Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
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 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 Common Stock, Shares Outstanding | 118,643,821 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 32,053 | $ 35,605 |
Accounts receivable | 1,990 | 1,437 |
Marketable equity securities | 419 | 904 |
Prepaid expenses and other current assets | 2,174 | 1,197 |
Total current assets | 36,636 | 39,143 |
NONCURRENT ASSETS | ||
Right-of-use and financing lease assets, net | 2,337 | 2,779 |
Machinery and equipment, net, and construction in progress | 9,256 | 5,748 |
Goodwill | 18,684 | 18,684 |
Intangible assets, net | 88,365 | 91,245 |
Restricted cash | 1,700 | 1,700 |
Other noncurrent assets | 366 | 264 |
TOTAL ASSETS | 157,344 | 159,563 |
CURRENT LIABILITIES | ||
Accounts payable | 1,826 | 2,447 |
Accrued compensation | 4,067 | 3,376 |
Accrued expenses and other current liabilities | 3,809 | 2,425 |
Accrued severance from acquisition | 2,314 | 2,352 |
Accrued liabilities from acquisition | 109 | 1,388 |
Loans payable, net of deferred financing costs | 1,313 | |
Right-of-use and financing lease liabilities, current | 827 | 819 |
Total current liabilities | 12,952 | 14,120 |
NONCURRENT LIABILITIES | ||
Right-of-use and financing lease liabilities, noncurrent | 2,935 | 3,545 |
Contingent consideration liabilities | 59,524 | 76,681 |
TOTAL LIABILITIES | 75,411 | 94,346 |
COMMITMENTS AND CONTINGENCIES | ||
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; 118,619 and 92,232 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 292,536 | 252,954 |
Accumulated other comprehensive income | 19 | 37 |
Accumulated deficit | (215,698) | (187,774) |
Total shareholders’ equity | 76,857 | 65,217 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 157,344 | 159,563 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
NONCURRENT LIABILITIES | ||
Series A Redeemable Convertible Preferred Stock, no par value; stated value $1,000 per share; 12 shares authorized, 6 shares issued and outstanding at September 30, 2022; aggregate liquidation preference of $6,001 as of September 30, 2022 | $ 5,076 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ / shares in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 230,000,000 | 230,000,000 |
Common stock, shares issued | 118,618,821 | 92,231,917 |
Common stock, shares, outstanding | 118,618,821 | 92,231,917 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Temporary equity, par value | $ 0 | |
Temporary equity, stated par value | $ 1,000 | |
Temporary equity, shares authorized | 11,765 | |
Temporary equity, shares issued | 5,882.4 | |
Temporary equity, shares outstanding | 5,882.4 | |
Temporary equity, liquidation preference | $ 6,001,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net revenue | $ 1,017 | $ 984 | $ 4,508 | $ 4,138 |
Cost of revenues | 1,215 | 860 | 3,641 | 2,948 |
Cost of revenues – amortization of acquired intangibles | 976 | 990 | 2,888 | 2,371 |
Gross profit | (1,174) | (866) | (2,021) | (1,181) |
Operating expenses: | ||||
Research and development | 4,421 | 3,142 | 15,123 | 9,040 |
Sales and marketing | 4,005 | 2,931 | 10,764 | 7,858 |
General and administrative | 5,763 | 5,495 | 16,927 | 18,193 |
Change in fair value of contingent consideration | (6,142) | 1,170 | (17,157) | 2,260 |
Total operating expenses | 8,047 | 12,738 | 25,657 | 37,351 |
Loss from operations | (9,221) | (13,604) | (27,678) | (38,532) |
OTHER INCOME (EXPENSES), NET | ||||
Interest expense, net | (14) | (50) | (65) | (167) |
Unrealized gain (loss) on marketable equity securities | (160) | (138) | (485) | 248 |
Pro rata loss from equity method investment in Razor | (270) | |||
Gain on extinguishment of debt (PPP loan) | 1,141 | |||
Other income (expenses), net | 62 | (8) | 304 | 10 |
Total other income (expenses), net | (112) | (196) | (246) | 962 |
LOSS BEFORE INCOME TAXES | (9,333) | (13,800) | (27,924) | (37,570) |
Income tax benefit | 9,358 | |||
NET LOSS | (9,333) | (13,800) | (27,924) | (28,212) |
Accretion of Series A redeemable convertible preferred stock | (222) | (294) | ||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS: BASIC AND DILUTED | $ (9,555) | $ (13,800) | $ (28,218) | $ (28,212) |
Net loss per share: basic and diluted | $ (0.08) | $ (0.15) | $ (0.26) | $ (0.32) |
Weighted average shares outstanding: basic and diluted | 118,610 | 91,453 | 108,158 | 87,812 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
NET LOSS | $ (9,333) | $ (13,800) | $ (27,924) | $ (28,212) |
Foreign currency translation adjustments | (12) | (18) | ||
COMPREHENSIVE LOSS | $ (9,345) | $ (13,800) | $ (27,942) | $ (28,212) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Preferred Stock [Member] Series A Redeemable Convertible Preferred Stock [Member] | Common Stock [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance at Dec. 31, 2020 | $ 157,160 | $ (123,677) | $ 33,483 | ||
Beginning balance, shares at Dec. 31, 2020 | 69,117 | ||||
Net Loss | (28,212) | (28,212) | |||
Foreign currency translation adjustment | |||||
Stock-based compensation | 5,136 | 5,136 | |||
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 | ||||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts | $ 74,922 | 74,922 | |||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts, shares | 19,536 | ||||
Stock options exercised | $ 2,573 | 2,573 | |||
Stock options exercised, shares | 894 | ||||
Warrants exercised | $ 2,631 | 2,631 | |||
Warrants exercised, shares | 828 | ||||
Issuance of common stock to Razor Genomics | 5,756 | 5,756 | |||
Issuance of common stock to Razor Genomics, shares | 982 | ||||
Issuance of common stock to Chronix Biomedical | $ 3,299 | 3,299 | |||
Issuance of common stock to Chronix Biomedical, shares | 648 | ||||
Ending balance at Sep. 30, 2021 | $ 251,238 | (151,889) | 99,349 | ||
Ending balance, shares at Sep. 30, 2021 | 92,158 | ||||
Beginning balance at Jun. 30, 2021 | $ 240,755 | (138,089) | 102,666 | ||
Beginning balance, shares at Jun. 30, 2021 | 90,316 | ||||
Net Loss | (13,800) | (13,800) | |||
Foreign currency translation adjustment | |||||
Stock-based compensation | 1,849 | 1,849 | |||
Shares issued upon vesting of RSU, net of shares retired to pay employees’ taxes | $ (202) | (202) | |||
Shares issued upon vesting of RSU, net of shares retired to pay employees taxes, shares | 23 | ||||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts | $ 6,054 | 6,054 | |||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts, shares | 1,109 | ||||
Stock options exercised | $ 974 | 974 | |||
Stock options exercised, shares | 137 | ||||
Warrants exercised | $ 1,808 | 1,808 | |||
Warrants exercised, shares | 573 | ||||
Ending balance at Sep. 30, 2021 | $ 251,238 | (151,889) | 99,349 | ||
Ending balance, shares at Sep. 30, 2021 | 92,158 | ||||
Beginning balance at Dec. 31, 2021 | $ 252,954 | 37 | (187,774) | 65,217 | |
Beginning balance, shares at Dec. 31, 2021 | 92,232 | ||||
Net Loss | (27,924) | (27,924) | |||
Foreign currency translation adjustment | (18) | (18) | |||
Stock-based compensation | 7,423 | 7,423 | |||
Shares issued upon vesting of RSU, net of shares retired to pay employees’ taxes | |||||
Shares issued upon vesting of RSU, net of shares retired to pay employees taxes, shares | 106 | ||||
Accretion of Series A convertible preferred stock to redemption value | 294 | $ (294) | (294) | ||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts | $ 32,453 | 32,453 | |||
Issuance of common shares, including at-the-market transactions, net of financing costs and underwriting discounts, shares | 26,281 | ||||
Issuance of Series A redeemable convertible preferred stock, net of financing costs | $ 4,782 | ||||
Issuance of Series A redeemable convertible preferred stock, net of financing costs, shares | 5,882 | ||||
Ending balance at Sep. 30, 2022 | $ 5,076 | $ 292,536 | 19 | (215,698) | 76,857 |
Ending balance, shares at Sep. 30, 2022 | 5,882 | 118,619 | |||
Beginning balance at Jun. 30, 2022 | $ 4,854 | $ 289,649 | 31 | (206,437) | 83,243 |
Beginning balance, shares at Jun. 30, 2022 | 5,882 | 118,609 | |||
Net Loss | (9,333) | (9,333) | |||
Foreign currency translation adjustment | (12) | (12) | |||
Stock-based compensation | 3,181 | 3,181 | |||
Shares issued upon vesting of RSU, net of shares retired to pay employees’ taxes | |||||
Shares issued upon vesting of RSU, net of shares retired to pay employees taxes, shares | 10 | ||||
Accretion of Series A convertible preferred stock to redemption value | 222 | $ (294) | 72 | (222) | |
Ending balance at Sep. 30, 2022 | $ 5,076 | $ 292,536 | $ 19 | $ (215,698) | $ 76,857 |
Ending balance, shares at Sep. 30, 2022 | 5,882 | 118,619 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (27,924) | $ (28,212) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 1,062 | 582 |
Amortization of intangible assets | 2,880 | 2,371 |
Pro rata loss from equity method investment in Razor | 270 | |
Stock-based compensation | 7,423 | 5,136 |
Unrealized (gain) loss on marketable equity securities | 485 | (248) |
Amortization of debt issuance costs | 12 | 46 |
Change in fair value of contingent consideration | (17,157) | 2,260 |
Change in fair value of Series A redeemable convertible preferred stock second tranche obligation | (352) | |
Deferred income tax benefit | (9,358) | |
Gain on extinguishment of debt (PPP loan) | (1,141) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (553) | (824) |
Lease liabilities | (156) | 169 |
Prepaid expenses and other assets | (745) | (787) |
Accounts payable and accrued liabilities | 422 | (1,592) |
Accrued severance and liabilities from Chronix Biomedical acquisition | (1,317) | 2,452 |
Net cash used in operating activities | (35,920) | (28,876) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of Insight Genetics, net of cash acquired | (607) | |
Acquisition of Razor Genomics asset, net of cash acquired | (6,648) | |
Acquisition of Chronix Biomedical, net of cash acquired | (4,459) | |
Construction in progress and purchases of equipment | (3,538) | (1,846) |
Net cash used in investing activities | (3,538) | (13,560) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 2,573 | |
Proceeds from sale of common shares | 32,812 | 65,262 |
Financing costs to issue common shares | (389) | (2,676) |
Proceeds from sale of redeemable convertible Series A preferred shares | 4,875 | |
Financing costs to issue redeemable convertible Series A preferred shares | (93) | |
Proceeds from sale of common shares under at-the-market transactions | 31 | 12,724 |
Financing costs for at-the-market sales | (1) | (390) |
Proceeds from exercise of warrants | 2,631 | |
Common shares received and retired for employee taxes paid | (239) | |
Repayment of loan payable | (1,325) | (1,125) |
Repayment of financing lease obligations | (4) | (127) |
Net cash provided by financing activities | 35,906 | 78,633 |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (3,552) | 36,197 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING | 37,305 | 8,843 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING | 33,753 | 45,040 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 24 | 96 |
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES | ||
Common stock issued for acquisition of Razor Genomics asset | 5,756 | |
Deferred tax liability generated from the acquisition of Razor Genomics asset | 7,564 | |
Common stock issued for acquisition of Chronix Biomedical | 3,299 | |
Deferred tax liability generated from the acquisition of Chronix | 1,794 | |
Initial fair value of contingent consideration at acquisition date | 42,295 | |
Assumed liability from Chronix Acquisition | 3,489 | |
Construction in progress, machinery and equipment purchases included in accounts payable, accrued liabilities and landlord liability | $ 1,032 | $ 193 |
Organization, Description of th
Organization, Description of the Business and Liquidity | 9 Months Ended |
Sep. 30, 2022 | |
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 tests 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 was 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 laboratory test development pipeline the DetermaCNI TM TM 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. Liquidity Oncocyte has incurred operating losses and negative cash flows since inception and had an accumulated deficit of $ 216.0 As of September 30, 2022, Oncocyte had $ 32.1 0.4 On June 11, 2021, Oncocyte entered into an at-the-market sales agreement with BTIG, LLC as sales agent and/or principal (the “Agent” or “BTIG”) pursuant to which Oncocyte may sell up to an aggregate of $ 50,000,000 Between July 1, 2021 and September 30, 2022, Oncocyte sold 1,123,337 5.58 6.27 On April 13, 2022, Oncocyte entered into a securities purchase agreement (the “Securities Purchase Agreement”) with institutional accredited investors (the “Investors”), including Broadwood Capital, L.P. (“Broadwood”), Oncocyte’s largest shareholder, in a registered direct offering of 11,765 7,689,542 1.53 850 1,000 5,000,000 10,000,000 4.9 Further, on April 13, 2022, Oncocyte entered into an underwriting agreement (the “Underwriting Agreement”) with BTIG, LLC, as representative of the underwriters named therein (the “Underwriters”), pursuant to which Oncocyte agreed to issue and sell to the Underwriters an aggregate of 26,266,417 26,266,417 13,133,208.5 5,220,654 6,003,752 3,001,876 1.53 4,984,093 5,731,707 2,865,853 32.8 26,266,417 26,266,417 13,133,208.5 As of September 30, 2022, Oncocyte devoted substantially all of its efforts on initial commercialization efforts for DetermaRx™, 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; continuing development and planning commercialization of DetermaTx TM TM Management believes that its cash, cash equivalents and marketable equity securities are sufficient to carry out operations through at least twelve months from the issuance date of the unaudited condensed consolidated interim financial statements included in this Report. However, the ability of the Company to continue as a going concern is dependent on the Company’s ability to implement or revise its current business plan, generate sufficient revenue and raise additional capital. Due to the inherent uncertainty in predicting future revenues and certain variable costs, management plans to reduce cash flows, including by: (i) materially deferring or limiting the Company’s spending on capital equipment; (ii) reevaluating the level of commission payouts to match current sales performance; (iii) reducing the use of external consultants and contract resources; (iv) possibly re-evaluating of our clinical trial expenses, or (v) reallocating investments in our fixed capital and infrastructure and/or (vi) making changes to our executive compensation structure. In addition to general economic and capital market trends and conditions, Oncocyte’s ability to raise sufficient additional capital to finance its operations from time to time will depend on a number of factors specific to Oncocyte’s operations such as operating revenues and expenses, progress in development of, or in obtaining reimbursement coverage from Medicare for DetermaIO™ and other future laboratory tests that Oncocyte may develop or acquire. See “Risk Factors”. 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 | 9 Months Ended |
Sep. 30, 2022 | |
