minimum royalties to certain licensors, as provided in the applicable agreements. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows. These obligations are referred to as contingent consideration. ASC 805 requires that contingent consideration be estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity interests to the selling shareholders in the future if certain future events occur or conditions are met, such as the attainment of product development milestones. Contingent consideration also includes additional future payments to selling shareholders based on achievement of components of earnings, such as “earn-out” provisions or percentage of future revenues, including royalties paid to the selling shareholders based on a percentage of revenues generated from DetermaIO™ and Insight Pharma Services over their respective useful life. The fair value of contingent consideration after the acquisition date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the consolidated statements of operations. Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss that Oncocyte records in its consolidated financial statements. See Note 3 for a full discussion of these liabilities. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Investments in capital stock of privately held companies Oncocyte evaluates whether investments held in common stock of other companies require consolidation of the company under, first, the variable interest entity (“VIE”) model, and then under the voting interest model in accordance with accounting guidance for consolidations under Accounting Standards Codification (“ASC”) 810-10. If consolidation of the entity is not required under either the VIE model or the voting interest model, Oncocyte determines whether the equity method of accounting should be applied in accordance with ASC 323, Investments – Equity Method and Joint Ventures Oncocyte initially records equity method investments at fair value on the date of the acquisition with subsequent adjustments to the investment balance based on Oncocyte’s share of earnings or losses from the investment. The equity method investment balance is shown in noncurrent assets on the consolidated balance sheets. Oncocyte reviews investments accounted for under the equity method for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be fully recoverable. If a determination is made that an “other-than-temporary” impairment exists, Oncocyte writes down its investment to fair value. On September 30, 2019, Oncocyte acquired a 25 On February 24, 2021, Oncocyte acquired the remaining 75 Leases Oncocyte accounts for leases in accordance with ASC 842, Leases On January 1, 2019, the adoption date of ASC 842, and based on the available practical expedients under the standard, Oncocyte did not reassess any expired or existing contracts, reassess the lease classification for any expired or existing leases and reassess initial direct costs for exiting leases. Oncocyte also elected not to capitalize leases that have terms of twelve months or less. The adoption of ASC 842 did not have a material impact to Oncocyte’s consolidated financial statements because Oncocyte did not have any significant operating leases at the time of adoption. During the years ended December 31, 2021 and 2020, Oncocyte entered into various operating leases and an embedded operating lease in accordance with ASC 842 discussed in Note 10. Oncocyte’s accounting for financing leases (previously referred to as “capital leases”) remained substantially unchanged. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Machinery and equipment, construction in progress Machinery and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally over a period of 3 10 3 5 Construction in progress, comprised primarily of leasehold improvements under construction, is not depreciated until the underlying asset is placed into service. Long-lived intangible assets Long-lived intangible assets, consisting of acquired Razor asset and customer relationships, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful life of 5 years (see Note 3). Impairment of long-lived assets Oncocyte assesses the impairment of long-lived assets, which consist primarily of right-of-use assets for operating leases, customer relationships and machinery and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. As part of Oncocyte’s impairment assessment of its long-lived assets, Oncocyte determined that certain assets, mainly comprised of machinery and equipment and related prepaid service agreements used in the development of DetermaDx™ were impaired as of June 30, 2020, because Oncocyte determined to discontinue the development of that diagnostic test. Accordingly, Oncocyte recorded a noncash charge of $ 422,000 Accounting for warrants Oncocyte determines the accounting classification of warrants it issues, as either liability or equity classified, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income taxes Oncocyte and its subsidiaries file a consolidated U.S. federal income tax return and combined California state return for the years ended December 31, 2021 and 2020. Oncocyte accounts for income taxes in accordance with ASC 740, Income Taxes The guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. Oncocyte will recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2021 and 2020. Oncocyte is not aware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation for the years ended December 31, 2021 and 2020. Oncocyte is currently unaware of any tax issues under review. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”) was enacted. The CARES Act included loans and grants to certain businesses, and temporary amendments to the Internal Revenue Code which changed net loss carryforward and back provisions and the business interest expenses limitation. Under the CARES Act provisions, the most relevant income tax considerations to Oncocyte relate to the amounts received under the Paycheck Protection Program loan program and the possible forgiveness of those loans by the SBA. On December 21, 2020, the U.S. president has signed into law the “Consolidated Appropriations Act, 2021” which includes further COVID-19 economic relief and extension of certain expiring tax provisions. The relief package includes a tax provision clarifying that businesses with forgiven PPP loans can deduct regular business expenses that are paid for with the loan proceeds for federal tax purposes. Additional pandemic relief tax measures include an expansion of the employee retention credit, enhanced charitable contribution deductions, and a temporary full deduction for business expenses for food and beverages provided by a restaurant (see Note 12). Revenue recognition Prior to January 1, 2020, Oncocyte generated no revenues. Effective on January 1, 2020, Oncocyte adopted the revenue recognition standard ASC Topic 606, Revenue from Contracts with Customers ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DetermaRx™ testing revenue In the first quarter of 2020, Oncocyte commercially launched DetermaRx™ and commenced performing tests on clinical samples through orders received from physicians, hospitals and other healthcare providers. In determining whether all of the revenue recognition criteria (i) through (v) above are met with respect to DetermaRx™ tests, each test result is considered a single performance obligation and is generally considered complete when the test result is delivered or made available to the prescribing physician electronically and, as such, there are no shipping or handling fees incurred by Oncocyte or billed to customers. Although Oncocyte bills a list price for all tests ordered and completed for all payer types, Oncocyte considers constraints on the variable consideration when recognizing revenue for DetermaRx™. Because DetermaRx™ is a novel test and there are no current reimbursement arrangements with third-party payers other than Medicare, the transaction price represents variable consideration. Application of the constraint for variable consideration is an area that requires significant judgment. For all payers other than Medicare, Oncocyte must take into account the novelty of the test, the uncertainty of receiving payment, or being subject to claims for refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte expects to continue to recognize revenue on a cash basis until it has a sufficient history to reliably estimate payment patterns or has contractual reimbursement arrangements, or both, in place. In September 2020, Oncocyte received a final pricing decision for DetermaRx™ from CMS, and with Medicare coverage in effect, Oncocyte commenced recognizing revenue when DetermaRx™ tests are performed for Medicare patients, or when payment was approved by Medicare in the case of certain tests performed prior to September 2020. The Company invoices third party payors, which include Medicare and Medicare Advantage, for its laboratory testing services upon providing test results to ordering physicians. As such, the Company takes assignment of benefits and risk of collection with third party payors. The Company continues to monitor the collection history for third party payors. Medicare and Medicare Advantage reimbursement programs are complex and ambiguous, and are continuously being evaluated and modified by the CMS. Our ability to receive timely reimbursements from third-party payors is dependent on our ability to correct and complete missing and incorrect billing information. Missing and incorrect information on reimbursement submissions slows down the billing process and increases the aging of accounts receivable. While we have receivables due from Medicare and Medicare Advantage, we do not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal and state governments, and payment is primarily dependent upon submitting appropriate documentation. As such, as of December 31, 2021 and December 31, 2020, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Medicare and Medicare Advantage covered DetermaRx™ tests. As of December 31, 2021, Oncocyte had accounts receivable of $ 1.1 million from Medicare and Medicare Advantage covered DetermaRx™ tests (see Note 7). As of December 31, 2020, Oncocyte had accounts receivable of $ 0.1 million from Medicare covered DetermaRx™ tests. Pharma Services revenue Revenues recognized during the year ended December 31, 2021 include Pharma Services performed by Oncocyte’s Insight subsidiary. Insight provides a range of molecular diagnostic services to its pharmaceutical customers (referred to as “Pharma Services”) including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests in its CLIA-certified laboratory. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements with specific deliverables defined by the customer. Pharma Services are generally performed on a time and materials basis. Upon Insight’s completion of the service to the customer in accordance with the SOW, Insight has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes the pharma service revenue at that time. Insight identifies each sale of its pharma service offering as a single performance obligation. Completion of the service and satisfaction of the performance obligation under a SOW is typically evidenced by access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the SOW. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Insight has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Insight recognizes revenue over a period of time during which the work is performed using a formula that accounts for expended efforts, generally measured in labor hours, as a percentage of total estimated efforts for the completion of the SOW. As Insight satisfies the performance obligation under the SOW, any amounts earned as revenue and billed to the customer are included in accounts receivable. Any revenues earned but not yet billed to the customer as of the date of Oncocyte’s consolidated financial statements are recorded as contract assets and are included in prepaids and other current assets as of the financial statement date. Amounts recorded in contract assets are reclassified to accounts receivable in Oncocyte’s consolidated financial statements when the customer is invoiced according to the billing schedule in the contract. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Insight establishes an allowance for doubtful accounts based on the evaluation of the collectability of its Pharma Services accounts receivables after considering a variety of factors, including the length of time receivables are past due, significant events that may impair the customer’s ability to pay, such as a bankruptcy filing or deterioration in the customer’s operating results or financial position, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Insight continuously monitors collections and payments from customers and maintains a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the allowance for doubtful accounts. As of December 31, 2021, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Pharma Services. As of December 31, 2021, Oncocyte had accounts receivable from Pharma Services customers of $ 364,000 (see Note 7). Cost of revenues Cost of revenues generally consists of cost of materials, direct labor including benefits, bonus and stock-based compensation, equipment and infrastructure expenses, clinical sample related costs associated with performing Pharma Services and DetermaRx™ tests, and license fees due to third parties, and also includes amortization of acquired customer relationship intangible assets. Infrastructure expenses include depreciation of laboratory equipment, allocated rent costs, leasehold improvements and allocated information technology costs for operations at Oncocyte’s CLIA laboratories in California and Tennessee. Costs associated with performing diagnostic tests and Pharma Services are recorded as the tests or services are performed regardless of whether revenue was recognized with respect to that test or pharma service. Royalties or revenue share payments for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expenses at the time the related revenues are recognized. Oncocyte generated no revenues or cost of revenues prior to January 1, 2020. Research and development expenses Research and development expenses are comprised of costs incurred to develop technology, and include: salaries and benefits, including stock-based compensation; laboratory expenses, including reagents and supplies used in research and development laboratory work; infrastructure expenses, including allocated facility occupancy costs; and contract services and other outside costs. Indirect research and development expenses are allocated primarily based on headcount, as applicable, and include rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Research and development costs are expensed as incurred. Sales and marketing expenses Sales and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade show expenses, branding and positioning expenses, and consulting fees. Sales and marketing expenses also include indirect expenses for applicable overhead allocated based on headcount, and include allocated costs for rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. General and administrative expenses General and administrative expenses consist primarily of compensation and related benefits (including stock-based compensation) for executive and corporate personnel, professional and consulting fees, rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Stock-based compensation Oncocyte recognizes compensation expense related to employee option grants and restricted stock grants, if any, in accordance with FASB ASC 718, Compensation – Stock Compensation All excess tax benefits and tax deficiencies from stock-based compensation awards accounted for under ASC 718 are recognized as income tax benefit or expense, respectively, in the statements of operations. An excess income tax benefit arises when the tax deduction of a share-based award for income tax purposes exceeds the compensation cost recognized for financial reporting purposes and, a tax deficiency arises when the compensation cost exceeds the tax deduction. Because Oncocyte has a full valuation allowance for all periods presented (see Note 8), there was no impact to Oncocyte statements of operations for any ex |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | 3. Business Combinations Acquisition of Insight Genetics, Inc. On January 31, 2020 (the “Insight Merger Date”), Oncocyte completed its acquisition of Insight pursuant to the Insight Merger Agreement. Merger Consideration at Closing Under the terms of the Insight Merger Agreement, Oncocyte agreed to pay $ 7 5 0.6 0.2 11.4 6.4 0.6 1.9 5 In March 2021, in accordance with the Insight Merger Agreement, the Cash Holdback was paid and the Stock Holdback was released from escrow to the selling shareholders. Milestone Payments (Milestone Contingent Consideration) In addition to the Initial Merger Consideration, Oncocyte may also pay contingent consideration of up to $ 6.0 million in any combination of cash or shares of Oncocyte common stock if certain milestones are achieved (the “Milestone Contingent Consideration”), which consist of (i) $ 1.5 million for clinical trial completion and data publication milestone, (ii) $ 3.0 million for an affirmative final local coverage determination from CMS for a specified lung cancer test, and (iii) up to $ 1.5 million for achieving certain CMS reimbursement milestones. As of December 31, 2021, no milestones have been met and no payments have been made. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenue Share (Royalty Contingent Consideration) As additional consideration for Insight’s shareholders, the Insight Merger Agreement provides for Oncocyte to pay a revenue share of not more than ten percent of net collected revenues for current Insight pharma service offerings over a period of ten years, and a tiered revenue share percentage of net collected revenues through the end of the technology lifecycle if certain new cancer tests are developed and commercialized using Insight technology (“Royalty Contingent Consideration”). As of December 31, 2021, the royalty contingent consideration has not been met and no payments have been made. Registration Rights Pursuant to the Insight Merger Agreement, Oncocyte filed a registration statement with the SEC to register the resale of the shares of common stock under the Securities Act of 1933, as amended (the “Securities Act”) issued in connection with the Insight Merger, which the SEC declared effective in August 2020. Workforce In connection with the closing of the Insight Merger, Oncocyte did not assume sponsorship of the Insight Equity Incentive Plan. Accordingly, the Insight Equity Incentive Plan and all related stock options to purchase shares of Insight common stock outstanding immediately prior to the Insight Merger were canceled on the Insight Merger Date for no consideration. At the Insight Merger Date, all of Insight’s employees ceased employment with Insight, and Oncocyte offered employment to certain of those former Insight employees, principally in laboratory roles and certain administrative roles (“New Oncocyte Employees”), and granted new equity awards to the New Oncocyte Employees under the Oncocyte 2018 Equity Incentive Plan. All Oncocyte stock option awards granted to the New Oncocyte Employees have vesting terms and conditions consistent with stock options granted to most other Oncocyte employees. Aggregate Merger Consideration and Purchase Price Allocation The calculation of the aggregate merger consideration, consisting of the Initial Merger Consideration, Milestone Contingent Consideration and Royalty Contingent Consideration (the “Aggregate Merger Consideration”) transferred on January 31, 2020, at fair value, is shown in the following table (in thousands, except for share and per share amounts). The Milestone Contingent Consideration and the Royalty Contingent Consideration are collectively referred to as “Contingent Consideration”. Schedule of Fair Value of Aggregate Merger Consideration Cash consideration $ 7,000 (1) Stock consideration Shares of Oncocyte common stock issued on the Merger Date 1,915,692 (2) Closing price per share of Oncocyte common stock on the Merger Date $ 2.61 Market value of Oncocyte common stock issued $ 5,000 Contingent Consideration $ 11,130 (3) Total fair value of consideration transferred on the Merger Date $ 23,130 (1) The cash consideration paid on the Insight Merger Date was $ 6.4 0.6 (2) The 229,885 (3) In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Insight Merger Date, as further discussed below. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Aggregate Merger Consideration allocation Oncocyte allocated the Aggregate Merger Consideration transferred to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the Insight Merger Date. The fair values of the identifiable intangible assets acquired and the liabilities assumed was determined based on inputs that were unobservable and significant to the overall fair value measurement, which is also based on estimates and assumptions made by management at the time of the Insight Merger. As such, this was classified as Level 3 fair value hierarchy measurements and disclosures in accordance with ASC 820, Fair Value Measurement The following table sets forth the allocation of the Aggregate Merger Consideration transferred to Insight’s tangible and identifiable intangible assets acquired and liabilities assumed on the Insight Merger Date, with the excess recorded as goodwill (in thousands): Schedule of Intangible Assets Acquired and Liabilities Assumed January 31, 2020 Assets acquired: Cash and cash equivalents $ 36 Accounts receivable and other current assets 42 Right-of-use assets, machinery and equipment 585 Long-lived intangible assets - customer relationships 440 Acquired in-process research and development 14,650 Total identifiable assets acquired (a) 15,753 Liabilities assumed: Accounts payable 61 Right-of-use liabilities - operating lease 495 Long-term deferred income tax liability 1,254 Total identifiable liabilities assumed (b) 1,810 Net assets acquired, excluding goodwill (a) - (b) = (c) 13,943 Total cash, contingent consideration, and stock consideration transferred (d) 23,130 Goodwill (d) - (c) 9,187 The valuation of identifiable intangible assets and applicable estimated useful lives are as follows (in thousands, except for useful life): Schedule of Identifiable Intangible Assets and Estimated Useful Life Estimated Useful Life Fair Value (Years) In process research and development (“IPR&D”) $ 14,650 n/a Customer relationships 440 5 $ 15,090 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following is a discussion of the valuation methods and significant assumptions used to determine the fair value of Insight’s material assets and liabilities in connection with the Insight Merger: Acquired In-Process Research and Development and Deferred Income Tax Liability 14.7 Oncocyte determined the estimated aggregate fair value of DetermaIO™ using the Multi-Period Excess Earnings Method (“MPEEM”) under the income approach. MPEEM calculates the economic benefits by determining the income attributable to an intangible asset after the returns are subtracted for contributory assets such as working capital, assembled workforce, and fixed assets. The resulting after-tax net earnings are discounted at a rate commensurate with the risk inherent in the economic benefit projections of the assets. To calculate fair value of DetermaIO™ under MPEEM, Oncocyte used probability-weighted, projected cash flows discounted at a rate considered appropriate given the significant inherent risks associated with similar assets. Cash flows were calculated based on projections of revenues and expenses related to the asset and were assumed to extend through a multi-year projection period. Revenues from commercialization of DetermaIO™ were based on the estimated market potential for the indications for use which may include tests for the treatment of certain lung cancers and tests for the treatment of certain breast cancers. The expected cash flows from DetermaIO™ were then discounted to present value using a weighted-average cost of capital for companies with profiles substantially similar to that of Oncocyte and the risk inherent in the economic benefit projections of similar assets, which Oncocyte believes represents the rate that market participants would use to value those assets. The discount rate used to value DetermaIO™ was approximately 35 Because the IPR&D (prior to completion or abandonment of the research and development) is considered an indefinite-lived asset for accounting purposes but is not recognized for tax purposes, the fair value of the IPR&D on the acquisition date generated a deferred income tax liability (“DTL”) in accordance with ASC 740, Income Taxes 1.3 Customer relationships 5 Customer relationships generate similar DTLs to IPR&D as Oncocyte records this asset for accounting purposes but not for tax purposes. Accordingly, Oncocyte has offset all the acquired DTLs associated with the customer relationships with available acquired NOLs and included in the amount recorded discussed above (see Note 8). ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Right-of-use assets and liabilities, machinery and equipment 0.5 0.1 Contingent consideration liabilities – There are three milestones comprising the Milestone Contingent Consideration, collectively referred to as the Milestones, in connection with the Insight Merger which Oncocyte valued and recorded as part of Contingent Consideration as of the Insight Merger Date (see table below), which consist of (i) a payment for clinical trial completion and related data publication (“Milestone 1”), (ii) a payment for an affirmative final local coverage determination from CMS for a specified lung cancer test (“Milestone 2”), and (iii) a payment for achieving specified CMS reimbursement milestones (“Milestone 3”). If achieved, any respective Milestone will be paid at the contractual value shown below, with the payment made either in cash or in shares of Oncocyte common stock as determined by Oncocyte. There can be no assurance that any of the Milestones will be achieved. There are two separate components of the Royalty Contingent Consideration, collectively referred to as the Royalty Payments, in connection with the Insight Merger which Oncocyte valued and recorded as part of Contingent Consideration as of the Insight Merger Date (see table below); Royalty Payments consist of (i) revenue share payments based on a percentage of future sales generated from DetermaIO™ (“Royalty 1”), and (ii) revenue share payments based on percentage of future sales generated from current Insight Pharma Service offerings, as defined in the Insight Merger Agreement (“Royalty 2”). There can be no assurance that any revenues on which the Royalty Payments are based will be generated from DetermaIO™ or Pharma Service offerings. The following table shows the Insight Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability (in thousands): Schedule of Fair Value of Contingent Consideration Liability Fair Contractual Value on the Value Merger Date Milestone 1 $ 1,500 $ 1,340 Milestone 2 3,000 1,830 Milestone 3 (a) 1,500 770 Royalty 1 (b) See(b) 5,980 Royalty 2 (b) See(b) 1,210 Total $ 6,000 $ 11,130 (a) Indicates the maximum payable if the Milestone is achieved. (b) As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The fair value of the Milestone Contingent Consideration was determined using a scenario analysis valuation method which incorporates Oncocyte’s assumptions with respect to the likelihood of achievement of the Milestones, credit risk, timing of the Milestone Contingent Consideration payments and a risk-adjusted discount rate to estimate the present value of the expected payments. The discount rate was estimated at approximately 7.5 The fair value of the Royalty Contingent Consideration was determined using a single scenario analysis method to value the Royalty Payments. The single scenario method incorporates Oncocyte’s assumptions with respect to specified future revenues generated from DetermaIO™ and current Insight Pharma Services over their respective useful lives, credit risk, and a risk-adjusted discount rate to estimate the present value of the expected royalty payments. The credit and risk-adjusted discount rate was estimated at approximately 45 The fair value of the Contingent Consideration after the Insight Merger Date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in Oncocyte’s consolidated statements of operations. As of December 31, 2021, based on Oncocyte’s reassessment of the significant assumptions noted above, there was a decrease of approximately $ 60,000 to the fair value of the Contingent Consideration primarily attributable to revised estimates of the timing of the possible future payouts and, accordingly, this decrease was recorded as an unrealized gain in the consolidated statements of operations for the year ended December 31, 2021. The following table reflects the activity for Oncocyte’s Contingent Consideration since the Insight Merger Date, measured at fair value using Level 3 inputs (in thousands): Schedule of Contingent Consideration, Measured at Fair Value Fair Value Balance at January 31, 2020 $ 11,130 Change in estimated fair value (4,010 ) Balance at December 31, 2020 $ 7,120 Change in estimated fair value (60 ) Balance at December 31, 2021 $ 7,060 Contingent consideration is not deductible for tax purposes, even if paid; therefore, no deferred tax assets related to the Contingent Consideration were recorded. Goodwill – 1.3 Goodwill and identifiable intangible assets are not amortizable or deductible for tax purposes since these assets are not recognized for tax purposes. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Asset acquisition of Razor Genomics, Inc. On September 30, 2019, Oncocyte completed the purchase of 1,329,870 0.0001 25 10 Purchase Option The Purchase Agreement and Minority Shareholder Agreements granted Oncocyte the option to acquire the balance of the outstanding shares of Razor common stock from Encore under the Purchase Agreement and from the Minority Shareholders under the Minority Purchase Agreements (the “Option”) for an additional $ 10 5 On January 29, 2021, the principal shareholder of Razor informed Oncocyte that the milestone requiring Oncocyte to purchase the outstanding shares of Razor common stock had been attained under the Purchase Agreement and Minority Shareholder Purchase Agreements. On February 24, 2021, Oncocyte exercised the Option and completed the purchase of all the issued and outstanding shares of common stock of Razor and paid the selling shareholders in total $ 10 982,318 5.7 Development Agreement Under the Development Agreement, Razor reserved as a “Clinical Trial Expense Reserve” $ 4 On February 24, 2021, upon the completion of the outstanding shares of Razor common stock and consolidation of Razor’s accounts, Oncocyte obtained control of approximately $ 3.4 16 Upon completion of enrollment of the full number of patients for the Clinical Trial, Oncocyte will issue to Encore and the Minority Shareholders shares of Oncocyte common stock with an aggregate market value at the date of issue equal to $ 3 If the issuance of shares of common stock having a market value of $3 million would require Oncocyte to issue a number of shares that, when combined with any shares issued under the Purchase Agreement and the Minority Shareholder Purchase Agreements, would exceed the number of shares that may be issued without shareholder approval under applicable stock exchange rules, Oncocyte may deliver the number of shares permissible under stock exchange rules and an amount of cash necessary to bring the combined value of cash and shares to $3 million. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS If, within a specified time frame, Encore is substantially responsible for obtaining funding to Oncocyte or Razor for the Clinical Trial from any third-party pharmaceutical company, a portion of such additional funding amount will be paid to Encore, subject to a $ 3 Sublicense Agreement Under the Sublicense Agreement, Razor granted to Oncocyte an exclusive worldwide sublicense under certain patent rights applicable to DetermaRx™ in the field of use covered by the applicable license held by Razor for purposes of commercialization and development of DetermaRx™. Pursuant to the Razor Sublicense Agreement, Oncocyte will pay all royalties and all revenue sharing and earnout payments owed by Razor to certain third parties with respect to DetermaRx™ revenues, including the licensor of the patent rights sublicensed to Oncocyte, but those payments will be deducted from gross revenues to determine net revenues for the purpose of paying royalties to the former Razor shareholders. Total royalty and earnout payments to the former Razor shareholders, the licensor, and other third parties will be a low double-digit percentage, and in addition certain milestone payments may become due if cumulative net revenue benchmarks are reached. Royalties and earnout payments will be payable on a quarterly basis. This payment obligation will continue after Oncocyte’s purchase of the Razor common stock from Encore and the Minority Shareholders. Laboratory Agreement Under the Laboratory Agreement, Oncocyte has assumed Razor’s Laboratory Agreement payment obligations of $ 450,000 September 29, 2021 Accounting for the Razor Investment Beginning on the Initial Closing and through February 23, 2021, Oncocyte has accounted for the Razor investment under the equity method of accounting under ASC 323 because prior to the Additional Purchase Payment discussed above Oncocyte exercised significant influence over, but did not control, the Razor entity. Oncocyte did not control Razor because, among other factors, Oncocyte was entitled to designate one person to serve on a three-member board of directors of Razor, with the other two members designated by Encore. Also, any deadlocked decisions by a Steering Committee of Oncocyte and Encore representatives that makes decisions with respect to the Clinical Trial, other than with respect to the Clinical Trial budget, will be resolved by a member designated by Encore. Prior to February 24, 2021, the aggregate Razor acquisition payments of $ 11.245 4 10-year The Initial Closing equity method investment in Razor and the Additional Purchase Payment for the remaining interests in Razor are both considered an asset acquisition, rather than a business combination, because, among other factors, Razor had no workforce, no commercial product (Razor had granted all commercial rights to Oncocyte), no revenues, no distribution system and no facilities. Substantially all of the fair value of Razor’s assets at the Initial Closing and on February 24, 2021 was concentrated in Razor’s intangible asset, the DetermaRx™ patent and related know-how, thus satisfying the requirements of the practical screen test to be considered an asset acquisition in accordance with ASU 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As Razor became a wholly owned subsidiary of Oncocyte on February 24, 2021, the DTA associated with the previous equity method investment was reversed. There is no tax effect of this reversal as the DTA had been fully offset by a valuation allowance (see Note 8). However, upon payment of the Additional Purchase Payment, Oncocyte recorded an additional step-up to fair value for the Razor intangible asset under ASC 805-50 for financial reporting purposes but this “step-up” is not recognized for income tax purposes. As a result, the fair value adjustment of the Razor intangible asset on the acquisition date generated a DTL in accordance with ASC 740. This DTL is computed using the fair value of the intangible assets on the acquisition date multiplied by Oncocyte’s federal and state effective income tax rates, using the simultaneous equations method for asset acquisitions under the guidance provided in ASC 740-10-25-51, which requires that the DTL be recognized as part of the investment of the acquired asset instead of any immediate income tax expense or benefit arising from the recognition of the DTL. Furthermore, ASC 740 allows Oncocyte to treat acquired available deferred tax assets, such as Razor’s NOLs (subject to the annual limitation under Section 382 of the Internal Revenue Code) as available DTAs to offset against the DTLs, as the DTLs are expected to reverse within the NOL carryforward period. Any excess DTAs over those DTLs would be assessed for a valuation allowance in accordance with ASC 740. As of February 24, 2021, Oncocyte estimated and recorded a net DTL of $ 7.1 million after offsetting the acquired available NOLs with the intangible asset shown in the table below. See Note 8 for a discussion related to the partial release of Oncocyte’s valuation allowance pertaining to the DTL generated above in accordance with ASC 740. As of February 24, 2021, upon Oncocyte’s acquisition of the outstanding common stock of Razor, the Razor intangible asset balance recorded on the acquisition date and included in Intangible Assets was as follows (in thousands): Schedule of Acquisition Intangible Assets As of 2021 Razor intangible asset recorded on the acquisition date: Equity method investment carrying value $ 13,147 Cash paid as Additional Purchase Payment for the Razor asset 10,000 Oncocyte common stock issued ( 982,318 5,756 Less: cash balance received from Razor for Clinical Trial expenses (3,352 ) Deferred tax liability generated from the Razor asset 7,077 Other 169 Total Razor investment asset balance as of February 24, 2021 (a) $ 32,797 (a) This balance will be amortized over the remaining useful life of the Razor asset, approximating 8.5 Under ASC 805-50, for asset acquisitions, the remaining Clinical Trial Milestone Payment will be recorded only if the consideration is both probable (milestone has been achieved) and estimable in accordance with ASC 450, Contingencies ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Summarized standalone financial data for Razor from January 1, 2021 through February 23, 2021 The unaudited standalone results of operations for Razor prior to being consolidated with Oncocyte is summarized below (in thousands): Schedule of Condensed Statement of Operations For the period from January 1, 2021 February 23, 2021 Condensed Statement of Operations (1) (unaudited) Research and development expense $ 125 General and administrative expense - Loss from operations (125 ) Net loss $ (125 ) (1) The condensed standalone statement of operations of Razor is provided for informational purposes only. Razor’s results for the period from January 1, 2021 through February 23, 2021 are not included in Oncocyte’s consolidated results of operations because Razor was not consolidated with Oncocyte’s financial statements but had been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date, however, Oncocyte’s results included its pro rata losses from Razor. Beginning on February 24, 2021, Razor’s results are included with Oncocyte’s consolidated results, primarily consisting of outside research and development expenses incurred by Razor for the Clinical Trial discussed above. Acquisition of Chronix Biomedical, Inc. On April 15, 2021, the Chronix Merger Date, Oncocyte completed its acquisition of Chronix pursuant the Chronix Merger Agreement. During the year ended December 31, 2021, Oncocyte incurred $ 700,000 in Chronix transaction costs, including advisory, legal, accounting, valuation, and other professional and consulting fees, which were accounted for as “General and administrative” expenses in the consolidated statement of operations. Merger Consideration at Closing Pursuant to the Chronix Merger Agreement, Oncocyte agreed to deliver closing consideration consisting of approximately (i) 648,000 1.43 1.87 5.09 4.0 550,000 Contingent Consideration As additional consideration for holders of certain classes and series of Chronix capital stock, the Chronix Merger Agreement also provides for Oncocyte to pay “Chronix Contingent Consideration” consisting of (i) “Chronix Milestone Payments” of up to $ 14 15 75 The Chronix Closing Consideration and Chronix Contingent Consideration include amounts payable to certain directors, officers and employees of Chronix, including officers and employees who are expected to continue to provide services to Chronix following the Chronix Merger. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Liabilities Pursuant to the Chronix Merger Agreement, to the extent that Oncocyte or any of its subsidiaries, including Chronix, pays, performs or discharges an amount of liabilities of Chronix in excess of $ 8.25 4.6 Deferred Revenue - 3.7 million, less applicable VAT obligations, which Chronix recognized ratably over the contract term of 3.5 years. The German agreement contains a stipulation that requires Chronix to refund to the German customer a portion of the upfront fee on a pro rata basis if the German agreement is terminated prior to December 31, 2021. The deferred revenue of $738,000 recorded at the acquisition date represents the refund Oncocyte would pay to the German customer should it terminate the agreement prior to the agreed upon term. As of December 31, 2021, Oncocyte has fully amortized the deferred revenue and recorded revenue ratably over the remaining period as the German customer’s refund rights expire. Registration Rights Pursuant to the Chronix Merger Agreement, Oncocyte filed a registration statement with the SEC to register the resale of the shares of common stock under the Securities Act issued in connection with the Chronix Merger, which the SEC declared effective in July 2021. Workforce At the Chronix Merger Date, all of Chronix’s employees ceased employment with Chronix, and Oncocyte offered employment to certain of those former Chronix employees, principally in laboratory roles and certain administrative roles in Germany, and granted new equity awards to them under the Oncocyte 2018 Equity Incentive Plan. All these Oncocyte stock option awards granted have vesting terms and conditions consistent with stock options granted to most other Oncocyte employees. Aggregate Chronix Merger Consideration and Purchase Price Allocation Measurement period adjustments reflect new information obtained about facts and circumstances that existed as of the acquisition date. Final determination of the fair values may result in further adjustments to the values presented. To the extent that significant changes occur in the future, Oncocyte will disclose such changes in the reporting period in which they occur. The calculation of the aggregate merger consideration, consisting of the Closing Consideration and Chronix Contingent Consideration (the “Aggregate Chronix Merger Consideration”), at fair value, is shown in the following table (in thousands, except for share and per share amounts). In accordance with ASC 805, the Chronix Contingent Consideration, at fair value, is part of the total considered transferred on the Chronix Merger Date, as further discussed below. Schedule of Fair Value of Aggregate Merger Consideration Cash consideration $ 3,960 Settlement of acquirer/acquiree activity pre-combination, net $ 550 Stock consideration Shares of Oncocyte common stock issued on the Merger Date 647,911 Closing price per share of Oncocyte common stock on the Merger Date $ 5.09 Market value of Oncocyte common stock issued $ 3,298 Contingent Consideration $ 42,295 Total fair value of consideration transferred on the Merger Date $ 50,103 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Pursuant to ASC 805, Business Combinations (“ASC 805”), Oncocyte accounted for the Chronix acquisition as a business combination using the acquisition method of accounting. Identifiable assets and liabilities of Chronix, including identifiable intangible assets, were recorded based on their fair values as of the date of the closing of the acquisition. The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill. Upon further review of the assets acquired and liabilities assumed, it was determined that the amount previously reported as assumed liabilities were not properly reflected. The following has been updated to reflect the assets acquired and liabilities as of the date of acquisition. The following table sets forth the allocation of the Aggregate Chronix Merger Consideration transferred to Chronix’s tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Schedule of Intangible Assets Acquired and Liabilities Assumed April 15, 2021 Assets acquired: Cash and cash equivalents $ 50 Accounts receivable and other current assets 25 Long-term assets 12 Acquired in-process research and development 46,800 Total identifiable assets acquired (a) 46,887 Liabilities assumed: Deferred revenue 738 Assumed liability 3,352 Long-term deferred income tax liability 2,184 Total identifiable liabilities assumed (b) 6,274 Net assets acquired, excluding goodwill (a) - (b) = (c) 40,613 Total cash, contingent consideration, and stock consideration transferred (d) 50,103 Goodwill (d) - (c) $ 9,490 All tangible assets and liabilities were valued at their respective carrying amounts as management believes that these amounts approximated their acquisition date fair values. The following is a discussion of the valuation methods and significant assumptions used to determine the fair value of Chronix’s material assets and liabilities in connection with the Chronix Merger: Acquired In-Process Research and Development and Deferred Income Tax Liability – 46.8 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS To calculate fair value of the TheraSure™ test assets under MPEEM, Oncocyte used probability-weighted, projected cash flows discounted at a rate considered appropriate given the significant inherent risks associated with similar assets. Cash flows were calculated based on projections of revenues and expenses related to the asset and were assumed to extend through a multi-year projection period. The discount rate used to value TheraSure™ test assets was approximately 12 Because the IPR&D is considered an indefinite-lived asset for accounting purposes but is not recognized for tax purposes, the fair value of the IPR&D on the acquisition date generated a DTL in accordance with ASC 740, Income Taxes. This DTL is computed using the fair value of the IPR&D assets on the acquisition date multiplied by Oncocyte’s federal and state effective income tax rates. ASC 740 allows Oncocyte to treat acquired available DTAs, such as Chronix’s NOLs (subject to the annual limitation under Section 382 of the Internal Revenue Code) as available DTAs to offset against the DTLs, as the DTLs are expected to reverse within the NOL carryforward period. Any excess DTAs over those DTLs would be assessed for a valuation allowance in accordance with ASC 740. This accounting treatment is acceptable if, at the time of the acquisition, Oncocyte can both reasonably estimate a timeline to commercialization and the economic useful life of the IPR&D assets upon commercialization, which will be amortized during the carryforward period of the offsetting DTAs. Oncocyte estimated and recorded a net DTL of $ 2.2 million after offsetting the acquired available NOLs with the IPR&D generated DTLs (see Note 8). Contingent consideration liabilities The fair value of the Milestone Payments was determined using a scenario analysis valuation method which incorporates Oncocyte’s assumptions with respect to the likelihood of achievement of the milestones defined in the Chronix Merger Agreement, credit risk, timing of the Milestone Payments and a risk-adjusted discount rate to estimate the present value of the expected payments. The discount rate was estimated at approximately 8 The fair value of the Royalty Payments was determined using a single scenario analysis method. The single scenario method incorporates Oncocyte’s assumptions with respect to |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | 4. Goodwill and Intangible Assets, net As of December 31, 2021 and 2020, goodwill and intangible assets, net, consisted of the following (in thousands): Schedule of Goodwill and Intangible Assets December 31, 2021 December 31, 2020 Goodwill - Insight Merger (1) $ 9,194 $ 9,187 Goodwill - Chronix Merger (1) 9,490 - Total Goodwill 18,684 9,187 Intangible assets: Acquired IPR&D - DetermaIO TM (2) $ 14,650 $ 14,650 Acquired IPR&D - TheraSure™ (3) 46,800 - Intangible assets subject to amortization: Acquired intangible assets - customer relationship – Insight (see Note 3) 440 440 Acquired intangible assets - Razor (5) 32,797 - Total intangible assets 94,687 15,090 Accumulated amortization - customer relationship (4) (169 ) (81 ) Accumulated amortization - Razor (4) (3,273 ) - Intangible assets, net $ 91,245 $ 15,009 (1) Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Insight Merger and the Chronix Merger (see Note 3). (2) See Note 3 for information on the Insight Merger. (3) See Note 3 for information on the Chronix Merger. (4) Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the consolidated statements of operations in the current year because the intangible assets pertain directly to the revenues generated from the acquired intangibles. (5) Razor intangible assets represents acquired Razor assay. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Future amortization expense is expected to be the following (in thousands): Schedule of Intangible Assets Future Amortization Expense Amortization Year ending December 31, 2022 3,856 2023 3,904 2024 3,904 2025 3,823 2026 3,816 Thereafter 10,493 Total $ 29,796 |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Shareholders’ Equity | 5. Shareholders’ Equity Preferred Stock Oncocyte is authorized to issue up to 5,000,000 no no Common Stock Oncocyte has 230,000,000 shares of no par value common stock authorized. The holders of Oncocyte’s common stock are entitled to receive ratably dividends when, as, and if declared by the Board of Directors out of funds legally available. Upon liquidation, dissolution, or winding up, the holders of Oncocyte common stock are entitled to receive ratably the net assets available after the payment of all debts and other liabilities and subject to the prior rights of Oncocyte outstanding preferred shares, if any. The holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of Oncocyte stockholders. The holders of common stock have no preemptive, subscription, or redemption rights. The outstanding shares of common stock are fully paid and non-assessable. Under the ATM Agreement, during the year ended December 31, 2020, Oncocyte sold 1,136,673 2.65 0.3 On June 11, 2021, Oncocyte entered into an at-the-market sales agreement with BTIG, LLC as sales agent and/or principal (the “Agent”) pursuant to which Oncocyte may sell up to an aggregate of $ 50,000,000 As of December 31, 2021 and 2020, Oncocyte had 92,231,917 and 69,116,802 issued and outstanding shares of common stock, respectively. See Note 11 with respect to certain financing transactions pursuant to which Oncocyte sold shares of common stock and common stock purchase warrants during the years ended December 31, 2021 and 2020. Common Stock Purchase Warrants As of December 31, 2021, Oncocyte had an aggregate of 2,251,576 common stock purchase warrants issued and outstanding with exercise prices ranging from $ 1.69 to $ 5.50 per warrant. The warrants will expire on various dates through October 17, 2029 . Certain warrants have “cashless exercise” provisions meaning that the value of a portion of warrant shares may be used to pay the exercise price rather than payment in cash, which may be exercised under any circumstances in the case of the 2017 Bank Warrants and 2019 Bank Warrants or, in the case of certain other warrants, only if a registration statement for the warrants and underlying shares of common stock is not effective under the Securities Act or a prospectus in the registration statement is not available for the issuance of shares upon the exercise of the warrants. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Oncocyte has considered the guidance in ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Stock Option Exercises During the years ended December 31, 2021 and 2020, 924,000 and 680,308 shares of common stock, respectively, were issued upon the exercise of stock options, from which Oncocyte received $ 2.6 million and $ 1.4 million in cash proceeds, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 6. Stock-Based Compensation Stock Option Plan Oncocyte had a 2010 Stock Option Plan (the “2010 Plan”) under which 5,200,000 On August 27, 2018, Oncocyte shareholders approved a new Equity Incentive Plan (as amended, the “2018 Incentive Plan”) to replace the 2010 Plan. In adopting the 2018 Incentive Plan, Oncocyte terminated the 2010 Plan and will not grant any additional stock options or sell any stock under restricted stock purchase agreements under the 2010 Plan; however, stock options issued under the 2010 Plan will continue in effect in accordance with their terms and the terms of the 2010 Plan until the exercise or expiration of the individual options. On July 24, 2021, Oncocyte amended the 2018 Equity Incentive Plan. As of December 31, 2021, the 2018 Incentive Plan reserved 21,000,000 shares of common stock for the grant of stock options or the sale of restricted stock (“Restricted Stock”) or for the settlement of hypothetical units issued with reference to common stock (“Restricted Stock Units”). Oncocyte may also grant stock appreciation rights (“SARs”) under the 2018 Incentive Plan. The 2018 Incentive Plan also permits Oncocyte to issue such other securities as its Board of Directors (the “Board”) or the Compensation Committee (the “Committee”) administering the 2018 Incentive Plan may determine. Awards of stock options, Restricted Stock, SARs, and Restricted Stock Units (“Awards”) may be granted under the 2018 Incentive Plan to Oncocyte employees, directors, and consultants. Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse on the date of grant or in periodic installments or upon the attainment of performance goals, or upon the occurrence of specified events. Awards may not vest, in whole or in part, earlier than one year from the date of grant. Vesting of an Award after the date of grant may be accelerated only in the limited circumstances specified in the 2018 Incentive Plan. In the case of the acceleration of vesting of any performance-based Award, acceleration of vesting shall be limited to actual performance achieved, pro rata achievement of the performance goal(s) on the basis for the elapsed portion of the performance period, or a combination of actual and pro rata achievement of performance goals. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS No person shall be granted, during any one-year period, options to purchase, or SARs with respect to, more than 1,000,000 500,000 No Awards may be granted under the 2018 Incentive Plan more than ten years after the date upon which the 2018 Incentive Plan was adopted by the Board, and no options or SARS granted under the 2018 Incentive Plan may be exercised after the expiration of ten years from the date of grant. Stock Options Options granted under the 2018 Incentive Plan may be either “incentive stock options” within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”), or “non-qualified” stock options that do not qualify incentive stock options. Incentive stock options may be granted only to Oncocyte employees and employees of subsidiaries. The exercise price of stock options granted under the 2018 Incentive Plan must be equal to the fair market of Oncocyte common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of Oncocyte stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of the common stock on the grant date, and the term of the option may be no longer than five years. 100,000 The exercise price of an option may be payable in cash or in common stock having a fair market value equal to the exercise price, or in a combination of cash and common stock, or other legal consideration for the issuance of stock as the Board or Committee may approve. Generally, options will be exercisable only while the optionee remains an employee, director or consultant, or during a specific period thereafter, but in the case of the termination of an employee, director, or consultant’s services due to death or disability, the period for exercising a vested option shall be extended to the earlier of 12 months after termination or the expiration date of the option. Restricted Stock and Restricted Stock Units In lieu of granting options, Oncocyte may enter into purchase agreements with employees under which they may purchase or otherwise acquire Restricted Stock or Restricted Stock Units subject to such vesting, transfer, and repurchase terms, and other restrictions. The price at which Restricted Stock may be issued or sold will be not less than 100% of fair market value. Subject to the restrictions set with respect to the particular Award, a recipient of Restricted Stock generally shall have the rights and privileges of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld for the recipient’s account, and interest may be credited on the amount of the cash dividends withheld. The cash dividends or stock dividends so withheld and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the recipient in cash or, at the discretion of the Board or Committee, in shares of common stock having a fair market value equal to the amount of such dividends, if applicable, upon the release of restrictions on the Restricted Stock and, if the Restricted Stock is forfeited, the recipient shall have no right to the dividends. The terms and conditions of a grant of Restricted Stock Units shall be determined by the Board or Committee. No shares of common stock shall be issued at the time a Restricted Stock Unit is granted. A recipient of Restricted Stock Units shall have no voting rights with respect to the Restricted Stock Units. Upon the expiration of the restrictions applicable to a Restricted Stock Unit, Oncocyte will either issue to the recipient, without charge, one share of common stock per Restricted Stock Unit or cash in an amount equal to the fair market value of one share of common stock. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At the discretion of the Board or Committee, each Restricted Stock Unit (representing one share of common stock) may be credited with cash and stock dividends paid in respect of one share (“Dividend Equivalents”). Dividend Equivalents shall be withheld for the recipient’s account, and interest may be credited on the amount of cash Dividend Equivalents withheld. Dividend Equivalents credited to a recipient’s account and attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or in shares of common stock having a fair market value equal to the amount of the Dividend Equivalents and earnings, if applicable, upon settlement of the Restricted Stock Unit. If a Restricted Stock Unit is forfeited, the recipient shall have no right to the related Dividend Equivalents. Equity awards activity A summary of Oncocyte equity awards activity under the 2010 Plan and related information follows (in thousands except weighted average exercise price): Summary of Stock Option Activity Shares Number Weighted Available of Options Average Options for Grant Outstanding Exercise Price Balance at December 31, 2020 - 1,218 $ 3.55 Options exercised - (164 ) $ 2.28 Options forfeited, canceled and expired - (131 ) $ 4.11 Balance at December 31, 2021 - 923 $ 3.65 Exercisable at December 31, 2021 923 $ 3.65 In 2018, under the 2010 Plan, Oncocyte granted certain stock options with exercise prices ranging from $ 2.30 3.15 47,500 101,000 125,000 265,000 466,000 no At December 31, 2021 and 2020, Oncocyte had approximately $ 19.1 million and $ 8.1 million, respectively, of total unrecognized compensation expense related to the 2010 Plan and 2018 Incentive Plan that will be recognized over a weighted-average period of approximately 2.7 years and 2.5 years, respectively. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of 2018 Incentive Plan activity and related information follows (in thousands except weighted average exercise price): Summary of Stock Option Activity Shares Number Number Weighted Available of Options of RSUs Average for Grant Outstanding Outstanding Exercise Price Balance at December 31, 2020 3,346 7,212 201 $ 2.60 RSUs vested - - (201 ) n/a RSUs granted (121 ) - 121 $ - Options increase from Plan Amendment 10,000 - - n/a Options granted (5,615 ) 5,615 - $ 4.72 Options exercised - (760 ) - $ 2.96 Options forfeited/cancelled 1,396 (1,396 ) - $ 3.17 Balance at December 31, 2021 9,006 10,671 121 $ 3.63 Options exercisable at December 31, 2021 3,291 $ 2.52 Additional information regarding Oncocyte’s outstanding stock options and vested and exercisable stock options is summarized below: Schedule of Stock Options Outstanding, Vested and Exercisable Options Outstanding as of December 31, 2021 Exercise Prices Number of Shares Weighted Average Weighted Average $ 2.12 3.80 1,163 8.98 $ 3.05 $ 3.91 5.21 983 9.54 4.24 $ 5.31 6.50 3,469 8.58 5.42 $ 2.12 6.50 5,615 8.82 $ 4.72 Oncocyte recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020 (in thousands): Summary of Stock-based Compensation Expense Year Ended December 31, 2021 2020 Cost of revenues $ 255 $ 93 Research and development 1,517 1,245 Sales and marketing 1,296 541 General and administrative 3,773 3,187 Total stock-based compensation expense $ 6,841 $ 5,066 The weighted-average estimated fair value of stock options with service-conditions granted during the years ended December 31, 2021 and 2020 was $ 3.66 2.42 Schedule of Assumptions Used to Calculate Fair Value of Stock Options Year Ended December 31, 2021 2020 Expected life (in years) 6.00 6.00 Risk-free interest rates 1.02 % 1.08 % Volatility 98.88 % 103.73 % Dividend yield - % - % The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If Oncocyte had made different assumptions, its stock-based compensation expense and net loss for years ended December 31, 2021 and 2020 may have been significantly different. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. |
Disaggregation of Revenues and
Disaggregation of Revenues and Concentration Risk | 12 Months Ended |
Dec. 31, 2021 | |
Disaggregation Of Revenues And Concentration Risk | |
Disaggregation of Revenues and Concentration Risk | 7. Disaggregation of Revenues and Concentration Risk The tables present certain information concerning source of Oncocyte revenues for the years ended December 31, 2021 and December 31, 2020. The following table presents the percentage of consolidated revenues attributable to products or services classes that represent greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Attributable to Products or Services Year Ended December 31, 2021 2020 DetermaRx™ 32 % 45 % Pharma Services 19 % 55 % Licensing 49 % - Total 100 % 100 % The following table presents the percentage of consolidated revenues received from unaffiliated customers that individually represent greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers Year Ended December 31, 2021 2020 Medicare for DetermaRx TM 17 % 40 % Medicare Advantage for DetermaRx TM 14 % - * Pharma services Company A - * 23 % Pharma services Company B - * 12 % Licensing - Company D 40 % - * Licensing - Company B 10 % - * * Less than 10% The following table presents the percentage of consolidated revenues attributable to geographical locations: Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations Year Ended December 31, 2021 2020 United States 45 % 61 % Outside of the United States – Pharma Services 6 % 39 % Outside of the United States – Licensing 49 % - Total 100 % 100 % The following table presents accounts receivable, as a percentage of total consolidated accounts receivables, from third-party payers and other customers that provided in excess of 10% of Oncocyte’s total accounts receivable. Schedule of Percentage of Total Consolidated Accounts Receivables December 31, 2021 December 31, 2020 Medicare for DetermaRx™ 9 % 45 % Medicare Advantage for DetermaRx™ 65 % * Pharma Services Company A * 35 % ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes A deferred income tax benefit of $ 9.3 million ($ 8.1 million U.S. federal and $ 1.2 million state) and $ 1.3 ($ 1.1 million federal and $ 0.2 million state) was recorded for the years ended December 31, 2021 and December 31, 2020, respectively. Oncocyte has filed standalone U.S. federal income tax returns since its inception and will file a consolidated return with its subsidiaries for the years ended December 31, 2021 and 2020. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The primary components of the deferred tax assets and liabilities at December 31, 2021 and 2020 were as follows (in thousands): Schedule of Components of Deferred Tax Assets and Liabilities 2021 2020 Deferred tax assets/(liabilities): Net operating loss carryforwards and capital loss carryforwards $ 51,051 $ 29,203 Research and development credit carryforwards 3,148 2,638 Marketable equity securities 193 261 Stock-based and other compensation 2,398 1,855 Equity method investment in Razor - 404 Right-of-use liability 949 1,064 Other - 168 Total deferred tax assets 57,739 35,593 Valuation allowance (37,167 ) (31,752 ) Deferred tax assets, net of valuation allowance 20,572 3,841 Right-of-use asset (591 ) (712 ) Intangibles and fixed assets (19,981 ) (3,129 Total deferred tax liabilities (20,572 ) (3,841 ) Net deferred tax assets $ - $ - In connection with the Merger discussed in Note 3 and in accordance with ASC 805, a change in the acquirer’s valuation allowance that stems from a business combination should be recognized as an element of the acquirer’s income tax expense or benefit in the period of the acquisition. Accordingly, for the year ended December 31, 2021, Oncocyte recorded a $ 9.3 million partial release of its valuation allowance and a corresponding income tax benefit stemming from the DTLs generated by the IPR&D and customer relationships intangible assets acquired in the Merger. Schedule of Income Tax Reconciliation 2021 2020 Computed tax benefit at federal statutory rate 21 % 21 % Permanent differences (1 )% 2 % State tax benefit 2 % 4 % Research and development credits - % 1 % Other - % - % Change in fair value consideration (8 )% - % Change in valuation allowance (1 )% (24 )% Income tax benefit percentage 13 % 4 % Income taxes differed from the amounts computed by applying the applicable U.S. federal income tax rates indicated to pretax losses from operations as a result of the following: ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2021, Oncocyte had net operating loss carryforwards of approximately $ 204.8 million for U.S. federal income tax purposes and $ 95.5 million for state income tax purposes. Federal net operating losses generated on or prior to December 31, 2017 expire in varying amounts between 2022 and 2037 , while federal net operating losses generated after December 31, 2017 carryforward indefinitely. The state net operating losses expire in varying amounts between 2022 and 2041 . Oncocyte also has capital loss carryforwards for federal and state income tax purposes of $ 0.3 million each which expire in 2022. As of December 31, 2021, Oncocyte has research and development credit carryforwards for federal and state purposes of $ 2.4 million and $ 2.1 million, respectively. The federal credits will expire between 2030 and 2041 , while the state credits have no expiration. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. Other than the partial release discussed above, Oncocyte established a full valuation allowance for all periods presented due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. The change in the valuation allowance was $ 5.4 million and $ 7.6 million for the years ended December 31, 2021 and 2020, respectively. Oncocyte has uncertain tax benefits (“UTBs”) totaling $ 1.4 million and $ 3.1 million as of December 31, 2021 and 2020, respectively, which were netted against deferred tax assets subject to valuation allowance as shown below. The UTBs had no effect on the effective tax rate and there would be no cash tax impact for any period presented. Oncocyte recognizes interest and penalties related to UTBs, when they occur, as a component of income tax expense. There were no interest or penalties recognized for the years ended December 31, 2021 and 2020. In 2021, Oncocyte received approval for its petition for alternative apportionment in California by the Franchise Tax Board. As a result, Oncocyte has derecognized its uncertain tax position of $ 2.2 M in the current year. There is no financial statement impact as the uncertain tax positions were previously offset against Oncocyte’s California net operating losses, which would otherwise have a full valuation allowance. Oncocyte does not expect its UTBs to change significantly over the next twelve months. A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands): Schedule of Unrecognized Tax Benefit 2021 2020 December 31, 2021 2020 (in thousands) Balance at the beginning of the year $ 3,052 $ 2,888 Additions based on tax positions related to current year 511 149 Adjustments based on tax positions related to prior years - 15 Settlements (2,173 ) Balance at end of year $ 1,390 $ 3,052 Other Income Tax Matters Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. California has similar rules. Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the NOL and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. In general, Oncocyte is no longer subject to tax examination by the Internal Revenue Service or state taxing authorities for years before 2017. Although the federal and state statutes are closed for purposes of assessing additional income tax in those prior years, the taxing authorities may still make adjustments to the NOL and credit carryforwards used in open years. Therefore, the tax statutes should be considered open as it relates to the NOL and credit carryforwards used in open years. For tax years that remain open to examination, potential examinations may include questioning of the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with the Internal Revenue Code or state tax laws. Oncocyte’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Oncocyte’s practice is to recognize interest and penalties related to income tax matters in tax expense. As of December 31, 2021 and 2020, Oncocyte has no accrued interest and penalties. Tax Filings Oncocyte tax filings are subject to audit by taxing authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. Management believes Oncocyte has adequately provided for any ultimate amounts that are likely to result from these audits; however, final assessments, if any, could be significantly different than the amounts recorded in the consolidated financial statements. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Right-of-use Assets, Machinery
Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress | 9. Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress As of December 31, 2021 and 2020, rights-of-use assets, machinery and equipment, net, and construction in progress were comprised of the following (in thousands): Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress December 31, 2021 December 31, 2020 Right-of-use assets (1) 3,499 3,397 Machinery and equipment 6,501 2,480 Accumulated depreciation and amortization (2,715 ) (1,440 ) Right-of-use assets, machinery and equipment, net 7,285 4,437 Construction in progress 1,242 2,087 Right-of-use assets, machinery and equipment, net, and construction in progress 8,527 6,524 (1) Oncocyte recorded certain right-of-use assets and liabilities for operating leases in accordance with ASC 842 (see Note 10). Depreciation expense amounted to approximately $ 844,000 313,000 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Oncocyte has certain commitments other than those discussed in Note 3. Office Lease Agreement On December 23, 2019, Oncocyte entered into an Office Lease Agreement (the “Irvine Lease”) of a building containing approximately 26,800 square feet of rentable space located at 15 Cushing in Irvine California (the “Premises”) that will serve as Oncocyte’s new principal executive and administrative offices and laboratory facility. Oncocyte completed the relocation of its offices to the Premises in January 2020. Oncocyte has constructed a laboratory at the Irvine facility to perform cancer diagnostic tests. The Irvine Lease has an initial term of 89 calendar months (the “Term”), which commenced on June 1, 2020 (the “Commencement Date”). Oncocyte has an option to extend the Term for a period of five years (the “Extended Term”). Oncocyte will pay base monthly rent in the amount of $ 61,640 3.5 50 If Oncocyte exercises its option to extend the Term, the initial base monthly rent during the Extended Term will be the greater of the base monthly rent in effect during the last year of the Term or the prevailing market rate. The prevailing market rate will be determined based on annual rental rates per square foot for comparable space in the area where the Premises are located. If Oncocyte does not agree with the prevailing market rate proposed by the lessor, the rate may be determined through an appraisal process. The base monthly rent during the Extended Term shall be subject to the same annual rent adjustment as applicable for base monthly rent during the Term. In addition to base monthly rent, Oncocyte will pay in monthly installments (a) all costs and expenses, other than certain excluded expenses, incurred by the lessor in each calendar year in connection with operating, maintaining, repairing (including replacements if repairs are not feasible or would not be effective) and managing the Premises and the building in which the Premises are located (“Expenses”), and (b) all real estate taxes and assessments on the Premises and the building in which the Premises are located, all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Premises, and costs and fees incurred in connection with seeking reductions in such tax liabilities (“Taxes”). Subject to certain exceptions, Expenses shall not be increased by more than 4% annually on a cumulative, compounded basis. