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Acquisition of Insight (Tables)

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Schedule of Fair Value of Aggregate Merger Consideration

The Milestone Contingent Consideration and the Royalty Contingent Consideration are collectively referred to as “Contingent Consideration”.

Cash consideration		$	7,000	⁽¹⁾

Stock consideration

Shares of Oncocyte common stock issued on the Merger Date			1,915,692	⁽²⁾

Closing price per share of Oncocyte common stock on the Merger Date		$	2.61

Market value of Oncocyte common stock issued		$	5,000

Contingent Consideration		$	11,130	⁽³⁾

Total fair value of consideration transferred on the Merger Date		$	23,130

(1)	The cash consideration paid on the Merger Date was $6.4 million, which was net of a $0.6 million cash holdback discussed above, recorded as a holdback liability since Oncocyte retained the cash. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers are included as part of the total consideration transferred.

(2)	The 229,885 Stock Holdback shares were placed in an escrow account and considered to be issued and outstanding Oncocyte common stock. In accordance with ASC 805, amounts held back for general representations and warranties of the sellers, including escrowed shares of common stock, are included as part of the total consideration transferred.

(3)	In accordance with ASC 805, Contingent Consideration, at fair value, is part of the total considered transferred on the Merger Date, as further discussed below.

Schedule of Intangible Assets Acquired and Liabilities Assumed

The following table sets forth the allocation of the Aggregate Merger Consideration transferred to Insight’s tangible and identifiable intangible assets acquired and liabilities assumed on the Merger Date, with the excess recorded as goodwill (in thousands):

		January 31, 2020
Assets acquired:
Cash and cash equivalents		$	36
Accounts receivable and other current assets			42
Right-of-use assets, machinery and equipment			585
Long-lived intangible assets – customer relationships			440
Acquired in-process research and development			14,650

Total identifiable assets acquired (a)			15,753

Liabilities assumed:
Accounts payable			61
Right-of-use liabilities – operating lease			495
Contingent Consideration transferred			11,130
Long-term deferred income tax liability			1,254

Total identifiable liabilities assumed (b)			12,940

Net assets acquired, excluding goodwill (a) - (b) = (c)			2,813

Total cash and stock consideration transferred (d)			12,000

Goodwill (d) - (c)		$	9,187

Schedule of Identifiable Intangible Assets and Estimated Useful Life

The valuation of identifiable intangible assets and applicable estimated useful lives are as follows (in thousands, except for useful life):

		Estimated Asset Fair Value				Useful Life (Years)
In process research and development (“IPR&D”)		$	14,650				n/a
Customer relationships			440				5
		$	15,090

Schedule of Fair Value of Contingent Consideration Liability

The following table shows the Merger Date contractual payment amounts, as applicable, and the corresponding fair value of each respective Contingent Consideration liability (in thousands):

		Contractual Value				Fair Value on the 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 achieved.
(b)	Royalty Payments are based on a percentage of future revenues of DetermaIO™ and Pharma Services over their respective useful life, as defined, accordingly, there is no fixed contractual value for the Royalty Contingent Consideration.

Schedule of Contingent Consideration, Measured at Fair Value

The following table reflects the activity for Oncocyte’s Contingent Consideration since the Merger Date, measured at fair value using Level 3 inputs (in thousands):

		Fair Value
Balance at December 31, 2020		$	7,120
Change in estimated fair value			1,060
Balance at March 31, 2021		$	8,180