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 unaudited condensed consolidated interim financial statements presented herein, and discussed below, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. In accordance with those rules and regulations, certain information and footnote disclosures normally included in comprehensive consolidated financial statements have been condensed or omitted. The condensed consolidated balance sheets as of December 31, 2021 was derived from the audited consolidated financial statements at that date. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Oncocyte’s Annual Report on Form 10-K for the year ended December 31, 2021. 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). The accompanying unaudited condensed consolidated interim 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 unaudited condensed 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 unaudited condensed 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, the valuation of Series A redeemable convertible preferred stock second tranche obligation, revenue recognition, assumptions related to 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. 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 as of the acquisition date based on prices quoted on the principal national securities exchange on which the shares traded. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development, 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 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 following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of September 30, 2022 (in thousands): Schedule of Fair Value Measurement of Financial Assets and Liabilities As of September 30, 2022 Total carrying and estimated fair value Quated prices in active markets Significant other observable inputs (Level 2) Significant other observable inputs Assets: Marketable equity securities $ 419 $ 419 $ - $ - Total $ 419 $ 419 $ - $ - Liabilities: Contingent consideration liabilities $ 59,524 $ - $ - $ 59,524 Total $ 59,524 $ - $ - $ 59,524 The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2021 (in thousands): As of December 31, 2021 Total carrying and estimated fair value Quated prices in active markets Significant other observable inputs (Level 2) Significant other observable inputs Assets: Marketable equity securities $ 904 $ 904 $ - $ - Total $ 904 $ 904 $ - $ - Liabilities: Contingent consideration liabilities $ 76,681 $ - $ - $ 76,681 Total $ 76,681 $ - $ - $ 76,681 The carrying amounts of prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. Cash, cash equivalents, and restricted cash The Company’s reconciliation of cash and cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows were as follows (in thousands): Schedule of Cash and Cash Equivalents and Restricted Cash September 30, December 31, 2022 2021 Cash and cash equivalents $ 32,053 $ 35,605 Restricted cash 1,700 1,700 Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows $ 33,753 $ 37,305 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 and September 30, 2022, there has been no impairment of goodwill and intangible assets. Long-lived intangible assets Long-lived intangible assets, consisting primarily of acquired customer relationships, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful life of 5 years 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 laboratory tests, as applicable, or annual minimum royalties to certain licensors, as provided in the applicable agreements. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows (see Notes 3 and 4). 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 certain revenues generated. The fair value of contingent consideration after the acquisition date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the condensed 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 unaudited condensed consolidated interim financial statements. See Notes 3 and 4 for a full discussion of these liabilities. Investments in capital stock of privately held companies Oncocyte evaluates whether investments held in common stock of other companies require consolidation of the company under, first, the variable interest entity (“VIE”) model, and then under the voting interest model in accordance with accounting guidance for consolidations under Accounting Standards Codification (“ASC”) 810-10. If consolidation of the entity is not required under either the VIE model or the voting interest model, Oncocyte determines whether the equity method of accounting should be applied in accordance with ASC 323, Investments – Equity Method and Joint Ventures Oncocyte initially records equity method investments at fair value on the date of the acquisition with subsequent adjustments to the investment balance based on Oncocyte’s pro rata share of earnings or losses from the investment. Since February 24, 2021, the date of Oncocyte’s acquisition of the remaining interests in Razor, the Razor entity’s financial statements have been consolidated with Oncocyte (see Notes 3 and 4). Impairment of long-lived assets Oncocyte assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Oncocyte’s long-lived assets consist primarily of intangible assets, right-of-use assets for operating leases, customer relationships, and machinery and equipment. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying value of the asset over its fair value, is recorded. As of December 31, 2021 and September 30, 2022, there has been no Revenue recognition Pursuant to ASC 606, revenues are recognized when control of services performed is transferred to customers, in an amount that reflects the consideration Oncocyte expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, an entity satisfies a performance obligation. Oncocyte determines transaction prices based on the amount of consideration we expect to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. The Company considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. DetermaRx™ testing revenue Oncocyte generates revenue from performing DetermaRx™ tests on clinical samples through orders received from physicians, hospitals, and other healthcare providers. In determining whether all the revenue recognition criteria (i) through (v) above are met with respect to DetermaRx™ tests, each test result is considered a single performance obligation and is generally considered complete when the test result is delivered or made available to the prescribing physician electronically, and, as such, there are no shipping or handling fees incurred by Oncocyte or billed to customers. Although Oncocyte 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 consider the novelty of the test, the uncertainty of receiving payment, or being subject to claims for a refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte expects to continue to recognize revenue upon payment until it has a sufficient history to reliably estimate payment patterns or has contractual reimbursement arrangements, or both, in place. During the three months ended March 31, 2021, after accumulating additional history of cash receipts and other factors considered by management for Medicare Advantage covered tests, including the recently published Medicare rate which management believes entitles Oncocyte to get reimbursed for Medicare Advantage covered tests at the Medicare rate, Oncocyte commenced recognizing Medicare Advantage covered tests on an accrual basis when the test result is delivered or made available to the prescribing physician electronically, upon considering no further constraints on the variable consideration, at the Medicare rate. As of September 30, 2022, Oncocyte had accounts receivable of $ 1.9 1.1 Pharma services revenue Revenues recognized include Pharma Services performed by Oncocyte’s Insight and Chronix subsidiaries for its pharmaceutical customers, including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements or license agreements (together with SOW the “Pharma Services Agreements”) with specific deliverables defined by the customer. Pharma Services are performed on a (i) time and materials basis or (ii) per test completed basis. Upon completion of the service to the customer in accordance with a Pharma Services Agreement, Oncocyte has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes Pharma Service revenue at that time. Insight identifies each sale of its Pharma Service offering as a single performance obligation. Chronix identifies the processing of test samples as a separate performance obligation (considered a series) within license agreements with customers. Completion of the service and satisfaction of the performance obligation 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 Pharma Services Agreements. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Oncocyte has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Oncocyte recognizes revenue over a period during which the work is performed using a formula that accounts for expended efforts, generally measured in labor hours, as a percentage of total estimated efforts for the completion of the SOW. As performance obligations are satisfied under the Pharma Services Agreements, any amounts earned as revenue and billed to the customer are included in accounts receivable. Any revenues earned but not yet billed to the customer as of the date of Oncocyte’s consolidated financial statements are recorded as contract assets and are included in prepaids and other current assets as of the financial statement date. Amounts recorded in contract assets are reclassified to accounts receivable in Oncocyte’s consolidated financial statements when the customer is invoiced according to the billing schedule in the contract. Oncocyte 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, reasonable and supportable forecast that affect the collectability of the reported amount, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Oncocyte continuously monitors collections and payments from customers and maintains a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the allowance for doubtful accounts. As of September 30, 2022, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Pharma Services. As of September 30, 2022, Oncocyte had accounts receivable from Pharma Services customers of $ 0.1 0.4 Licensing revenue Revenues recognized includes licensing revenue derived from agreements with customers for exclusive rights to market Oncocyte’s proprietary testing technology. Under the agreements, Oncocyte grants exclusive rights to certain trademarks and technology of Oncocyte for the purpose of marketing Oncocyte’s tests within a defined geographic territory. A license agreement may specify milestone deliverables or performance obligations, for which Oncocyte recognizes revenue when its licensee confirms the completion of Oncocyte’s performance obligation. A licensing agreement may also include ongoing sales support from Oncocyte and typically includes non-refundable licensing fees and per-test Pharma Services revenues discussed above, for which Oncocyte treats the licensing of the technology, trademarks, and ongoing support as a single performance obligation satisfied by the passage of time over the term of the agreement. 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 DetermaRx™ tests and Pharma Services, providing deliverables according to our licensing agreements, license fees due to third parties, and amortization of acquired intangible assets such as the Razor asset and 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 generating the revenues are recorded as the tests or services are performed regardless of whether revenue was recognized. Royalties or revenue share payments for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expenses at the time the related revenues are recognized. Research and development expenses Research and development expenses are comprised of costs incurred to develop technology, which include salaries and benefits (including stock-based compensation), laboratory expenses (including reagents and supplies used in research and development laboratory work), infrastructure expenses (including allocated facility occupancy costs), and contract services and other outside costs. Indirect research and development expenses are allocated primarily based on headcount, as applicable, and include rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Research and development costs are expensed as incurred. Sales and marketing expenses Sales and marketing expenses 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. Net loss per common share Basic loss per share is computed by dividing the net loss applicable to common stockholders after deducting cumulative unpaid dividends and accretion of the preferred stock, by the weighted average number of shares of common stock outstanding during the year. Diluted loss per share is computed by dividing the net loss applicable to common stockholders after deducting cumulative unpaid dividends and accretion of the preferred stock, by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method or the if-converted method, or the two-class method for participating securities, whichever is more dilutive. Potential common shares are excluded from the computation if their effect is antidilutive. All common stock equivalents are antidilutive because Oncocyte reported a net loss for all periods presented. The following table presents the calculation of basic and diluted loss per share of common stock (in thousands): Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Net loss attributable to Oncocyte Corporation $ (9,333 ) $ (13,800 ) $ (27,924 ) $ (28,212 ) Accretion of Series A redeemable convertible preferred stock (222 ) - (294 ) - Net loss at attributable to common stockholders - Basic and Diluted $ (9,555 ) $ (13,800 ) $ (28,218 ) $ (28,212 ) Denominator: Weighted average shares used in computing net loss per share attributable to common stockholders - Basic and Diluted 118,610 91,453 108,158 87,812 Basic and diluted net loss per common share $ (0.08 ) $ (0.15 ) $ (0.26 ) $ (0.32 ) Anti-dilutive potential common shares excluded from the computation of diluted net loss per common share: Stock options 14,405 4,501 13,374 3,404 RSUs 452 60 48 - Warrants 16,395 2,555 16,395 2,555 Series A redeemable convertible preferred stock 3,845 - 3,845 - Total 35,097 7,116 33,662 5,959 Leases Oncocyte accounts for leases in accordance with ASC 842, Leases During 2020 and 2021, 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 remained substantially unchanged. Accounting for Lineage and AgeX shares of common stock Oncocyte accounts for the shares of Lineage and AgeX common stock 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 September 30, 2022 and December 31, 2021, Oncocyte held 353,264 35,326 0.4 0.9 Recently issued accounting pronouncements not yet adopted The following accounting standards, which are not yet effective, are presently being evaluated by Oncocyte to determine the impact that it might have on its consolidated financial statements. In 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 In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, 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. 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 laboratory tests and Pharma Services and resulting revenues. Concerns over available hospital, staffing, equipment, and other resources, and the risk of exposure to the virus, have led to delays in early-stage lung cancer surgeries and clinical trials of drugs under development by pharma companies, and the continued deferral of lung cancer surgeries and drug development clinical trials due to resurgence in COVID-19 cases could continue to result in delayed or reduced use of DetermaRx™ and Oncocyte’s Pharma Services. 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. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | 3. Business Combinations Acquisition of Insight Genetics, Inc. On January 31, 2020 (the “Insight Merger Date”), Oncocyte completed its acquisition of Insight pursuant to the Insight Merger Agreement. Contingent consideration 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. 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 17% 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 condensed consolidated statements of operations. As of September 30, 2022, based on Oncocyte’s reassessment of the significant assumptions noted above, there was an increase of approximately $ 0.4 The following tables reflect the activity for Oncocyte’s Contingent Consideration for the nine months ended September 30, 2022 and September 30, 2021, measured at fair value using Level 3 inputs (in thousands): Schedule of Contingent Consideration, Measured at Fair Value Fair Value Balance at December 31, 2020 $ 7,120 Change in estimated fair value 2,260 Balance at September 30, 2021 $ 9,380 Fair Value Balance at December 31, 2021 $ 7,060 Change in estimated fair value 420 Balance at September 30, 2022 $ 7,480 Contingent consideration is not deductible for tax purposes, even if paid; therefore, no deferred tax assets related to the Contingent Consideration were recorded. 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” $ 4.0 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 enrolment 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. 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 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. On February 24, 2021, Oncocyte estimated and recorded a net DTL of $ 7.1 On 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 February 24, 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 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 through 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 unaudited 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. 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. 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 - TM TM 3.7 3.5 738,000 738,000 no 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 Pursuant to ASC 805, Business Combinations 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 TM TM TM TM To calculate fair value of the 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 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 Contingent consideration liabilities TM TM 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 17% 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 specified future revenues generated from DetermaCNI TM 17% The fair value of the Transplant Sale Payments was determined using a single scenario analysis method. The single scenario method incorporates Oncocyte’s assumptions with respect to specified future licensing revenues generated from VitaGraft TM 17% The fair value of the Chronix Contingent Consideration after the Chronix Merger Date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in Oncocyte’s condensed consolidated statements of operations. As of September 30, 2022, based on Oncocyte’s reassessment of the significant assumptions noted above, there was a decrease of approximately $ 17.6 The following tables reflect the activity for Oncocyte’s Contingent Consideration for the nine months ended September 30, 2022 and September 30, 2021, 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 - Balance at September 30, 2021 $ 42,295 Fair Value Balance at December 31, 2021 $ 69,621 Change in estimated fair value (17,577 ) Balance at September 30, 2022 $ 52,044 Goodwill 2.2 TM 9.5 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 Assets,