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Oncocyte was entitled to an abatement of its obligations to pay Expenses and Taxes while constructing improvements to the Premises constituting “Tenant’s Work” under the Lease prior to the Commencement Date, except that Oncocyte was obligated to pay 43.7 The lessor has agreed to provide Oncocyte with a “Tenant Improvement Allowance” in the amount of $ 1,340,000 to pay for the plan, design, permitting, and construction of the improvements constituting Tenant’s Work. The lessor shall be entitled to retain 1.5 % of the Tenant Improvement Allowance as an administrative fee. As of December 31, 2021, the lessor had provided $ 1.3 million of the total Tenant Improvement Allowance. Oncocyte has provided the lessor with a security deposit in the amount of $ 150,000 1,700,000 To obtain the letter of credit, Oncocyte has provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor. The restricted cash may not be used for any other purpose. On August 27, 2021, Oncocyte entered into a lease agreement to add an additional suite to its Nashville office space, containing approximately 1,928 Application of leasing standard, ASC 842 The Irvine Lease is an operating lease under ASC 842 included in the tables below. The tables below provide the amounts recorded in connection with the application of ASC 842 as of, and during, the year ended December 31, 2021, for Oncocyte’s operating and financing leases (see Note 2). Under the Laboratory Agreement discussed in Note 3, Oncocyte assumed all of Razor’s Laboratory Agreement payment obligations. Although Oncocyte is not a party to any lease agreement with Razor or Encore, under the terms of the Laboratory Agreement, Oncocyte received the landlord’s consent for the use of the laboratory at Razor’s Brisbane, California location (the “Brisbane Facility”) under the terms of a sublease to which Encore is the sublessee. The sublease expires on March 31, 2023 (the “Brisbane Lease”). The laboratory fee payments to Encore include both laboratory services and the use of the Brisbane Facility. Under the provisions of the Laboratory Agreement, if Oncocyte terminates the Laboratory Agreement prior to the expiration of the Brisbane Lease, Oncocyte shall assume the costs related to the subletting or early termination of the Brisbane Lease. If the Laboratory Agreement were to be terminated on December 31, 2021, the aggregate payments due to the landlord for early cancellation of the Brisbane Lease would be approximately $ 192,000 (aggregate payments from December 31, 2021 through March 31, 2023). Oncocyte determined that the Laboratory Agreement contains an embedded operating lease for the Brisbane Facility and Oncocyte allocated the aggregate payments to this lease component for purposes of calculating the net present value of the right-of-use asset and liability as of the inception of the Laboratory Agreement in accordance with ASC 842, as shown in the table below. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Financing lease As of December 31, 2021, Oncocyte has one financing lease remaining through December 2023 for certain laboratory equipment with aggregate remaining payments of $ 248,000 Operating and Financing leases The following table presents supplemental cash flow information related to operating and financing leases for the year ended December 31, 2021 (in thousands): Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease 2021 2020 Year Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from operating leases 1,042 552 Operating cash flows from financing leases 147 9 Financing cash flows from financing leases 34 71 Right-of-use assets obtained in exchange for lease obligations Operating lease, including lease acquired in Insight Genetics business combination - 536 The following table presents supplemental balance sheet information related to operating and financing leases as of December 31, 2021 (in thousands, except lease term and discount rate): Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases December 31, 2021 Operating lease Right-of-use assets, net $ 2,579 Right-of-use lease liabilities, current $ 715 Right-of-use lease liabilities, noncurrent 3,428 Total operating lease liabilities $ 4,143 Financing lease Machinery and equipment $ 537 Accumulated depreciation (337 ) Machinery and equipment, net $ 200 Current liabilities $ 104 Noncurrent liabilities 117 Total financing lease liabilities $ 221 Weighted average remaining lease term Operating lease 5.3 Financing lease 2 .0 years Weighted average discount rate Operating lease 11.17 % Financing lease 11.55 % ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table presents future minimum lease commitments as of December 31, 2021 (in thousands): Schedule of Future Minimum Lease Commitments for Operating and Financing Leases Operating Financing Leases Leases Year Ending December 31, 2022 $ 1,143 $ 124 2023 1,048 124 2024 903 - 2025 869 - 2026 899 - Thereafter 695 - Total minimum lease payments $ 5,557 $ 248 Less amounts representing interest (1,413 ) (28 ) Present value of net minimum lease payments $ 4,144 $ 220 Litigation – General Oncocyte will be subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and other matters. When Oncocyte is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, Oncocyte will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, Oncocyte discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. Employment Contracts Oncocyte has entered into employment and severance benefit contracts with certain executive officers. Under the provisions of the contracts, Oncocyte may be required to incur severance obligations for matters relating to changes in control, as defined, and certain terminations of executives. As of December 31, 2021, Oncocyte accrued approximately $ 2.4 million in severance obligations for certain executive officers, in accordance with the severance benefit provisions of their respective employment and severance benefit agreements, related to Oncocyte’s acquisition of Chronix Biomedical Inc. in 2021. Indemnification In the normal course of business, Oncocyte may provide indemnification of varying scope under Oncocyte’s agreements with other companies or consultants, typically Oncocyte’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, Oncocyte will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties in connection with the use or testing of Oncocyte’s diagnostic tests. Indemnification provisions could also cover third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to Oncocyte’s diagnostic tests. Oncocyte’s office and laboratory facility leases also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from Oncocyte’s use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, lease, or license agreement to which they relate. The Purchase Agreement also contains provisions under which Oncocyte has agreed to indemnify Razor and Encore from losses and expenses resulting from breaches or inaccuracy of Oncocyte’s representations and warranties and breaches or nonfulfillment of Oncocyte’s covenants, agreements, and obligations under the Purchase Agreement. The potential future payments Oncocyte could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, Oncocyte has not been subject to any claims or demands for indemnification. Oncocyte also maintains various liability insurance policies that limit Oncocyte’s financial exposure. As a result, Oncocyte management believes that the fair value of these indemnification agreements is minimal. Accordingly, Oncocyte has not recorded any liabilities for these agreements as of December 31, 2021 and 2020. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions Financing Transactions On January 2, 2020, Oncocyte entered into Subscription Agreements with selected investors, including Broadwood Partners, L.P. (“Broadwood”) and certain funds and accounts managed by Pura Vida Investments LLC (“Pura Vida”), in a registered direct offering of 3,523,776 2.156 7.6 5 During April 2020, Oncocyte sold 4,733,700 2.27 10.75 On January 20, 2021, Oncocyte entered into Subscription Agreements with certain institutional investors for a registered direct offering of 7,301,410 no 3.424 25.0 On February 9, 2021, Oncocyte completed an underwritten public offering of 8,947,000 4.50 37.5 600,000 On September 23, 2021, Oncocyte entered into a Warrant Exercise Agreement with Broadwood, pursuant to which (i) Oncocyte agreed to reduce the exercise price of a common stock warrant held by Broadwood to purchase up to 573,461 3.25 3.1525 573,461 1,807,835.81 Consulting Services During the three months ended March 31, 2020, Oncocyte incurred consulting fees of $ 0.3 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Loan Payable to Silicon Valley
Loan Payable to Silicon Valley Bank | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Loan Payable to Silicon Valley Bank | 12. Loan Payable to Silicon Valley Bank Amended Loan Agreement On October 17, 2019, Oncocyte entered into a First Amendment to Loan and Security Agreement (the “Amended Loan Agreement”) with the Bank pursuant to which Oncocyte obtained a new $ 3 400,000 116,000 2 20 TM Payments of interest only on the principal balance were due monthly from the draw date through March 31, 2020, followed by 24 monthly payments of principal and interest, but the Bank has agreed to a deferral of principal payments, as discussed below. The outstanding principal balance of the loan will bear interest at a stated floating annual interest equal to the greater of (a) the prime rate or (b) 5 3.25 On April 2, 2020, as part of the Bank’s COVID-19 pandemic relief program, Oncocyte and the Bank entered into a Loan Deferral Agreement (“Loan Deferral”) with respect to the Amended Loan Agreement. Under the Loan Deferral Agreement, the Bank agreed to (i) extend the scheduled maturity date of the Amended Loan Agreement from March 31, 2022 to September 30, 2022, and (ii) deferred the principal payments by an additional 6 months whereby payments of interest only on the Bank loan principal balance will be due monthly from May 1, 2020 through October 1, 2020, followed by 23 monthly payments of principal and interest beginning on November 1, 2020, all provided at no additional fees to Oncocyte. Debt – Modifications and Extinguishments At maturity of the loan, Oncocyte will also pay the Bank an additional final payment fee of $ 200,000 12,000 Oncocyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 2.0% of the outstanding principal balance if prepaid more than one year but less than two years after October 17, 2019, or 1.0% of the outstanding principal balance if prepaid two years or more after October 17, 2019. Any amounts borrowed and repaid may not be reborrowed. The outstanding principal amount of the loan, with interest accrued, the final payment fee, and the prepayment fee may become due and payable prior to the applicable maturity date if an “Event of Default” as defined in the Amended Loan Agreement occurs. Oncocyte was in compliance with the Amended Loan Agreement as of the filing date of this Report. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Bank Warrants In 2017, in connection with the Loan Agreement, Oncocyte issued common stock purchase warrants to the Bank (the “2017 Bank Warrants”) entitling the Bank to purchase shares of Oncocyte common stock in tranches related to the loan tranches under the Loan Agreement. In conjunction with the availability of the loan, the Bank was issued warrants to purchase 8,247 4.85 7,321 5.46 On October 17, 2019, in conjunction with Tranche 1 becoming available under the Amended Loan Agreement, Oncocyte issued a common stock purchase warrant to the Bank (the “2019 Bank Warrant”) entitling the Bank to purchase 98,574 1.69 0.02 1 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | 13. Quarterly Financial Data (unaudited) The following table sets forth unaudited consolidated statements of operations data for the eight quarters in the period ended December 31, 2021. This information has been derived from Oncocyte’s unaudited condensed consolidated financial statements that have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the information when read in conjunction with the audited consolidated financial statements and related notes thereto. Oncocyte’s quarterly results have been, and may in the future be, subject to significant fluctuations. As a result, Oncocyte believes that results of operations for interim periods should not be relied upon as any indication of the results to be expected in any future periods. Schedule of Quarterly Financial Information Mar. 31, Jan. 30, Sep. 30, Dec. 31, Mar. 31, Jan. 30, Sep. 30, Dec. 31, Quarter Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Revenues 16 143 555 503 1,124 2,030 984 3,589 Cost of revenues 173 365 601 716 1,045 2,424 1,850 2,220 Research and development expenses 2,159 3,225 2,615 1,800 3,361 2,537 3,142 4,591 Sales and marketing expenses 1,490 1,562 1,568 1,874 2,254 2,673 2,931 3,309 General and administrative expenses 4,625 3,759 4,995 3,410 4,764 7,934 5,495 4,143 Change in fair value of contingent consideration - - (2,980 ) (1,030 ) 1,060 30 1,170 25,006 Loss from operations (8,431 ) (8,768 ) (6,244 ) (6,267 ) (11,360 ) (13,568 ) (13,604 ) (35,680 ) Other income (expense) (396 ) (340 ) (539 ) (201 ) (123 ) 1,281 (196 ) (108 ) Loss before income taxes (8,827 ) (9,108 ) (6,783 ) (6,468 ) (11,483 ) (12,287 ) (13,800 ) (35,788 ) Income tax benefit 1,095 - - 159 7,564 1,794 - (97 ) Net Loss (7,732 ) (9,108 ) (6,783 ) (6,309 ) (3,919 ) (10,493 ) (13,800 ) (35,885 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Co-Development Agreement with Life Technologies Corporation On January 13, 2022, Oncocyte entered into a Collaboration Agreement (the “LTC Agreement”) with Life Technologies Corporation, a Delaware corporation and subsidiary of Thermo Fisher Scientific (“LTC” and together with Oncocyte, the “Parties” or individually, a “Party”), in order to partner in the development and collaborate in the commercialization of Thermo Fisher Scientific’s existing Oncomine Comprehensive Assay Plus (“OCA Plus”) and Oncocyte’s Determa IO assay for use with LTC’s Ion Torrent TM TM TM TM in vitro Development Under the terms of the LTC Agreement, Oncocyte will clinically validate LTC’s OCA Plus assay, which is LTC’s proprietary NGS-based assay designed to be run on the Genexus system as an IVD assay (the “Collaboration LTC Product”) and Oncocyte’s Determa IO assay, which is a multivariate gene expression test performed on FFPE biopsy specimens, as an IVD assay run on the Genexus system (the “Collaboration Determa Product”), paving the way toward regulatory approval for use in tumor profiling and guidance of therapy selection for solid tumor cancers in humans. LTC retains the exclusive right to partner with therapeutics companies to develop the Collaboration LTC Product as a companion diagnostic. Oncocyte retains the exclusive right to partner with therapeutics companies to develop the Collaboration Determa Product as a companion diagnostic. All development work will be conducted pursuant to development plans agreed by the Parties through a series of governance committees that will oversee the collaboration. Costs Associated with Product Development Oncocyte will be responsible for all costs associated with Oncocyte activities under the LTC product development budget. Oncocyte and LTC will share development costs associated with LTC activities under the LTC product development budget. LTC will be responsible for costs associated with the performance of research and development activities for the RUO-labeled OCA Plus and related components as is necessary to enable the development of the Collaboration LTC Product as contemplated by the LTC product development plan. Oncocyte will be responsible for all costs associated with activities of both Parties under the Determa product development budget. LTC will be responsible, at LTC’s own cost, for the performance of research and development activities for the RUO-labeled OCA Plus and related components as is necessary to enable the development of the Collaboration LTC Product as contemplated by the development plan for the Collaboration LTC Product. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Commercialization LTC will be responsible for the commercialization of the Collaboration LTC Product throughout the world, but the Parties will co-market it in the United States, Canada, the United Kingdom, European Union, Switzerland, Australia, and New Zealand (the “LTC Product Territory”). Oncocyte will be responsible for the commercialization of the Collaboration Determa Product in the United States (the “Determa Product Territory”), and LTC will be responsible for commercializing it in the rest of the world. All commercialization activities for the Collaboration LTC Product and the Collaboration Determa Product will be conducted pursuant to commercialization plans agreed by the Parties through the collaboration’s governance committees. Economic Terms Under the LTC Agreement, LTC will pay Oncocyte a percentage of revenue received by LTC on sales of the Collaboration LTC Product throughout the world and on sales of the Collaboration Determa Product outside the United States. The revenue share percentage for the Collaboration LTC Product will vary based on the timing of the sale, the territory of the sale, and the degree to which consumables, reagents, and other products are included in the kit being sold, but the Company estimates that the average revenue share percentage that it will receive under the LTC Agreement will likely range from the low teens to the low twenties. The revenue share percentage LTC will pay to Oncocyte on sales of the Collaboration Determa Product will vary based on the timing of the sale, and the degree to which consumables, reagents, and other products are included in the kit being sold, but the Company estimates that the average revenue share that it will receive under the LTC Agreement will likely range in the low twenties. Oncocyte will pay LTC a mid single-digit percentage of its revenue on sales of the Collaboration Determa Product in the United States. Oncocyte will also receive up to two milestone payments in the low seven figures if LTC successfully commercializes the OCA Plus IVD assay as a companion diagnostic with certain claims. Exclusivity During the term of the LTC Agreement, (a) LTC will not enter into any agreement or arrangement with any third party with respect to the development or commercialization of OCA Plus on the Genexus system in the field of distributed IVD assay kits for the tumor profiling of and guidance of therapy selection for solid tumor cancers in humans (the “LTC Field”) in the LTC Product Territory, (b) Oncocyte will not partner with any third-party NGS equipment manufacturer with respect to the development and commercialization of a comprehensive genomic profiling assay on an instrument platform similar to or competitive with LTC’s NGS systems in the LTC Field in the LTC Product Territory, and (c) LTC will not develop, market or sell a new panel or other substantially similar comprehensive genomic profiling assay that would compete with the Collaboration LTC Product in the LTC Field in the LTC Product Territory on the Genexus system. Manufacturing LTC is responsible for the manufacture and supply of all OCA Plus assays and Collaboration LTC products, among other consumables and reagents required for the development of the Collaboration LTC Product. LTC will supply Oncocyte all consumables and reagents necessary for use in developing the Collaboration LTC Product pursuant to the LTC product development plan. In addition, following the effective date of the LTC Agreement, the Parties will negotiate in good faith a supply agreement pursuant to which LTC will supply Oncocyte with the Collaboration Determa Products for commercialization in the United States. LTC will also supply Oncocyte with all Genexus instruments, consumables and reagents, necessary for use in developing Collaboration Determa Products pursuant to the Determa product development plan. Term; Termination Unless earlier terminated as described in the LTC Agreement, the LTC Agreement will remain in effect until December 31, 2035. The LTC Agreement may be (i) terminated for cause by either Party based on any uncured material breach or insolvency by the other Party, and (ii) terminated by either Party with respect to specific termination events occurring for either the Collaboration LTC products or the Collaboration Determa Products, including but not limited to, the failure to achieve certain milestones and failure to agree to initial development or commercialization plans for the Collaboration Determa Product. If LTC fails to meet its certain product development milestones, the term of the LTC Agreement shall be extended on a proportionate basis. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements include the accounts Oncocyte and our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Principles of consolidation | Principles of consolidation On January 31, 2020, with the consummation of the Insight Merger, Insight became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Insight’s operations and results with Oncocyte’s operations and results (see Note 3). On February 24, 2021, with the acquisition of the remaining equity interests in Razor, Razor became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Razor’s results with Oncocyte’s operations and results (see Note 3). On April 15, 2021, with the acquisition of Chronix, Chronix became a wholly owned subsidiary of Oncocyte, and on that date Oncocyte began consolidating Chronix’s operations and results with Oncocyte’s operations and results (see Note 3). ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of Oncocyte’s financial condition and results of operations. The consolidated results of operations are not necessarily indicative of the results to be expected for any other interim period or for the entire year. All material intercompany accounts and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates estimates which are subject to significant judgment, including, but not limited to, valuation methods used, assumptions requiring the use of judgment to prepare financial projections, timing of potential commercialization of acquired in-process intangible assets, applicable discount rates, probabilities of the likelihood of multiple outcomes of certain events related to contingent consideration, comparable companies or transactions, determination of fair value of the assets acquired and liabilities assumed including those relating to contingent consideration, assumptions related to the going concern assessments, allocation of direct and indirect expenses, useful lives associated with long-lived intangible assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, and assumptions used to value debt and stock-based awards and other equity instruments. Actual results may differ materially from those estimates. Similarly, Oncocyte assessed certain accounting matters that generally require consideration of forecasted financial information. The accounting matters assessed included, but were not limited to, Oncocyte’s equity investments, the carrying value of goodwill, acquired in-process intangible assets and other long-lived assets. Those assessments as well as other estimates referenced above were made in the context of information reasonably available to Oncocyte. While Oncocyte considered known or expected impacts of COVID-19 in making its assessments and estimates, the future impacts of COVID-19 are not presently determinable and could cause actual results to differ materially from Oncocyte’s estimates and assessments. Oncocyte’s future analysis or forecast of COVID-19 impacts could lead to changes in Oncocyte’s future estimates and assessments which could result in material impacts to Oncocyte’s consolidated financial statements in future reporting periods. |
Going concern assessment | Going concern assessment In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update, or ASU No. 2014-15, Oncocyte assesses going concern uncertainty in its consolidated financial statements to determine if it has sufficient cash, cash equivalents and working capital on hand, including marketable equity securities, and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to Oncocyte, it will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, Oncocyte makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent Oncocyte deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Business combinations and fair value measurements | Business combinations and fair value measurements Oncocyte accounts for business combinations in accordance with ASC 805, which requires the purchase consideration transferred to be measured at fair value on the acquisition date in accordance with ASC 820, Fair Value Measurement ● Level 1 ● Level 2 ● Level 3 When a part of the purchase consideration consists of shares of Oncocyte common stock, Oncocyte calculates the purchase price attributable to those shares, a Level 1 security, by determining the fair value of those shares quoted on the NYSE American as of the acquisition date. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including IPR&D, and liabilities assumed, including any contingent consideration, as of the acquisition date. Goodwill is recognized as any amount of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in excess of the consideration transferred. ASC 805 precludes the recognition of an assembled workforce as an asset, effectively subsuming any assembled workforce value into goodwill. In determining fair value, Oncocyte utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value. For the periods presented, Oncocyte has no financial assets or liabilities recorded at fair value on a recurring basis, except for cash and cash equivalents consisting of money market funds and marketable equity securities of Lineage and AgeX common stock held by Oncocyte described below. These assets are measured at fair value using the period-end quoted market prices as a Level 1 input. Oncocyte also has certain contingent consideration liabilities which are carried at fair value based on Level 3 inputs (see Note 3). The carrying amounts of cash equivalents, prepaid expenses and other current assets, amounts due to Lineage and other affiliates, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The carrying amount of the Loan Payable to Silicon Valley Bank approximates fair value because the loan bears interest at a floating market rate, and the carrying amount of the PPP loan approximates fair value because of the SBA guarantee on the terms of the loan and the relatively recent funding date of the loan (see Note 12). |
Cash and cash equivalents | Cash and cash equivalents Cash equivalents typically consist of money market fund investments for capital preservation, with maturities of three months or less when purchased. At December 31, 2021 and 2020, Oncocyte’s cash and cash equivalents balances totaled $ 35.6 7.1 Financial instruments that potentially subject Oncocyte to credit risk consist principally of cash and cash equivalents. Oncocyte maintains cash and cash equivalent balances at financial institutions in excess of amounts insured by United States government agencies. Oncocyte places its cash and cash equivalents with high credit quality financial institutions. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable are stated at the amount we expect to collect. Our evaluation of the collectability of customer accounts receivable is based on various factors, including the length of time the receivables are past due, our history of bad debts and general industry conditions. Accounts that are deemed uncollectible are written off against the allowance for doubtful accounts. As of December 31, 2021 and December 31, 2020, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Accounting for Lineage and AgeX shares of common stock | Accounting for Lineage and AgeX shares of common stock Oncocyte accounts for the Lineage and AgeX shares of common it holds as marketable equity securities in accordance with ASC 320-10-25, Investments – Debt and Equity Securities Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities As of December 31, 2021, Oncocyte held 353,264 35,326 904,000 |
Prepaid expenses and other current assets | Prepaid expenses and other current assets As of December 31, 2021 and 2020, prepaid expenses and other current assets were comprised of the following (in thousands): Schedule of Prepaid Expenses and Other Current Assets 2021 2020 Prepaid vendors, deposits, and service agreements 365 646 Supplies inventory 304 - Prepaid insurance 243 264 Note receivable 200 - Other 85 295 Total prepaid expenses and other current assets 1,197 1,205 |
Restricted cash | Restricted cash Oncocyte classifies cash that has contractual or legal restrictions imposed by third parties as restricted cash, which is restricted as to withdrawal or use except for the specified purpose under a contract. Oncocyte includes the restricted cash consistent with the nature of the underlying contract and classifies it as part of current assets if the restricted cash will be released in the next twelve months from the balance sheet date, or in deposits and other noncurrent assets if it will be restricted for longer than twelve months from the balance sheet date. Oncocyte adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the statements of cash flows in accordance with ASU 2016-18 (in thousands): Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash 2021 2020 December 31, 2021 2020 Cash and cash equivalents $ 35,605 $ 7,143 Restricted cash included in deposits and other noncurrent assets (see Note 10) 1,700 1,700 Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows $ 37,305 $ 8,843 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Goodwill and intangible assets | Goodwill and intangible assets In accordance with ASC 350, Intangibles – Goodwill and Other Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill, similar to IPR&D, is not amortized but is tested for impairment at least annually, or if circumstances indicate its value may no longer be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting Oncocyte’s business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Oncocyte continues to operate in one segment and considered to be the sole reporting unit and, therefore, goodwill is tested for impairment at the enterprise level. Oncocyte does not have intangible assets with indefinite useful lives other than goodwill and the acquired IPR&D discussed in Notes 3 and 4. As of December 31, 2021, there has been no |
Contingent consideration liabilities | Contingent consideration liabilities Certain of Oncocyte’s asset and business acquisitions involve the potential for future payment of consideration to third-parties and former selling shareholders in amounts determined as a percentage of future net revenues generated, or upon attainment of revenue milestones, from Pharma Services or diagnostic tests, as applicable, or annual minimum royalties to certain licensors, as provided in the applicable agreements. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows. These obligations are referred to as contingent consideration. ASC 805 requires that contingent consideration be estimated and recorded at fair value as of the acquisition date as part of the total consideration transferred. Contingent consideration is an obligation of the acquirer to transfer additional assets or equity interests to the selling shareholders in the future if certain future events occur or conditions are met, such as the attainment of product development milestones. Contingent consideration also includes additional future payments to selling shareholders based on achievement of components of earnings, such as “earn-out” provisions or percentage of future revenues, including royalties paid to the selling shareholders based on a percentage of revenues generated from DetermaIO™ and Insight Pharma Services over their respective useful life. The fair value of contingent consideration after the acquisition date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the consolidated statements of operations. Changes in key assumptions can materially affect the estimated fair value of contingent consideration liabilities and, accordingly, the resulting gain or loss that Oncocyte records in its consolidated financial statements. See Note 3 for a full discussion of these liabilities. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Investments in capital stock of privately held companies | Investments in capital stock of privately held companies Oncocyte evaluates whether investments held in common stock of other companies require consolidation of the company under, first, the variable interest entity (“VIE”) model, and then under the voting interest model in accordance with accounting guidance for consolidations under Accounting Standards Codification (“ASC”) 810-10. If consolidation of the entity is not required under either the VIE model or the voting interest model, Oncocyte determines whether the equity method of accounting should be applied in accordance with ASC 323, Investments – Equity Method and Joint Ventures Oncocyte initially records equity method investments at fair value on the date of the acquisition with subsequent adjustments to the investment balance based on Oncocyte’s share of earnings or losses from the investment. The equity method investment balance is shown in noncurrent assets on the consolidated balance sheets. Oncocyte reviews investments accounted for under the equity method for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be fully recoverable. If a determination is made that an “other-than-temporary” impairment exists, Oncocyte writes down its investment to fair value. On September 30, 2019, Oncocyte acquired a 25 On February 24, 2021, Oncocyte acquired the remaining 75 |
Leases | Leases Oncocyte accounts for leases in accordance with ASC 842, Leases On January 1, 2019, the adoption date of ASC 842, and based on the available practical expedients under the standard, Oncocyte did not reassess any expired or existing contracts, reassess the lease classification for any expired or existing leases and reassess initial direct costs for exiting leases. Oncocyte also elected not to capitalize leases that have terms of twelve months or less. The adoption of ASC 842 did not have a material impact to Oncocyte’s consolidated financial statements because Oncocyte did not have any significant operating leases at the time of adoption. During the years ended December 31, 2021 and 2020, Oncocyte entered into various operating leases and an embedded operating lease in accordance with ASC 842 discussed in Note 10. Oncocyte’s accounting for financing leases (previously referred to as “capital leases”) remained substantially unchanged. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Machinery and equipment, construction in progress | Machinery and equipment, construction in progress Machinery and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally over a period of 3 10 3 5 Construction in progress, comprised primarily of leasehold improvements under construction, is not depreciated until the underlying asset is placed into service. |
Long-lived intangible assets | Long-lived intangible assets Long-lived intangible assets, consisting of acquired Razor asset and customer relationships, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful life of 5 years (see Note 3). |
Impairment of long-lived assets | Impairment of long-lived assets Oncocyte assesses the impairment of long-lived assets, which consist primarily of right-of-use assets for operating leases, customer relationships and machinery and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. As part of Oncocyte’s impairment assessment of its long-lived assets, Oncocyte determined that certain assets, mainly comprised of machinery and equipment and related prepaid service agreements used in the development of DetermaDx™ were impaired as of June 30, 2020, because Oncocyte determined to discontinue the development of that diagnostic test. Accordingly, Oncocyte recorded a noncash charge of $ 422,000 |
Accounting for warrants | Accounting for warrants Oncocyte determines the accounting classification of warrants it issues, as either liability or equity classified, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Income taxes | Income taxes Oncocyte and its subsidiaries file a consolidated U.S. federal income tax return and combined California state return for the years ended December 31, 2021 and 2020. Oncocyte accounts for income taxes in accordance with ASC 740, Income Taxes The guidance also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. Oncocyte will recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2021 and 2020. Oncocyte is not aware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation for the years ended December 31, 2021 and 2020. Oncocyte is currently unaware of any tax issues under review. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”) was enacted. The CARES Act included loans and grants to certain businesses, and temporary amendments to the Internal Revenue Code which changed net loss carryforward and back provisions and the business interest expenses limitation. Under the CARES Act provisions, the most relevant income tax considerations to Oncocyte relate to the amounts received under the Paycheck Protection Program loan program and the possible forgiveness of those loans by the SBA. On December 21, 2020, the U.S. president has signed into law the “Consolidated Appropriations Act, 2021” which includes further COVID-19 economic relief and extension of certain expiring tax provisions. The relief package includes a tax provision clarifying that businesses with forgiven PPP loans can deduct regular business expenses that are paid for with the loan proceeds for federal tax purposes. Additional pandemic relief tax measures include an expansion of the employee retention credit, enhanced charitable contribution deductions, and a temporary full deduction for business expenses for food and beverages provided by a restaurant (see Note 12). |
Revenue recognition | Revenue recognition Prior to January 1, 2020, Oncocyte generated no revenues. Effective on January 1, 2020, Oncocyte adopted the revenue recognition standard ASC Topic 606, Revenue from Contracts with Customers ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DetermaRx™ testing revenue In the first quarter of 2020, Oncocyte commercially launched DetermaRx™ and commenced performing tests on clinical samples through orders received from physicians, hospitals and other healthcare providers. In determining whether all of the revenue recognition criteria (i) through (v) above are met with respect to DetermaRx™ tests, each test result is considered a single performance obligation and is generally considered complete when the test result is delivered or made available to the prescribing physician electronically and, as such, there are no shipping or handling fees incurred by Oncocyte or billed to customers. Although Oncocyte bills a list price for all tests ordered and completed for all payer types, Oncocyte considers constraints on the variable consideration when recognizing revenue for DetermaRx™. Because DetermaRx™ is a novel test and there are no current reimbursement arrangements with third-party payers other than Medicare, the transaction price represents variable consideration. Application of the constraint for variable consideration is an area that requires significant judgment. For all payers other than Medicare, Oncocyte must take into account the novelty of the test, the uncertainty of receiving payment, or being subject to claims for refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte expects to continue to recognize revenue on a cash basis until it has a sufficient history to reliably estimate payment patterns or has contractual reimbursement arrangements, or both, in place. In September 2020, Oncocyte received a final pricing decision for DetermaRx™ from CMS, and with Medicare coverage in effect, Oncocyte commenced recognizing revenue when DetermaRx™ tests are performed for Medicare patients, or when payment was approved by Medicare in the case of certain tests performed prior to September 2020. The Company invoices third party payors, which include Medicare and Medicare Advantage, for its laboratory testing services upon providing test results to ordering physicians. As such, the Company takes assignment of benefits and risk of collection with third party payors. The Company continues to monitor the collection history for third party payors. Medicare and Medicare Advantage reimbursement programs are complex and ambiguous, and are continuously being evaluated and modified by the CMS. Our ability to receive timely reimbursements from third-party payors is dependent on our ability to correct and complete missing and incorrect billing information. Missing and incorrect information on reimbursement submissions slows down the billing process and increases the aging of accounts receivable. While we have receivables due from Medicare and Medicare Advantage, we do not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal and state governments, and payment is primarily dependent upon submitting appropriate documentation. As such, as of December 31, 2021 and December 31, 2020, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Medicare and Medicare Advantage covered DetermaRx™ tests. As of December 31, 2021, Oncocyte had accounts receivable of $ 1.1 million from Medicare and Medicare Advantage covered DetermaRx™ tests (see Note 7). As of December 31, 2020, Oncocyte had accounts receivable of $ 0.1 million from Medicare covered DetermaRx™ tests. Pharma Services revenue Revenues recognized during the year ended December 31, 2021 include Pharma Services performed by Oncocyte’s Insight subsidiary. Insight provides a range of molecular diagnostic services to its pharmaceutical customers (referred to as “Pharma Services”) including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests in its CLIA-certified laboratory. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements with specific deliverables defined by the customer. Pharma Services are generally performed on a time and materials basis. Upon Insight’s completion of the service to the customer in accordance with the SOW, Insight has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes the pharma service revenue at that time. Insight identifies each sale of its pharma service offering as a single performance obligation. Completion of the service and satisfaction of the performance obligation under a SOW is typically evidenced by access to the report or test made available to the customer or any other form or applicable manner of delivery defined in the SOW. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Insight has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Insight recognizes revenue over a period of time during which the work is performed using a formula that accounts for expended efforts, generally measured in labor hours, as a percentage of total estimated efforts for the completion of the SOW. As Insight satisfies the performance obligation under the SOW, any amounts earned as revenue and billed to the customer are included in accounts receivable. Any revenues earned but not yet billed to the customer as of the date of Oncocyte’s consolidated financial statements are recorded as contract assets and are included in prepaids and other current assets as of the financial statement date. Amounts recorded in contract assets are reclassified to accounts receivable in Oncocyte’s consolidated financial statements when the customer is invoiced according to the billing schedule in the contract. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Insight establishes an allowance for doubtful accounts based on the evaluation of the collectability of its Pharma Services accounts receivables after considering a variety of factors, including the length of time receivables are past due, significant events that may impair the customer’s ability to pay, such as a bankruptcy filing or deterioration in the customer’s operating results or financial position, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Insight continuously monitors collections and payments from customers and maintains a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the allowance for doubtful accounts. As of December 31, 2021, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Pharma Services. As of December 31, 2021, Oncocyte had accounts receivable from Pharma Services customers of $ 364,000 (see Note 7). |
Cost of revenues | Cost of revenues Cost of revenues generally consists of cost of materials, direct labor including benefits, bonus and stock-based compensation, equipment and infrastructure expenses, clinical sample related costs associated with performing Pharma Services and DetermaRx™ tests, and license fees due to third parties, and also includes amortization of acquired customer relationship intangible assets. Infrastructure expenses include depreciation of laboratory equipment, allocated rent costs, leasehold improvements and allocated information technology costs for operations at Oncocyte’s CLIA laboratories in California and Tennessee. Costs associated with performing diagnostic tests and Pharma Services are recorded as the tests or services are performed regardless of whether revenue was recognized with respect to that test or pharma service. Royalties or revenue share payments for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expenses at the time the related revenues are recognized. Oncocyte generated no revenues or cost of revenues prior to January 1, 2020. |
Research and development expenses | Research and development expenses Research and development expenses are comprised of costs incurred to develop technology, and include: salaries and benefits, including stock-based compensation; laboratory expenses, including reagents and supplies used in research and development laboratory work; infrastructure expenses, including allocated facility occupancy costs; and contract services and other outside costs. Indirect research and development expenses are allocated primarily based on headcount, as applicable, and include rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Research and development costs are expensed as incurred. |
Sales and marketing expenses | Sales and marketing expenses Sales and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade show expenses, branding and positioning expenses, and consulting fees. Sales and marketing expenses also include indirect expenses for applicable overhead allocated based on headcount, and include allocated costs for rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. |
General and administrative expenses | General and administrative expenses General and administrative expenses consist primarily of compensation and related benefits (including stock-based compensation) for executive and corporate personnel, professional and consulting fees, rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. |
Stock-based compensation | Stock-based compensation Oncocyte recognizes compensation expense related to employee option grants and restricted stock grants, if any, in accordance with FASB ASC 718, Compensation – Stock Compensation All excess tax benefits and tax deficiencies from stock-based compensation awards accounted for under ASC 718 are recognized as income tax benefit or expense, respectively, in the statements of operations. An excess income tax benefit arises when the tax deduction of a share-based award for income tax purposes exceeds the compensation cost recognized for financial reporting purposes and, a tax deficiency arises when the compensation cost exceeds the tax deduction. Because Oncocyte has a full valuation allowance for all periods presented (see Note 8), there was no impact to Oncocyte statements of operations for any excess tax benefits or deficiencies, as any excess benefit or deficiency would be offset by the change in the valuation allowance. Forfeitures are accounted for as they occur. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Oncocyte estimates the fair value of employee stock-based payment awards on the grant-date and recognizes the resulting fair value over the requisite service period. For stock-based awards that vest only upon the attainment of one or more performance goals set by Oncocyte at the time of the grant (sometimes referred to as milestone vesting), compensation cost is recognized if and when Oncocyte determines that it is probable that the performance condition or conditions will be, or have been, achieved. Oncocyte uses the Black-Scholes option pricing model for estimating the fair value of options granted under Oncocyte’s equity plans. The fair value of each restricted stock grant, if any, is determined based on the value of the common stock granted or sold. Oncocyte has elected to treat stock-based payment awards with graded vesting schedules and time-based service conditions as a single award and recognizes stock-based compensation on a straight-line basis over the requisite service period. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Black-Scholes option pricing model requires Oncocyte to make certain assumptions including the expected option term, the expected volatility, the risk-free interest rate and the dividend yield (see Note 6). The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. Oncocyte estimates the expected term of options granted based on its own experience and, in part, based on upon the “simplified method” provided under Staff Accounting Bulletin, Topic 14 |
Net loss per common share | Net loss per common share Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the weighted-average number of shares of common stock outstanding plus the potential effect of dilutive securities or contracts which are exercisable to common stock, such as stock options and warrants (using the treasury stock method) and shares issuable in future periods, except in cases where the effect would be anti-dilutive. Because Oncocyte reported net losses for all periods presented, all potentially dilutive common stock is antidilutive for those periods. The following common stock equivalents were excluded from the computation of diluted net loss per common share of common stock for the years ended December 31, 2021 and 2020 because including them would have been antidilutive (in thousands): Schedule of Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock Year Ended December 31, 2021 2020 Stock options 4,579 8,906 Warrants 2,252 3,384 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Segments | Segments Oncocyte’s executive management team, as a group, represents the entity’s chief operating decision makers. To date, Oncocyte’s executive management team has viewed Oncocyte’s operations as one segment that includes the research, development and commercialization of diagnostic tests for the detection of cancer, including molecular diagnostic services to pharmaceutical customers. As a result, the financial information disclosed materially represents all of the financial information related to Oncocyte’s sole operating segment. |