Goodwill and Intangible Assets, net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | 4. Goodwill and Intangible Assets, net At September 30, 2022 and December 31, 2021, goodwill and intangible assets, net, consisted of the following (in thousands): Schedule of Goodwill and Intangible Assets September 30, 2022 December 31, 2021 Goodwill - Insight Merger (1) $ 9,194 $ 9,194 Goodwill - Chronix Merger (1) 9,490 9,490 Total Goodwill 18,684 18,684 Intangible assets: Acquired IPR&D - DetermaIO TM (2) $ 14,650 $ 14,650 Acquired IPR&D - DetermaCNI™ and VitaGraft™ (3) 46,800 46,800 Intangible assets subject to amortization: Acquired intangible assets - customer relationship 440 440 Acquired intangible assets - Razor (see Note 3) 32,797 32,797 Total intangible assets 94,687 94,687 Accumulated amortization - customer relationship (4) (235 ) (169 ) Accumulated amortization - Razor (4) (6,087 ) (3,273 ) Intangible assets, net $ 88,365 $ 91,245 (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 condensed consolidated statements of operations because the intangible assets pertain directly to the revenues generated from the acquired intangibles. Future amortization expense of intangible assets subject to amortization is expected to be the following (in thousands): Schedule of Intangible Assets Future Amortization Expense Amortization Year ending December 31, 2022 976 2023 3,904 2024 3,904 2025 3,823 2026 3,816 Thereafter 10,493 Total $ 26,916 |
Shareholders_ Equity
Shareholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Shareholders’ Equity | 5. Shareholders’ Equity Series A Redeemable Convertible Preferred Stock On April 13, 2022, the Company entered into a securities purchase agreement (“Purchase Agreement”) with institutional accredited investors, including Broadwood Capital, L.P., the Company’s largest shareholder, (the “Investors”) in a registered direct offering of 11,765 7,689,542 1.53 850 1,000 5,000,000 10,000,000 The Preferred Stock is convertible into shares of the Company’s common stock at any time at the holder’s option. The conversion price will be subject to customary anti-dilution adjustments for matters such as stock splits, stock dividends and other distributions on our common stock, and recapitalizations. A holder is prohibited from converting shares of Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the shares of our common stock then issued and outstanding (provided a holder may elect, at the first closing, to increase such beneficial ownership limitation solely as to itself up to 19.99% of the number of shares of our common stock outstanding immediately after giving effect to the conversion, provided further that following the receipt of shareholder approval required by applicable Nasdaq rules with respect to the issuance of common stock that would exceed the beneficial ownership limitation, such beneficial ownership limitation will no longer apply to the holder if the holder notified the Company that the holder wishes the Company to seek such shareholder approval). On July 15, 2022, the Company received such shareholder approval to remove the beneficial ownership limitation with respect to the Preferred Stock held by Broadwood Capital, L.P. The Company may force the conversion of up to one-third of the shares of Preferred Stock originally issued, subject to customary equity conditions, if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140 The Company may only effect one forced conversion during any 30-trading day period. In the event of the Company’s liquidation, dissolution, or winding up, holders of Preferred Stock will receive a payment equal to the stated value of the Preferred Stock plus accrued but unpaid dividends and any other amounts that may have become payable on the Preferred Stock due to any failure or delay that may have occurred in issuing shares of common stock upon conversion of a portion of the Preferred Stock, before any distribution or payment to the holders of common stock or any of our other junior equity. Shares of Preferred Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Preferred Stock will be required to amend any provision of our certificate of incorporation that would have a materially adverse effect on the rights of the holders of the Preferred Stock. Additionally, as long as any shares of Preferred Stock remain outstanding, unless the holders of at least 51% 8 15 Shares of Preferred Stock will be entitled to receive cumulative dividends at a rate per share (as a percentage of stated value) of 6% per annum, payable quarterly in cash or, at our option, by accreting such dividends to the stated value. The Company is required to redeem, for cash, the shares of Preferred Stock on the earlier to occur of (1) April 8, 2024, (2) the commencement of certain a voluntary or involuntary bankruptcy, receivership, or similar proceedings against the Company or its assets, (3) a Change of Control Transaction (as defined herein) and (4) at the election and upon notice of 51% in interest of the holders, if the Company fails to meet the Cash Minimum Requirement. A “Change of Control Transaction” means the occurrence of any of (a) an acquisition by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% 50% As of September 30, 2022, Oncocyte had 11,765 5,882.4 5 0.4 Common Stock As of September 30, 2022 and December 31, 2021, Oncocyte has 230,000,000 no 118,618,821 92,231,917 Common Stock Purchase Warrants As of September 30, 2022, Oncocyte had an aggregate of 16,395,343 1.53 5.46 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-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 6. Stock-Based Compensation Oncocyte had a 2010 Stock Option Plan (the “2010 Plan”) under which 5,200,000 In 2018, under the 2010 Plan, Oncocyte granted certain stock options with exercise prices ranging from $ 2.30 3.15 125,000 no no During the nine months ended September 30, 2022, the Company awarded executive share-based payment awards under the 2018 Plan to certain executive officers and employees with time-based, market-based and performance-based vesting conditions (“2022 equity awards”). The fair value of the 2022 equity awards with performance-based vesting condition was estimated using the Black-Scholes option-pricing model assuming that performance goals will be achieved. If such performance conditions are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The probability of 2022 equity awards performance-based vesting conditions will be evaluated each reporting period and the Company will true-up the amount of cumulative cost recognized for the 2022 performance-based awards at each reporting period based on the most up-to-date probability estimates. The Company will recognize the compensation expense for 2022 performance-based awards expected to vest on a straight-line basis over the respective service period for each separately vesting tranche. The fair value of the 2022 equity awards with market-based vesting condition was estimated using the Monte Carlo simulation model. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility and the estimated period to achievement of the performance and market conditions, which are subject to the achievement of the market-based goals established by the Company and the continued employment of the participant. These awards vest only to the extent that the market-based conditions are satisfied as specified in the vesting conditions. Unlike the performance-based awards, the grant date fair value and associated compensation cost of the market-based awards reflect the probability of the market condition being achieved, and the Company will recognize this compensation cost regardless of the actual achievement of the market condition. Assumptions utilized in connection with the Monte Carlo valuation technique included: estimated risk-free interest rate of 2.0 2.8 100 0 117,625 In May 2022, the Company approved amendments to vesting conditions of 1,237,500 250,000 50% TM TM 50% ™ TM the Company of average market capitalization minimum, target, and maximum goals of (i) $300 million; (ii) $400 million; and (iii) $500 million, respectively, during the period beginning on January 1, 2022 and ending on December 31, 2024. In accordance with ASC 718, the Company calculated the fair value of the market-based awards on the date of modification, noting an increase in the fair value of approximately $ 58,500 Schedule of Assumptions Used to Calculate Fair Value of Stock Options Risk-free interest rates 2.72 % Expected term (in years) 2.6 Volatility 95.0 % Grant date fair value of awards granted during the period $ 1.13 In July 2022, the Company approved amendments to vesting conditions of 475,000 50% 50% the achievement of performance minimum, target, and maximum goals of (i) 90% of revenue goal; (ii) 100% of revenue goal; and (iii) exceed revenue goal by up to 150%, respectively, during fiscal year 2022. During the nine months ended September 30, 2022, the Company accelerated the vesting of certain equity awards in accordance with the 2018 Incentive Plan after the departure of an officer of the Company and the adoption of the workforce reduction plan. Due to the acceleration of such awards all associated unrecognized compensation was accelerated and recognized in full as one-time expense of $ 1.0 A summary of Oncocyte’s 2010 Plan activity 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, 2021 - 923 $ 3.65 Options exercised - - $ - Options forfeited, canceled and expired - (200 ) $ - Balance at September 30, 2022 - 723 $ 3.99 Exercisable at September 30, 2022 723 $ 3.99 As of September 30, 2022, 21,000,000 A summary of Oncocyte’s 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, 2021 9,006 10,679 121 $ 3.63 RSUs vested 106 - (106 ) $ - RSUs granted (291 ) - 291 $ - Performance RSUs granted (1,150 ) - 1,150 $ - Options granted (3,907 ) 3,907 - $ 1.16 Options exercised - - - $ - Options forfeited/cancelled 1,224 (1,224 ) - $ 2.51 Balance at September 30, 2022 4,988 13,362 1,456 $ 2.93 Options exercisable at September 30, 2022 5,659 $ 3.33 Oncocyte recorded stock-based compensation expense in the following categories on the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 (unaudited and in thousands): Summary of Stock-based Compensation Expense 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenues $ 94 $ 70 $ 239 $ 166 Research and development 521 387 1,416 1,023 Sales and marketing 942 412 1,681 953 General and administrative 1,624 981 4,087 2,994 Total stock-based compensation expense $ 3,181 $ 1,850 $ 7,423 $ 5,136 The assumptions that were used to calculate the grant date fair value of Oncocyte’s employee and non-employee stock option grants for the nine months ended September 30, 2022 and 2021 were as follows: Schedule of Assumptions Used to Calculate Fair Value of Stock Options Nine Months Ended September 30, 2022 2021 Expected life (in years) 5.98 6.00 Risk-free interest rates 2.29 % 0.99 % Volatility 106.85 % 99.85 % Dividend yield 0 % 0 % The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If Oncocyte had made different assumptions, its stock-based compensation expense and net loss for the three and nine months ended September 30, 2022 and 2021 may have been significantly different. Oncocyte does not recognize deferred income taxes for incentive stock option compensation expense and records a tax deduction only when a disqualified disposition has occurred. |
Disaggregation of Revenues and
Disaggregation of Revenues and Concentration Risk | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues and Concentration Risk | 7. Disaggregation of Revenues and Concentration Risk The following table presents the percentage of consolidated revenues generated by unaffiliated customers that individually represent greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Medicare for DetermaRx 40 % 23 % 30 % 23 % Medicare Advantage for DetermaRx 49 % 16 % 29 % 17 % Pharma services - Other - 26 % - 11 % Licensing - Company A - - 23 % 25 % Licensing - Company B - 26 % - 12 % * Less than 10% The following table presents the percentage of consolidated revenues by products or services classes: Schedule of Consolidated Revenues Attributable to Products or Services 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 DetermaRx 93 % 41 % 62 % 40 % Pharma Services 7 % 29 % 15 % 23 % Licensing - 30 % 23 % 37 % Total 100 % 100 % 100 % 100 % The following table presents the percentage of consolidated revenues attributable to geographical locations: Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 United States 98 % 61 % 73 % 41 % Outside of the United States – Pharma Services 2 % 9 % 4 % 22 % Outside of the United States – Licensing - 30 % 23 % 37 % Total 100 % 100 % 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 September 30, 2022 December 31, 2021 Medicare for DetermaRx ™ 10 % 9 % Medicare Advantage for DetermaRx ™ 86 % 65 % As of December 31, 2021, our accounts receivable were $ 1.4 4.5 3.9 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The provision for income taxes for interim periods is determined using an estimated annual effective tax rate in accordance with ASC 740-270, Income Taxes, Interim Reporting In connection with the Razor acquisition discussed in Note 3, a change in the acquirer’s valuation allowance that stems from the purchase of assets should be recognized as an element of the acquirer’s income tax benefit in the period of the acquisition. Accordingly, for the three months ended March 31, 2021, Oncocyte recorded a $ 7.6 Oncocyte did not record any provision or benefit for income taxes for the nine months ended September 30, 2022, as Oncocyte had a full valuation allowance for the periods presented. 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 releases 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 carry-forwards and other deferred tax assets. In December 2017, the Tax Cuts and Jobs Act, or Tax Act, was signed into law. The Tax Act, among other things, contains significant changes to corporate taxation, including changes to the expensing of research and development expenses for tax years beginning after December 31, 2021. The changes will not have a material impact to the Company’s provision as the Company still expects to be in a taxable loss position. |
Right-of-use assets, machinery
Right-of-use assets, machinery and equipment, net, and construction in progress | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 and December 31, 2021, right-of-use assets, machinery and equipment, net, and construction in progress were as follows (in thousands): Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress September 30, 2022 December 31, 2021 (unaudited) Right-of-use assets (1) 3,499 3,499 Machinery and equipment 9,881 6,501 Accumulated depreciation and amortization (4,137 ) (2,715 ) Right-of-use assets, machinery and equipment, net 9,243 7,285 Construction in progress 2,350 1,242 Right-of-use assets, machinery and equipment, net, and construction in progress 11,593 8,527 (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 $ 391,000 255,000 1.1 582,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Oncocyte has certain commitments other than 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 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 lessor and used in connection with the operation, maintenance and repair of the Premises, and costs and fees incurred in connection with seeking reductions in such tax liabilities (“Taxes”). Subject to certain exceptions, Expenses shall not be increased by more than 4% annually on a cumulative, compounded basis. Oncocyte was entitled to an abatement of its obligations to pay Expenses and Taxes while constructing improvements to the Premises constituting “Tenant’s Work” under the Irvine Lease prior to the Commencement Date, except that Oncocyte was obligated to pay 43.7 The lessor provided Oncocyte with a “Tenant Improvement Allowance” in the amount of $ 1.3 1.5 1.3 Oncocyte has provided the lessor with a security deposit in the amount of $ 150,000 1.7 To obtain the letter of credit, Oncocyte has provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor. The restricted cash may not be used for any other purpose. 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 nine months ended September 30, 2022, 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 September 30, 2022, the aggregate payments due to the landlord for early cancellation of the Brisbane Lease would be approximately $ 78,000 Financing lease As of September 30, 2022, Oncocyte has one financing lease remaining through December 2023 for certain laboratory equipment with aggregate remaining payments of $ 155,000 Operating and Financing leases The following table presents supplemental cash flow information related to operating and financing leases for the nine months ended September 30, 2022 and 2021 (in thousands): Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from operating leases 854 765 Operating cash flows from financing leases 77 27 Financing cash flows from financing leases 4 127 The following table presents supplemental balance sheets information related to operating and financing leases as of September 30, 2022 and September 30, 2021 (in thousands, except lease term and discount rate): Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases September 30, 2022 September 30, 2021 Operating lease Right-of-use assets, net $ 2,218 $ 2,690 Right-of-use lease liabilities, current $ 714 $ 685 Right-of-use lease liabilities, noncurrent 2,904 3,618 Total operating lease liabilities $ 3,618 $ 4,303 Financing lease Machinery and equipment $ 537 $ 537 Accumulated depreciation (419 ) (309 ) Machinery and equipment, net $ 118 $ 228 Current liabilities $ 113 $ 101 Noncurrent liabilities 31 144 Total financing lease liabilities $ 144 $ 245 Weighted average remaining lease term Operating lease 4.7 5.5 Financing lease 1.3 2.3 Weighted average discount rate Operating lease 11.22 % 11.16 % Financing lease 11.55 % 11.55 % Future minimum lease commitments are as follows (in thousands): Schedule of Future Minimum Lease Commitments for Operating and Financing Leases Operating Financing Leases Leases Year Ending December 31, 2022 289 31 2023 1,048 124 2024 903 - 2025 869 - 2026 899 - Thereafter 695 - Total minimum lease payments $ 4,703 $ 155 Less amounts representing interest (1,085 ) (11 ) Present value of net minimum lease payments $ 3,618 $ 144 Litigation – General Oncocyte will be subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and other matters. When Oncocyte is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, Oncocyte will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, Oncocyte discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. Tax Filings Oncocyte tax filings are subject to audit by taxing authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. Management believes Oncocyte has adequately provided for any ultimate amounts that are likely to result from these audits; however, final assessments, if any, could be significantly different than the amounts recorded in the unaudited condensed consolidated interim financial statements. Employment Contracts Oncocyte has entered into employment and severance benefit contracts with certain executive officers. Under the provisions of the contracts, Oncocyte may be required to incur severance obligations for matters relating to changes in control, as defined, and certain terminations of executives. As of September 30, 2022, Oncocyte accrued approximately $ 3.2 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. Oncocyte periodically enters into underwriting and securities sales agreements with broker-dealers in connection with the offer and sale of Oncocyte securities. The terms of those underwriting and securities sales agreements include indemnification provisions pursuant to which Oncocyte agrees to indemnify the broker-dealers from certain liabilities, including liabilities arising under the Securities Act, in connection with the offer and sale of Oncocyte securities. The potential future payments Oncocyte could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, Oncocyte has not been subject to any claims or demands for indemnification. Oncocyte also maintains various liability insurance policies that limit Oncocyte’s financial exposure. As a result, Oncocyte management believes that the fair value of these indemnification agreements is minimal. Accordingly, Oncocyte has not recorded any liabilities for these agreements as of September 30, 2022 and December 31, 2021. |
Workforce Reduction
Workforce Reduction | 9 Months Ended |
Sep. 30, 2022 | |
Workforce Reduction | |
Workforce Reduction | 11. Workforce Reduction In August 2022, the Company committed to a workforce reduction plan to strategically realign its operations and implement cost reduction programs to prioritize near term revenue generators and to manage and preserve cash (the “Reduction”). In connection with the Reduction, the Company eliminated 14 positions, implemented tighter expense controls, and ceased non-core activities. During the three months ended September 30, 2022, the Company incurred $ 0.7 The Company accrued $ 0.5 In the accompanying consolidated balance sheets, the Company’s remaining accrued severance and other charges are included within accrued expenses and other current liabilities. Expenses incurred under the Reduction during the period ended September 30, 2022, are included within operating expenses in the accompanying consolidated statements of operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions Financing Transactions On January 20, 2021, Oncocyte entered into Subscription Agreements with certain institutional investors for a registered direct offering of 7,301,410 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 On April 13, 2022, Oncocyte entered into the Securities Purchase Agreement with Investors, including Broadwood and John Peter Gutfreund, a director of Oncocyte, for the Series A Preferred Stock Offering. Each of Broadwood and Mr. Gutfreund has a direct material interest in the Series A Preferred Stock Offering and agreed to purchase 5,882.35 1,176.48 Further, on April 13, 2022, Oncocyte entered into the Underwriting Agreement with the Underwriters for the Underwritten Offering. Pursuant to the Underwritten Offering, Broadwood acquired from us (i) 5,220,654 6,003,752 3,001,876 1.53 6,003,752 783,098 4,984,093 5,731,707 2,865,853 5,731,707 747,614 6,199,527 7,129,456 3,564,728 7,129,456 929,929 |
Loan Payable to Silicon Valley
Loan Payable to Silicon Valley Bank | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Loan Payable to Silicon Valley Bank | 13. 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 Silicon Valley Bank (“the Bank”) pursuant to which Oncocyte obtained a new $ 3 400,000 116,000 2 20 TM 2 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 6.25 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 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 |
Co-Development Agreement with L
Co-Development Agreement with Life Technologies Corporation | 9 Months Ended |
Sep. 30, 2022 | |
Co-development Agreement With Life Technologies Corporation | |
Co-Development Agreement with Life Technologies Corporation | 14. 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 DetermaIO 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. 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. As of September 30, 2022, the Company owned 10 Genexus Integrated Sequencers and 10 Genexus Purification Instruments in connection with submission of an initial PO of $ 3.1 4.6 1.9 As of September 30, 2022, LTC has incurred $ 749,000 5 |
April 2022 Offerings
April 2022 Offerings | 9 Months Ended |
Sep. 30, 2022 | |
April 2022 Offerings | |
April 2022 Offerings | 15. April 2022 Offerings Series A Preferred Stock Offering On April 13, 2022, Oncocyte entered into the Securities Purchase Agreement with Investors, including Broadwood, in a registered direct offering of 11,765 7,689,542 1.53 850 1,000 5,000,000 10,000,000 The Series A Preferred Stock is convertible into shares of common stock at any time at the holder’s option. The conversion price will be subject to customary anti-dilution adjustments for matters such as stock splits, stock dividends and other distributions on common stock, and recapitalizations . The holder will be prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140% In the event of the Company’s liquidation, dissolution, or winding up, holders of Series A Preferred Stock will receive a payment equal to the stated value of the Series A Preferred Stock plus accrued but unpaid dividends and any other amounts that may have become payable on the Series A Preferred Stock due to any failure or delay that may have occurred in issuing shares of common stock upon conversion of a portion of the Series A Preferred Stock, before any distribution or payment to the holders of common stock or any of Oncocyte’s other junior equity. Shares of Series A Preferred Stock generally has no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series A Preferred Stock will be required to amend any provision of our certificate of incorporation that would have a materially adverse effect on the rights of the holders of the Series A Preferred Stock. Additionally, as long as any shares of Series A Preferred Stock remain outstanding, unless the holders of at least 51% of the then outstanding shares of Series A Preferred Stock shall have otherwise given prior written consent, the Company, on a consolidated basis with its subsidiaries, is not permitted to (1) have less than $ 8 15 Shares of Series A Preferred Stock will be entitled to receive cumulative dividends at a rate per share (as a percentage of stated value) of 6 The Company is required to redeem, for cash, the shares of Series A Preferred Stock on the earlier to occur of (1) April 8, 2024, (2) the commencement of certain a voluntary or involuntary bankruptcy, receivership, or similar proceedings against us or our assets, (3) a Change of Control Transaction (as defined herein) and (4) at the election and upon notice of 51 50 50 The issuance and sale of the Series A Preferred Stock was completed pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-256650), filed with the Securities and Exchange Commission on May 28, 2021 and declared effective by the SEC on June 8, 2021, and an accompanying prospectus dated June 8, 2021 as supplemented by a prospectus supplement dated April 13, 2022. The Series A Preferred Stock dividend for all issued and outstanding shares is set at 6 89,000 118,000 As of September 30, 2022, Oncocyte had 11,765 no 5,882.4 5 0.4 The following table reflects the activity for Second Closing Tranche Preferred Stock for the nine months ended September 30, 2022 measured at fair value (in thousands): Schedule of Tranche Preferred Stock Fair Value Balance at April 13, 2022 $ - Change in estimated fair value 352 Balance at September 30, 2022 $ 352 Underwritten Offering On April 13, 2022, Oncocyte entered into the Underwriting Agreement with the Underwriters, pursuant to which the Company agreed to issue and sell to the Underwriters an aggregate of 26,266,417 26,266,417 13,133,208.5 1.3325 1.3225 0.01 Under the terms of the Underwriting Agreement, the Company also granted to the Underwriters an over-allotment option, exercisable in whole or in part at any time for a period of 30 days from the date of the Underwriting Agreement, to purchase up to an additional 3,939,962 3,939,962 1,969,981 1.24255 0.01 3,939,962 3,939,962 The Company received net proceeds of approximately $ 32.8 The Underwritten Offering was made pursuant to the Company’s effective “shelf” registration statement on Form S-3 (Registration No. 333-256650) filed with the Securities and Exchange Commission on May 28, 2021 and declared effective by the SEC on June 8, 2021, and an accompanying prospectus dated June 8, 2021 as supplemented by a prospectus supplement dated April 13, 2022. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events None |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited condensed consolidated interim financial statements presented herein, and discussed below, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. In accordance with those rules and regulations, certain information and footnote disclosures normally included in comprehensive consolidated financial statements have been condensed or omitted. The condensed consolidated balance sheets as of December 31, 2021 was derived from the audited consolidated financial statements at that date. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Oncocyte’s Annual Report on Form 10-K for the year ended December 31, 2021. |
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). The accompanying unaudited condensed consolidated interim 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 unaudited condensed 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 unaudited condensed 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, the valuation of Series A redeemable convertible preferred stock second tranche obligation, revenue recognition, assumptions related to 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. |
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 as of the acquisition date based on prices quoted on the principal national securities exchange on which the shares traded. Oncocyte recognizes estimated fair values of the tangible assets and identifiable intangible assets acquired, including in-process research and development, 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 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 following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of September 30, 2022 (in thousands): Schedule of Fair Value Measurement of Financial Assets and Liabilities As of September 30, 2022 Total carrying and estimated fair value Quated prices in active markets Significant other observable inputs (Level 2) Significant other observable inputs Assets: Marketable equity securities $ 419 $ 419 $ - $ - Total $ 419 $ 419 $ - $ - Liabilities: Contingent consideration liabilities $ 59,524 $ - $ - $ 59,524 Total $ 59,524 $ - $ - $ 59,524 The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2021 (in thousands): As of December 31, 2021 Total carrying and estimated fair value Quated prices in active markets Significant other observable inputs (Level 2) Significant other observable inputs Assets: Marketable equity securities $ 904 $ 904 $ - $ - Total $ 904 $ 904 $ - $ - Liabilities: Contingent consideration liabilities $ 76,681 $ - $ - $ 76,681 Total $ 76,681 $ - $ - $ 76,681 The carrying amounts of prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. |
Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash The Company’s reconciliation of cash and cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows were as follows (in thousands): Schedule of Cash and Cash Equivalents and Restricted Cash September 30, December 31, 2022 2021 Cash and cash equivalents $ 32,053 $ 35,605 Restricted cash 1,700 1,700 Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows $ 33,753 $ 37,305 |
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 and September 30, 2022, there has been no impairment of goodwill and intangible assets. |
Long-lived intangible assets | Long-lived intangible assets Long-lived intangible assets, consisting primarily of acquired customer relationships, are stated at acquired cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful life of 5 years |
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 laboratory tests, as applicable, or annual minimum royalties to certain licensors, as provided in the applicable agreements. The fair value of such liabilities is determined using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows and the risk-adjusted discount rate used to present value the cash flows (see Notes 3 and 4). 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 certain revenues generated. The fair value of contingent consideration after the acquisition date is reassessed by Oncocyte as changes in circumstances and conditions occur, with the subsequent change in fair value recorded in the condensed 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 unaudited condensed consolidated interim financial statements. See Notes 3 and 4 for a full discussion of these liabilities. |
Investments in capital stock of privately held companies | Investments in capital stock of privately held companies Oncocyte evaluates whether investments held in common stock of other companies require consolidation of the company under, first, the variable interest entity (“VIE”) model, and then under the voting interest model in accordance with accounting guidance for consolidations under Accounting Standards Codification (“ASC”) 810-10. If consolidation of the entity is not required under either the VIE model or the voting interest model, Oncocyte determines whether the equity method of accounting should be applied in accordance with ASC 323, Investments – Equity Method and Joint Ventures Oncocyte initially records equity method investments at fair value on the date of the acquisition with subsequent adjustments to the investment balance based on Oncocyte’s pro rata share of earnings or losses from the investment. Since February 24, 2021, the date of Oncocyte’s acquisition of the remaining interests in Razor, the Razor entity’s financial statements have been consolidated with Oncocyte (see Notes 3 and 4). |
Impairment of long-lived assets | Impairment of long-lived assets Oncocyte assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Oncocyte’s long-lived assets consist primarily of intangible assets, right-of-use assets for operating leases, customer relationships, and machinery and equipment. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying value of the asset over its fair value, is recorded. As of December 31, 2021 and September 30, 2022, there has been no |