Recently issued and adopted accounting pronouncements not yet adopted | Recently issued and adopted accounting pronouncements not yet adopted The following accounting standards, which are not yet effective, are presently being evaluated by Oncocyte to determine the impact that it might have on its consolidated financial statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-10, which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables. Generally, this amendment requires entities to establish a valuation allowance for the expected lifetime losses of these certain financial assets. Upon the initial recognition of such assets, which will be based on, among other things, historical information, current conditions, and reasonable supportable forecasts. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Currently, U.S. GAAP requires entities to write down credit losses only when losses are probable and loss reversals are not permitted. The update will be effective for Oncocyte in the first quarter of 2023. Early adoption is permitted. Oncocyte is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures. In August 2020, the Financial Accounting Standards Board issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) In December 2019, the FASB issued ASU No. 2019-12 Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, to remove certain exceptions related to the approach for intraperiod tax allocation, recognition of deferred tax liabilities for outside basis differences and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The amendments in this update are effective for us beginning with fiscal year 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of the amendments in this update did not have a material impact on our consolidated financial position and results of operations as of and for the year ended December 31, 2021. In October 2020, the FASB issued ASU No. 2020-10 Codification Improvements, to make incremental improvements to GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section. The amendments in this update are effective for us beginning with fiscal year 2021. The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date. The adoption of the amendments in this update did not have a material impact on our financial disclosures as of and for the year ended December 31, 2021. |
COVID-19 impact and related risks | COVID-19 impact and related risks The ongoing global outbreak of COVID-19, and the various attempts throughout the world to contain it, have created significant volatility, uncertainty and disruption. In response to government directives and guidelines, health care advisories and employee and other concerns, Oncocyte has altered certain aspects of its operations. A number of Oncocyte’s employees have had to work remotely from home and those on site have had to follow Oncocyte’s social distance guidelines, which could impact their productivity. COVID-19 could also disrupt Oncocyte’s operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who cannot effectively work remotely but who elect not to come to work due to the illness affecting others in Oncocyte’s office or laboratory facilities, or due to quarantines. During the COVID-19 pandemic, Oncocyte has not been able, and may continue to not be able, to maintain its preferred level of physician or customer outreach and marketing of its diagnostic testing and Pharma Services, which may have negatively impacted and may continue to negatively impact potential new customers’ interest in those tests and services. Because of COVID-19, travel, visits, and in-person meetings related to Oncocyte’s business have been severely curtailed or canceled and Oncocyte has instead used on-line or virtual meetings to meet with potential customers and others. ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In addition to operational adjustments, the consequences of the COVID-19 pandemic have led to uncertainties related to Oncocyte’s business growth and ability to forecast the demand for its diagnostic testing and Pharma Services and resulting revenues. Concerns over available hospital, staffing, equipment, and other resources, and the risk of exposure to the virus, has led to early-stage lung cancer surgeries being delayed, and the continued deferral of lung cancer surgeries due to resurgence in COVID-19 cases could result in delayed or reduced use of DetermaRx™. It is possible that impacts of COVID-19 on Oncocyte’s operations or revenues or its access to capital could prevent Oncocyte from complying, or could result in a material noncompliance, with one or more obligations or covenants under material agreements to which Oncocyte is a party, with the result that Oncocyte would be in material breach of the applicable obligation, covenant, or agreement. Any such material breach could cause Oncocyte to incur material financial liabilities or an acceleration of the date for paying a financial obligation to the other party to the applicable agreement, or could cause Oncocyte to lose material contractual rights, such as rights to use leased equipment or laboratory or office space, or rights to use licensed patents or other intellectual property the use of which is material to Oncocyte’s business. Similarly, it is possible that impacts of COVID-19 on the business, operations, or financial condition of any third party with whom Oncocyte has a contractual relationship could cause the third party to be unable to perform its contractual obligations to Oncocyte, resulting in Oncocyte’s loss of the benefits of a contract that could be material to Oncocyte’s business. The full extent to which the COVID-19 pandemic and the various responses to it might impact Oncocytes’ business, operations and financial results will depend on numerous evolving factors that are not subject to accurate prediction and that are beyond Oncocyte’s control. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | As of December 31, 2021 and 2020, prepaid expenses and other current assets were comprised of the following (in thousands): Schedule of Prepaid Expenses and Other Current Assets 2021 2020 Prepaid vendors, deposits, and service agreements 365 646 Supplies inventory 304 - Prepaid insurance 243 264 Note receivable 200 - Other 85 295 Total prepaid expenses and other current assets 1,197 1,205 |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the statements of cash flows in accordance with ASU 2016-18 (in thousands): Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash 2021 2020 December 31, 2021 2020 Cash and cash equivalents $ 35,605 $ 7,143 Restricted cash included in deposits and other noncurrent assets (see Note 10) 1,700 1,700 Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows $ 37,305 $ 8,843 |
Schedule of Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock | The following common stock equivalents were excluded from the computation of diluted net loss per common share of common stock for the years ended December 31, 2021 and 2020 because including them would have been antidilutive (in thousands): Schedule of Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock Year Ended December 31, 2021 2020 Stock options 4,579 8,906 Warrants 2,252 3,384 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Aggregate Merger Consideration | Schedule of Fair Value of Aggregate Merger Consideration Cash consideration $ 7,000 (1) Stock consideration Shares of Oncocyte common stock issued on the Merger Date 1,915,692 (2) Closing price per share of Oncocyte common stock on the Merger Date $ 2.61 Market value of Oncocyte common stock issued $ 5,000 Contingent Consideration $ 11,130 (3) Total fair value of consideration transferred on the Merger Date $ 23,130 (1) The cash consideration paid on the Insight Merger Date was $ 6.4 0.6 (2) The 229,885 (3) In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Insight Merger Date, as further discussed below. |
Schedule of Intangible Assets Acquired and Liabilities Assumed | The following table sets forth the allocation of the Aggregate Merger Consideration transferred to Insight’s tangible and identifiable intangible assets acquired and liabilities assumed on the Insight Merger Date, with the excess recorded as goodwill (in thousands): Schedule of Intangible Assets Acquired and Liabilities Assumed January 31, 2020 Assets acquired: Cash and cash equivalents $ 36 Accounts receivable and other current assets 42 Right-of-use assets, machinery and equipment 585 Long-lived intangible assets - customer relationships 440 Acquired in-process research and development 14,650 Total identifiable assets acquired (a) 15,753 Liabilities assumed: Accounts payable 61 Right-of-use liabilities - operating lease 495 Long-term deferred income tax liability 1,254 Total identifiable liabilities assumed (b) 1,810 Net assets acquired, excluding goodwill (a) - (b) = (c) 13,943 Total cash, contingent consideration, and stock consideration transferred (d) 23,130 Goodwill (d) - (c) 9,187 |
Schedule of Identifiable Intangible Assets and Estimated Useful Life | The valuation of identifiable intangible assets and applicable estimated useful lives are as follows (in thousands, except for useful life): Schedule of Identifiable Intangible Assets and Estimated Useful Life Estimated Useful Life Fair Value (Years) In process research and development (“IPR&D”) $ 14,650 n/a Customer relationships 440 5 $ 15,090 |
Schedule of Fair Value of Contingent Consideration Liability | The following table shows the Insight Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability (in thousands): Schedule of Fair Value of Contingent Consideration Liability Fair Contractual Value on the Value Merger Date Milestone 1 $ 1,500 $ 1,340 Milestone 2 3,000 1,830 Milestone 3 (a) 1,500 770 Royalty 1 (b) See(b) 5,980 Royalty 2 (b) See(b) 1,210 Total $ 6,000 $ 11,130 (a) Indicates the maximum payable if the Milestone is achieved. (b) As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. |
Schedule of Acquisition Intangible Assets | As of February 24, 2021, upon Oncocyte’s acquisition of the outstanding common stock of Razor, the Razor intangible asset balance recorded on the acquisition date and included in Intangible Assets was as follows (in thousands): Schedule of Acquisition Intangible Assets As of 2021 Razor intangible asset recorded on the acquisition date: Equity method investment carrying value $ 13,147 Cash paid as Additional Purchase Payment for the Razor asset 10,000 Oncocyte common stock issued ( 982,318 5,756 Less: cash balance received from Razor for Clinical Trial expenses (3,352 ) Deferred tax liability generated from the Razor asset 7,077 Other 169 Total Razor investment asset balance as of February 24, 2021 (a) $ 32,797 (a) This balance will be amortized over the remaining useful life of the Razor asset, approximating 8.5 |
Schedule of Condensed Statement of Operations | The unaudited standalone results of operations for Razor prior to being consolidated with Oncocyte is summarized below (in thousands): Schedule of Condensed Statement of Operations For the period from January 1, 2021 February 23, 2021 Condensed Statement of Operations (1) (unaudited) Research and development expense $ 125 General and administrative expense - Loss from operations (125 ) Net loss $ (125 ) (1) The condensed standalone statement of operations of Razor is provided for informational purposes only. Razor’s results for the period from January 1, 2021 through February 23, 2021 are not included in Oncocyte’s consolidated results of operations because Razor was not consolidated with Oncocyte’s financial statements but had been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date, however, Oncocyte’s results included its pro rata losses from Razor. Beginning on February 24, 2021, Razor’s results are included with Oncocyte’s consolidated results, primarily consisting of outside research and development expenses incurred by Razor for the Clinical Trial discussed above. |
Insight Merger [Member] | |
Business Acquisition [Line Items] | |
Schedule of Contingent Consideration, Measured at Fair Value | The following table reflects the activity for Oncocyte’s Contingent Consideration since the Insight Merger Date, measured at fair value using Level 3 inputs (in thousands): Schedule of Contingent Consideration, Measured at Fair Value Fair Value Balance at January 31, 2020 $ 11,130 Change in estimated fair value (4,010 ) Balance at December 31, 2020 $ 7,120 Change in estimated fair value (60 ) Balance at December 31, 2021 $ 7,060 |
Chronix Biomedica lInc [Member] | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Aggregate Merger Consideration | Schedule of Fair Value of Aggregate Merger Consideration Cash consideration $ 3,960 Settlement of acquirer/acquiree activity pre-combination, net $ 550 Stock consideration Shares of Oncocyte common stock issued on the Merger Date 647,911 Closing price per share of Oncocyte common stock on the Merger Date $ 5.09 Market value of Oncocyte common stock issued $ 3,298 Contingent Consideration $ 42,295 Total fair value of consideration transferred on the Merger Date $ 50,103 |
Schedule of Intangible Assets Acquired and Liabilities Assumed | Upon further review of the assets acquired and liabilities assumed, it was determined that the amount previously reported as assumed liabilities were not properly reflected. The following has been updated to reflect the assets acquired and liabilities as of the date of acquisition. The following table sets forth the allocation of the Aggregate Chronix Merger Consideration transferred to Chronix’s tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Schedule of Intangible Assets Acquired and Liabilities Assumed April 15, 2021 Assets acquired: Cash and cash equivalents $ 50 Accounts receivable and other current assets 25 Long-term assets 12 Acquired in-process research and development 46,800 Total identifiable assets acquired (a) 46,887 Liabilities assumed: Deferred revenue 738 Assumed liability 3,352 Long-term deferred income tax liability 2,184 Total identifiable liabilities assumed (b) 6,274 Net assets acquired, excluding goodwill (a) - (b) = (c) 40,613 Total cash, contingent consideration, and stock consideration transferred (d) 50,103 Goodwill (d) - (c) $ 9,490 |
Chronix Merger [Member] | |
Business Acquisition [Line Items] | |
Schedule of Contingent Consideration, Measured at Fair Value | The following table reflects the activity for Oncocyte’s Contingent Consideration since the Chronix Merger Date, measured at fair value using Level 3 inputs (in thousands): Schedule of Contingent Consideration, Measured at Fair Value Fair Value Balance at April 15, 2021 $ 42,295 Change in estimated fair value 27,326 Balance at December 31, 2021 $ 69,621 ONCOCYTE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Goodwill 2.2 million of net deferred tax liabilities recorded principally related to the TheraSure™ discussed above. Oncocyte recognized approximately $ 9.5 million of goodwill related to the Chronix acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes. Goodwill is not amortized but is tested for impairment at least annually, or more frequently if circumstances indicate potential impairment (see Notes 2 and 4). |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | As of December 31, 2021 and 2020, goodwill and intangible assets, net, consisted of the following (in thousands): Schedule of Goodwill and Intangible Assets December 31, 2021 December 31, 2020 Goodwill - Insight Merger (1) $ 9,194 $ 9,187 Goodwill - Chronix Merger (1) 9,490 - Total Goodwill 18,684 9,187 Intangible assets: Acquired IPR&D - DetermaIO TM (2) $ 14,650 $ 14,650 Acquired IPR&D - TheraSure™ (3) 46,800 - Intangible assets subject to amortization: Acquired intangible assets - customer relationship – Insight (see Note 3) 440 440 Acquired intangible assets - Razor (5) 32,797 - Total intangible assets 94,687 15,090 Accumulated amortization - customer relationship (4) (169 ) (81 ) Accumulated amortization - Razor (4) (3,273 ) - Intangible assets, net $ 91,245 $ 15,009 (1) Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Insight Merger and the Chronix Merger (see Note 3). (2) See Note 3 for information on the Insight Merger. (3) See Note 3 for information on the Chronix Merger. (4) Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the consolidated statements of operations in the current year because the intangible assets pertain directly to the revenues generated from the acquired intangibles. (5) Razor intangible assets represents acquired Razor assay. |
Schedule of Intangible Assets Future Amortization Expense | Future amortization expense is expected to be the following (in thousands): Schedule of Intangible Assets Future Amortization Expense Amortization Year ending December 31, 2022 3,856 2023 3,904 2024 3,904 2025 3,823 2026 3,816 Thereafter 10,493 Total $ 29,796 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Options Outstanding, Vested and Exercisable | Additional information regarding Oncocyte’s outstanding stock options and vested and exercisable stock options is summarized below: Schedule of Stock Options Outstanding, Vested and Exercisable Options Outstanding as of December 31, 2021 Exercise Prices Number of Shares Weighted Average Weighted Average $ 2.12 3.80 1,163 8.98 $ 3.05 $ 3.91 5.21 983 9.54 4.24 $ 5.31 6.50 3,469 8.58 5.42 $ 2.12 6.50 5,615 8.82 $ 4.72 |
Summary of Stock-based Compensation Expense | Oncocyte recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020 (in thousands): Summary of Stock-based Compensation Expense Year Ended December 31, 2021 2020 Cost of revenues $ 255 $ 93 Research and development 1,517 1,245 Sales and marketing 1,296 541 General and administrative 3,773 3,187 Total stock-based compensation expense $ 6,841 $ 5,066 |
Schedule of Assumptions Used to Calculate Fair Value of Stock Options | Schedule of Assumptions Used to Calculate Fair Value of Stock Options Year Ended December 31, 2021 2020 Expected life (in years) 6.00 6.00 Risk-free interest rates 1.02 % 1.08 % Volatility 98.88 % 103.73 % Dividend yield - % - % |
2010 Plan Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of Oncocyte equity awards activity under the 2010 Plan and related information follows (in thousands except weighted average exercise price): Summary of Stock Option Activity Shares Number Weighted Available of Options Average Options for Grant Outstanding Exercise Price Balance at December 31, 2020 - 1,218 $ 3.55 Options exercised - (164 ) $ 2.28 Options forfeited, canceled and expired - (131 ) $ 4.11 Balance at December 31, 2021 - 923 $ 3.65 Exercisable at December 31, 2021 923 $ 3.65 |
2018 Paln Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of 2018 Incentive Plan activity and related information follows (in thousands except weighted average exercise price): Summary of Stock Option Activity Shares Number Number Weighted Available of Options of RSUs Average for Grant Outstanding Outstanding Exercise Price Balance at December 31, 2020 3,346 7,212 201 $ 2.60 RSUs vested - - (201 ) n/a RSUs granted (121 ) - 121 $ - Options increase from Plan Amendment 10,000 - - n/a Options granted (5,615 ) 5,615 - $ 4.72 Options exercised - (760 ) - $ 2.96 Options forfeited/cancelled 1,396 (1,396 ) - $ 3.17 Balance at December 31, 2021 9,006 10,671 121 $ 3.63 Options exercisable at December 31, 2021 3,291 $ 2.52 |
Disaggregation of Revenues an_2
Disaggregation of Revenues and Concentration Risk (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disaggregation Of Revenues And Concentration Risk | |
Schedule of Consolidated Revenues Attributable to Products or Services | The following table presents the percentage of consolidated revenues attributable to products or services classes that represent greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Attributable to Products or Services Year Ended December 31, 2021 2020 DetermaRx™ 32 % 45 % Pharma Services 19 % 55 % Licensing 49 % - Total 100 % 100 % |
Schedule of Consolidated Revenues Generated by Unaffiliated Customers | The following table presents the percentage of consolidated revenues received from unaffiliated customers that individually represent greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers Year Ended December 31, 2021 2020 Medicare for DetermaRx TM 17 % 40 % Medicare Advantage for DetermaRx TM 14 % - * Pharma services Company A - * 23 % Pharma services Company B - * 12 % Licensing - Company D 40 % - * Licensing - Company B 10 % - * * Less than 10% |
Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations | The following table presents the percentage of consolidated revenues attributable to geographical locations: Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations Year Ended December 31, 2021 2020 United States 45 % 61 % Outside of the United States – Pharma Services 6 % 39 % Outside of the United States – Licensing 49 % - Total 100 % 100 % |
Schedule of Percentage of Total Consolidated Accounts Receivables | The following table presents accounts receivable, as a percentage of total consolidated accounts receivables, from third-party payers and other customers that provided in excess of 10% of Oncocyte’s total accounts receivable. Schedule of Percentage of Total Consolidated Accounts Receivables December 31, 2021 December 31, 2020 Medicare for DetermaRx™ 9 % 45 % Medicare Advantage for DetermaRx™ 65 % * Pharma Services Company A * 35 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets and Liabilities | The primary components of the deferred tax assets and liabilities at December 31, 2021 and 2020 were as follows (in thousands): Schedule of Components of Deferred Tax Assets and Liabilities 2021 2020 Deferred tax assets/(liabilities): Net operating loss carryforwards and capital loss carryforwards $ 51,051 $ 29,203 Research and development credit carryforwards 3,148 2,638 Marketable equity securities 193 261 Stock-based and other compensation 2,398 1,855 Equity method investment in Razor - 404 Right-of-use liability 949 1,064 Other - 168 Total deferred tax assets 57,739 35,593 Valuation allowance (37,167 ) (31,752 ) Deferred tax assets, net of valuation allowance 20,572 3,841 Right-of-use asset (591 ) (712 ) Intangibles and fixed assets (19,981 ) (3,129 Total deferred tax liabilities (20,572 ) (3,841 ) Net deferred tax assets $ - $ - |
Schedule of Income Tax Reconciliation | Schedule of Income Tax Reconciliation 2021 2020 Computed tax benefit at federal statutory rate 21 % 21 % Permanent differences (1 )% 2 % State tax benefit 2 % 4 % Research and development credits - % 1 % Other - % - % Change in fair value consideration (8 )% - % Change in valuation allowance (1 )% (24 )% Income tax benefit percentage 13 % 4 % |
Schedule of Unrecognized Tax Benefit | A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands): Schedule of Unrecognized Tax Benefit 2021 2020 December 31, 2021 2020 (in thousands) Balance at the beginning of the year $ 3,052 $ 2,888 Additions based on tax positions related to current year 511 149 Adjustments based on tax positions related to prior years - 15 Settlements (2,173 ) Balance at end of year $ 1,390 $ 3,052 |
Right-of-use Assets, Machiner_2
Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress | As of December 31, 2021 and 2020, rights-of-use assets, machinery and equipment, net, and construction in progress were comprised of the following (in thousands): Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress December 31, 2021 December 31, 2020 Right-of-use assets (1) 3,499 3,397 Machinery and equipment 6,501 2,480 Accumulated depreciation and amortization (2,715 ) (1,440 ) Right-of-use assets, machinery and equipment, net 7,285 4,437 Construction in progress 1,242 2,087 Right-of-use assets, machinery and equipment, net, and construction in progress 8,527 6,524 (1) Oncocyte recorded certain right-of-use assets and liabilities for operating leases in accordance with ASC 842 (see Note 10). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease | The following table presents supplemental cash flow information related to operating and financing leases for the year ended December 31, 2021 (in thousands): Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease 2021 2020 Year Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from operating leases 1,042 552 Operating cash flows from financing leases 147 9 Financing cash flows from financing leases 34 71 Right-of-use assets obtained in exchange for lease obligations Operating lease, including lease acquired in Insight Genetics business combination - 536 |
Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases | The following table presents supplemental balance sheet information related to operating and financing leases as of December 31, 2021 (in thousands, except lease term and discount rate): Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases December 31, 2021 Operating lease Right-of-use assets, net $ 2,579 Right-of-use lease liabilities, current $ 715 Right-of-use lease liabilities, noncurrent 3,428 Total operating lease liabilities $ 4,143 Financing lease Machinery and equipment $ 537 Accumulated depreciation (337 ) Machinery and equipment, net $ 200 Current liabilities $ 104 Noncurrent liabilities 117 Total financing lease liabilities $ 221 Weighted average remaining lease term Operating lease 5.3 Financing lease 2 .0 years Weighted average discount rate Operating lease 11.17 % Financing lease 11.55 % |
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases | The following table presents future minimum lease commitments as of December 31, 2021 (in thousands): Schedule of Future Minimum Lease Commitments for Operating and Financing Leases Operating Financing Leases Leases Year Ending December 31, 2022 $ 1,143 $ 124 2023 1,048 124 2024 903 - 2025 869 - 2026 899 - Thereafter 695 - Total minimum lease payments $ 5,557 $ 248 Less amounts representing interest (1,413 ) (28 ) Present value of net minimum lease payments $ 4,144 $ 220 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Schedule of Quarterly Financial Information Mar. 31, Jan. 30, Sep. 30, Dec. 31, Mar. 31, Jan. 30, Sep. 30, Dec. 31, Quarter Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Revenues 16 143 555 503 1,124 2,030 984 3,589 Cost of revenues 173 365 601 716 1,045 2,424 1,850 2,220 Research and development expenses 2,159 3,225 2,615 1,800 3,361 2,537 3,142 4,591 Sales and marketing expenses 1,490 1,562 1,568 1,874 2,254 2,673 2,931 3,309 General and administrative expenses 4,625 3,759 4,995 3,410 4,764 7,934 5,495 4,143 Change in fair value of contingent consideration - - (2,980 ) (1,030 ) 1,060 30 1,170 25,006 Loss from operations (8,431 ) (8,768 ) (6,244 ) (6,267 ) (11,360 ) (13,568 ) (13,604 ) (35,680 ) Other income (expense) (396 ) (340 ) (539 ) (201 ) (123 ) 1,281 (196 ) (108 ) Loss before income taxes (8,827 ) (9,108 ) (6,783 ) (6,468 ) (11,483 ) (12,287 ) (13,800 ) (35,788 ) Income tax benefit 1,095 - - 159 7,564 1,794 - (97 ) Net Loss (7,732 ) (9,108 ) (6,783 ) (6,309 ) (3,919 ) (10,493 ) (13,800 ) (35,885 ) |
Organization, Description of _2
Organization, Description of the Business and Liquidity (Details Narrative) - USD ($) | Jun. 11, 2021 | Feb. 24, 2021 | Feb. 24, 2021 | Apr. 23, 2020 | Mar. 20, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 28, 2021 | Sep. 30, 2019 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Shares issued during the period, value | $ 18,343,000 | |||||||||
Retained Earnings (Accumulated Deficit) | $ 187,774,000 | $ 187,774,000 | 123,677,000 | |||||||
Cash and cash equivalents | 35,605,000 | 35,605,000 | 7,143,000 | |||||||
Marketable equity securities | $ 904,000 | 904,000 | 675,000 | |||||||
Additional capital | $ 69,600 | |||||||||
Proceeds from loan | $ 1,141,000 | |||||||||
Razor Genomics, Inc. [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Equity ownership percentage | 25.00% | 25.00% | 25.00% | |||||||
Cash paid to purchase shares of common stock | $ 10,000,000 | $ 10,000,000 | ||||||||
Shares issued during the period, value | $ 5,700,000 | $ 5,700,000 | ||||||||
Piper Sandler And Co [Member] | ATM Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Fair value of common stock sold | $ 25,000 | |||||||||
Silicon Valley Bank [Member] | PPP [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Proceeds from loan | $ 1,140,930 | |||||||||
Interest rate | 1.00% | |||||||||
Maturity date | Apr. 23, 2022 | |||||||||
Gain on extinguishment of debt | $ 1,140,930 | |||||||||
BTIG, LLC [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 1,108,650 | |||||||||
Sale of Stock, Price Per Share | $ 5.63 | $ 5.63 | ||||||||
Proceeds from Issuance Initial Public Offering | $ 6,240,000 | |||||||||
BTIG, LLC [Member] | At The Market Sales Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Fair value of common stock sold | $ 50,000,000 |
Schedule of Prepaid Expenses an
Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Prepaid vendors, deposits, and service agreements | $ 365 | $ 646 |
Supplies inventory | 304 | |
Prepaid insurance | 243 | 264 |
Note receivable | 200 | |
Other | 85 | 295 |
Total prepaid expenses and other current assets | $ 1,197 | $ 1,205 |
Schedule of Reconciliation of C
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 35,605 | $ 7,143 | |
Restricted cash included in deposits and other noncurrent assets (see Note 10) | 1,700 | 1,700 | |
Total cash, cash equivalents, and restricted cash as shown in the statements of cash flows | $ 37,305 | $ 8,843 | $ 23,772 |
Schedule of Common Stock Equiva
Schedule of Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share of Common Stock (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 4,579 | 8,906 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 2,252 | 3,384 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) shares in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Feb. 24, 2021 | Sep. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Cash and cash equivalents balances | $ 35,605,000 | $ 7,143,000 | ||
Marketable equity securities, fair market value | 904,000 | 675,000 | ||
Impairment charge on goodwill and intangible asset | 0 | |||
Impairment charge for long-lived assets | 422,000 | |||
Income Tax Examination, Penalties and Interest Expense | 0 | |||
Research and Development Expense [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment charge for long-lived assets | $ 422,000 | |||
Customer Relationships [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||
Machinery and Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life of plant and equipment | 3 years | |||
Machinery and Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life of plant and equipment | 10 years | |||
Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Lease term | 3 years | |||
Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Lease term | 5 years | |||
Razor [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity ownership percentage | 75.00% | |||
Parent [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Accounts Receivable, Sale | $ 364,000 | |||
Razor Genomics, Inc. [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity ownership percentage | 25.00% | 25.00% | ||
Accounts Receivable, Sale | $ 1,100,000 | |||
Lineage [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Shares held as available-for-sale securities, shares | 353,264 | |||
Marketable equity securities, fair market value | $ 904,000 | |||
AgeX Therapeutics Inc [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Shares held as available-for-sale securities, shares | 35,326 | |||
Marketable equity securities, fair market value | $ 904,000 |
Schedule of Fair Value of Aggre
Schedule of Fair Value of Aggregate Merger Consideration (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 15, 2021 | Jan. 31, 2020 | |
Insight Merger Agreements [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | [1] | $ 7,000 | |
Shares of Oncocyte common stock issued on the Merger Date | [2] | 1,915,692 | |
Closing price per share of Oncocyte common stock on the Merger Date | $ 2.61 | ||
Market value of Oncocyte common stock issued | $ 5,000 | ||
Contingent Consideration | [3] | 11,130 | |
Total fair value of consideration transferred on the Merger Date | $ 23,130 | ||
Chronix Biomedica lInc [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 3,960 | ||
Shares of Oncocyte common stock issued on the Merger Date | 647,911 | ||
Closing price per share of Oncocyte common stock on the Merger Date | $ 5.09 | ||
Market value of Oncocyte common stock issued | $ 3,298 | ||
Contingent Consideration | 42,295 | ||
Total fair value of consideration transferred on the Merger Date | 50,103 | ||
Settlement of Acquirer/Acquiree Activity Pre-Combination, net | $ 550 | ||
[1] | The cash consideration paid on the Insight Merger Date was $ 6.4 0.6 | ||
[2] | The 229,885 | ||
[3] | In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Insight Merger Date, as further discussed below. |
Schedule of Fair Value of Agg_2
Schedule of Fair Value of Aggregate Merger Consideration (Details) (Parenthetical) shares in Thousands, $ in Millions | 1 Months Ended |
Jan. 31, 2020USD ($)shares | |
Business Acquisition [Line Items] | |
Cash consideration paid | $ 6.4 |
Cash Holdback [Member] | |
Business Acquisition [Line Items] | |
Cash consideration paid | $ 0.6 |
Stock Holdback [Member] | |
Business Acquisition [Line Items] | |
Escrow account deposit, shares | shares | 229,885 |
Schedule of Intangible Assets A
Schedule of Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 15, 2021 | Dec. 31, 2020 | Jan. 31, 2020 |
Business Combination and Asset Acquisition [Abstract] | ||||
Cash and cash equivalents | $ 50 | $ 36 | ||
Accounts receivable and other current assets | 25 | 42 | ||
Right-of-use assets, machinery and equipment | 585 | |||
Long-lived intangible assets - customer relationships | 440 | |||
Acquired in-process research and development | 46,800 | 14,650 | ||
Total identifiable assets acquired (a) | 46,887 | 15,753 | ||
Accounts payable | 61 | |||
Right-of-use liabilities - operating lease | 495 | |||
Long-term deferred income tax liability | 2,184 | 1,254 | ||
Total identifiable liabilities assumed (b) | 6,274 | 1,810 | ||
Net assets acquired, excluding goodwill (a) - (b) = (c) | 40,613 | 13,943 | ||
Total cash, contingent consideration, and stock consideration transferred (d) | 50,103 | 23,130 | ||
Goodwill (d) - (c) | $ 18,684 | 9,490 | $ 9,187 | $ 9,187 |
Long-term assets | 12 | |||
Deferred revenue | 738 | |||
Assumed liability | $ 3,352 |
Schedule of Identifiable Intang
Schedule of Identifiable Intangible Assets and Estimated Useful Life (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Estimated Asset Fair Value | $ 15,090 |
In Process Research and Development [Member] | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Estimated Asset Fair Value | 14,650 |
Customer Relationships [Member] | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Estimated Asset Fair Value | $ 440 |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Schedule of Fair Value of Conti
Schedule of Fair Value of Contingent Consideration Liability (Details) $ in Thousands | Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | ||
Contractual Value | $ 6,000 | |
Fair Value on the Merger Date | 11,130 | |
Milestone 1 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 1,500 | |
Fair Value on the Merger Date | 1,340 | |
Milestone 2 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 3,000 | |
Fair Value on the Merger Date | 1,830 | |
Milestone 3 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 1,500 | [1] |
Fair Value on the Merger Date | 770 | [1] |
Royalty 1 [Member] | ||
Business Acquisition [Line Items] | ||
Fair Value on the Merger Date | 5,980 | [2] |
Royalty 2 [Member] | ||
Business Acquisition [Line Items] | ||
Fair Value on the Merger Date | $ 1,210 | [2] |
[1] | Indicates the maximum payable if the Milestone is achieved. | |
[2] | As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. |
Schedule of Contingent Consider
Schedule of Contingent Consideration, Measured at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||||||||
Change in estimated fair value | $ (25,006) | $ (1,170) | $ (30) | $ (1,060) | $ 1,030 | $ 2,980 | $ (27,266) | $ 4,010 | |||
Ending balance | 11,130 | $ 11,130 | 11,130 | ||||||||
Fair Value, Inputs, Level 3 [Member] | Insight Merger [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Beginning balance | $ 7,120 | $ 11,130 | 7,120 | 11,130 | |||||||
Change in estimated fair value | (60) | (4,010) | |||||||||
Ending balance | 7,060 | $ 7,120 | 7,060 | 7,060 | $ 7,120 | ||||||
Fair Value, Inputs, Level 3 [Member] | Chronix Merger [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Beginning balance | 42,295 | ||||||||||
Change in estimated fair value | 27,326 | ||||||||||
Ending balance | $ 69,621 | $ 69,621 | $ 69,621 |
Schedule of Acquisition Intangi
Schedule of Acquisition Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Feb. 24, 2021 | Dec. 31, 2020 | Sep. 30, 2019 | |
Equity method investment carrying value | $ 13,417 | ||||
Oncocyte common stock issued (982,318 shares issued at market value) as Additional Purchase Payment | $ 252,954 | $ 157,160 | |||
Razor Genomics, Inc. [Member] | |||||
Equity method investment carrying value | $ 13,147 | $ 11,245 | |||
Cash paid as Additional Purchase Payment for the Razor asset | 10,000 | ||||
Oncocyte common stock issued (982,318 shares issued at market value) as Additional Purchase Payment | 5,756 | ||||
Less: cash balance received from Razor for Clinical Trial expenses | (3,352) | ||||
Deferred tax liability generated from the Razor asset | 7,077 | ||||
Other | 169 | ||||
Total Razor investment asset balance as of February 24, 2021 | [1] | $ 32,797 | |||
[1] | This balance will be amortized over the remaining useful life of the Razor asset, approximating 8.5 |
Summary of Acquisition Intangib
Summary of Acquisition Intangible Assets (Details) (Parenthetical) - Razor Genomics, Inc. [Member] - shares | Feb. 24, 2021 | Feb. 24, 2021 |
Stock issued during the period | 982,318 | 982,318 |
Remaining Useful Life of Asset | 8 years 6 months |
Schedule of Condensed Statement
Schedule of Condensed Statement of Operations (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 23, 2021 | [1] | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||||||||||||
Research and development expense | $ 125 | $ 4,591 | $ 3,142 | $ 2,537 | $ 3,361 | $ 1,800 | $ 2,615 | $ 3,225 | $ 2,159 | $ 13,631 | $ 9,800 | |
General and administrative expense | 4,143 | 5,495 | 7,934 | 4,764 | 3,410 | 4,995 | 3,759 | 4,625 | 22,336 | 16,788 | ||
Loss from operations | (125) | (35,680) | (13,604) | (13,568) | (11,360) | (6,267) | (6,244) | (8,768) | (8,431) | (74,212) | (29,711) | |
Net loss | $ (125) | $ (35,885) | $ (13,800) | $ (10,493) | $ (3,919) | $ (6,309) | $ (6,783) | $ (9,108) | $ (7,732) | $ (64,097) | $ (29,932) | |
[1] | The condensed standalone statement of operations of Razor is provided for informational purposes only. Razor’s results for the period from January 1, 2021 through February 23, 2021 are not included in Oncocyte’s consolidated results of operations because Razor was not consolidated with Oncocyte’s financial statements but had been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date, however, Oncocyte’s results included its pro rata losses from Razor. Beginning on February 24, 2021, Razor’s results are included with Oncocyte’s consolidated results, primarily consisting of outside research and development expenses incurred by Razor for the Clinical Trial discussed above. |
Business Combinations (Details
Business Combinations (Details Narrative) $ / shares in Units, € in Millions | Apr. 15, 2021USD ($)$ / sharesshares | Apr. 15, 2021USD ($)$ / shares | Feb. 24, 2021USD ($)shares | Feb. 24, 2021USD ($)shares | Jun. 30, 2020USD ($) | Jan. 31, 2020USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Apr. 15, 2021EUR (€) | ||
Business Acquisition [Line Items] | ||||||||||||
Shares issued, amount | $ 18,343,000 | |||||||||||
[custom:FairValueOfContingentConsideration] | $ 60,000,000,000 | |||||||||||
Common stock value | 252,954,000 | 157,160,000 | ||||||||||
Equity Method Investments | 13,417,000 | |||||||||||
Business combination assumed liabilities | $ 40,613,000 | $ 40,613,000 | $ 13,943,000 | |||||||||
Amount of liabilities | 94,346,000 | 21,936,000 | ||||||||||
Goodwill | $ 9,490,000 | $ 9,490,000 | 9,187,000 | 18,684,000 | 9,187,000 | |||||||
Razor Genomics, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Shares issued, amount | $ 5,700,000 | $ 5,700,000 | ||||||||||
Stock issued during the period | shares | 982,318 | 982,318 | ||||||||||
Deferred tax liability | $ 7,077,000 | $ 7,077,000 | ||||||||||
Equity ownership percentage | 25.00% | 25.00% | 25.00% | |||||||||
Stock purchase price | $ 10,000,000 | |||||||||||
Common stock value | $ 5,756,000 | $ 5,756,000 | ||||||||||
Cash paid to purchase shares of common stock | 10,000,000 | 10,000,000 | ||||||||||
Equity Method Investments | 13,147,000 | 13,147,000 | $ 11,245,000 | |||||||||
Chronix [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
[custom:FairValueOfContingentConsideration] | 27,300,000 | |||||||||||
Series A Convertible Preferred Stock [Member] | Razor Genomics, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of shares purchased | shares | 1,329,870 | |||||||||||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||||||||
Milestone Contingent Consideration [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
[custom:PaymentsForMilestones] | $ 6,000,000 | |||||||||||
Discount rate | 8.00% | 8.00% | 7.50% | 8.00% | ||||||||
Credit and risk-adjusted discount rate | 21.00% | 45.00% | ||||||||||
Cash Holdback [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | $ 600,000 | 6,400,000 | ||||||||||
Shares issued, amount | $ 600,000 | |||||||||||
Stock Holdback [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Stock issued during the period | shares | 200,000 | |||||||||||
Stock Holdback One [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Stock issued during the period | shares | 1,900,000 | |||||||||||
Clinical Trial And Data Publication Milestone [Member] | Milestone Contingent Consideration [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
[custom:PaymentsForMilestones] | $ 1,500,000 | |||||||||||
C M S Specified Lung Cancer [Member] | Milestone Contingent Consideration [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
[custom:PaymentsForMilestones] | 3,000,000 | |||||||||||
C M S Reimbursement Milestones [Member] | Milestone Contingent Consideration [Member] | Maximum [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
[custom:PaymentsForMilestones] | 1,500,000 | |||||||||||
Chronix Biomedica lInc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Fair value of intangible assets | $ 46,800,000 | $ 46,800,000 | ||||||||||
Discount rate | 12.00% | 12.00% | 12.00% | |||||||||
Deferred tax liability | $ 2,200,000 | $ 2,200,000 | ||||||||||
Business Acquisition, Transaction Costs | 700,000 | |||||||||||
Goodwill | 9,500,000 | 9,500,000 | 9,490,000 | [1] | [1] | |||||||
Insight Merger Agreements [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | 7,000,000 | |||||||||||
Shares issued, amount | 5,000,000 | |||||||||||
Merger consideration | 11,400,000 | |||||||||||
Fair value of intangible assets | $ 14,700,000 | |||||||||||
Discount rate | 35.00% | |||||||||||
Acquisition of offsetting | $ 1,300,000 | |||||||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 5 years | |||||||||||
Operating lease, right of use liability | $ 500,000 | |||||||||||
Operating lease, right use of asset | 100,000 | |||||||||||
Merger Agreements [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquisition of offsetting | 2,200,000 | |||||||||||
Deferred tax liability | $ 1,300,000 | |||||||||||
Minority Purchase Agreements [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Common stock value | 10,000,000 | |||||||||||
Additional Purchase Payment [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Common stock value | 5,000,000 | |||||||||||
Development Agreement [Member] | Razor Genomics, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Clinical trial expense reserve amount | $ 3,400,000 | $ 3,400,000 | 4,000,000 | |||||||||
Development Agreement [Member] | Razor Genomics, Inc. [Member] | CMS Final [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Milestone payment | $ 4,000,000 | |||||||||||
Development Agreement [Member] | Razor Genomics, Inc. [Member] | CMS Final [Member] | Determa Rx [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Property, Plant and Equipment, Estimated Useful Lives | 10-year | |||||||||||
Development Agreement [Member] | Encore Clinical, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Research and Development Arrangement, Contract to Perform for Others, Costs Incurred, Gross | 3,000,000 | |||||||||||
Development Agreement [Member] | Encore Clinical, Inc. [Member] | Minority Shareholders [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Shares issued, amount | $ 3,000,000 | |||||||||||
Equity method investment, description | If the issuance of shares of common stock having a market value of $3 million would require Oncocyte to issue a number of shares that, when combined with any shares issued under the Purchase Agreement and the Minority Shareholder Purchase Agreements, would exceed the number of shares that may be issued without shareholder approval under applicable stock exchange rules, Oncocyte may deliver the number of shares permissible under stock exchange rules and an amount of cash necessary to bring the combined value of cash and shares to $3 million. | |||||||||||
Development Agreement [Member] | Maximum [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Estimated clinical trial expense | $ 16,000,000 | |||||||||||
Laboratory Agreement [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payment obligation amount | $ 450,000,000 | |||||||||||
Lease Expiration Date | Sep. 29, 2021 | |||||||||||
Chronix Merger Agreement [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash | 4,000,000 | 4,000,000 | ||||||||||
Shares issued, amount | $ 1,430,000 | |||||||||||
Stock issued during the period | shares | 648,000 | |||||||||||
Business combination assumed liabilities | $ 1,870,000 | $ 1,870,000 | ||||||||||
Closing price per share | $ / shares | $ 5.09 | $ 5.09 | ||||||||||
Business combination settlement net | $ 550,000 | $ 550,000 | ||||||||||
Chronix Merger Agreement [Member] | Chronix Biomedica lInc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Amount of liabilities | 8,250,000 | 8,250,000 | ||||||||||
Amount of liabilities | $ 4,600,000 | 4,600,000 | ||||||||||
[custom:ValueAddedTaxTermOfContract] | 3 years 6 months | |||||||||||
Chronix Merger Agreement [Member] | Chronix Biomedica lInc [Member] | German Customer [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
[custom:UpfrontPaymentReceived-0] | € | € 3.7 | |||||||||||
Deferred Revenue | $ 738,000 | $ 738,000 | ||||||||||
Chronix Merger Agreement [Member] | Chronix Biomedica lInc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Discount rate | 12.00% | 12.00% | 12.00% | |||||||||
Merger Agreement [Member] | Maximum [Member] | Chronix Biomedica lInc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Business combination consideration transferred | $ 14,000,000 | |||||||||||
Earnout percentage on collections for sales | 15.00% | |||||||||||
Earnout percentage on collections for sale or license | 75.00% | |||||||||||
[1] | Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Insight Merger and the Chronix Merger (see Note 3). |
Schedule of Goodwill and Intang
Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2021 | Dec. 31, 2020 | Apr. 15, 2021 | Jan. 31, 2020 | ||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 18,684 | $ 9,187 | $ 9,490 | $ 9,187 | |||
Total intangible assets | 94,687 | 15,090 | |||||
Intangible assets, net | 91,245 | 15,009 | |||||
Customer Relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquired intangible assets - customer relationship | 440 | 440 | |||||
Finite-Lived Intangible Assets, Accumulated Amortization | (169) | (81) | [1] | ||||
DetermaIO [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Intangible assets acquired IPR&D | [2] | 14,650 | 14,650 | ||||
TheraSure [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Intangible assets acquired IPR&D | [3] | 46,800 | |||||
Razor Genomics, Inc. [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquired intangible assets - customer relationship | [4] | 32,797 | |||||
Finite-Lived Intangible Assets, Accumulated Amortization | [1] | (3,273) | |||||
Insight Merger Agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | [5] | 9,194 | 9,187 | ||||
Chronix Biomedica lInc [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 9,490 | [5] | [5] | $ 9,500 | |||
[1] | Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the consolidated statements of operations in the current year because the intangible assets pertain directly to the revenues generated from the acquired intangibles. | ||||||
[2] | See Note 3 for information on the Insight Merger. | ||||||
[3] | See Note 3 for information on the Chronix Merger. | ||||||
[4] | Razor intangible assets represents acquired Razor assay. | ||||||
[5] | Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the Insight Merger and the Chronix Merger (see Note 3). |
Schedule of Intangible Assets F
Schedule of Intangible Assets Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 3,856 |
2023 | 3,904 |
2024 | 3,904 |
2025 | 3,823 |
2026 | 3,816 |
Thereafter | 10,493 |
Total | $ 29,796 |
Shareholders_ Equity (Details N
Shareholders’ Equity (Details Narrative) - USD ($) | Jun. 11, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock par value | $ 0 | $ 0 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common Stock, Shares Authorized | 230,000,000 | 230,000,000 | |
Common Stock, No Par Value | $ 0 | $ 0 | |
Net proceeds from common stock | $ 65,263,000 | $ 18,343,000 | |
Common Stock, Shares, Outstanding | 92,231,917 | 69,116,802 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,251,576 | ||
Warrants and Rights Outstanding, Maturity Date | Oct. 17, 2029 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 924,000 | ||
Stock Issued During Period, Value, Stock Options Exercised | $ 2,584,000 | $ 1,422,000 | |
Equity Option [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 680,308 | ||
Minimum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.69 | ||
Maximum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.50 | ||
ATM Agreement [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stock issued during the period | 1,136,673 | ||
Net proceeds from common stock | $ 2,650,000 | ||
At The Market Sales Agreement [Member] | BTIG, LLC [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Fair value of common stock sold | $ 50,000,000 | ||
Common Stock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common Stock, Shares Authorized | 230,000,000 | ||
Stock issued during the period | 8,257,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 924,000 | 680,000 | |