Revenue recognition | Revenue recognition Pursuant to ASC 606, revenues are recognized when control of services performed is transferred to customers, in an amount that reflects the consideration Oncocyte expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, an entity satisfies a performance obligation. Oncocyte determines transaction prices based on the amount of consideration we expect to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. The Company considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. DetermaRx™ testing revenue Oncocyte generates revenue from performing DetermaRx™ tests on clinical samples through orders received from physicians, hospitals, and other healthcare providers. In determining whether all the revenue recognition criteria (i) through (v) above are met with respect to DetermaRx™ tests, each test result is considered a single performance obligation and is generally considered complete when the test result is delivered or made available to the prescribing physician electronically, and, as such, there are no shipping or handling fees incurred by Oncocyte or billed to customers. Although Oncocyte 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 consider the novelty of the test, the uncertainty of receiving payment, or being subject to claims for a refund, from payers with whom it does not have a sufficient payment collection history or contractual reimbursement agreements. Accordingly, for those payers, Oncocyte expects to continue to recognize revenue upon payment until it has a sufficient history to reliably estimate payment patterns or has contractual reimbursement arrangements, or both, in place. During the three months ended March 31, 2021, after accumulating additional history of cash receipts and other factors considered by management for Medicare Advantage covered tests, including the recently published Medicare rate which management believes entitles Oncocyte to get reimbursed for Medicare Advantage covered tests at the Medicare rate, Oncocyte commenced recognizing Medicare Advantage covered tests on an accrual basis when the test result is delivered or made available to the prescribing physician electronically, upon considering no further constraints on the variable consideration, at the Medicare rate. As of September 30, 2022, Oncocyte had accounts receivable of $ 1.9 1.1 Pharma services revenue Revenues recognized include Pharma Services performed by Oncocyte’s Insight and Chronix subsidiaries for its pharmaceutical customers, including testing for biomarker discovery, assay design and development, clinical trial support, and a broad spectrum of biomarker tests. These Pharma Services are generally performed under individual scope of work (“SOW”) arrangements or license agreements (together with SOW the “Pharma Services Agreements”) with specific deliverables defined by the customer. Pharma Services are performed on a (i) time and materials basis or (ii) per test completed basis. Upon completion of the service to the customer in accordance with a Pharma Services Agreement, Oncocyte has the right to bill the customer for the agreed upon price (either on a per test or per deliverable basis) and recognizes Pharma Service revenue at that time. Insight identifies each sale of its Pharma Service offering as a single performance obligation. Chronix identifies the processing of test samples as a separate performance obligation (considered a series) within license agreements with customers. Completion of the service and satisfaction of the performance obligation 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 Pharma Services Agreements. However, for certain SOWs under which work is performed pursuant to the customer’s highly customized specifications, Oncocyte has the enforceable right to bill the customer for work completed, rather than upon completion of the SOW. For those SOWs, Oncocyte recognizes revenue over a period during which the work is performed using a formula that accounts for expended efforts, generally measured in labor hours, as a percentage of total estimated efforts for the completion of the SOW. As performance obligations are satisfied under the Pharma Services Agreements, any amounts earned as revenue and billed to the customer are included in accounts receivable. Any revenues earned but not yet billed to the customer as of the date of Oncocyte’s consolidated financial statements are recorded as contract assets and are included in prepaids and other current assets as of the financial statement date. Amounts recorded in contract assets are reclassified to accounts receivable in Oncocyte’s consolidated financial statements when the customer is invoiced according to the billing schedule in the contract. Oncocyte 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, reasonable and supportable forecast that affect the collectability of the reported amount, and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. Oncocyte continuously monitors collections and payments from customers and maintains a provision for estimated credit losses and uncollectible accounts, if any, based upon its historical experience and any specific customer collection issues that have been identified. Amounts determined to be uncollectible are written off against the allowance for doubtful accounts. As of September 30, 2022, Oncocyte has not recorded any losses or allowance for doubtful accounts on its account receivables from Pharma Services. As of September 30, 2022, Oncocyte had accounts receivable from Pharma Services customers of $ 0.1 0.4 Licensing revenue Revenues recognized includes licensing revenue derived from agreements with customers for exclusive rights to market Oncocyte’s proprietary testing technology. Under the agreements, Oncocyte grants exclusive rights to certain trademarks and technology of Oncocyte for the purpose of marketing Oncocyte’s tests within a defined geographic territory. A license agreement may specify milestone deliverables or performance obligations, for which Oncocyte recognizes revenue when its licensee confirms the completion of Oncocyte’s performance obligation. A licensing agreement may also include ongoing sales support from Oncocyte and typically includes non-refundable licensing fees and per-test Pharma Services revenues discussed above, for which Oncocyte treats the licensing of the technology, trademarks, and ongoing support as a single performance obligation satisfied by the passage of time over the term of the agreement. |
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 DetermaRx™ tests and Pharma Services, providing deliverables according to our licensing agreements, license fees due to third parties, and amortization of acquired intangible assets such as the Razor asset and 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 generating the revenues are recorded as the tests or services are performed regardless of whether revenue was recognized. Royalties or revenue share payments for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expenses at the time the related revenues are recognized. |
Research and development expenses | Research and development expenses Research and development expenses are comprised of costs incurred to develop technology, which include salaries and benefits (including stock-based compensation), laboratory expenses (including reagents and supplies used in research and development laboratory work), infrastructure expenses (including allocated facility occupancy costs), and contract services and other outside costs. Indirect research and development expenses are allocated primarily based on headcount, as applicable, and include rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. Research and development costs are expensed as incurred. |
Sales and marketing expenses | Sales and marketing expenses Sales and marketing expenses consist primarily of personnel costs and related benefits, including stock-based compensation, trade show expenses, branding and positioning expenses, and consulting fees. Sales and marketing expenses also include indirect expenses for applicable overhead allocated based on headcount, and include allocated costs for rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. |
General and administrative expenses | General and administrative expenses General and administrative expenses consist primarily of compensation and related benefits (including stock-based compensation) for executive and corporate personnel, professional and consulting fees, rent and utilities, common area maintenance, telecommunications, property taxes, and insurance. |
Net loss per common share | Net loss per common share Basic loss per share is computed by dividing the net loss applicable to common stockholders after deducting cumulative unpaid dividends and accretion of the preferred stock, by the weighted average number of shares of common stock outstanding during the year. Diluted loss per share is computed by dividing the net loss applicable to common stockholders after deducting cumulative unpaid dividends and accretion of the preferred stock, by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method or the if-converted method, or the two-class method for participating securities, whichever is more dilutive. Potential common shares are excluded from the computation if their effect is antidilutive. All common stock equivalents are antidilutive because Oncocyte reported a net loss for all periods presented. The following table presents the calculation of basic and diluted loss per share of common stock (in thousands): Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Net loss attributable to Oncocyte Corporation $ (9,333 ) $ (13,800 ) $ (27,924 ) $ (28,212 ) Accretion of Series A redeemable convertible preferred stock (222 ) - (294 ) - Net loss at attributable to common stockholders - Basic and Diluted $ (9,555 ) $ (13,800 ) $ (28,218 ) $ (28,212 ) Denominator: Weighted average shares used in computing net loss per share attributable to common stockholders - Basic and Diluted 118,610 91,453 108,158 87,812 Basic and diluted net loss per common share $ (0.08 ) $ (0.15 ) $ (0.26 ) $ (0.32 ) Anti-dilutive potential common shares excluded from the computation of diluted net loss per common share: Stock options 14,405 4,501 13,374 3,404 RSUs 452 60 48 - Warrants 16,395 2,555 16,395 2,555 Series A redeemable convertible preferred stock 3,845 - 3,845 - Total 35,097 7,116 33,662 5,959 |
Leases | Leases Oncocyte accounts for leases in accordance with ASC 842, Leases During 2020 and 2021, 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 remained substantially unchanged. |
Accounting for Lineage and AgeX shares of common stock | Accounting for Lineage and AgeX shares of common stock Oncocyte accounts for the shares of Lineage and AgeX common stock 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 September 30, 2022 and December 31, 2021, Oncocyte held 353,264 35,326 0.4 0.9 |
Recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted The following accounting standards, which are not yet effective, are presently being evaluated by Oncocyte to determine the impact that it might have on its consolidated financial statements. In 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 In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, |
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. 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 laboratory tests and Pharma Services and resulting revenues. Concerns over available hospital, staffing, equipment, and other resources, and the risk of exposure to the virus, have led to delays in early-stage lung cancer surgeries and clinical trials of drugs under development by pharma companies, and the continued deferral of lung cancer surgeries and drug development clinical trials due to resurgence in COVID-19 cases could continue to result in delayed or reduced use of DetermaRx™ and Oncocyte’s Pharma Services. 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) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measurement of Financial Assets and Liabilities | The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of September 30, 2022 (in thousands): Schedule of Fair Value Measurement of Financial Assets and Liabilities As of September 30, 2022 Total carrying and estimated fair value Quated prices in active markets Significant other observable inputs (Level 2) Significant other observable inputs Assets: Marketable equity securities $ 419 $ 419 $ - $ - Total $ 419 $ 419 $ - $ - Liabilities: Contingent consideration liabilities $ 59,524 $ - $ - $ 59,524 Total $ 59,524 $ - $ - $ 59,524 The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2021 (in thousands): As of December 31, 2021 Total carrying and estimated fair value Quated prices in active markets Significant other observable inputs (Level 2) Significant other observable inputs Assets: Marketable equity securities $ 904 $ 904 $ - $ - Total $ 904 $ 904 $ - $ - Liabilities: Contingent consideration liabilities $ 76,681 $ - $ - $ 76,681 Total $ 76,681 $ - $ - $ 76,681 |
Schedule of Cash and Cash Equivalents and Restricted Cash | Schedule of Cash and Cash Equivalents and Restricted Cash September 30, December 31, 2022 2021 Cash and cash equivalents $ 32,053 $ 35,605 Restricted cash 1,700 1,700 Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows $ 33,753 $ 37,305 |
Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock | All common stock equivalents are antidilutive because Oncocyte reported a net loss for all periods presented. The following table presents the calculation of basic and diluted loss per share of common stock (in thousands): Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Net loss attributable to Oncocyte Corporation $ (9,333 ) $ (13,800 ) $ (27,924 ) $ (28,212 ) Accretion of Series A redeemable convertible preferred stock (222 ) - (294 ) - Net loss at attributable to common stockholders - Basic and Diluted $ (9,555 ) $ (13,800 ) $ (28,218 ) $ (28,212 ) Denominator: Weighted average shares used in computing net loss per share attributable to common stockholders - Basic and Diluted 118,610 91,453 108,158 87,812 Basic and diluted net loss per common share $ (0.08 ) $ (0.15 ) $ (0.26 ) $ (0.32 ) Anti-dilutive potential common shares excluded from the computation of diluted net loss per common share: Stock options 14,405 4,501 13,374 3,404 RSUs 452 60 48 - Warrants 16,395 2,555 16,395 2,555 Series A redeemable convertible preferred stock 3,845 - 3,845 - Total 35,097 7,116 33,662 5,959 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Contingent Consideration Liability | The following table shows the Insight Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability (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 | On 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 February 24, 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 through 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 unaudited 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 tables reflect the activity for Oncocyte’s Contingent Consideration for the nine months ended September 30, 2022 and September 30, 2021, measured at fair value using Level 3 inputs (in thousands): Schedule of Contingent Consideration, Measured at Fair Value Fair Value Balance at December 31, 2020 $ 7,120 Change in estimated fair value 2,260 Balance at September 30, 2021 $ 9,380 Fair Value Balance at December 31, 2021 $ 7,060 Change in estimated fair value 420 Balance at September 30, 2022 $ 7,480 |
Chronix Biomedical Inc [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 tables reflect the activity for Oncocyte’s Contingent Consideration for the nine months ended September 30, 2022 and September 30, 2021, 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 - Balance at September 30, 2021 $ 42,295 Fair Value Balance at December 31, 2021 $ 69,621 Change in estimated fair value (17,577 ) Balance at September 30, 2022 $ 52,044 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | At September 30, 2022 and December 31, 2021, goodwill and intangible assets, net, consisted of the following (in thousands): Schedule of Goodwill and Intangible Assets September 30, 2022 December 31, 2021 Goodwill - Insight Merger (1) $ 9,194 $ 9,194 Goodwill - Chronix Merger (1) 9,490 9,490 Total Goodwill 18,684 18,684 Intangible assets: Acquired IPR&D - DetermaIO TM (2) $ 14,650 $ 14,650 Acquired IPR&D - DetermaCNI™ and VitaGraft™ (3) 46,800 46,800 Intangible assets subject to amortization: Acquired intangible assets - customer relationship 440 440 Acquired intangible assets - Razor (see Note 3) 32,797 32,797 Total intangible assets 94,687 94,687 Accumulated amortization - customer relationship (4) (235 ) (169 ) Accumulated amortization - Razor (4) (6,087 ) (3,273 ) Intangible assets, net $ 88,365 $ 91,245 (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 condensed consolidated statements of operations because the intangible assets pertain directly to the revenues generated from the acquired intangibles. |
Schedule of Intangible Assets Future Amortization Expense | Future amortization expense of intangible assets subject to amortization is expected to be the following (in thousands): Schedule of Intangible Assets Future Amortization Expense Amortization Year ending December 31, 2022 976 2023 3,904 2024 3,904 2025 3,823 2026 3,816 Thereafter 10,493 Total $ 26,916 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Assumptions Used to Calculate Fair Value of Stock Options | Schedule of Assumptions Used to Calculate Fair Value of Stock Options Risk-free interest rates 2.72 % Expected term (in years) 2.6 Volatility 95.0 % Grant date fair value of awards granted during the period $ 1.13 |
Summary of Stock Option Activity | A summary of Oncocyte’s 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, 2021 9,006 10,679 121 $ 3.63 RSUs vested 106 - (106 ) $ - RSUs granted (291 ) - 291 $ - Performance RSUs granted (1,150 ) - 1,150 $ - Options granted (3,907 ) 3,907 - $ 1.16 Options exercised - - - $ - Options forfeited/cancelled 1,224 (1,224 ) - $ 2.51 Balance at September 30, 2022 4,988 13,362 1,456 $ 2.93 Options exercisable at September 30, 2022 5,659 $ 3.33 |
Summary of Stock-based Compensation Expense | Oncocyte recorded stock-based compensation expense in the following categories on the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 (unaudited and in thousands): Summary of Stock-based Compensation Expense 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenues $ 94 $ 70 $ 239 $ 166 Research and development 521 387 1,416 1,023 Sales and marketing 942 412 1,681 953 General and administrative 1,624 981 4,087 2,994 Total stock-based compensation expense $ 3,181 $ 1,850 $ 7,423 $ 5,136 |
Schedule of Assumptions Used to Calculate Fair Value of Stock Options | The assumptions that were used to calculate the grant date fair value of Oncocyte’s employee and non-employee stock option grants for the nine months ended September 30, 2022 and 2021 were as follows: Schedule of Assumptions Used to Calculate Fair Value of Stock Options Nine Months Ended September 30, 2022 2021 Expected life (in years) 5.98 6.00 Risk-free interest rates 2.29 % 0.99 % Volatility 106.85 % 99.85 % Dividend yield 0 % 0 % |
2010 Plan Activity [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Summary of Stock Option Activity | A summary of Oncocyte’s 2010 Plan activity 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, 2021 - 923 $ 3.65 Options exercised - - $ - Options forfeited, canceled and expired - (200 ) $ - Balance at September 30, 2022 - 723 $ 3.99 Exercisable at September 30, 2022 723 $ 3.99 |
Disaggregation of Revenues an_2
Disaggregation of Revenues and Concentration Risk (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Consolidated Revenues Generated by Unaffiliated Customers | The following table presents the percentage of consolidated revenues generated by unaffiliated customers that individually represent greater than ten percent of consolidated revenues: Schedule of Consolidated Revenues Generated by Unaffiliated Customers Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Medicare for DetermaRx 40 % 23 % 30 % 23 % Medicare Advantage for DetermaRx 49 % 16 % 29 % 17 % Pharma services - Other - 26 % - 11 % Licensing - Company A - - 23 % 25 % Licensing - Company B - 26 % - 12 % * Less than 10% |
Schedule of Consolidated Revenues Attributable to Products or Services | The following table presents the percentage of consolidated revenues by products or services classes: Schedule of Consolidated Revenues Attributable to Products or Services 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 DetermaRx 93 % 41 % 62 % 40 % Pharma Services 7 % 29 % 15 % 23 % Licensing - 30 % 23 % 37 % Total 100 % 100 % 100 % 100 % |
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 1 2 3 4 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 United States 98 % 61 % 73 % 41 % Outside of the United States – Pharma Services 2 % 9 % 4 % 22 % Outside of the United States – Licensing - 30 % 23 % 37 % Total 100 % 100 % 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 September 30, 2022 December 31, 2021 Medicare for DetermaRx ™ 10 % 9 % Medicare Advantage for DetermaRx ™ 86 % 65 % |
Right-of-use assets, machiner_2
Right-of-use assets, machinery and equipment, net, and construction in progress (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress | As of September 30, 2022 and December 31, 2021, right-of-use assets, machinery and equipment, net, and construction in progress were as follows (in thousands): Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress September 30, 2022 December 31, 2021 (unaudited) Right-of-use assets (1) 3,499 3,499 Machinery and equipment 9,881 6,501 Accumulated depreciation and amortization (4,137 ) (2,715 ) Right-of-use assets, machinery and equipment, net 9,243 7,285 Construction in progress 2,350 1,242 Right-of-use assets, machinery and equipment, net, and construction in progress 11,593 8,527 (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) | 9 Months Ended |
Sep. 30, 2022 | |
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 nine months ended September 30, 2022 and 2021 (in thousands): Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of financing lease liabilities: Operating cash flows from operating leases 854 765 Operating cash flows from financing leases 77 27 Financing cash flows from financing leases 4 127 |
Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases | The following table presents supplemental balance sheets information related to operating and financing leases as of September 30, 2022 and September 30, 2021 (in thousands, except lease term and discount rate): Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases September 30, 2022 September 30, 2021 Operating lease Right-of-use assets, net $ 2,218 $ 2,690 Right-of-use lease liabilities, current $ 714 $ 685 Right-of-use lease liabilities, noncurrent 2,904 3,618 Total operating lease liabilities $ 3,618 $ 4,303 Financing lease Machinery and equipment $ 537 $ 537 Accumulated depreciation (419 ) (309 ) Machinery and equipment, net $ 118 $ 228 Current liabilities $ 113 $ 101 Noncurrent liabilities 31 144 Total financing lease liabilities $ 144 $ 245 Weighted average remaining lease term Operating lease 4.7 5.5 Financing lease 1.3 2.3 Weighted average discount rate Operating lease 11.22 % 11.16 % Financing lease 11.55 % 11.55 % |
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases | Future minimum lease commitments are as follows (in thousands): Schedule of Future Minimum Lease Commitments for Operating and Financing Leases Operating Financing Leases Leases Year Ending December 31, 2022 289 31 2023 1,048 124 2024 903 - 2025 869 - 2026 899 - Thereafter 695 - Total minimum lease payments $ 4,703 $ 155 Less amounts representing interest (1,085 ) (11 ) Present value of net minimum lease payments $ 3,618 $ 144 |
April 2022 Offerings (Tables)
April 2022 Offerings (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
April 2022 Offerings | |
Schedule of Tranche Preferred Stock | Schedule of Tranche Preferred Stock Fair Value Balance at April 13, 2022 $ - Change in estimated fair value 352 Balance at September 30, 2022 $ 352 |
Organization, Description of _2
Organization, Description of the Business and Liquidity (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 15 Months Ended | |||||||||||
Jun. 01, 2022 | Apr. 19, 2022 | Apr. 13, 2022 | Apr. 12, 2022 | Jun. 11, 2021 | Feb. 24, 2021 | Feb. 23, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 29, 2022 | Dec. 31, 2021 | Sep. 30, 2019 | |
Accumulated deficit | $ 215,698,000 | $ 215,698,000 | $ 187,774,000 | |||||||||||
Cash and cash equivalents | 32,053,000 | 32,053,000 | 35,605,000 | |||||||||||
Fair market value | 419,000 | $ 419,000 | $ 904,000 | |||||||||||
Net proceeds | $ 32,812,000 | $ 65,262,000 | ||||||||||||
Exercise price | $ 5.46 | $ 5.46 | $ 1.53 | |||||||||||
Common Stock [Member] | ||||||||||||||
Acquired shares | 648,000 | |||||||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||||||||
Net proceeds | $ 5,000,000 | |||||||||||||
Securities Purchase Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | ||||||||||||||
Net proceeds | $ 850 | |||||||||||||
Purchase of warrant | 11,765 | |||||||||||||
Convertible preferred shares | 7,689,542 | |||||||||||||
Conversion price | $ 1.53 | |||||||||||||
Stated value per share | $ 1,000 | |||||||||||||
Net proceeds | $ 10,000,000 | $ 10,000,000 | ||||||||||||
Securities Purchase Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||||||||
Net proceeds | 5,000,000 | $ 5,000,000 | ||||||||||||
Net proceeds | $ 4,900,000 | |||||||||||||
Securities Purchase Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||||||||
Net proceeds | $ 5,000,000 | $ 5,000,000 | ||||||||||||
Underwriting Agreement [Member] | ||||||||||||||
Purchase of warrant | 3,939,962 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | ||||||||||||||
Purchase of warrant | 26,266,417 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Common Stock [Member] | ||||||||||||||
Net proceeds | $ 32,800,000 | |||||||||||||
Purchase of warrant | 26,266,417 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Common Stock [Member] | Broadwood [Member] | ||||||||||||||
Acquired shares | 5,220,654 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Common Stock [Member] | Pura Vida [Member] | ||||||||||||||
Acquired shares | 4,984,093 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Minimum [Member] | ||||||||||||||
Purchase of warrant | 26,266,417 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Minimum [Member] | Common Stock [Member] | ||||||||||||||
Purchase of warrant | 26,266,417 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Minimum [Member] | Common Stock [Member] | Broadwood [Member] | ||||||||||||||
Purchase of warrant | 6,003,752 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Minimum [Member] | Common Stock [Member] | Pura Vida [Member] | ||||||||||||||
Purchase of warrant | 5,731,707 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Maximum [Member] | ||||||||||||||
Purchase of warrant | 13,133,208.5 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Maximum [Member] | Common Stock [Member] | ||||||||||||||
Purchase of warrant | 13,133,208.5 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Maximum [Member] | Common Stock [Member] | Broadwood [Member] | ||||||||||||||
Purchase of warrant | 3,001,876 | |||||||||||||
Exercise price | $ 1.53 | |||||||||||||
Underwriting Agreement [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Underwriter [Member] | Maximum [Member] | Common Stock [Member] | Pura Vida [Member] | ||||||||||||||
Purchase of warrant | 2,865,853 | |||||||||||||
Razor Genomics, Inc. [Member] | ||||||||||||||
Cash paid to purchase shares of common stock | $ 10,000,000 | $ 10,000,000 | ||||||||||||
Net proceeds | $ 5,700,000 | $ 5,700,000 | ||||||||||||
Purchase of warrant | 982,318 | |||||||||||||
Razor Genomics, Inc. [Member] | Oncocyte Corp [Member] | ||||||||||||||
Equity ownership percentage | 25% | 25% | ||||||||||||
BTIG, LLC [Member] | ||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 1,123,337 | |||||||||||||
Sale of stock, price per share | $ 5.58 | $ 5.58 | ||||||||||||
Proceeds from Issuance Initial Public Offering | $ 6,270,000 | |||||||||||||
BTIG, LLC [Member] | At The Market Sales Agreement [Member] | ||||||||||||||
Fair value of common stock sold | $ 50,000,000 |
Schedule of Fair Value Measurem
Schedule of Fair Value Measurement of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | $ 419 | $ 904 |
Liabilities, Fair Value Disclosure | 59,524 | 76,681 |
Fair Value, Inputs, Level 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | 419 | 904 |
Liabilities, Fair Value Disclosure | ||
Fair Value, Inputs, Level 2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | ||
Liabilities, Fair Value Disclosure | ||
Fair Value, Inputs, Level 3 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | ||
Liabilities, Fair Value Disclosure | 59,524 | 76,681 |
Marketable Equity Securities [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | 419 | 904 |
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | 419 | 904 |
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | ||
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Assets, Fair Value Disclosure | ||
Contingent Consideration Liabilities [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | 59,524 | 76,681 |
Contingent Consideration Liabilities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | ||
Contingent Consideration Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | ||
Contingent Consideration Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Liabilities, Fair Value Disclosure | $ 59,524 | $ 76,681 |
Schedule of Cash and Cash Equiv
Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 32,053 | $ 35,605 |
Restricted cash | 1,700 | 1,700 |
Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows | $ 33,753 | $ 37,305 |
Schedule of Common Stock Comput
Schedule of Common Stock Computation of Diluted Net Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
NET LOSS | $ (9,333) | $ (13,800) | $ (27,924) | $ (28,212) |
Accretion of Series A redeemable convertible preferred stock | (222) | (294) | ||
Net loss at attributable to common stockholders - Basic and Diluted | $ (9,555) | $ (13,800) | $ (28,218) | $ (28,212) |
Weighted average shares used in computing net loss per share attributable to common stockholders - Basic and Diluted | 118,610 | 91,453 | 108,158 | 87,812 |
Basic and diluted net loss per common share | $ (0.08) | $ (0.15) | $ (0.26) | $ (0.32) |
Total | $ 35,097 | $ 7,116 | $ 33,662 | $ 5,959 |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 14,405 | 4,501 | 13,374 | 3,404 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 452 | 60 | 48 | |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 16,395 | 2,555 | 16,395 | 2,555 |
Series A Redeemable Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | $ 3,845 | $ 3,845 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||
Long-lived intangible assets, useful life | 5 years | |
Impairment of long-lived assets | $ 0 | $ 0 |
Fair value of equity securities | $ 419,000 | $ 904,000 |
Lineage and AgeX [Member] | ||
Product Information [Line Items] | ||
Common Stock, Shares Held as Available for Sale Securities | 353,264 | 35,326 |
Fair value of equity securities | $ 400,000 | $ 900,000 |
Pharma Services [Member] | ||
Product Information [Line Items] | ||
Accounts receivable | 100,000 | 400,000 |
Medicare for DetermaRx and Medicare Advantage for DetermaRx [Member] | ||
Product Information [Line Items] | ||
Accounts receivable | $ 1,900,000 | $ 1,100,000 |
Schedule of Fair Value of Conti
Schedule of Fair Value of Contingent Consideration Liability (Details) $ in Thousands | Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | ||
Contractual Value | $ 6,000 | |
Fair Value on the Merger Date | 11,130 | |
Milestone 1 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 1,500 | |
Fair Value on the Merger Date | 1,340 | |
Milestone 2 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 3,000 | |
Fair Value on the Merger Date | 1,830 | |
Milestone 3 [Member] | ||
Business Acquisition [Line Items] | ||
Contractual Value | 1,500 | [1] |
Fair Value on the Merger Date | 770 | [1] |
Royalty 1 [Member] | ||
Business Acquisition [Line Items] | ||
Fair Value on the Merger Date | 5,980 | [2] |
Royalty 2 [Member] | ||
Business Acquisition [Line Items] | ||
Fair Value on the Merger Date | $ 1,210 | [2] |
[1]Indicates the maximum payable if the Milestone is achieved.[2]As defined, Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, accordingly there is no fixed contractual value for the Royalty Contingent Consideration. |
Schedule of Contingent Consider
Schedule of Contingent Consideration, Measured at Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | |||
Ending balance | $ 11,130 | ||
Fair Value, Inputs, Level 3 [Member] | Insight Merger [Member] | |||
Business Acquisition [Line Items] | |||
Beginning balance | 7,060 | $ 7,120 | |
Change in estimated fair value | 420 | 2,260 | |
Ending balance | $ 9,380 | 7,480 | 9,380 |
Fair Value, Inputs, Level 3 [Member] | Chronix Merger [Member] | |||
Business Acquisition [Line Items] | |||
Beginning balance | 42,295 | 69,621 | |
Change in estimated fair value | (17,577) | ||
Ending balance | $ 42,295 | $ 52,044 | $ 42,295 |
Schedule of Acquisition Intangi
Schedule of Acquisition Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 24, 2021 | |
Oncocyte common stock issued (982,318 shares issued at market value) as Additional Purchase Payment | $ 292,536 | $ 252,954 | ||
Razor Genomics, Inc. [Member] | ||||
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 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 |
Schedule of Acquisition Intan_2
Schedule of Acquisition Intangible Assets (Details) (Parenthetical) - Razor Genomics, Inc. [Member] | Feb. 24, 2021 shares |
Stock issued during the period | 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 | 9 Months Ended | |||
Feb. 23, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Research and development expense | $ 4,421 | $ 3,142 | $ 15,123 | $ 9,040 | ||
General and administrative expense | 5,763 | 5,495 | 16,927 | 18,193 | ||
Loss from operations | (9,221) | (13,604) | (27,678) | (38,532) | ||
Net loss | $ (9,333) | $ (13,800) | $ (27,924) | $ (28,212) | ||
Razor Genomics, Inc. [Member] | ||||||
Research and development expense | [1] | $ 125 | ||||
General and administrative expense | [1] | |||||
Loss from operations | [1] | (125) | ||||
Net loss | [1] | $ (125) | ||||