Stock Issued During Period, Value, Stock Options Exercised | $ 2,584,000 | $ 1,422,000 | |
Common Stock [Member] | Sales Agent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net proceeds from common stock | $ 300,000 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding, options exercised | (924,000) | |
Number of options outstanding, end of period | 5,615,000 | |
Weighted average exercise price, outstanding end of period | $ 4.72 | |
Weighted average exercise price, option granted | $ 3.66 | $ 2.42 |
2010 Plan Activity [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant options, beginning of period | ||
Number of options outstanding, beginning of period | 1,218,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 3.55 | |
Shares available for grant options exercised | ||
Number of options outstanding, options exercised | (164,000) | |
Weighted average exercise price, options exercised | $ 2.28 | |
Shares available for grant options forfeited, cancelled and expired | ||
Number of options outstanding, options forfeited, cancelled and expired | (131,000) | |
Weighted average exercise price, options forfeited, cancelled and expired | $ 4.11 | |
Shares available for grant outstanding, end of period | ||
Number of options outstanding, end of period | 923,000 | 1,218,000 |
Weighted average exercise price, outstanding end of period | $ 3.65 | $ 3.55 |
Number of options outstanding, exercisable, end of period | 923,000 | |
Weighted average exercise price, exercisable, end of period | $ 3.65 | |
2018 Paln Activity [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant options, beginning of period | 3,346,000 | |
Number of options outstanding, beginning of period | 7,212,000 | |
Weighted average exercise price, options outstanding, beginning of period | $ 2.60 | |
Shares available for grant options exercised | ||
Number of options outstanding, options exercised | (760,000) | |
Weighted average exercise price, options exercised | $ 2.96 | |
Shares available for grant options forfeited, cancelled and expired | 1,396,000 | |
Number of options outstanding, options forfeited, cancelled and expired | (1,396,000) | |
Weighted average exercise price, options forfeited, cancelled and expired | $ 3.17 | |
Shares available for grant outstanding, end of period | 9,006,000 | 3,346,000 |
Number of options outstanding, end of period | 10,671,000 | 7,212,000 |
Weighted average exercise price, outstanding end of period | $ 3.63 | $ 2.60 |
Number of options outstanding, exercisable, end of period | 3,291,000 | |
Weighted average exercise price, exercisable, end of period | $ 2.52 | |
Number of RSUs Outstanding, beginning of period | 201,000 | |
Shares available for grant options RSUs vested | ||
Number of options outstanding, option RSUs vested | ||
Number of RSUs Outstanding, option RSUs vested | (201,000) | |
Shares available for grant options RSUs granted | (121,000) | |
Number of options outstanding, option RSUs granted | ||
Number of RSUs Outstanding, option RSUs granted | 121,000 | |
Weighted average exercise price, option RSUs granted | ||
Shares available for options increase from plan amendment | 10,000,000 | |
Number of options outstanding, options increase from plan amendment | ||
Number of RSUs Outstanding, options increase from plan amendment | ||
Shares available for grant options granted | (5,615,000) | |
Number of options outstanding, option granted | 5,615,000 | |
Number of RSUs Outstanding, option granted | ||
Weighted average exercise price, option granted | $ 4.72 | |
Number of RSUs Outstanding, options exercised | ||
Number of RSUs Outstanding, options forfeited, canceled and expired | ||
Number of RSUs Outstanding, end of period | 121,000 | 201,000 |
Schedule of Stock Options Outst
Schedule of Stock Options Outstanding, Vested and Exercisable (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | $ 2.12 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 6.50 |
Options Outstanding, Number of Shares | shares | 5,615 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 8 years 9 months 25 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 4.72 |
Exercise Price Range One [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | 2.12 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 3.80 |
Options Outstanding, Number of Shares | shares | 1,163 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 8 years 11 months 23 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 3.05 |
Exercise Price Range Two [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | 3.91 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 5.21 |
Options Outstanding, Number of Shares | shares | 983 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 9 years 6 months 14 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 4.24 |
Exercise Price Range Three [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding, Weighted-Average Exercise Price, Minimum | 5.31 |
Options Outstanding, Weighted-Average Exercise Price, Maximum | $ 6.50 |
Options Outstanding, Number of Shares | shares | 3,469 |
Options Outstanding, Weighted-Average Remaining Contractual Life (Years) | 8 years 6 months 29 days |
Options Outstanding, Weighted-Average Exercise Price, | $ 5.42 |
Summary of Stock-based Compensa
Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 6,841 | $ 5,066 |
Share-based Payment Arrangement, Option [Member] | Cost Of Revenues [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 255 | 93 |
Share-based Payment Arrangement, Option [Member] | Research and Development Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,517 | 1,245 |
Share-based Payment Arrangement, Option [Member] | Selling and Marketing Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,296 | 541 |
Share-based Payment Arrangement, Option [Member] | Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 3,773 | $ 3,187 |
Schedule of Assumptions Used to
Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Expected life (in years) | 6 years | 6 years |
Risk-free interest rates | 1.02% | 1.08% |
Volatility | 98.88% | 103.73% |
Dividend yield |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 31, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise prices ranging, lower limit | $ 2.12 | |||
Exercise prices ranging, upper limit | $ 6.50 | |||
Share based compensation expenses | $ 6,841,000 | $ 5,066,000 | ||
Options outstanding | 5,615,000 | |||
Fair value option exercise price per share | $ 3.66 | $ 2.42 | ||
Stock Appreciation Rights (SARs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option granted during the period | 1,000,000 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option granted during the period | 500,000 | |||
Stock options description | The price at which Restricted Stock may be issued or sold will be not less than 100% of fair market value. | |||
2010 Stock Option Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares authorized | 5,200,000 | |||
2010 Stock Option Plan [Member] | Employees And Consultants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise prices ranging, lower limit | $ 2.30 | |||
Exercise prices ranging, upper limit | $ 3.15 | |||
2018 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares authorized | 21,000,000 | |||
2018 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options description | under the 2018 Incentive Plan must be equal to the fair market of Oncocyte common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of Oncocyte stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of the common stock on the grant date, and the term of the option may be no longer than five years. | |||
Stock options exercisable | $ 100,000 | |||
Performance-Based Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Option vested | 47,500 | 265,000 | ||
Share based compensation expenses | $ 101,000 | $ 466,000 | ||
Options outstanding | 0 | |||
Performance-Based Options [Member] | Determa Dx [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option granted during the period | 125,000 | |||
2010 Plan and 2018 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 19,100,000 | $ 8,100,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 8 months 12 days | 2 years 6 months |
Schedule of Consolidated Revenu
Schedule of Consolidated Revenues Attributable to Products or Services (Details) - Revenue Benchmark [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Geographic Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Determa Rx [Member] | Product Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 32.00% | 45.00% |
Pharma Services [Member] | Product Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 19.00% | 55.00% |
License [Member] | Product Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 49.00% |
Schedule of Consolidated Reve_2
Schedule of Consolidated Revenues Generated by Unaffiliated Customers (Details) - Revenue Benchmark [Member] - Product Concentration Risk [Member] | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | ||||
Medicare For Determa Rx [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 17.00% | 40.00% | |||
Medicare Advantage for DetermaRx [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 14.00% | [1] | |||
Pharma Services Company A [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | [1] | 23.00% | |||
Pharma Services Company B [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | [1] | 12.00% | |||
License Company D [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 40.00% | [1] | |||
License Company B [Member] | |||||
Product Information [Line Items] | |||||
Concentration risk, percentage | 10.00% | [1] | |||
[1] | Less than 10% |
Schedule of Percentage of Conso
Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations (Details) - Revenue Benchmark [Member] - Geographic Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
UNITED STATES | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 45.00% | 61.00% |
Outside United States - Pharma Services [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 6.00% | 39.00% |
Outside United States - Licensing [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 49.00% |
Schedule of Percentage of Total
Schedule of Percentage of Total Consolidated Accounts Receivables (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Medicare For Determa Rx [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 9.00% | 45.00% |
Medicare Advantage for DetermaRx [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 65.00% | |
Pharma Services Company A [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 35.00% |
Schedule of Components of Defer
Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards and capital loss carryforwards | $ 51,051 | $ 29,203 |
Research and development credit carryforwards | 3,148 | 2,638 |
Marketable equity securities | 193 | 261 |
Stock-based and other compensation | 2,398 | 1,855 |
Equity method investment in Razor | 404 | |
Right-of-use liability | 949 | 1,064 |
Other | 168 | |
Total deferred tax assets | 57,739 | 35,593 |
Valuation allowance | (37,167) | (31,752) |
Deferred tax assets, net of valuation allowance | 20,572 | 3,841 |
Right-of-use asset | (591) | (712) |
Intangibles and fixed assets | (19,981) | (3,129) |
Total deferred tax liabilities | (20,572) | (3,841) |
Net deferred tax assets |
Schedule of Income Tax Reconcil
Schedule of Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Computed tax benefit at federal statutory rate | 21.00% | 21.00% |
Permanent differences | (1.00%) | 2.00% |
State tax benefit | 2.00% | 4.00% |
Research and development credits | 1.00% | |
Other | ||
Change in fair value consideration | (8.00%) | |
Change in valuation allowance | (1.00%) | (24.00%) |
Income tax benefit percentage | 13.00% | 4.00% |
Schedule of Unrecognized Tax Be
Schedule of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Balance at the beginning of the year | $ 3,052 | $ 2,888 |
Additions based on tax positions related to current year | 511 | 149 |
Adjustments based on tax positions related to prior years | 15 | |
Settlements | (2,173) | |
Balance at end of year | $ 1,390 | $ 3,052 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||||||||||
Income Tax Expense (Benefit) | $ 97,000 | $ (1,794,000) | $ (7,564,000) | $ (159,000) | $ (1,095,000) | $ 9,261,000 | $ 1,254,000 | ||||
Income Tax Expense (Benefit) | (97,000) | $ 1,794,000 | $ 7,564,000 | 159,000 | $ 1,095,000 | (9,261,000) | (1,254,000) | ||||
Partial release of valuation allowances | 9,300,000 | ||||||||||
Deferred Tax Assets, Operating Loss Carryforwards | 51,051,000 | 51,051,000 | $ 29,203,000 | ||||||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 3,148,000 | 3,148,000 | 2,638,000 | ||||||||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | 5,400,000 | 7,600,000 | |||||||||
Unrecognized Tax Benefits | 1,390,000 | 3,052,000 | 1,390,000 | 3,052,000 | $ 2,888,000 | ||||||
Income Tax Examination, Penalties and Interest Accrued | $ 0 | 0 | |||||||||
[custom:DerecognizedUncertainTaxPosition-0] | 2,200,000 | $ 2,200,000 | |||||||||
Other Information Pertaining to Income Taxes | Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. | ||||||||||
Domestic Tax Authority [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Income Tax Expense (Benefit) | $ (8,100,000) | (1,100,000) | |||||||||
Income Tax Expense (Benefit) | 8,100,000 | 1,100,000 | |||||||||
Domestic Tax Authority [Member] | Research and Development Expense [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 2,100,000 | 2,100,000 | |||||||||
State and Local Jurisdiction [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Income Tax Expense (Benefit) | (1,200,000) | (200,000) | |||||||||
Income Tax Expense (Benefit) | 1,200,000 | $ 200,000 | |||||||||
State and Local Jurisdiction [Member] | Research and Development Expense [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 2,400,000 | 2,400,000 | |||||||||
Federal [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred Tax Assets, Operating Loss Carryforwards | 204,800,000 | $ 204,800,000 | |||||||||
Net operating loss expiration period description | between 2022 and 2037 | ||||||||||
State [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred Tax Assets, Operating Loss Carryforwards | 95,500,000 | $ 95,500,000 | |||||||||
Net operating loss expiration period description | between 2022 and 2041 | ||||||||||
Federal and State [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Deferred Tax Assets, Operating Loss Carryforwards | $ 300,000 | $ 300,000 | |||||||||
Federal and State [Member] | Research and Development Expense [Member] | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Credit carryforward expiration term | between 2030 and 2041 |
Schedule of Right-of-use Assets
Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Right-of-use assets, net | [1] | $ 3,499 | $ 3,397 |
Machinery and equipment | 6,501 | 2,480 | |
Accumulated depreciation and amortization | (2,715) | (1,440) | |
Right-of-use assets, machinery and equipment, net | 7,285 | 4,437 | |
Construction in progress | 1,242 | 2,087 | |
Right-of-use assets, machinery and equipment, net, and construction in progress | $ 8,527 | $ 6,524 | |
[1] | Oncocyte recorded certain right-of-use assets and liabilities for operating leases in accordance with ASC 842 (see Note 10). |
Right-of-use Assets, Machiner_3
Right-of-use Assets, Machinery and Equipment, Net and Construction in Progress (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 844,000 | $ 313,000 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 1,042 | $ 552 |
Operating cash flows from financing leases | 147 | 9 |
Financing cash flows from financing leases | 34 | 71 |
Operating lease, including lease acquired in Insight Genetics business combination | $ 536 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets, net | [1] | $ 3,499 | $ 3,397 |
Machinery and equipment, net | 2,779 | $ 3,262 | |
Operating and Financing Leases [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets, net | 2,579 | ||
Right-of-use lease liabilities, current | 715 | ||
Right-of-use lease liabilities, noncurrent | 3,428 | ||
Total operating lease liabilities | 4,143 | ||
Machinery and equipment | 537 | ||
Accumulated depreciation | (337) | ||
Machinery and equipment, net | 200 | ||
Current liabilities | 104 | ||
Noncurrent liabilities | 117 | ||
Total financing lease liabilities | $ 221 | ||
Weighted average remaining lease term, Operating leases | 5 years 3 months 18 days | ||
Finance Lease, Weighted Average Remaining Lease Term | 2 years | ||
Operating lease | 11.17% | ||
Financing lease | 11.55% | ||
[1] | Oncocyte recorded certain right-of-use assets and liabilities for operating leases in accordance with ASC 842 (see Note 10). |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Operating Lease [Member] | |
2021 | $ 1,143 |
2022 | 1,048 |
2023 | 903 |
2024 | 869 |
2025 | 899 |
Thereafter | 695 |
Total minimum lease payments | 5,557 |
Less amounts representing interest | (1,413) |
Present value of net minimum lease payments | 4,144 |
Financing Lease [Member] | |
2021 | 124 |
2022 | 124 |
2023 | |
2024 | |
2025 | |
Thereafter | |
Total minimum lease payments | 248 |
Less amounts representing interest | (28) |
Present value of net minimum lease payments | $ 220 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Dec. 23, 2019USD ($)ft² | Dec. 31, 2021USD ($) | Aug. 27, 2021ft² |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
[custom:PaymentsDueToTheLandLordForEarlyCancellation] | $ 192,000 | ||
Severance Costs | 2,400,000 | ||
Laboratory Equipment [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Payment obligation amount. | 248,000 | ||
Office Lease Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of Land | ft² | 26,800 | ||
Payments for rent | $ 61,640 | ||
Payments for (Proceeds from) Tenant Allowance | $ 1,340,000 | ||
Percentage of administrative fee paid on original cost of equipment | 1.50% | ||
Security Deposit | $ 150,000 | ||
Line of Credit, Current | $ 1,700,000 | ||
Office Lease Agreement [Member] | Landlord [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Payments for (Proceeds from) Tenant Allowance | $ 1,300,000 | ||
Office Lease Agreement [Member] | Monthly Rent [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Interest rate on lease agreement | 3.50% | ||
Obligated to pay expenses and taxes percentage | 43.70% | ||
Office Lease Agreement [Member] | First Ten Calendar [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Interest rate on lease agreement | 50.00% | ||
Lease Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of Land | ft² | 1,928 | ||
Razor's Laboratory Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Lease Expiration Date | Mar. 31, 2023 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Sep. 23, 2021 | Feb. 09, 2021 | Jan. 20, 2021 | Jan. 02, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2021 |
Shares issued, amount | $ 18,343,000 | |||||||
Common stock, par value | $ 0 | $ 0 | ||||||
Minimum [Member] | ||||||||
Warrants exercise price | 1.69 | |||||||
Maximum [Member] | ||||||||
Warrants exercise price | $ 5.50 | |||||||
Offering [Member] | ||||||||
Number of common stock, shares issued | 8,947,000 | |||||||
Proceeds from offering | $ 37,500,000 | |||||||
Share price per share | $ 4.50 | |||||||
Warrant Exercise Agreements [Member] | ||||||||
Number of common stock, shares issued | 573,461 | |||||||
Shares issued, amount | $ 1,807,835.81 | |||||||
Warrants to purchase common stock | 573,461 | |||||||
Warrant Exercise Agreements [Member] | Minimum [Member] | ||||||||
Warrants exercise price | $ 3.25 | |||||||
Warrant Exercise Agreements [Member] | Maximum [Member] | ||||||||
Warrants exercise price | $ 3.1525 | |||||||
Institutional Investors [Member] | Subscription Agreements [Member] | ||||||||
Number of common stock, shares issued | 7,301,410 | |||||||
Shares issued, amount | $ 25,000,000 | |||||||
Common stock, par value | $ 0 | |||||||
Share price per share | $ 3.424 | |||||||
Ronald Andrews [Member] | ||||||||
Professional Fees | $ 300,000 | |||||||
Pura Vida Investments LLC [Member] | ||||||||
Number of common stock, shares issued | 3,523,776 | 4,733,700 | ||||||
Shares issued, price per share | $ 2.156 | $ 2.27 | ||||||
Proceeds from offering | $ 7,600,000 | |||||||
Minimum beneficial ownership percentage | 5.00% | |||||||
Shares issued, amount | $ 10,750,000 | |||||||
Broadwood Capital, LP [Member] | Offering [Member] | ||||||||
Number of common stock, shares issued | 600,000 |
Loan Payable to Silicon Valle_2
Loan Payable to Silicon Valley Bank (Details Narrative) - USD ($) | Apr. 02, 2020 | Oct. 17, 2019 | Dec. 31, 2021 | Mar. 23, 2017 | Feb. 21, 2017 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Interest rate | 3.25% | ||||
Warrants to purchase, shares | 2,251,576 | ||||
Warrant [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Warrants to purchase, shares | 7,321 | 8,247 | |||
Warrant exercise price, per share | $ 5.46 | $ 4.85 | |||
Amended Loan Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Line of credit, description | Oncocyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 2.0% of the outstanding principal balance if prepaid more than one year but less than two years after October 17, 2019, or 1.0% of the outstanding principal balance if prepaid two years or more after October 17, 2019. Any amounts borrowed and repaid may not be reborrowed. | ||||
Amended Loan Agreement [Member] | Bank Warrant [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Debt instrument, final payment | $ 200,000 | ||||
Unamortized deferred financing cost | $ 12,000 | ||||
Warrants to purchase, shares | 98,574 | ||||
Warrant exercise price, per share | $ 1.69 | ||||
Amended Loan Agreement [Member] | Share-based Payment Arrangement, Tranche One [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Line of Credit, Current | $ 3,000,000 | ||||
Repayments of Lines of Credit | 400,000 | ||||
Debt instrument, final payment | 116,000 | ||||
Amended Loan Agreement [Member] | Share-based Payment Arrangement, Tranche Two [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Line of Credit, Current | 2,000,000 | ||||
Additional Paid in Capital | $ 20,000,000 | ||||
Interest rate | 5.00% | ||||
Amended Loan Agreement [Member] | Share-based Payment Arrangement, Tranche Two [Member] | Bank Warrant [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Percentage for warrant exercise price per share | 0.02% | ||||
Diluted equity outstanding | $ 1,000,000 | ||||
Loan Deferral Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Debt instrument, maturity date description | Under the Loan Deferral Agreement, the Bank agreed to (i) extend the scheduled maturity date of the Amended Loan Agreement from March 31, 2022 to September 30, 2022, and (ii) deferred the principal payments by an additional 6 months whereby payments of interest only on the Bank loan principal balance will be due monthly from May 1, 2020 through October 1, 2020, followed by 23 monthly payments of principal and interest beginning on November 1, 2020, all provided at no additional fees to Oncocyte. |
Schedule of Quarterly Financial
Schedule of Quarterly Financial Information (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 23, 2021 | [1] | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenues | $ 3,589 | $ 984 | $ 2,030 | $ 1,124 | $ 503 | $ 555 | $ 143 | $ 16 | $ 7,727 | $ 1,216 | ||
Cost of revenues | 2,220 | 1,850 | 2,424 | 1,045 | 716 | 601 | 365 | 173 | 4,185 | 1,855 | ||
Research and development expenses | $ 125 | 4,591 | 3,142 | 2,537 | 3,361 | 1,800 | 2,615 | 3,225 | 2,159 | 13,631 | 9,800 | |
Sales and marketing expenses | 3,309 | 2,931 | 2,673 | 2,254 | 1,874 | 1,568 | 1,562 | 1,490 | 11,167 | 6,494 | ||
General and administrative expenses | 4,143 | 5,495 | 7,934 | 4,764 | 3,410 | 4,995 | 3,759 | 4,625 | 22,336 | 16,788 | ||
Change in fair value of contingent consideration | 25,006 | 1,170 | 30 | 1,060 | (1,030) | (2,980) | 27,266 | (4,010) | ||||
Loss from operations | (125) | (35,680) | (13,604) | (13,568) | (11,360) | (6,267) | (6,244) | (8,768) | (8,431) | (74,212) | (29,711) | |
Other income (expense) | (108) | (196) | 1,281 | (123) | (201) | (539) | (340) | (396) | 854 | (1,475) | ||
Loss before income taxes | (35,788) | (13,800) | (12,287) | (11,483) | (6,468) | (6,783) | (9,108) | (8,827) | (73,358) | (31,186) | ||
Income tax benefit | (97) | 1,794 | 7,564 | 159 | 1,095 | (9,261) | (1,254) | |||||
Net Loss | $ (125) | $ (35,885) | $ (13,800) | $ (10,493) | $ (3,919) | $ (6,309) | $ (6,783) | $ (9,108) | $ (7,732) | $ (64,097) | $ (29,932) | |
[1] | The condensed standalone statement of operations of Razor is provided for informational purposes only. Razor’s results for the period from January 1, 2021 through February 23, 2021 are not included in Oncocyte’s consolidated results of operations because Razor was not consolidated with Oncocyte’s financial statements but had been accounted for under the equity method of accounting since the September 30, 2019 Initial Closing date, however, Oncocyte’s results included its pro rata losses from Razor. Beginning on February 24, 2021, Razor’s results are included with Oncocyte’s consolidated results, primarily consisting of outside research and development expenses incurred by Razor for the Clinical Trial discussed above. |