[1]The unaudited 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. |
Schedule of Fair Value of Aggre
Schedule of Fair Value of Aggregate Merger Consideration (Details) - Chronix Biomedical Inc [Member] $ / shares in Units, $ in Thousands | Apr. 15, 2021 USD ($) $ / shares shares |
Business Acquisition [Line Items] | |
Cash consideration | $ 3,960 |
Settlement of Acquirer/Acquiree Activity Pre-Combination, net | $ 550 |
Shares of Oncocyte common stock issued on the Merger Date | shares | 647,911 |
Closing price per share of Oncocyte common stock on the Merger Date | $ / shares | $ 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 A
Schedule of Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Apr. 15, 2021 |
Business Combination and Asset Acquisition [Abstract] | |||
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 | ||
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) | $ 18,684 | $ 18,684 | $ 9,490 |
Business Combinations (Details
Business Combinations (Details Narrative) $ / shares in Units, € in Millions | 1 Months Ended | 9 Months Ended | ||||||||||||
Apr. 15, 2021 USD ($) $ / shares shares | Feb. 24, 2021 USD ($) shares | Feb. 23, 2021 USD ($) | Jun. 30, 2020 USD ($) | Jan. 31, 2020 | Jun. 30, 2018 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2019 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Apr. 16, 2021 | Feb. 01, 2021 USD ($) | Jun. 30, 2018 EUR (€) | |||
Business Acquisition [Line Items] | ||||||||||||||
Fair value | $ 400,000 | |||||||||||||
Common stock value | 292,536,000 | $ 252,954,000 | ||||||||||||
Business combination assumed liabilities | $ 40,613,000 | |||||||||||||
Goodwill | $ 9,490,000 | 18,684,000 | 18,684,000 | |||||||||||
Chronix Biomedical Inc [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Discount rate | 12% | |||||||||||||
Net deferred tax liabilities | $ 2,200,000 | |||||||||||||
Fair value of intangible assets | 46,800,000 | |||||||||||||
Goodwill | $ 9,500,000 | 9,490,000 | [1] | 9,490,000 | [1] | |||||||||
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] | 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 | |||||||||||||
Lease Expiration Date | Sep. 29, 2021 | |||||||||||||
Chronix Merger Agreement [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Stock issued during the period | shares | 648,000 | |||||||||||||
Shares issued, amount | $ 1,430,000 | |||||||||||||
Business combination assumed liabilities | $ 1,870,000 | |||||||||||||
Closing price per share | $ / shares | $ 5.09 | |||||||||||||
Cash | $ 4,000,000 | |||||||||||||
Business combination settlement net | $ 550,000 | |||||||||||||
Merger Agreement [Member] | Chronix Biomedical Inc [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Discount rate | 17% | |||||||||||||
Merger Agreements [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition of offsetting | $ 2,200,000 | |||||||||||||
Razor Genomics, Inc. [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash | $ 10,000,000 | |||||||||||||
Common stock value | $ 5,756,000 | |||||||||||||
Cash paid to purchase shares of common stock | $ 10,000,000 | $ 10,000,000 | ||||||||||||
Stock issued during the period | shares | 982,318 | |||||||||||||
Shares issued, amount | $ 5,700,000 | $ 5,700,000 | ||||||||||||
Equity Method Investments | 13,147,000 | |||||||||||||
Net deferred tax liabilities | 7,077,000 | |||||||||||||
Razor Genomics, Inc. [Member] | Development Agreement [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Clinical trial expense reserve amount | $ 3,400,000 | $ 4,000,000 | ||||||||||||
Equity Method Investments | $ 11,245,000 | |||||||||||||
Razor Genomics, Inc. [Member] | Development Agreement [Member] | CMS Final [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Milestone payment | $ 4,000,000 | |||||||||||||
Razor Genomics, Inc. [Member] | Development Agreement [Member] | CMS Final [Member] | DetermaRx [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Property, Plant and Equipment, Estimated Useful Lives | 10-year | |||||||||||||
Razor Genomics, Inc. [Member] | Oncocyte Corp [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Outstanding equity | 25% | 25% | ||||||||||||
Encore Clinical, Inc. [Member] | Development Agreement [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Research and Development Arrangement, Contract to Perform for Others, Costs Incurred, Gross | 3,000,000 | |||||||||||||
Encore Clinical, Inc. [Member] | Development Agreement [Member] | Minority Shareholders [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Shares issued, amount | $ 3,000,000 | |||||||||||||
Encore Clinical, Inc. [Member] | Oncocyte Corp [Member] | Development Agreement [Member] | Minority Shareholders [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Description of principal activities | 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. | |||||||||||||
Chronix Biomedical Inc [Member] | Chronix Merger Agreement [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Amount of liabilities | 8,250,000 | |||||||||||||
Value added tax term of contract | 3 years 6 months | |||||||||||||
Chronix Biomedical Inc [Member] | Chronix Merger Agreement [Member] | Chronix Merger Date [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Amount of liabilities | 4,600,000 | |||||||||||||
Chronix Biomedical Inc [Member] | Chronix Merger Agreement [Member] | German Customer [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Upfront payment received | € | € 3.7 | |||||||||||||
Deferred revenue | $ 738,000 | $ 0 | $ 738,000 | |||||||||||
Chronix Biomedical Inc [Member] | Merger Agreement [Member] | Maximum [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination consideration transferred | $ 14,000,000 | |||||||||||||
Earnout percentage on collections for sales | 15% | |||||||||||||
Earnout percentage on collections for sale or license | 75% | |||||||||||||
Chronix [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value | $ 17,600,000 | |||||||||||||
Series A Convertible Preferred Stock [Member] | Razor Genomics, Inc. [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Purchase of shares | shares | 1,329,870 | |||||||||||||
Preferred stock par value | $ / shares | $ 0.0001 | |||||||||||||
Milestone Contingent Consideration [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Discount rate | 17% | 17% | ||||||||||||
Credit and risk-adjusted discount rate | 17% | 45% | ||||||||||||
[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 | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Dec. 31, 2021 | Apr. 15, 2021 | ||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 18,684 | $ 18,684 | $ 9,490 | |||
Total intangible assets | 94,687 | 94,687 | ||||
Intangible assets, net | 88,365 | 91,245 | ||||
Customer Relationships [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Acquired intangible assets | 440 | 440 | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | [1] | (235) | (169) | |||
DetermaI O [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 | 46,800 | |||
Razor Genomics, Inc. [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Acquired intangible assets | [3] | 32,797 | 32,797 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | [1] | (6,087) | (3,273) | |||
Insight Merger Agreements [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | [4] | 9,194 | 9,194 | |||
Chronix Biomedical Inc [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 9,490 | [4] | $ 9,490 | [4] | $ 9,500 | |
[1]Amortization of intangible assets is included in “Cost of revenues – amortization of acquired intangibles” on the condensed consolidated statements of operations because the intangible assets pertain directly to the revenues generated from the acquired intangibles.[2]See Note 3 for information on the Insight Merger.[3]See Note 3 for information on the Chronix Merger.[4]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 | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 976 |
2023 | 3,904 |
2024 | 3,904 |
2025 | 3,823 |
2026 | 3,816 |
Thereafter | 10,493 |
Total | $ 26,916 |
Shareholders_ Equity (Details N
Shareholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||
Jul. 15, 2022 | Jun. 01, 2022 | Apr. 13, 2022 | Apr. 12, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 29, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||||||
Proceeds common stock | $ 32,812,000 | $ 65,262,000 | |||||||
Conversion price percentage | 140% | 140% | |||||||
Common stock, shares authorized | 230,000,000 | 230,000,000 | |||||||
Common stock, no par value | $ 0 | $ 0 | |||||||
Common stock, shares issued | 118,618,821 | 92,231,917 | |||||||
Common stock, shares issued | 118,618,821 | 92,231,917 | |||||||
Number of common stock purchase warrants | 16,395,343 | ||||||||
Warrant exercise price per share | $ 5.46 | $ 1.53 | |||||||
Common Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized | 230,000,000 | 230,000,000 | |||||||
Common stock, no par value | $ 0 | $ 0 | |||||||
Series A Redeemable Convertible Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock outstanding percentage | 51% | ||||||||
Cash in hand | $ 8,000,000 | ||||||||
Indebtedness expenses | $ 15,000,000 | ||||||||
Temporary equity, shares authorized | 11,765 | ||||||||
Temporary equity, shares issued | 5,882.4 | ||||||||
Temporary equity, shares outstanding | 5,882.4 | ||||||||
Fair value | $ 400,000 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Convertible preferred shares | 5,882,000 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Oncocyte Corp [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Equity Method Investment, Description of Principal Activities | if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140% of the conversion price and on 20 out of the same 30 trading days the daily trading volume equals or exceeds 400,000 shares of our common stock. | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Oncocyte Corp [Member] | Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Ownership percentage | 50% | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Security [Member] | Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Ownership percentage | 50% | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Proceeds common stock | $ 5,000,000 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Offering shares | 11,765 | ||||||||
Convertible preferred shares | 7,689,542 | ||||||||
Conversion price | $ 1.53 | ||||||||
Preferred stock offering | $ 850 | ||||||||
Stated value per share | $ 1,000 | ||||||||
Proceeds common stock | $ 10,000,000 | $ 10,000,000 | |||||||
Series A Redeemable Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | Share-Based Payment Arrangement, Tranche One [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock offering | 5,000,000 | $ 5,000,000 | |||||||
Proceeds common stock | $ 4,900,000 | ||||||||
Series A Redeemable Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock offering | $ 5,000,000 | $ 5,000,000 |
Schedule of Assumptions Used to
Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rates | 2.29% | 0.99% |
Expected life (in years) | 5 years 11 months 23 days | 6 years |
Volatility | 106.85% | 99.85% |
Dividend yield | 0% | 0% |
Market Based Awards [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rates | 2.72% | |
Expected life (in years) | 2 years 7 months 6 days | |
Volatility | 95% | |
Grant date fair value of awards granted during the period | $ 1.13 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
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 | 923 |
Weighted average exercise price, options outstanding, beginning of period | $ / shares | $ 3.65 |
Shares available for grant options exercised | |
Number of options outstanding, options exercised | |
Weighted average exercise price, options exercised | $ / shares | |
Shares available for grant options forfeited, cancelled and expired | |
Number of options outstanding, options forfeited, cancelled and expired | (200) |
Weighted average exercise price, options forfeited, cancelled and expired | $ / shares | |
Shares available for grant outstanding, end of period | |
Number of options outstanding, end of period | 723 |
Weighted average exercise price, outstanding end of period | $ / shares | $ 3.99 |
Number of options outstanding, exercisable, end of period | 723 |
Weighted average exercise price, exercisable, end of period | $ / shares | $ 3.99 |
2018 Paln Activity [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Shares available for grant options, beginning of period | 9,006 |
Number of options outstanding, beginning of period | 10,679 |
Weighted average exercise price, options outstanding, beginning of period | $ / shares | $ 3.63 |
Shares available for grant options exercised | |
Number of options outstanding, options exercised | |
Weighted average exercise price, options exercised | $ / shares | |
Shares available for grant options forfeited, cancelled and expired | 1,224 |
Number of options outstanding, options forfeited, cancelled and expired | (1,224) |
Weighted average exercise price, options forfeited, cancelled and expired | $ / shares | $ 2.51 |
Shares available for grant outstanding, end of period | 4,988 |
Number of options outstanding, end of period | 13,362 |
Weighted average exercise price, outstanding end of period | $ / shares | $ 2.93 |
Number of options outstanding, exercisable, end of period | 5,659 |
Weighted average exercise price, exercisable, end of period | $ / shares | $ 3.33 |
Number of RSUs Outstanding, beginning of period | 121 |
Shares available for grant options RSUs vested | 106 |
Number of options outstanding, option RSUs vested | |
Number of RSUs Outstanding, option RSUs vested | (106) |
Weighted average exercise price, options exercised | $ / shares | |
Shares available for grant options RSUs granted | (291) |
Number of options outstanding, option RSUs granted | |
Number of RSUs Outstanding, option RSUs granted | 291 |
Weighted average exercise price, option RSUs granted | $ / shares | |
Shares available for grant options performance RSUs granted | (1,150) |
Number of options outstanding, option performance RSUs granted | |
Number of RSUs Outstanding, option performance RSUs granted | 1,150 |
Weighted average exercise price, option RSUs granted | $ / shares | |
Shares available for grant options granted | (3,907) |
Number of options outstanding, option granted | 3,907 |
Number of RSUs Outstanding, option granted | |
Weighted average exercise price, option granted | $ / shares | $ 1.16 |
Number of RSUs Outstanding, options exercised | |
Number of RSUs Outstanding, options forfeited, canceled and expired | |
Number of RSUs Outstanding, end of period | 1,456 |
Summary of Stock-based Compensa
Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 3,181 | $ 1,850 | $ 7,423 | $ 5,136 |
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 | 94 | 70 | 239 | 166 |
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 | 521 | 387 | 1,416 | 1,023 |
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 | 942 | 412 | 1,681 | 953 |
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 | $ 1,624 | $ 981 | $ 4,087 | $ 2,994 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2022 | May 31, 2022 | May 30, 2022 | May 31, 2018 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2018 | Dec. 30, 2018 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
stock-based compensation expense | $ 3,181,000 | $ 1,850,000 | $ 7,423,000 | $ 5,136,000 | ||||||
Risk-free interest rates | 2.29% | 0.99% | ||||||||
Expected life (in years) | 5 years 11 months 23 days | 6 years | ||||||||
Expected Volatility | 106.85% | 99.85% | ||||||||
Dividend yield | 0% | 0% | ||||||||
Share based payment award description | the achievement of performance minimum, target, and maximum goals of (i) 90% of revenue goal; (ii) 100% of revenue goal; and (iii) exceed revenue goal by up to 150%, respectively, during fiscal year 2022. | the Company of average market capitalization minimum, target, and maximum goals of (i) $300 million; (ii) $400 million; and (iii) $500 million, respectively, during the period beginning on January 1, 2022 and ending on December 31, 2024. | ||||||||
Increase in fair value | $ 58,500 | |||||||||
Market Based Awards [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Risk-free interest rates | 2.72% | |||||||||
Expected life (in years) | 2 years 7 months 6 days | |||||||||
Expected Volatility | 95% | |||||||||
Monte Carlo Valuation Technique [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Risk-free interest rates | 2% | |||||||||
Expected life (in years) | 2 years 9 months 18 days | |||||||||
Expected Volatility | 100% | |||||||||
Dividend yield | 0% | |||||||||
Vita Graft [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Vested percentage | 50% | 50% | ||||||||
Determal O [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Vested percentage | 50% | 50% | ||||||||
Executive Officers And Employees [Member] | Performance Shares [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Purchase of warrant | 475,000 | 1,237,500 | ||||||||
Executive Officers And Employees [Member] | Market Based Awards [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Purchase of warrant | 250,000 | |||||||||
2010 Stock Option Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Common stock, shares authorized | 5,200,000 | 5,200,000 | ||||||||
2010 Stock Option Plan [Member] | Employees And Consultants [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Minimum exercise price per share | $ 2.30 | |||||||||
Maximum exercise price per share | $ 3.15 | |||||||||
Performance-Based Options [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
stock-based compensation expense | $ 0 | $ 0 | ||||||||
Performance-Based Options outstanding | 0 | 0 | ||||||||
Grant date fair value | $ 117,625 | |||||||||
Performance-Based Options [Member] | Determa Dx [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Stock options granted | 125,000 | |||||||||
2018 Incentive Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Common stock, shares authorized | 21,000,000 | 21,000,000 | ||||||||
Unrecognized expense | $ 1,000,000 |
Schedule of Consolidated Revenu
Schedule of Consolidated Revenues Generated by Unaffiliated Customers (Details) - Revenue Benchmark [Member] - Product Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | 100% | 100% | 100% | 100% | |||
Medicare For DetermaRx [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | 40% | 23% | 30% | 23% | |||
Medicare Advantage for DetermaRx [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | 49% | 16% | 29% | 17% | |||
Pharma Services Other [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | (0.00%) | [1] | 26% | (0.00%) | [1] | ||
Pharma Services Company A [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | (0.00%) | [1] | [1] | 23% | |||
Pharma Services Company B [Member] | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Concentration risk, percentage | (0.00%) | [1] | 26% | (0.00%) | [1] | 12% | |
[1]Less than 10% |
Schedule of Consolidated Reve_2
Schedule of Consolidated Revenues Attributable to Products or Services (Details) - Revenue Benchmark [Member] - Product Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total | 100% | 100% | 100% | 100% |
DetermaRx [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 93% | 41% | 62% | 40% |
Pharma Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 7% | 29% | 15% | 23% |
License Company B [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 30% | 23% | 37% |
Schedule of Percentage of Conso
Schedule of Percentage of Consolidated Revenues Attributable to Geographical Locations (Details) - Revenue Benchmark [Member] - Product Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total | 100% | 100% | 100% | 100% |
UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 98% | 61% | 73% | 41% |
Outside United States Pharma Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 2% | 9% | 4% | 22% |
Outside United States Licensing [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 30% | 23% | 37% |
Schedule of Percentage of Total
Schedule of Percentage of Total Consolidated Accounts Receivables (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Medicare For DetermaRx [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Medicare Advantage for DetermaRx™ | 10% | 9% |
Medicare Advantage for DetermaRx [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Medicare Advantage for DetermaRx™ | 86% | 65% |
Disaggregation of Revenues an_3
Disaggregation of Revenues and Concentration Risk (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 1,990 | $ 1,437 |
Increase in accounts receivables | 4,500 | |
Offset of cash collected | $ 3,900 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Millions | 3 Months Ended |
Mar. 30, 2021 USD ($) | |
Razor Genomics, Inc. [Member] | |
Partial release of valuation allownces | $ 7.6 |
Schedule of Right-of-use Assets
Schedule of Right-of-use Assets, Machinery and Equipment, Net, and Construction in Progress (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Right-of-use assets | [1] | $ 3,499 | $ 3,499 |
Machinery and equipment | 9,881 | 6,501 | |
Accumulated depreciation and amortization | (4,137) | (2,715) | |
Right-of-use assets, machinery and equipment, net | 9,243 | 7,285 | |
Construction in progress | 2,350 | 1,242 | |
Right-of-use assets, machinery and equipment, net, and construction in progress | $ 11,593 | $ 8,527 | |
[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 ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 391,000 | $ 255,000 | $ 1,100,000 | $ 582,000 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information Related to Operating and Financing Lease (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 854 | $ 765 |
Operating cash flows from financing leases | 77 | 27 |
Financing cash flows from financing leases | $ 4 | $ 127 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Operating and Financing Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Lessee, Lease, Description [Line Items] | |||
Machinery and equipment, net | $ 2,337 | $ 2,779 | |
Total financing lease liabilities | 144 | ||
Operating And Financing Leases [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets, net | 2,218 | $ 2,690 | |
Right-of-use lease liabilities, current | 714 | 685 | |
Right-of-use lease liabilities, noncurrent | 2,904 | 3,618 | |
Total operating lease liabilities | 3,618 | 4,303 | |
Machinery and equipment | 537 | 537 | |
Accumulated depreciation | (419) | (309) | |
Machinery and equipment, net | 118 | 228 | |
Current liabilities | 113 | 101 | |
Noncurrent liabilities | 31 | 144 | |
Total financing lease liabilities | $ 144 | $ 245 | |
Operating Lease, Weighted Average Remaining Lease Term | 4 years 8 months 12 days | 5 years 6 months | |
Finance Lease, Weighted Average Remaining Lease Term | 1 year 3 months 18 days | 2 years 3 months 18 days | |
Operating lease | 11.22% | 11.16% | |
Financing lease | 11.55% | 11.55% |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Commitments for Operating and Financing Leases (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2022 | $ 289 |
2023 | 1,048 |
2024 | 903 |
2025 | 869 |
2026 | 899 |
Thereafter | 695 |
Total minimum lease payments | 4,703 |
Less amounts representing interest | (1,085) |
Present value of net minimum lease payments | 3,618 |
Finance Lease, Liability, to be Paid [Abstract] | |
2022 | 31 |
2023 | 124 |
2024 | |
2025 | |
2026 | |
Thereafter | |
Total minimum lease payments | 155 |
Less amounts representing interest | (11) |
Present value of net minimum lease payments | $ 144 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Dec. 23, 2019 USD ($) ft² | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Aug. 27, 2021 ft² | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Payments due to land lord for early cancellation | $ 78,000 | |||
Severance Costs | $ 700,000 | |||
Laboratory Equipment [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Payment obligation amount. | $ 155,000 | 155,000 | ||
Executive Officers [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Severance Costs | 3,200,000 | |||
Office Lease Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Area of Land | ft² | 26,800 | |||
Payments for rent | $ 61,640 | |||
Total tenant improvement allowance | $ 1,300,000 | |||
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] | ||||
Total tenant improvement 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% | |||
Lease Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Area of Land | ft² | 1,928 |
Workforce Reduction (Details Na
Workforce Reduction (Details Narrative) $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Workforce Reduction | |
Severance expenses | $ 0.7 |
Reduction cost | $ 0.5 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Apr. 13, 2022 | Sep. 23, 2021 | Feb. 09, 2021 | Jan. 20, 2021 | Sep. 30, 2022 | Sep. 29, 2022 |
Warrant exercise price | $ 5.46 | $ 1.53 | ||||
Warrant to purchase common stock | 16,395,343 | |||||
Underwritten Public Offering [Member] | ||||||
Purchase of warrant | 8,947,000 | |||||
Share Price | $ 4.50 | |||||
Sale of Stock, Consideration Received on Transaction | $ 37,500,000 | |||||
Underwritten Public Offering [Member] | Broadwood Capital, LP [Member] | ||||||
Purchase of warrant | 600,000 | |||||
April 2022 Offering [Member] | Broadwood Capital, LP [Member] | ||||||
Warrant exercise price | $ 1.53 | |||||
Warrant to purchase common stock | 6,003,752 | |||||
April 2022 Offering [Member] | Broadwood Capital, LP [Member] | Common Stock [Member] | ||||||
Sale of stock, shares | 5,220,654 | |||||
April 2022 Offering [Member] | Broadwood Capital, LP [Member] | Maximum [Member] | Common Stock [Member] | ||||||
Warrant to purchase common stock | 3,001,876 | |||||
April 2022 Offering [Member] | Pura Vida Investments LLC [Member] | ||||||
Warrant to purchase common stock | 5,731,707 | |||||
April 2022 Offering [Member] | Pura Vida Investments LLC [Member] | Common Stock [Member] | ||||||
Sale of stock, shares | 4,984,093 | |||||
Issuance of shares | 5,731,707 | |||||
April 2022 Offering [Member] | Pura Vida Investments LLC [Member] | Maximum [Member] | Common Stock [Member] | ||||||
Warrant to purchase common stock | 2,865,853 | |||||
April 2022 Offering [Member] | Halle Special Situations Fund LLC [Member] | ||||||
Warrant to purchase common stock | 7,129,456 | |||||
April 2022 Offering [Member] | Halle Special Situations Fund LLC [Member] | Common Stock [Member] | ||||||
Warrant to purchase common stock | 7,129,456 | |||||
Sale of stock, shares | 6,199,527 | |||||
Warrant to purchase common stock | 929,929 | |||||
April 2022 Offering [Member] | Halle Special Situations Fund LLC [Member] | Maximum [Member] | Common Stock [Member] | ||||||
Warrant to purchase common stock | 3,564,728 | |||||
Warrant Exercise Agreements [Member] | ||||||
Purchase of warrant | 573,461 | |||||
Shares issued, amount | $ 1,807,835.81 | |||||
Warrant to purchase common stock | 573,461 | |||||
Warrant Exercise Agreements [Member] | Maximum [Member] | ||||||
Warrant exercise price | $ 3.25 | |||||
Warrant Exercise Agreements [Member] | Minimum [Member] | ||||||
Warrant exercise price | $ 3.1525 | |||||
Securities Purchase Agreement [Member] | Broadwood Capital, LP [Member] | Series A Convertible Preferred Stock [Member] | ||||||
Purchase of warrant | 5,882.35 | |||||
Institutional Investors [Member] | Subscription Agreements [Member] | ||||||
Purchase of warrant | 7,301,410 | |||||
Share Price | $ 3.424 | |||||
Shares issued, amount | $ 25,000,000 | |||||
Other Investors [Member] | April 2022 Offering [Member] | Broadwood Capital, LP [Member] | Common Stock [Member] | ||||||
Sale of stock, shares | 1,176.48 | |||||
Underwriters [Member] | April 2022 Offering [Member] | Broadwood Capital, LP [Member] | ||||||
Warrant to purchase common stock | 783,098 | |||||
Underwriters [Member] | April 2022 Offering [Member] | Pura Vida Investments LLC [Member] | Common Stock [Member] | ||||||
Issuance of shares | 747,614 |
Loan Payable to Silicon Valle_2
Loan Payable to Silicon Valley Bank (Details Narrative) - USD ($) | Apr. 02, 2020 | Oct. 17, 2019 | Sep. 30, 2022 | Sep. 29, 2022 | Mar. 23, 2017 | Feb. 21, 2017 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Interest rate | 6.25% | |||||
Warrants to purchase, shares | 16,395,343 | |||||
Exercise price | $ 5.46 | $ 1.53 | ||||
Warrant [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Warrants to purchase, shares | 7,321 | 8,247 | ||||
Exercise price | $ 5.46 | $ 4.85 | ||||
Amended Loan Agreement [Member] | Bank Warrant [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Debt instrument, final payment | $ 200,000 | |||||
Warrants to purchase, shares | 98,574 | |||||
Exercise price | $ 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 | |||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 | |||||
Interest rate | 5% | |||||
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 |
Co-Development Agreement with_2
Co-Development Agreement with Life Technologies Corporation (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2022 | Feb. 11, 2022 | Sep. 30, 2022 | Mar. 01, 2023 | |
Life Technologies Corporation [Member] | ||||
Development costs | $ 749,000 | |||
Product development budget | $ 5,000,000 | |||
Collaboration Agreement [Member] | Thermo Fisher Scientific [Member] | ||||
Assets acquired amount | $ 1,900,000 | |||
Collaboration Agreement [Member] | 10 Genexus Integrated Sequencers and 10 Genexus Purification Instruments [Member] | ||||
Assets acquired amount | $ 3,100,000 | |||
Collaboration Agreement [Member] | 15 Genexus Integrated Sequencers and 15 Genexus Purification Instruments [Member] | Forecast [Member] | ||||
Asset acquisition payable amount | $ 4,600,000 |
Schedule of Tranche Preferred S
Schedule of Tranche Preferred Stock (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
April 2022 Offerings | |||
Balance at April 13, 2022 | |||
Change in estimated fair value | 352 | $ 352 | |
Balance at September 30, 2022 | $ 352 | $ 352 |
April 2022 Offerings (Details N
April 2022 Offerings (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Jul. 15, 2022 | Apr. 19, 2022 | Apr. 13, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 29, 2022 | Dec. 31, 2021 | |
Conversion of Stock, Description | The holder will be prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the shares of common stock then issued and outstanding (provided a holder may elect, at the first closing, to increase such beneficial ownership limitation solely as to itself up to 19.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion). | ||||||
Percentage of issued and outstanding shares | 4.99% | ||||||
Conversion price percentage | 140% | 140% | |||||
Restricted cash | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | ||||
Debt instrument, decrease, forgiveness | $ 15,000,000 | ||||||
Ownership percentage | 50% | ||||||
Proceeds from issuance of convertible preferred stock | 5,000,000 | ||||||
Change in fair value of preferred stock | $ 400,000 | ||||||
Number of common stock purchase warrants | 16,395,343 | 16,395,343 | |||||
Exercise price | $ 5.46 | $ 5.46 | $ 1.53 | ||||
Underwriting Agreement [Member] | |||||||
Purchase of warrant | 3,939,962 | ||||||
Shares issued, price per share | $ 1.24255 | ||||||
April 2022 Warrants [Member] | Underwriting Agreement [Member] | |||||||
Purchase of warrant | 3,939,962 | ||||||
Common Stock [Member] | |||||||
Shares issued, price per share | $ 0.01 | ||||||
Common Stock [Member] | Underwriting Agreement [Member] | |||||||
Number of common stock purchase warrants | 1,969,981 | ||||||
Warrant [Member] | Underwriting Agreement [Member] | |||||||
Number of common stock purchase warrants | 3,939,962 | ||||||
Over-Allotment Option [Member] | |||||||
Purchase of warrant | 3,939,962 | ||||||
Proceeds from issuance initial public offering | $ 32,800,000 | ||||||
Over-Allotment Option [Member] | April 2022 Warrants [Member] | |||||||
Purchase of warrant | 26,266,417 | ||||||
IPO [Member] | April 2022 Warrants [Member] | |||||||
Number of common stock purchase warrants | 26,266,417 | ||||||
Sale of stock, price per share | $ 1.3325 | ||||||
IPO [Member] | Common Stock [Member] | |||||||
Number of common stock purchase warrants | 13,133,208.5 | ||||||
Shares issued, price per share | $ 1.3225 | ||||||
IPO [Member] | Warrant [Member] | |||||||
Exercise price | $ 0.01 | ||||||
Business Acquistion [Member] | |||||||
Business combination, step acquisition, equity interest in acquiree, percentage | 51% | ||||||
Business acquisition, percentage of voting interests acquired | 50% | ||||||
Minimum [Member] | |||||||
Restricted cash | $ 8,000,000 | ||||||
Series A Convertible Preferred Stock [Member] | |||||||
Stock issued during period, shares, conversion of units | 11,765 | ||||||
Preferred stock, convertible, shares issuable | 7,689,542 | ||||||
Preferred stock, convertible, conversion price | $ 1.53 | ||||||
Purchase price | 850 | ||||||
Stated value | $ 1,000 | ||||||
Proceeds from issuance of preferred stock and preference stock | $ 10,000,000 | ||||||
Series A Convertible Preferred Stock [Member] | Two Equal Tranches [Member] | |||||||
Proceeds from issuance of preferred stock and preference stock | $ 5,000,000 | ||||||
Series A Redeemable Convertible Preferred Stocks [Member] | Oncocyte Corp [Member] | |||||||
Equity Method Investment, Description of Principal Activities | if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140% of the conversion price and on 20 out of the same 30 trading days the daily trading volume equals or exceeds 400,000 shares of our common stock. Oncocyte may only effect one forced conversion during any 30-trading day period. | ||||||
Series A Preferred Stock [Member] | |||||||
Preferred stock, dividend rate, percentage | 6% | 6% | |||||
Dividends, preferred stock | $ 89,000 | $ 118,000 | |||||
Series A Redeemable Convertible Preferred Stock [Member] | |||||||
Temporary equity, shares authorized | 11,765 | 11,765 | |||||
Temporary equity, par value | $ 0 | $ 0 | |||||
Temporary equity, shares issued | 5,882.4 | 5,882.4 | |||||
Series A Redeemable Convertible Preferred Stock [Member] | Oncocyte Corp [Member] | |||||||
Equity Method Investment, Description of Principal Activities | if the daily volume weighted average price of our common stock for 20 out of 30 trading days exceeds 140% of the conversion price and on 20 out of the same 30 trading days the daily trading volume equals or exceeds 400,000 shares of our common stock. |